Clinical laboratory testing is generally categorized as either of two general areas–clinical testing and anatomical pathology testing. Clinical and anatomical pathology procedures are frequently ordered as part of regular physician office visits and hospital admissions in connection with the diagnosis and treatment of illnesses. As such, clinical laboratory analysis is one of the most important sections of medical care. The purpose of this report is to describe the specific segments of the clinical laboratory analysis business. The emphasis in this review is on those companies that are actively developing and marketing laboratory data for the clinical setting, including hospitals, independent labs, physician’s offices and miscellaneous clinics. This study concentrates on the clinical laboratory industry in the U.S. It defines the dollar volume of sales in each major market and analyzes the factors that influence the size and the growth of the individual market segments. The study surveys some of the primary companies known to be marketing clinical laboratory data into the market. Each company is discussed in depth with a section on the history of the company, the product line, business and marketing analysis, and a subjective commentary of the position of the company in its market.

Table of Contents :

1. Overview 5

1.1 Objectives of the Report 5

1.2 Methodology 6

1.3 Scope of the Report 7

1.4 Executive Summary 8

2. IVD Clinical Laboratory Market 10

2.1 Introduction 10

2.2 Key Players for Independent Clinical Labs 11

2.3 Reimbursement Pressure 11

2.4 Medicare Part B Spending Trends 13

2.5 Cost of Billing and Average Receipts for Commercial Labs 15

2.6 Hospital Outreach Programs 16

2.7 Criteria for Selection of Lab Services 20

3. The Clinical Laboratory Testing Market 21

3.1 U.S. Market 21

3.1.1 Hospital-based Clinical Laboratories 23

3.1.2 Commercial Clinical Laboratory Testing 23

3.1.3 Physician Office Laboratories (POLs) 24

3.2 Clinical Lab Testing Key Players 29

3.2.1 Commercial Clinical Labs 29

3.2.2 Hospital Lab Collaborative Ventures 30

3.2.3 Specialty Labs 31

3.3 Revenue and Reimbursement 32

3.4 Outlook for Clinical Laboratory Testing 35

3.4.1 Long-Term Changes 35

3.4.2 Market Drivers 36

3.4.3 The Limits to Growth 37

3.4.4 Key Technologies 37

3.4.5 Conclusion 38

4. Hot Sectors in the Clinical Lab Testing Market 39

4.1 Workplace Drugs-of-Abuse Testing 39

4.2 Clinical Toxicology 39

4.3 Clinical Testing for the Pharmaceutical Industry 40

4.4 Heavy Metal, Trace Element, and Solvent Analyses 40

4.5 Diabetes (Glucose) Testing 40

4.6 Molecular Diagnostic Testing 40

4.7 Cardiac Markers 41

4.8 Blood Bank Screening 41

4.9 Genetic Testing 41

4.10 Predictive Medicine Testing 42

4.11 Personalized Medicine 44

4.12 Cancer Testing 44

4.13 Cell Based Cancer Testing 45

4.14 Monitoring Technologies 47

4.15 Anatomic Pathology 48

5. Important Technology Trends 49

5.1 Technology Platform Innovations in Point-of-Care Testing 49

5.2 The New Paradigm 49

5.3 Consolidated Workstations 49

5.4 Automation in the Laboratory 51

5.5 Laboratory Information Systems 52

5.6 New User-friendly Interface 52

5.7 Data-Management Issues 53

5.7.1 Wireless LANs 53

5.7.2 Data and Workflow Management Systems 54

5.7.3 Beckman Central Command 54

5.7.4 Clinical IT More Widely Available in Physician Practices 55

5.7.5 Physician Electronic Health Records (EHRs) 56

5.7.6 Specimen Tracking and Processing 56

6. Business Trends in the Clinical Laboratory Analyzer Sector 57

6.1 Key Developments 57

6.2 Sector Consolidation 57

6.3 Acquisition Pricing 58

6.4 A Closer Look at Recent Lab Deals 59

6.5 Acquisition, License Agreements, Internal Development and Partnerships 60

6.6 Merger, Acquisition, Financing and Partnering Activities in the Clinical Lab Industry 61

6.7 Comparison of Quest and LabCorp 65

6.7.1 Acquisitions 65

6.7.2 Quest’s Growth, 2000-2006 65

6.7.3 Laboratory Corporation of America 66

6.7.4 LabCorp’s Growth, 2000-2006 66

6.7.5 Competitive Advantages at Quest and LabCorp 67

6.7.6 National Managed Care Contracts 67

6.7.7 Billing and Collection Management 68

6.7.8 Lower Reagent and Supply Costs 68

6.7.9 Esoteric Testing Capabilities 68

6.7.10 Ability to Invest in Web-Based Connectivity Solutions 68

6.7.11 Competitive Disadvantages of Quest and LabCorp 68

6.7.12 Difficulties with Turnaround Times and Stat Services 69

6.7.13 Physician-Laboratory Communication 69

6.7.14 Specimen Pickup Scheduling Inflexibility 69

6.8 Regulation of Clinical Laboratory Operations 70

6.8.1 CLIA and State Regulations 70

6.8.2 Drug Testing 70

6.8.3 Controlled Substances 71

6.8.4 Medical Waste, Hazardous Waste and Radioactive Materials 71

6.8.5 FDA 71

6.8.6 Occupational Safety 71

6.8.7 Specimen Transportation 71

6.8.8 Corporate Practice of Medicine 71

6.9 Hospital Outreach Programs 72

6.10 Supply Chain and GPO Contracting 72

6.11 Specialty Labs 72

6.12 Expansion of Hospital-Based Labs and Hospital Outreach Programs 73

6.13 Managed Care 73

7. Company Profiles 74

7.1 ACM Medical Laboratory 74

7.2 American Esoteric Laboratories (Sonic Healthcare) 74

7.3 American Pathology Partners 74

7.4 AmeriPath (Quest) 75

7.5 ARUP Laboratories 75

7.6 Athena Diagnostics 76

7.7 Aurora Diagnostics 76

7.8 Bio-Reference Laboratories, Inc. 76

7.9 BioTech Labs 77

7.10 CBLPath 77

7.11 Centrex Clinical Laboratories 77

7.12 Clarient, Inc. 77

7.13 Clinical Laboratories of Hawaii (Sonic Healthcare) 78

7.14 Clinical Reference Laboratory 78

7.15 Clongen Laboratories 78

7.16 CompuNet Clinical Laboratories 78

7.17 Diagnostic Systems Laboratories 79

7.18 Enzo Biochem, Inc. 79

7.19 Esoterix 79

7.20 Focus Diagnostics 80

7.21 Fresenius Medical Care AG & Co. KGaA 80

7.22 Geneva Laboratories 81

7.23 Genomic Health, Inc. 81

7.24 Genzyme 82

7.25 IBT Laboratories 83

7.26 Integrated Regional Laboratories (IRL) 84

7.27 LabCorp 84

7.28 MDS Diagnostic Services 85

7.29 MEDTOX Scientific, Inc. 86

7.30 Meriter Health Services 86

7.31 Mid America Clinical Laboratories (MACL) 86

7.32 Monogram Biosciences, Inc. 86

7.33 Myriad Genetics, Inc. 87

7.34 National Jewish Medical and Research Center 87

7.35 Parkway Clinical Laboratories 88

7.36 Pathology Associates Medical Laboratories (PAML) 88

7.37 Psychemedics Corporation 88

7.38 Quest Diagnostics Incorporated 88

7.39 RDL Reference Laboratory 89

7.40 Satellite Laboratory Services 89

7.41 Spectrum Laboratory Network 89

7.42 Sonic Healthcare 90

8. Clinical Laboratory Testing Sector Trends and Forecasts 91

8.1 Home Care Analysis 91

8.2 Non-Traditional Collection for Laboratory Testing 91

8.3 New Systems for Critical-Care and Near-Patient Testing 91

8.4 Shift to Preventative Medicine 91

8.5 Mergers of Diagnostic Companies 91

8.6 Information Management Advances 91

8.7 Test Ordering Patterns 91

8.8 Patient Satisfaction 91

8.9 Move Away from Central Laboratory 92

8.10 Healthcare Cost Controls 92

8.11 Competition for Services 92

8.12 Drivers and Barriers of Clinical Laboratory Testing 92

8.13 Confluence of New Technology 93

8.14 New Trends in Clinical Laboratory Testing 93

8.14.1 Trends in Reimbursement Practices 93

8.14.2 Managed Care 95

8.14.3 Point of Care Testing 96

8.14.4 Satellite Facilities 96