CEO SUMMARY: When a mass exodus of at least 15 civilian subspecialist pathologists left the Armed Forces Institute of Pathology (AFIP) to join the newly-formed American International Pathology Laboratories (AIPL) in September, it triggered a number of consequences for both labs, along with a slew of rumors. AFIP reports that it is maintaining services and has hired five new pathologists to work during the interim before AFIP’s transition to the Joint Pathology Center. At AIPL, no official statements have been made about recent events.
THERE’S A WHO’S WHO OF SUBSPECIALIST PATHOLOGY TALENT on the roster of the newly-opened American International Pathology Laboratories (AIPL) in Silver Spring, Maryland, a business division of Bostwick Laboratories.
In fact, of the 16 AIPL pathologists listed on its web site, at least 13 came directly to AIPL from the Armed Forces Institute of Pathology (AFIP). Acting in an opportunistic fashion because of planned changes at AFIP, Bostwick Labs recruited civilian pathologists from AFIP with the promise to build them a new laboratory facility in Silver Spring. (See TDR, August 31, 2009.)
However, the opening of AIPL’s new laboratory facility has not been a totally happy story of new jobs for pathologists and a new laboratory service offering high quality subspecialty pathology services. Among the reasons is that Bostwick Laboratories’ gain was seen by many pathologists in the region as an immediate loss for the Armed Forces Institute of Pathology.
Rumors are flying throughout the pathology community in Washington, DC. After AFIP said it lost 15 pathologists to AIPL, wagging tongues spread the rumor that, because of this loss of staff, AFIP would no longer be taking new cases. That rumor is false.
AFIP Issued Public Statement
AFIP refuted this rumor several times, including a public statement issued last Thursday, October 29, that said AFIP would absolutely continue to receive and process pathology consultation cases. “The AFIP proudly continues to serve our beneficiaries and customers as we have done ever since our founding in 1862,” AFIP said.
For its part, AFIP lost 15 pathologists to the new venture. That represented about 15% of its 100-member staff of pathologists, said Colonel Jo Lynne Raymond, DVM, AFIP’s Chair, Department of Veterinary Pathology and Deputy Director. In an interview with THE DARK REPORT last week, Raymond said, “We are operating as normal now and our director, Florabel Garcia Mullick, M.D., ScD, FCAP, has said her number one continual focus is to provide expert medical care to our beneficiaries.”
Also, in response to the departure of the 15 pathologists, AFIP recently announced the hiring of additional pathologists. AFIP officials were not aware of any pathologists who may want to leave AIPL and return to AFIP.
AFIP To Transition In 2011
“AFIP is not recruiting pathologists for any permanent positions,” stated Colonel Raymond. “That’s because, under the Base Realignment and Closing Act (BRAC) of 2005, both the AFIP and Walter Reed Army Medical Center in Washington, D.C., will be closed in 2011. At that time, AFIP will transition to become the Joint Pathology Center (JPC).
“With these events ahead, we are focusing on maintaining the patient care mission during the transition,” commented Colonel Raymond. “We did have staff leave, but we had absolutely no degradation in services and we back-filled some of the key positions with short term contracts. As a result, we continue to support our customers.”
Over at AIPL, the opening of the new laboratory division appears not to have gone as smooth as planned. A variety of rumors are circulating among pathologists in the area. To help separate fact from fiction, THE DARK REPORT spoke to Richard Bostwick, J.D., who serves as Corporate Counsel for Bostwick Laboratories. He declined to comment at this time.
21 Pathologists To Join AIPL
Several facts indicate that the opening has not been fully compatible with management plans. On September 8, 2009, Bostwick Laboratories issued a press release announcing the opening of the laborator y facility at American International Pathology Laboratories. In this press release, it identified 21 pathologists by name who were joining AIPL. It also stated “other colleagues are scheduled to join later this year.”
Yet, on the AIPL web site, currently only 16 pathologists are listed. Assuming this is accurate as of this date, then either some AFIP pathologists who planned to join AIPL started and then quit, or never started. A comparison of the list of pathologists announced as starting in the press release indicates 10 pathologists who currently are not shown on the roster at the AIPL web site.
The fact that 10 pathologists identified in September as part of the AIPL medical staff are not there today would indicate that there is some substance to the rumors now circulating around laboratories in the area. For example, a pathologist who asked not to be named, heard that the volume of specimens coming into AIPL was not as high as the business projections, which she thought were predicated on the expectation that case referrals would follow the subspecialist pathologists as they left AFIP and started practicing at AIPL.
“I wonder if AIPL assumed that, because each of the AFIP pathologists was a recognized subspecialist expert, case referrals from long-time clients would quickly follow them from AFIP to AIPL,” said this pathologist. “However, the word I hear is that, in the weeks since AIPL began handling cases, the influx of case referrals has been below what was projected.
“In my case, I’ve referred specimens to AFIP over the years,” continued this pathologist. “My lab has received letters and telephone calls from AIPL asking me to switch my referrals to their laboratory. However, I don’t want to switch. I have a lot of loyalty for AFIP.”
A second rumor making the rounds is that some of the newly-hired pathologists were displeased with terms of their contracts. One source claiming knowledge of the situation told THE DARK REPORT that some of the newly-hired pathologists were looking to leave because AIPL required them to pay the first $500,000 in any losses from medical malpractice cases.
“A malpractice deductible of $500,000 is very high, especially when you consider that the average malpractice case is only $250,000 to $300,000,” said this source. “I was told that the pathologists who left AFIP to go to work at AIPL were not aware of the malpractice payment requirement until after they arrived at AIPL. Maybe because of lengthy employment at AFIP, they were not concerned about malpractice issues. In that sense, these pathologists may have been a bit naïve.
“I believe this issue surfaced when one pathologist got his pay stub,” continued the source. “He saw a deduction for insurance and asked about it. The answer was that he agreed to that amount when he signed the contract. So these malpractice premiums were being deducted from his salary. But, with the pathologist assuming responsibility for the first $500,000 of malpractice liability, that would put most of the premium burden on the pathologist, leaving the laboratory with a significantly smaller premium.”
THE DARK REPORT notes that these rumors are unconfirmed and readers should note that fact. Collectively, the rumors do mirror the attention that pathologists in the Mid-Atlantic states are giving to the unfolding situations at both AFIP and AIPL. It is extremely uncommon for 15 to 20 pathologists to leave one laboratory organization en masse and travel across town to begin working at another laboratory competitor.
What adds further interest to this story is the 150-year history of the Armed Forces Institute of Pathology. Pathologists across the country have utilized the services of AFIP for years. The sudden loss of a large number of subspecialist pathologists at AFIP becomes a factor in their decision to refer cases. So it is not surprising that many pathologists are following the events in Washington, DC.
Similarly, the fast-growth success of Bostwick Laboratories since its founding in 1998 has also been watched by many pathologists across the country. Therefore, the press release announcing the hiring of 21 subspecialist pathologists and the opening of a new laboratory division caught the attention of many pathologists, who are curious as to whether this business strategy will prove successful for Bostwick Laboratories.
AFIP Beefs Up Roster, Hires Five Pathologists
LAST WEEK, the Armed Forces Institute of Pathology (AFIP) announced it had hired five pathologists who were previously employed at AFIP. They had worked in specialty pathology departments as staff pathologists and would now return to manage those departments.
Sharda Sabnis, M.D., who served as a pathologist for 30 years and retired in 2006, returned as Chief of Nephropathology. She is responsible for consultation work, including signing out cases.
Other returning pathologists include Russell A. Harley, M.D.; Edina Paal, M.D.; Linda Murakata, M.D.; and Hala R. Markhlouf, M.D., Ph.D. Collectively, these pathologists have more than 140 years of pathology training and experience.
Harley is now Chair of the Department of Pulmonary and Mediastinal Pathology at AFIP. Paal will serve as a pathologist in the Department of Endocrine and Otolaryngologic-Head and Neck Pathology.
Murakata will be Senior Pathologist for the Division of Hepatic Pathology. She will sign out liver cases, and handle the department’s administrative duties.
Hala R. Markhlouf, M.D., Ph.D., now serves as Acting Chief for both the Department of Hepatic and Gastrointestinal Pathology and Division of Gastrointestinal Pathology.