The Daily Brief Diagnosing the Diagnostic Business
Nov 25, 2025
Explore the vital role of diagnostics in healthcare, revealing how it outshines its modest funding. Discover the distinct functions of diagnostic companies and their economic dynamics compared to hospitals. Learn about the impact of volume-driven revenue amidst falling per-test prices. Shift gears to examine the cooling demand in the quick service restaurant sector, with insights into Domino's successful strategies versus challenges faced by McDonald's and Devyani's brands. The discussion rounds off with intriguing tidbits about economic trends.
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Diagnostics Is An Information Business
- Diagnostics is an information business that runs tests, collects samples, and processes them centrally at scale.
- Its hub-and-spoke model and low marginal cost per test make it asset-light with high asset turnover.
Dr. Lal's Hub-And-Spoke Reach
- Dr. Lal Path Labs connects 298 labs to 6,607 patient service centres and 12,000 pickup points to reach 29 million patients yearly.
- This example shows scaling via networked collection points rather than replicating full labs.
Volume, Not Price, Drives Profitability
- Revenue in diagnostics comes from volumes rather than rising prices, as per-patient and per-test realizations have fallen.
- Higher volumes turn near-zero marginal costs into profit, so companies prioritise customer acquisition and utilisation.