“August 30, 1999 Intelligence: Late Breaking Lab News”

There’s a new for-profit hospital player out there which probably needs a good laboratory leader. Iasis Corp. of Nashville, Tennessee just spent more than $800 million to buy 15 hospitals. Iasis is a hospital management company. It expects both deals to close in October. Odds are that Iasis will need to create a position for national direc-tor of laboratories within a few months.


Iasis is purchasing ten hospitals from Tenet Healthcare for $520 million. The hospitals are located in Arizona, Florida, and Texas. Iasis purchased another five hospitals from Paracelsus Healthcare Corp. for $280 million. The Paracelsus hospitals are all located in Utah.

Pathology Service Associates(PSA), the national network of pathology practices, expanded into Pennsylvania during the year. This brings the number of states with active PSA member practices to eleven.


Affymetrix Inc.’s “lab-on-a-chip” technology helped researchers at the University of Wisconsin at Madison identify as many as 6,000 genes that play critical roles in the aging process. Affymetrix’s technology permits rapid scanning of DNA to identify changes in activity in hundreds of genes at a time.


The ease with which researchers in this project accomplished their goals demonstrates how the rapid microminiaturization of laboratory processes is transforming research laboratory practices. The day approaches when this technology will be feasible for use in clinical laboratories.

For at least six months, there have been plenty of rumors that the Dynacare-Hermann Hospital laboratory partnership in Houston is dead as a consequence of the merger between Hermann and Memorial Hospital. Regardless of the truth of these rumors, just the fact that this venture may be terminated illustrates the unbusinesslike thinking of many senior hospital administrators. When Dynacare’s Bill Pesci and Hermann’s Sylvia Skotak presented the joint venture to the 1998 Executive War College, it was a public declaration, with supporting numbers, that this partnership was profitable and considered successful by both parties. Thus, it boggles the mind that Memorial’s senior administrators would consider pulling the plug on a lucrative source of existing and future profits, not to mention the enhanced lab services that a higher-volume lab can provide its inpatients. Is this another instance of the “not invented here” syndrome?

Here’s an important fact: Wiess Ratings of Palm Beach Gardens, Florida reports that, among the nation’s 55 Blue Cross and Blue Shield plans, 45 (82%) lost an aggregate total of $835 million on underwriting in 1998! It’s the third time in as many years that this has occurred. Investment income of $1.2 billion offset underwriting losses. Such losses mean little hope for increases to lab testing reimbursement.


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