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R. Lewis Dark: Professional Management Does
Get Results
If you take the time to study the financial performance of certain
public laboratories in 1999 and into 2000, you will be struck by
the strong growth and profit numbers. That is contrary to the popular
wisdom, which says that the clinical lab industry is in financial
doldrums.
But the strong financial gains posted by companies such as DIANON
Systems, Inc., IMPATH, Inc., LabOne, Inc., Quest Diagnostics Incorporated
and others in 1999 and the first two quarters of 2000 illustrate
an undeniable fact: professional management, diligently applied,
gets results. Even the executives from these lab companies will
agree that reimbursement for testing is declining; that test utilization
patterns are changing, usually for the worse; and that basic costs
are rising year-by-year faster than lab test reimbursement.
So why do some of these companies show revenue and profit growth
ranging from 20% to 40%? (See page 8.) And why do these companies
financially outperform most of their independent commercial lab
and hospital lab outreach competitors? I believe it is because they
are ahead of most laboratory organizations in shedding the old management
conventions of the prior generation of technically-trained lab administrators.
In their place, these lab companies are adopting new models of professional
corporate business management.
For example, these companies are willing to declare a growth goal
of 10% or 30% per year. Then they ask their managers and employees
to contribute in making that goal a reality. I mention this first
because, if your lab team doesn't have a goal, it can't
achieve things which might be considered improbable or even impossible.
Yet an essential part of professional management is to establish
goals, then help the organization achieve those goals. I would be
remiss in failing to also point out the important role of sales
and marketing to professional management. Organizations need to
grow to retain their vitality and momentum. Yet in most hospital
lab outreach programs, sales and marketing is under appreciated
and fails to get the support it should from senior administration.
This despite the fact that increased test volumes usually mean employment
stability, career opportunity, and increased profits for expansion.I
believe today's most successful laboratory organizations are
possessed of good management discipline. The strong financial performance
of these lab companies during 1999 and into 2000 demonstrates that
professional management methods do make a positive difference!
• Qualigen's POL PSA test Cleared for Sale by FDA
• Goal is to introduce in-office PSA testing to urologists
in a fall marketing campaign
• CEO Summary: Qualigen, Inc. gained FDA approval to sell
its FastPack™ System for PSA testing in the United States.
Qualigen is one more example of a technology company that expects
to shift diagnostic testing out of core laboratories and closer
to the patient. Initially, Qualigen will sell this system to urologists,
where it believes the 15-minute turnaround time for PSA results
will make it a winner.
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The Dark Group Inc. © 2000 |
Lab Industry Attracting New Investment
Dollars
Professional investors becoming interested
in clinical lab & anatomic pathology services
CEO Summary: Professional investors with access to hundreds of
millions of dollars of investment capital are closely scrutinizing
the clinical laboratory industry. They are encouraged by the recent
financial performance of public laboratory companies. For independent
laboratory owners, this may be a golden opportunity to sell or restructure
their business on favorable terms.
Several Labs Planning a Public Stock
Offering
These laboratory firms have the motive,
the size, and the capability to go public.
CEO Summary: During the past six years, no general clinical laboratory
company has undergone an initial public stock offering (IPO). That
will certainly change during the next 24 months. There are several
private lab companies which want to go public. But this business
strategy can only succeed if the stock market stays flush and the
financial performance of individual labs remain at acceptable levels.
Dr. Friedman Identifies Market Dynamics
Driving Lab Information
He sees five dynamics actively shaping
the future content and delivery of laboratory information
CEO Summary: Probably no one is better positioned to identify the
evolution of laboratory information services than Bruce Friedman,
M.D., Professor of pathology at the University of Michigan Medical
School in Ann Arbor. For almost 20 years, he has hosted the pre-eminent
meeting in laboratory informatics, known as AIMCL—Automated
Information Management for Clinical Laboratories. Dr. Friedman recently
chaired the Laboratory Web Informatics Day at the Executive War
College in New Orleans. He shares his thinking about the important
forces currently driving the rapid evolution of laboratory information
services and products.
Intelligence: Late-Breaking Lab News
• Medical Management Programs, Inc. (MMP) of Southfield, Michigan
is the new owner of the TPA...:
• Merger Rumors: New rumors predict that a well-known lab
information systems vendor will merge....
• Genetic Test for Melanoma Almost Ready for Market: "Predictive
medicine" will soon get a new diagnostic tool. Millennium Pharmaceuticals,
Inc., has developed a genetic test....
• More on--Genetic Test: Millennium's new melanoma assay will
be manufactured and distributed by....
• Healtheon/WebMD Turning Over Staff: Interestin things are
afoot at Healtheon/WebMD Corporation. In January....
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