January 21, 2008 “Intelligence: Late Breaking Lab News”

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It’s a laboratory acquisition that shows the importance of anatomic pathology in today’s competitive laboratory marketplace. Carilion Labs of Roanoke, Virginia, acquired Innovative Pathology Services (IPS), an anatomic pathology and cytology lab in Knoxville, Tennessee. The deal closed last year. Carilion Labs acquired the laboratory and entered into professional service contracts with the 13 pathologists at Innovative Pathology. IPS serves 10 hospitals, five surgery centers, physician offices in Tennessee, and pathology practices nationwide. Carilion Labs is a subsidiary of Carilion Clinic, also in Roanoke.

MORE ON: Carilion

Carilion Labs is embarked on an expansion strategy and is becoming an active acquirer of laboratories. In December, 2006, it purchased Presbyterian Reference Laboratory in Charlotte, North Carolina. Earlier it had acquired the consulting company now known as Chi Solutions.

PRIVATE INSURERS FOLLOW CMS, STOP PAYING FOR ERRORS

Refusing to pay hospitals for treatment associated with preventable medical errors is gaining traction among the nation’s private health insurers. In separate announcements recently, Aetna, Inc., WellPoint, Inc., and other insurers have declared that they will cease to pay for errors, such as operating on the wrong limb or giving a patient incompatible blood. These payers are following the example of Medicare, which published a new policy last fall that denies payment to hospitals for eight conditions recognized as preventable events.

ADD TO: No Payment

THE DARK REPORT predicts this trend will spread. It is based on the work done by the National Quality Forum (NQF), in Washington, DC, to publicize its list of 28 “never events” that are widely agreed to be medical and operational errors that should never happen to a patient. “Never events” range from errors that include surgical-site infections and urinary-tract infection from a catheter, to bedsores and falls. Refusing to pay for “never events” and similar medical errors raises the performance bar for hospitals, physicians, and other providers. This trend is likely to favor laboratories, because lab testing is a key tool, particularly in programs to control the spread of infections in hospitals.

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