Flipping the Funnel: Diagnostics as the First Touchpoint

Eliad Josephson, Subject Matter Expert - Diagnostics @ HLTH

From patient‑initiated testing to value‑based impact, diagnostics is positioning itself as the backbone of the new care economy.

When Roche announced its $50 billion strategy to bypass pharmacy benefit managers (PBMs) and go direct‑to‑patient the goal was clear: reduce friction, lower costs, and give patients earlier, simpler access to the tests and therapies they need. It was more than a supply‑chain shake‑up. It signaled a broader shift we began charting in “Diagnostics in Healthcare: From Foundation to Frontier - diagnostics moving from the background of care to the front door.

For decades, testing was foundational yet hidden. Ordered reactively, processed out of sight, discussed only after the fact. Today, that model is flipping. A growing set of platforms, retailers, pharma and health systems are reimagining diagnostics as proactive, patient‑initiated, digitally enabled, and essential for earlier engagement.

This isn’t just a change in channel; it’s a change in mindset.

What’s Driving the Shift in 2025

• Executive priorities now align with consumer expectations. Nearly 72% of health‑system executives list “improve consumer experience, engagement, and trust” as a 2025 priority (Deloitte, 2025).
  
  

• Digital health behavior is mainstreaming. Rock Health’s 2024 consumer survey shows broad, cross‑generational adoption of virtual care, wearables, and digital tracking (e.g., 52% of women own a wearable; 56% used virtual care in the last 12 months) (Rock Health, 2024; Rock Health, 2024).
  
  

• Demand for proactive health insights is surging. More than 60% of consumers say they want health testing options that can help them make lifestyle changes before symptoms appear (Deloitte, 2025).
  
  

“Continuous monitoring and earlier testing aren’t luxuries, they are our future standards of care.” Dr. Marty Makary, FDA Commissioner (March 2025)

Business Models, Evolving

The market is crystallizing around three core approaches, each targeting different points in the patient journey:

The throughline: move testing closer to the patient and closer to the decision.

Prevention, Unlocked

70% of clinical decisions rely on lab results, yet millions of patients still skip recommended tests because of inconvenience, stigma, or access barriers. When those barriers are removed, behavior changes. Lives are saved.

After U.S. guidelines lowered the colorectal cancer screening age from 50 to 45, uptake among 45–49-year-olds jumped significantly. Programs that mailed at-home FIT kits directly to patients saw screening rates climb by more than 50% (JAMA, 2025), enabling earlier detection and more effective treatment.

Three innovations are proving that smarter access drives better prevention:

• At-home self-collection for cancer and chronic disease screening, removing the need for in-person appointments.
  
  

• Community-based testing in pharmacies and retail clinics, embedding diagnostics into everyday life with same-day results.
  
  

• Bundled preventive panels that consolidate multiple relevant tests into a single sample, making adherence easier and more cost-effective.
  
  

On the horizon, multi-cancer early-detection (MCED) blood tests are showing promise. In the PATHFINDER‑2 study, when the Galleri MCED test was added to standard screening, there was substantially greater additional cancer detection, with high positive predictive value and consistent specificity, without serious safety concerns (GRAIL). Researchers agree that real-world evidence will determine where MCED fits, but the potential to catch dozens of cancers with one blood draw is a paradigm shift in the making.

Bottom line: diagnostics doesn’t just identify disease, it moves the clock back, often by years. In prevention, timing is everything. Diagnostics is how we change it.

The Financial Case for Early, Direct Access

Catching disease early isn’t just good medicine, it’s good economics.

• Cancer care costs multiply with each stage. Treating Stage I colorectal cancer averages ~$55,000, but Stage IV care can exceed $150,000 per patient (NCI, 2024). Similar gaps exist across breast, lung, and prostate cancers. Late detection often means triple the cost and far lower survival rates.
  
  

• Chronic disease prevention saves billions. Avoidable hospitalizations for conditions like heart failure, diabetes, and hypertension consume $25–30 billion annually in the U.S. (AHRQ). Early detection and proactive management can slash these costs by reducing admissions and complications.
  
  

• Employers see the ROI. With healthcare spending per employee now averaging $15,000+ annually (Business Group on Health, 2025), large employers are adding home-based diagnostics to wellness benefits, alongside virtual primary care and specialty “centers of excellence.” These programs are designed to catch risks before they escalate, lowering claims costs while improving workforce health.
  
  

The pattern is clear: every month you diagnose sooner, you save—not just in dollars, but in lives and productivity.

“The greatest breakthroughs in medicine will come not from treatment, but from the information that guides it.” Eric Topol, MD

The Reimbursement Paradox

Diagnostics have historically sat outside traditional revenue cycles, with reimbursement models that fail to capture their true impact on outcomes and downstream cost savings. Even when clinically validated, coverage is inconsistent across payers, with coding and classification often lagging behind scientific progress. Complexities such as Z-codes and region-specific programs like MolDx add further hurdles, slowing time to coverage and creating geographic inequities in access. 

Payers typically require both clinical validity and clinical utility, yet demonstrating real-world utility takes time and delays adoption. Preventive and population-based diagnostics are particularly under-recognized in reimbursement frameworks designed around acute care. 

This is beginning to change as forward-thinking payers experiment with bundled payments that include testing within episode-based care, enhanced reimbursement for tests that prevent downstream costs (such as pharmacogenomic testing that reduces adverse drug events), and “diagnostics-as-a-service” models that tie payment to outcomes rather than volume. Large employers are also stepping in, covering at-home and precision diagnostics where ROI is clearer at the workforce level. 

AI is now adding a new layer of efficiency, streamlining evidence generation, coding, and claims processing, making it easier to demonstrate economic value and secure reimbursement. The challenge remains proving the math: showing that a $500 test today can prevent a $50,000 hospitalization tomorrow.

Whole-Genome Sequencing (WGS): Ready to Scale

Cost curves have finally crossed the adoption threshold. In 2001, sequencing a single human genome cost millions; today, clinical-grade WGS in the U.S. can be performed for under $500 (NHGRI, 2025).

Source: NHGRI, 2025

What makes WGS different from one-off diagnostic tests is its permanence and versatility: sequence once, reinterpret for life. The same genomic dataset can be re-analyzed again and again as science advances, without requiring a new sample.

WGS is increasingly being used to:

• Diagnose rare diseases in children and adults, often ending years of “diagnostic odyssey” and guiding targeted therapies.
  
  

• Pharmacogenomics (PGx): predicting how patients will respond to specific medications to optimize prescribing and reduce adverse drug reactions.
  
  

• Carrier screening: identifying individuals at risk of passing on genetic conditions before family planning.
  
  

• Hereditary cancer risk assessment: detecting germline variants linked to cancers such as BRCA-related breast and ovarian cancer.
  
  

• Polygenic risk scores (PRS): estimating an individual’s inherited risk for common complex conditions like coronary artery disease or type 2 diabetes, enabling earlier lifestyle or medical interventions.
  
  

Because the data can be stored and re-queried, WGS becomes a longitudinal preventive asset. A single investment that can inform care for decades. This makes it especially attractive for:

• Employers seeking to reduce long-term health costs through personalized prevention.
  
  

• Health systems building data-rich population health platforms that integrate genomics with EHRs and AI-driven care models.
  
  

• Public health programs in rare disease, newborn screening, and cancer prevention.
  
  

With costs dropping, infrastructure maturing, and payer interest growing, WGS adoption is projected to surge over the next 3–5 years. As sequencing becomes embedded into primary care and preventive health strategies, its role will shift from niche genomics to a core component of the diagnostic toolkit, powering early detection, tailored treatments, and a lifetime of actionable insights.

Policy, Trust, and Integration

Momentum is building for a diagnostic ecosystem that's innovative, accurate, and grounded in sound policy even as regulatory landscapes evolve. The regulatory environment took a significant turn in March 2025 when a federal district court in Texas struck down the FDA's 2024 rule that would have regulated laboratory-developed tests (LDTs) as medical devices, ruling the agency exceeded its statutory authority. With the FDA choosing not to appeal, LDTs remain under the existing CLIA framework (Clinical Laboratory Improvement Amendments), which sets national quality standards for clinical laboratories to ensure accuracy and reliability of patient test results. Laboratories must be CLIA-certified to perform human testing in the US. This  decision preserves laboratories' ability to innovate and respond quickly to emerging health needs.

This regulatory clarity has shifted the focus toward ensuring high-quality, clinically valid testing while enabling rapid development of new diagnostics. The balance is particularly crucial for addressing rare diseases, unmet medical needs, and early detection programs, where the ability to move quickly from concept to clinical use can be life-saving. Under CLIA oversight, laboratories can maintain the agility needed to advance public health without sacrificing the rigor required for patient safety.

Yet regulation is only part of the equation. The real value of diagnostics emerges when results flow seamlessly into the broader healthcare ecosystem, connecting to EMRs, informing clinical decision support systems, and enabling coordinated care workflows. This is where the concept of diagnostics-as-infrastructure proves its worth, transforming raw data into timely, actionable insights that guide both immediate interventions and long-term health planning. With policy stability, trust-building measures, and robust integration working in concert, early detection can scale responsibly, unlocking the full potential of diagnostics to transform care from reactive to proactive.

From Foundation to Front Door (and Beyond)

Diagnostics has now become the service layer of modern care: risk stratification, precision therapeutics, AI‑driven insights, and remote monitoring, delivered closer to the patient and earlier in the journey.

Patients have already embraced direct access to testing. They're ordering their own labs, using home collection kits, and tracking biomarkers through apps. The infrastructure challenge remains: medical records that don't talk to each other, insurance that won't cover prevention, and a trust gap between what technology promises and what it delivers.

Diagnostics is no longer just the supporting actor in healthcare. It’s the first move, the signal before the symptom, the insight before the intervention.

Diagnostics is driving the future of healthcare - faster, smarter, and more personalized. At HLTH USA 2025, we're spotlighting the breakthroughs redefining early detection, precision medicine, and system-wide efficiency. From genomics to digital pathology, join the leaders turning science into scalable, life-changing solutions. 👉 Be a part of the diagnostics transformation at HLTH USA 2025