The year 2014 may be one of the most momentous in health care delivery since the creation of the Medicare and Medicaid programs nearly a half-century ago. And G2 Intelligence, which publishes Laboratory Industry Report
, has just released a forecast of what the lab sector is facing in the turbulent year ahead and in 2015. G2’s new report, “U.S. Clinical Laboratory and Pathology Testing 2013-2015: Market Analysis, Trends, and Forecasts,” is now available in both print and electronic formats. Authored by L. Eleanor J. Herriman, M.D., G2’s managing director of advisory services; Jennifer Musumeci, associate director of advisory services; and Jenny Xu, Ph.D., director of research, the 200-page report provides a comprehensive outlook of the current state of the laboratory sector, outlines the challenges ahead, and provides a pathway for the sector’s players to move forward. The report identifies seven specific trends G2 believes is affecting the laboratory sector. They include reimbursement, the physician-as-employee model, molecular medicine, consumer health care, and others. Overarching all of these trends is the rolling out of the primary components of the Patient Protection and Affordable Care Act (ACA) in 2014 and the years beyond. Although health care reform will create an influx of millions of new commercial and Medicaid health plan enrollees in the coming months and years, how that will impact the lab sector remains to be seen. G2 concluded that lab revenue experienced a decline in 2013 of about 2.8 percent after two prior years of relatively vigorous growth. The organization expects lab revenue to be challenged by a confluence of market forces over the next couple of years. For example, molecular testing—which has been powering much of the sector’s growth in recent years—grew a scant 4 percent in 2013, impacted by the gap-fill payment system used by the Centers for Medicare and Medicaid Services to price new molecular CPT codes that replaced prior code-stacking methodology and reduced overall reimbursement by about 15 percent. G2 discusses its forecast for this market in 2014 and 2015 in the new report. Reimbursement cuts also hit the anatomic pathology market hard as well—particularly the 52 percent reduction in the technical component of CPT code 88305, the most widely billed procedure in the entire segment. The report discusses the horizon ahead for the segment, with both a forecast for 2014 and 2015 and a discussion of how it will likely adapt and change. Hospital laboratories, which are still one of the biggest forces in the sector, are also under pressure from the ACA. They face the need to update their health care IT structure while battling declining outreach revenues due to their parent institutions retaining more doctors as employees. The report delves at great length into what hospitals are doing to reshape this particular revenue stream. The report also examines challenges facing independent laboratories. Many have reported drops in revenues and margins, prompting staff layoffs and other cutbacks. It examines how the changes in the overall marketplace are creating both new opportunities and challenges. The report includes sizing for the various laboratory markets, as well as revenue for each segment, new payment and care delivery models, and a discussion of what various laboratories are doing to respond to the new and ongoing pressures. “U.S. Clinical Laboratory and Pathology Testing 2013-2015: Market Analysis, Trends, and Forecasts,” may be purchased for $1,495 at www.G2Intelligence.com/ClinPathTesting
or by calling 800-531-1026. Takeaway: G2 Intelligence offers the most comprehensive report available on the current laboratory sector and how it will evolve in the future.