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The Clinical Laboratory Services Market (Growth Opportunities, Competitive Analysis and Competitor Profiles)

The Clinical Laboratory Services Market (Growth Opportunities, Competitive Analysis and Competitor Profiles)

Clinical laboratories are an essential part of the health industry. Kalorama Information estimates that approximately 80% of physicians' diagnoses are a result of laboratory tests.he constant pressure to reduce healthcare spending is shifting healthcare utilization in favor of the laboratory, making it an ever more valuable part of the treatment plan. As hospital stays are shortened, contact between the physician and patient is reduced, which places a larger role on labs to gather, interpret, and deliver accurate information to the physician in a timely manner. We can expect to see an increase in the number of clinical labs, particularly in the independent sector, as these trends continue to influence the industry.

Since the last time Kalorama Information studied this market two years ago, there have been substantial changes in the industry, including changes in market share as major companies eat into regional labs, new competitors enter the marketplace, and new specialty tests are developed and priced.Clinical Laboratory Services (Markets, Growth Opportunities, Competitive Analysis and Competitor Profiles), provides an in-depth market overview, a total market analysis, analysis by laboratory type, and by routine and specialty testing and a review of the latest trends driving growth. Revenues and forecasts presented are for the U.S. market. Key international markets are discussed as well.

Key Clinical Laboratory Services Market Data

  • Hospital, Physician and Independent Lab Statistics
  • Major Tests Performed by Clinical Lab Companies
  • Disease Incidence and Trends Driving Lab Business
  • Market Forecast to 2014
  • Market Breakdown by Lab Type (Hospital, Physician, Independent)
  • Market Breakdown by Test Type (Specialty, Routine)
  • Market Share of Competitors
  • Competitive Analysis of Leading clinical Lab Providers

Clinical Laboratory Services Market Issues and Trends

A trend towards preventive and risk factor testing has been noted in several disciplines, particularly in the areas of oncology, endocrinology, and gynecology. Physicians in these areas are taking full advantage of testing for early detection and disease prevention. Some of the other issues and trends explored in this study include:

  • U.S. Demographics
  • Types of Specialty Tests
  • Growing Competition
  • Increasing Life Expectancy
  • Growing Incidence of Disease
  • New Product Offerings
  • Regulatory Environment
  • Insurance and Reimbursement
  • Payer Types
  • Developments in Personalized Medicine

Leading Clinical Laboratory Services Providers Analysis:

  • Quest Diagnostics, Inc.
  • Laboratory Corporation of America (LabCorp)
  • Genomic Health
  • Genoptix, Inc.
  • Genzyme Corporation
  • DaVita
  • Clarient, Inc.
  • Spectra Laboratories
  • Bio-Reference Laboratories

Scope & Methodology

The information in this report is the result of interviews with executives and market experts, as well as thorough research of secondary sources such as company literature, trade publications and medical and business journals. The emphasis Kalorama puts on primary research guarantees that new insights will be uncovered that are not available from any other source. The most important part of Kalorama's efforts is its superior analysis of company activities and their true significance in the marketplace.

All market data pertains to the world market at the manufacturers’ level. The base year for data was 2009. Historical data was provided for the years 2006, 2007 and 2008, with forecast data provided for 2010 through 2014. Compound annual growth rates (CAGRs) are provided for the 2006-2009 and 2009-2014 periods for each segment covered. A competitive analysis is provided for the year 2009. The forecasted market analysis for 2010-2014 was largely based on demographic trends, new developments, company performance trends, mergers and acquisitions, and national expansion.


Interview Re: Clinical Lab Services with Kalorama Information Publisher Bruce Carlson

Can you elaborate on what is behind the growth in the specialty testing market?

Better, more useful technologies that give results clinicians want - FISH, immunohistochemistry and molecular tests among them. They represent tests where specialty knowledge and equipment is needed that generally the hospital doesn’t have, Advanced services such as immunohistochemistry, flow cytometry, and molecular genetics technologies, and thus these tests can command a higher price There is also a large volume of these tests, and so we expect growth the continue. While fees for some tests have been reduced, Centers for Medicare and Medicaid show that FISH manual testing increased.

Reimbursement of tests. A test is only going to be a successful product if it is reimbursed and increasingly insurance companies are showing a willingness to reimburse. Pharmacodiagnostic tests that can help to limit the use of treatements that don’t work on a given paitent, will be favored by governments and insurance companes..

Of course sadly more incidence of cancer and other diseases for which speciality tests are needed is a growth factor. But also because these tests require knowledge and technology not commonly found in the hospital setting, there is a premium charge for these tests.

What are key trends that you expect to see more of in the near future?

IVD companies performing tests and marketing new tests as a service rather than merely selling kits. A trend we’ve seen develop over the last decade and,. Given the growth rates of companies who pursue this type of strategy, we expect others will follow. This would also lead us to believe that there will be more acquisitions of companies who have this competency.

What impact do you expect the health care reform law to have on clinical labs?

Generally good impact. The legislation introduced taxes and fees to other industries but left diagnostics - both kit sellers and service sellers alone for the most part, so ‘no harm done’ is good news there. Testing benefits from health care reform. In general terms, more patients with insurance will mean more doctor visits; less visits skipped for lack of financing. Doctor visits will lead testing. Near term may see the best result - As a significant group of people who were uninsured become insured between Medicaid and healthcare exchanges as part of the bill. As they come ‘on line’ with insurance, those first years of doctor visits are going to have to be test - rich, as doctors likely will be seeing patients who have not had a physicial for some time. This should help LabCorp and Quest. But this is not without challenges. For a test to be ordered, there has to be a doctor’s visit, and if there is a doctor shortage or long waiting line, the promised test volumes may not arrive. We will also see over the next few years, the governments tolerance for reimbursing all these tests.

What is impacted are high cost tests. With the government as a key payor and with a lot of attention on cost cutting, there will be pressure to negotiate lower reimbursement on tests. So far though, FDA has shown a willingness to reimburse a test where it works; the Oncotype DX is an example. Even the high-cost tests can get dollars if they can show they limit more expensive treatment in cases where treatment will not be effective.

What emerging technologies do you expect will impact the clinical lab business in the near term?

Getting results to patients in a high-tech way is an interesting trend. In an evolving effort to more efficiently connect with patients and physicians, several clinical laboratories have developed electronic test result distribution. This is not a novel concept but it has been an area of focus for companies in the past several years, especially as new electronic technologies and the internet have become used extensively. Companies in the industry have seen that efficiently communicating results with clients is an essential part of the job, and may be just as important as providing leading test menus in cutting-edge areas of lab testing.

For example, patients registered with a Google Health account, may view lab results online if they were ordered through Quest Diagnostics. The two companies paired up in 2008, after Google started the personal healthcare management system. The argument for this system is increased efficiency. In some cases it may also help people manage, or be more proactive with their health.

Were any findings in your report surprising?

A very scattered market. The top eight or so companies make 10BN, the others make about 37BN. Most healthcare markets are 80-20 or roughly so, with the top few companies owning 80%. This reperesents the regional nature of a market that services hospitals and physicians.

Quest’s considerable growth between 07 and 09 - 9.8%. Genomic Health’s fast rise and successful business model leading to 82% growth 2007-9. It is not so much a surprise to us as we’ve been watching the service trend but for your readers it may be, and certainly the large IVD companies are noticing. While these small companies are no where near Quest or Lab Corps revenue, they can affect the growth rate of those companies by competing in the high-growth sector of speciality testing.

We noticed slightly higher growth overall in the market in 2009 then had anticipated in 2007 when we did the last report on this subject, market 54BN vs our 2007 of 50BN.

TESTING INCREASINGLY IMPORTANT, REPORT FINDS

New York, February 4, 2010 — About eighty percent of physicians’ diagnoses result from a lab test. This bodes well for clinical lab service providers, especially the two major players Quest and LabCorp who provide lab services to hospitals, according to healthcare market research publisher Kalorama Information, which recently published Clinical Laboratory Services Market (Growth Opportunities, Competitive Analysis and Competitor Profiles).

In today’s cost cutting reality, there is a shift taking place in healthcare that includes shortened hospital stays. The average length of hospital stays in the U.S. is 4.7 days today, down from about 5.4 days in 1995 and 4.9 days in 2000. As a result, clinical labs have been pressured to improve the turnaround of test results so they can pick up the slack and help doctors to continue providing proper healthcare. This means they have also become a more valuable part of the treatment plan and are improving a physician’s ability to treat patients like never before.

“As hospital stays are shortened, contact between the physician and patient is reduced, which places a larger role on labs to gather, interpret, and deliver accurate information to the physician in a timely manner,” notes Melissa Elder, an analyst with Kalorama Information. “We expect to see an increase in the number of clinical labs, particularly in the independent sector, as these trends continue to influence the industry.”

In the report, Kalorama estimates the clinical lab services market in the U.S. was about $52.7 billion in 2009 and will grow at an annual rate of 4.1% to reach $61.9 billion by 2014. New technologies in testing will likely continue to fuel growth in combination with an aging population, increasing disease incidence and prevalence, a greater focus on prevention and early detection, and new trends in personalized medicine. Some key areas of growth include genomic and esoteric testing, anatomic pathology, and specialized testing in oncology and infectious disease.

The clinical lab services market in the U.S. is highly competitive with a large number of players. However, two big players, Quest Diagnostics and LabCorp, dominate the industry with combined lab service revenues of nearly $12 billion in 2009. No other players approach these two, but smaller companies have achieved noticeable growth in the past two years, especially in the area of specialty testing where they have cut into the pricing and volume of the major companies. Overall, the specialty segments enjoyed higher growth in test volume than the routine segments in 2009.

Kalorama Information’s Clinical Laboratory Services Market (Growth Opportunities, Competitive Analysis and Competitor Profiles) provides an in-depth market overview, a total market analysis, analysis by laboratory type, and by routine and specialty testing and a review of the latest trends driving growth. Forecasts through 2014 and profiles of major players in the industry are also included.

About Kalorama Information
Kalorama Information supplies the latest in independent market research in the life sciences, as well as a full range of custom research services.

  • Executive Summary
    • INDUSTRY AT A GLANCE
    • SCOPE AND METHODOLOGY
    • SIZE AND GROWTH OF THE MARKET
    • KEY ISSUES AND TRENDS AFFECTING THE MARKET
    • LEADING MARKET PARTICIPANTS
  • Industry Overview, Regulation and Trends
    • TESTING AND SERVICES
      • Routine Testing
      • Blood Cell Count
        • Table Laboratory Reference Parameters for CBC
      • Cholesterol Level Testing
        • Table High Cholesterol Risk Categories
      • HIV Testing
        • Table HIV Testing Products/Services Approved by the FDA
      • Pap Testing
      • Pregnancy Testing
        • Table HCG Levels in Pregnant Women by Days Past Ovulation
      • Substance Abuse Testing
        • Table Substance Detection Periods by Test Method
      • Urinalysis
        • Table Normal Reference Levels in a Medical Urinalysis
      • Specialty Testing
      • Endocrinology
      • Esoteric Testing
      • Genetics
      • Immunology and Molecular Microbiology
      • Oncology
      • Serology
      • Toxicology
      • INDUSTRY STRUCTURE
      • Hospital-based Laboratories
        • Table U.S. Registered Hospitals by Type, 2006 compared to 2008
        • Table Leading For-Profit U.S. Hospital Chains, 2006, 2007, 2008
      • Physician-office Laboratories
        • Table Physicians in the US by Specialty, 1970-2008
      • Independent Clinical Laboratories
        • Table Leading U.S. Independent Laboratory Groups, 2008
    • INCIDENCE OF DISEASES
      • Table U.S. Prevalence of Selected Medical Conditions
    • DEMOGRAPHICS
      • Table The U.S. Population, 1980-2020
      • Population Over Age 65
        • Table Percent U.S. Population Over Age 65 by Year
      • Life Expectancy
        • Table Average U.S. Life Expectancy in Years 1980, 2004, 2006 and 2008
    • REGULATORY OVERVIEW
      • Certificate of Waiver
        • Table Selected CLIA Waived Laboratory Tests
      • Certificate of Provider-Performed Microscopy Procedures (PPMP)
        • Table Provider-Performed Microscopy Procedures
      • Certificate of Compliance and Certificate of Accreditation
        • Table Clinical Laboratory Certificates Issued by Type (non-exempt laboratories only), December 2008
      • States Exempt from Federal Clinical Laboratory Improvements Amendments (CLIA) of 1988
        • Table CLIA Exempt States, Number of Laboratories, 2008
    • INSURANCE AND REIMBURSEMENT
      • Table Health Insurance Trends in the United States, Estimated 2007* (millions)
      • Laboratory Service Payer Types
        • Table Clinical Laboratory Clients and Payers by Type
      • Trends in Medicare Reimbursement
        • Table Laboratory Fee Schedule for Common CPT Codes in Specialty Testing, 2007-2009
      • Commercial Insurance Providers
        • Table Leading Commercial Insurance Providers, 2008
        • Table Quest and LabCorp Service Contracts for Leading Insurance Providers
    • NEW DEVELOPMENTS IN INFORMATION TECHNOLOGY
    • INTERNATIONAL MARKETS AND TRENDS
  • Leading Market Participants
    • SUMMARY
    • QUEST DIAGNOSTICS, INC.
      • Company Overview
        • Table Corporate Details of Quest Diagnostics
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Business Locations
    • LABORATORY CORPORATION OF AMERICA
      • Company Overview
        • Table Corporate Details of Laboratory Corporation of America
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • GENZYME CORPORATION
      • Company Overview
        • Table Corporate Details of Genzyme Corporation
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • DAVITA, INC.
      • Company Overview
        • Table Corporate Details of DaVita
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • CLARIENT, INC.
      • Company Overview
        • Table Corporate Details of Clarient
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • SPECTRA LABORATORIES
      • Company Overview
        • Table Corporate Details of Fresenius Medical Care AG
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • BIO-REFERENCE LABORATORIES
      • Company Overview
        • Table Corporate Details of Bio-Reference Laboratories
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • GENOMIC HEALTH, INC.
      • Company Overview
        • Table Corporate Details of Genomic Health, Inc.
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
    • GENOPTIX, INC.
      • Company Overview
        • Table Corporate Details of Genoptix, Inc.
      • Performance Review
      • Key Acquisitions, Alliances, and Partnerships
      • Products and Services
      • Growth Strategy
      • Locations
  • Market Trends and Summary
    • MARKET OVERVIEW
      • Table U.S. Clinical Laboratory Market Analysis, 2006-2013
      • Market Analysis by Laboratory Type
        • Table U.S. Clinical Laboratory Market Analysis by Type, 2006-2013
      • Market Analysis by Test Type
        • Table U.S. Clinical Laboratory Market Analysis by General Test Type, 2009
      • Competitive Analysis
        • Table Estimated Laboratory Service Revenues and Market Share of Leading Clinical Laboratory Providers 2007 and 2009
  • List of Major Companies and Organizations
  • State CLIA Offices

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