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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Consolidation of Pathology and Clinical Laboratory Testing Happening in India

Super Religare Laboratories Acquires Piramal Diagnostic Services in $129 million deal


Pathology and clinical laboratory testing in India is poised to undergo ongoing consolidation as the pace of merger & acquisition activity increases. One sign of this trend is last month’s acquisition of the pathology business of Piramal Healthcare Limited by Super Religare Laboratories Limited (SRL).

In a deal valued at US$129 million, Super Religare Laboratories purchased Piramal’s pathology and radiology diagnostic services subsidiary, called Piramal Diagnostic Services Private Limited. Announced on July 14, 2010, Super Religare Laboratories said this acquisition will give it one of India’s largest pathology and clinical laboratory testing networks.

After combining the two businesses, Super Religare will operate 185 laboratories. It will have 1,500 patient collection centers that serve 12 million patients per year. Further acquisitions are planned by SRL.

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Cuts in Health Budgets Are Threat and Opportunity for Clinical Pathology Laboratories

Some clinical labs use new pathology lab test technologies to deliver added value to physicians, patients, and payers

Clinical pathology laboratories in the United States and other developed countries across the globe face an unprecedented double-whammy. On one hand, the ongoing explosion of genetic and molecular knowledge gives pathologists and clinical laboratories incredible new tools for diagnosing disease and guiding therapy.

On the other hand, funding for government health programs in the United States and other developed countries is failing to keep pace with demand for health services and the need to pay for all the sophisticated molecular diagnostics and complex therapies now coming to market.

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Australia’s Pathology Lab Giant Goes Toe-to-Toe with Private Insurers over Higher fees for Pathology Tests

Sonic Healthcare asks for 30% pathology test fee increase from Bupa and MediBank

In Australia, reduced funding for pathology testing by government health programs is being blamed as one factor contributing to a contract spat between the nation’s largest clinical laboratory and its major private health insurance companies. Pathologists across the globe will recognize several familiar issues, as Australia’s health institutions struggle to cope with increased utilization of pathology testing and higher healthcare costs.

By asking for a price increase of 30% for pathology testing, Sonic Healthcare Ltd (ASX: SHL) has put itself at loggerheads with several of the nation’s largest private health insurance companies. As contracts between Sonic Healthcare and these private insurance companies expire, Sonic then sends bills directly to the patients insured by those health plans for the costs of the pathology testing performed during their stay at private hospitals. The amount of the bill reflects the “gap” fee difference between government reimbursement and the actual charge for laboratory tests.

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Auckland Hospital Laboratories Play Defined Role in Supporting Patient Care

Highly-automated hospital labs are organized to serve inpatient testing and don’t compete for “outreach” lab business from office-based physicians in the community

DATELINE: AUCKLAND, NEW ZEALAND—In this nation’s single payer health system, clinical laboratory testing services are allotted to hospital laboratories and commercial laboratories in very specific ways. Consequently, hospital laboratories in New Zealand tend to provide testing primarily for inpatients and for outpatients seen by specialists who practice within the hospital’s facilities.

This is an interesting distinction which sets New Zealand hospital laboratories apart from hospital labs in such countries as the United Kingdom, the United States, Canada, and Australia. In each of these countries, it is common for hospital laboratories to provide some laboratory testing to the outpatient and outreach sector, particularly to primary care clinics and office-based specialist physicians.

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Pathology Testing Prices as a Commodity: Australia’s Health System Stands at a Crossroads

Increased Test Volumes in Recent Years Trigger an Important Review of Coverage and Funding for Pathology Testing Services

DATELINE: MELBOURNE, AUSTRALIA—Pathology testing is under the gun in Australia. Fast-rising utilization of pathology testing over the past decade has caught the attention of health system policy makers. They are concerned about the funding and clinical service implications in downstream years should these growth rates in the volume of tests performed continue to increase at comparable rates into the future.

At the same time, a five-year master contract between the Australian national government and a representative group of national pathology and clinical laboratory associations that has brought some predictability in year-to-year spending on pathology testing expired on June 30, 2009. This contract is known as the Pathology Quality and Outlays Memorandum of Understanding (MOU). The MOU process was launched in 1989 and continued for 20 years. Since expiring in June, this MOU has not been renewed and the pathology profession in Australia is waiting to learn what new approach may be proposed by government health officials.
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