“January 19, 1998 Intelligence: Late Breaking Lab News”

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Interesting events continue unfolding at Columbia/HCA Healthcare Corp. Last November the hospital giant announced plans to spin off 108 of its 340 hospitals. Later that month the Columbia signs were removed from its corporate headquarters building in Nashville. Columbia hospitals in different cities around the country have quietly removed the word Columbia from their names. Indications are that Columbia intends to undergo a name change at some future point.

Early in January it was revealed that the Justice Department is asking state officials to join its probe of Columbia’s laboratory billing methods. A confidential Justice Department memo was circulated to state officials nationwide on the issue of laboratory test billing and medical necessity for these tests.

According to the American Medical Association, more than half of the 600,000 physicians in the United States negotiated through an independent physician association (IPA) last year. Estimates are that 3,000 IPAs and 3,000 physician-hospital organizations (PHO) currently operate. Laboratories sell their services to IPAs and PHOs in many markets. With half of the nation’s physicians now participating in IPAs and PHOs, this demonstrates the rapid restructuring occurring to the traditional clients of clinical laboratories.


There is a change of leadership at American Pathology Resources in Nashville, Tennessee. George Goodwin, President and CEO, left the pathology-based physician practice management (PPM) last week. Chairman Robert West, M.D. is the interim President and CEO. No public announcement was made concerning reasons for Goodwin’s departure.

An interesting footnote to events at SmithKline Beecham Clinical Laboratories (SBCL). The company announced the sale of its SBCL SCAN® business to ActaMed Corporation of Atlanta last week. SBCL SCAN is the computer system used by physicians offices for ordering laboratory tests and receiving results. More than 60,000 clients are hooked up to this system. ActaMed will maintain service to SBCL clients and assume responsibility for ongoing product development of this system. SBCL officials declined to comment on reasons for the divestiture of this business unit.

PhyCor, Inc. and MedPartners, Inc. will not merge after all. Officials at both companies announced on January 8 that “significant operational and strategic differences” made it impractical to complete the proposed merger. The combination would have boasted annual revenues of $8 billion and affiliations with 35,000 doctors nationwide (about 5% of all physicians in the United States).

Regardless of the corporate cultures of the two firms, the most daunting task facing them individually is how to address the unique differences of each regional healthcare market. These national physician practice management companies are struggling to maintain relevant local services appropriate to each regional market’s needs.


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