Why Do Michigan Hospital Labs “Have it Together?

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WHAT MAKES HOSPITAL LABORATORY ADMINISTRATORS AND PATHOLOGISTS in
Michigan so willing to be both innovative and collaborative in creating sophisticated and financially successful regional laboratory organizations?

As you will read on pages 2-6, Michigan Co-Tenancy Laboratory (MCL), founded in 1997, is owned by 17 competing hospitals and provides shared testing services to more than 30 participating hospitals. The Ann Arbor-based laboratory is organized in such a way that its hospital owners have powerful incentives to feed ever-growing volumes of specimens into the shared laboratory as a way to improve the quality of lab services while simultaneously lowering costs.

Michigan Co-Tenancy Laboratory runs in parallel with Joint Venture Hospital Laboratories (JVHL), based in Detroit. JVHL is a regional laboratory network that has as many as 150 Michigan hospital labs participating in specific managed care contracts. Few states can boast of even one sophisticated and successful regional laboratory collaboration between competing hospitals. That is why Michigan, with two such lab models, is noteworthy.

Commendations are in order for the hospital laboratory administrators and pathologists participating in both regional lab organizations. They’ve proved willing to move beyond the issues of control and mistrust which frequently prevent hospital lab leaders in other cities from moving discussions about regional laboratory networks into operational reality, even after years of meetings. MCL and JVHL provide persuasive evidence that collaboration among competing hospital laboratories can benefit patient care—the primary goal of laboratory medicine—while returning important financial benefits to the participating hospitals.

As clients and long-time readers of THE DARK REPORT know, hospital laboratories in Michigan have used JVHL to become the dominant provider of physicians’ office testing throughout Detroit and other cities in the state. Their willingness to collaborate is helping them roll back the inroads made by national laboratory competitors. I believe MCL reinforces the strategic market position of its participating laboratories in a similar way.

Both of Michigan’s collaborative regional lab organizations provide hospital labs in every part of the country with an undeniable reminder that local lab testing services, delivered professionally to physicians’ offices, are the match for any national lab competitor.

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