“August 25, 1997 Intelligence:  Late Breaking Lab News”

Meris Laboratories continues to be a turnaround challenge. The company announced on August 4 that CEO and President Denis Simon had resigned. Appointed by the board on March 25, Simon stayed less than 18 weeks in the position. Like several other California labs, the San Jose-based company has struggled financially in recent years.

ADD TO:… CALIFORNIA LABORATORIES
Meanwhile, the state’s largest laboratory, Unilab, Inc. got a boost. On August 7, Standard & Poor’s revised its business outlook on Unilab from negative to stable. The bond rating company noted that Unilab had improved both operating margins and EBITA (earnings before interest, taxes, depreciation, and amortization) in recent months. Standard & Poor’s continues to give Unilab’s bonds a speculative rating due to the company’s high leverage and the heavy penetration of managed care in the California marketplace.

Regional Sales Manager James Cameron from Quest Diagnostics Incorporated’s Denver region noted that Quest’s laboratory in Billings, Montana was not closing down completely.  Cameron indicates that “time-sensitive” laboratory tests will continue to be performed at the Billings laboratory. Other specimens from that market will be sent to Quest’s Denver facility for testing.

Check out the AACC’s audioconference on An Introduction To ISO 9002 Registration. Scheduled for November 5, 1997, it is a basic overview as to why ISO 9002 is a management strategy worth considering. As laboratory executives seek to “reinvent” themselves to stay relevant with changes under way in healthcare, it becomes imperative to stay up with successful management models. Quality management programs such as ISO 9002 represent the new paradigm shift in healthcare management strategies.

HIGHER HMO PREMIUMS

Indications are that corporations will pay higher premiums for the next fiscal year. Compensation experts predict companies will pay an average of between 6% and 10% more. This reverses a trend of declining or flat premiums experienced in recent years. Clinical laboratories may see further reimbursement declines from private payers as they seek to preserve profit margins.

MORE ON:…PREMIUM INCREASES
One reason behind the widespread premium increases are disappointing profit margins at publicly traded managed care companies. “It must be very clear to everybody that the HMOs have to raise prices at least 5% or they are in big trouble,” said Kenneth Abramowitz, healthcare analyst at Sanford, Bernstein & Co.

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