2017 Laboratory Market Report
The laboratory testing market was $72 billion in 2016. The largest market segments were hospital labs at 58%, independent labs at 33%, and physician office labs at 4% of the total market in 2016. Medicare remains the largest payer for lab testing, with $7 billion in spending as of 2015. The top 25 tests account for 59% of Medicare’s lab spending. Legislative reform aims to curb Medicare spending in the near future, and laboratory revenues could fall by as much as 50% by 2023.
Genetic, Molecular, And Companion Diagnostics Are Growth Areas
Genetic testing is on the rise with more than 65,000 testing products available as of 2016. Similarly, molecular testing, valued at $6.45 billion globally, continues to gain traction as a more accurate alternative to common rapid tests. Companion diagnostics, a $2.8 billion global market, are projected to grow to $5.8 billion by 2019 with continued development of new therapeutic products requiring companion tests.
Hospital Laboratories To Receive Increased Investment
Hospital CFOs report increased investment in laboratory departments. An estimated 23% of hospitals are investing in new capital equipment, while 16% are replacing or updating existing capital equipment. Hospital laboratory directors point to staff hiring, increased productivity, and modernization as key elements of their 2017-18 strategic plans.
Physician Office Labs Growing In Number
Physician office labs (POLs) make up nearly half (47.8%) of all U.S. laboratories. The number of facilities has grown steadily to a total of 121,973.
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