| R. Lewis Dark:
Is There A Power Shift in Pathology?
SINCE THE END OF WORLD WAR II, the dominant practice model for the
pathology profession has been the private group practice. Outside of academia
and a few other settings, the vast majority of pathologists practiced laboratory
medicine as physician-partners in a medical group.
During this same period, the pathology profession’s major defender was
the College of American Pathologists (CAP). As the specialty association
representing pathologists, CAP has been the first line of defense against
threats to the scope of practice, professional compensation, and onerous regulation
of laboratory medicine. For many decades, the pathology profession
has generally prospered under this arrangement. But today, we may be seeing
a power shift within the pathology services marketplace.
Consider this: Quest Diagnostics Incorporated has more than 500 pathologist-
employees. Laboratory Corporation of America and AmeriPath Inc. each
have more than 400 pathologist-employees. Now that Quest is about to acquire
AmeriPath, the pathology profession may be reaching a tipping point. Just two
companies will employ 10% of the 13,000 members of CAP.
Over the years, national labs have invested in sales and marketing to capture
additional specimens from office-based physicians at the expense of private
pathology groups. National labs also invest in information systems required to
manage the managed care contracting data needed to expand in a changing
market. In other words, these large companies are investing in three specific
areas: sales, information systems, and managed care contracting expertise.
In contrast, private pathology groups typically defer or fail to invest in
these three areas. By failing to invest in the future of their own businesses,
many private pathology groups have seen continual erosion of market share
in their communities. All the while, national labs invest to support growth in
their specimen volume and revenue.
Now here’s the irony. Employee pathologists at national labs are often paid a
salary and a production incentive. National labs take the difference between professional
fees collected and pathologist compensation paid and invest it back in
building their businesses. Private practice pathologists, if they were similarly
willing to take reasonable compensation and invest the group’s additional earnings
back into their businesses, might well have growing practice revenues that
generate larger partner incomes in the coming years.
Quest Bites: Will Pay
$2 Billion for AmeriPath
AmeriPath's tires have been kicked by a
host of buyers, so why Quest and why now?
CEO SUMMARY: From its inception in the mid-1990s as a
pathology physician practice management (PPM) company,
AmeriPath was a business that its investors created specifically
to be sold. Now Quest Diagnostics Incorporated is stepping
up to pay a princely ransom of $2 billion to make
AmeriPath's ultimate destiny become a reality. However, after
the marriage, it is likely that neither the bride nor the groom
will live happily ever after.
FDA Sends Warning Letter
To Abbott Laboratories
Products manufactured in Irving, Texas,
have not met FDA’s CGMP guidelines
CEO SUMMARY: On March 13, 2007, the Food and Drug
Administration sent a warning letter to Abbott Laboratories’
Chairman and CEO, Miles D. White. The letter identified nine quality
system violations and requested a satisfactory response by
August 15, 2007. The warning letter is based on deficiencies identified
by FDA inspectors at Abbott's manufacturing facility in
Irving, Texas, during the period October 30 to November 17, 2006.
Newsmaker Interview: Why Labs Will Increase Their Use
of Middleware and Informatics
Part One of Two Parts
CEO SUMMARY: Middleware seems to be all the rage across the laboratory
industry these days. Many lab organizations now use software
provided by multiple vendors. One of the newest players in this market is
Technidata America Medical Software LLC, based in Tucson, Arizona. But
Technidata is not a new company. Its roots go back to the earliest days of
laboratory information systems (LIS) in Europe in the late 1970s. Its parent
company, headquartered in Grenoble, France, serves 700+ laboratories
in 25 countries worldwide with installed laboratory information systems.
No American healthcare IT company can match this installed LIS base
globally. That is why THE DARK REPORT's Editor-in-Chief, Robert L. Michel,
caught up with Technidata America’s Executive Vice President and General
Manager, Jaques Baudin. Baudin’s global experience with laboratory software
provides plenty of useful insights about how American labs are likely
to utilize software in coming years.
Joint Venture Launches
Molecular Pathology Lab
Spectrum Health and Van Andel Institute
tap Daniel H. Farkas, Ph.D. to lead effort
CEO SUMMARY: As genomic medicine advances,
researchers into various diseases quickly recognize the need to
incorporate molecular pathologists onto their teams. In Grand
Rapids, Michigan, a large integrated health system and a private
research institute have come together to jointly fund a state-ofthe-
art molecular pathology laboratory. The twin goals are to
advance research and create new assays to offer to clinicians.
INTELLIGENCE: Late & Latent
PATHOLOGIST SUES,
CLAIMS THREAT FOR WHISTLEBLOWINGBidding War For Biosite | 
