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It’s No Surprise Why More Consumers Use the Internet to Order Lower-Priced Clinical Laboratory Tests

Web-based medical laboratory testing companies give consumers the option to purchase lab tests at cheap prices

It’s nearly impossible to do a web search for any term that includes “medical laboratory tests” and not have the search engine return paid listings for numerous clinical laboratory testing companies organized specifically to allow consumers to order their own lab tests over the Internet. This is a sign that the direct-to-consumer medical laboratory testing marketplace is booming.

These companies seem to be multiplying like rabbits. It is common to see such names as AccessaLabs.com, AnyLabTestNow.com, HealthOneLabs.com, PrePaidLabTests.com, and PrivateMDLabs.com pop up in the search engine. For a consumer looking to order their own clinical laboratory tests, these are enticing names.

One clue as to why these laboratories are springing up can be found in their message to consumers. “Save Up To 60% on Direct Lab Testing!” says one site. “Accurate and affordable medical tests online!” declares another.

Those headlines promise that the consumer can save money—plenty of money—if they will bypass traditional brick-and-mortar clinical laboratories. By using the Internet to order medical laboratory tests, consumers can save remarkable amounts of money.

With growing frequency, consumers are going to the Internet to order low-priced clinical laboratory tests from on-line medical laboratory testing companies. Their goal is to save money, because they are either uninsured, under-insured, or have health insurance with very high yearly deductibles. (Photo copyright Coulee Medical Center.)

With growing frequency, consumers are going to the Internet to order low-priced clinical laboratory tests from on-line medical laboratory testing companies. Their goal is to save money, because they are either uninsured, under-insured, or have health insurance with very high yearly deductibles. (Photo copyright Coulee Medical Center.)

Even CNN has noticed this “order your lab tests over the Internet” phenomenon. When CNN did a news report on this trend last December, one online test provider got an immediate boost in sales from consumers nationwide. That caught the attention of The Dark Report and it interviewed Tom Patton, CEO of PrePaid Lab, LLC, a company that offers consumers the ability to order lab tests online (at www.PrePaidLab.com).

It was PrePaidLab.com, of Avon Lake, Ohio, that was the subject of the CNN report in December. After the report aired, PrePaidLab went from processing payments for about 100 lab test specimens each month to 600 specimens a month.

During The Dark Report’s interview with Tom Patton, he explained why there is a market opportunity in serving consumers who want to order lower-priced clinical laboratory tests using the Internet. He described three categories of people who have a motivation to order lab tests from an Internet-based company:

  • First, growing numbers of people have health insurance coverage that mandates high deductibles. It is becoming more common for the annual deductable to be $1,500 or more. For consumers with a health savings account (HSA), the individual yearly deductible can be $2,600 and the family deductible can be $5,600.
  • Second, more people are under-insured. Their current health coverage may offer limited benefits. That motivates them to find medical services and laboratory testing at the lowest possible price.
  • Third, the number of uninsured in the United States has increased significantly since the advent of the recession in late 2008. With unemployment continuing at relatively high levels, these people must pay cash for their healthcare.

Patton explained that online marketers are organized to serve these three sizeable categories of consumers. They target consumers who seek to keep the cost of clinical laboratory tests as low as possible. Patients who fit into one of the three categories listed above are typically acutely conscious of the cost of medical lab tests.

Reporting on the trend of online companies marketing lab tests to consumers, The Wall Street Journal cited the case of a woman in New Hampshire who has a high-deductible health insurance plan and needs to watch her cholesterol levels. In an article last year, the WSJ said the woman did not want to incur the fees for the regular office visits to her physician. To get the lab tests she needs to monitor her health condition, she goes online to order her own clinical lab tests. The online lab testing service she uses charges about $40 for her cholesterol panel, she told the WSJ reporter.

Testing companies that offer services online typically charge $30 to $50 for a full lipid panel, including cholesterol and triglycerides, and $25 to $40 for a blood glucose test, the journal reported.

In his interview with CNN, Patton said that the prices charged by online clinical laboratory testing companies are “spectacularly low.” “These people who would ordinarily not be able to afford lab work are paying almost identical the amount the government pays for Medicare,” he told CNN. Patton explained that many of the Internet-based lab testing companies set their prices at levels close to the Medicare laboratory fee schedule.

For pathologists and lab directors who want to learn more about this growing competitor to traditional lab testing practices, Dark Daily offers a free white paper report, How Internet-Based Lab Tests Access Helps Clinical Laboratories Serve Un-Insured and Under-Insured Patients. The report is available here http://www.darkdaily.com/white-papers/how-internet-based-lab-tests-access-helps-clinical-laboratories-serve-un-insured-and-under-insured-patients-71411.

This report explains how online clinical laboratory testing services work. It describes the benefits these companies provide to the uninsured, the underinsured, and those with high-deductible health insurance. In addition, the report outlines the value of transparency in healthcare pricing and how price transparency benefits these patients and anyone paying cash for healthcare services.

It is a reality in today’s healthcare market that there is a sizeable group of consumers who cannot afford to pay the patient list prices for medical laboratory tests typically charged by the national laboratory companies. That is why the business goal of these Internet-based lab testing companies is to offer medical lab tests at prices that are very low when compared to the patient list prices charged by local hospital labs in their community.

These cash-paying consumers represent an emerging market for the traditional brick-and-mortar clinical laboratories. However, established laboratories are not likely to successfully tap this new source of revenue until: 1) they make it easier for patients to be quoted specific prices; 2) they offer much lower patient-pay prices than is common today; and, 3) they are capable of collecting cash up front from the patient at the time of service.

Related Information:

How Internet-Based Lab Tests Access Helps Clinical Laboratories Serve Un-Insured and Under-Insured Patients

Worried About Cholesterol? Order Your Own Tests

Doctors slash patients’ lab-test costs

Discount Lab Tests Could Be Shelved

Program Helps Uninsured Access Affordable Lab Tests: THE DARK REPORT, February 28, 2011

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