CEO SUMMARY: In an opportunistic business move, Bostwick Laboratories is recruiting up to 25 pathologists and a similar number of staff members from the Armed Forces Institute of Pathology (AFIP). AFIP is scheduled to close in 2011, at which time it will transition to the new Department of Defense Joint Pathology Center (JPC). Bostwick is calling its new business “American International Pathology Laboratories,” (AIPL). It will operate from a new laboratory facility located in Silver Spring, Maryland.
TWO YEARS BEFORE IT IS SCHEDULED to officially close, pathologists currently working at the Armed Forces Institute of Pathology (AFIP) have chosen two paths to secure their futures.
Going down one path, AFIP will continue to operate as usual in preparation for its closing in 2011. As part of the Base Realignment and Closing Act (BRAC) of 2005, both the AFIP and Walter Reed Army Medical Center in Washington, D.C., will be transitioned and closed in 2011. However, there is an interesting future for AFIP. Pursuant to Federal legislation, plans are for the AFIP to transition to a new Department of Defense Joint Pathology Center in 2011.
At the same time, moving down another path, at least 25 of AFIP’s pathologists are leaving AFIP as a group prior to the AFIP’s BRAC disestablishment in 2011. They are joining Bostwick Laboratories and will create a new national competitor in the market for anatomic pathology services.
“This new pathology operation will be located in Silver Spring, Maryland, and will be known as American International Pathology Laboratories (AIPL). It will be a division of Bostwick Laboratories, which itself is based in Glen Allen, Virginia,” stated Evan Farmer, M.D., a dermatopathologist who will serve as AIPL’s director. “AIPL will offer second opinion anatomic pathology services with expertise in all organ systems.
“We are in the process of hiring 25 civilian pathologists from AFIP, along with about 25 to 30 of the civilian staff,” said Farmer. “The planning for AIPL started last spring. That is when one pathologist at AFIP contacted David G. Bostwick, M.D., our CEO and Medical Director. Collectively, these civilian pathologists have a unique combination of experience, skills, and expertise. This was an opportunity to create a unique pathology business model.”
New Laboratory Facility
In recent months, the civilian pathologists were offered contracts with the new laboratory division. Meanwhile, Bostwick executives leased a lab site nearby and began work to prepare the laboratory facility.
“As these pathologists and other staff members resign from AFIP, they will begin working for AIPL,” observed Farmer, who was a pathology fellow at AFIP for one year in the mid-1970s. “Not only are these pathologists experts in their fields, but they have worked together for many years. Because of ongoing sharing of cases within AFIP, these subspecialist pathologists come to AIPL as collaborators with an established history of synergy.
“AIPL wants to quickly develop relationships with pathologists and physicians who referred cases to our pathologists when they worked at AFIP,” added Farmer. “We hope to have about the same case vol- ume that was flowing to AFIP. Among the clients served by AFIP, we would like to similarly provide pathology services to such agencies as the U.S. Department of Defense and the Veterans Administration (VA). Of course, we will also be marketing to sources of civilian business.”
Farmer estimated that about one third of AFIP’s existing test volume comes from the Department of Defense. Another one-third originates from the VA. The remaining one-third is referred from civilian sources.
The subspecialty expertise to be offered by AIPL will be extensive. The list of services includes: breast, cardiovascular, endocrine, gastrointestinal, gynecologic, hepatic, infectious disease, neuromuscular, ophthalmic, oral and maxilofacial, orthopedic, pulmonary, and soft tissue pathology.
“It is an exciting time,” commented Farmer. “These pathologists are premier experts in their fields. Our goal is to support this expertise with enhanced speed and billing capabilities to better serve clients and patients.”
AIPL will launch with a national sales force already in place. “AIPL will leverage our sales force of over 140 representatives who cover territories across the United States,” said Brent D. Sower, Bostwick’s Vice President of Marketing. “This sales team is already marketing AIPL’s services to pathologists in an effort to build the new lab’s consultation business. We also want to increase our volume of primary specimens.”
The Armed Forces Institute of Pathology has a long and distinguished history. Opened in 1862, during the Civil War, AFIP has a repository of 95 million tissue samples. These specimens have been accessed by medical researchers for more than 150 years. Closure of AFIP is a cost-cutting move mandated by the Department of Defense’ Base Closure and Realignment Commission. In 2005, it announced plans to shut down both the Walter Reed Army Medical Center and AFIP in 2011.
Claims On The APIF Name
There was a bit of a dust-up earlier this month when Bostwick used the name AFIP Laboratories in its press release. The press release announced the opening of the new laboratory business division, along with the news that it was hiring former staff members from the Armed Forces Institute of Pathology.
As it turns out, AFIP had already pursued a trademark claim on the AFIP name. Accordingly, Bostwick adopted the AIPL name for its new business unit.
In an interview with THE DARK REPORT, U.S. Army Colonel Jo Lynne Raymond, DVM, who is the Chair, Department of Veterinary Pathology and Deputy Director at AFIP, said the institute does about 50,000 surgical and autopsy consultation requests per month. Currently, the staff numbers 800, of which 80 are pathologists. “AFIP is not closing and will continue to serve those who need our services,” stated Raymond.
Bostwick Laboratories is making a bold move. It is incurring significant costs to hire 25 pathologists, with support staff, while building and equipping a new 30,000 square foot laboratory. All this is based on the hope that many of the clients who referred cases to these pathologists while they worked at AFIP, will want to refer cases to them at AIPL.
But then, since its founding more than a decade ago, Bostwick Laboratories has repeatedly surprised the pathology profession with its aggressive business strategies and success at generating specimen volume and revenue. In fact, its speedy and nimble grab of these 25 pathologists from AFIP is consistent with Bostwick’s approach to spotting opportunities in the pathology testing market and taking quick action to exploit these opportunities.
Meanwhile, as noted in the sidebar above, leaders at AFIP are working earnestly on their plans to transition the AFIP into a new pathology service that will become operational in 2011. It will be called the Joint Pathology Center (JCP). TDR Contact Evan Farmer, M.D., at 1-877-234- 7522; Colonel Jo Lynne Raymond, DVM, at 202-782-2100.
AFIP Announces: “We’re Open for Business!”
OPEN FOR BUSINESS” is the message on the home page of the web site of the Armed Forces Institute of Pathology (AFIP). It wants the world know that it is not closing now.
“The AFIP absolutely will continue to receive and process pathology consultation cases in our AFIP laboratories,” says the statement on the web site. “The AFIP proudly continues to serve our beneficiaries and customers as we have done ever since our founding in 1862.
“Unfortunately, it has come to the attention of the AFIP that some contributors are confused and under the false impression that the AFIP will no longer be accepting cases for consultation after August 2009 or that the AFIP has already transitioned into another organization,” AFIP continued.
“This is not the case—the AFIP has not closed. We want to assure you that the Armed Forces Institute of Pathology and its AFIP labs are still operational and located at 6825 16th Street, NW, Washington, D.C., on the campus of the Walter Reed Army Medical Center…”
The AFIP explained that the U.S. Department of Defense (DoD) is establishing the Joint Pathology Center (JPC) which will succeed the AFIP when the AFIP is “disestablished” in the Base Realignment and Closure process in September 2011. The JPC will serve as the reference center in pathology for the federal government and provide pathology services to the military healthcare system, Department of Veterans Affairs, and other federal agencies.
“There should be no decrement in pathology consultative services as the AFIP transitions to the JPC by 2011,” the state- ment added. “So, please rest assured that the AFIP is open and definitely continues to accept military, Veterans Affairs, and civilian cases in all pathology departments and that the AFIP is committed to maintaining its tradition of pathology consultative serv- ices, education, and research.
“The AFIP and other leaders in military healthcare are committed to ensuring that DoD continues to have a one-stop shop for pathology consultation and that the transition from the AFIP to the JPC in terms of services will be transparent and seamless to our beneficiaries and customers,” the statement concluded.