CEO SUMMARY: Its time again for THE DARK REPORT to make its yearly selection of the lab industry’s Movers & Shakers. Individuals chosen for 2000 represent a cross section of laboratory companies. Their successes demonstrate that leadership and vision continue to make a difference, despite the financial challenges of today’s healthcare marketplace.
IT IS ALWAYS A CHALLENGING TASK for THE DARK REPORT to select its annual list of the laboratory industry’s Movers & Shakers.
That’s because many of the most effective management leaders in clinical laboratories and pathology group practices labor in relative anonymity. Since most laboratories and pathology groups are “hidden” within the larger organization of the hospital, their management leaders get much less recognition than those of publicly-traded companies.
As public firms, it is certainly easy to track the business performance of Quest Diagnostics Incorporated and AmeriPath, Inc. Every quarter these companies are required to make detailed financial disclosures.
It is much more difficult to track the management performance of hospital laboratories and pathology group practices, since they seldom make public any details about their overall financial performance.
That is why THE DARK REPORT’s annual selection of the lab industry’s Movers & Shakers is important. It often brings unrecognized management leaders into the public eye. These exceptional individuals demonstrate that a well-managed laboratory can still grow, make money, and be a good place to work.
The popular conception of the clinical laboratory industry today is that it’s in a general state of financial depression. Sustained erosion in the levels of reimbursement for lab testing have caused operating profit margins to fall to levels which are inadequate to sustain viable laboratory operations.
This popular conception of the lab industry is not totally true. There are regions of the United States where most laboratories continue to operate with a reasonable degree of financial comfort.
These regions stand in stark contrast to those areas of the country where virtually all laboratories find themselves in a constant struggle for financial survival. California is probably the most prominent example.
THE DARK REPORT’s Movers & Shakers for 2000 come from all regions of the United States. The successes of their laboratory organizations demonstrates that it is still feasible to create a dynamic, growing laboratory organization.
As in past years, we expect some of the individuals on this year’s Movers & Shakers list to be controversial. Like the Academy Awards, every fan has an opinion on why their favorite candidate should win. That also applies to THE DARK REPORT’s Movers & Shakers selections.
Yet we believe that each of our selection shave unquestionable merit for recognition as a Mover & Shaker. When their individual accomplishments are matched against other peers in the lab industry, they compare favorably. The sustained performance of their laboratory organizations offers further validation that each individual’s leadership skills made important contributions to its success.
For example, take regional laboratory networks. They became a common industry business model starting in 1995. Yet the measurable impact and success of some 40 to 50 regional lab networks across the country during the past five years has been negligible.
Major Population Centers
Judged from this perspective, the accomplishments of Detroit’s Joint Venture Hospital Laboratory Network (JVHLN) are considerable and impressive. Since its operational launch in 1993, it has grown to encompass all the major population centers in Michigan.
It’s infrastructure of patient access points and stat labs is unmatched by any commercial lab competitor in Michigan. During its seven years of operation, it has generated positive cash flows and funded the costs of its own operations.
It’s accomplishments in managed care contracting are equally impressive. It now holds contracts with Michigan payers to service 1.6 million lives. It is a lab services provider to all major Michigan payers, including, as of early this year, Michigan’s largest health insurer.
Compared to all other regional lab networks in the United States, JVHLN’s accomplishments are truly exceptional. That is why THE DARK REPORT selected JVHLN’s Executive Director, Jack Shaw, as one of this year’s Movers & Shakers. In seven years of leading JVHLN, Shaw has helped his network achieve business outcomes that are unmatched by any other regional lab network.
Another good example is AmeriPath, Inc., the pathology physician practice management (PPM) company based in Riviera Beach, Florida. AmeriPath has grown to become a quarter billion-dollar pathology business in just a few years. Many did not believe that pathologists would buy into the PPM concept.
But today, AmeriPath has almost 300 pathologists working in 30 states. It is posting healthy profits, despite the reimbursement squeeze on lab testing. Credit for this business growth must go to its management leader, James New, one of THE DARK REPORT’s Movers & Shakers for 2000.
Hopefully the accomplishments and successes of our Movers & Shakers will inspire other laboratory executives and pathologists to energize their own laboratory organizations. The lab industry needs more leaders with confidence, vision, and energy.
This year’s group of Movers & Shakers, along with the individuals selected in past years, provides ample proof that skillful management does make an important difference in the success or failure of a lab organization.
THE DARK REPORT encourages all levels of lab managers to study and master the tools and techniques of management and leadership. The rewards from such effort are fulfilling and worthwhile.
Michael Laposata, M.D., Ph.D.
Director of Clinical Laboratories
Massachusetts General Hospital
GOOD THINGS ARE HAPPENING to clinical pathology at Massachusetts General Hospital in Boston. Michael Laposata, M.D., Ph.D. is actively making lab data more useful and relevant to clinicians and HMOs.
As Director of Clinical Laboratories, Dr. Laposata developed a way to make clinicians recognize and use enhanced clinical pathology professional services in an added-value manner. The goal was to directly help physicians practice better medicine at less cost.
Dr. Laposata used a “close to the customer” philosophy to identify the unmet needs physicians had concerning the lab tests they ordered. He then developed a customized series of clinical pathology professional opinions which are added to lab test reports.
These enhanced clinical pathology professional services are a hit with doctors, who encourage HMOs to reimburse Dr. Laposata and his team for such professional services.
Although still unrecognized by much of the clinical pathology profession, Dr. Laposata’s successes did not go unnoticed by several large, market-responsive commercial laboratories. Dr. Laposata’s innovations at adding value to clinical pathology will be a transforming force all across the country.
Director of Laboratories
FULL INTEGRATION of clinical care is the next challenge for lab executives. At Kaiser Permanente Northwestin Portland, Oregon, Administrative Director of Laboratories Dixie McFadden is already positioning her laboratory organization to meet these challenges.
During the past five years, McFadden conducted rigorous evaluations of different lab strategies required to service a clinically-integrated healthcare system. Under her leadership, the lab developed a cost-effective business plan which mixes the practical with the visionary.
The end result is a laboratory organization that incorporates today’s latest automation solutions with the flexibility—and willingness—to adopt even newer technology in the near future. In one sense, McFadden has created a “modular business strategy” for her lab organization.
McFadden represents the next generation of laboratory administrator. She can impart vision, understands how to manage people resources, and will go outside the lab industry to find management tools that she can use in the laboratory.
McFadden’s leadership skills make the lab organization at Kaiser Permanente Northwest a good business model to watch for innovation in serving the integrated clinical environment.
Chairman & Chief Executive Officer
Riviera Beach, FL
PROBABLY NO SINGLE FORCE IS doing more to reshape the traditional practice of anatomic pathology than AmeriPath, Inc., led by Chairman and CEO James C. New.
Under New’s leadership, Ameri-Path was the only pathology physician practice management (PPM) firm to go public (October 1997).
In the 31 months since that date, New has built AmeriPath into a national pathology company with a quarter billion dollars in revenue and 297 pathologists practicing in 30 states. Unlike national AP companies such as DIANON Systems, Inc. and IMPATH, INC., AmeriPath actively owns and operates locally-based pathology practices which primarily service hospitals.
New and his executive team should be given full credit for creating a pathology-driven business entity which many independent-minded pathologists believed would never work in today’s healthcare market.
New cut his management teeth at Textron, Inc. and Emerson Electric, Inc., both companies respected as rigorous developers of skilled managers. James C. New is definitely bringing modern corporate management principles to anatomic pathology. So far, his track record demonstrates that corporate management has a place in pathology.
Joint Venture Hospital Lab Network
DETROIT’S Joint Venture Regional Laboratory Network (JVHL) has always been an ambitious undertaking since its formation in 1992.
One constant in this lab network’s growth has been its Executive Director, Jack Shaw. During the 1990s, Shaw successfully led JVHL through the same obstacles which derailed most other lab networks.
Originally organized by the lab divisions of four competing health systems in Detroit, JVHL has expanded and now has 20 hospital labs as participating members.
As a managed care contracting entity, JVHL has no peer among the nation’s regional lab networks. It holds contracts covering 1.6 million lives and recently gained provider status with Michigan’s largest insurer.
With this newest contract, JVHL is a full-fledged, credible competitor in Michigan against the two national laboratories. In so doing, JVHL fulfills the potential expected of the regional lab network concept.
Jack Shaw’s nine years of leadership at the helm of JVHL amply demonstrate his skills in diplomacy, team-building, and strategic market positioning. JVHL is a great example of how successful a regional lab network can be in its local market.
Thomas Tiffany, Ph.D.
Chief Executive Officer
Pathology Associates Medical Labs
IF LABORATORY REGIONALIZATION is a defining trend this decade, then the example of Spokane’s Pathology Associates Medical Laboratories (PAML), led by CEO Thomas Tiffany, Ph.D., is worth studying.
During the second half of the 1990s, Dr. Tiffany deftly positioned PAML to be a major laboratory player in western Washington and Idaho, its prime service area. Using a focused business strategy of acquisitions, affiliations, and strategic partnerships, Dr. Tiffany has built PAML’s market presence throughout the state, from Seattle to Boise.
In particular, PAML’s involvement as a full participant in the PacLab Laboratory Network, with eight hospital labs, demonstrates that an independent commercial lab company can work cooperatively with a network of hospital laboratories.
Certainly PAML faces daunting financial challenges, particularly given the needs of its hospital system owner. But Dr. Tiffany’s accomplishments in building PAML’s presence in local markets throughout Washington and Idaho demonstrate that the age of the independent commercial laboratory has not quite ended.
What are they doing now?
Movers & Shakers Continue Making Big Contributions
Michael Becich, M.D., Ph.D.
Director, Pathology Informatics
University of Pittsburgh
Few pathologists bridge the worlds of academics, clinical practice, and business as well as Dr. Becich. Since his 1998 recognition as a Mover & Shaker, he has moved forward on several fronts. Dr. Becich is successfully obtaining a sizable amount of grant money to develop digital and electronic pathology capabilities. He is working with venture capitalists to fund pathology-based start-ups. THE DARK REPORT was not the only organization which recognized Dr. Becich’s exceptional accomplishments. Intel Corporation declared Dr. Becich to be one of its Healthcare Heroes. (See website: www.Intel.com/intel/e-health/heroes.htm.)
Chief Executive Officer
Centrex Clinical Laboratories
New Hartford, New York
This 1998 Mover & Shaker became one of the first hospital-owned laboratory organizations to implement a Web-based test requisition and results reporting system. Since December, Centrex has been connecting clients and lab users with the Abaton.com solution. With this accomplishment, Finn places Centrex at the forefront of the Internet informatics trend while giving his lab a competitive advantage in the marketplace.
Bruce Friedman, M.D.
Professor of Pathology Informatics
University of Michigan
Ann Arbor, MI
Dr. Friedman is another Mover & Shaker actively involved in laboratory informatics and the Internet. He is developing wireless connections between his laboratory and physicians to provide clinicians with remote access test results. He is also working on ASP (application service provider) lab information services at the University of Michigan Medical Center.
Timothy J. Brodnik
President & CEO
American Medical Laboratories
In keeping with his reputation for moving at light speed, Brodnik is implementing multiple business initiatives at American Medical Laboratories (AML). During the past year, AML added Pathologists Medical Laboratories of Las Vegas to its corporate structure, won the national reference testing contract for Kaiser Permanente, and inked a strategic affiliation with Park City Solutions of Park City, Utah. Revenues and operating profits at AML are climbing steadily.
Lots of Talent Among Movers & Shakers
Here’s a complete list of past honorees of THE DARK REPORT’S annual Movers & Shakers awards. These individuals represent an impressive cross section of the laboratory industry’s brightest and best management leaders.
Timothy J. Brodnik, President & CEO
American Medical Laboratories, Chantilly, VA
Phillips I. Gausewitz M.D.
Pathology Medical Laboratories, La Jolla, CA
Jerry Goldsmith, Vice President Marketing Programs
American Association for Clinical Chemistry, Washington, DC
Gene Pawlick, M.D., Regional Director of Laboratories
Kaiser Permanente-Northern California, Berkeley, CA
Al Sirmon, Chief Financial Officer
Pathology Service Associates, LLC, Florence, SC
Bill Hagestrom, Chief Executive Officer
UroCor, Inc., Oklahoma City, OK
Jack Finn, Chief Executive Officer
Centrex Clinical Laboratories, New Hartford, NY
Michael Becich, M.D., Ph.D., Director
Pathology Informatics, University of Pittsburgh Medical Center, Pittsburgh, PA
Michael Snyder, M.D.
UMASS Memorial Health Systems Labs, Worcester, MA
Charles J. Miller, COO & Executive Director
Peconoic Regional Laboratories, Southampton, NY
David Beckwith, Ph.D.
Clinical Director, Health Network Laboratories, Allentown, PA
Richard Brooks, Chief Financial Officer
Physicians Clinical Laboratories, Inc., Stockton, CA
Robin Felder, Ph.D., Professor of Pathology and Director
Medical Automation Research Center, University of Virginia Hospital, Charlottesville, VA
Ken Freeman, Chief Executive Officer
Quest Diagnostics Incorporated, Teterboro, NJ
Bruce Friedman, M.D., Professor of Pathology Informatics
University of Michigan Medical Center, Ann Arbor, MI
Robert Hamon, Directory of Laboratory Services
Presbyterian Laboratory Services, Charlotte, NC (now with Premier, Inc.)
James Neeley, M.D., Consultant
Meris Laboratories, San Jose, CA (now with Incline Software Consultants)