Deal with Providence Health gives PAML access to 78 CHI hospitals in 20 states

Yesterday it was announced that Pathology Associates Medical Laboratories (PAML) of Spokane, Washington, has a new equity partner. In a joint release, Catholic Health Initiatives (CHI) and Providence Health & Services acknowledged a “definitive agreement in which CHI will assume a 25% equity position” in PAML.

This is a significant development in the laboratory testing industry. It provides PAML with easier access to the capital it needs to sustain ongoing growth. The new agreement also positions PAML as a preferred partner to develop laboratory outreach joint ventures with hospitals owned by CHI, which is the second largest catholic-owned health system in the United States.

Catholic Health Initiatives has annual revenue of $8.6 billion. It operates 78 hospitals and 40 non-acute care facilities in 20 states. With annual revenue of $7.0 billion, Providence Health & Services is the largest catholic health system on the West Coast. It owns 27 hospitals and operates 35 non-acute care facilities in the states of Washington, Oregon, California, Alaska, and Montana.

“This partnership with CHI is an important milestone for PAML as we continue to expand our laboratory joint ventures with leading hospital systems across the country,” said Thomas Tiffany, Ph.D., CEO and President of PAML. “We are confident our partner health systems will realize the benefits of working in collaboration to expand the outreach lab business and provide an opportunity for CHI and Providence to grow the esoteric reference laboratory to better support the hospital systems’ service lines.”

Thomas Tiffany PhDThomas Tiffany, Ph.D., CEO and President of PAML

Tiffany’s comments refer to two major objectives in the new agreement between Providence, CHI, and PAML. “Based on work already completed as this agreement was developed, PAML expects to enter 10 new markets during the next three to four years,” stated Noel Maring, Senior Vice President and Chief Marketing Officer of PAML. “This will happen as steps are taken to implement laboratory outreach joint ventures with hospitals owned by CHI.

“Another goal is for PAML to become the primary provider of reference testing services to the hospitals owned by CHI,” continued Maring. “This additional volume will make PAML one of the nation’s largest reference testing laboratories, along with providing enhanced clinical service and economies of scale to the hospital laboratories at CHI.”

Noel Noel Maring, Senior Executive Vice President and Chief Marketing Officer of PAML

PAML is the largest regional laboratory in the Northwest United States. What makes it unique among clinical laboratory companies in this country is its success in developing, managing, and sustaining laboratory joint ventures with hospitals. Currently it has five active joint ventures that involve 17 different hospitals. These laboratory joint ventures are located in Washington, Idaho, and Utah. (See list below.)

The next issue of The Dark Report, which goes to press on Monday, November 2, will have detailed coverage about the new agreement between Providence Health, Catholic Health Initiatives, and PAML. By collaborating, these three healthcare organizations are positioned to help PAML become a national laboratory organization within the next decade. The Dark Report’s upcoming analysis of these important developments will explain the reasons why this is an achievable goal for PAML.

Current Laboratory Testing Joint Ventures Involving PAML and hospitals:

ALPHA MEDICAL LABORATORY, LLC
Coeur d’Alene, ID—Founded 1995
Kootenai Medical Center

TRI-CITIES LABORATORY, LLC
Kennewick, Pasco, Richland,WA—Founded 1997
Lourdes Health Network
Kennewick General Hospital
Kadlec Medical Center

TREASURE VALLEY LABORATORY
Boise, ID—Founded 1999
Saint Alphonsus Regional Medical Center

MOUNTAINSTAR CLINICAL LABS, LLC
Salt Lake City, UT—Founded 2007
St Marks Hospital
Lakeview Hospital
Ogden Regional Medical Center

PACLAB NETWORK LABS, LLC
Olympia, Tacoma, Seattle, Everett, Bellevue,
Kirkland, WA—Founded 1996
PAML (Bellevue, Seattle, Olympia)
Providence Health System – Washington
Providence Everett Medical Center
Providence Centralia Medical Center
Franciscan Health System
St Josephs Medical Center
St Francis Hospital
St Clare Hospital
Stevens Healthcare
Evergreen Healthcare
Overlake Hospital & Medical Center
Valley Medical Center

Related Information:

Catholic Health Initiatives Becomes Equity Partner in Providence Health & Services Reference Laboratory

Hospitals Saw Several Benefits in Forming Lab Joint Venture

How PAML Built a Major Business In Lab Joint Ventures with Hospitals

The Dark Report