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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PAML and Centura Health Announce Creation of New Clinical Pathology Laboratory Company in Denver

It’s the second new hospital laboratory joint venture for PAML in past eight days

Earlier today, PAML and Centura Health of Denver, Colorado, announced the creation of a new clinical pathology laboratory company. It will be called “Colorado Laboratory Services” (CLS) and will operate as an LLC (limited liability company). CLS represents the second major hospital laboratory outreach joint venture for PAML in the past eight days.

Centura Health is Colorado’s largest integrated health system. It owns 13 hospitals and its flagship is 593-bed St. Anthony Central Hospital in Denver. Its hospitals are strategically located throughout the Denver metropolitan area and will provide CLS with a local presence to serve physicians’ offices located around each of these medical campuses.


PAML & Providence Health Announce Clinical Pathology Laboratory Joint Venture in California

Hospital lab—commercial medical laboratory collaboration will launch in San Fernando Valley

Yesterday, Pathology Associates Medical Laboratories (PAML) announced a new clinical pathology laboratory joint venture (JV) that is likely to create a tough new laboratory competitor in Southern California.

Spokane, Washington-based PAML and Renton, Washington-based Providence Health & Services will create a new medical laboratory services company to serve California’s San Fernando Valley and its surrounding communities. The new company will begin operating early in 2011 and will be called California Laboratory Associates (CLA), LLC. CLA will provide routine laboratory testing services to medical practices and hospitals from the recently remodeled labs at Providence Saint Joseph Medical Center in Burbank, and more specialized reference and esoteric testing from PAML’s laboratory in Washington.


MountainStar–PAML Lab Joint Venture Doubles in Size in 24 Months

Hospital/commercial lab JV finds success in competitive Salt Lake City market

DATELINE: SALT LAKE CITY, UTAH—Since its formation less than two years ago, MountainStar Clinical Laboratories, LLC, has more than doubled in size. This unique laboratory outreach joint venture is a partnership between MountainStar Healthcare and Pathology Associates Medical Laboratories (PAML).

To learn more about this fast-growing joint venture, last week, Dark Daily traveled to Salt Lake City to visit MountainStar Clinical Laboratories, LLC . First, some background about this partnership.


PAML Has New Owner as Catholic Health Initiatives Buys a Stake

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.


Seattle’s PACLAB Network Wins Market Share From Blood Brothers

In Seattle, Washington, the two blood brothers are dealing with an upstart competitor—one that they cannot acquire nor make go away. Since it became operational in 1997, PACLAB Network Laboratories has directly challenged the national laboratories on what can be considered their “home turf,” since both national labs operate regional testing laboratories in Seattle. Not only has it made steady gains in market share, but PACLAB is poised to become the market leader in Seattle.

Since the year 2000, a growing number of community hospitals have launched laboratory outreach programs. The most successful of these lab outreach programs—with effective sales reps and a commitment to top service—are posting impressive gains in specimen volume and net revenue. These “best of class” lab outreach programs are fully competitive and, in the communities they serve, they are steadily eroding the market share of the national lab companies. PACLAB Network Laboratories should be included in this “best of class” list.

“Currently, we estimate that PACLAB holds a 30% share of the Seattle market for testing referred by office-based physicians,” stated Stewart Adelman, General Manager of PACLAB. “That makes us about equal to each of the two blood brothers, since we estimate that, in the Seattle metro, Laboratory Corporation of America (NYSE: LH) has about 30% and Quest Diagnostics Incorporated (NYSE: DGX) has about 30%. The remaining 10% of the market is shared among several other lab companies.”

Adelman made his remarks at PACLAB’s annual strategic retreat, conducted last week in Spokane. Dark Daily Editor Robert Michel was there to participate. “On several of the medical campuses of PACLAB member hospitals, we currently hold market shares of 80% and 90%,” observed Adelman. “It is powerful evidence that physicians will support their community hospital’s lab outreach program when it offers service levels that match or exceed that of competing laboratories.”

As a phenomenon, the mushrooming number of hospital laboratory networks is a natural market response to the lack of local independent laboratory companies in many cities across the United States. During the past 15 years, Laboratory Corporation of America and Quest Diagnostics Incorporated have regularly acquired any local or regional laboratory that achieved size and scale. Thus, it is not surprising that many community hospital administrators recognized the void in local laboratory services and organized a laboratory outreach program to provide more lab testing choices in the local community.

That is certainly one of the reasons why PACLAB Network Laboratories was organized. When it became operational in 1997, PACLAB’s equity members included eight hospital laboratories, with PAML, Inc. of Spokane as a partner and the manager of the regional laboratory network. During the past decade, it has grown to include 11 member hospital laboratories and serve all of the Seattle metro region, from Centralia in the south to Everett in the north.

PACLAB is also noteworthy for one other impressive achievement. It is living proof that hospital laboratories can band together and collaborate to their mutual benefit over the long term. In addition to paying for all expenses associated with the outreach business, each quarter, PACLAB distributes a sizeable dividend check to the CFO of each member hospital. Laboratory administrators and pathologists in other regions should study PACLAB as a business model that could advance the clinical and economic success of their own laboratory organizations.

P.S.: Dark Daily readers with knowledge of other successful, innovative and thriving laboratory outreach programs are invited to contact us with that information: and/or