Laboratory business models and practices: implications for availability and access to germline genetic testing

Maren T Scheuner,Michael P Douglas,Paloma Sales,Sara L Ackerman,Kathryn A Phillips

doi:10.1038/s41436-021-01184-z

Abstract

PurposeGermline testing laboratories have evolved over several decades. We describe laboratory business models and practices and explore their implications on germline testing availability and access. MethodsWe conducted semistructured interviews with key informants using purposive sampling. We interviewed 13 key informants representing 14 laboratories. We used triangulation and iterative data analysis to identify topics concerning laboratory business models and practices. ResultsWe characterized laboratories as full-service (FSL), for-profit germline (PGL), and not-for-profit germline (NGL). Relying on existing payer contracts is a key characteristic of the FSL business models. FSLs focus on high-volume germline tests with evidence of clinical utility that have reimbursable codes. In comparison, a key business model characteristic of PGLs is direct patient billing facilitated by commodity-based pricing made possible by investors and industry partnerships. Client billing is a key business model characteristic of NGLs. Because many NGLs exist within academic settings, they are challenged by their inability to optimize laboratory processes and billing practices. ConclusionContinued availability of, and access to germline testing will depend on the financial success of laboratories; organizational characteristics of laboratories and payers; cultural factors, particularly consumer interest and trust; and societal factors, such as regulation and laws surrounding pricing and reimbursement.

Highlights

IntroductionMolecular genetic testing for heritable genetic variants (i.e., germline testing) is important to decision-making across all medical specialties, and increasingly individuals are using this genetic information to inform their health, reproductive, and life planning decisions.[1,2,3,4] Germline testing and the laboratories that perform this testing have undergone considerable change in the past several decades due in large part to technological innovations, regulatory requirements, and the 2013 United States Supreme Court ruling invalidating gene patents.[5,6,7,8,9,10,11]Laboratories that offer germline testing are a heterogeneous group.[12,13] Molecular germline testing first became available in the 1970s, and in the United States, it was performed initially in academic medical centers in clinical or grant-supported research laboratories.[12]
We found the breadth of germline testing available from laboratories is highly dependent upon their business model, that business practices can promote or hinder access to germline testing, and factors internal and external to the laboratory can influence the business models and practices in similar or different ways depending on the laboratory type
The laboratory types we defined closely resemble the types in a review of the history of germline testing laboratories, which described commercial national laboratories (FSLs), academic laboratories (NGLs), “hybrid” academic for-profit spinoffs (PGLs), and standalone genetic testing laboratories with national clientele (PGLs).[12]

Summary

Introduction

Molecular genetic testing for heritable genetic variants (i.e., germline testing) is important to decision-making across all medical specialties, and increasingly individuals are using this genetic information to inform their health, reproductive, and life planning decisions.[1,2,3,4] Germline testing and the laboratories that perform this testing have undergone considerable change in the past several decades due in large part to technological innovations, regulatory requirements, and the 2013 United States Supreme Court ruling invalidating gene patents.[5,6,7,8,9,10,11]Laboratories that offer germline testing are a heterogeneous group.[12,13] Molecular germline testing first became available in the 1970s, and in the United States, it was performed initially in academic medical centers in clinical or grant-supported research laboratories.[12]. In 1980, a third option emerged: standalone, national commercial laboratories with a focus on germline testing services.[12]

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