News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Thermo Fisher Trumped by Merck KGaA’s $7.2 Billion Bid to Acquire Millipore

Clinical Pathology Laboratory Customers of Millipore Not Likely to See Many Changes

It only took a few days for Millipore Corporation (NYSE: MIL) to find a buyer willing to outbid Thermo Fisher Scientific Inc. (NYSE: TMO). Millipore agreed to be acquired by Merck KGaA (FWB: MRK) of Darmstadt, Germany. Merck will pay about $7.2 billion for Millipore, which tops a reported bid of $6 billion made by Thermo Fisher last week.

Because many clinical pathology laboratories use Millipore’s water purification systems and other products, the pending acquisition of Millipore by Merck represents more consolidation among vendors serving the clinical laboratory industry. The acquisition is expected to close during the second half of 2010.

First Two Laboratories in U.S. Earn ISO 15189 Accreditation

It’s an important first for the laboratory medicine profession in the United States. In recent months, two clinical laboratories received formal notice of their successful accreditation with the standards of ISO 15189:Medical Laboratories.

In November 2008, Piedmont Medical Laboratory of Winchester, Virginia became the first laboratory in the United States to be officially accredited under ISO 15189. Last month, in January 2009, the laboratory at Avera McKennan Hospital and University Health Center Avera McKennan Medical Laboratory in Sioux Falls, South Dakota received its official notification of ISO 15189 accreditation.

The Dark Report was first to alert the laboratory industry to the accreditation efforts by Piedmont and Avera McKennan. (See “First U.S. Laboratories Nearing ISO:15189 Accreditation,” The Dark Report, August 18, 2008) The decision by both laboratories to pursue ISO 15189 accreditation shows how the quality management trend is establishing deeper roots among labs in this country.

ISO 15189 is designed specifically for medical laboratories. It is a quality management system to help laboratories develop a highly-disciplined approach to improving the quality of services and outcomes. It provides a road map for identifying opportunities to improve, implementing change, and then sustaining the resulting gains in quality. The process involves nine steps and typically takes two years to complete.

Both Piedmont and Avera achieved their ISO 15189 accreditation through a new program offered by the College of American Pathologists (CAP). In the United States, ISO 15189 accreditation is a voluntary step and does not replace a laboratory’s requirement to maintain its CLIA license.

One reason Piedmont Medical Laboratory invested the considerable time and resources required to achieve ISO 15189 accreditation is to build its credibility with local businesses and employers. Joseph Skrisson, President and CEO of Piedmont Medical Laboratory, points out that most businesses are very familiar with ISO accreditation. Many companies have become ISO-accredited themselves over the years. On the other hand, they generally don’t recognize the significance of accreditation through the programs of either the Joint Commission or CAP.

Leadership in quality management is a primary strategy at Avera McKennan Laboratory. Leo Serrano, Director of Laboratory Services at Avera McKennan Laboratory, observed that achieving ISO 15189 accreditation is consistent with his laboratory’s use of quality management methods such as Lean and Six Sigma. As with Piedmont, Avera McKennan believes that ISO 15189 accreditation will be recognized and respected by local employers and businesses.

Regular readers of Dark Daily now that ISO 15189:Medical Laboratories is gaining acceptance across the globe as an international standard for laboratory accreditation and reimbursement. This is particularly true in countries which have previously lacked any type of licensing or accreditation requirement. Because of the existing, rigorous federal and state licensing mandates in the United States, only a limited number of labs in this country will likely invest the resources to achieve ISO 15189 accreditation in the short term. -P. Kirk

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News Flash! New York Times Hits Quest Diagnostics for Erroneous Vitamin D Results!

Just days after The Dark Report and Dark Daily alerted the laboratory industry to systemic problems with “home brew” mass spectrometry Vitamin D testing at Quest Diagnostics Incorporated (NYSE:DGX) during a period starting in early 2007 and lasting into mid-2008, the New York Times has confirmed the essential details of this extraordinary story.

In the Thursday, January 8, 2009, edition of the New York Times, reporter Andrew Pollack wrote a story titled “Lab Acknowledges Problem with Vitamin D Test.” In balanced coverage, Pollack provided information about Quest Diagnostics’ acknowledgement that it had reported inaccurate results for what appears to be about a year and a half. He also quoted physicians on the various clinical issues associated with Vitamin D testing, Vitamin D therapy, and the role Vitamin D plays in various diseases.

The exact magnitude of the problem remains unknown, because Quest Diagnostics has neither disclosed the number of physicians who received letters about erroneous Vitamin D results reported on their patients, nor the number of patients for whom inaccurate Vitamin 25(OH) D test results were reported by Quest Diagnostics during the 2007-2008 time period.

However, competing laboratories in the New York metropolitan area have told The Dark Report and Dark Daily that thousands of physicians in this region received Vitamin D recall/retest letters from Quest Diagnostics. Most of these letters were sent in October 2008. Each physician may have had as few as a handful of patients to retest, or as many as several hundred. Thus, just in the New York region, it would not be unreasonable to estimate that tens of thousands of patients are involved in this Vitamin D retest program.

One clue to the total number of inaccurate results was provided in The New York Times story, which wrote that “Dr. Salameh [Wael A. Salameh, M.D., Medical Director, Endocrinology at Quest Nichols Institute in San Juan Capistrano, California] said the inaccurate results represented fewer than 10% of all the vitamin D tests done by the Quest from early 2007 to mid 2008. And even many of the possibly inaccurate results were probably accurate, he said, because Quest sent letters even if there was only a remote chance that the test was erroneous.”

Take Salameh’s statement that “fewer than 10% of all the Vitamin D tests” were inaccurate, and assume a 9% rate of inaccurate tests. Next, combine that with a rough estimate that Quest Diagnostics performed between 5 million and 7 million Vitamin D results during 2007-2008, and one comes up a possible range of between 450,000 to 630,000 inaccurate Vitamin D test results.

That’s a lot of patients-and a lot of doctors! Assume 10 patients per doctor, and that means Quest Diagnostics may have reported inaccurate Vitamin D results to between 45,000 and 63,000 doctors! If the real numbers approach these estimates of affected patients and referring physicians, then this is a laboratory failure without precedent.

How could something this troubling happen at the nation’s largest laboratory company? According to the New York Times, Salameh stated that “some materials used to calibrate test results were faulty.” Salameh also admitted that “four of Quest’s seven testing laboratories around the country did not follow proper procedures for some period of time.”

The January 12 issue of The Dark Report will have additional intelligence briefings on this unfolding story. Dark Daily readers interested in becoming a subscribing member to The Dark Report can act immediately with this link (or copy this URL and paste in your browser:

The current issue of The Dark Report (dated December 22, 2008) was the first public news reporting on Quest Diagnostics’ problems with Vitamin D testing. This issue has been distributed to existing subscribing members. Dark Daily readers can see the individual intelligence briefings by using this link (or pasting this URL in your browser: For more information on Charter Memberships go here.

Dark Daily asks that anyone with knowledge of this remarkable story about inaccurate Vitamin D results and willing to share insights can contact editor Robert L. Michel in complete confidence at or by dialing 512-264-7103.

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LabCorp CEO Reshuffles Executive Team to Set New Direction

Come January 1, 2009, Laboratory Corporation of America (NYSE:LH) will have new players on its executive team. These changes demonstrate that David King, who took the reins as LabCorp’s new President and CEO about two years ago, is actively reshaping senior leadership to better fit his vision for the nation’s second largest clinical laboratory company.

As of January 1, Bradford T. Smith is retiring from his position as Executive Vice President, Corporate Affairs and Chief Legal Officer. Smith has had long and continuous service at LabCorp, as well as at Roche Biomedical Laboratories prior to its acquisition by LabCorp. Another significant change to the executive line-up at LabCorp is the departure of Myla Lai-Goldman M.D., who has served as Executive Vice President, Chief Scientific Officer, and Medical Director since 1998. Lai-Goldman also has deep roots at LabCorp, having established the advanced molecular diagnostics laboratory at Research Triangle Park for Roche Biomedical Laboratories back in the 1980s.

Another new member of the executive team is William Bonello, who joined LabCorp on December 8, 2008, as Senior Vice President of Investor Relations. Bonello is familiar to clients of The Dark Report because of his coverage of the clinical laboratory industry as a Managing Director and Senior Equity Research Analyst for Wachovia Capital Markets, LLC for the past six years.

The investor relations position became available when Eric Lindblom, who had held that position, was given new management responsibilities by King. Lindblom is now responsible for several strategic responsibilities, including the LabCorp 2010 initiative.

When LabCorp was originally created by the merger of National Health Laboratories and Roche Biomedical Laboratories in 1995, it experienced some management turnover as executives from both companies adjusted to responsibilities in a single corporation. However, by the late 1990s, LabCorp has enjoyed relative stability in its executive management team. Even since David King’s appointment as CEO at the time that Thomas MacMahon moved to Chairman at the end of 2006, the management line-up at LabCorp has remained stable.

Pathologists and laboratory directors will want to watch how the evolution from LabCorp’s old guard to its new guard shows up in the company’s competitive stance in the marketplace and in new business strategies.

Two Labs in Friendly Race to Win First ISO 15189 Accreditation in U.S.

It’s a sprint to the finish line in the friendly race to be first laboratory in the United States to earn accreditation under ISO 15189:2007 Medical Laboratories. The two contestants are Piedmont Medical Laboratory (PML) of Winchester, Virginia, and Avera Health Laboratories of Sioux Falls, South Dakota.

Within the next six to eight weeks, both laboratories expect to complete all steps in the accreditation process. Each will eagerly await word that, based on the final assessment by outside auditors, all requirements have been meet and ISO 15189:2007 accreditation is granted.

This achievement will be a milestone event for the clinical laboratory industry. It marks the arrival of quality management systems (QMS) in laboratory management. This changes the status quo because quality management systems, like ISO:15189:2007 Medical Laboratories, are a comprehensive approach to managing all activities in the laboratory organization.

Until recently, both laboratories have chosen to keep their pursuit of ISO 15189:2007 accreditation out of the public eye. That is why this important story has gone unnoticed by the greater laboratory public and unreported in The Dark Report. But that is no longer the situation.

At the upcoming Lab Quality Confab on September 24-25 in Atlanta, both Piedmont Medical Laboratory and Avera Health Laboratories will be present and will make presentations on their quality journey. This is the first opportunity for lab directors and pathologists to directly the reasons behind this strategic decision and the lessons learned during the ISO 15189:2007 accreditation process.

To further help lab manager and pathologists understand the ramifications of this milestone, this week’s issue of The Dark Report published interviews with the laboratory leaders of Piedmont Medical Laboratory and Avera Health Laboratories. Among major motivations to spend the money and resources to achieve ISO 15189 accreditation was the competitive advantage each lab would realize, both with providers in the community as well as managed care plans.

In their Dark Report interview, both PML’s CEO, Joseph Skrisson, and Benita Haines, PML’s Quality Management, Compliance and Education Coordinator, stressed that ISO 15189 accreditation was triggering ongoing benefits to the laboratory, both internally in operations, quality and productivity, and externally, with regional payers and the community at large.

Leo Serrano, Director of Laboratory Services for Avera Health Laboratories, similarly stressed how ISO 15189 accreditation would help boost the competitive position of his laboratory in its service region. In fact, because of Avera’s commitment to quality, Avera’s senior administrators were immediately supportive when the ISO 15189 strategy was first proposed.

The arrival of quality management systems, including ISO 15189, will be discussed in several important sessions at Lab Quality Confab in Atlanta at the Hilton Hotel on September 24-25. Laboratory managers, pathologists, and others wanting to understand the ramifications of this new development in laboratory medicine should make plans to attend the second annual L ab Quality Confab on Quality Management in Diagnostic Medicine.

More than 50 sessions and topics will be presented, covering the full range of laboratory and pathology operations, ranging from specimen collection and courier logistics to using Lean with automation in the high-volume core laboratory. Poster sessions will take place, and national awards and prizes totaling $6,000 will be awarded. To see topics, speakers, and all the events at Lab Quality Confab, visit

To register for Lab Quality Confab, visit

Finally, Dark Daily observes that it has taken only five years, since 2003, for the laboratory industry go from the first examples of Lean and Six Sigma in hospital laboratory operations to the first examples of ISO 15189:2007 accreditation by a hospital laboratory and an independent laboratory. These developments demonstrate how the art and science of clinical laboratory management continues to be influenced by the principles of quality management.

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