“December 17, 2001 Intelligence: Late Breaking Lab News”

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Laboratorians interested in the economic paradoxes that sunk the managed care industry might be interested in a new book, Oxymorons: The Myth of a U.S. Healthcare System. Author J.D. Kleinke provides a lucid analysis of the contradictions in our healthcare system. For example, Kleinke describes how incentives could lead money-minded HMOs to decide not to pay for every 60-year-old to have a $1,000 colonoscopy to screen for premalignant polyps. That’s because, within five years, the few resulting cancers, if overlooked, would be a Medicare problem. He also addresses the dilemma of new drugs and new technologies which offer marginal clinical benefits, but add greatly to costs.


Kleinke’s proposed solutions center around increased consumer choice and tax deductions for out-of-pocket medical expenses. He points out that, when bureaucrats dictate healthcare, arbitrary decisions are made—like when New York State Medicaid established a policy of six Viagra tablets per month.


News that St. Paul Company is exiting the medical malpractice business presages growing problems in this type of insurance coverage. During 2001, St. Paul expects underwriting losses of $940 from its medical malpractice business. It insures 42,000 physicians in the United States, along with 750 hospitals, 5,800 healthcare facilities, and 72,000 providers, including nurses. St. Paul does not plan to cancel existing policies. It will exit the medical mal-practice business by refusing to renew existing policies as they expire.


As a result of several converging trends, pathologists and laboratories are seeing stiff increases in their medical malpractice premiums. Insurance experts predict this pattern will continue. In the early 1990s, profits from medical malpractice were strong and many insurance companies competed for market share by offering lower premiums. Meanwhile, throughout the de- cade, the number of medical malpractice lawsuits increased. As well, the average size of court judgements and settlement amounts have climbed sharply. Collectively, these factors are forcing medical malpractice insurers to raise their premiums by significant amounts.


Eugene Heidt has left his position as President of Genesis Clinical Laboratory, based in Berwyn, Illinois. Brenda Van Wyhe, Vice President of Finance, is now the senior executive at Genesis. • In Kingsport, Tennessee, G. Robert Ainslie, Ph.D. resigned as President of Medex Laboratories. The new President is Mike Ladd. No word on Ainslie’s future plans. • After many years in Lincoln, Nebraska, Larry Warrellman is retiring. He is General Manager of the Quest Diagnostics Lab there and has worked at that location through its acquisition by Nichols Institute in the late 1980s and then MetPath in 1994.


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