Taking a fresh look at veterinary diagnostic laboratories

Dr. Wendy Hauser built her veterinary practice in Denver around the concept of preventive care, including informing pet owners about the value of regular diagnostics.

“What we saw were less ‘train wreck’ cases over time. We were so able to successfully manage diseases in an earlier state that it was a rare pet that came in in a crisis, and most of the time they were not our patients,” Dr. Hauser said. “So I firmly, firmly believe in the value of diagnostics in daily practice and of educating clients so that they can make the best choices for their pets.”

Together with veterinary practices, state and commercial diagnostic laboratories across the country have helped drive the growth of veterinary diagnostics for well and unwell animals, while companies also continue to develop more options for point-of-care testing.

The state veterinary diagnostic laboratories, often located at universities, provide services for food animals and public health as well as companion animals. Many of these laboratories recently assisted with the response to the COVID-19 pandemic in humans and the outbreak of highly pathogenic avian influenza.

The commercial laboratories primarily provide services for cats and dogs, with Antech Diagnostics and Idexx Laboratories being by far the biggest players. Other companies have entered the national diagnostic market in the past few years, namely drugmaker Zoetis via several acquisitions and Texas-based Ellie Diagnostics as a startup. Some small commercial laboratories also remain a part of the picture, with one example being Miami-based National Bio Vet Laboratories.

The public and private laboratories offer not only diagnostic services but also the expertise of veterinary specialists who can consult on cases by helping select tests, interpret results, and talk through treatments.

By the time Dr. Hauser sold her practice, income from diagnostics made up 25% of revenues. She went on to found Peak Veterinary Consulting, advising new and established practices on matters such as diagnostics.

Much of the veterinary community has embraced point-of-care diagnostics for rapid results, but Dr. Hauser believes many general practices only need equipment that can run basic tests because diagnostic laboratories deliver quick turnaround and quality control with less staff time. She said practices that provide urgent or emergency care do need more in-house diagnostic capabilities.

Negotiating competitive test prices with commercial laboratories can drive more profit by allowing practices to reach more clients, Dr. Hauser said. Practices can negotiate prices for individual tests on the basis of usage, and they should know when their contracts expire so they can renegotiate terms. Independent practices can take advantage of group purchasing organizations.

Dr. Hauser admitted that some clients can’t afford the level of diagnostics that she did in her practice, but she said there are a lot of basic diagnostics that hospitals can do that won’t break the bank.

The main changes that Dr. Hauser has seen in the past five years in the overall diagnostic market are the increasing availability of novel tests—for everything from gastrointestinal parasites to chronic kidney disease—and the consolidation of commercial laboratories, plus new opportunities with new laboratories opening up.

As for diagnostics at the practice level, she said, “It is a huge part of a hospital, and I don’t know that it gets the attention that it should get.”