HIDA 2019 Laboratory Market Report

HIDA 2019 Laboratory Market Report

Market-At-A-Glance
The U.S. laboratory testing market was valued at $80 billion in 2018. The largest market segments were hospital labs (59%), independent labs (35%), and physician office labs (5%). According to the Centers for Medicare and Medicaid Services (CMS), in 2018 there were 264,000 clinical laboratories nationwide.

Staffing was cited as the top challenge facing laboratories in 2018. This comes as the U.S. Bureau of Labor and Statistics projects a 12.7% increase in the number of laboratory employees by 2026, a number that is nearly double the national average for all occupations.

Rate Cuts Under PAMA Eliminate $670 Million In Payments
In a 2018 survey, government reimbursement was cited as the second most important challenge facing laboratories. Under the Protecting Access to Medicare Act (PAMA), CMS requires ”applicable laboratories” to submit private payer data to use in adjusting Medicare reimbursement for laboratory services. However, many laboratories are unsure of their status as an applicable laboratory, and lack the resources needed to meet data submission requirements. The issue is further complicated as CMS has announced penalties of up to $10,000 per day for labs that fail to provide data.

Genetic Testing Continues To Gain Steam
In 2018, the market gained 5,210 unique genetic tests, bringing the total number of available genetic tests to 74,448. The prior year, newly developed tests focused primarily on pediatrics, rare diseases, and prenatal.

As testing continues to increase in complexity and availability, the number of test send-outs is on the rise. In a 2018 survey, molecular genetic pathology (83%) and genomic testing (81%) were the two most likely tests to be sent to independent labs for processing. That same year, 48% of lab directors reported an increase in the number of molecular genetic pathology test send-outs while 43% reported an increase in the number of genomic test send-outs.

Distribution Plays A Key Role In Clinical Laboratories
In 2018, GHX reported $10.9 billion in laboratory-related product sales through distribution; roughly one-fifth of total distributed product sales of $48.4 billion across all markets. In a 2018 clinical laboratory study, 95% of lab directors reported purchasing supplies from either a laboratory or a medical distributor.

65% of laboratories that purchase from a laboratory distributor, receive more than 40% of their products through distribution. The number is higher for those who purchase from a medical distributor, with 73% receiving greater than 40% of their products through distribution.


Executive Summary
Laboratory Market Overview
Private Insurance And Medicare Pay For Most Lab Tests
Laboratories Name Staffing As Top Challenge In 2018
Laboratory Employment Growth To Outpace Broader Economy
Hospital Labs See Volume Increases But Flat Revenues
Hospital Lab Testing Trends
Independent Laboratories Earn $28 Billion In 2018
Complex Genetic Testing Most Likely To Be Sent Out To Independent Labs
Quest, LabCorp Receive Most Hospital Lab Test Send-Outs
POL Revenues Reach $4 Billion In 2018
Skilled Nursing, Home Health Labs Decrease In Number In 2019
Medicare Spending On Lab Testing Up In 2017
55% Of Medicare Payments Went To The Top 1% Of Labs
PAMA’s Initial Implementation Results In Lower Medicare Payments For Most Lab Tests
Hospital Labs Could Face $10,000 Per Day Federal Fines Under New PAMA Reporting Rules
Labs Face Difficulties In Determining Their Reporting Requirements
Hospital Executives Unsure Of PAMA Impact
PAMA To Have Biggest Impact On Tests Performed In Nursing Homes And Clinical Laboratories
80% Of Lab Reports Received Electronically
Precision Medicines Exceed 30% Of FDA Approvals For Second Year In A Row
Next-Generation Sequencing Projected To Reach $27 Million By 2025
FDA Helps Drive Efficient Genetic Test Development
Rapid Growth In Number Of Genetic Tests
Top 25 Tests Total 64% Of Medicare Lab Spend
Majority Of Lab Supplies Purchased Through Distribution
GHX Reports $580 Million In Clinical Laboratory Products Sold Through Distribution In 2018
GHX Lists Clinical Laboratory Products Sold Through Distribution
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