This session focused on one central issue: how diagnostics, specifically lab data, can generate revenue based on the value created rather than just reimbursement for the test performed.

The panel argued that labs can do much more than return a result: they can identify risk earlier, improve care coordination, close care gaps, and help health systems and payers succeed in value-based care. The challenge is that the current system still mostly pays labs in a Lab 1.0 model: order, run the test, report the value, bill for reimbursement. The panel explored what it would take to move toward a Lab 2.0 model where labs are, paid for identifying risk, driving meaningful action, and improving patient outcomes.

A major proof point came from Rick VanNess sharing his story about working at TriCore Reference Laboratories, where the lab built contracts with Medicaid plans and received payment on a per-member-per-month basis for identifying pregnancies, hepatitis C, diabetes, and other conditions earlier and more accurately than claims data alone. This, in and of itself, demonstrated that an alternative payment model could work. But the panel also explained why this has not been more broadly scaled: health systems are under financial pressure, incentives are misaligned, communication pathways are weak, and labs are still treated primarily as a transactional service rather than a strategic population-health asset.

The panel’s overall conclusion was that labs already have the data and the clinical relevance to create major value, but they need better economic alignment, policy support, workflow integration, and educational avenues to become full partners in value-based care.