Adding Lab Testing Services to Your Private Practice with Options for Ancillary Income
- Nisha Mehta, MD
- 1 day ago
- 9 min read
Offering lab testing services at your private practice is a way to provide a value-add service to busy patients to help them get labs done without the additional hassle of scheduling a separate appointment at a lab testing facility and can be a way to add additional ancillary income to your private practice. Adding in-house services, however, may or may not be worth the additional operating expenses of offering these services. Alternative options are also available for private practice doctors who want to add additional lab testing options for their patients, including some without any upfront start-up costs. Below, we look into how different options for lab testing can add revenue while providing benefits to your patients.
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What are the options for adding lab testing services to a private practice?
What are the disadvantages of and considerations when adding lab testing services?
How does offering lab testing increase my practice’s revenue?
What are the logistics of adding lab testing services to a practice?
Commonly asked questions regarding third-party lab testing services
What are the options for adding lab testing services to a private practice?
There are different options for adding lab services to your private practice. These include:
Having an in-house laboratory
Offering point-of-care testing at your office
Partnering with an independent laboratory
Offering mobile lab services
Each has benefits and limitations. There is no general, perfect solution for every private practice. To find the best fit, it’s important to assess factors such as:
Your practice size
Your budget for overhead start-up costs
Staffing considerations for expanded services
Volume of demand for services by your patients
Below, we cover the benefits and considerations to factor in for adding different levels of lab testing services.
What are the benefits of adding lab testing services?
Adding lab testing services to your practice can offer several benefits, both for you and your patients.
Improves Patient Outcomes: Offering in-house or partnered lab testing streamlines the diagnostic process, leading to quicker results and better treatment plans, as well as making it more likely that patients will get their labs done.
Increases Practice Efficiency: Access to direct lab results reduces delays and enhances the productivity of both physicians and staff.
Provides Proactive Patient Care: Regular lab testing allows for early detection of potential health issues, enabling timely intervention and reducing the risk of complications.
Supports Preventative Healthcare: Offering wellness panels and preventative screenings encourages patients to take an active role in their health.
Increases Practice Revenue: Integrating lab testing can serve as a significant source of additional income for your practice. We expand on this below.
Provides an Advantage Over Your Competition: Offering in-house lab testing provides convenience to busy patients that they may not be able to get at other practices in your local area.
What are the disadvantages of and considerations when adding lab testing services?
Different options for lab testing service carry different disadvantages or considerations to factor in when assessing if it’s a good fit for your practice.
Considerations when adding an in-house laboratory
Adding in-house lab testing services is a large decision that comes with several logistical steps to implement. When adding in-house lab testing services, keep in mind:
Initial Investment Startup Costs: you will need to purchase equipment and ensure you have an area of your practice where your staff can perform blood draws, which may include a time investment of adjusting the current office setup or expanding your offices to add space for lab testing.
Ongoing Maintenance Costs: you will need to make sure your lab testing equipment is properly maintained once set up.
Requires Certification: your in-house laboratory will need to be CLIA compliant. It will require certification for all lab tests you will provide to patients for assessment, diagnosis, prevention, and other medical treatments.
Staffing Considerations: depending on the size of your in-house laboratory, you may need to hire additional staff to help with blood draws and other testing procedures and operations. If adding limited testing services versus a full scale lab, you will likely need to invest time into training current staff to be able to assist with lab testing.
In-house laboratory services are typically a best fit for practices with a high testing volume that already have enough medical office space for the lab setup and enough staff to help run the lab testing.
Considerations when adding point-of-care testing
Point-of-care testing has a significantly less burden on your staff and budget while still allowing smaller practices to offer some in-house testing options. These testing options, however, will be limited. They typically only include simple tests, such as:
COVID-19 and/or flu testing
Glucose level testing
Pregnancy tests
Point-of-care testing is typically a best fit for smaller primary care private practices, or specialty practices that need rapid diagnostic testing.
Considerations when adding lab testing options through a partnership with an independent laboratory
Offering lab testing services to your patients by partnering with a third-party laboratory is the simplest option for adding lab testing services to your practice while still providing the benefits of adding an additional revenue stream and providing additional care options to your patients.
When partnering with a third-party laboratory, you have limited or no upfront costs to get started. We’ve partnered with a company that can help you get started free of charge.
Related PSG Perk: Ulta Lab Tests helps physicians provide affordable and high-quality lab testing for their self-pay patients while improving revenue streams for their practice. Ulta Lab Tests offers access to 2,000+ tests and panels at wholesale prices, with testing available at over 2,100 patient service centers, through mobile phlebotomy, or via in-house specimen collection. As a perk to PSG members, they are giving away 50,000 free CMPs to offer your patients. Registration is free and there are no subscription fees or minimum orders, helping keep overhead costs low while providing added services to patients. Learn more and sign up through our PSG affiliate link.
Though this is the cheapest and quickest way to add lab testing services, it isn’t always the right solution. Consider:
Additional revenue from lab testing is limited compared to in-house services
Turnaround times for results are longer
Patients must still make appointments/coordinate getting tests performed, which can lower their convenience
Adding lab testing options through a third-party lab is often a good fit for smaller practices that want to avoid the high startup costs and regulatory requirements of an in-house laboratory.
Considerations when adding mobile lab testing services
Mobile lab testing services offer the most flexibility and convenience for patients and do not require additional in-office space, which can be a benefit for large practices that want to grow their ancillary services without growing their medical office space. Since few practices will have the resources or desire to add this service in-house, most mobile lab testing is done through a third-party service. This means you will have less control or say over the process, as you will need to rely on a third-party and their offerings and availability.
Practices that might want to consider mobile lab testing services include concierge practices and private practices, including telehealth physicians, who have home-bound patients.
How does offering lab testing increase my practice’s revenue?
There are a few different ways that offering lab testing services can help increase a private practice’s revenue.
Physician Interpretation Fees: Offering lab testing allows physicians to charge for interpretation of results, adding an additional revenue stream while improving patient understanding and care.
Patient Retention: By offering the convenience of lab testing services, you can provide a service other physicians in your area don’t offer. Adding a level of service and convenience can help maintain patient loyalty to your practice.
Telehealth physicians can increase monthly revenue by offering routine panels and result consultations as part of their services.
Primary care clinics can expand their patient base by promoting affordable wellness packages, including comprehensive lab tests.
Early Detection & Follow-Up Visits: With access to lab testing, you can diagnose conditions faster and initiate treatment sooner. This can lead to more follow-up visits that generate additional revenue. Diagnosis can also lead to additional medical services, such as chronic disease management.
Collection Fees: You can bill specimen collection fees or blood draw charges when performing lab tests in-house
Direct Billing for Tests: If you have an in-house laboratory, you can bill patients or insurance companies directly for tests performed.
What are the logistics of adding lab testing services to a practice?
There are a few steps to getting started with this additional revenue stream for your private practice.
Step 1: Determine which option is the best fit for your practice currently (you can always scale up in the future).
Step 2: Research and select a lab testing provider that aligns with your practice’s needs, if partnering with a third-party laboratory. If adding an in-house laboratory, research and select which equipment you would need and compliance for regulation requirements. Ensure your office space is properly set up for testing.
Step 3: Explore the range of tests and packages available, considering options that best serve your patient population.
Step 4: Train your staff (or hire additional staff to cover the additional workload) on your standard procedures for lab testing, as well as what lab tests you’ll be offering to patients.
Step 5: Begin offering lab testing services, integrating them seamlessly into your workflow to enhance patient care and practice efficiency.
Commonly asked questions regarding third-party lab testing services
A few commonly asked questions to help physicians as they consider and look to set up third-party lab testing services.
How do lab testing services differ between providers?
Consider aspects such as pricing transparency, client and customer support, patient service center availability, ease of ordering and speed of results, and reporting capabilities (clinical and functional reference ranges) when evaluating lab service providers. Look for solutions for insured, underinsured, and uninsured patients. Additionally, look for solutions for patients who want to be more proactive in health than what insurance will cover.
How can I ensure the trustworthiness of lab results when using a third-party laboratory?
Look for providers with certifications such as CLIA and CAP accreditation, as these demonstrate high standards in lab testing accuracy and reliability.
How quickly can lab services be integrated?
Registration and onboarding vary by provider. Many services offer streamlined processes to help physicians get started quickly and efficiently.
How can telehealth benefit from lab testing services?
Telehealth practices benefit significantly from lab services through options like virtual results consultations, and broad access to patient service centers, enabling seamless integration of diagnostics into remote care models.
How can lab services support multi-state practices?
Some providers offer solutions, such as medical director networks, to handle orders in states where the physician isn’t licensed. This can be a valuable option for practices with patients across state lines.
Our partners at Ulta Lab Tests provide support in this situation with their medical director network.
Related PSG Perk: Ulta Lab Tests helps physicians provide affordable and high-quality lab testing for their self-pay patients while improving revenue streams for their practice. Ulta Lab Tests offers access to 2,000+ tests and panels at wholesale prices, with testing available at over 2,100 patient service centers, through mobile phlebotomy, or via in-house specimen collection. As a perk to PSG members, they are giving away 50,000 free CMPs to offer your patients. Registration is free and there are no subscription fees or minimum orders, helping keep overhead costs low while providing added services to patients. Learn more and sign up through our PSG affiliate link.
Conclusion
Adding lab testing options to your private practice is a potential way to add revenue while offering patients ease of convenience and/or cost saving alternatives. While not every option is the best fit for every practice, some options, such as offering cash-based labs to patients, can have little to no upfront startup costs as you look to increase revenue while maintaining or looking for ways to decrease overhead expenses.
Additional resources for physicians in private practice
Explore related PSG content:
Sign up for our PSG weekly newsletter for alerts on upcoming free webinars for physicians in private practice. You can watch replays of past events in our free private practice educational series.
If you have a specific question about running your practice, you can always reach out to our hivemind in our physician online community.