Feb 18, 2009 | Laboratory News, Laboratory Pathology
The Central Laboratory of the Centre for Infectious Disease Research in Zambia (CIDRZ) has developed a profitable business model that might offer wealthy nations a way to jumpstart similar programs worldwide, then create profit centers to help sustain them.
This business model, developed under the leadership of Executive Director Jeff Stringer, MD, and Laboratory Director Ron Brown in collaboration with the lab’s new Business Manager Henry Latner-formerly of PACLAB Network Laboratories in Washington’s Puget Sound region-creates a sustainable funding source to assist funding at 64 free AIDS clinics in urban Luska, Zambia. The clinics provide more than 140,000 HIV-infected adults and children Antiretroviral Therapy (ART) and Prevention of Mother to Child Transmission (PMTCT) services.
With funding from the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) , the Central Laboratory experienced rapid scale-up of services over the last four years, growing at an annual rate of about 250%. Today, the lab performs more than one million tests annually.
The steep growth curve caused Brown to focus on workload forecasting and continual service demand projections to ensure adequate testing resources are in the pipeline as needed to meet demand for growing services. This prudent planning resulted in operational efficiencies that created consistent excess testing capacity in key analytic areas, allowing the laboratory to market testing services to private sector clinics, faith-based and other non-government organizations in the region. Offering this service added a revenue stream for sustainable growth that reduces dependency on foreign donor support for anti-retroviral treatment programs.
Latner’s business plan called for building the for-profit laboratory service on an existing, well-established services foundation, including current courier routing and result delivery systems, and focusing on creating efficiencies and standardizing work in pre- and post-analytical areas of the lab.
CIDRZ Medical Laboratory Ltd., a separate, not-for-profit company which falls under the parent company of CIDRZ, now provides daily, full-service laboratory support to several hospitals and care clinics throughout the greater Lusaka region. Key to the success of this service are the focus on consistent, predictable, high-quality laboratory testing, with excellent customer service and a fair market price.
This business model was evaluated by a team from the Global Health Delivery program at Massachusetts Institute of Technology’s Sloan School of Management to validate current financial forecasts and potential for additional revenue streams, based on demand for private healthcare growth and market research. The analysis indicated potential for continued growth in demand for laboratory services by private care facilities in this region, and if managed well, Central Laboratory can expect a strong, sustained revenue stream to support CIDRZ care and treatment programs well into the future.
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Feb 9, 2009 | Laboratory Pathology, Management & Operations
UniPath of Denver, Colorado sells its Technical Laboratories
February 9, 2009
Having shopped itself to a number of interested buyers in recent years, pathology supergroup UniPath, LLC, in Denver, Colorado, has sold its histology laboratory operations to American Pathology Partners (APP) , of Brentwood, Tennessee. It keeps full ownership of its pathology professional corporation, which has an agreement to provide services to APP.
This acquisition has several interesting and innovative aspects. These are analyzed in detail in the current issue of The Dark Report. (See “Denver’s UniPath Sells Its Histology Labs to APP”, The Dark Report, February 2, 2009) Probably the most significant fact is that American Pathology Partners now has a platform lab that enables it to immediately begin seeking new business. That may mean that local pathology groups in the Rocky Mountain states and further west will have a new pathology player in the marketplace.
“This partnership advances APP’s vision of joining with the country’s top pathologists, aligning incentives, and working together to improve the delivery of exceptional care,” said CEO Bob Yeager of APP. “APP will market UniPath’s services to small pathology groups of two, three, or more physicians on the west coast and on the east coast as well. APP has financial support from New Enterprise Associates, a venture capital firm in Chevy Chase, Maryland.
UniPath, LLC, has been a successful, aggressive pathology competitor within the Rocky Mountain Region. The company has a 40,000 square foot central laboratory in Denver, on-site labs in 11 hospitals in Colorado, and expertise in all pathology subspecialties. Among its 120 employees are 21 Board-certified pathologists, 19 of whom are partners in the professional corporation. The other two are on a partnership track. UniPath executives told Dark Daily that, in 2008, UniPath analyzed 173,000 patient cases generating 363,000 specimens, about two thirds of which originate from physicians’ offices and one third come from hospital procedures.
Under the terms of the new business arrangement, APP now owns and manages UniPath’s central laboratory in Denver, along with its 120 employees, and the on-site laboratories in 11 hospitals in Colorado. UniPath gets funding to support expansion, investment in technology and lab equipment, and sales support. As noted earlier, UniPath’s physicians continue to own and manage the professional corporation.
“As president of the professional corporation, what I found attractive about APP was they wanted to keep the professional corporation (PC) absolutely intact,” said Karim Sirgi, M.D., President of UniPath.in his interview with The Dark Report. “They allowed the PC to keep its independence with regard to decision making, staffing, and how to apply national and regional standards on the quality of care UniPath provides to referring physicians.”
Until its sale to American Pathology Partners, UniPath’s growth has come from: a) mergers and acquisitions of pathology groups in the Denver area; and, b) by investing in a regional and national marketing and sales program, funded by the partner-pathologists. UniPath’s pathologists believe their new business agreement with APP will help fuel growth in and beyond the Rocky Mountain market.
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