Most people knowledgeable about the inner workings of the clinical laboratory industry generally agree that hospital laboratories possess inherent advantages over commercial laboratories—anytime a hospital lab outreach program is organized properly and marketed professionally.

Certainly the managed care contracting success of Joint Venture Hospital Laboratories (JVHL) in Detroit and throughout the state of Michigan bears testimony to the potential of hospital laboratories to operate competitive outreach programs against the national commercial laboratories. (See pages 2-5.) Since its founding in 1992, JVHL has outlasted public lab companies such as Universal Standard Medical Laboratories and SmithKline Beecham Clinical Laboratories while helping its member hospital laboratories expand their share of the physicians' office marketplace in Greater Detroit.

This achievement required a level of unity and commitment by participating hospital lab directors that is seldom seen around the country. From the chosen business structure of its regional laboratory network to close teamwork in developing the type of lab data reporting formats requested by payers, JVHL demonstrates how collaboration between hospital labs can be to everyone's benefit.

So why is it that other regional laboratory networks around the United States have found it so difficult to organize around an economically-sustainable business model and then build outreach lab testing business from physicians' offices in their community? Maybe an equally valid question is to ask, if Detroit's hospital labs could work so effectively together and compete successfully against the two blood brothers, why have the pathology groups that anchor these hospital labs failed to organize an equally effective "regional pathology network"? It certainly seems that a pathology network layered on top of JVHL's clinical laboratory network would have the inside track to chase national pathology companies like DIANON Systems and IMPATH out of the Detroit market.

Of course, there are predictable answers to these questions. Efforts to create collaboration between different hospital labs are frequently stymied because lab directors can't get past issues of control or long-standing competitive feelings about their cross-town brethren. That's a shame, because a little collaboration could take these hospital laboratories a long way in their home town.

Michigan Lab Network Wins Major HMO Deal

Latest contract award comes at the expense of one of the national commercial lab firms

CEO Summary:  By winning the contract for Health Alliance Plan (HAP), Joint Venture Hospital Laboratories (JVHL) captured another major exclusive managed care contract for lab testing services in Southeast Michigan. Its victory demonstrates that local hospital lab outreach programs can compete on equal terms with national laboratory competitors. Service and enhanced lab data reporting are keystones to its success.

Cytyc Acquires Digene To Expand Product Line

HPV testing may become differentiator for liquid preparation Pap testing kits

CEO Summary:  Cytyc Corporation will pay more than one half billion dollars to purchase Digene, Inc., and its DNA Capture HPV test. For Cytyc, this may prove to be a strategic masterstroke. In the short term, it alters the competitive balance in the market for liquid preparation Pap testing products, where Cytyc already holds more than half of the market share for Pap testing in the United States.

Lab Test Manual Now Available on Handheld PDA Devices

Lab Industry Update