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As U.S. diagnostic labs began confronting the Covid-19 pandemic in early March 2020, they faced monumental challenges to quickly build laboratory capacity. That included ramping up staffing and finding sources for the equipment and supplies needed to handle an unpredictable surge in the volume of Covid-19 testing.

Despite the vital role that labs play in providing diagnostic information, they have been running lean shops for years with little ability to increase their daily testing capacity. This behavior was borne out of a need for financial stability, largely because commercial and federal insurers like Medicare and Medicaid have been paying labs less and less for the same testing since well before the pandemic.

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