Judge decides injuries claimed by pathologists are not antitrust injuries and that plaintiffs have no standing to bring antitrust lawsuit
Four pathologists who filed an antitrust lawsuit alleging their former employer “engaged in a series of unfair and deceptive practices” in an effort to maintain a monopoly on clinical pathology services in central Iowa had their lawsuit dismissed by a federal judge. The plaintiffs appealed the decision. Two related state lawsuits are still pending, one in which the plaintiffs are the defendants.
It is common for pathologists in a community to leave one pathology practice and either establish a new practice or join a nearby practice. What is less common is litigation that involves the original group practice and the departed pathologists.
Thus, this example of lawsuits and counter lawsuits is interesting because it creates court rulings about the strengths and weaknesses of the arguments asserted by both plaintiffs and defendants in situations where pathologists leave their employer but continue to practice in the same community.
The court decisions in these cases demonstrate how judges are handling these issues involving antitrust allegations, market share, and non-compete agreements.
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” wrote federal judge Rebecca Goodgame Ebinger, JD (above), in her order granting defendants’ motion to dismiss. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally.” Clinical laboratories and anatomic pathology practices can learn from the decisions handed down in this court case. (Photo copyright: Wikipedia.)
Pathologists Accuse Defendants of Suppressing Competition
In their original complaint, which was filed May 13, 2024, in the US District Court for the Southern District of Iowa, the plaintiffs said that, beginning in 2021, IPA “strongly pressured” them to sign an employment agreement that would have prevented them from launching a competing practice in the Des Moines area. They refused to comply, but “the administrator of these corporations told these pathologists that the Agreement was in effect even though they had not signed it,” the complaint states.
On October 2022, they informed IPA that they intended to leave to form their own pathology practice, according to the complaint.
The new practice, Goldfinch Laboratory in Urbandale, Iowa, began offering pathology services in February 2023.
“Prior to the formation of Goldfinch, IPA was the only independent pathology practice in central Iowa that was not exclusively tied to one source of referrals,” the complaint states. In addition, “it was the only independent pathology practice in central Iowa that offered dermatopathology services.”
After they notified IPA and RLC of their intention to leave, the plaintiffs alleged that the employer engaged in a series of efforts to “suppress competition” and monopolize the local market for pathology and dermatopathology services.
Plaintiffs Allege Defendants’ Behavior Could Have Harmed Patients
The pathologists were barred from entering IPA’s offices, leaving potential referring physicians with the impression that “these pathologists were no longer practicing,” the complaint states, and preventing them from “maintaining on-going relations with potential referral sources.”
IPA, the complaint alleges, “refused to share biopsy slides with Goldfinch pathologists when those slides were required for continuity of care of the patient—even though this practice was contrary to the standard of care and could well have caused harm to patients.” The complaint characterized this as “an effort to induce referral sources not to make referrals to Goldfinch.”
The plaintiffs also alleged that IPA and RLC made “false and deceptive statements to dissuade referral sources from making referrals to Goldfinch,” for example by claiming that legal problems would force the practice to close.
Given their “monopoly power” in the local market, the plaintiffs argued, IPA and RLC “were able to charge supracompetitive prices for their services.” A $1.4 million contract with one hospital corporation was “in the top 5% of Part A contracts in the United States,” the complaint alleges, and rural hospitals paid “at least 400% of the actual Medicare fee schedule amount for the technical component of pathology services for Medicare patients.”
Defendants’ Response to Allegations
In their motion to dismiss the suit, the defendants argued that Goldfinch was “a classic ‘disgruntled competitor’” that had not demonstrated an “antitrust injury” as defined by federal and state law.
“Goldfinch’s owners used to work for IPA and RLC, voluntarily left, and now seek to litigate their personal financial losses under the guise of federal and state antitrust claims,” the motion states.
The defendants also argued that Goldfinch lacked standing to file an antitrust claim.
Goldfinch “alleges the ‘antitrust practices’ of IPA and RLC are harmful to patients and other payers for pathology and dermatopathology services,” the motion states. “But patients and payers are quite capable of noticing and seeking redress for the alleged harms and Goldfinch need not do so on their behalf.”
In addition, the defendants argued, Goldfinch failed to adequately define a “plausible” product market or geographic market that was subject to the alleged monopoly power.
“Goldfinch’s alleged geographic market is vaguely ill-defined as ‘central Iowa,’” the motion states. “But there is a difference between the service area and a geographic market.” The motion cited an earlier decision in which the US Court of Appeals for the Seventh Circuit “deemed a relevant market for a pathology practice to be nationwide.”
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” she wrote. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally. These injuries, instead, are a result of Defendants’ alleged actions targeting Goldfinch and demonstrate an injury to Goldfinch as a competitor—the loss of some patients and referral sources.”
She also agreed with the defendants that Goldfinch lacked sufficient standing to bring an antitrust claim, and that the plaintiffs had failed “to adequately allege a relevant market for pathology and dermatopathology services.”
Goldfinch filed a Notice of Appeal on Jan. 10.
State Lawsuits Pending
Meanwhile, both parties are awaiting a decision in a state court lawsuit in which the Goldfinch partners are the defendants, according to the Iowa Capital Dispatch.
IPA filed the suit late in 2022, shortly after learning that the four pathologists planned to leave and start their own practice. It alleged “breach of contract, breach of the common law duty of loyalty, civil conspiracy and tortious interference,” Iowa Capital Dispatchreported at the time, claiming that the pathologists were improperly attempting to lure clients away.
In a related case, Goldfinch pathologists Milless and Halverson have filed a state discrimination lawsuit against their former employer, “alleging they were paid $200,000 to $350,000 annually, which they claim was far less than what some of the less qualified male doctors were paid,” Iowa Capital Dispatch reported. That case goes to trial in August.
This is a plethora of lawsuits involving pathologists and the pathology practices in the communities where they formally practiced. Pathologists and group pathology managers may find useful insights from a study of the legal arguments made by the two parties, as well as the decisions laid down by judges in these court cases.
Incorrect results spanned exams from 2022-2024 with those students affected by this situation stunned by ABPath’s admission
There are always young anatomic pathologists who experience the heartache of failing board exams. Failing, after all, is part of the education process. But how disheartening would it be to learn years later that you actually passed those exams? For about 70 pathology students that’s exactly what happened.
On October 3, the American Board of Pathology (ABPath) announced that “a small percentage” of students were told they had failed an exam when they had not, MedPage Today reported. The test dates ranged from 2022 to 2024 and affected 76 students out of 4,059.
In its official statement, ABPath wrote that it had “recently conducted a reassessment and rescoring of the Primary and Subspecialty certification examinations. In doing so, ABPath identified that a small percentage of candidates (less than 2%) actually met the passing score requirements that were previously scored as slightly below the passing score threshold.”
The organization added, “The impacted candidates have all been notified. Those candidates received a passing score for their respective certification examination and will receive a refund of their application fee, as well as any fees paid toward subsequent examinations. Impacted training programs will be receiving notifications soon.”
According to MedPage Today, which received a copy of the email from a pathology student, “ABPath’s email to affected test takers was brief, explaining that a reassessment of the anatomic pathology certification examination ‘disclosed that your score exceeded the cut-score threshold for a passing score, rather than being slightly below it.’”
Many pathology students were stunned by ABPath’s admission and went to message boards to vent their frustration.
“Failing a major board hits you hard especially after so many years of training and so much time spend on studying. This situation was a shock, a disappointment, and a betrayal,” one former student identified as Idfcwytas wrote on Reddit concerning ABPath’s revelation, MedPage Today reported.
In its coverage of the ABPath announcement, MedPage Today wrote, “Bryan Carmody, MD (above), of Eastern Virginia Medical School in Norfolk, who blogs frequently about medical education issues, said that a situation like this decreases trust in the boards themselves, and that being mistakenly failed has financial and career impacts. For instance, he said, ‘many hospitals require board certification to get hospital privileges or to work there … so if you were applying to an academic job or something, I think it’s going to hurt your application.’” Anatomic pathologists understand clearly how lack of board certification affects their career goals. (Photo copyright: Eastern Virginia Medical School.)
ABPath’s Response and the Impact on Students
An ABPath spokesperson told MedPage Today, “We understand how significant this is to our candidates and diplomats and are committed to working closely with those impacted. ABPath has also implemented improvements to our processes to prevent this issue in the future.”
No details were disclosed on what changes would be made going forward, MedPage Today noted. As a result of the mistake, ABPath refunded exam fees and offered affected testers updated certificates and letters showing the proper results.
Some declared that response does not go far enough. Many claimed ABPath’s efforts lack adequate financial compensation as well as genuine compassion.
Reddit user walleyealx wrote, “The mistake definitely cost me LOTS of time, mental anguish, and money. Please note, there was no apology at all in these emails, which makes me even more angry,” MedPage Today reported.
Several days after the initial email, ABPath offered an apology “for the frustration this has caused,” according to MedPage Today.
No Recourse for Failing Grades
ABPath’s website notes that failed exams cannot be appealed. This means that any students doubting their scores during those years would not have been able to challenge the results.
“Even if the board offers a refund for the exams, it hardly makes up for the time, money, and lost career opportunities these individuals have had to deal with,” noted the Lento Law Firm in a blog post following ABPath’s announcement.
The firm added, “This incident only affected about 2% of exam takers from 2022 to 2024, but it’s a significant issue for these people. Not getting board certification can mean no hospital privileges, which can prevent you from obtaining certain jobs. Failing to get a certain specialty certification can also mean a $30,000 difference in your paycheck. Pathologists have only five years and 10 tries to pass the exam, which costs between $2,100 and $2,600 each time. Re-taking the exam after getting a failing score, therefore, represents a significant financial investment—not to mention the time spent studying.”
Implications of failure can be profound, but mistakes happen. ABPath appears to be taking steps to prevent similar mistakes in the future. Hopefully, the organization will also find a way to make whole those affected by its error.
Founder of now defunct clinical laboratory testing company was supposed to report to prison April 27, but a last-minute legal challenge has delayed that judge’s order
Anatomic pathologists and clinical laboratory leaders who are following the continuing saga of Theranos and Elizabeth Holmes may be interested to learn that the former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict. At the same time, Holmes appears to be on a mission to revamp her public image.
Apparently, the twists and turns in Holmes’ never-ending story are not yet over when it comes to Theranos, its maligned clinical laboratory technology, and the company’s convicted founder.
On May 7, The New York Times (NYT) profiled Holmes in a massive, 5,000-word story that attempted to portray her as a flawed businessperson who now prefers a simpler life with her partner and two young children.
“I made so many mistakes and there was so much I didn’t know and understand, and I feel like when you do it wrong, it’s like you really internalize it in a deep way,” disgraced Theranos founder Elizabeth Holmes recently told The New York Times. Anatomic pathologists and clinical laboratory directors impacted by the revelation that Theranos hide the fact that its blood testing technology was faulty may not sympathize with Holmes’ position. (Photo copyright: Stuart Isett/Fortune Global Forum.)
Legal Team Secures Last-Minute Delay in Holmes’ Surrender
Holmes admitted to the news outlet that the deep voice she used in public, along with her black turtleneck sweaters, were part of a character she created.
“I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,” Holmes told the NYT. “Maybe people picked up on that not being authentic, since it wasn’t.”
However, on April 26, the 9th Circuit Court of Appeals stayed her surrender date until that court rules on Holmes’ latest bid to stay free while she appeals her conviction, The Washington Post reported.
Just days earlier on April 10, a district court judge ruled that Holmes would not stay free while her appeal progresses. The 9th Circuit announcement curtailed the district court ruling. It is not known when the 9th Circuit will issue a decision in the matter.
New York Times Reports on Holmes’ Change in Personality
The somewhat odd New York Times profile of Holmes varied between reflections on her past crimes and on her current personal life, where she is known as “Liz.”
“In case you’re wondering, Holmes speaks in a soft, slightly low, but totally unremarkable voice—no hint of the throaty contralto she used while running her blood-testing startup Theranos, now defunct,” the NYT reported.
Holmes still lives in California with her partner, Billy Evans (whose parents own a luxury hotel chain), and their two children: a son who is almost two years old and a daughter born in February. She works at home for a rape-crisis hotline.
Balwani’s Role in Theranos Again Publicly Debated
In the NYT interview, Holmes talked about being raped while a student at Stanford University and about alleged abuse from her Theranos business partner and former lover, Ramesh “Sunny” Balwani.
Balwani, Theranos’ former President and Chief Operating Officer, began his 12-year, 11-month prison sentence on April 20 in a Southern California facility for his role in defrauding Theranos investors, KTVU TV reported. Balwani has also appealed his conviction on the 12 fraud charges.
Holmes reiterated to the NYT past statements she made in court that Balwani allegedly exerted social and sexual control over her when they both worked at Theranos and were in a romantic relationship.
“She lived by entrepreneurial tenets that she said Balwani told her she needed to follow in order to succeed,” the NYT reported. “These included not sleeping for more than five hours, going vegan, getting to the office daily by 5 a.m., no alcohol.”
“[I] deferred to [Balwani] in the areas he oversaw because I believed he knew better than I did,” including on clinical lab activities at Theranos, Holmes said.
Balwani’s attorneys dismissed Holmes’ allegations, as they have in the past.
Clinical laboratory professionals can reasonably make two broad observations from the continuing saga of Theranos and Elizabeth Holmes:
Justice for healthcare crimes is often deferred for those who have influence and money.
Holmes’ image overhaul may be a last-ditch effort to sway public opinion about her, in the event that she receives a new jury trial as a result of her appeal.
Dark Daily will continue to keep you updated on further developments in this case.
HIMSS names SMC a ‘world leader’ in digital pathology and awards the South Korean Healthcare provider Stage 7 DIAM status
Anatomic pathologists and clinical laboratory managers in hospitals know that during surgery, time is of the essence. While the patient is still on the surgical table, biopsies must be sent to the lab to be frozen and sectioned before going to the surgical pathologist for reading. Thus, shortening time to answer for frozen sections is a significant benefit.
This effort in surgical pathology is part of a larger story of the digital transformation underway across all service lines at this hospital. For years, SMC has been on track to become one of the world’s “intelligent hospitals,” and it is succeeding. In February, SMC became the first healthcare provider to achieve Stage 7 in the HIMSS Digital Imaging Adoption Model (DIAM), which “assesses an organization’s capabilities in the delivery of medical imaging,” Healthcare IT News reported.
As pathologists and clinical laboratory leaders know, implementation of digital pathology is no easy feat. So, it’s noteworthy that SMC has brought together disparate technologies to reduce turnaround times, and that the medical center has caught the eye of leading health information technology (HIT) organizations.
“The digital pathology system established by the pathology department and SMC’s information strategy team could be one of the good examples of the fourth industrial revolution model applied to a hospital system,” anatomic pathologist Kee Taek Jang, MD (above), Professor of Pathology, Sungkyunkwan University School of Medicine, Samsung Medical Center told Healthcare IT News. Clinical laboratory leaders and surgical pathologists understand the value digital pathology can bring to faster turnaround times. (Photo copyright: Samsung Medical Center.)
Anatomic Pathologists Can Read Frozen Sections on Their Smartphones
Prior to implementation of its 5G digital pathology system, surgeons and their patients waited as much as 20 minutes for anatomic pathologists to traverse SMC’s medical campus to reach the healthcare provider’s cancer center diagnostic reading room, Healthcare IT News reported.
Now, SMC’s integrated digital pathology system—which combines slide scanners, analysis software, and desktop computers with a 5G network—has enabled a “rapid imaging search across the hospital,” Healthcare IT News noted. Surgical pathologists can analyze tissue samples faster and from remote locations on digital devices that are convenient to them at the time, a significant benefit to patient care.
“The system has been effective in reducing the turnaround time as pathologists can now attend to frozen test consultations on their smartphone or tablet device via 5G network anywhere in the hospital,” Jean-Hyoung Lee, SMC’s Manager of IT Infrastructure, told Healthcare IT News which noted these system results:
TAT decreased from 20 minutes to 10 minutes.
Transferring scans of large frozen tissues up to three gigabyte in size is now possible through the 5G network.
Additionally, through the 5G network, pathologists can efficiently access CT scans and MRI data on proton therapy cancer treatments. Prior to the change, the doctors had to download the image files in SMC’s Proton Therapy Center, according to a news release from KT Corporation, a South Korean telecommunications company that began working with SMC on building the 5G-connected digital pathology system in 2019.
DIAM is an approach for gauging an organization’s medical imaging delivery capabilities. To achieve Stage 7—External Image Exchange and Patient Engagement—healthcare providers must also have achieved all capabilities outlined in Stages 5 and 6.
In addition, the following must also have been adopted:
The majority of image-producing service areas are exchanging and/or sharing images and reports and/or clinical notes based on recognized standards with care organizations of all types, including local, regional, or national health information exchanges.
The application(s) used in image-producing service areas support multidisciplinary interactive collaboration.
Patients can make appointments, and access reports, images, and educational content specific to their individual situation online.
Patients are able to electronically upload, download, and share their images.
“This is the most comprehensive use of integrated digital pathology we have seen,” Andrew Pearce, HIMSS VP Analytics and Global Advisory Lead, told Healthcare IT News.
SMC’s Manager of IT Planning Seungho Lim told Healthcare IT News the medical center’s goal is to become “a global advanced intelligent hospital through digital health innovation.” The plan is to offer, he added, “super-gap digital services that prioritize non-contact communication and cutting-edge technology.”
For pathologists and clinical laboratory leaders, SMC’s commitment to 5G to move digital pathology data is compelling. And its recognition by HIMSS could inspire more healthcare organization to make changes in medical laboratory workflows. SMC, and perhaps other South Korean healthcare providers, will likely continue to draw attention for their healthcare IT achievements.
Hello primary diagnosis of digital pathology images via artificial intelligence! Goodbye light microscopes!
Digital pathology is poised to take a great leap forward. Within as few as 12 months, image analysis algorithms may gain regulatory clearance in the United States for use in primary diagnosis of whole-slide images (WSIs) for certain types of cancer. Such a development will be a true revolution in surgical pathology and would signal the beginning of the end of the light microscope era.
A harbinger of this new age of digital pathology and automated image analysis is a press release issued last week by Ibex Medical Analytics of Tel Aviv, Israel. The company announced that its Galen artificial intelligence (AI)-powered platform for use in the primary diagnosis of specific cancers will undergo an accelerated review by the Food and Drug Administration (FDA).
FDA’s ‘Breakthrough Device Designation’ for Pathology AI Platform
Ibex stated that “The FDA’s Breakthrough Device Designation is granted to technologies that have the potential to provide more effective treatment or diagnosis of life-threatening diseases, such as cancer. The designation enables close collaboration with, and expedited review by, the FDA, and provides formal acknowledgement of the Galen platform’s utility and potential benefit as well as the robustness of Ibex’s clinical program.”
“All surgical pathologists should recognize that, once the FDA begins to review and clear algorithms capable of using digital pathology images to make an accurate primary diagnosis of cancer, their daily work routines will be forever changed,” stated Robert L. Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report. “Essentially, as FDA clearance is for use in clinical care, pathology image analysis algorithms powered by AI will put anatomic pathology on the road to total automation.
“Clinical laboratories have seen the same dynamic, with CBCs (complete blood counts) being a prime example. Through the 1970s, clinical laboratories employed substantial numbers of hematechnologists [hematechs],” he continued. “Hematechs used a light microscope to look at a smear of whole blood that was on a glass slide with a grid. The hematechs would manually count and record the number of red and white blood cells.
“That changed when in vitro diagnostics (IVD) manufacturers used the Coulter Principle and the Coulter Counter to automate counting the red and white blood cells in a sample, along with automatically calculating the differentials,” Michel explained. “Today, only clinical lab old-timers remember hematechs. Yet, the automation of CBCs eventually created more employment for medical technologists (MTs). That’s because the automated instruments needed to be operated by someone trained to understand the science and medicine involved in performing the assay.”
Primary Diagnosis of Cancer with an AI-Powered Algorithm
Surgical pathology is poised to go down a similar path. Use of a light microscope to conduct a manual review of glass slides will be supplanted by use of digital pathology images and the coming next generation of image analysis algorithms. Whether these algorithms are called machine learning, computational pathology, or artificial intelligence, the outcome is the same—eventually these algorithms will make an accurate primary diagnosis from a digital image, with comparable quality to a trained anatomic pathologist.
How much of a threat is automated analysis of digital pathology images? Computer scientist/engineer Ajit Singh, PhD, a partner at Artiman Ventures and an authority on digital pathology, believes that artificial intelligence is at the stage where it can be used for primary diagnosis for two types of common cancer: One is prostate cancer, and the other is dermatology.
On June 17, Ajit Singh, PhD (above), Partner at Artiman Ventures, will lead a special webinar and roundtable discussion for all surgical pathologists and their practice administrators on the coming arrival of artificial intelligence-powered algorithms to aid in the primary diagnosis of certain cancers. Regulatory approval for such solutions may happen by the end of this year. Such a development would accelerate the transition from light microscopes to a fully digital pathology workflow. Singh is shown above addressing the 2018 Executive War College. (Photo copyright: The Dark Report.)
“It is now possible to do a secondary read, and even a first read, in prostate cancer with an AI system alone. In cases where there may be uncertainty, a pathologist can review the images. Now, this is specifically for prostate cancer, and I think this is a tremendous positive development for diagnostic pathways,” he added.
Use of Digital Pathology with AI-Algorithms Changes Diagnostics
Pathologists who are wedded to their light microscopes will want to pay attention to the impending arrival of a fully digital pathology system, where glass slides are converted to whole-slide images and then digitized. From that point, the surgical pathologist becomes the coach and quarterback of an individual patient’s case. The pathologist guides the AI-powered image analysis algorithms. Based on the results, the pathologist then orders supplementary tests appropriate to developing a robust diagnosis and guiding therapeutic decisions for that patient’s cancer.
In his interview with The Dark Report, Singh explained that the first effective AI-powered algorithms in digital pathology will be developed for prostate cancer and skin cancer. Both types of cancer are much less complex than, say, breast cancer. Moreover, the AI developers have decades of prostate cancer and melanoma cases where the biopsies, diagnoses, and downstream patient outcomes create a rich data base from which the algorithms can be trained and tuned.
This webinar is organized as a roundtable discussion so participants can interact with the expert panelists. The Chair and Moderator is Ajit Singh, PhD, Adjunct Professor at the Stanford School of Medicine and Partner at Artiman Ventures.
The panelists (above) represent academic pathology, community hospital pathology, and the commercial sector. They are:
Because the arrival of automated analysis of digital pathology images will transform the daily routine of every surgical pathologist, it would be beneficial for all pathology groups to have one or more of their pathologists register and participate in this critical webinar.
The roundtable discussion will help them understand how quickly AI-powered image analysis is expected be cleared for use by the FDA in such diseases as prostate cancer and melanomas. Both types of cancers generate high volumes of case referrals to the nation’s pathologists, so potential for disruption to long-standing client relationships, and the possible loss of revenue for pathology groups that delay their adoption of digital pathology, can be significant.
On the flip side, community pathology groups that jump on the digital pathology bandwagon early and with the right preparation will be positioned to build stronger client relationships, increase subspecialty case referrals, and generate additional streams of revenue that boost partner compensation within their group.
Also, because so many pathologists are working remotely, Dark Daily has arranged special group rates for pathology practices that would like their surgical pathologists to participate in this important webinar and roundtable discussion on AI-powered primary diagnosis of pathology images. Inquire at info@darkreport.com or call 512-264-7103.
