“December 29, 1997 Intelligence:  Late Breaking Lab News”

AmeriPath, Inc. is at it again. On December 19, company officials announced the acquisition of two more pathology practices. The practices are The Dermatopathology Laboratory in Pittsburgh and Laboratory Physicians in Jacksonville. More acquisition announcements should be expected from AmeriPath. Growth by acquisition will be its dominant strategy during the next several years.

Managed care giant Oxford Health Plans, Inc. disclosed that it would post a fourth quarter loss of $120 million. This comes on the heels of last quarter’s $78.2 million loss. Internal problems were greater than originally announced, causing company officials to increase write-downs.

MORE ON:…HMOS
Three Massachusetts HMOs are caught in an interesting paradox. Profits are marginal even as they increase the number of enrollees. Harvard Pilgrim Health Care, Tufts Health Plans, and Falcon Community Health Plan all reported slim or no profits for third quarter. At the same time, enrollment was up by 186,000 at Tufts, 116,000 at Harvard Pilgrim and 12,000 at Falcon. If the three plans are struggling to make money, increasing the number of enrollees may only make it more difficult to return to profitability.

LAB ACQUISITION COMPLETED

Laboratory Specialists of America completed its acquisition of the drugs of abuse testing operations of Arkansas-based AccuPath Medical Laboratory. The sale involved around $500,000 in testing. Laboratory Specialists has been quietly acquiring small chunks of toxicology business and posting steady profits. It is a NASDAQ-traded stock, and its symbol is LABZ.

More evidence that automated cytology technology is gaining acceptance comes from announcements by Cytyc Corporation of Boxborough, Massachusetts. According to the company, its ThinPrep® Pap Smear test will be covered by California’s Medi-Cal Program. This is the largest Medicaid program in the United States and covers about 5.5 million people. Cytyc also announced that Harvard Pilgrim Health Care will cover ThinPrep procedures for its 1 million members.

ADD TO:…AUTOMATED CYTOLOGY
Now that CPT codes are available for automated cytology procedures, expect a steady stream of announcements by individual health- care plans stating that they will reimburse for these procedures. All three of the major players, Cytyc, NeoPath, Inc. and Neuromedical Systems, Inc., are hoping that Medicare will eventually authorize reimbursement for automated cytology procedures. However, no one expects quick action by Medicare on this issue.

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