The Biggest Mistake Clinical Laboratories Make: Misunderstanding Who Their Customer Is

By: Jon Harol, Founder, Lighthouse Lab Services

For more than two decades, I’ve worked alongside clinical laboratories of every size, from physician office laboratories and hospital systems to independent reference laboratories and startups introducing innovative diagnostics.

During that time, I’ve noticed one misconception that quietly shapes nearly all commercial decisions laboratories make. Ask a laboratory executive, “Who is your customer?” and the answer is almost always the same: “The physician.”

It’s an understandable response. Physicians order laboratory testing. They determine where specimens are sent. They rely on laboratory results to diagnose disease, monitor treatment, and make life-changing clinical decisions.

Physicians are essential partners. But they’re usually not the customer. The customer is the entity that pays the invoice, and in most cases, that’s Medicare, Medicaid, a commercial insurance company, a self-funded employer, or another payer.

At first glance, this may sound like semantics, but it isn’t. It changes nearly every strategic decision a laboratory should make.

 

The Difference Between a User and a Customer

Think about other industries: An employee may choose which software platform to use every day, but the company’s procurement department purchases it. A child may decide which cereal they want for breakfast, but their parents pay for it.

The person using a product isn’t always the customer, and healthcare works the same way. The physician is the clinical user of laboratory information, while the patient is the beneficiary. The payer is typically the customer.

Each has different priorities.

Physicians want:

• Fast turnaround times
• Reliable and accurate results
• Easy ordering
• Responsive client service
• Clear reporting

These are incredibly important and should never be minimized because without physician confidence, laboratories cannot grow. But payers evaluate laboratories through an entirely different lens.

 

What Payers Are Actually Buying

Insurance companies don’t purchase laboratory tests. Instead, they purchase healthcare value, and every reimbursement decision is really an investment decision.

They’re asking questions such as:

• Does this test improve patient outcomes?
• Will earlier diagnosis reduce expensive downstream treatment?
• Does it prevent unnecessary procedures?
• Does it improve treatment selection?
• Does it reduce total cost of care?
• Is there sufficient clinical evidence?
• Is there real-world evidence demonstrating economic benefit?

Those questions determine whether reimbursement expands, contracts, or disappears altogether. Yet many laboratories invest disproportionately in physician marketing while investing relatively little in generating the evidence that answers the questions payers actually ask.

 

Why This Matters More Than Ever

The laboratory industry is entering one of the most exciting periods in its history. Artificial intelligence. Precision medicine. Genomics. Proteomics. Multi-cancer early detection. Companion diagnostics. Liquid biopsy. It’s no question the scope of new scientific innovation is extraordinary. But innovation alone doesn’t create a sustainable business.

Clinical utility creates adoption. Economic utility creates reimbursement. Both are vitally necessary.

A technically brilliant test that cannot demonstrate value to the organizations financing healthcare will struggle to achieve widespread adoption regardless of its scientific promise.

 

The New Competitive Advantage

Historically, laboratories differentiated themselves through operational excellence: faster turnaround, better customer service, expanded menus, sales relationships, and geographic coverage. Make no mistake, those capabilities still matter.

But tomorrow’s market leaders will distinguish themselves differently. They will produce compelling evidence showing that their diagnostics improve outcomes, reduce unnecessary healthcare utilization, prevent disease progression, support value-based care initiatives, and lower the total cost of managing patients.

At this point, the conversation shifts from: “Our assay has excellent analytical performance”, to “Here’s how our testing saved your health plan millions of dollars while improving patient outcomes.”

That is an entirely different value proposition.

 

Physicians Still Matter, Perhaps More Than Ever

None of this diminishes the physician’s role as they remain the gateway to laboratory utilization. Without physician confidence, there are no specimens. Without excellent service, there is no loyalty. Without clinical excellence, there is no credibility. In short, the physician experience remains essential.

But laboratories must recognize that they serve multiple stakeholders simultaneously.

The physician determines utilization. The patient receives the benefit. The payer determines financial sustainability.

Ignoring any one of these groups creates risk.

 

The Future Laboratory Will Speak Two Languages

The laboratories that thrive over the next decade will become fluent in both clinical medicine and healthcare economics.

• They will communicate clinical evidence to physicians.
• They will communicate economic evidence to payers.
• They will publish peer-reviewed outcomes studies.
• They will generate real-world evidence.
• They will quantify avoided hospitalizations, reduced downstream costs, earlier intervention, and improved quality metrics.
• They won’t simply prove their test works.
• They’ll prove why someone should pay for it.

 

A Final Thought

Perhaps the better question isn’t, “Who is your customer?” It’s: “Whose problem are you solving?”

For physicians, the laboratory provides diagnostic certainty. For patients, it provides answers and better health. For payers, it must provide measurable value.

The laboratories that understand all three perspectives won’t simply survive the next decade, they’ll define it. As healthcare continues its transition toward prevention, precision medicine, and value-based care, the laboratories that can connect scientific innovation with economic value will become indispensable partners in the future of medicine.

The question every laboratory leader should ask is simple: If your largest payer asked tomorrow, “Why should we continue reimbursing your test?”—would your laboratory have an answer backed by evidence, outcomes, and economics?

 

Sharing is caring!