For the past 14 years, healthcare spending as a percentage of US gross domestic product has stayed flat—17.2% in 2010 compared to 17.8% in 2024—according to numbers presented by Robert Michel, editor-in-chief of Dark Daily and founder of the Executive War College.
“This is not auspicious for either the vendor side of the clinical laboratory business or providers,” Michel told attendees during the conference’s opening session.
“Clinical laboratories all must watch for opportunities to earn revenue through new business models,” said Robert Michel (above), editor-in-chief of Dark Daily. Michel spoke during a general session at the 2025 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management in New Orleans. (Photo copyright: LabX.)
Spending Blockades Will Push New Business Models for Labs
Michel ran through a series of other, similarly grim statistics that put hard numbers on trends that many laboratory executives and owners already suspected:
Half of Americans have less than $500 in a savings account, according to a January 2025 survey by GOBankingRates.com. Those people face tough financial decisions, including whether to postpone healthcare testing and treatment, Michel said.
Growth in Medicare spending by beneficiary generally stopped in 2010 and remained flat at around $12,500 per beneficiary as of 2023.
“Social Security and Medicaid are going to go broke sooner rather than later,” Michel predicted. “Congress has seen this problem and not reacted.”
Such financial challenges will force the need for new clinical laboratory business models. Among the key areas that will inspire these models are diagnostic data and technology, said Sam Terese, CEO and president at Alverno Laboratories, during his general session at the Executive War College.
“It comes back to using data to predict disease,” Terese explained. “If you can prevent someone from getting seriously ill, you will lower the cost of care.”
Terese pointed out the need to effectively use artificial intelligence (AI) to digest the massive amount of clinical data that labs sit on.
Another New Clinical Laboratory Business Model: Closing Care Gaps
Diagnostic laboratories should also be in the business of identifying care gaps among their patients and consumers. One subset to consider is diabetic and prediabetic people.
“Can the lab identify an A1C patient who should have come in to see their doctor based on the test result?” Michel asked. That type of approach raises the value of a lab test beyond just the result it produced, he added.
During another general session, Sonora Quest Laboratories showed how it determines risk stratification for colorectal cancer by using an algorithm that considers a patient’s age, gender, and minimum of two complete blood count test results to flag at-risk people.
“We’re able to get information to physicians to close that care gap,” said Jen Umscheid, senior director of quality, innovation, and performance excellence at Sonora Quest.
The Executive War College continues through Thursday, with an expected attendance of just over 1,000 delegates, speakers, and vendor representatives. Friday’s Dark Daily will explore how AI topics played out among curious attendees.
Lab professionals will learn more at the upcoming 30th annual edition of the event
Big changes and challenges are coming for the clinical laboratory anatomic pathology industry, and with them a slew of opportunities for lab and pathology practice leaders. At the upcoming 30th Annual Executive War College on Diagnostics, Pathology, and Clinical Laboratory Management, expert speakers and panelists will focus on the three most disruptive forces.
There will be more than 169 presenters at this year’s Executive War College. Those speakers include:
David Dexter, MD, clinical and laboratory pathology at M Health Fairview, and Sam Terese, president and CEO at Alverno Laboratories, who will present a strategic case study about the support labs can provide to parent hospitals when navigating new waters.
Paul Wilder, executive director of CommonWell Health Alliance, who will speak on the effort to improve the transferability and portability of patient and healthcare data in ways that improve the quality of care.
“Since the inception of The Dark Report in 1995 there has been continual change both within the US healthcare system and within the profession of laboratory medicine,” noted Robert L. Michel, Dark Daily’s editor-in-chief and creator of the Executive War College. “Now, three decades later, the following three items are imperatives for all labs: controlling costs; having adequate lab staff across all positions; and having enough capital to acquire and deploy new diagnostic technologies, along with the latest information technologies.”
“Most clinical laboratory managers would agree that many of the same operational pain points faced by labs in the 1990s exist today,” said Robert L. Michel (above), founder of the Executive War College. In an interview with Dark Daily, Michel broke down the nuances of this triad of forces and what participants in the Executive War College can expect. (Photo copyright: LabX.)
Forces at Work in Clinical Labs and Pathology Groups
Here’s a more detailed look at each of the forces that Michel noted.
Force 1: An acute shortage of experienced lab scientists
“When you look at the supply-demand for laboratory personnel in the United States today, it is recognized that demand exceeds supply, and that gap continues to widen,” Michel noted. “For example, in the case of anatomic pathologists, the increased number of case referrals grows faster than medical schools can train new pathologists. Currently, the ability of pathology laboratories large and small to hire and retain an adequate number of pathologists is a challenge.”
Executive War College attendees can expect panelists and speakers to highlight creative problem solving techniques to circumvent the challenges labor shortages cause.
Force 2: New applications of artificial intelligence
“Today every instrument vendor, every automation supplier, every software supplier, every service supplier is telling labs that they have artificial intelligence (AI) baked inside,” Michel observed. “It is important for lab managers to understand that a variety of technologies are used by different AI solutions.”
Clinical laboratory managers and pathologists interested in acquiring a deeper understanding of where to start with AI in their lab will find numerous sessions on artificial intelligence at this year’s Executive War College. “There will be a number of sessions this year where clinical labs discuss their success deploying various AI solutions,” Michel said.
Force 3: Financial stress across the entire US healthcare system
“It’s recognized that a significant number of US hospitals and integrated delivery networks (IDNs) are struggling to maintain adequate operating margins,” Michel noted. “This obviously impacts the clinical laboratories serving these hospitals. If the hospitals’ cash flows and operating profit margins are being squeezed, typically the administration comes to the lab team and says, ‘Your budget for next year will be x% less than this year.’
“There are many IDNs and hospital labs where budget cuts have happened for multiple years,” Michel continued. “As a consequence, labs in these hospitals must be nimble to maintain a high-quality menu of diagnostic tests. Several years of such budget cuts by the parent hospital can undermine the ability of the clinical lab team to offer competitive salary packages to attract and retain the clinical lab scientists, pathologists, and clinical chemists they need.”
Recognizing Opportunities in Today’s Lab Market
The good news is that—despite the negative forces acting upon the US healthcare system today—clinical laboratories, genetic testing companies, and anatomic pathology groups have a path forward.
“This path forward is informed by two longstanding precepts recognized by innovative managers. One precept is ‘Change creates new winners and losers.’ The other precept is ‘Change creates opportunity,’” Michel said. “Savvy lab leaders recognize the powerful truths in each precept.
“As healthcare has changed over the past four decades, nearly all the regional and national laboratories that were dominant in 1990, for example, don’t exist today!” he noted. “And yet, even as these lab organizations disappeared, new clinical lab organizations emerged that recognized healthcare’s changes and organized themselves to serve the changing needs of hospitals, office-based physicians, payers, and patients.”
All of these critical topics and more will be covered during the 30th Annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management on April 29-30, 2025, at the Hyatt Regency in New Orleans. Signup today to bring your lab’s management team by registering at https://www.executivewarcollege.com.
However, effective communication can bring more harmony to medical lab managers and scientists when it comes to compliance
Depending on how lab professionals view it, clinical laboratory regulations can be characterized as a series of checklists to fill out or an opportunity to grow an organization.
Leaning into the latter option will preserve regulatory compliance while also ensuring the operational health of the clinical laboratory.
At the Lab Manager Leadership Summit, Kelly VanBemmel, MS, MB(ASCP)CM (above) pressed attendees to open the lines of communication between bench scientists and lab managers when it comes to clinical laboratory regulations. (Photo copyright: Scott Wallask.)
‘There’s a Gap’ in How Both Sides View Regulatory Compliance
VanBemmel spent her presentation aiming to bridge the rift between how bench scientists look at clinical laboratory regulations compared to the views of medical lab managers.
“There’s a gap between how staff experience regulations and how management does,” she noted. “Staff typically think of compliance as a checklist to do their jobs.” Managers, however, need to understand a wider compliance picture. She illustrated her point by comparing views on the following regulatory bodies.
Staff understand that the FDA clears tests and devices for use in non-research environments, though not all consumables or equipment are in that setting.
Managers understand that the FDA develops rules and guidance for CLIA complexity categorization.
Communication Leads to Common Ground with Clinical Laboratory Regulations
Given the above differences among managers and staff, VanBemmel explained that both sides must frequently talk to each other to fill in the missing details.
“When you’re in the thick of regulations, communication becomes critical,” she said.
For example, bench staff may feel it is solely their manager’s responsibility to comply with clinical laboratory regulations. Savvy lab leaders will point out non-compliant conditions—such as diagnostic analyzer malfunctions and sample cross contamination—over which bench staff have direct control, helping workers better understand their responsibility when it comes to compliance.
On the other hand, lazy communication from managers to their bench scientists can stunt compliance efforts. She recalled a prior supervisor who often answered questions about regulations by asking: What does the standard operation procedure state?
“That answer wasn’t particularly helpful,” VanBemmel recalled. “That made me think that my supervisor didn’t understand nuance.”
Thorough communication builds greater trust, and seasoned clinical laboratory professionals of all ranks will quickly recognize the compliance benefits when the worker-manager relationship gels.
Move comes two-years post-acquisition and is the second such unionization of Labcorp hospital lab workers
In February, clinical laboratory staff at Providence Portland Hospital in Oregon landed a 77% vote to unionize, with its 114 members joining the Oregon Federation of Nurses and Health Professionals (OFNHP). The laboratory scientists had been employees of Providence before the Catholic Health chain outsourced its medical laboratory operations to Labcorp in 2023.
“We decided to unionize because we want to ensure a stable, well-trained, well-staffed medical laboratory is available to our community. By unionizing we can have a strong voice for our patients and ourselves, ensuring a positive future for healthcare in this region,” said medical laboratory scientist Allister Brister-Smith, laboratory services team lead, in an OFNHP news release.
“Since the transition with Labcorp, we’ve noticed an increase in workload, an increase in expectations, and more of a focus on volume and throughput. Providence was more focused on quality,” Brister-Smith told Northwest Labor Press.
“That lab performs the blood, stool, and tissue testing that doctors at Providence’s Portland hospital rely on to make treatment decisions,” Willamette Week noted, adding that both staff and patients have been bemoaning test result delays that have occurred since the May 2023 transition. “Several blamed short-staffing for the lines and delays.”
Labcorp has not commented on the news, Labor Press reported.
One of the 114 Labcorp clinical laboratory workers at Providence Portland Hospital in Oregon who voted in February to unionize. “We are tasked with running so many tests and serving so many patients that we are concerned over the future of the care and services we offer, and we know that a change is necessary,” the workers stated in an OFNHP news release. (Photo copyright: OFNHP.)
Lab Workers Taken by Surprise
The 2023 news of the Labcorp outsourcing damaged morale, Northwest Labor Press reported.
“Lab, typically, is a fairly profitable section for a healthcare system, so when they pulled us into a big meeting and our lab director who had been with us since that lab was created announced to us that Providence had elected to sell off some of the assets, we were all really taken by surprise,” Brister-Smith told Northwest Labor Press.
He noted that many employees were committed to Providence’s corporate values and had forged ahead through the COVID-19 pandemic. “Most people who’d been working there and stuck around through COVID were pretty committed to the mission of Providence. It was quite a shock, honestly, to be told that our jobs would be outsourced to a for-profit company,” Brister-Smith added.
The Providence lab is comprised of employees with two- or four-year degrees, all certified from the American Society for Clinical Pathology (ASCP). Brister-Smith told Northwest Labor Press that lack of pay raises paired with diminishing quality of benefits has discouraged additional talented staff from joining there and instead saw them headed to Oregon Health and Science University and Kaiser Permanente.
The lab workers decided that unionizing was the way to be heard. “We believe that our voice and our input on workflow and the amount of work and staffing can have a positive impact on the long-term future of patient care,” Brister-Smith said. “It’s very inspiring to see people be on the same page, wanting to have some degree of control in their lives.”
Prior Labcorp Worker Unionization
This latest unionization movement is the second local hospital system that saw a merger with Labcorp result in a union. Prior to this, Legacy Health lab workers from 12 locations in Oregon and Washington state joined the union, 435 employees strong. That group is in the midst of contract bargaining, Northwest Labor Press added.
The timing of the unionization comes at a tender time for Providence as they have just wrapped up a 46-day strike comprised of 5,000 of their staff, including doctors and nurses. The strike began on January 10 but followed more than a year’s worth of bargaining. The end result impacted staffing, patient safety, and wages, the Oregon Nurses Association reported.
While businesses generally have an aversion to unions, response from Labcorp has been nonexistent. Willamette Week reported that “Labcorp’s media office did not immediately respond to a request for comment. Nor did Providence spokespeople,” and at this time, no press releases exist from Labcorp on the matter.
Strikes could lead to delays or cancelations of as many as 123,000 clinical laboratory test across the nation’s healthcare system
Once again, New Zealand medical laboratory workers are returning to the picket line. On March 6, APEX, a specialist union representing more than 4,000 allied, scientific, and technical health professionals throughout New Zealand, issued a strike notice to “three corporate laboratory companies—Awanui, Pathlab, and Medlab,” according to an APEX news release.
“Over 850 laboratory scientists and technicians across New Zealand will take rolling strike action over seven days beginning on 22 March, with at least 123,000 patient tests impacted. Over 70% of New Zealand towns and cities including Tauranga, Rotorua, Palmerston North, Gisborne, Wellington and Dunedin will lose access to medical laboratory testing for their public hospital, or primary care system, or both for a minimum of 72 hours,” the news release notes.
“Pathlab staff across Waikato, Bay of Plenty and Taupō will strike from March 24 until March 26, Awanui staff in Wellington and Canterbury will strike from March 25 until March 27, and Medlab workers in the MidCentral region will strike for a full week from March 22 until March 28. Auckland and the West Coast are the only regions where no labs are affected,” The Post reported.
“Those who use and rely on laboratory services need to brace for impact. We estimate that over 123,000 tests normally carried out as part of urgent or routine patient testing will not be performed during the week of strikes,” said Deborah Powell, MBChB, APEX National Secretary, in the news release.
“We are keen to work with the laboratory employers to resolve this dispute,” said Deborah Powell, MBChB (above), APEX National Secretary, in the news release. “Patients, clinicians, and laboratory workers are now stuck between the rock of underfunding and the hard place of corporate ownership of the medical laboratory sector. To avoid these rolling strikes, we need all parties to the dispute to work together to come up with a creative and sensible solution which works for everyone.” Clinical laboratories in the US may want to pay close attention to the struggles of their counterparts in New Zealand. (Photo copyright: New Zealand Doctor.)
Private Lab Ownership versus Public Funding
In February, more than 900 New Zealand medical laboratory workers nationwide walked off the job to protest “poor conditions and a lack of pay parity with the public sector,” according to the Otago Daily Times. Until now, that was the latest labor action in the ongoing struggle.
But those walkouts did not produce the results the union organizers had hoped.
“We didn’t get what we wanted at all,” Pathlab Tauranga senior medical laboratory scientist Steven Clements told NZ Herald. “We feel like there’s a lot of blame being passed between our employer and the government.”
Clements claimed the New Zealand government made its “standard statement” about it not being involved in private laboratory negotiations.
“They actually provide almost all of our funding, so we feel like the government hasn’t particularly listened. We also feel like our employer maybe isn’t really supporting us … so it’s led to another strike,” he said.
“We are in the weird situation where the employers agree with us,” said APEX National Secretary Powell, NZ Herald reported. “Pay parity between public and corporate employed lab scientists and technicians is the only fair, just, and sustainable solution to this dispute. Unfortunately, the lab triopoly are refusing pay parity without further government funding,” she added.
Disruptions in Care
As is the case with any strike, they are disruptive. During the February strikes, NZ Pathology Chairman, Peter Gootjes, DPH, director of the Awanui Group, told the New Zealand Doctor that they were trying to minimize any disruptions. The New Zealand Association of Pathology Practices (NZ Pathology), according to the organization’s website, is the “collective voice of New Zealand’s private sector laboratory providers, representing the views and aspirations of the funded pathology sector.”
“Our laboratories play an essential role in the provision of healthcare services, and we are working closely with the union, hospitals, and health professionals to ensure essential life-preserving services remain available and ongoing disruption to the community can be minimized,” Gootjes told New Zealand Doctor.
“Pathology sits at the heart of modern healthcare,” he continued. “Ensuring New Zealanders have access to quality, reliable, efficient and trusted pathology services is vital to patient care and public health. These services are a fundamental, yet often unseen, component of the clinical pathway for patients.
“We understand the concerns raised by APEX members and recognize the challenges posed by pay discrepancies following the previous government’s pay equity settlements for public sector employees. We are committed to working constructively with government and officials on this matter,” he said.
Pathlab, Health NZ Respond
In separate statements, Pathlab and Health NZ-Te Whatu Ora (New Zealand’s primary publicly funded healthcare system) attempted to address the APEX lab workers’ demands and assure the public.
“We value [APEX workers’] work and have engaged with APEX in good faith, doing everything we can within the funding we receive. … The problem is that private laboratories, including Pathlab, receive the vast majority of their funding through long-run bulk-funded contracts with Health NZ that pre-date the settlement and are inflexible when it comes to unforeseen cost increases, such as this one,” Pathlab’s chief executive Brian Millen stated, adding, “We remain committed to finding a workable solution while continuing to provide the high-quality services our communities rely on,” NZ Herald reported.
Health NZ, which, according to NZ Herald, “was aware Apex members were in collective bargaining … [but] not involved in this as they did not employ the private sector workforce,” sought to ensure that the strikes’ impact on hospitals and community healthcare services would be minimal.
“All our hospitals and emergency departments will remain open, and we are liaising with the private laboratories to ensure patients who require urgent and critical care receive the services they need, including testing carried out at hospitals and in the community,” said Health NZ, adding, “We respect the right of workers to take strike action and any questions about this matter should be directed to the employers or the union.”
Dark Daily has covered these ongoing strikes in many previous ebriefings. Clinical laboratory and pathology professionals in the United States should take note of their New Zealand counterparts’ recent and ongoing struggle for fair pay and safe working environments. America is no stranger to issues like these and our lab workers could find themselves in a similar situation.
Polling indicates one in eight recruiters refuse to hire ‘unprepared for workforce’ college graduates in 2025
When it comes to hiring entry-level employees, a new national survey of managers in charge of recruiting for their companies offers insights about recently graduated Generation Z (people born between 1997 and 2012) candidates. All clinical laboratories and pathology groups regularly have the opportunity to hire new college graduates. Thus, these valuable findings may help inform clinical laboratory recruitment and retention practices.
Seattle-based Intelligent.com used the market research platform Pollfish to conduct the survey in December 2024 to learn if perceptions of Gen Z workers were true.
“In recent years, a narrative has emerged that Gen Zers aren’t excelling in the workforce due to poor attitudes and work ethic,” said Intelligent.com in a news release.
The company surveyed 1,000 hiring managers on their attitudes about where new college graduates stand in getting hired. The researchers found that one in eight recruiters said they will avoid hiring recent college graduates in 2025. And 55% said they participated in a company decision to terminate a recent college graduate in 2024.
As a Fortune notes, “the class of 2024’s shortcomings will impact future grads.”
An earlier poll conducted by Intelligent.com in September found that three out of four companies surveyed had difficulties with newly hired graduates.
“Among these companies, only 25% state that all recent college graduate hires worked out well, while 62% mention that only some were successful. Further, 14% report that only a few or none of the hires were successful,” Intelligent.com reported.
“Many recent college graduates may struggle with entering the workforce for the first time as it can be a huge contrast from what they are used to throughout their education journey. They are often unprepared for a less structured environment, workplace cultural dynamics, and the expectation of autonomous work,” said Huy Nguyen (above), chief education and career development advisor at Intelligent.com, in a news release. Clinical laboratories and pathology groups may be experiencing similar circumstances with their own Gen Z workers. (Photo copyright: LinkedIn.)
Recent Graduates Lack ‘Work Ethic’
Here are more findings from the Intelligent.com survey of hiring managers. According to the survey:
33% of hiring managers said, “recent graduates lack work ethic.”
24% said new grads are “unprepared for the workforce.”
25% reported recent grads are “unprepared for interviews” and that they “struggle with eye contact, professional appearance, and salary negotiations.”
29% described new grads as “entitled.”
28% said the job candidates “lack motivation.”
27% found new graduates could be “easily offended.”
25% said new grads had trouble with feedback and 23% said they had trouble with punctuality.
20% said new graduates need to be “micromanaged.”
20% of hiring managers said recent grads have “poor communication skills,” while 17% cited “laziness” as a problem with recent graduates.
Nevertheless, companies have entry-level positions to fill in 2025, according to 97% of the hiring managers. Twelve percent of those surveyed told Intelligent.com they planned to “prioritize hiring older candidates” instead of the college grads.
For their part, according to Fortune, colleges “know their students are wholly unprepared for the workforce” and are trying to help them. For example, Michigan State University teaches students conversation-building skills including knowing when “the other party is starting to get bored,” Fortune reported.
Intelligent.com urged hiring managers to step-up interviewing techniques that better reveal a job candidate’s true potential.
“Instead of avoiding recent college grads based on biases and stereotypes, hiring managers need to identify individuals with demonstrated motivation, adaptability, and growth potential. Skills can be taught to those with the right attitude,” said Huy Nguyen, chief education and career development advisor at Intelligent.com, said in a news release.
“Although they may have some theoretical knowledge from college, they often lack the practical, real-world experience and soft skills required to succeed in the work environment. These factors, combined with the expectations of seasoned workers, can create challenges for both recent grads and the companies they work for,” he said.
“It can be easy for managers to buy into typical stereotypes of Gen Z and dismiss them entirely; however, companies have an equal responsibility to prepare recent graduates for their particular workplace and give them the best chance to succeed. By understanding the challenges of Gen Z workers, companies can take a more proactive approach by implementing formal employee onboarding programs that clearly outline company culture and expectations. Paring recent grads with mentors in the company can also pay huge dividends as that can provide Gen Z workers with the guidance, feedback, and support for them to succeed,” he advised.
Recruitment is costly. Clinical laboratory hiring managers can learn from the Intelligent.com survey findings. Those who develop a deeper understanding of Gen Z job candidates’ expectations and capabilities straight out of college stand a better chance of hiring personnel who will establish a positive, long-term working relationships with the lab.
