Rural Hospital Labs and their Lab Directors

FROM TWO DIFFERENT STATES, WE PRESENT INTELLIGENCE BRIEFINGS that have a common element: laboratories in many rural hospitals are struggling. We consider these stories, when taken together, to be persuasive evidence that some significant number of rural hospital laboratories are experiencing ongoing erosion of their financial stability.

First, you will read about the closure of 37-bed E.J. Noble Hospital in Gouverneur, New York. Alerted to deficiencies in the laboratory by the laboratory director who was terminating his contract for this reason, New York state health department officials inspected the lab and later suspended the lab’s license. In response to that action, hospital administrators closed the hospital last month and it may reopen soon.

Next, we were following up the intriguing story that a pathology supergroup in Shreveport, Louisiana, was building a substantial business in laboratory consulting when we learned something interesting. Requests from rural hospitals for help to maintain the CLIA compliance of their labs is one of the fastest-growing areas of Pathology Resource Network, the lab management company established by the 26 pathologists of Delta Pathology Group, LLC.

Consider these two developments in tandem with the action taken by New York lab regulators earlier this year to close the laboratory of 173-bed Peninsula Hospital in the Far Rockaway section of Queens, New York. In that case, NYSDOH officials found the financially-struggling hospital had serious deficiencies in its lab operations.

In my opinion, we are seeing the first wave of hospitals forced to close because ongoing financial problems caused their administrators to starve their institutions’ laboratories of money needed to maintain lab testing activities at a compliant level. It is known that many hundreds of hospitals across the nation don’t generate enough revenue from patient services to cover their operational costs. Thus, you should expect to see more examples of hospitals forced to close because regulators found serious deficiencies in their laboratories.

For that reason, pathologists who serve as laboratory directors and are on the license for rural and community hospital labs may want to pay much closer attention to the effect that shrinking hospital lab budgets have on the ability of their laboratories to operate without serious deficiencies.