Clinical Lab Services Industry Endeavors to Overcome Reimbursement Cuts

The market was estimated at USD 99.1 billion for 2013, up 1.3% from the estimated value in 2008 of USD 92.7 billion in its new report.

Kalorama reported that there are a number of drivers for this market such as aging populations, a growing incidence of chronic diseases, increasing emphasis on diagnosis and disease monitoring, and a growth in advanced testing technologies and practices. However, there are also a number of inhibitors to growth such as the increasing effort to reduce health costs and uncertain economic conditions, and these are dampening growth.

“Today, clinical laboratories are improving a physician’s ability to treat patients like never before,” said Melissa Elder, analyst for Kalorama Information and the author of the report. “ There is a shift in healthcare utilization primarily due to reducing healthcare spending which makes the laboratory an even more valuable part of the treatment plan. But cost-cutting measures mean tests may not see the benefits of hospital-stay reducing factors.”

In the United States, the US Congress ultimately has the responsibility to adjust the Medicare fee schedule according to economic factors, including controlling costs, monitoring utilization, and ensuring adequate delivery of health care services. The passing of the Patient Protection and Affordable Care Act generated a number of provisions on laboratory fee schedules, mostly in the direction of reductions. These reductions were effective starting 2011 and will continue to be adjusted through 2015. Medicare slashed reimbursement amounts for many common tests such as Vitamin B12, triglycerides, and glucose nearly six percent between 2009 and 2013. Some tests, such as total iron or aluminum tests have been cut 19% and 30% respectively during that period. “As the world’s largest healthcare market, the US cuts are affecting the larger global market,” Melissa Elder noted.

Leaders in the industry include Bio-Reference Labs, Quest, Lab Corp, Myriad, and Spectra. Quest Diagnostics and LabCorp have advantages in the market due to the wide exposure, large number of locations, and greater financial positions. Smaller, independent laboratories could find it difficult to keep up with the fast changing industry largely due to limited financial abilities to invest in new technologies and testing services. Some laboratories, such as Bio-Reference Labs have found success in operating on a regional basis while companies such as Myriad Genetics and Genomic Health remain competitive by focusing on more specialized genetic-based testing. The new report includes more information on these markets including segment estimates and corporate profiles.

Kalorama Information is a division of MarketResearch dot com. It supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices, and healthcare. It also provides a full range of custom research services. In addition, the publishing company routinely assists the media with healthcare topics.

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