WHEN IT COMES TO THE CLINICAL LABORATORY BUSINESS, generally included in the lab industry’s Pantheon of Greatest Physician (Pathologist) Businessmen are Paul A. Brown, MD, and James B. Powell, MD. I’d like to nominate another physician to this list: Marc D. Grodman, MD.
During the 1970s and 1980s, Brown and Powell—both pathologists— founded and led two of the nation’s most successful laboratory companies. It was in 1967 when Brown founded MetPath, the laboratory company acquired for $140 million by Corning Corporation in 1982. Brown left MetPath shortly thereafter. In 1996, Corning spun off this lab division, creating Quest Diagnostics Incorporated.
Along with his two brothers, Powell launched Biomedical Reference Laboratories in 1969 in North Carolina. In 1979, Biomedical went public and was valued at about $50 million. Just three years later, in 1982, Hoffman-La Roche purchased the lab for $163.5 million. It was merged with another lab division and became Roche Biomedical Laboratories. Powell stayed on as CEO. In 1994, National Health Laboratories acquired a majority interest in Roche Biomedical and the merged lab company was renamed Laboratory Corporation of America. Powell continued as CEO, retiring in 1997.
What qualifies Grodman to be associated with these two physician lions of the laboratory industry is his sustained business successes over the past 35 years. Trained in internal medicine, Grodman founded Bio-Reference Laboratories in New York City in 1981. It grew steadily and, by the late 1990s, was a public company with annual revenue of about $60 million.
Through the decade of the 2000s—a time of intense price pressure and bitter managed care contract wars triggered by the two blood brothers—Bio-Reference posted an impressive track record of double-digit growth in specimen volume and revenue. Grodman did this with different business strategies than his major competitors—and without the need for serial lab acquisitions. Moreover, throughout this time, unlike its other public lab company peers, BRLI never settled a federal whistleblower lawsuit.
Last year, BRLI posted revenue of $832 million and is the nation’s third-largest lab company. These accomplishments surely make Grodman worthy of inclusion in the lab industry’s Pantheon of Greatest Physician Businessmen.