R. Lewis Dark: New Technologies Bring New Issues for Pathologists

TECHNOLOGICAL IMPROVEMENTS ARE MOVING through the lab industry like a buzz saw through balsa. Three briefings in this issue provide examples. In two briefings, we address the topic of false positive results generated in part because of innovations in molecular testing. In the third briefing, we explain how more sophisticated automation and complex new diagnostic technologies are outrunning the ability of legacy laboratory information systems (LIS) to keep pace.

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Quest Acknowledges Loss of United Business

Company tells investors that, during January, it lost 50% of its existing UnitedHealth business

CEO SUMMARY: In the boxing world, prize fights between heavyweight contenders always grab the world�s attention. The same is true in the lab industry, where the current fight between the industry�s two heavyweights has the potential to reshape several important aspects of the national market for lab testing services. This boxing match started on January 1, when the exclusive national contract between UnitedHealth and LabCorp became effective.

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New Competive Forces Alter Market Status Quo

Quest Diagnostics announces plans to expand internationally and enter POCT

CEO SUMMARY: January was not kind to Quest Diagnostics, as the company disclosed that it was likely to lose all its UnitedHealth business by year end. It also found itself excluded from the Horizon Blue Cross Blue Shield of New Jersey program. By February 1, however, Quest Diagnostics had acquired HemoCue, a point-of-care testing company with international distribution and annual revenue of $90 million.

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LabCorp Uses United As a �Growth Driver�

Company reports positive progress from the first six weeks of its United Contract

CEO SUMMARY: In the first six weeks since its exclusive national contract with UnitedHealth became effective, Laboratory Corporation of America has made major gains in several key markets. It has also begun to share the details of its three-phase strategic plan to maximize the leverage it gets from its 10-year pact with UnitedHealth.

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UK Laboratories Pushed To Serve Primary Care

National Health Service shifts emphasis to early detection and active intervention

CEO SUMMARY: At the fifth annual Frontiers in Laboratory Medicine (FiLM) meeting in Birmingham, England, lab administrators and pathologists from the United Kingdom and the United States gathered to share knowledge about innovations in the management of clinical laboratories. The event sold out for the second consecutive year, demonstrating the keen interest in the United Kingdom for improving laboratory testing services.

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LIS As Productivity Tool Throughout the Laboratory

Laboratories are becoming sophisticated in their approach to lab information systems

CEO SUMMARY: Is the classic laboratory information system (LIS) morphing into a different information technology product? That�s the observation of one laboratory IT expert, who says that �best of breed� LIS products are becoming productivity tools that support improved clinical performance and give lab managers the comprehensive, real time information they need to closely manage laboratory work flow, including genetic and molecular testing.

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Whooping Cough Cases Reveal Test Deficiencies

Molecular tests called into question as hospitals research outbreaks of Bordetella pertussis

CEO SUMMARY: Doctors rely on labs for the definitive diagnosis of the bacterium that causes whooping cough. Yet in several recent cases, the use of a molecular test for a definitive diagnosis led to questions about the effectiveness of the test. Molecular pathologists recommend labs may need to do a second test to confirm initial findings and labs may need to be diligent about any equivocal findings to avoid reporting false positive results.

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New Rules to Boost Cancer Test Accuracy

Breaking new ground, oncodiagnostics are changing how pathologists test for breast cancer

CEO SUMMARY: Recent developments in breast cancer testing are leading to changes in pathology. Oncologists and pathologists have issued new guidelines regarding HER2 testing and new research suggests changes may be coming for estrogen-receptor testing as well. For the first time, the new guidelines require a certain level of testing and new procedures for pre-analytical processing.

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INTELLIGENCE: Late & Latent

KAISER PERMANENTE TO CREATE DATABASE WITH GENETIC INFO

GENETIC DISCRIMINATION LAW MOVES TO VOTE

 

R. Lewis Dark: New Technologies Bring New Issues for Pathologists

TECHNOLOGICAL IMPROVEMENTS ARE MOVING through the lab industry like a buzz saw through balsa. Three briefings in this issue provide examples. In two briefings, we address the topic of false positive results generated in part because of innovations in molecular testing. In the third briefing, we explain how more sophisticated automation and complex new diagnostic technologies are outrunning the ability of legacy laboratory information systems (LIS) to keep pace.

---

Quest Acknowledges Loss of United Business

Company tells investors that, during January, it lost 50% of its existing UnitedHealth business

CEO SUMMARY: In the boxing world, prize fights between heavyweight contenders always grab the world�s attention. The same is true in the lab industry, where the current fight between the industry�s two heavyweights has the potential to reshape several important aspects of the national market for lab testing services. This boxing match started on January 1, when the exclusive national contract between UnitedHealth and LabCorp became effective.

---

New Competive Forces Alter Market Status Quo

Quest Diagnostics announces plans to expand internationally and enter POCT

CEO SUMMARY: January was not kind to Quest Diagnostics, as the company disclosed that it was likely to lose all its UnitedHealth business by year end. It also found itself excluded from the Horizon Blue Cross Blue Shield of New Jersey program. By February 1, however, Quest Diagnostics had acquired HemoCue, a point-of-care testing company with international distribution and annual revenue of $90 million.

---

LabCorp Uses United As a �Growth Driver�

Company reports positive progress from the first six weeks of its United Contract

CEO SUMMARY: In the first six weeks since its exclusive national contract with UnitedHealth became effective, Laboratory Corporation of America has made major gains in several key markets. It has also begun to share the details of its three-phase strategic plan to maximize the leverage it gets from its 10-year pact with UnitedHealth.

---

UK Laboratories Pushed To Serve Primary Care

National Health Service shifts emphasis to early detection and active intervention

CEO SUMMARY: At the fifth annual Frontiers in Laboratory Medicine (FiLM) meeting in Birmingham, England, lab administrators and pathologists from the United Kingdom and the United States gathered to share knowledge about innovations in the management of clinical laboratories. The event sold out for the second consecutive year, demonstrating the keen interest in the United Kingdom for improving laboratory testing services.

---

LIS As Productivity Tool Throughout the Laboratory

Laboratories are becoming sophisticated in their approach to lab information systems

CEO SUMMARY: Is the classic laboratory information system (LIS) morphing into a different information technology product? That�s the observation of one laboratory IT expert, who says that �best of breed� LIS products are becoming productivity tools that support improved clinical performance and give lab managers the comprehensive, real time information they need to closely manage laboratory work flow, including genetic and molecular testing.

---

Whooping Cough Cases Reveal Test Deficiencies

Molecular tests called into question as hospitals research outbreaks of Bordetella pertussis

CEO SUMMARY: Doctors rely on labs for the definitive diagnosis of the bacterium that causes whooping cough. Yet in several recent cases, the use of a molecular test for a definitive diagnosis led to questions about the effectiveness of the test. Molecular pathologists recommend labs may need to do a second test to confirm initial findings and labs may need to be diligent about any equivocal findings to avoid reporting false positive results.

---

New Rules to Boost Cancer Test Accuracy

Breaking new ground, oncodiagnostics are changing how pathologists test for breast cancer

CEO SUMMARY: Recent developments in breast cancer testing are leading to changes in pathology. Oncologists and pathologists have issued new guidelines regarding HER2 testing and new research suggests changes may be coming for estrogen-receptor testing as well. For the first time, the new guidelines require a certain level of testing and new procedures for pre-analytical processing.

---

INTELLIGENCE: Late & Latent

KAISER PERMANENTE TO CREATE DATABASE WITH GENETIC INFO

GENETIC DISCRIMINATION LAW MOVES TO VOTE

Dark Report presents "White Paper" Summary of Laboratory Industry

Unmet challenges of the 1990s still require appropriate response by lab industry leaders

Introduction: To celebrate five eventful years of service to the laboratory industry and pathology profession, The Dark Report is pleased to present its first "White Paper" on the laboratory industry. Our goal is to help laboratories and their suppliers accurately identify relevant market dynamics and understand how and why these market forces will affect the stability and financial fortunes of laboratories during the first 24 to 36 months of this new decade.

• Chapter 1: Business Premises Underlying Laboratory Industry Dynamics

• Chapter 2: Strategic Business Failures of the Laboratory Industry During the 1990s

• Chapter 3: Competitive Dynamics in the Lab Testing Marketplace

• Chapter 4: Summary and Overview of Lab Industry

R. Lewis Dark: Consumers are Ripe, Low-Hanging Fruit!

• Two Labs Complete IPOs, American Med Labs May be Next in Line
  
• Dynacare's Business Plan Includes New Direction
  
• Number of Hospital Deals Declines Again in 2000
  
• Consumers Taking Active Role in Their Laboratory Testing
  
• HIPAA Hits Radar Screen, Expected to be Expensive
  
• Lab Briefs: DNA Diagnostics Market, Kaiser Permanente, TriPath Imaging, LifeScan
  
• Intelligence: Late-Breaking News
  

 

Commentary & Opinion by R. Lewis Dark, Founder & Publisher

It's time to pay attention to a growing area of medicine loosely described as "information therapy."  It is the concept of providing consumers and patients with reliable health information without requiring face-to-face visits with physicians or other healthcare professionals.

For clinical laboratories and anatomic pathologists, this is an important development.  After all, information is the stock in trade for any laboratory.  It seems obvious that "information therapy" would play directly to the strengths of clinical laboratories.  When you learn more, I think you'll agree.

There is a growing body of evidence which indicates that consumers who access accurate and carefully vetted medical information will generate fewer visits to either the emergenccy room or the physician's office.  This reduces the cost of caring for these patients.  This has been the experience at Kaiser Permanente, which is moving rapidly to incorporate information therapy into its continuum of care.  In 1996, Kaiser launced Kaiser Permanente Online as a pilot project.  It is a password-protected site that offers a variety of services: health and drug encyclopedias, personalized health risk assessments, e-mail connections to nurses and physicians for questions and on-line appointment booking, and doctor-monitored health discussion groups.  Originally started with 1,000 members, it now has almost 325,000 registered members.  Kaiser estimates that 71% of its eight million beneficiaries have access to the Web, so it's beefing up the capacity of its Website.

Another place to learn more about information therapy is Healthwise, a non-profit organization in Boise, Idaho.  For years, Healthwise has produced pamphlets and other patient-information materials for healthcare providers.  It is now expanding into Web-based health information services.

The concept of information therapy is perfect for laboratories.  After all, within the healthcare system, who know more about when and why it's appropriate to order a specific lab test, and how to interpret the results?  This is a tailor-made opportunity for laboratories to establish direct links with consumers and educate them about the importance of laboratory testing to all aspects of their personal health.

I'll end with a provocative quote from Anna-Lisa Silvestre, Director of Kaiser Permanente Online.  She says: "The Internet is becoming a triage station consumers go to first, whereas before they might have come in to the doctor or done nothing at all."

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Eight Trends Reshaping Clinical Lab Services

Disruptive technologies starting to alter the traditional role of clinical laboratories

CEO Summary:  Once again, The Dark Report's annual list of lab industry trends deals less with government regulation and influence on laboratory operations and more with the impact of new technologies and new management philosophies.  Marketplace acceptance of these lab industry trends is occurring swiftly.  Throughout 2000, early adopter labs moved readily to respond to these new technologies.

 

Lab Industry Trend #1

Consumers are here

 

Lab Industry Trend #2

Clinical Data Repositories

 

Lab Industry Trend #3

Web-Based Test Reporting

 

Lab Industry Trend #4

Lab Regionalization

 

Lab Industry Trend #5

E-Health Services

 

Lab Industry Trend #6

Incremental Automation

 

Lab Industry Trend #7

Med Tech Availability

 

Lab Industry Trend #8

Management Philosophy

 

"Local" Anatomic Path Has Two Major Players

Consolidations and mergers during 2000 reduce options for local pathology groups

CEO SUMMARY:  After a lot of money and much effort, the fledgling crop of companies wanting to consolidate and manage pathology group practices has narrowed into just two market leaders: AmeriPath and Pathology Service Associates.  These two companies could not be more different in their goals and operating philosophies.  For local pathology groups, this is certainly an unexpected outcome.

Market Favors Five Distinct Pathology Business Models

In recent years, five primary business models have emerged in the anatomic pathology marketplace.  Because of ongoing changes to the American healthcare system....

Lab Industry Briefs

Early Adopters Offer Web-enabled Lab Test Reporting to Doctors

Cytyc & Tripath Imaging Issue Earnings Reports for Q-4 and Full Year

Anthem Insurance Co. Plans a Huge Stock Sale Later in 2001

Lab Sales & Marketing Programs are Changing

National labs are altering sales incentives, regional labs and path firms are expanding

CEO SUMMARY:  Market evidence points to a shifting role in the sales priorities of the national labs.  Meanwhile, regional laboratories and pathology companies are enjoying surprising success with their sales and marketing programs.  These shifting patterns may indicate a new stratification in the laboratory services marketplace.  It may be closely linked ot managed care contracting practices.

• R Lewis Dark: When the Laboratory Marketplace Speaks
  
• Labs Moving to the Internet for Results Reporting
  
• New Products for Lab Test Results Reporting via Web
  
• Web-Based Lab Test Ordering is a "Tough Nut to Crack"
  
• Nurse Shortage Parallels Shortage of Med Techs
  
• Lab Briefs: DIANON Systems, IMPATH, Specialty Labs, Dynacare, Quest, LabCorp
  
• Intelligence: Late-Breaking Lab News

• R. Lewis Dark: Lab Industry Easing Back to Financial Stability
  
• LabNet of Ohio Profits from Network Projects
  
• Knoxville Pathology Group Reports Path Results via Web
  
• Market Changes Lead LabCorp to Follow New Strategic Direction
  
• Lab Industry Trends: Controversial Montana Ruling Pits Nurses Against Labs
  
• Lab Briefs: DIANON Systems, UroCor, Cytye, Digene, McKesson HBOC, Abaton.com, Abbott
  
• Intelligence: Late-Breaking News

• R Lewis Dark: Identifying Future Lab Winners from Losers
  
• The "Movers & Shakers" for 2001
  
• Ampersand's New Cytology Technology Entering Clinical Study Phase
  
• Tissue Banking May Become Source of New Pathology Revenues
  
• Dark Index: Specialty Laboratories, Inc. and Dynacare Have Balance Sheet Differences
  
• Intelligence: Late-Breaking News
  

• R Lewis Dark Time to Change Bad Medicare Lab Policies
  
• New England's Path Lab is Acquired by LabCorp
  
• Bigger Labs Have Always Coveted Lab Testing
  
• Trends in Pathology: Wall Street Journal Addresses Error Rates by Pathologists
  
• Institute of Medicine Calls for 12 Medicare Lab Reforms
  
• Luminex Multi-Analyte Test Technology Entering Clinical Usage
  
• Intelligence: Late-Breaking News

• R. Lewis Dark: Shift in Lab and Pathology Management Thinking
  
• Lab Owners Selling Stock to Harvest Big Profits
  
• Unilab Files Registration for IPO of $115 Million
  
• New Specimen Transport Box Technology Ready for Laboratories to Use
  
• Changing Lab Industry Trends Identified at Executive War College
  
• Laboratory Web Watch: Abaton.com Will not be Offered as Stand-Alone Lab Solution
  
• Dark Index: Public Labs Enjoy Boom Times as Revenues and Profits Climb
  
• Intelligence: Late-Breaking News