LabCorp
Ousted from Aetna's National Contract
In
the heavyweight championship fight taking place between the two
blood brothers, Quest
Diagnostics Incorporated has just won the next round. Earlier
today, Laboratory Corporation
of America issued a terse press release titled: “LabCorp
Notified by Aetna of Contract Termination.”
LabCorp acknowledged that “it will no longer be a contracted
laboratory provider for Aetna Inc.
(NYSE:AET), effective July 1, 2007.” LabCorp further disclosed
that it expects the loss of its contract relationship with Aetna
to be the primary reason why it expects earnings per share in
2007 will decline from a projected $0.16 to $0.12 in 2007. That’s
a 25% reduction.
This breaking development is not a total surprise. Quest Diagnostics
found itself excluded from almost all UnitedHealth contracts last
October (United
Health Disrupts the National Contract Status Quo Between the Two
Blood Brothers) and from New Jersey-based Horizon
Blue Cross Blue Shield in January. In both cases, LabCorp
had negotiated an exclusive relationship.
Now it's tit for tat. Quest Diagnostics is likely to announce
that it has an exclusive national contract with Aetna, effectively
denying LabCorp access to Aetna's 16 million members. Aetna is
one of the five largest health insurance companies in the United
States.
Each of these national managed care contracts has implications
for clinical laboratory management. That's because both of the
blood brothers want to negotiate a national contract with insurer
that include terms designed to exclude regional independent laboratories
and hospital laboratory outreach programs. To help lab directors
and pathologists stay on top of this emerging trend, this year's
Executive War College
on Laboratory and Pathology Management has several sessions
devoted exclusively to the latest developments in managed care
contracting.
In particular, LabCorp's new CEO, David P. King, will be discussing
how managed care companies are altering their strategies for contracting
laboratory testing services. This will be a unique opportunity
to hear, first hand, what is likely to unfold in the next 24 months.
That’s particularly important, since the developments of
the past five months are pointing to a managed care contracting
environment which is increasingly excludes independent lab companies
and hospital laboratory outreach program in favor of the national
laboratories.
Stay tuned to Dark Daily
for more updates on both this story and this rapidly unfolding
trend. Once LabCorp used its exclusive pact with UnitedHealth
to break the managed carecontracting status quo between it and
Quest Diagnostics, it set in motion forces which are already propelling
the laboratory industry into uncharted territory.
PS: To get the latest news and effective strategies dealing
with new trends, join us in Miami on May 10-11, 2007 for the 12th
Annual Executive War College. You can access the full details
using the links below. Take action today to reserve your place.
Early-Bird
Discount Registration now available online
Visit http://www.executivewarcollege.com
Download
Full Program Agenda
Four Easy Ways to Register:
1. Register
ONLINE
2. Call 800-560-6363. Our friendly staff can register you quickly
and easily, as well as answer any questions you may have.
3. Fax
this complete registration form PDF to 512-264-0969
4. Mail the one page form with payment to:
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REPORT
21806 Briarcliff Dr.
Spicewood, TX 78669
© 2007 The Dark Group, Inc
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