TODAY I WOULD LIKE TO SPEAK TO ONE OF THE ELEPHANTS IN THE LAB INDUSTRY'S ROOM. It is the ticking time bomb of lab utilization. Sometime in the next 36 to 60 months, this time bomb will go off. It will catch both health policy makers and payers unprepared and, the consequences will be corrosive to the laboratory testing profession.

Going forward, three trends will drive utilization of lab testing. One trend is the increased volume of lab tests ordered by physicians who are responding to pressures and financial incentives to provide all the recommended care to 100% of their patients. For example, think of 100%of diabetic patients getting HgA1c tests annually at the same time that doctors diligently work to diagnose more of the tens of millions of undiagnosed diabetics in this country. The increased utilization of lab tests is a result that is desired by the health system.

Second is the natural uptake of lab testing that occurs as baby boomers leave their fifth decade of life and push into their sixth decade. Both payers and laboratories that bid private Medicare contracts know that, on average, an individual 65 years and older, uses more than four times the number of lab tests per year than a commercial life. Again, this increased utilization is a natural consequence of the aging process and the system should ethically be prepared to provide those services, as appropriate.

Third is the ongoing addition of new diagnostic tests to the existing lab test catalogue. As physicians have new diagnostic assays that support more precise and earlier diagnosis for an expanding number of diseases, they will naturally and appropriately order a higher volume of tests. As with the two other trends, this trend underpins higher diagnostic and treatment accuracy-which benefits the healthcare system by reducing the overall cost per episode of care.

However, in THE DARK REPORT'S travels across the United States and a number of other developed countries in Europe and the Pacific Rim, it has been unable to identify any government health system or healthcare policy maker which recognizes and discusses these approaching developments. This lack of perceptive analysis about the essential value of clinical laboratory testing, in the context of the three trends described above, represents a "black hole" for the lab medicine profession. It means that health policy makers are not likely to establish budgets and reimbursement for lab testing based on the most relevant factors. As that happens, further underfunding for lab testing will occur.

2009's Top Ten Lab Stories Reflect Some Good, Bad

Year unfolds with a mixed bag of developments even as economic recession dampens activity

CEO SUMMARY: As the closing year of the first decade of the new century and the new millennium, 2009 brought neither disruption nor upheaval to the majority of laboratories in the United States. Rather, it was marked by at least two themes. One was how public disclosure of problems with lab testing services generated media headlines. The other was economic, and ranged from the effects of the recession to how specific healthcare reform proposals might negatively affect the financial status of laboratories.

Quest Diagnostics' Vitamin D Test Alert/Retest Effort Makes Headlines

Quest Diagnostics Pays $302 Million To Resolve Federal Qui Tam Lawsuit

Hospitals Prune Budgets, Causing Laboratories to Rein in Spending

Labs Dodge $750 Million Annual Tax Proposed in Baucus Reform Bill

Labs Experience Quiet Fall Flu Season Despite More Cases of Novel A/H1N1

Testing Failures in Canadian Labs Are Warning to Govt. Health Programs

Cost of Whole Genome Sequencing Falls as Low as $20,000 per Person

Auckland Lab Contract Decision Disrupts Physicians and Patients

Companion Diagnostics Activity Gains Momentum During 2009

Catholic Health Initiatives Invests In Pathology Associates Med Labs

DNV Offers Accreditation For Both CMS and ISO

DNV offers hospital accreditation that combines CMS CoP with ISO 9001 compliance

CEO SUMMARY: For about a year, hospitals and health systems have had a new choice formeeting the Medicare Conditions of Participation. This new choice is Det Norske Veritas (DNV). Because DNV offers a dual process for achieving Medicare accreditation and ISO 9001 certification, it brings client hospitals a different bundle of benefits. As hospitals adopt ISO 9001, it will require the clinical laboratory to align management and operations to the standards of this quality management system (QMS).

Lab Briefs: DNA NANOCHIP IS GOAL OF IBM SCIENTISTS, QIAGEN NV POISED TO BECOME NEXT IVD FIRM TO TOP $1 BILLION DOLLARS, HEALTH INFORMATION ON THE INTERNET CHANGES PATIENT-DOCTOR TALKS

The Dark Index: Laboratory Merger & Acquisitions Saw Several Deals during 2009

Sonic and LabCorp remain opportunistic buyers, some pathology groups tap private equity capital

Catholic Health Initiatives Ramps Up Lab Outreach

78-hospital health system says lab outreach is right vehicle to support integrated patient care

CEO SUMMARY: Catholic Health Initiatives (CHI) wants to expand its presence in outpatient and outreach services. It sees hospital laboratory outreach programs as a key component of this strategy. It will use an equity investment in Pathology Associates Medical Laboratories (PAML) as the foundation of a series of laboratory outreach joint ventures between its 78 hospitals and PAML. Along with generating a new source of revenue, CHI expects these lab JVs will help it establish tightly-integrated electronic links with office-based physicians.

INTELLIGENCE: Late & Latent

TRANSITIONS Aperio Technologies, Inc., of Vista, California,

MORE ON: Fraud The criminal complaint states that Adeyemi stole the identities of more than 150 of his coworkers.

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