Laboratory News

PAML Creates Lab Joint Venture with HCA's MountainStar Healthcare Network

Today news broke that Pathology Associates Medical Laboratories (PAML) of Spokane, Washington, has entered into a laboratory joint venture with MountainStar Healthcare Network of Salt Lake City, Utah. MountainStar, with eight hospitals, is owned by Hospital Corporation of America (HCA).

Participating in the laboratory joint venture will be PAML, 297-bed St. Mark's Hospital of Salt Lake City, Utah and 1116-bed Lakeview Hospital of Bountiful, Utah. The new joint venture will be called "MountainStar Clinical Laboratories LLC." The partners will match the local presence and fast turnaround times of the two hospitals with PAML's services in such areas as "advanced physician connectivity, logistics, and client service support products."

PAML currently owns and operates a regional laboratory in the Salt Lake City metropolitan area. That site is likely to be a service hub for the joint venture. There was no comment on whether either joint venture partner would contribute existing outreach laboratory clients and revenues to the joint venture.

This development is significant. First, it represents a major milestone for PAML, which has been building its expertise and experience in creating and supporting laboratory joint ventures with hospitals. Second, having MountainStar as a partner in the joint venture adds credibility to PAML as it works to develop similar joint ventures with other hospitals in different regions of the country. Third, HCA, which was acquired by equity investors last year and taken private, is the nation's largest for-profit hospital company. It owns 179 hospitals in the United States, United Kingdom, and Switzerland. It is probable that HCA has an interest in establishing other laboratory joint ventures once MountainStar Clinical Laboratories demonstrates that it can operate profitably and complement the clinical mission of St. Mark's Hospital and Lakeview Hospital.

During the past fifteen years, PAML has entered into laboratory joint ventures with a number of hospitals in the Northwest. Of these, PACLAB Network Laboratories  may be best known. The network has grown to include 11 hospital laboratory members. In the Greater Seattle metropolitan area, PACLAB has grown steadily. It now holds a market share of approximately 30%, which PACLAB says makes it about equal in size to the two national labs in that market. PAML would like to duplicate that success in the Salt Lake City metropolitan area with MountainStar Clinical Laboratories.

There will be further analysis and insights about the new MountainStar Clinical Laboratories joint venture in the upcoming issue of The Dark Report . It is another demonstration of why interest in clinical laboratory ventures remains white hot. This joint venture may also encourage other for-profit hospital companies to consider entering into laboratory joint ventures involving their own hospitals.