| R. Lewis Dark:
Heeding the Lessons of Market Competition
It is no surprise, then, that independent labs and hospital laboratory outreach
programs are beginning to spend money to create electronic interface
gateways between their laboratory information system (LIS) and the EMRs of
their physician-clients. The depth and breadth of this trend was confirmed at
the special LIS-EMR Interface Gateway program at the Executive War College
last May in Miami.
In this issue of THE DARK REPORT, readers will notice how we’ve identified
market threats to the status quo of laboratories across the country. Probably the
most noteworthy development is the threat to anatomic pathology as specialist
physicians build their own, in-clinic pathology laboratories.
That is why it is instructive to study the efforts of Kettering Pathology
Associates (KPA), a five-physician group in Kettering, Ohio, to retain specimen
referrals as each of three gastroenterology groups in town decided to open their
own in-house pathology labs. (See pages 3-6.) As each GI group opened its lab, it
requested a proposal fromKPA.The first two times,KPA declined to do the work
at the discounted rate theGIswere seeking.But after losing 40%of their outreach
specimen volume to the first two new in-house labs, the pathologists at KPA
decided to work with the third GI group when it opened its lab lastmonth.
Next,we provide the assessments of consultants who actively work with both
pathologists and specialty physicians. (See pages 7-9, 17.) Many of you are likely
to be surprised by their observation that pathologists can do okay in a discounted
fee arrangement—if they just show up, read slides, and get amonthly check from
the specialists. That’s because pathologists in these types of deals have no overhead
or other costs.
In the clinical laboratory sector of the marketplace, our coverage of Quest
Diagnostics Incorporated’s South Florida business unit provides a serious early
warning about how labs that use Six Sigma and Lean effectively can create competitive
advantage while raising the bar on customer expectations. (See pages 10-
16.) By fulfilling those needs with targeted and innovative services such as a
scheduling systemto allow patientsmake appointments for collecting their specimens,
the lab was able to differentiate itself from its competitors and raise the
level of customer service in the lab industry in Florida.The result was a return on
its investment in quality improvement of almost $10 for every $1 invested and a
prestigious quality award, which the business unit won this year.
These three articles show why it is imperative for pathologists and lab directors
to respond to such changes nimbly in order to grab market share in today’s
competitive environment.
Path Group Closes Its Lab After GIs Do In-Clinic Lab
Pathology group in Kettering, Ohio, responds
to specialist docs building in-clinic pathology labs
CEO SUMMARY: Kettering Pathology Associates of Kettering,
Ohio, built a thriving outreach pathology business in this Dayton
suburb before three gastroenterology groups either sent biopsy
work out of state or built their own lab, and asked the pathologists
to provide contracted professional component services at a
discount. How the pathologists responded to these developments
illustrates new challenges to the pathology profession.
An Economic Perspective
On Discounted PC Deals
Financial analysis of providing path services
to specialist physicians shows some benefits
CEO SUMMARY: By opening their own in-office pathology laboratories,
specialist physicians are undermining a long-established
referral relationship with the pathology profession.
Pathologists are debating the merits of this market-based trend
and its effect on their profession. However this debate often fails
to include an objective assessment of how contracting for professional
services can provide financial benefits to pathologists.
Quest South Florida
Wins Governor’s
Award for Quality
Sigma & Lean Methods Six Sigma & Lean Methods Spark Innovations
CEO SUMMARY: It’s an important milestone for the clinical laboratory
profession. Quest Diagnostics Incorporated South Florida, based in
Deerfield Beach, Florida, earned the 2007 Florida Governor’s Sterling Award
for quality. This is only the second laboratory in this country to win a state
quality award. But that’s just part of the story. Guided by the philosophies
and methods of Six Sigma and Lean, and the goal of meeting customers’
expectations, Quest Diagnostics South Florida has developed value added
services, such as patient appointments at Patient Service Centers.
Health Trends: Cost of Health Benefits Outpaces
Inflation in Ongoing, 7-Year Trend
INTELLIGENCE: Late & Latent
MILESTONES: Oracle Diagnostic LaboratoriesTRANSITIONS: S.E.D. Medical Laboratories | 
