Quest To Buy Outreach Lab In Maine

Quest To Buy Outreach Lab In Maine

Quest To Buy Outreach Lab In Maine

 Quest Diagnostics has agreed to acquire certain outreach lab assets from
Northern Light Health (Brewer, ME), an integrated healthcare system,
in an all-cash transaction. In addition, Quest will manage nine of Northern
Light Health’s inpatient hospital labs, along with its cancer center lab at
Northern Light Cancer Care in Brewer, Maine.

Northern Light Health’s outreach lab services business does business as Northern Light Laboratory (formerly named Affiliated Laboratory Inc.). It has 225 employees and is based at a core laboratory in Bangor, Maine. It serves 250 physician practices throughout the region and provides
reference testing services to more than two dozen hospitals.

Northern Light Laboratory is operated as a hospital-owned independent lab. It collected $1.5 million of Medicare Part B Carrier allowed revenue from 135,489 allowed tests in 2020 (the latest year of available data). Laboratory Economics estimates that overall revenue for Northern Light Laboratory is between $10 million and $20 million per year.

Northern Light Health has a systemwide laboratory department budget of $88 million, according to hospital cost reports for 2021. Its largest inpatient lab is at Northern Light Eastern Maine Medical Center (377 staffed beds), which has a lab department budget of $35 million per year.

Non-urgent routine clinical lab testing and reference testing now performed by Northern Light Laboratory will be shifted to Quest’s regional lab in Marlborough, Massachusetts (about 250 miles from Bangor). A Quest rapid response lab in the Bangor area and select Northern Light Health hospital labs will perform tests requiring rapid results.

Northern Light employees working in the labs will become Quest employees, and no one is being laid off, according to Northern Light spokesperson Suzanne Spruce.

In addition, Spruce says that the agreement with Quest will not affect anatomic pathology services that are now provided at Northern Light Health by Dahl-Chase Pathology Associates (Bangor, ME).

“This agreement will bring Quest scale in Maine. This market is largely a white space for Quest and the transaction makes strategic sense to both parties. It will create a low-cost consolidated lab in a state currently dominated by NorDx Laboratories,” observes David Nichols, President of
Nichols Management Group (York Harbor, ME).

Did Digital Pathology Utilization Increase During The Pandemic?

Did Digital Pathology Utilization Increase During The Pandemic?

Did Digital Pathology Utilization Increase During The Pandemic?

The conventional wisdom says that digital pathology use surged as a result of the pandemic. However, Medicare data for CPT 88361 (computer-assisted IHC for breast cancer) tells a different story. The volume of Medicare Part B allowed claims for 88361 declined by 16% to 160,819 in 2020, followed by only a 3% rebound to 165,231 in 2021. CPT 88361 is the only code devoted specifically to bill Medicare for reading digitized slides. It therefore gives an indication of digital pathology trends in the clinical market.

Another indication that the digital pathology market has not taken off during the pandemic is the falling number of pathologists using it. A total of 736 pathologists billed Medicare for CPT 88361 in 2020 (the latest year of available data), which was down from 871 pathologists in 2019. The number of independent labs billing Medicare for CPT 88361 declined from 96 labs in 2013 to 66 labs in 2019 but increased slightly to 69 labs in 2020.

The main barrier, irrespective of the pandemic, to more widespread adoption of digital pathology has been the added expense of digitizing slides without reimbursement. The problem is that digital pathology comes as an “add on” process that is produced from a traditional glass slide. Digital pathology does not eliminate the need to process, section, glass-slide-mount and stain biopsy specimens. A high-end conventional microscope costs between $9,000 and $12,000, while a complete digital pathology
system can cost between $100,000 and $400,000.

In addition, pathologist practice patterns are hard to change, especially without a clear clinical benefit and/or compelling financial incentive.

 Artificial intelligence could be the game changer that jumpstarts the digital pathology market. AI-based decision-support tools that boost pathologist productivity and reduce errors need digitized images to read. AI vendors (PathAI, Paige, Ibex Medical Analytics, etc.) claim their software can help pathologists read 30+% more slides per day. This may provide hospitals and labs with the return on investment necessary to justify an investment in digital pathology scanners.

New Research Report on U.S. Anatomic Pathology Market

New Research Report on U.S. Anatomic Pathology Market

New Research Report on U.S. Anatomic Pathology Market

Laboratory Economics has just released The U.S. Anatomic Pathology Market: Forecast & Trends 2022-2024. With this special report, you can tap into 150 pages of proprietary market research that reveals critical data and information about key business trends affecting the anatomic pathology market.

The report reveals that the U.S. anatomic pathology market represented an estimated $25.8 billion of revenue in 2022 with a long-term annual growth rate of 7-8%. Growth is being driven almost entirely by increased molecular oncology testing.

U.S. Anatomic Pathology Market

The U.S. anatomic pathology market faces unprecedented change, including the introduction of artificial intelligence tools that increase pathologist productivity, greater utilization management by private payers and persistent reimbursement pressure.

“The introduction of new higher-priced molecular oncology tests and next-generation sequencing for tumor mutation profiling should more than offset price and volume pressure on routine pathology tests,” according to Jondavid Klipp, President of Laboratory Economics.

“In addition, the introduction of AI software tools that enhance pathologist productivity has the potential to profoundly change the way pathology is practiced within the next 3-5 years.”

The report includes:

  • More than 150 charts and graphs
  • Pathology market size and growth rates
  • Detailed estimates for market subsets like uropathology,
    dermatopathology, and gastrointestinal pathology
  • In-depth analysis of the molecular oncology testing market size and growth rates
  • Medicare claims data for 60+ key pathology codes covering surgical pathology, molecular oncology, immunohistochemistry and special stains, tumor marker immunoassays, FISH testing and flow cytometry
  • Cervical cancer testing trends and pricing data
  • In-office histology lab trends
  • Detailed analysis of the emerging digital pathology & AI market
  • Results from Laboratory Economics Anatomic Pathology
    and Clinical Lab Trends Surveys from 2015 through 2021

Anatomic pathology companies highlighted include:

  • Ambry Genetics
  • Bako Diagnostics
  • Caris Life Sciences
  • CellNetix Pathology & Laboratories
  • Exact Sciences
  • Foundation Medicine
  • Fulgent Genetics
  • Guardant Health
  • Labcorp
  • Mayo Clinic Laboratories
  • Myriad Genetics
  • NeoGenomics
  • OPKO/BioReference Labs
  • PathAI/Poplar Healthcare
  • PathGroup
  • Quest Diagnostics
  • Sonic Healthcare/Aurora Diagnostics/ProPath Services

The U.S. Anatomic Pathology Market: Forecast & Trends 2022-2024 is published by Laboratory Economics, an independent market research firm focused exclusively on the business of pathology and laboratory medicine.

Quest To Buy Outreach Lab In Maine

Quest To Acquire Summa Health’s Outreach Lab Business

Quest To Acquire Summa Health’s Outreach Lab Business

Quest Diagnostics (Secaucus, NJ) has agreed to acquire select assets of Summa Health’s (Akron, OH) clinical lab outreach business, which does business as LabCare Plus, in an all-cash transaction. Summa picked Quest as a buyer after a competitive bid. The purchase price has not been disclosed.

Summa Health operates four hospitals and a multi-specialty medical group with 300 physicians at 100 offices in northeast Ohio. Summa Health will continue to own and operate its hospital labs, which serve inpatient and hospital-based outpatient departments. In addition, Summa will maintain its pathology department and services.

Summa’s LabCare Plus outreach business is based at its flagship Summa Health System—Akron Campus (648 beds). LabCare Plus has 19 patient service centers in the greater Akron area. It generated $1.5 million in Medicare CLFS payments in 2021. Laboratory Economics estimates that the overall outreach business has revenue of $5-10 million per year.

Quest plans to shift the acquired outreach test volumes to its labs in Twinsburg, Ohio (22 miles north of Akron) and Pittsburgh (111 miles southeast).

The transaction is expected to close in the fourth quarter of 2022.

Labcorp Completes Outreach Lab Deal With RWJBarnabas Health

Labcorp Completes Outreach Lab Deal With RWJBarnabas Health

Labcorp Completes Outreach Lab Deal With RWJBarnabas Health

Labcorp has completed its acquisition of RWJBarnabas Health’s outreach laboratory business and select related assets (see LE, August 2022). RWJBarnabas Health (West Orange, NJ), which has 12 acute-care hospitals with 4,357 staffed beds, is New Jersey’s largest academic health system. Financial terms of the transaction were not revealed.

Clinical lab outreach testing from RWJBarnabas Health will be shifted to Labcorp’s regional laboratory in Raritan, New Jersey. Some STAT and same-day testing will be performed at select RWJBarnabas Health hospitals. Anatomic pathology services are not part of the deal and will not be affected.

In addition, any potential future reference testing relationship with RWJBarnabas Health would be independent of this transaction, according to a Labcorp spokesperson.

“This strategic business decision will provide a high-performing, streamlined outreach network to support our community,” according to John Doll, Senior Executive Vice President and Chief Operations Officer of RWJBarnabas Health. The arrangement is also expected to reduce out-of-
pocket lab costs for RWJBarnabas patients.

RWJBarnabas Health’s decision to sell its clinical lab outreach business comes as it struggles with investment losses, rising labor costs and inflation. In the six months ended June 30, 2022, RWJBarnabas Health reported a net loss of $489 million vs. a net gain of $325 million in the same period a year earlier; total revenue was up 14% to $3.651 billion.

Investment losses at RWJBarnabas Health totaled $729 million in the six months ended June 30, 2022. In addition, salaries and employee benefits increased by $264,375 or 18%; physician fees and salaries increased by $79,207 or 22%; and supplies and other expenses increased by $191,781 or 17%.

RWJBarnabas Health collected total Medicare Part B CLFS revenue of $6.3 million in full-year 2021. Laboratory Economics estimates that Medicare Part B CLFS represents 25% of the overall revenue at RWJBarnabas Health’s clinical lab outreach business (total annual revenue estimated at
$25 million).