The laboratory environment has been characterized by ongoing rapid and dramatic innovation since the 1980s. There has been remarkable growth in the range and complexity of available tests and services, which is expected to continue. Laboratory technology is often at the forefront of medical advances. In some cases, testing techniques to diagnose or screen for a particular condition are available before effective treatment. Innovation in laboratory technology, which includes both new tests and advances in equipment and testing techniques, has made testing more efficient and automated. Information technology (IT) has revolutionized the transfer of data by decreasing the time it takes to order and receive test results and by creating opportunities for research on large datasets. Many predict that clinical laboratory technology will play an even more important role in the future delivery of health care (Felder et al., 1999; Wilkinson, 1997). Innovation in health care, particularly when it is more efficient than existing methods (see Box 3.1), is welcomed by payers, providers, and patients; however, the efficient integration of innovation into medical care may be affected by policies related to coverage, coding, and payment.