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How Much Does It Cost to Build a Clinical Laboratory?

Whether you are a physician who is part of the growing trend to move clinical laboratory testing into your clinic, or an entrepreneur seeking to start a new independent medical lab, you likely have questions about the true cost of building a clinical lab.

Starting a clinical lab requires extensive research and planning. From hiring qualified employees who will follow proper procedures to help your lab earn accreditation, to optimizing your design layout, instrumentation and test menu, there are countless items to consider before you’re ready to start testing and serving patients.

While starting your own in-house lab can lead to improved turnaround times and more accurate results, one of the first questions we’re often asked is “How much does it cost to build a clinical laboratory?” Fortunately, our extensive experience building labs for existing physician practices and local communities has provided us with intimate knowledge of what every aspect of a desired lab buildout will cost. Whether looking to build a toxicology lab, perform Molecular PCR testing for Infectious Diseases, or focus on another testing line, we help providers and new lab owners capture revenue that is being lost to out-of-state or large reference labs

Curious about getting started? Below we review a basic outline of all the most important items and pricing variables to consider when building a lab:

 

Space: Variable based on the amount of work needed to prepare the space

Anyone looking to build a new clinical laboratory must first determine the best site to acquire based on your test menu, throughput, and growth plans, and any floor plans should be reviewed for suitability prior to signing a lease. New lab owners should optimize their layout design according to lean efficiency practices to ensure optimal placement of equipment and other necessary supplies. It’s also crucial to work with an expert to ensure your lab design complies with manufacturer guidelines, in addition to local, state, and federal ordinances.

Your costs for space will vary greatly depending on a number of factors, which is why it’s beneficial to work with a consultant to develop your design plans and budget prior to signing a lease.

We’ve built labs in all shapes and sizes, from a single instrument in a supply closet, to a 100,000+ square-foot molecular lab processing thousands of samples per day. It’s important to identify any significant changes required in your space before you start moving in any equipment. The key areas you’ll want to review, and where costs can add up quickly, include:

  • Size – Can I design a proper workflow given the space, and will my employees be comfortable working in it?
  • Flooring – Is my flooring suitable for the type of testing I’m running?
  • Electrical – Do I have enough circuits and outlets to accommodate the instrumentation I’ll be running?
  • Ventilation – Am I required to have particular ventilation in place?

 

Instrumentation: See the list below
  • Benchtop Chemistry Analyzers – $25,000-$45,000
  • Floor-Model Chemistry Analyzers – $40,000-$80,000
  • PCR Instrument – $25,000-$125,000
  • Automated Extraction – $25,000-$75,000
  • LCMS – $120,000-$300,000
  • Next-Generation Sequencer – $100,000-$500,000
  • Ancillary Equipment – $15,000-$50,000

Your exact instrumentation needs will vary depending on your desired lines of testing and complexity level. Labs should consider open system options that can be validated to run Laboratory Developed Tests (LDTs), which in turn leads to cost savings and test menu flexibility. There are also significant price differences between buying new and used equipment. A good consultant should also be able guide you through these decisions and negotiate with vendors on behalf of the lab owner to secure a cost-effective price and additional benefits like ongoing support and training for your personnel.

Finally, any lab will need a Laboratory Information System (LIS) that integrates with your instrumentation and other Electronic Medical Records (EMRs). Many systems have cloud-based or server options and are customizable to meet your lab’s needs. An LIS can range in price from $1,500/month to $500K+ just to get started depending on your lab’s needs. However, the average lab’s startup and monthly payment are in the thousands, not the tens of thousands.

 

Personnel: Accessioning labor: roughly $2,000/month. – Technologist labor: about $5,500/month.

A significant portion of any lab’s recurring monthly expenses will be dedicated to hiring qualified personnel to staff your facility. However, the exact personnel required will depend on the type of lab you’re operating. While an Anatomic Pathology lab may need Histology and Cytology Technologists, building a toxicology lab will require roles such LCMS Operators and Certifying Scientists. These are just a few examples that display the complexities and specializations between medical lab roles.

New lab owners should seek to work with an experienced clinical lab recruiter when filling these positions in order to most effectively interview and screen their candidate pool. Due to the ongoing severe staffing shortage that has been exacerbated by a decline in the number of programs graduating new medical lab professionals, working with a recruiter who specializes in the industry can help you understand how elevate your positions above those of your competitors. Lighthouse Lab Services offers risk-free recruiting, meaning clients only pay for our services if a candidate is placed.

 

Supplies: Reagents and consumables can range from a few dollars per test for general chemistry, to a few hundred dollars per test for Next Gen Sequencing.

Supplies are another area of your build that will vary greatly depending on the type of testing you plan to offer when considering how much it costs to build a clinical laboratory. However, most labs will require supplies such as reagents, quality control material, and miscellaneous materials such as pipette tips, tubes, sealing film, wash solution, and reservoirs.

As noted above, working with a well-connected consultant should open pathways to receiving discounts on supplies.

 

Validation: About $15,000-$40,000 for one full validation of a Laboratory Developed Test (LDT). LDT validation is typically more expensive than validating an FDA approved assay, however, it also typically saves the lab money over time.

Once you’ve identified your test menu goals, you’ll then want to draft a validation plan. This plan should involve the running of validation samples and data analysis of the results, which is then compiled into a CLIA-compliant validation summary. Developing a Technical Standard Operating Procedure (SOP) and any additional training your staff needs is also crucial to ensuring new tests are performed accurately and efficiently. Keep in mind that these steps need to be completed in collaboration with your Medical Lab Director.

You will also need to account for the supplies used during the validation process. For some validations, you can run up to a few hundred samples to complete all the required studies.

Below is a sampling of the testing programs Lighthouse offers:

 

CLIA: Estimated prices by state/accreditation listed below

Prior to beginning testing, new labs will first need to navigate the oftentimes complex state and federal regulatory landscape, including filing CLIA paperwork to ensure all necessary accreditations are secured. As part of this process, labs must hire a qualified Lab Director to oversee operations, enroll with other necessary agencies, provide ownership disclosures and validation plans, and file a CMS 116 application. You’ll also need to prepare for annual competency assessments and organization surveys required by CLIA and other accrediting organizations, such as CAP and COLA.

Below are general estimates for our comprehensive CLIA, COLA, and state license application processing service rates:

  • CLIA – Starts at $1,000
  • CMS Region VI Toxicology Specialty – $3,500
  • COLA – $1,000
  • NPI – $500
  • Medicare – $5,500
  • California – $5,500
  • Maryland – $3,000
  • New York – Starts at $5,500
  • Nevada – Starts at $4,500
  • Pennsylvania – $2,500
  • Rhode Island – $2,500

 

Medical Laboratory Director: $1,500/month+ depending on complexity and test menu

As the highest-level position within your lab, the Medical Lab Director must meet very stringent qualifications, which is why it’s key to make sure you work with a regulatory expert to understand federal and state requirements. While some labs may require a full-time Lab Director to oversee staff, smaller labs and startups should explore whether a part-time Lab Director could fulfill their requirements at a lower cost.

Part-time Medical Lab Directors can review your SOPs and sign off on changes, monthly quality control logs, and perform all other appropriate responsibilities as dictated by CLIA. They complete these duties through a combination of remote and on-site involvement. Lighthouse’s part-time Lab Directors will also be on site at least once per quarter and for inspections.

 

Estimated total cost when utilizing LLS Full Lab Startup Consulting: $170,000

 

Conclusion

As this breakdown displays, there are countless variables and regulations to consider when exploring the question of how much it costs to build a clinical laboratory and exact pricing will depend upon the type of lab you intend to start. That’s why any physician or entrepreneur starting a lab for the first time will want to work closely with a consultant or expert in the field to ensure all necessities are covered and costs are in line with industry standards.

If you’re looking to build a clinical laboratory, Lighthouse Lab Services is happy to assist you with every step of the process. Unsure of where to begin or what questions to ask? Contact us today for a free consultation so we can learn more about your goals and vision.

 

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