Consolidating clinical services


NEW YORK (360Dx) – Eric Liston worries a lot these days.In fact, the assistant vice president of laboratory services at Intermountain Health System said something's been weighing heavily on his mind for some time."I've aged a whole bunch in the last year," he said.At the beginning of next year, federal legislation called the Protecting Access to Medicare Act, or PAMA, will take effect, resulting in cuts in reimbursements to clinical laboratories on a scale that the industry has rarely, if ever, seen.When it does, labs like Intermountain will see a reduction in reimbursements for some test procedures of up to 10 percent for each of the first three years after implementation, followed by reductions of up to 15 percent for each of the next three years.All clinical labs in the US — from the largest reference labs to hospital labs to physician-practice labs — will be touched by the changes to varying degrees, and as the clock continues ticking, anxiety about its implications is widespread throughout the industry.Even for the largest labs, like Quest Diagnostics and Laboratory Corporation of America, which may see some benefits from PAMA, the legislation is not without its concerns.But because of their size, they will be able to better absorb cuts in reimbursements.



When the dust settles, what results may be a market with fewer independently operated small and regional labs, as well as fewer outreach labs that are owned by hospitals.Instead, such operations could become part of Quest's and Lab Corp's networks.Together, the two already have about a 27 percent share of the $50 billion clinical lab market, measured by revenues, according to Barclays analyst Jack Meehan.By volume, they own an even bigger slice of the pie, 45 percent.



Consolidating clinical services comments


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