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R. Lewis Dark: How Smaller Lab Organizations
Can Compete
Maybe the pendulum is swinging back in favor of smaller laboratory
organizations. During most of the 1990s, consolidation and large
size seemed to generate clout. But huge size didn't always result
in profitable laboratory companies.
Witness the red ink spilled from such public laboratory companies
as Corning Clinical Laboratories (now Quest Diagnostics Incorporated),
Laboratory Corporation of America, Unilab, and others during the
years 1995-1997. And these were the companies that survived. Others
filed bankruptcy and disappeared, such as Meris Laboratories, Physicians
Clinical Laboratories, and Universal Standard Medical Laboratories.
Now the Internet and healthcare e-commerce promise to reshuffle
the competitive deck. In the laboratory marketplace, this will create
an opportunity for smaller laboratory organizations to regain their
competitive edge. large size and huge specimen volumes will not
be the competitive advantage that it once was. Instead, being close
to the customer and serving the unique needs of physicians and patients
in the local community will be the critical success factors for
laboratories.
That is why the business achievements of Clinical Laboratories,
Inc. (CLI) in Throop, Pennsylvania are worth studying. (See pages
2-6) It recognized the opportunities that Web-enabled lab test results
reporting would create. Two years ago, when most labs were not paying
attention to the Internet, Kuo Cheng and Gary Ross had the vision
and foresight to recognize this opportunity. Using the internal
resources of the lab, they "home brewed" their own Web-enabled
lab test result reporting system for clients and had it in operation
by the summer of 1998!
This is local laboratory services at their best. Good management
vision, coupled with a nimble response and fast implementation,
is making CLI the dominant lab competitor in its service area of
Northeastern Pennsylvania. I believe that hospital laboratory administrators
sit atop untapped gold mines around their hospital campus. Just
like CLI, they have a natural market advantage with the physicians
on their hospital staff. It is time for hospital lab administrators
to harness the power of the Internet. In so doing, they can become
the primary lab resource in their local community.
Beckman Coulter's Strategy Reflects Consolidation Trends
Diagnostic Testing Remains and Undervalued Asset
CEO Summary: Rapid changes to the clincial laboratory industry
had equally profound impact upon the major diagnostic companies.
At Beckman Coulter, Inc., market forces triggered a decade of acquisitions
and internal consolidation. The company looks very different today
than it did ten years ago. Here's a look at how Beckmamn Coulter
view the near future for clinical laboratories, along with its business
strategies for developing new Diagnostic products.
Managed Care Briefs: Insurers
Dropping Medicare HMO Programs in Various Regions Diagnostic Meanwhile,
Pacificare teams up with Compaq to buy e-commerce company targeting
seniors
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Lab "Home Brews"
Web Solution for Test Results
"Do-it-yourself" effort proves
successful with physicans and other lab clients
CEO Summary: Internet-enabled lab test ordering and results reporting
may help independent commercial labs and hospital laboratory outreach
programs become more competitive against the two blood brothers.
In eastern Pennsylvania, Clinical Laboratories, Inc. introduced
Web-based lab test results reporting in July 1998. Since that date,
sales are up and clients are happier.
Neurology is Test Focus for Athena Diagnostics
Long term strategy is disease management
services that include diagnostics & therapeutics
CEO Summary: There are few examples of laboratory companies focused
on a single medical specialty, a business model that is expected
to become more common in coming years. One such company is Athena
Diagnostics. For 12 years, this company has concentrated on providing
diagnostic testing for neurology specialists. It grew steadily throughout
the 1990s and is continuing to expand its diagnostic testing services.
Intelligence: Late-Breaking Lab News
• When it comes to laboratory information services, the Internet
may indeed be a competitive leveler.....
• Healtheon is Dead! Long Live WebMD!: Sometime in the days
after Healtheon/WebMD Corp. acquires Medical Manager Corp....
• Watch Out! Bluetooth is Ready to Hit the Market: Lab executives
and pathologists interested in wireless reporting of lab test results...
MORE ON: Bluetooth: Bluetooth
technology already has wide support from the electronics industry.
Some 1,700 comapnies worldwide...
Human Genomre Map Nearing Comletion: Competition certainly makes
things move faster. Most laboratorians know that...
Lab Industry Briefs
• Prescription Drug Spending Hits a Record Increase of 17.4%
in 1999
• Does Wall Street Really Believe its own Hype about Labs?
• Urocor Sells Access to its Prostate Cancer Gene Database
• On-line CMEs available at BRLIs CareInvolve Physician's
Web Portal
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