Lab Market update

LabCorp Prepares to Expand Direct-to-Consumer Test Program

RECENT DEVELOPMENTS MAKE IT SEEM as if lab test orders signed by physicians might soon go out of style. Last month in Arizona, Theranos played a role in changing a state law that now lets consumers order their own clinical laboratory tests without a physician’s order. Then, before the end of last month, Laboratory Corporation of America said it would expand its direct-to-consumer testing program nationwide.

On April 24, Bloomberg News disclosed the new LabCorp DTC program, writing that LabCorp will let consumers order cholesterol, thyroid, and other tests online, bypassing their doctors. The nation’s largest laboratory company did not identify which tests it will offer or how much it will charge, Bloomberg said.

Consumers can pay for tests online and then visit a LabCorp service center to get their blood drawn, the news organization said. When their test results are available, they can view those results online, Bloomberg’s Cynthia Koons reported.

Serving Internet Lab Firms

“The company has already been doing backoffice lab work for a number of Internet firms that let people order up tests without a doctor,” she added. In addition, Koons wrote that all clinical laboratories are facing competition from companies that make and market at-home diagnostics tests, as well as from labs that cater to patients who pay cash so that neither insurers nor their health plans know about the test results.

Companies such as WellnessFX Inc. and Direct Laboratory Services LLC offer these DTC services, Koons reported.

Consumers using these labs prefer to monitor their own health outside of the traditional doctor’s office.

“We need to retake that territory for ourselves,” stated LabCorp CEO David King in the Bloomberg story. “It’s a growth opportunity for us. It’s something consumers increasingly want to have access to, and it’s something we’re doing already and our capabilities are being utilized without us getting the benefit from a branding perspective.”

Cutting out the Middleman

Why this timing for LabCorp to announce its expansion of its DTC testing program? Some observers think that LabCorp is acting now to strengthen its direct-to-consumer testing services in anticipation of Theranos entering more regional markets.

THE DARK REPORT has another theory. For the past 15 years, LabCorp has been one of the major “wholesalers” of clinical lab tests to many internet-based lab companies. Typically these companies pay LabCorp a price significantly below the Medicare rate for the test and use of the patient service center. The lab then charges the consumer a price that is typically the amount of the Medicare Part B test price.

Because of this wholesale relationship, LabCorp is able to see the rates of growth in specimen volume for these Internet-based lab firms. Should it be true that LabCorp is seeing these lab companies enjoy substantial rates of growth, then that may be the reason why LabCorp wants to expand its DTC testing program to get a larger share of the market for consumer self-testing.

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