Avalon 2025 Lab Trend Report: Genetic Testing Rises as Routine Testing Levels Off

A new report from Avalon Healthcare Solutions highlights a significant rise in genetic and biomarker testing, even as routine diagnostic testing stabilizes. The 2025 Lab Trend Report, now in its fifth year, draws insights from 18 million members across Avalon’s managed population, offering health plans a detailed look at shifting diagnostic trends and associated cost implications.

Key Findings

1. Growing Use of Genetic Testing

In 2024, health plan spending on genetic testing averaged $14.80 per member per year (PMPY) — a 10% increase from 2023.
Utilization of genetic testing also rose by 10%.
Although genetic testing represents just 10% of total test volume, it accounts for 30% of payer spend.
Over the five-year period from 2020 to 2024, overall genetic testing spend rose 66%, while utilization increased 56%.

“There are over 175,000 genetic tests in the U.S., but only about 500 CPT codes to cover them,” the report notes, citing challenges in coding, quality control, pricing, and determining clinical value.

2. Routine Testing Stabilizing

Routine testing remains the largest category by volume, representing 90% of all tests.
Routine testing spend was $192 PMPY in 2024, a 2% increase from 2023.
General routine testing rose to $183 PMPY, up 4%
COVID testing fell to $9 PMPY, a 27% decrease.

Avalon reports that this slight increase in spend mirrors a matched rise in utilization, not pricing.

From 2020 to 2024, routine testing spend for Avalon clients grew by just 1%, significantly below the industry trend of 2–5% CAGR. However, non-COVID testing costs rose 16%, reflecting demographic shifts and a return to pre-pandemic testing levels.

3. Pricing Variability Across Settings

The report highlights pricing disparities based on the site of service:

A basic metabolic panel (CPT 80053) cost:

$8.51 at an independent lab
$12.04 at a physician’s office
$48.45 at a hospital outpatient lab

Hospital outpatient labs consistently reported the highest prices for the top 10 tests by volume.

Biomarker Testing on the Rise
The report also points to increased use of biomarker testing across clinical domains such as risk assessment, diagnosis, prognosis, monitoring, and treatment planning.

Prominent examples include:

Multi-cancer early detection (MCED) blood tests
Polygenic risk score (PRS) tests estimating risk for common diseases
Alzheimer’s disease blood tests measuring amyloid levels

“These are the types of diagnostics that are shaping the next phase of healthcare,” said Kristie Ressler, DO, Chief Medical Officer at Avalon. “As diagnostics become more sophisticated, payers need strategies that are just as advanced — grounded in evidence, driven by data, and built to deliver value.”

Program Management as a Cost Control Lever

Avalon emphasizes that its program management has kept cost growth in check compared to industry averages. The report points to persistent challenges in both routine and genetic testing, including:

Overuse and underuse of tests
Misalignment in test coding and categorization
Place-of-service inconsistencies
Limited clarity on test clinical utility

“Lab testing is the most utilized medical benefit in healthcare, influencing the majority of clinical decisions — yet it remains one of the most undermanaged,” said Bill Kerr, MD, CEO of Avalon. “To improve outcomes and reduce costs, we need to modernize how diagnostics are selected, delivered, and paid for.”

The full 2025 Lab Trend Report is available from Avalon Healthcare Solutions.