It’s the second new hospital laboratory joint venture for PAML in past eight days
Earlier today, PAML and Centura Health of Denver, Colorado, announced the creation of a new clinical pathology laboratory company. It will be called “Colorado Laboratory Services” (CLS) and will operate as an LLC (limited liability company). CLS represents the second major hospital laboratory outreach joint venture for PAML in the past eight days.
Centura Health is Colorado’s largest integrated health system. It owns 13 hospitals and its flagship is 593-bed St. Anthony Central Hospital in Denver. Its hospitals are strategically located throughout the Denver metropolitan area and will provide CLS with a local presence to serve physicians’ offices located around each of these medical campuses.
In the Centura—PAML hospital laboratory outreach joint venture, Centura will provide most of the laboratory testing. The two partners issued a statement which said that CLS “will combine the high-quality laboratory testing capabilities of the 13 Centura Health hospitals in Colorado with the esoteric testing capabilities and lab outreach support services offered by PAML. The rapid turnaround times delivered by each of Centura Health’s hospital-based laboratories and the advanced physician connectivity, logistics and client service support products [provided by] PAML …will enhance the delivery of laboratory services available to physicians in Colorado.”
The launch of Colorado Laboratory Services will immediately make it a major competitor to Quest Diagnostics Incorporated (NYSE: DGX), which operates a major regional laboratory in Denver. PAML participates in similar hospital laboratory outreach joint ventures in the metropolitan areas of Seattle, Boise, and Salt Lake City, as well as several smaller communities. In each of these markets, its joint ventures with local hospitals have steadily increased market share, specimen volume, and revenue.
PAML’s Other New Lab Joint Venture is in California
It was only eight days ago, on August 31, that PAML and Renton, Washington-based Providence Health & Services publicly disclosed their agreement to form and operate a new clinical laboratory testing joint venture that would be based in Burbank, California. This enterprise will be called California Laboratory Associates (CLA).
There is one interesting coincidence with PAML’s new laboratory outreach joint ventures with health systems in Denver and Burbank. As noted above, in Denver, the lab competitor with the closest major laboratory facility is Quest Diagnostics. That is also true in California’s San Fernando Valley. Quest Diagnostics operates a very large testing facility in Woodland Hills, which is only 17 miles from the Providence Saint Joseph Medical Center in Burbank where CLA will be based.
By gaining two multi-billion dollar health systems as hospital laboratory outreach joint ventures in two major regional markets, PAML is serving notice that its business strategy and track record are credible with health system administrators. These important market developments will be covered in greater depth with the next issue of The Dark Report, which goes to press on Monday, September 13.