R. Lewis Dark:
Re-shaping the Profession of Anatomic Pathology
WHEN JANUARY 1, 2011, ARRIVED, IT MARKED AN IMPORTANT MILESTONE for the
anatomic pathology profession. That is the day that the oldest pathologists in the
Baby Boomer generation turned 65 years old and became eligible for Social
Security andMedicare.Not getting The Dark Report in your mailbox every 3 weeks?
This is an event we have discussed our entire adult lives. The question is
asked constantly. How will the "me generation" transform American society
as they enter their retirement years? Now we are about to find out.
Demographics indicate that the number of individuals reaching the age of 65
this year will be 50% greater than in any single year of the past decade.
One obvious consequence of this demographic fact is that clinical laboratories
and independent pathology group practices will likely see a similar
50% increase in the rate at which pathologists and staff members reach
retirement age. As you will read on pages 17-19, many laboratories are failing
to put an effective succession plan into place. That leaves them vulnerable
to the unexpected retirement of key physicians and managers.
Another consequence of this demographic fact is that many of the
nation's thousands of smaller, community hospital-based pathology groups
will find it difficult—if not impossible—to recruit a younger pathologist to
replace a retiring pathologist partner. Certainly that was a factor in the decision
of Davis-Sameh-Meeker Laboratory (DSM) of Walla Walla,
Washington, to sell itself to InCyte Pathology, P.S., of Spokane Valley in
recent weeks. (See pages 3-7.)
It is for that reason, among several others, that a growing number of independent
pathology groups are beginning to explore consolidation and integration
with cross-town colleagues. A full consolidation does not have to happen.
Some form of collaborative test services may be the answer and shared laboratory
testing networks are a visible sign of this trend. (See The Dark Report, March 21, 2011.)
Add to these marketplace dynamics the triple threat of ObamaCare's
accountable care organizations (ACO), medical homes, and value-based purchasing.
Each has the potential to change the way providers buy and use laboratory
tests. When you consider the collective impact that all these trends
may have to the profession of anatomic pathology, it is easy to conclude that
a major transformation of this medical specialty is already under way. How
fast this transformation occurs has yet to be determined.
InCyte Pathology Buys
DSM Lab in Walla Walla
Pathology super-group has strategy to grow
into an integrated provider in the Pacific Northwest
CEO SUMMARY: For the nation's thousands of private
pathology group practices, consolidation is now a growing
trend. The latest example is last week's acquisition of the threepathologist
practice known as the Davis-Sameh-Meeker
Laboratory in Walla Walla, Washington, by InCyte Pathology, P.S.,
of Spokane Valley. There are growing numbers of these mergers
and consolidations involving independent pathology practices,
but few are reported by local newspapers or other media.
Smaller Pathology Groups
Retiring partner pathologists in small groups
are one reason why acquisition activity is climbing
CEO SUMMARY: In eastern Washington State, InCyte
Pathology is developing a strategy that may well be repeated
many times over in the coming years. As older pathologists
who run smaller groups look to retire, they will consider selling
their group practices to larger entities interested in forming
regional pathology groups. These larger groups will
consolidate the smaller practices, then invest in computer
and digital pathology systems required to make them more
competitive against national pathology companies.
G-Men Mistakenly Raid
Pathology Lab in California
At least 15 agents arrive at a pathology lab
to execute a search warrant and seize records
CEO SUMMARY: On February 10, 15 armed agents from the
Department of Justice (DOJ) arrived at a pathology laboratory in
Chico, California, to serve a search warrant and seize billing
records, computers, and other evidence believed to be associated
with fraudulent billing for CPT code 88175. However, in the
weeks since this raid took place, facts leaking out indicate that
the search warrant was prepared based on an inaccurate
understanding of laboratory billing practices. That would indicate
that this raid by armed agents was made in error.
Seven Deadly Sins of Lab Management Are Much Too Common
Survey of lab consultants Survey of lab consultants identifies specific problems
CEO SUMMARY: Pity the poor laboratory manag
budgets are shrinking. It is difficult to staff adequate number of skilled
medical technologists. Baby boomers are now retiring. At the same time
accreditation and licensure inspections are becoming tougher. Recently
an experienced laboratory management consultant polled her peers to
identify the specific problems that were most often encountered in lab
consulting assignments. The survey identified what Anne Daley of
Solutions, Inc., calls the "Seven Deadly Lab Sins."
Lack of Succession Plan
Now Hurts Many Labs
More labs find themselves short of leaders
following a sudden retirement or regulatory issues
CEO SUMMARY: Throughout the past decade, laboratory
administrators and pathologists have been reminded about
the importance of having a succession plan in their laboratory.
Now one veteran lab industry CEO says the lack of a
succession plan, unexpected retirements, the discovery of
serious compliance deficiencies, or failure to achieve financial
targets are the reasons why a growing number of hospital
labs find themselves leaderless. In such cases, these labs
are forced to hire interim managers.
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