Developing New Revenue Streams for Labs

Every type of laboratory ultimately has the same goal: introduce profitable new products and processes that generate new growth. In order to get ahead of the competition, lab managers must stay abreast of the latest technology, research, and industry trends to take advantage of potentially lucrative opportunities. Otherwise, they risk their competition edging ahead of them in an already highly competitive market.  

Lab services only account for roughly 3% of all money spent on healthcare, meaning competition for that 3% is steep. Yet it’s an incredibly important cornerstone of treatment and research, as 70% of all medical decisions are made with diagnostic results under consideration. Demand has grown in recent years; Medicare spending on lab services increased 17% in 2021, driven by COVID-19, genetic, and chemistry testing. However, since Medicare changed the way it pays laboratories, many in the US are hurting from high supply costs and declining volume. 

Laboratories are looking for new ways to get ahead and stay there. Generating fresh revenue through new volume is rarely as simple as it sounds, but laboratories are discovering a new avenue for growth: remote diagnostics. 

A Budding B2B Business

Most labs operate on a business-to-business basis; they provide their services to CROs, hospital systems, telehealth organizations, third-party payers, and more. In addition to the traditional diagnostics laboratories offer their customers, many are now beginning to offer their customers remote testing. By leveraging their own network or partnering with a Diagnostics-as-a-Service (DaaS) provider, laboratories are able to easily launch remote testing processes for clients that want the capability. 

Effective and reliable at-home testing methods are becoming increasingly common throughout healthcare. Innovative technology allows for rapid testing, wherever the patient is, which can help facilitate diagnosis, monitoring, and condition management. Remote diagnostics streamlines the entire process, decreases time to results, provides an engaging patient experience, and displays relevant data in a singular, secure digital ecosystem– all the things laboratory clients need. 

To increase volume and maximize value from current customers, many laboratories are looking for ways to add remote options to their diagnostic capabilities. Building out a laboratory or adding new biomarker capabilities can be a lengthy and expensive process, especially for mid-size to small labs. Thus, the rise of DaaS providers who provide plug-in diagnostic networks, pre-built technology and processes, and supply chain support. 

For labs looking to grow their B2B prospects, it’s important to stay ahead of the latest developments; at-home diagnostics is rapidly coming down the pipeline. In order to stay competitive, laboratories should consider evaluating interest in at-home versions of their current tests. 

Consider Direct-to-Consumer Testing

Genetic (and epigenetic) testing accounts for a large share of current at-home testing. As genetic sequencing becomes cheaper, companies like 23AndMe have built a multi-million dollar industry on analyzing raw genetic data for a variety of purposes: learning about your heritage, for example, or assessing risk for chronic health conditions and disease. 

Healthcare is shifting towards an even more personalized approach, and the onset of remote care has encouraged patient engagement by increasing access. Many patients worry about their health, but for a variety of reasons – lack of time, resources, transportation, or medical distrust – might be hesitant to go into a clinic or doctor’s office for traditional testing. Offering at-home test kits for the frequently analyzed biomarkers directly to patients can not only boost revenue, but give patients increased control over their own risk assessment and monitoring. 

Unilab, for example, is a specialty fertility lab in the southeastern United States; after partnering with a DaaS provider, they launched direct-to-consumer AMH testing. This allows patients to test their ovarian reserves and receive valuable insight into their future fertility. Couples undergoing IVF treatments often have to test AMH levels frequently; offering an at-home test kit directly to patients not only increases their profit margins, but offers unmatched convenience for their end users. 

For laboratories looking to expand, direct-to-consumer at-home testing is a rapidly growing avenue worth considering. 

New Opportunities for Growth

The medical and scientific communities will always rely on diagnostics for research and care. Labs play a critical role in this process, as the work they do is the backbone of all new developments and most treatment plans. In such a vital industry, organizations must be hyper aware of new innovations that can improve efficiency, processes, and drive new revenue. 

Remote diagnostics offers a unique opportunity for laboratories to enhance their current offerings or launch new, low-cost products in a B2B or DTC capacity. To learn more about how at-home testing can be leveraged for lab growth, check out Hurdle’s free webinar: Remote Testing: New Avenues of Revenue Growth for Diagnostic Labs