Sonic Healthcare Limited Selected to Provide $3-Billion in Medical Lab Services to Edmonton and Parts of Central and Northern Alberta

Other clinical laboratory organizations responding to the RFP were Laboratory Corporation of America, Quest Diagnostics Incorporated, and Mayo Clinic

Last Friday, Alberta Health Services (AHS) in Edmonton, Alberta, announced that Sonic Healthcare Limited (SHL.AX), of Sydney, Australia, has been selected as the medical laboratory testing provider to serve Edmonton and parts of central and northern Alberta. This agreement is worth $3 billion Canadian over 15 years and is believed to be the world’s biggest clinical laboratory testing contract currently out for bid.

Competition for this clinical laboratory testing contract was intense. Last April, four organizations were identified as having submitted responses to Alberta Health Service’s (AHS) request for proposals (RFP). They were: (more…)

Facing the Looming End of Fee-for-Service, Clinical Laboratories and Anatomic Pathology Groups Look for New Business Models

Failing finances at technical pathology laboratories may be the most immediate concern for many pathology group practices

Many clinical laboratories and anatomic pathology groups now recognize the new reality of the American healthcare system: less reimbursement for laboratory testing. On one hand, the fee-for-service prices for lab tests paid by government and private payers have been aggressively slashed.

On the other hand, all payers have become stubbornly resistant to issuing coverage guidelines and setting adequate prices for the flood of new molecular assays and gene tests coming to market.

These trends have already brought a handful of medical laboratories and pathology practices to the point of bankruptcy, sale, or closure. This is definitely true for the technical laboratories owned by many local pathology groups, which have become unprofitable due to fee cuts. (See below.) (more…)

More Consolidation in the Clinical Laboratory Industry, as Quest Diagnostics Agrees to Pay $570 Million to Acquire Solstas Lab Partners

When completed, this acquisition will give Quest Diagnostics a major laboratory presence in the backyard of competitor Laboratory Corporation of America

Another big lab domino fell in the continuing consolidation of the clinical laboratory testing industry. This time it was Solstas Lab Partners, which announced that it would be acquired by Quest Diagnostics Incorporated (NYSE:DGX).

The agreement was announced by both companies earlier this week. Quest Diagnostics will pay $570 million to acquire Solstas, which is based in Greensboro, North Carolina. Solstas provides medical laboratory testing services to clients in nine states across the South. Quest Diagnostics says it expects to close the sale by the middle of this year, subject to the usual regulatory reviews of such transactions. (more…)

Is a Patient-Centric Approach to Clinical Laboratory Management the Best Way to Move from Volume to Value?

Healthcare’s coming shift from fee-for-service to value-based reimbursement creates both a crisis and an opportunity for clinical laboratories and pathology groups.

With the era of fee-for-service medicine under siege, every clinical laboratory and anatomic pathology organization needs a strategy for getting paid, as new reimbursement models that support patient-centric care will make up a larger portion of lab revenues. Unfortunately, few real-world examples exist today to guide clinical laboratory executives as they develop these strategies.

Patient-centric medical care is an important goal for every healthcare provider. Patient-centered medical homes are enjoying strong growth and acceptance. Accountable care organizations (ACOs) are designed to serve the individual needs of each patient. Meanwhile, hospitals and physicians are getting better at measuring patient satisfaction because health plans are basing payment on these scores. (more…)

California’s John Muir Health Closes Core Lab, Sells Its Clinical Laboratory Outreach and Reference Business to LabCorp

Laboratory Corporation of America gets 26 MuirLab Patient Service Centers (PSCs) in Northern California

Another hospital system is exiting the clinical laboratory outreach business. John Muir Health in Walnut Creek, California, agreed on Tuesday to sell its MuirLab business to Laboratory Corporation of America (NYSE: LH) in Burlington, North Carolina.

In the deal, LabCorp will take over and operate 26 MuirLab Patient Service Centers (PSCs) in parts of Northern California, including Contra Costa, Alameda, and Solano counties. In addition, LabCorp is purchasing the client list of office-based physicians and hospitals serve by MuirLab. LabCorp will also be the preferred provider of reference lab services for John Muir Health and its affiliates.

John Muir Health will retain its two hospital-based labs in Walnut Creek and Concord. Terms were not announced and the sale is due to close in November.