From Professional Monopoly to Corporate Oligopoly: The Clinical Laboratory Industry in Transition

Abstract

Until the mid-1960s the nonhospital clinical laboratory industry was dominated by pathologists. The ethics of medical professionalism protected the pathologists' market from price competition and from any serious threat from new entrants into the market. Immune from the competitive pressures of the marketplace, pathologists exerted monopoly control in local markets. That power was eroded by laboratories operated by technologists and bioanalysts and was finally overcome by the entry of large corporations into the industry. The market power of the largest corporate laboratories is now growing to a point where competition may again be thwarted. The professional ethics of pathologists allowed high prices, but there was little push toward higher volume. The commercial ethics of the corporate entrants brought lower prices but resulted in strong pressure for greater test quantities. In either case, the power wielded by the dominant producer would seem to go against the consumer's interests.