“July 14, 1997 Intelligence: Late Breaking Lab News”

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Neuromedical Systems, Inc.’s (NSI) President and CEO, Mark Rutenberg, is probably the first victim of the Pap smear technology wars. It was announced on June 30 that Rutenberg had resigned. Apparently investors are unhappy with his company’s performance. Despite widespread promotion of Neuromedical’s PapNet™ technology, the company’s stock price dropped precipitously in recent months. Rutenberg is the visionary who founded NSI and spent almost ten years bringing the technology to market. In fact, just last year Rutenberg was honored as Entrepreneur Of The Year by Ernst & Young.


For Cytyc, Inc., news from the battlefront was good. Quest Diagnostics Inc. agreed to offer Cytyc’s ThinPrep™ Pap Test throughout its national system of laboratories. Reimbursement remains an obstacle, and Quest’s Chief Medical and Science Officer, Dr. Gregory Critchfield, noted that fact in Cytyc’s press release.


In a study partially funded by the R.J. Wood Foundation, it was determined that HMO enrollees see their doctor more than PPO or indemnity enrollees. HMO medical visits averaged 4.8 per person per year. The number for PPO and indemnity enrollees was 4.5 and 4.0, respectively. Researchers attribute this increased number of visits to their belief that HMO enrollees have easier access to primary care providers.

Columbia/HCA may be picking up an image of a media “bad boy.” In the last month, both the Wall Street Journal and Modern Healthcare Weekly ran large stories built around interviews with ex-Columbia executives. Both stories referenced the stress and conflict managers experience in attempting to meet Columbia’s rigorous financial goals.

Healthcare consolidation continues, and Kaiser Permanente is on the move. Voting members of Group Health of Puget Sound in Seattle voted to approve an unusual merger with Kaiser’s Northwest Division. Although both plans retain their name, assets and operations, a newly formed, not-for-profit company in Portland, Oregon will oversee the combined operations. This partnership creates a plan with 1.1 million enrollees, 1,912 physicians and $1.9 billion in revenue. Kaiser would like to create similar partnerships in other parts of the United States.

Physician Office Laboratories (POL) may be on the decline. According to the
Center for Laboratories at HCFA, the number of POLs decreased by 3,000 between 1995 and 1996. POLs represent 55.2% of all labs registered or certified in HCFA’s database under the CLIA amendments. This is a decline from 57.9% in 1995.


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