When Laboratory Vendors Go Bankrupt

BANKRUPTCY AMONG VENDORS AND SUPPLIERS in the laboratory industry is an uncommon event. Since it is so rare, that is one less issue about which laboratory directors and pathologists must worry.

However, occasionally there are reminders that it is good management practice to track the financial stability of your laboratory’s primary vendors and suppliers. One such example is IMPATH, Inc.’s recent bankruptcy, which had the potential to cause significant problems for Tamtron, Inc., its business division which sells PowerPath® . As most know, PowerPath is one of the nation’s leading information systems for anatomic pathology. Had Tamtron been affected by IMPATH’s financial woes, the effect might have been felt across several hundred laboratory sites where PowerPath is in use.

The other reminder is LAB-Interlink, Inc., the manufacturer of laboratory automation systems based in Omaha, Nebraska. In late November, the company laid off the majority of its employees and operates from a skeleton staff and shoestring budget. This followed a year of strenuous effort to find an investor or buyer for the company. As you will read, the company has not filed bankruptcy in the United States. However, its inability to properly fund service staff and stock inventory has placed a burden on at least some laboratories which use its automation systems.

Laboratory administrators and pathologists should consider both these examples to be timely warnings about the importance of “knowing your supplier.” No laboratory wants to go through the experience of having an automated line in the high-volume core laboratory cease operations completely—with no warning and no opportunity to regroup. Yet that’s precisely the situation at the laboratory division of West Tennessee Healthcare in Jackson, Tennessee. It may take more than six months before that laboratory can get a replacement automation solution installed and into full operation. In the meantime, imagine the stress on the laboratory staff, already at full productivity, having to compensate for the lack of the automation system.

Another lesson to be gleaned from the Tamtron and LAB-Interlink examples is that things can change for the worse very rapidly. For that reason, lab directors and pathologists should regularly evaluate the financial stability of their laboratory’s key vendors and suppliers.