“January 12, 2004 Intelligence: Late Breaking Lab News”

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There’s a new joint venture between a commercial laboratory and a multi-hospital group. On January 5, 2004, LabOne, Inc. of Lenexa, Kansas announced that it had completed negotiations with The Health Alliance of Greater Cincinnati. LabOne paid $38.5 million to acquire core laboratory assets of the hospital-owned venture. It will also manage the rapid response labs in six hospitals and provide reference testing. LabOne intends to build a new core laboratory during 2004 and expects to keep most existing testing in Cincinnati.

MORE ON: LabOne

Several aspects of this new joint venture are noteworthy. First, this is a major expansion for LabOne and the first time it has demonstrated its willingness to participate with hospitals in this type of laboratory venture. Second, the price paid by LabOne demonstrates that hospital laboratory outreach programs have capital value, in addition to the other benefits they provide to the parent hospitals.

EMERGENCY ROOMS BECOMING SOURCE OF PRIMARY CARE

Here’s interesting confirmation that ever-increasing numbers of people are using hospital emergency rooms as their source for primary care. Use of emergency rooms in Tennessee is up by more than a third since 2000. The Tennessee Hospital Association (THA) issued an astonishing report. For the fiscal year ending June 30, 2003, 2.9 million people visited emergency rooms. This was an increase of 4.1% from the previous year, and a 34.6% increase from 2000. During fiscal 2003, emergency room visits by indigent and self-pay patients increased 20.1%. For patients in TennCare, the state’s Medicaid program, emergency room visits have increased by almost half, 49.1% in the three-year period of 2000-03.

ADD TO: ER Visits

Among other reasons, a poor economy and higher unemployment in Tennessee is one explanation as to why visits to the emergency room are increasing so rapidly. But another reason seems to be Medicaid reimbursement levels which many physicians consider to be inadequate. “When TennCare patients cannot find doctors willing to see them or take care of them in a timely manner, they have little choice but to turn to hospitals who do not turn patients away,” stated Craig Becker, President and CEO of THA. Tennessee’s experience demonstrates how a continual squeeze on reimbursement discourages provider participation. It also indicates that hospital laboratories may continue to see growing numbers of indigent and self-pay patients showing up in emergency rooms seeking primary care, not emergency care.

  • In Oakland, California, there’s a new laboratory start-up that has just launched clinical testing services. Machaon Diagnostics, Inc. is offering coagulation testing. Michael P. Ero is its President.
  • Pathology has lost another of its prime contributors. At the end of December, Kenneth McClatchey, M.D. died of cancer. Long-affiliated with Loyola Medical Center in Chicago, he had been Editor of Archives of Laboratory Medicine.

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