| R. Lewis Dark:
Healthcare Reform Puts Local Labs at Risk
THESE ARE DANGEROUS TIMES for local clinical labs and community hospitalbased
pathology groups. Although several elements of healthcare reform and
emerging models of integrated clinical care favor local labs, there are equally
powerful trends at play with the potential to concentrate ever more market
share and economic power into the hands of a dwindling number of huge
national lab companies—to the extreme disadvantage of local labs.
At this year’s Executive War College on Laboratory and Pathology
Management, the consequences of healthcare reform, the Accountable Care
Act (ACA), and other prominent healthcare trends were the subject of several
important presentations by expert speakers. Collectively, these speakers did
not have good news for the long-term viability of smaller laboratory organizations
if current, unfolding developments go unchecked.
One particularly relevant presentation on this subject was delivered by
Paul Mango, Director of McKinsey & Company. He provided attendees of the
Executive War College with a lucid, detailed strategic analysis of the key trends
now reshaping the healthcare system of the United States. You can read our
analysis of his remarks on pages 10-17 of this issue. However, I would recommend
that you also purchase the audio recording of his presentation, along
with his slide deck, so you and your lab team can listen and get the full impact
of his message to the attendees, along with the important nuances that are
tough to capture in a written intelligence briefing.
In particular, I am proud to say that, as you read about how Paul Mango
analyzes the impact of the ObamaCare bill on socializing what he calls the
“financial accountability for medical risk,” you will acquire insights into the
construction and intent of this legislation that I have never seen reported on
by a major media source. THE DARK REPORT is first to help you access this
invaluable strategic information.
Based upon the collective wisdom and predictions offered by the 90 speakers
at this year’s Executive War College, my primary message to you today is that a
range of trends and healthcare market dynamics are underway that will prove
unfavorable to local labs, hospital lab outreach programs, and pathology groups.
It will require foresight and proactive effort by our industry leaders to forestall the
worst consequences of these trends. It is a time for all the parochial interests in lab
medicine to come together and work for the common good.
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Cleveland Clinic Lab Aims
To Grow Reference Testing
Big new laboratory facility doubles space
to support planned growth in outreach testing
CEO SUMMARY: In the national market for reference and
esoteric testing, Cleveland Clinic Laboratories (CCL) is preparing
to expand its presence. It has just moved into a $75 million
state-of-the-art laboratory facility and wants to increase its
outreach reference testing by four-fold within five years. A
doubling of the national sales force is in the works. CCL says it
wants to work with hospitals and health systems while also
competing against national specialty lab testing companies.
HIPAA UPDATE: Sonic Healthcare Acquires
Labs from Aussie Competitor
Just as in the United States, lab consolidation
is ongoing in Australia with this $100 million deal
In Florida, New Law Bans
Certain Lab Sales Practices
Labs can no longer place phlebotomists
in doctors’ offices nor lease phlebotomy space
CEO SUMMARY: Florida law has long prohibited clinical laboratories
from giving kickbacks and other forms of remuneration to
physicians to induce specimen referrals. Specifically, state regulations
have prevented labs from placing specimen collectors in
physicians’ offices. Despite these clear prohibitions, labs regularly
violated state rules by placing specimen collectors and other lab
employees in physicians’ offices. Now a new law enacted by the
2012 Florida legislature specifically prohibits these activities.
HIPAA UPDATE: Patient Service Center Theft Highlights
Labs’ Need to Protect Paper Records
Health Insurers Now
Finding Ways to Cut
Costs and Shed Risks
Initiatives May Reduce Lab Test Reimbursement
CEO SUMMARY: Both employers and health insurers are taking aggressive steps to
rein in healthcare costs. Several strategies to control spending and create powerful new
incentives for providers are gaining favor. At this year’s Executive War College, Paul
Mango of McKinsey & Company, explained these strategies and emphasized that new
models for handling health risk are changing the status quo. More employers are selfinsuring
and putting their employees into high-deductible health plans. One consequence
of these trends is more downward pressure on lab test reimbursement.
World Lab Watch: Lab Restructuring Moves Ahead
In United Kingdom and Ireland
Need to reduce cost of laboratory testing is one motive
behind more aggressive steps to consolidate lab services
INTELLIGENCE: Late & Latent
Atlas Development
Corporation, of Calabasas,
California, appointed Aron
Seidman as Vice President of
Product Management
More oN: Genomes
Laboratory professionals,
researchers, and the public
can access this genome data
at: www.1000genomes.org
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