1. Get more info on this report!
The Clinical Laboratory Services Market (Growth Opportunities,
Competitive Analysis and Competitor Profiles)
February 1, 2010
Clinical laboratories are an essential part of the health industry. It is estimated that
approximately 80% of physician's diagnoses are a result of laboratory tests. The
constant pressure to reduce healthcare spending is shifting healthcare utilization in
favor of the laboratory, making it an ever more valuable part of the treatment plan. As
hospital stays are shortened, contact between the physician and patient is reduced,
which places a larger role on labs to gather, interpret, and deliver accurate information
to the physician in a timely manner. We can expect to see an increase in the number of
clinical labs, particularly in the independent sector, as these trends continue to influence
the industry.
Since the last time Kalorama Information studied this market two years ago, there have
been substantial changes in the industry, including changes in market share as major
companies eat into regional labs, new competitors enter the marketplace, and new
specialty tests are developed and priced. Clinical Laboratory Services (Markets, Growth
Opportunities, Competitive Analysis and Competitor Profiles), provides an in-depth
market overview, a total market analysis, analysis by laboratory type, and by routine
and specialty testing and a review of the latest trends driving growth. Revenues and
forecasts presented are for the U.S. market. Key international markets are discussed as
well.
Key market data provided includes:
Hospital, Physician and Independent Lab Statistics
Major Tests Performed by Clinical Lab Companies
Disease Incidence and Trends Driving Lab Business
Market Forecast to 2014
Market Breakdown by Lab Type (Hospital, Physician, Independent)
Market Breakdown by Test Type (Specialty, Routine)
Market Share of Competitors
Competitive Analysis of Leading clinical Lab Providers

2. The issues and trends which are fueling growth:
A trend towards preventive and risk factor testing has been noted in several disciplines,
particularly in the areas of oncology, endocrinology, and gynecology. Physicians in
these areas are taking full advantage of testing for early detection and disease
prevention. Some of the other issues and trends explored in this study include:
U.S. Demographics
Types of Specialty Tests
Growing Competition
Increasing Life Expectancy
Growing Incidence of Disease
New Product Offerings
Regulatory Environment
Insurance and Reimbursement
Payer Types
Developments in Personalized Medicine
A competitive analysis of leading clinical laboratory providers includes:
Quest Diagnostics, Inc.
Laboratory Corporation of America (LabCorp)
Genomic Health
Genoptix, Inc.
Genzyme Corporation
DaVita
Clarient, Inc.
Spectra Laboratories
Bio-Reference Laboratories
Our methodology:
The information in this report is the result of interviews with executives and market
experts, as well as thorough research of secondary sources such as company literature,
trade publications and medical and business journals. The emphasis Kalorama puts on
primary research guarantees that new insights will be uncovered that are not available
from any other source. The most important part of Kalorama's efforts is its superior
analysis of company activities and their true significance in the marketplace.
All market data pertains to the world market at the manufacturers‟ level. The base year
for data was 2009. Historical data was provided for the years 2006, 2007 and 2008, with
forecast data provided for 2010 through 2014. Compound annual growth rates (CAGRs)
are provided for the 2006-2009 and 2009-2014 periods for each segment covered. A
competitive analysis is provided for the year 2009. The forecasted market analysis for
2010-2014 was largely based on demographic trends, new developments, company
performance trends, mergers and acquisitions, and national expansion.

3. Additional Information
Interview Re: Clinical Lab Services with Kalorama Information Publisher Bruce
Carlson
Can you elaborate on what is behind the growth in the specialty testing market?
Better, more useful technologies that give results clinicians want - FISH,
immunohistochemistry and molecular tests among them. They represent tests where
specialty knowledge and equipment is needed that generally the hospital doesn‟t have,
Advanced services such as immunohistochemistry, flow cytometry, and molecular
genetics technologies, and thus these tests can command a higher price There is also a
large volume of these tests, and so we expect growth the continue. While fees for some
tests have been reduced, Centers for Medicare and Medicaid show that FISH manual
testing increased.
Reimbursement of tests. A test is only going to be a successful product if it is
reimbursed and increasingly insurance companies are showing a willingness to
reimburse. Pharmacodiagnostic tests that can help to limit the use of treatements that
don‟t work on a given paitent, will be favored by governments and insurance
companes..
Of course sadly more incidence of cancer and other diseases for which speciality tests
are needed is a growth factor. But also because these tests require knowledge and
technology not commonly found in the hospital setting, there is a premium charge for
these tests.
What are key trends that you expect to see more of in the near future?
IVD companies performing tests and marketing new tests as a service rather than
merely selling kits. A trend we‟ve seen develop over the last decade and,. Given the
growth rates of companies who pursue this type of strategy, we expect others will
follow. This would also lead us to believe that there will be more acquisitions of
companies who have this competency.
What impact do you expect the health care reform law to have on clinical labs?
Generally good impact. The legislation introduced taxes and fees to other industries but
left diagnostics - both kit sellers and service sellers alone for the most part, so „no harm
done‟ is good news there. Testing benefits from health care reform. In general terms,
more patients with insurance will mean more doctor visits; less visits skipped for lack of
financing. Doctor visits will lead testing. Near term may see the best result - As a
significant group of people who were uninsured become insured between Medicaid and

4. healthcare exchanges as part of the bill. As they come „on line‟ with insurance, those
first years of doctor visits are going to have to be test - rich, as doctors likely will be
seeing patients who have not had a physicial for some time. This should help LabCorp
and Quest. But this is not without challenges. For a test to be ordered, there has to be a
doctor‟s visit, and if there is a doctor shortage or long waiting line, the promised test
volumes may not arrive. We will also see over the next few years, the governments
tolerance for reimbursing all these tests.
What is impacted are high cost tests. With the government as a key payor and with a lot
of attention on cost cutting, there will be pressure to negotiate lower reimbursement on
tests. So far though, FDA has shown a willingness to reimburse a test where it works;
the Oncotype DX is an example. Even the high-cost tests can get dollars if they can
show they limit more expensive treatment in cases where treatment will not be effective.
What emerging technologies do you expect will impact the clinical lab business
in the near term?
Getting results to patients in a high-tech way is an interesting trend. In an evolving effort
to more efficiently connect with patients and physicians, several clinical laboratories
have developed electronic test result distribution. This is not a novel concept but it has
been an area of focus for companies in the past several years, especially as new
electronic technologies and the internet have become used extensively. Companies in
the industry have seen that efficiently communicating results with clients is an essential
part of the job, and may be just as important as providing leading test menus in cutting-
edge areas of lab testing.
For example, patients registered with a Google Health account, may view lab results
online if they were ordered through Quest Diagnostics. The two companies paired up in
2008, after Google started the personal healthcare management system. The argument
for this system is increased efficiency. In some cases it may also help people manage,
or be more proactive with their health.
Were any findings in your report surprising?
A very scattered market. The top eight or so companies make 10BN, the others make
about 37BN. Most healthcare markets are 80-20 or roughly so, with the top few
companies owning 80%. This reperesents the regional nature of a market that services
hospitals and physicians.
Quest‟s considerable growth between 07 and 09 - 9.8%. Genomic Health‟s fast rise and
successful business model leading to 82% growth 2007-9. It is not so much a surprise
to us as we‟ve been watching the service trend but for your readers it may be, and
certainly the large IVD companies are noticing. While these small companies are no
where near Quest or Lab Corps revenue, they can affect the growth rate of those
companies by competing in the high-growth sector of speciality testing.

5. We noticed slightly higher growth overall in the market in 2009 then had anticipated in
2007 when we did the last report on this subject, market 54BN vs our 2007 of 50BN.
TESTING INCREASINGLY IMPORTANT, REPORT FINDS
New York, February 4, 2010 — About eighty percent of physicians‟ diagnoses result
from a lab test. This bodes well for clinical lab service providers, especially the two
major players Quest and LabCorp who provide lab services to hospitals, according to
healthcare market research publisher Kalorama Information, which recently published
Clinical Laboratory Services Market (Growth Opportunities, Competitive Analysis
and Competitor Profiles).
In today‟s cost cutting reality, there is a shift taking place in healthcare that includes
shortened hospital stays. The average length of hospital stays in the U.S. is 4.7 days
today, down from about 5.4 days in 1995 and 4.9 days in 2000. As a result, clinical labs
have been pressured to improve the turnaround of test results so they can pick up the
slack and help doctors to continue providing proper healthcare. This means they have
also become a more valuable part of the treatment plan and are improving a physician‟s
ability to treat patients like never before.
“As hospital stays are shortened, contact between the physician and patient is reduced,
which places a larger role on labs to gather, interpret, and deliver accurate information
to the physician in a timely manner,” notes Melissa Elder, an analyst with Kalorama
Information. “We expect to see an increase in the number of clinical labs, particularly in
the independent sector, as these trends continue to influence the industry.”
In the report, Kalorama estimates the clinical lab services market in the U.S. was about
$52.7 billion in 2009 and will grow at an annual rate of 4.1% to reach $61.9 billion by
2014. New technologies in testing will likely continue to fuel growth in combination with
an aging population, increasing disease incidence and prevalence, a greater focus on
prevention and early detection, and new trends in personalized medicine. Some key
areas of growth include genomic and esoteric testing, anatomic pathology, and
specialized testing in oncology and infectious disease.
The clinical lab services market in the U.S. is highly competitive with a large number of
players. However, two big players, Quest Diagnostics and LabCorp, dominate the
industry with combined lab service revenues of nearly $12 billion in 2009. No other
players approach these two, but smaller companies have achieved noticeable growth in
the past two years, especially in the area of specialty testing where they have cut into
the pricing and volume of the major companies. Overall, the specialty segments enjoyed
higher growth in test volume than the routine segments in 2009.
Kalorama Information‟s Clinical Laboratory Services Market (Growth Opportunities,
Competitive Analysis and Competitor Profiles) provides an in-depth market
overview, a total market analysis, analysis by laboratory type, and by routine and

6. specialty testing and a review of the latest trends driving growth. Forecasts through
2014 and profiles of major players in the industry are also included.
About Kalorama Information
Kalorama Information supplies the latest in independent market research in the life
sciences, as well as a full range of custom research services.
Table of Contents
CHAPTER ONE: EXECUTIVE SUMMARY
Industry at a Glance
Scope and Methodology
Size and Growth of the Market
Key Issues and Trends Affecting the Market
Leading Market Participants
CHAPTER TWO: INDUSTRY OVERVIEW, REGULATION AND TRENDS
Clinical Laboratory Description
Testing and Services
Routine Testing
o Blood Cell Count
o Cholesterol Level Testing
o HIV Testing
o Anti-HIV-1 Oral Specimen Collection Device
o Anti-HIV-1 Testing Service
o Nucleic Acid Testing
o Human Immunodeficiency Virus Type 1 (Anti-HIV-1 Assay)
o Human Immunodeficiency Virus Types 1 & 2 (Anti-HIV-1/2 Assay)
o Pap Testing
o Pregnancy Testing
o Substance Abuse Testing
o Urinalysis
Specialty Testing
o Endocrinology
o Esoteric Testing
o Genetics
o Immunology and Molecular Microbiology
o Oncology
o Serology
o Toxicology
Industry Structure
o Hospital-based Laboratories

7. o Physician-office Laboratories
o Independent Clinical Laboratories
Incidence of Diseases
Demographics
o Population Over Age 65
o Life Expectancy
Regulatory Overview
o Certificate of Waiver
o Certificate of Provider-Performed Microscopy Procedures (PPMP)
o Certificate of Compliance and Certificate of Accreditation
o States Exempt from Federal Clinical Laboratory Improvements
Amendments (CLIA) of 1988
Insurance and Reimbursement
o Laboratory Service Payer Types
o Trends in Medicare Reimbursement
o Commercial Insurance Providers
New Developments in Information Technology
International Markets and Trends
CHAPTER THREE: LEADING MARKET PARTICIPANTS
Summary
Quest Diagnostics, Inc.
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Business Locations
Laboratory Corporation of America
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Genzyme Corporation
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
DaVita, Inc.
o Company Overview
o Performance Review

8. o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Clarient, Inc.
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Spectra Laboratories
o Company Overview
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Bio-Reference Laboratories
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Genomic Health, Inc.
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
Genoptix, Inc.
o Company Overview
o Performance Review
o Key Acquisitions, Alliances, and Partnerships
o Products and Services
o Growth Strategy
o Locations
CHAPTER FOUR: MARKET ANALYSIS
Market Overview
Market Analysis by Laboratory Type
Market Analysis by Test Type
Competitive Analysis

9. APPENDIX: COMPANY DIRECTORY
LIST OF EXHIBITS
CHAPTER ONE: EXECUTIVE SUMMARY
Figure 1-1: U.S. Clinical Laboratory Market Analysis: 2006-2013
CHAPTER TWO: INDUSTRY OVERVIEW
Table 2-1: Laboratory Reference Parameters for CBC
Table 2-2: High Cholesterol Risk Categories
Table 2-3: HIV Testing Products/Services Approved by the FDA
Table 2-4: HCG Levels in Pregnant Women by Days Past Ovulation
Table 2-5: Substance Detection Periods by Test Method
Table 2-6: Normal Reference Levels in a Medical Urinalysis
Figure 2-1: Growth in Clinical Laboratories, 1997-2008
Table 2-7: U.S. Registered Hospitals by Type, 2006 compared to 2008
Table 2-8: Leading For-Profit U.S. Hospital Chains, 2006, 2007, 2008
Figure 2-2: Trend in For-Profit U.S. Hospital Facilities, 2006-2008
Figure 2-3: Trend in For-Profit U.S. Hospital Licensed Beds, 2006-2008
Figure 2-4: Trend in For-Profit U.S. Hospital Inpatient Admissions, 2006-2008
Table 2-9: Physicians in the US by Specialty, 1970-2008
Table 2-10: Leading U.S. Independent Laboratory Groups, 2008
Table 2-11: U.S. Prevalence of Selected Medical Conditions
Figure 2-5: U.S. Prevalence of Selected Medical Conditions
Table 2-12: The U.S. Population, 1980-2020
Figure 2-6: The US Population, 1980-2020
Table 2-13: Percent U.S. Population Over Age 65 by Year
Figure 2-7: Estimated Population by Age Group, 2000 and 2050
Table 2-14: Average U.S. Life Expectancy in Years 1980, 2004, 2006 and 2008
Figure 2-8: Average U.S. Life Expectancy in Years 1980 and 2008
Table 2-15: Selected CLIA Waived Laboratory Tests
Table 2-16: Provider-Performed Microscopy Procedures
Figure 2-9: Clinical Laboratory Certificate of Accreditation Issued by Organization
(non-exempt laboratories only), December 2008
Table 2-17: Clinical Laboratory Certificates Issued by Type (non-exempt
laboratories only), December 2008
Figure 2-10: Clinical Laboratory Certificates Issued by Selected State (non-
exempt laboratories only), December 2008
Figure 2-11: Clinical Laboratory Certificates Issued by Type (non-exempt
laboratories only), December 2008
Table 2-18: CLIA Exempt States, Number of Laboratories, 2008
Table 2-19: Health Insurance Trends in the United States, Estimated 2007*
Table 2-20: Clinical Laboratory Clients and Payers by Type
Figure 2-12: Clinical Laboratory Clients and Payers by Type
Table 2-21: Laboratory Fee Schedule for Common CPT Codes in Specialty
Testing, 2007-2009

10. Table 2-21: Leading Commercial Insurance Providers, 2008
Table 2-22: Quest and LabCorp Service Contracts for Leading Insurance
Providers
CHAPTER THREE: LEADING MARKET PARTICIPANTS
Table 3-1: Corporate Details of Quest Diagnostics
Figure 3-1: Quest Diagnostics‟ Clinical Testing Sales to Third Parties, 2006-2008
and Estimated 2009 ($millions)
Table 3-2: Corporate Details of Laboratory Corporation of America
Figure 3-2: Laboratory Corporation of America‟s Sales to Third Parties, 2006-
2008 and Estimated 2009 ($millions)
Table 3-3: Corporate Details of Genzyme Corporation
Figure 3-3: Genzyme Corporation Testing Service Sales to Third Parties, 2006-
2008 and Estimated 2009 ($millions)
Table 3-4: Corporate Details of DaVita
Figure 3-4: DaVita‟s Laboratory Service Revenues, 2006-2008 and Estimated
2009 ($millions)
Table 3-5: Corporate Details of Clarient
Figure 3-5: Clarient‟s Sales to Third Parties, 2006-2008 and Estimated 2009
($millions)
Table 3-6: Corporate Details of Fresenius Medical Care AG
Table 3-7: Corporate Details of Bio-Reference Laboratories
Figure 3-6: Bio-Reference‟s Sales to Third Parties, 2006-2009 ($millions)
Table 3-8: Corporate Details of Genomic Health, Inc.
Figure 3-7: Genomic Health‟s Sales to Third Parties, 2006-2008 and estimated
2009 ($millions)
Table 3-9: Corporate Details of Genoptix, Inc.
Figure 3-8: Genoptix Sales to Third Parties, 2006-2008 and Estimated 2009
($millions)
CHAPTER FOUR: ANALYSIS
Table 4-1: U.S. Clinical Laboratory Market Analysis, 2006-2013
Figure 4-1: U.S. Clinical Laboratory Market Analysis: 2006-2013
Table 4-2: U.S. Clinical Laboratory Market Analysis by Type, (Hospital-Based,
Physician, Other) 2006-2013
Figure 4-2: U.S. Clinical Laboratory Market Analysis by Type, (Hopsital-Based,
Phyisican, Other) 2006-2013
Figure 4-3: U.S. Clinical Laboratory Market Share by Type, (Hopsital-Based,
Phyisican, Other) 2009
Figure 4-4: U.S. Clinical Laboratory Market Share by Type, (Hopsital-Based,
Phyisican, Other) 2013
Table 4-3: U.S. Clinical Laboratory Market Analysis by General Test Type,
(Routine vs. Specialty) 2009

11. Figure 4-5: U.S. Clinical Laboratory Market Analysis by General Test Type,
(Routine vs. Specialty) 2009
Table 4-4: Estimated Laboratory Service Revenues and Market Share of Leading
Clinical Laboratory Providers 2007 and 2009
Figure 4-6: Estimated Laboratory Service Revenues and Market Share of
Leading Clinical Laboratory Providers 2009
Figure 4-7: Estimated Laboratory Service Revenues for Leading Clinical
Laboratory Providers 2007 and 2009
Figure 4-7: Rate of Growth: Lab Corp and Quest Diagnostics 2007 and 2009
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