Imagine if you work in a lab in New York or California. The costs to run a lab in those places is astronomical. You wont be competitive with labs in other states. The only thing that would keep specimens in those areas would be protectionist laws/regs.
Maybe we can all move our labs to West Virginia or some other cheap place.
the big elephant in the room for bx companies is their shipping charges, which are out of control. that will be the biggest cost driver for TC labs going forward given that smaller practices might send out 1-2 specimens max a day at least $40 for an overnight ship out to the "cheap place" read Tenn. or Georgia.
No, stuff will begin falling back to the locale where the biopsy is done if only due to shipping expenses eating all the profit and then some! Ive been shouting this from the roof tops for 5 years to all the national lab types who will listen and only now are they realizing they need to start regionalizing resources rather than super consolidating at large national level facilities if they want to stay competitive.
Basically its counter intuitive to standard scale up economics, but the driver here will be fossil fuels especially as the TC drops likely another 20% in next 5 years (and 88342 goes with it).
My guess is the TC ends up 1/2 of the PC fee rather than the other way around. That would make it spot on the $18 for the 88305TC analysts have been saying. Also realize that since CMS rates the reimbursement on the geographic area, my region gets 30% more than the lowest "cheap place" rates.
Meaning your profit is going to get completely wiped out: first on transporting it to the cheap place and then on the fact the cheap place is getting you only a fraction of the expensive place's reimbursement!!