Pathology Clients Now Competing Against Pathologists

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THIS ENTIRE ISSUE IS DEVOTED TO A SINGLE TOPIC: the exploding interest by specialist physicians in establishing their own in-practice ancillary service in anatomic pathology (AP). Once again, THE DARK REPORT is first to provide the pathology profession with a concise and insightful assessment of a disruptive trend.

I use the word “disruptive” for good reason. Pathologists are about to confront a business nightmare as a significant segment of their customers—primarily urology and gastroenterology groups—decides to enter the anatomic pathology business themselves. As our editor points out, “anytime a profession’s major source of business and revenues decides to compete against its supplier, that’s a major development.”

So far, this phenomenon is concentrated in certain regions of the United States. For those of you working in those regions, it’s likely that you’ve already seen major urology and gastroenterology clients divert their specimens away from pathology group practices in your community and into their own in-practice ancillary AP service. It’s likely that these customer defections have had a serious impact on the financial viability of the pathology practices which lost access to those specimens.

There are still areas of the United States where this trend has yet to surface. For example, a pathology sales manager told me last week that, after making a week’s worth of calls on urology offices in Southern California, she had heard no discussion of TC/PC arrangements or in- house AP labs. The situation is exactly the opposite in states like New York and New Jersey, where many urology and GI groups are actively involved in capturing at least some of the revenues generated by their anatomic pathology case referrals.

Even if this trend were to be derailed, because of, say, legislative prohibitions or actions by Medicare and private payers to prevent specialist physicians from submitting claims for anatomic pathology services, I believe the old business models in anatomic pathology are being permanently overturned.

I recommend that your pathologists and practice administrators carefully study the business intelligence presented in this issue, then use it as the basis for a strategic planning session. Timely preparation may help your group save several important client relationships.

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