HIDA 2018 Lab Market Report

HIDA 2018 Lab Market Report

Market-At-A-Glance
The laboratory testing market was valued at $79 billion in 2017. The largest market segments were hospital labs (59.1%), independent labs (39.1%), and physician office labs (3.7%).

PAMA Rate Reductions Take Effect
Beginning January 2018, the new clinical laboratory fee schedule (CLFS) was implemented. This cut reimbursement for 75% of tests listed, adding additional financial pressure to laboratories nationwide.

Genetic Testing Market More Than Doubles In Size
The U.S. genetic testing market was valued at $5 billion in 2016, up 150% from 2012. This market is rapidly growing due to both increased demand, and advances in technology. From 2003-2018, a notable subsegment, genomic testing, saw advances in technology reduce the price of genome sequencing from $2.7 billion to just $100. As of 2017, there were 69,100 genetic testing products available. These tests covered 4,500 testable disorders, and nearly 19,000 testable genes.

Reference Lab Giants Plan For Acquisition
Nearly half of the $27 billion reference lab market is dominated by two players, LabCorp and Quest. These two companies performed over 300 million tests in 2017. As of 2018, there were 6,584 independent U.S. lab facilities.

Physician Office Labs Vulnerable To Rate Cuts
Physician office labs (POLs) at just $2.9 billion, represent a fraction of the overall laboratory market but total nearly half of U.S. laboratory facilities. This segment of laboratories received 47% of their revenues from Medicare in 2016. As reimbursement cuts arrive in 2018, this segment is particularly susceptible to changes.