Independent physician association (IPA) executives gathered in Orlando two weeks ago for the annual meeting of TIPAAA, The IPA Association of America. Because IPAs play an increasing role in contracting for laboratory services, THE DARK REPORT was in attendance to learn more about this phenomenon. Over 1,000 people showed up for the meeting.
IPAs are undergoing the same economic stress as clinical laboratories. Reimbursement is declining, legal issues are increasing and prosperity is elusive. Regional differences cause IPAs to have more power in some cities, less power in other cities. Information, both clinical and financial, is recognized as a critical success factor. Given the consensus among attendees that these are common challenges for most IPAs, it was striking that few success stories were shared. IPAs, and the physicians they represent, are under siege. There were many interesting parallels between IPAs and clinical laboratories. We’ll provide additional in-depth reporting on this in the future.
Impath Inc. of New York City announced that it would offer the public an additional 2 million shares of common stock at a price of $33.25 per share. If successful, the company will raise $66.5 million. Impath provides diagnostic and disease management services relating to cancer. It is fast-growing and represents a new type of laboratory business model.
CHANGES AT CYTYC
Cytyc Corporation, manufacturers of ThinPrep™, reshuffled its Board of Directors. Monroe Trout, a director, was elected Chairman. Trout is Chairman Emeritus of American Healthcare Systems (AmHS), a hospital purchasing consortium. Patrick Kennedy remains as President. Three venture capitalists resigned from the board and were replaced by new directors. Cytyc’s stock price has declined and is currently trading around $25 per share.
At least one financial analyst is disappointed that SmithKline Beecham’s merger with Glaxo Welcome fell through. Analyst Neil Sweig at Southeast Research Partners lowered his rating on SB from hold to sell. Analysts are beginning to acknowledge that the SB-Glaxo deal is dead.
An interesting career move was announced last month. Jack Holthaus became President and CEO of LAB-Interlink, Inc. of Omaha, Nebraska. LAB-Interlink is one of the major players in total laboratory automation. What makes this interesting is that Holthaus was formerly President of Advanced Laboratory Systems (ALS), an LIS vendor purchased by HBOC in 1995. At ALS, Holthaus and his team were working to add process control capability to the next generation of ALG’s LIS software.
It can be speculated that LAB-Interlink wants to leapfrog competitors at providing a total solution for both lab automation and LIS. Holthaus brings the expertise necessary to blend both technologies into a compatible package. THE DARK REPORT profiled ALG’s future vision for LIS software in its March 31, 1997 issue.