“April 13, 1998 Intelligence: Late Breaking Lab News”

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Last Thursday was the 20th Annual Conference of the Biomedical Marketing Association (BMA). Held in Baltimore, it brought together the marketing and sales executives from diagnostics companies all over the United States. The program focused on changes to how hospitals and laboratories purchase diagnostic equipment and supplies.

Consolidation within the diagnostics industry is influencing how diagnostics instruments are marketed. Executives from both Novation (VHA) and Premiere made presentations. Each of their purchasing organizations is creating anew emphasis on contracting for laboratory services and equipment. Contract compliance remains an issue for both organizations.

Since many of the executives in attendance at the BMA are involved in both total laboratory automation (TLA) and modular automation, it was a good opportunity for THE DARK REPORT to take an informal poll about TLA. Without question, individuals with hands-on experience on TLA projects expressed frustration. Most felt that there were no short term prospects for TLA products. Modular automation, on the other hand, seems to be growing and shows good investment returns.

Apparently the financial performance of clinical laboratories continues to be dismal. When WDI Capital Markets released their quarterly listing of healthcare company earnings, the category for clinical laboratories was missing. Leading the pack, however, was the biotechnology segment. For fourth quarter 1997, their collective earnings were up 184%. Second on the list was home healthcare, with an increase of 125%. At the bottom? Practice Management companies were down 74%. Diagnostics was the next poorest category, at  -69.7%.


Minnesota HMOs are struggling financially, just like the national HMOs. Medica Health Plans, part of Allina Health Systems, lost money on a premium base of $1.7 billion for 1997. Across town, HealthPartners posted a loss of $9.9 million against premium revenues of $1.3 billion. Blue Cross/Blue Shield of Minnesota also posted a net loss from operations. This is more evidence of the general erosion of finances among the HMO industry.


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