Clinical Laboratory Testing Volume 2: Business Strategies

Table of Contents

1. Overview

• 1.1 Objectives of the Report
• 1.2 Methodology
• 1.3 Scope of the Report
• 1.4 Executive Summary

2. IVD Clinical Laboratory Market

• 2.1 Introduction
• 2.2 Key Players for Independent Clinical Labs
• 2.3 Reimbursement Pressure
• 2.4 Medicare Part B Spending Trends
• 2.5 Cost of Billing and Average Receipts for Commercial Labs
• 2.6 Hospital Outreach Programs
• 2.7 Criteria for Selection of Lab Services

3. The Clinical Laboratory Testing Market

• 3.1 U.S. Market
  • 3.1.1 Hospital-based Clinical Laboratories
  • 3.1.2 Commercial Clinical Laboratory Testing
  • 3.1.3 Physician Office Laboratories (POLs)
• 3.2 Clinical Lab Testing Key Players
  • 3.2.1 Commercial Clinical Labs
  • 3.2.2 Hospital Lab Collaborative Ventures
  • 3.2.3 Specialty Labs
• 3.3 Revenue and Reimbursement
• 3.4 Outlook for Clinical Laboratory Testing
  • 3.4.1 Long-Term Changes
  • 3.4.2 Market Drivers
  • 3.4.3 The Limits to Growth
  • 3.4.4 Key Technologies
  • 3.4.5 Conclusion

4. Hot Sectors in the Clinical Lab Testing Market

• 4.1 Workplace Drugs-of-Abuse Testing
• 4.2 Clinical Toxicology
• 4.3 Clinical Testing for the Pharmaceutical Industry
• 4.4 Heavy Metal, Trace Element, and Solvent Analyses
• 4.5 Diabetes (Glucose) Testing
• 4.6 Molecular Diagnostic Testing
• 4.7 Cardiac Markers
• 4.8 Blood Bank Screening
• 4.9 Genetic Testing
• 4.10 Predictive Medicine Testing
• 4.11 Personalized Medicine
• 4.12 Cancer Testing
• 4.13 Cell Based Cancer Testing
• 4.14 Monitoring Technologies
• 4.15 Anatomic Pathology

5. Important Technology Trends

• 5.1 Technology Platform Innovations in Point-of-Care Testing
• 5.2 The New Paradigm
• 5.3 Consolidated Workstations
• 5.4 Automation in the Laboratory
• 5.5 Laboratory Information Systems
• 5.6 New User-friendly Interface
• 5.7 Data-Management Issues
  • 5.7.1 Wireless LANs
  • 5.7.2 Data and Workflow Management Systems
  • 5.7.3 Beckman Central Command
  • 5.7.4 Clinical IT More Widely Available in Physician Practices
  • 5.7.5 Physician Electronic Health Records (EHRs)

6. Business Trends in the Clinical Laboratory Analyzer Sector

• 6.1 Key Developments
• 6.2 Sector Consolidation
• 6.3 Acquisition Pricing
• 6.4 A Closer Look at Six Big Lab Deals
• 6.5 Acquisition, License Agreements, Internal Development and Partnerships
• 6.6 Comparison of Quest and LabCorp
  • 6.6.1 Quest
  • 6.6.2 Acquisitions
  • 6.6.3 Quest' s Growth, 2000-2006
  • 6.6.4 Laboratory Corporation of America
  • 6.6.5 LabCorp' s Growth, 2000-2006
  • 6.6.6 Competitive Advantages at Quest and LabCorp
  • 6.6.7 National Managed Care Contracts
  • 6.6.8 Billing and Collection Management
  • 6.6.9 Lower Reagent and Supply Costs
  • 6.6.10 Esoteric Testing Capabilities
  • 6.6.11 Ability to Invest in Web-Based Connectivity Solutions
  • 6.6.12 Competitive Disadvantages of Quest and LabCorp
  • 6.6.13 Difficulties with Turnaround Times and Stat Services
  • 6.6.14 Physician-Laboratory Communication
  • 6.6.15 Specimen Pickup Scheduling Inflexibility
• 6.7 Regulation of Clinical Laboratory Operations
  • 6.7.1 CLIA and State Regulations
  • 6.7.2 Drug Testing
  • 6.7.3 Controlled Substances
  • 6.7.4 Medical Waste, Hazardous Waste and Radioactive Materials
  • 6.7.5 FDA
  • 6.7.6 Occupational Safety
  • 6.7.7 Specimen Transportation
  • 6.7.8 Corporate Practice of Medicine
• 6.8 Hospital Outreach Programs
• 6.9 Supply Chain and GPO Contracting
• 6.10 Specialty Labs
• 6.11 Expansion of Hospital-Based Labs and Hospital Outreach Programs
• 6.12 Managed Care

7. Company Profiles

• 7.1 ACM Medical Laboratory
• 7.2 American Esoteric Laboratories
• 7.3 American Medical Laboratories
• 7.4 AmeriPath
• 7.5 ARUP Laboratories
• 7.6 Athena Diagnostics
• 7.7 Bio-Reference Laboratories, Inc.
• 7.8 BioTech Labs
• 7.9 BioLabs, Inc.
• 7.10 CBLPath
• 7.11 Centrex Clinical Laboratories
• 7.12 Clarient, Inc.
• 7.13 Clinical Laboratories of Hawaii
• 7.14 Clinical Reference Laboratory
• 7.15 Clongen Laboratories
• 7.16 CompuNet Clinical Laboratories
• 7.17 Diagnostic Systems Laboratories
• 7.18 Enzo Biochem, Inc.
• 7.19 Esoterix
• 7.20 Focus Diagnostics
• 7.21 Fresenius Medical Care AG & Co. KGaA
• 7.22 Geneva Laboratories
• 7.23 Genomic Health, Inc.
• 7.24 Genzyme
• 7.25 IBT Laboratories
• 7.26 Integrated Regional Laboratories
• 7.27 LabCorp
• 7.28 MDS Diagnostic Services
• 7.29 MEDTOX Scientific, Inc.
• 7.30 Meriter Health Services
• 7.31 Mid America Clinical Laboratories
• 7.32 Monogram Biosciences, Inc.
• 7.33 Myriad Genetics, Inc.
• 7.34 National Jewish Medical and Research Center
• 7.35 Parkway Clinical Laboratories
• 7.36 Pathology Associates Medical Laboratories
• 7.37 Psychemedics Corporation
• 7.38 Quest Diagnostics Incorporated
• 7.39 RDL Reference Laboratory
• 7.40 Satellite Laboratory Services
• 7.41 Spectrum Laboratory Network

8. Clinical Laboratory Testing Sector Trends and Forecasts

• 8.1 Home Care Analysis
• 8.2 Non-Traditional Collection for Laboratory Testing
• 8.3 New Systems for Critical-Care and Near-Patient Testing
• 8.4 Shift to Preventative Medicine
• 8.5 Mergers of Diagnostic Companies
• 8.6 Information Management Advances
• 8.7 Test Ordering Patterns
• 8.8 Patient Satisfaction
• 8.9 Move Away from Central Laboratory
• 8.10 Healthcare Cost Controls
• 8.11 Competition for Services
• 8.12 Drivers and Barriers of Clinical Laboratory Testing
• 8.13 Confluence of New Technology
• 8.14 New Trends in Clinical Laboratory Testing
  • 8.14.1 Trends in Reimbursement Practices
  • 8.14.2 Managed Care
  • 8.14.3 Point of Care Testing
  • 8.14.4 Satellite Facilities

LIST OF FIGURES

• Figure 2.1: Total Medicare Expenditures, 1995-2005
• Figure 2.2: Effect of Medicare Laboratory Fee Schedule Changes on a $10 Test, 1984-2006
• Figure 2.3: Part B Spending on Clinical Laboratory Services, 1991-2005
• Figure 2.4: Cost Per Billable Test
• Figure 2.5: Annual Billable Tests Processed Per FTE
• Figure 2.6: Outreach Business Operated at a Freestanding Lab Facility
• Figure 2.7: Volume of Dedicated Sales and Marketing Staff for Outreach Business
• Figure 2.8: Separately Managed Outreach Billing and Collection
• Figure 3.1: Lab Revenue by Lab Type
• Figure 3.2: Lab Revenue by Test Type
• Figure 3.3: Physician Office Laboratory Revenue, 2000-2006
• Figure 3.4: Unweighted Average Medicare Reimbursement for the 10 Most Common POL Tests
• Figure 3.5: Total Number of Non-Waived POLs, 2000-2006
• Figure 3.6: Number of New Tests Granted CLIA-Waived Status, 2000-2006
• Figure 3.7: High-Volume Waived Tests
• Figure 4.1: Laboratory Service Revenue from Pap Testing, 1998-2005
• Figure 4.2: Percentage of Pap Tests Performed Using Mono-Layer Methods, 1998-2006
• Figure 4.3: Market Share for Pap Test Vendors, 2006
• Figure 5.1: Percentage of Physicians in Practices with IT for Specific Clinical Activities
• Figure 5.2: Office-Based Physicians That Use EHRs, 2001-2005
• Figure 6.1: Average Revenue Multiple Paid to Acquire Labs, 2000-2006
• Figure 6.2: Hospital Market Share for Outreach Programs

LIST OF TABLES

• Table 2.1: Hospital Laboratory Share of Part B Medicare Spending, 1996-2005
• Table 2.2: Medicare Spending on Clinical Lab Services, 1991-2005
• Table 2.3: Medicare Part B Spending Per Medicare Enrollee, 1998-2005
• Table 2.4: Allowed Charges for Top 25 Clinical Laboratory Procedures, 2005
• Table 2.5: Washington G-2 Hospital Lab Outreach Survey
• Table 3.1: U.S. Clinical Laboratory Testing Market Revenue, 2005-2012
• Table 3.2: U.S. Clinical Laboratory Diagnostic Test Market Segments, 2006
• Table 3.3: Growth Rates of Test Types
• Table 3.4: Independent Commercial Laboratory Testing Test Volume, 2005-2012
• Table 3.5: Twenty Most Common Laboratory Tests Offered at Family Physician Offices
• Table 3.6: Important New Waived Tests
• Table 3.7: Revenue Growth At 14 Publicly-Traded Lab Companies, 2005
• Table 3.8: Payer Group wise Percentage of Total Volume of Requisitions and Net Revenues
• Table 4.1: Pap Testing at the Largest U.S. Laboratory Companies, 2006
• Table 5.1: Applications for Wireless LAN Technology
• Table 6.1: Laboratory/Pathology Acquisitions
• Table 6.2: Revenue Growth at Quest Diagnostics, 2000-2006
• Table 6.3: Revenue Growth at LabCorp, 2000-2006
• Table 6.4: LabCorp Revenue from Managed Care Contracts, 2004-2006
• Table 6.5: Quest Diagnostics Revenue from Managed Care Contracts, 2004-2006
• Table 8.1: Medicare Billing Guidelines for Multi-channel Laboratory Tests
• Table 8.2: Targeted Lab Tests and Brief Educational Reminder Messages