"Lab Industry Briefs"

ARUP Labs, ProxyMed, Unilab, Quest Diagnostics, Ventana, , Misys Molecular Diagnostics, WebMD, Varian

ARUP TO USE PROXYMED FOR BROWSER-BASED TEST ORDERS & RESULTS

ARUP LABORATORIES, INC. and ProxyMed, Inc. signed an agreement that makes ProxyMed’s ProxyLabSM the preferred product for browser-based lab test ordering between physicians and ARUP’s hospital clients.

The two companies will jointly market this product. It is designed to allow physicians to both electronically order tests and receive results from their local hospital laboratory. It is a value-added service designed to support the laboratory outreach programs of ARUP’s hospital clients.

ARUP is the second reference lab to implement this type of service on behalf of hospital clients. It illustrates how competition is stimulating the national reference labs to bring enhanced services to this market segment as a way of differentiating themselves from competing labs.

Alert readers will recall that Proxy-Med inked a separate deal last November to use the technology of Atlas Development Corporation to drive ProxyLabSM’s lab test ordering and results reporting functions. (See TDR, November 21, 2001.) Atlas’ technology allows the same software product to operate in such modes as thick client, thin client, lab-hosted, and ASP.

NON-INVASIVE AND RAPID TESTS MAKE NEW INROADS AT MAJOR LABS

IN RECENT YEARS, the technology supporting non-invasive testing and “rapid” diagnostic assays has made great strides. Two public labs have recently added such assays to their test menu.

Unilab Corporation will now offer a non-invasive HIV-1 test developed by Calypte Biomedical Corporation. It is a urine antibody assay that was recently approved under California licensing requirements. Studies indicate that when this assay is coupled with the urine western blot test, it provides equivalent accuracy to HIV blood tests.

Quest Diagnostics Incorporated signed a distribution agreement with American Bio Medica Corporation. It will be come the exclusive distributor of a rapid, urine-based test for drugs of abuse. American Bio Medica’s Rapid Drug Screen point-of-collection drug testing line has kits that can test for one to nine drugs at the collection sites. Any positive samples will then be sent to Quest Diagnostics for confirmation.

Expect both Unilab and Quest Diagnostics to begin marketing these tests to selected clients, emphasizing the non-invasive benefit (Calypte’s HIV-1 test) and the immediate answer for negative screens (American Bio Medica’s point-of collection rapid drug tests). Should lab testing customers respond favorably to these benefits, it will represent a change in customer expectations.

VENTANA SYSTEMS MOVES TO EXPAND PRODUCT LINE; POSTS STRONG GROWTH

MANY OF THE RECENT CHANGES at Ventana Medical Systems have gone unnoticed by most in the lab industry. The Tucson-based company is working diligently to expand its products and services.

During 2001, Ventana introduced two new probe assays which were well accepted by the lab marketplace. One was a fully automated Inform Her2 neu gene test. The other was a slide-based HPV test for specimens prepared from either tissue or liquid methodologies.

To further its plans for its own proprietary imaging system products, Ventana recently invested $1.8 million in Molecular Diagnostics, Inc. (MDI, formerly Ampersand Medical, Inc.) and will utilize several MDI products.

Ventana’s fourth quarter revenues were $25.5 million, an increase of 47% over the same quarter last year. Full year revenues were $87.8 million, which was a 23% increase over 2000 revenues of $71.1 million.

WEBMD NAILS A CONTRACT WITH MISYS HEALTHCARE

MAYBE THE LONG-TROUBLED WebMD, Corporation is ready to pursue its vision of an Internet-connected health- care system. It’s also a reminder that, although the dot.com bust slowed the move toward e-health services, the revolution still moves forward.

It was announced on January 29 that Misys Healthcare Systems would “integrate WebMD’s full suite of batch and real-time transaction processing services into its extensive range of products and to exclusively use WebMD’s network of connections to commercial healthcare payers across the United States for the processing of covered services, including claims sub- mission, referral, eligibility verification, and pre-certification.”

Put more simply, this means that Misys, formerly known as Sunquest, will use WebMD’s transaction processing capabilities in all the products it sells to hospitals, laboratories, and physicians (who use its Medic software system).

Back in 1999, transaction processing was the primary business objective of Healtheon/WebMD. But then came WebMD’s string of healthcare acquisitions, which sent it down a different business path, resulting in the loss of billions of dollars.

WebMD’s ability to successfully serve Misys should be watched closely. During 2000, many clinical laboratories negotiated with WebMD to acquire and implement its lab test ordering and results reporting product. But the company could not deliver and eventually pulled the plug on its laboratory product. That resulted in a number of unhappy laboratory customers.

One primary competitor to WebMD is MedUnite, a company created and funded by some of the nation’s largest insurers. MedUnite is now entering the lab marketplace, so expect the competition to heat up as sales reps visit laboratories looking for business.

IMPATH MOVES TO LINK RADIOLOGY DATA AND PATHOLOGY DATA

Not only does IMPATH, Inc. have a grand strategy for converting anatomic pathology data into valuable information, but has the money and resources to pursue that vision.

IMPATH’s latest deal is a strategic alliance with Varian Medical Systems, Inc. to develop “software interfaces linking radiation and medical oncology databases with tumor registries.” This announcement follows by just four weeks IMPATH’s contract to purchase Tamtron Corp., which sells anatomic pathology software systems.

The goal is a create a single-entry system for cancer patient demographics, treatment protocols, and outcomes. This information would then move between radiology departments, oncologists, and the tumor registry. Varian’s participation is an example of how manufacturers are becoming involved in the downstream use of clinical data captured by their instrument systems.

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