Two stories in this issue of The Dark Report demonstrate why regional laboratory networks are a business model which should be revisited by hospital laboratories with outreach programs.

Seattle provides a great example of how an existing laboratory network gives hospitals in that region an additional business option. PACLAB, an eight-hospital laboratory network, has steadily grown in size, professionalism, and market impact. When two hospitals went shopping for a commercial laboratory partner, PACLAB was able to provide a credible proposal in both cases. (See pages 10-14.)

Plans in Florida to select a single laboratory to do all testing statewide for Medicare beneficiaries is a direct threat to independent laboratories and hospital lab outreach programs. Laboratories in that state are scrambling to develop a lobbying coalition that can stop this proposal. A regional laboratory network would help in this effort. (See pages 5-7.)

What is ironic about the situation in Florida is that the state's major hospital laboratory outreach programs actually did have a network. The Florida Reference Laboratory Network (FRLN) was developed to help these lab outreach programs bid and service large managed care contracts in the state. However, when closed-panel HMO contracts became less of an issue, the lab network's organizers allowed it to languish in recent years.

In contrast, Detroit's regional laboratory network is probably"best in class." Over a ten-year period beginning in 1992, Joint Venture Hospital Laboratories (JVHL) successfully captured almost every significant managed care contract in Michigan. As many as 150 Michigan hospital laboratories participate in certain contracts. Like PACLAB, JVHL is a work in progress. Each year additional resources are developed and put in service to the benefit of member hospital laboratories and their physician-clients.

Current developments in Seattle and the State of Florida remind us that hospital lab outreach programs can accomplish more by collaborating than by working alone. If payers continue to develop contracting models which cover larger regions, then lab outreach programs should respond by creating a regional laboratory resource. By the way, anatomic pathologists would benefit from the same kind of regional collaboration. But that's another opinion for another column!

MT Contracts HIV & HCV In Hospital Lab Scandal

Maryland state health officials uncover numerous serious violations

CEO SUMMARY: An extraordinary story is unfolding in Baltimore hospital laboratory. Maryland state health officials have uncovered serious operational deficiencies, particularly with HIV and HCV testing performed over a 14-month period. During this same time, a medical technologist now infected with both HIV and HCV claims a malfunctioning laboratory instrument was the source of her infection.

Florida Issues State RFP For Sole Medicaid Lab

Effort to award $100 million contract using a 28-day RFP process is criticized

CEO SUMMARY: If competitive bidding for Medicare business is something universally viewed as bad by the laboratory industry, then the lab services RFP issued by Florida's Medicaid program must be considered a serious threat to the status quo. Further, the fact that Medicaid officials in Florida designed a 28-day RFP process to award a single lab with an exclusive, 3-year, $100 million contract earned criticism from both labs and employers.

LabCorp Buys MDS Labs In New York and Georgia

MDS concedes U.S. lab market and its lab automation strategy