IN THIS ISSUE THERE ARE STORIES ABOUT THE SUCCESSES of SmithKline Beecham Clinical Laboratories (SBCL) and UroCor. Each company has a lesson to teach us about developing a business strategy, then making it work in the marketplace.
In the case of SBCL, I was astonished to realize that it has quietly become the sole source laboratory services provider for nine million people. Since late 1995, SBCL won national contracts from Cigna, Prudential, and Aetna. Current estimates are that 271 million people live in the United States; thus SBCL has captured an exclusive right to serve 3.3% of the population!
That is a remarkable achievement, regardless of whether you consider sole source contracts to be good for the laboratory industry or not. It’s my opinion that a great amount of credit for SBCL’s accomplishment in this area should be given to the individual who’s been in charge of SBCL’s national managed care effort. That individual is Vijay Aggarwal, Ph.D., who was given responsibility for SBCL’s managed care back in 1994.
Critics can say that SmithKline’s original willingness to enter into a sole source agreement with Cigna back in 1995 was folly, because of pricing, risk factors, and a mismatch between SBCL’s laboratory infrastructure and where Cigna’s beneficiaries lived. But two full years later, the program is still ongoing and neither party is seeking to tear it apart.
At UroCor, the achievement is to convert one-third of the office-based urologists into UroCor customers during a seven-year period. Starting from scratch in 1991, UroCor now has 2,500 of the nation’s 7,500 urologists ordering diagnostic services from UroCor. Full credit should be given to Mark Dimitrof, the sales and marketing mind who doggedly built and managed the field force which sold those new client accounts. Dimitrof has been instrumental in converting UroCor’s marketing and sales strategy from concept to reality during these seven years.
The accomplishments of these two individuals should remind us of two things. First, it is still possible to create a plan to expand a laboratory’s market share, then go out and capture that new business. SBCL and UroCor represent the billion-dollar lab and niche diagnostics provider. Yet, big or little, both are progressing forward.
Second, success in managing laboratories requires exceptional individuals. These are people willing to volunteer for risky projects. They can visualize how to make things happen in the market, then hit the streets and make the fur fly. They are people who make the difference. My hat is off to Dr. Aggarwal and Mr. Dimitroff. We need more like them in our industry!