Strike may delay critical blood testing and cause postponement of many surgical procedures
Medical technicians, phlebotomists, and clinical laboratory scientists in New Zealand are once again going on strike for fairer pay in various areas around the island nation. And their complaints mirror similar complaints by healthcare and clinical laboratory workers in the US.
The latest group of New Zealand medical laboratory workers to strike are in the South Island and Wellington regions. They were scheduled to walk off the job on July 28 after a negotiated agreement was not reached between APEX, a “specialist union representing over 4,000 allied, scientific, and technical health professionals,” according to the union’s website, and Awanui Labs, one of the country’s largest hospital and clinical laboratory services providers.
Medical laboratory workers in New Zealand are among some of the poorest paid healthcare professionals in the country’s medical industry, according to New Zealand Institute of Medical Laboratory Science President Terry Taylor who told the New Zealand Doctor that some workers aren’t making a living wage. “These people worked their butts off during the pandemic, so you’d think [Awanui] would be able to come up with a decent offer for its staff,” Taylor said.
On the picket line, New Zealand phlebotomists and medical laboratory technicians express that they do not feel they are being compensated properly. “Without your blood samples, you don’t get your results, you don’t get your treatments, you don’t get admissions, your hospital appointments, your operations,” a phlebotomist told 1News. Clinical laboratory workers in the US who experienced the enormous pressure during the COVID-19 lockdowns would likely agree. (Photo copyright: Otago Daily Times.)
Phlebotomists and lab workers in an around New Zealand are demanding a pay wage to put them on par with healthcare workers in the public sector. According to The Southland Times this raise would average around 23.5%.
However, to date Awanui has only offered the medical laboratory workers a 5% pay increase. The APEX union says that is far below what is acceptable for them.
“It doesn’t even get them to parity with colleagues from the public hospitals, and with inflation the way it is at the moment, it’s effectively a wage cut. So, it looks like these strikes are continuing,” David Munroe, Apex Union Advocacy Lead, told 1News New Zealand.
Patients in these regions can expect to see delays on blood test results as medical laboratories and phlebotomy collection centers close due to the strike action.
Poorest Paid Health Professionals in New Zealand
Last year, Dark Daily reported on a similar strike of New Zealand’s 10,000 healthcare workers—including its 4,000 medical laboratory scientists and technicians—which was scheduled to take place in March.
That strike was also over low pay and poor working conditions.
This year, unionized workers met with Awanui on May 23, but the company declined to make an offer to prevent the strike. A second day of bargaining was scheduled for May 24, but according to Munroe, Awanui refused to show up for negotiations. However, Vicki McKnight, an Awanui General Manager, claimed the company was willing to come to the table but that “APEX declined,” New Zealand Doctor reported.
“To date, there has only been one day of bargaining and the collective agreement has not yet expired, so we are surprised by the comments on potential industrial action after just one day of negotiations,” McKnight told New Zealand Doctor.
McKnight said the parties were unable to come to an agreement because of a significant gap between the claims the parties brought to the bargaining table.
Awanui Pays Out Dividends in the Millions
In reaction to workers taking to the picket line, Awanui Labs acknowledged the strike. The company’s Chief People Officer Emma Kelly told 1News, “We do value our people, and it’s a difficult position to be in strikes for our people, for our patients, for everyone. So, I just want to go into this situation with empathy and respect for all of those involved.”
However, one of the things the New Zealand clinical laboratory workers took particular issue with, in light of Awanui’s 5% offer, was that in the last financial year Awanui paid out $41 million in dividends to its shareholders. According to Munroe, the workers want the company to invest in them—instead of the shareholders.
“They are the business. You can’t run laboratories without scientists, technicians, and phlebotomists. They know it, and it’s about time the company knows it too,” Munroe told 1News.
The medical laboratory workers plan to remain on the picket line until a deal is made.
Clinical laboratory managers in the US should take heed of what the New Zealand strikers are saying about low pay and poor working conditions—situations mirrored in many nations following the COVID-19 pandemic.
Australian government rules lab employee’s rogue actions jeopardized patient care
In an example of “if something can go wrong in the lab, it will,” a senior histology laboratory worker at Royal North Shore Hospital in Sydney, Australia, has been banned for life from providing health services for allegedly swapping patient tissue samples in an attempt to harm a lab co-worker, according to The Sydney Morning Herald.
Dianne Reader, 61, was a “a senior technical officer at the Anatomical Pathology Laboratory with more than 40 years’ experience,” the Herald noted, adding that Reader “had swapped 20 patient tissue samples, leading to the misdiagnosis of at least one patient.”
Her motivation, the Herald reported, was to “target and discredit her colleague.”
“Ms. Reader repeatedly engaged in conduct that demonstrated a flagrant disregard for patient health and safety” that may have “serious adverse consequences for the patients involved,” Tony Kofkin at Australia’s Health Care Complaints Commission told The Sydney Morning Herald. This is a lesson that clinical laboratory managers can never be too diligent because something unexpected can happen at any moment—and these events have the potential to cause serious patient harm. (Photo copyright: LinkedIn.)
Lab Staff Suspicions Raised
The sample mixups began in 2020, when the targeted employee (employee A) was working specimen “cut-up” duty. After two incidents of sample mixups being found in her work, she was removed from the duty for three weeks. The Herald reported that the employee told a co-worker she believed she was being “framed.” When she returned to cut-up duty, she took photographs of her work as a precautionary measure.
The employee’s photos served as evidence when that day’s work again showed errors, now the third incident of sample mixups. Upon further research, a total of four occasions of swapping samples were discovered between March and June of 2020.
Laboratory records showed that Reader was responsible for unpacking the tissue processor on each of those occasions, the Herald noted.
Lab workers noted a strained working relationship between Reader and the targeted employee. “One co-worker, a hospital scientist, told the [Health Care Complaints Commission] the working relationship between Reader and ‘Employee A’ could be ‘frosty,’” the Herald reported.
Lab staff apparently grew suspicious when a co-worker discovered that Reader “was only looking up gall bladder and appendices samples on the mornings Employee A had been ‘cutting up’ (dissecting and describing samples before placing them into cassettes for processing).” Lab staff also confirmed to the Health Care Complaints Commission that Reader had improperly accessed 43 patient records, adding that “there was no reason for her to have accessed the records when she did,” The Sydney Morning Herald reported.
Reader, according to the Herald, “denied she had ever interchanged specimens or improperly accessed patient files in two recorded interviews in July 2020, and maintains her innocence.”
Nevertheless, Tony Kofkin, the Commission’s complaint operations Executive Director, found that Reader “posed a risk to the health and safety of the public because she was prepared to risk patient safety in order to discredit her colleague.
“Ms. Reader repeatedly engaged in conduct that demonstrated a flagrant disregard for patient health and safety,” he wrote in the Commission’s findings, adding that Reader “had shown no remorse or insight into her conduct ‘despite the overwhelming evidence’ and as such posed a permanent risk to the health and safety of the public,” the Herald reported.
The Health Care Complaints Commission determined that Reader’s actions were “motivated by a desire to target and discredit her colleague.” The Commission’s decision prevents Reader from forever providing healthcare services, including medical, hospital, pharmaceutical, forensic pathology, or health education services, according to the Herald.
Who Was Harmed by the Swapped Samples?
Reader’s alleged actions had significant consequences. One patient’s swapped sample nearly led her to having a hysteroscopy for a glandular polyp, when in fact she was suffering with endometrial hyperplasia. Thankfully, the histology laboratory staff discovered the mistake and quickly contacted the patient’s doctor to ensure the proper surgery was performed, the Herald noted.
Things could have gone much worse for that patient and for others. Clinical laboratory managers should look upon this as a cautionary tale and consider how to ensure similar—and very rare—occurrences do not happen in their own laboratories.
In preparing to deal with outbreaks of three different respiratory viruses, measures include newly approved vaccines for RSV and reformulated COVID-19 shots
Clinical laboratories are the frontline of testing for respiratory infections, and as such, were heavily involved in last winter’s so-called “tripledemic” of Influenza, SARS-CoV-2, and respiratory syncytial virus (RSV). According to a Kaiser Family Foundation (KFF) survey, 38% of US households were affected. Now, federal health officials are taking steps to prevent a repeat tripledemic season, which includes new vaccines for RSV as well as reformulated COVID-19 vaccines.
The big breakthrough this year is the federal Food and Drug Administration’s (FDA) first-ever approval of RSV vaccines in the US. On May 3, the FDA approved GSK’s Arexvy for use in adults 60 years or older. Then, on May 31, the agency approved Pfizer’s Abrysvo for use in the same age group.
“Older adults, in particular those with underlying health conditions such as heart or lung disease or weakened immune systems, are at high risk for severe disease caused by RSV,” said Peter Marks, MD, PhD, Director of the FDA’s Center for Biologics Evaluation and Research (CBER), in an FDA statement announcing approval of the GSK vaccine. “[The] approval of the first RSV vaccine is an important public health achievement to prevent a disease which can be life-threatening and reflects the FDA’s continued commitment to facilitating the development of safe and effective vaccines for use in the United States.”
A GSK press release notes that a clinical trial is underway to evaluate the vaccine for adults aged 50 to 59.
“The number of elders who die of viral infection every winter in our intensive care units, and also sometimes in the summer, is large—it’s in the tens of thousands of individuals,” pediatrician Ofer Levy MD, PhD (above), an advisor to the FDA, told The New York Times. “Each of these vaccines is a huge win.” Clinical laboratories will be looking for these new vaccines to help protect their customers from tripledemic infections. (Photo copyright: Harvard.)
As of early June, XBB lineages accounted for more than 95% of the SARS-CoV-2 variants circulating in the US, noted a recommendation from the VRBPAC committee. The recommendation also noted that the XBB 1.16 and 2.3 variants are on the rise as XBB 1.5 is declining, but “the protein sequences of XBB.1.5, XBB.1.16, and XBB.2.3 spike protein appear similar, with few amino acid differences. Available evidence suggests little to no further immune evasion from these new substitutions in the XBB.1.16 spike protein compared to XBB.1.5.”
The committee recommended a monovalent vaccine composition in contrast to the current bivalent vaccines, which have separate components targeting the original coronavirus strain and the Omicron variant.
Experts Differ on How Best to Administer New Vaccines
One question is whether the three vaccines—COVID-19, RSV, Influenza—should be given in a single visit or spread out. FDA advisor and pediatrician Ofer Levy MD, PhD, told The New York Times that bundling the shots could result in higher rates of immunization. “Plus, you want to get these shots in arms before the viral respiratory season in the winter,” he said. Levy is Director of the Precision Vaccines Program at Boston Children’s Hospital and Professor of Pediatrics at Harvard Medical School.
However, advisors to the federal Centers for Disease Control and Prevention (CDC) have warned that administering the flu and RSV vaccines at the same time could make both less effective. “I would say, when possible, it might be good to spread them out,” Camille Kotton, MD, Clinical Director of Transplant and Immunocompromised Host Infectious Diseases in the Infectious Diseases Division at Massachusetts General Hospital, told The New York Times. “I remain clinically concerned, especially where influenza vaccine doesn’t engender as much protection as we might like,” she said.
Looking Back at Last Winter
Just how bad was the last triple outbreak? In the KFF survey, 38% of respondents said their households were affected by at least one of the three diseases in the previous month:
27% reported someone in their household having the flu,
“News about the three viruses also made some people more likely to take preventive measures such as:
Wearing a mask in public (31%),
Avoiding large gatherings (26%),
Traveling less (20%),
Avoiding eating indoors at restaurants (18%).”
Additionally, people with compromised immune systems were more likely to take precautions, as were Black and Hispanic adults, KFF reported.
Clinical laboratories will soon have new vaccines to combat another potential tripledemic. Whether people will line up to receive them is another matter.
As mergers and acquisitions of large-scale hospital systems continue, their clinical laboratories feel the pressure of deteriorating finances and ongoing staff shortages
In response to the latest National Hospital Flash Report from Kaufman Hall, the financial/performance consulting firm’s Senior Vice President, Eric Swanson, wrote that 2022 was “shaping up to be one of the worst financial years on record for hospitals.
“Expense pressures—particularly with the cost of labor—outpaced revenues and drove poor performance [in hospitals]. While emergency department visits and operating room minutes increased slightly, hospitals struggled to discharge patients due to internal staffing shortages and shortages at post-acute facilities,” Swanson noted.
Like their parent organizations, hospital and health system-based medical laboratories are dealing with ongoing staffing shortages, which Dark Daily covered extensively in multiple ebriefings.
Non-profit healthcare systems are particularly hard hit, leading to merger/acquisition deals that continue the trend of hospital consolidation.
“Consolidation will continue. Here’s the scary part. The old solutions of jacking up treatment volumes and commercial payment rates aren’t working. Evidence of business model failure abounds. A fiscal storm is raging,” David Johnson, CEO, 4sight Health, wrote in an article for the Healthcare Financial Management Association. The results of these business failures have a direct impact on hospital-based medical laboratories as well as clinical laboratories in surrounding areas that service a health system’s physicians. (Photo copyright: 4sight Health.)
The numbers speak volumes. Looking at financial statements from 2022, Ascension, Cleveland Clinic, CommonSpirit Health, Providence, and Mass General Brigham all posted losses of more than $316 million dollars, the HFMA series noted. Two in that group (CommonSpirit and Providence) posted losses over $1.1 billion. Providence’s losses represented only nine months of data from 2022.
So, what’s the problem? In another HFMA article titled, “The End of Traditional Nonprofit Healthcare Business Models?” Johnson wrote, “Even in the best of times, the nonprofit hospital business model has never been robust. Hospitals are capital-intensive, labor-intensive, highly-regulated, low-margin businesses that require high-cost facilities and highly expert personnel to operate.
“Competing mission and business priorities make running nonprofit hospitals even more difficult,” he added. “The existential question is whether current operating losses at nonprofit health systems are aberrant or indicate a broader collapse of their models. I believe it’s the latter. Structural weaknesses, combined with pernicious macro forces, make this a period of unprecedented challenge for nonprofit providers.”
In his “Cracks in the Foundation” series, Johnson lists five “deeply embedded defects in current nonprofit business models.” They are:
Artificial economics
Needs-services mismatch
Brittle business models
Regulatory headwinds
Inadequate leadership
“Under pressure, health systems are struggling to right the ship, but they are defaulting to old habits,” Johnson wrote. “They’re chasing volume and rates under fee-for-service (FFS) medicine. While this has worked in the past, it is not a viable long-term strategy. Powerful macro forces are aligning against healthcare business practices. Ignoring them won’t make them go away.”
This chart, taken from 4sight Health CEO David Johnson’s HFMA article, shows the five large health systems that showed operating losses in 2022. The numbers displayed are drawn from each health system’s publicly released financial statements for the periods shown, HFMA noted. (Graphic copyright: Healthcare Financial Management Association.)
Deteriorating Outlook for Health Systems
Increased expenses for labor and supplies paired with inflation is what a 2022 Fitch Ratings report cited as contributing to a “‘deteriorating’ outlook for systems,” Healthcare Dive reported.
“Labor will remain the largest hurdle for hospitals this year even as they struggle with inflation and spiking COVID-19 admissions that can dent revenue. The labor story just dwarfs the inflation story,” financial analyst Kevin Holloran, Senior Director and Sector Leader USPF Healthcare at Fitch Ratings, told Healthcare Dive.
Holloran has worked for Fitch since 2017, joining after 14 years at S/P Global Ratings. He has 20-years experience in the healthcare sector.
Nonprofit hospitals that posted COVID-19-related operating losses are struggling with higher costs for labor and supplies while navigating declining and neutral admission volumes, Healthcare Dive noted, citing that healthcare systems have turned to staffing agencies and contracted labor to counter the loss of burned-out employees who go on strike or who leave healthcare entirely. On a positive note, Holloran sees contract labor use decreasing in the future.
What’s Next?
There’s a steep road ahead for nonprofits but Holloran see positive changes. “We are beginning to come out of the worst of it,” he told Healthcare Dive. However, he added, “Hospitals should not expect to ‘grow [their] way out’ of soaring labor expenses by raising revenues or increasing hospital admissions.”
Like Johnson, Holloran stressed the importance of looking for long-term solutions. With rising expenses, declining revenues, and increased labor costs projected to continue for years, “hospitals are putting recruiting and retention efforts ‘on steroids’ amid challenges,” he noted.
One coming improvement is that hospitals “can look toward commercial payer contracts to ease high expenses,” Holloran predicted.
“Payer contracts fall in the approximately 25% to 30% of non-fixed revenue that hospitals have the ability to control. … The ratings agency [Fitch] now expects to see a shift from long-term contracts to single-year contracts as nonprofits attempt to ease expenses,” Healthcare Dive noted.
It appears that, for the foreseeable future, clinical laboratories will continue to feel the pressures brought on by mergers and acquisitions as the healthcare industry struggles to find solutions to the economic downturn and loss of qualified staff following the COVID-19 pandemic.
Microbiology team has tracked 37 unique strains of the coronavirus since they began researching lineages two years ago
Microbiologists and clinical laboratory scientists will be interested to learn about the discovery of a new strain of SARS-CoV-2, the coronavirus that caused the COVID-19 pandemic, in wastewater sampled in Ohio.
According to an article published in Nature Reviews Genetics, a CVG is “a genetic variation that normally has little or no effect on phenotype but that—under atypical conditions that were rare in the history of a population—generates heritable phenotypic variation.”
Johnson tracked the lineage of the cryptic strain to Ohio, where it appears to have originated from one individual who travels regularly between the cities of Columbus and Washington Court House. He believes this person may have a form of long COVID and is unaware that he or she is infected with the coronavirus.
“This person was shedding thousands of times more material than a normal person ever would,” Johnson told The Columbus Dispatch. “I think this person isn’t well. … I’m guessing they have GI issues.”
“If someone has this infection, the chances are nil that they’re going to figure out what it is,” Marc Johnson, PhD, Professor of Molecular Microbiology and Immunology at the University of Missouri School of Medicine, told Insider. Microbiologists and clinical laboratory scientists in the Columbus, Ohio, area may be able to help locate this person. (Photo Copyright: University of Missouri.)
Other Cryptic COVID-19 Lineages
This isn’t the only “Cryptic COVID” case identified by Johnson and his team. In Wisconsin, another unique strain was discovered and narrowed down to a single facility and about 30 individuals. Two thirds of the employees were tested but, unfortunately, all tests came back negative. The cryptic strain seemed to have disappeared.
“We don’t know why,” Johnson told The Hill. “Either [the infected person] left the job, or got better, or is in remission—we don’t know. But we’re still monitoring it. And we’ve actually now gotten started collecting stool samples from the company.”
“We systematically sampled [sewer] maintenance holes to trace the Wisconsin lineage’s origin. We sequenced spike RBD [receptor-binding domain] domains, and where possible, whole viral genomes, to characterize the evolution of this lineage over the 13 consecutive months that it was detectable.
“The high number of unusual mutations found in these wastewater-specific cryptic sequences raises the possibility that they originate from individual prolonged shedders or even non-human sources. The Wisconsin lineage’s persistence in wastewater, single-facility origin, and heavily mutated Omicron-like genotype support the hypothesis that cryptic wastewater lineages arise from persistently infected humans.”
Johnson and his team have tracked 37 unique strains of the COVID-19 virus, including one in New York City, The New York Times reported.
In a statement to The Columbus Dispatch regarding the Columbus strain, the federal Centers for Disease Control and Prevention (CDC) noted that, “The virus lineage in question is not currently spreading or a public health threat.
“Unusual or ‘cryptic’ sequences identified in wastewater may represent viruses that can replicate in particular individuals, but not in the general population,” the CDC noted. “This can be because of a compromised immune system. CDC and other institutions conduct studies in immunocompromised individuals to understand persistent infection and virus evolution.”
In identifying these lineages, and the individuals who shed them, scientists can learn more about how COVID-19 mutates and spreads.
Mitigating Consequences of COVID-19 Variants
Although the CDC says that particular strain is not a threat to the public it could pose a long-term health risk for the individual suffering. And this individual may hold clues for the future of how the COVID-19 virus mutates and grows. Therefore, locating these people is a priority.
“The coronavirus will continue to spread and evolve, which makes it imperative for public health that we detect new variants early enough to mitigate consequences,” Rob Knight, PhD, Founding Director of the Center for Microbiome Innovation and Professor of Pediatrics, Computer Science and Engineering at the University of California San Diego (UCSD).
“Before wastewater sequencing, the only way to do this was through clinical testing, which is not feasible at large scale, especially in areas with limited resources, public participation, or the capacity to do sufficient testing and sequencing,” said Knight in a UCSD press release. “We’ve shown that wastewater sequencing can successfully track regional infection dynamics with fewer limitations and biases than clinical testing to the benefit of almost any community.”
Although tracing the individuals shedding cryptic COVID-19 lineages may not have an immediate effect on public health, it could lead to future discoveries about the SARS-CoV-2 coronavirus that can help shape public health goals in fighting future pandemics.
At the very least, one individual in Columbus may learn how to treat long COVID’s adverse symptoms. Microbiologists and clinical laboratory scientists involved in COVID-19 wastewater research can learn much from following these research investigations.
Post-merger, a first goal is often to achieve cost savings by consolidating hospital laboratory testing into fewer medical laboratory sites
Major integrated delivery network (IDN) healthcare systems continue to acquire other hospitals. These deals are getting larger in scope and confirm that the trend of hospital consolidation is robust and ongoing. They also present a challenge for clinical laboratories that service the IDN’s physicians from both inside and outside the networked systems.
One most recent example is the announced mega-merger of non-profit BJC HealthCare (BJC) in St. Louis and faith-based non-profit Saint Luke’s Health System (St. Luke’s) in Kansas City, both in Missouri. St. Louis Post-Dispatch described the deal as “one of the biggest local hospital mergers in recent memory.”
And for good reason. According to Healthcare Dive, the partnership that will create a 28-hospital, $10 billion dollar health system with more than 100 specialty and primary care offices serving patients in Illinois, Kansas, and Missouri. Fiscally, BJC showed $6.3 billion in revenue last year and Saint Luke’s $2.4 billion.
Mega mergers are a big deal (pun intended). They can give the new healthcare organization unrivaled competitive authority in the marketplace potentially passing along lower healthcare prices to patients. But they come at cost to embedded clinical staff, including medical laboratories.
The health system merger gives BJC/St. Luke’s “huge leverage in terms of negotiating power with the insurers,” Ryan Barker, an independent healthcare policy consultant, told the St. Louis Post-Dispatch. Clinical laboratories are also impacted in these mergers when hospital systems consolidate their testing capabilities and locations. (Photo copyright: Missouri Foundation for Health.)
Impact of the BJC/St. Luke’s Merger
BJC and St. Luke’s signed a non-binding agreement to merge on May 31 and plan to reach a final agreement before the year’s end barring regulatory interference. The duo’s combined 28-hospital system will operate out of two headquarters: One in St. Louis managing southern Illinois and eastern Missouri, and another in Kansas City to serve parts of Kansas as well as western Missouri, Healthcare Dive reported.
The merger of BJC and St. Luke’s means the formation of a “clear market leader in Missouri,” St. Louis Post-Dispatch reported, adding that BJC has 40% of the market’s patient discharges and St. Luke’s holds 20% of the market share in the “state’s second largest metropolitan area.”
This will likely manifest itself in leverage during negotiations with healthcare payers that service that area.
“It continues to be the case that the hospitals are trying to gain the upper hand on the insurers,” John Romley, PhD, Associate Professor in the University of Southern California (USC) Price School of Public Policy and USC Mann School of Pharmacy and Pharmaceutical Sciences, told the St. Louis Post-Dispatch. Romley is also an economist at the USC Schaeffer Center for Health Policy and Economics, and adjunct economist at the Rand Corporation. “That was true 10 years ago. That’s true today,” he added.
“That’s what I always worry about with consolidation is the impact on [healthcare] pricing,” Ryan Barker, an independent healthcare policy consultant in St. Louis and former Vice President of Health Policy at Missouri Foundation for Health, told the Post-Dispatch.
Other Large Health System Mergers and Acquisitions
There have been a growing number of large-scale mergers and acquisitions of IDNs in the last few months. Dark Daily’s sister publication The Dark Report has covered these deals in multiple intelligence briefings.
Healthcare policy makers were surprised by the merger, as Kaiser and Geisinger were often cited as two of the best IDNs in the nation.
Now under single ownership there will be implications that take years to play out, especially for clinical laboratories that now must service a significantly larger physician base. Conversely, if the new combined healthcare system decides to combine multiple medical laboratories to save on costs it will have a huge impact on lab staff.
Another deal recently announced involves UPMC’s (University of Pittsburgh Medical Center) announcement to merge with multihospital Washington Health System (WHS) in Washington, Pennsylvania, a WHS news release noted. But the move has drawn pushback from elected officials and organized labor, the Pittsburgh Post-Gazette reported.
UPMC has recorded rapid growth over the year acquiring smaller hospitals, but hospital mergers are getting closer inspections from federal regulators, the Pittsburgh Post-Gazette noted.
SEIU Healthcare Pennsylvania—part of the Service Employees International Union—was first to request an investigation by the US Department of Justice for what it called a “long and egregious history of labor law violations.” It also claimed that UPMC merged with 27 hospitals from 1996 to 2019, adding 10 between 2016 and 2018, the Pittsburgh Post-Gazette reported.
Concentrated ownership of diagnostic services impacts clinical laboratories in many ways. The Dark Report noted that combined IDNs often review clinical laboratory services across the entire healthcare network. Opportunities for third-party commercial labs to step in and run the hospitals’ local laboratory services may also present themselves.
Impact IDN Mergers Have on Clinical Laboratories
Mergers occur for many reasons. Monetary stress has a wide-reaching impact, and some healthcare researchers suggest that financial pressures may cause hospitals formerly hopeful about their medical laboratory outreach businesses to consider selling their programs, as The Dark Report noted.
One significant impact that health system mergers and acquisitions can have on clinical laboratories is to reduce their number, particularly by consolidating testing from multiple sites into a core laboratory.
“There is a growing body of empirical research about the potential for competitive harm to labor markets from consolidation and concentration,” Federal Trade Commissioner Rebecca Kelly Slaughter, JD and FTC Chair Lina M. Khan, JD, wrote in a joint 2022 statement about the merger of the first and second biggest healthcare providers in Rhode Island. “The loss of competition from mergers may be especially pernicious in the healthcare sector where skilled medical professionals are uniquely limited in employer options within their local geographic area,” the Pittsburgh Post-Gazette reported.
In this case, the plans to merge were ended after the FTC sued to block the partnership.
More IDN Mergers on the Way
But increased FTC scrutiny does not seem to have slowed the trend toward larger merger and acquisition deals. Kaufman Hall’s 2023 National Hospital Flash Report states that both mergers and acquisitions are trending toward cross-regional partnerships and predicts a “new wave of transaction activity,” Healthcare Dive reported. The report looks at actual and budget data collected over the past three years that was sampled from more than 900 hospitals on a recurring monthly basis.
And so, moving into the future, clinical laboratories can expect to see more mergers and acquisitions of IDNs, with consolidation, regionalization, and standardization occurring in the combined IDN’s clinical laboratory once the merger is completed and leadership begins to look for ways to save costs. Labs are generally first to be consolidated because it is easier to move lab specimens than it is to move patients.
