5 Benefits of Building a Physician Laboratory in Your Practice

Many physician practices are missing out on the opportunity to maximize their opportunity from ancillary services by not building an in-house laboratory. Right now, most practices ship samples off to a massive third-party lab and hope for the best while forfeiting clinical, operational, and financial control in the process.

Establishing a physician office laboratory (POL) allows practices to capture lost revenue, improve patient experience, and gain greater control over their diagnostic capabilities. But when it’s done incorrectly, practices can spend huge amounts of time and money to make it work when the laboratory should be set up to work for them. Unfortunately, when many laboratory consulting firms pitch you on building an in-house laboratory, they’re selling you on the all the dreams of the potential revenue without the reality of the problems they leave you with after the high-price laboratory is built.

That’s where PhytestDX is different.  We don’t just set up a lab and wish you luck—we build, manage, and operate it to ensure its long-term success.

So, if you’re tired of outsourcing tests with no control (or being left to figure things out alone), here’s why you need a physician  laboratory—done the right way.

1. Unlock a New Revenue Stream

Expanding Your Practice’s Financial Potential

By operating an in-house laboratory, physician practices can generate additional revenue by billing directly for diagnostic tests. Rather than outsourcing all testing to large reference labs, your practice can capture a new income stream while maintaining control over the billing process. 

Moreover, the scale of your group practice amplifies this benefit. Larger patient bases produce a consistent demand for diagnostic services that makes it a sustainable and predictable source of income. An in-house laboratory is as scalable as the practice itself. Your practice’s laboratory can evolve to accommodate increased test volumes and expand its testing capabilities as demand for certain tests becomes more diverse.

Your in-house laboratory allows you to leverage flexibility in your own growth where third-party labs may inhibit or present unnecessary challenges. The larger a practice becomes, the more effort it takes to manage the varied preferences and processes of different tests, labs to choose from, billing requirements, networks statuses, and support teams. Incorporating a central laboratory for your practice allows you to streamline all these processes and get reimbursed more, and faster as you grow.

Baked-In Laboratory Revenue Cycle Management

Operating an in-house lab also means greater control over the revenue cycle. Rather than waiting for third-party labs to process claims and reimbursements, your practice can directly bill insurance providers and patients, leading to faster collections and fewer disputes. But many practices aren’t equipped for the complexities of laboratory billing. 

A laboratory that doesn’t get reimbursed isn’t a business; it’s a cost center. And if you set out to bill for your claims but don’t have the proper billing environment in place, well that can become a cost center in itself. That’s where we come up to bat for you – our all-inclusive offering comes with built in laboratory revenue cycle management (RCM) services through our sister company, Phytest LLC. Billing and collecting laboratory claims isn’t just what they do, it’s all they do. Laboratory billing is not something that can be done effectively without specialized knowledge and dedicated technology, no matter how low the monthly fee is. So, here’s where our model really shines.

2. Enhance Clinical Control and Flexibility

Customized Test Offerings

When working with third-party reference labs, physician practices often have limited influence over the types of tests offered, turnaround times, and quality assurance measures. By establishing a physician laboratory, your practice gains full control over:

• The selection of diagnostic tests offered
• The ability to customize test panels based on patient demographics
• Compliance with the latest clinical and regulatory standards

As highlighted by Lab2Doctors, in-house laboratories allow practices to maintain direct oversight over quality control, ensuring more consistent and accurate test results. However, when practices are expected to undertake the staffing process for their new in-house laboratory on their own, or blindly trust other outsourced agencies, they lack guidance and point-of-reference for the highest standards in laboratory procedures. After all, providers are focused on their acute knowledge in medicine, not laboratories.

Our team not only removes the administrative load from recruitment and overhead by employing laboratory staff directly for practices, but we commit to sourcing the most qualified professionals that meet the expectations set by our Clinical Director. By providing practices with stable, experienced Laboratory Directors, Molecular Technologists, Technicians, we keep clinical excellence and quality at the forefront of a practice’s in-house laboratory.

Faster Turnaround Times

Quick access to laboratory results is crucial for timely diagnoses and treatment plans. A physician laboratory eliminates the delays associated with sending samples to external facilities, ensuring that test results are available faster—often within the same day. This efficiency translates to better patient care and improved clinical decision-making.

3. Improve Patient Satisfaction and Convenience

Enhancing the Patient Experience

The timeliness of diagnostic processing in a patient’s health journey greatly impacts their anxiety and confidence in the care they are receiving. Delays associated with external labs such as transport times, batch processing, and communication inefficiencies place a strain on your team as they navigate issues with their patients every time an order is placed.

When testing is performed on-site, faster turnaround times also can be the difference between early intervention and delayed care. Providers are enabled with better clinical decision-making and can initiate treatment plans with near immediate feedback within hours or a few days. Reducing the downtime between a patient’s sample collection to delivering diagnostic results and treatments fosters greater patient care, satisfaction, and retention.

Reducing Billing Confusion

Many patients struggle to understand bills from third-party laboratories, leading to unnecessary disputes and delayed payments. With a physician owned laboratory, practices can streamline their laboratory medical billing, provide clearer cost estimates, and offer better transparency about what tests are performed and how they are billed.

However, laboratory medical billing is a game that most practices and their physicians don’t know how to play efficiently. Patients are integral in the laboratory revenue cycle and should be highly considered in the process. Our sister company, Phytest, not only has the knowledge of the complexities to successfully bill for a laboratory claim, but also premier patient service offerings to help them pay their laboratory bill. Our team develops clear, easy to understand statements that give patients various options to pay their claim and always have experienced, on-shore staff available to answer any questions.

4. Attract and Retain Providers and Patients

Standing Out in a Competitive Market

A practice with a physician laboratory offers a more comprehensive patient experience, making it an attractive choice for new patients. Providing on-site diagnostics can differentiate your practice from competitors that still rely entirely on third-party reference labs.

Enhancing Provider Recruitment and Retention

Physicians and healthcare providers seek workplaces that offer efficiency, high-quality patient care, and streamlined workflows. An in-house laboratory contributes to a more integrated clinical environment, reducing frustration with external lab delays and lost test results. According to Provista, in-house testing can increase provider satisfaction and improve overall workflow efficiency. Leveraging the clinical and financial appeal of an in-house laboratory for your practice can help attract new talent and retain existing providers, therefore strengthening the longevity of the practice.

5. PhytestDX Simplifies and Ensures your Laboratory Will Work for You

Comprehensive Laboratory Management

While the benefits of a physician laboratory are clear, many practices hesitate due to concerns about setup, compliance, and ongoing management. This is where PhytestDX comes in. Our team specializes in building, managing, and optimizing physician office laboratories, ensuring that your practice gains the maximum return on investment with minimal hassle.

How PhytestDX Supports Your Practice

• Lab Design and Setup: We design and build all specs and requirements for a high-complexity laboratory using your available spac
• Setup and Certifications: Our team handles all certifications, licensing, equipment validations, and technology implementation to integrate your new laboratory into your practice environment.
• Staffing and Ongoing Management: PhytestDX fully employs and manages the day-to-day laboratory operations including maintenance, inventory management, in-depth reporting, and more.
• Billing and Collections: We handle the revenue cycle management of the laboratory to ensure maximum return for every test you run.

See How Your Practice can Benefit  from a Physician Owned Laboratory Today

Integrating an in-house laboratory within your physician practice is a strategic decision that can lead to improved patient outcomes, increased revenue, and enhanced operational efficiency—if it’s done right. By gaining greater control over test offerings, turnaround times, and billing processes, practices can deliver superior care while benefiting financially.

With PhytestDX as your trusted partner, building and managing a physician laboratory has never been easier. Contact us today to explore how your practice can unlock the full potential of ancillary diagnostic services and physician laboratory solutions.