“February 2, 2004 Intelligence: Late Breaking Lab News”

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Changes are afoot in the national market for anatomic pathology services. At AmeriPath, Inc., the search is on for a new CEO. Current Chairman and CEO, James C. New retired, effective February 1. The company has commenced the search for a new CEO. New had been with AmeriPath since its earliest days.

Meanwhile, over in Nashville, Tennessee, a couple of ex-AmeriPath executives are rumored to be launching another laboratory company. Brian Carr and Jim Billington are said to be developing a new business which will offer anatomic pathology services. Prior to working with AmeriPath, both executives had formed Pathology Consultants of America (PCA). This was one of the handful of pathology physician practice (PPM) management companies funded by venture capitalists during the second half of the 1990s. PCA became Inform DX, which was acquired by AmeriPath in 2000.

MORE PHYSICIANS DECIDE TO DROP MALPRACTICE INSURANCE

Pathologists should take note of this developing trend. With medical malpractice premiums continuing to climb at double and triple digit rates, the number of physicians choosing to self-insure is growing. And this phenomenon is not limited to physicians. In Arkansas, at least 100 of the state’s 237 nursing homes had no liability insurance of as June 2003. Florida is the state to watch for physicians “going bare.” It has some of the nation’s highest malpractice premiums. But Florida also has one factor which helps physicians in their decision to self-insure. By state law, assets such as a home and annuities, are protected from creditors. Statistics from the Florida Department of Health indicate that 5% of the state’s 47,000 physicians currently lack malpractice coverage. Last year, the number was 4%.

ADD TO: Malpractice

Even more remarkable, estimates are that one in five physicians in Miami-Dade County are now self-insured against malpractice claims! Most physicians making this choice are in specialties consider high-risk, such as obstetrics and neurosurgery. Florida state law requires physicians lacking malpractice insurance to post a notice in their office or give patients a statement informing them of this fact. Because pathologists do not see patients directly, giving patients notice would be more difficult. Experts believe this trend will grow in states where tort reform does not occur.

It’s deja vu in the for-profit sector of the hospital industry. On January 28, Tenet Healthcare Corporation announced that it would sell 27 hospitals and post a $1.4 billion charge. Last year it sold 14 hospitals and announced plans to sell four more. When completed, these transactions will leave Tenet with only 69 hospitals. The company’s problems with Medicare have weakened its finances. Tenet’s situation seems a replay of 1997-98. That year, then-named Columbia HCA ran into problems with Medicare, lost money, and divested almost one-third of the hospitals that it then owned.

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