“June 23, 1997 Intelligence: Late Breaking Lab News”

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Joint Venture Hospital Laboratory network (JVHL) of Detroit added a not her hospital system to its growing regional laboratory network. M-Labs, the laboratory division of the University of Michigan Health System, joined JVHL. This is the eighth hospital system laboratory division to be come an equity member of JVHL.

Jack Shaw, Executive Director at JVHL, reports that the network also signed a new managed care contract. JVHL now has provider status with DMC Care. The contract covers 28,000 lives.

Managed care’s impact on healthcare prices continues. The U.S. Department of Labor’s Producer Price Index for acute-care hospital services climbed only 1.2% for the twelve-month period ending April 30. The index was unchanged for the month of April.


Not only is Columbia/HCA a target for federal investigators, but now lawyers have staked a claim against the $20 billion corporation. The New York law firms of Abbey, Gardy & Squitieri and Curtis V. Trinko filed a class action suit in April against Columbia. It represents the interests of all purchasers of Columbia common stock bought between February 14, 1996 and March 27, 1997. The complaint alleges that Columbia withheld material facts from investors concerning Medicare reimbursement practices, patient referral arrangements and “ practices used to acquire hospitals.”

In terms of beds, Columbia/HCA is the largest hospital system in the United States with 57,000 beds. It overshadows the second largest system, which is the Veterans Administration, at 44,082 beds. Who’s number three in beds? It’s Quorum Health Group, with 22,235 beds.

Laboratory reimbursement shrinks whenever individual states add managed care to their Medicaid programs. HCFA reports that enrollment in Medicaid managed care plans is up 170% since 1993 , including a 33% rise from 1995 to 1996. As of June 30, 1996 (most recent data available), 35% of Medicare beneficiaries, about 13 million people, were in some type of managed care plan.

Currently every state but Alaska and Wyoming offer a Medicaid managed care option. California and Tennessee have the largest numbers enrolled in managed care plans. Medicaid managed care beneficiaries total more than 1.2 million
in each state.

Another pathology-based physicians’ practice management company may be preparing to hit the marketplace. Based in Nashville, it is said that Heywood Cochrane, former CEO of Allied Clinical Laboratories, is part of the management team.


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