“November 9, 1998 Intelligence:  Late Breaking Lab News”

HBO & Co. is the latest to fall victim to consolidation mania. McKesson, Inc. is purchasing HBO for $14 billion in stock. McKesson wants to complement its services as a pharmacy benefits manager with HBO’s extensive health information system capabilities. Combined, the two companies will have more than $21.0 billion in annual revenue.

MORE ON:…HBO & CO.
News of the acquisition was welcomed by Columbia/ HCA VP James Fitzgerald. “This can’t be anything but very positive,” he said, adding that he hoped McKesson would use HBO’s expertise to create integrated information products for monitoring drug inventories, patient-information databases, and accounting systems. McKesson already has a five-year, $5 billion contract with Columbia. Could this be a wedge in the door for HBO to pitch its information system products to Columbia? Meditech has had an exclusive lock on Columbia’s IS business for several years. Healthworks Alliance, based in King of Prussia, Pennsyl- vania, continues to push its products into the marketplace. The company recently was awarded a contract by TenetHealthcare Corporation to provide its Compliance Checker™ software product in all 120 of Tenet’s acute care hospitals. It is a major vote of confidence for Healthworks’ product and demonstrates how laboratory compliance is becoming a major management issue.

JVHL LAB NETWORK INKS NEW PROVIDER AGREEMENT

Joint Venture Hospital Laboratory Network (JVHL), the 25-hospital lab consortium in Greater Detroit, announced an agreement to provide laboratory services for Universal Standard Healthcare, a major third party administrator in Detroit. JVHL currently has contracts to provide services to more than 1.1 million enrollees, a feat unmatched by any other regional laboratory network in the United States.

THE DARK REPORT has preached it for years. Now Alan Greenspan, Chairman of the Federal Reserve, confirms that new management techniques make the difference in a company’s success, He recently observed that corporate managers are making more efficient use of capital by using new management practices to redesign their businesses. “Total quality management, customer satisfaction… we’ve got a whole generation of executives who are thinking differently,” says Federal Reserve Vice Chair Alice M. Rivlin, who agrees with Greenspan on this point. Question is: how many lab administrators are learning and applying these new management techniques to keep their laboratories competitive?

Beckman-Coulter Corporation announced on October 19 that further staffing cuts would be made during 1999. Since Beckman acquired Coulter a year ago, it has reduced its work force by 8%, or 980 full- and part-time positions. Beckman’s earnings are lagging behind analysts’ expectations. Savings from integrating the two companies have not yet offset lower revenues from falling diagnostics sales and negative foreign exchange effects.

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