Innovative in-office test, when integrated with UTI microbiology testing performed by clinical laboratories, could contribute to better patient outcomes
Treatments for certain bacterial infections are becoming less effective due to antimicrobial resistance (AMR). Now, after a 10-year-long worldwide competition, the first multi-million euro prize for an accurate, rapid, and cost effective clinical laboratory test for diagnosing and treating urinary tract infections (UTIs) went to Sysmex Corporation’s subsidiary Astrego. This milestone event could benefit tens of millions of people who suffer from UTIs annually.
Astrego, of Uppsala, Sweden, won the €8 million (US$8.19 million) Longitude Prize on AMR for its PA-100 AST System. The new diagnostic technology will “transform treatment of urinary tract infections and brings the power of clinical laboratory testing into a doctor’s office,” according to a news release from Challenges Works, the United Kingdom-based organization that organized and awarded the prize.
The Astrego system is, according to Challenge Works’ website, a “game-changing solution” in “a novel point-of-care diagnostic test that rapidly and accurately identifies the presence of a bacterial infection and the right antibiotic to prescribe.”
“We launched the Longitude Prize on AMR (in 2014) to create the urgent ‘pull’ needed to get innovators working on one of the biggest life-and-death challenges facing humanity. Hundreds of teams [that] competed with multiple solutions [are] now close to market thanks to the prize,” said Tris Dyson, Managing Director, Challenge Works, in a news release.
The new diagnostic technology “could herald a ‘sea change’ in antibiotic use” according to the judges of the competition, The Guardian reported.
“The PA-100 AST System (above) creates a future where patients can quickly and accurately get a diagnosis and the correct treatment when they visit the doctor,” said Sherry Taylor, MD, UK National Health Service, Temple Fortune Medical Group, London, in the Challenge Works news release. “Accurate, rapid diagnosis of bacterial infections that help doctors and health workers to manage and target antibiotics, will slow the development and spread of antibiotic resistant infections, improve healthcare and save potentially millions of lives,” she added. In-office point-of-care systems like the PA-100 may reduce the number of doctor orders for UTI tests to clinical laboratories while contributing to better patient outcomes. (Photo copyright: Sysmex.)
How the Test Works
In the UK, people are treated for UTIs more than any other infection. It takes about three days for doctors to receive the results from traditional microbiology testing. They then prescribe an antibiotic to treat the infection. But about half of “infection-causing bacteria are resistant to at least one antibiotic,” according to a news release from the Geneva, Switzerland-based NESTA Foundation which funded the Longitude Prize on AMR.
“It’s impossible to overstate how critical it is to address AMR [antimicrobial resistance]. By 2050, it is predicted to cause 10 million deaths a year—matching those caused by cancer—and cost $1 trillion in additional health costs,” the news release states.
UTI are more common in women and the reason for eight million healthcare appointments annually in the US, according to Medscape.
The PA-100 AST system makes it possible for patients to provide a small urine sample during their appointments with doctors, find out if they have a bacterial infection in 15 minutes, and receive the “right antibiotic to treat it within 45 minutes,” NESTA said. Sysmex describes the PA-100 AST as an “automated phenotypic analyzer, based on EUCAST standards,” that combines “phase-contrast microscopy and nanofluidics to make available antibiograms at point of care.” It enables healthcare providers to perform antimicrobial susceptibility testing (AST) in-office rather than sending out urine samples to microbiology laboratories.
The systems works as follows, according to the Sysmex website:
As a urine sample passes through the chip, “single bacterial cells are trapped in individual channels.”
Meanwhile, “larger cellular components” are filtered and kept out of the nanofluidic chip.
Contrast-phase microscopy enables real-time monitoring of cell growth. “Resistant bacteria keep a higher growth rate during incubation, while susceptible ones grow slowly or lyse.”
Expert computer software identifies that bacterial strain, delivers an “easy to interpret antibiogram after assay completion” and provides an “informed prescription decision” on which antibiotic is expected to fight the infection.
“The PA-100 AST System challenges bacteria present in a patient’s urine with microscopic quantities of antibiotics in tiny channels embedded in a cartridge the size of a smartphone,” said Mikael Olsson, CEO and co-founder of Sysmex Astrego, in The Microbiologist.
“We rapidly pinpoint whether a bacterial infection is present and identify which antibiotic will actually kill the bugs, guiding doctors only to prescribe antibiotics that will be effective,” he added.
Sysmex is conducting more studies in the UK and working with regulators in Europe for clearances, according to Olsson.
Older Antibiotics May Make Comeback
It’s possible that use of the PA-100 system to identify the best antibiotic to treat infections could lead to a resurgence in the use of previously retired antibiotics.
“Roughly 25-30% of patients have infections resistant to older first-line antibiotics which have been retired as a result; this means the remaining 70-75% of patients could still benefit from those older drugs,” Pathology in Practice reported, adding, “Since the PA-100 AST System identifies which specific antibiotic can treat an infection, it will likely allow retired antibiotics to be brought back into service because the test is able to demonstrate when an infection is susceptible to their effects.”
Many people could benefit from the older antibiotics, Challenge Works noted.
Revolutionizing Healthcare
The Sysmex Astrego’s PA-100 AST System is a significant development.
“Currently, I send the urine sample off for analysis, and it usually takes around three days to come back with results,” said Sherry Taylor, MD, UK National Health Service, Temple Fortune Medical Group, London, in the Challenge Works news release. “Having a bedside test that would enable rapid diagnosis through antibiotic susceptibility testing would revolutionize general practice and patient care. It’s all about using antibiotics only when necessary and appropriate.”
Each individual test costs about €25 (US$25.72), The Guardian reported, adding that ramped up production may lower the price.
The PA-100 AST System is the latest example of a diagnostic/therapeutic solution developed in Europe rather than the US, which is often slower to award regulatory clearance.
It also is another test that will be performed outside of traditional clinical laboratory settings, demonstrating the trend to move medical laboratory tests closer to patients.
Findings could lead to new clinical laboratory tests to screen for individuals with increased risk of blood transfusion complications
Pathologists and clinical laboratory scientists who understand the complexities of blood typing from one human to another will be interested to learn that a 50 year-old mystery has brought about an exciting new discovery—a new human blood group.
British and Israeli scientists led by the UK’s NHS Blood and Transplant (NHSBT) and the University of Bristol discovered the meaning behind a missing protein molecule found in a pregnant woman five decades ago. This anomaly has now been given its own blood group identification called MAL, according to a University of Bristol new release.
“Some people can lack this blood group due to the effect of illness, but the rare inherited form of the AnWj-negative phenotype has only been found in a handful of individuals—though due to this discovery it will now be easier to find others in the future,” the news release notes.
This is important because receiving mismatched blood can be fatal.
“AnWj is a high-prevalence red blood cell (RBC) antigen in the ISBT 901 series. Only nine reports of anti-AnWj have been published since it was first documented in 1972,” according to a 2012 article published by the American Association of Blood Banks, now known as the Association for the Advancement of Blood and Biotherapies (AABB).
For even the small proportion of the population with this new blood group, diagnosing its presence can have a major impact while preventing unwanted harm.
“The work was difficult because the genetic cases are very rare. We would not have achieved this without exome sequencing, as the gene we identified wasn’t an obvious candidate and little is known about Mal protein in red cells,” said Louise Tilley, PhD, Senior Research Scientist, IBGRL Red Cell Reference at NHS Blood and Transplant, in the news release.
“The genetic background of AnWj has been a mystery for more than 50 years, and one which I personally have been trying to resolve for almost 20 years of my career,” said Louise Tilley, PhD (above), Senior Research Scientist, IBGRL Red Cell Reference at NHS Blood and Transplant, in the news release. “It represents a huge achievement, and the culmination of a long term effort, to finally establish this new blood group system and be able to offer the best care to rare, but important, patients,” she added. Clinical laboratory scientists involved in blood banking will want to keep updated as further research into this new blood group is published. (Photo copyright: NHS Blood and Transplant.)
Unraveling the Mystery
In 1972, scientists were stumped by a pregnant woman with a blood sample that was “mysteriously missing a surface molecule found on all other known red blood cells at the time,” Science Alert reported. The AnWj antigen that was missing in that patient’s blood is present in 99.9% of human blood samples.
“Researchers found that the AnWj antigen is carried on the Mal protein. While illness can cause some people to lose the AnWj antigen, inherited cases of the AnWj-negative phenotype are extremely rare. Using whole exome sequencing on five genetically AnWj-negative individuals, researchers confirmed that, in these cases, the participants lacked the antigen due to homozygous deletions in the MAL gene,” an AABB news release stated.
The researchers named the group with the missing antigen the MAL blood group (short for Myelin and Lymphocyte Protein) which is where the antigen resides.
Genetic sequencing enabled the scientists to locate the gene when they “inserted the normal MAL gene into blood cells that were AnWj-negative. This effectively delivered the AnWj antigen to those cells,” Science Alert noted.
Mutated MAL genes result in the AnWj-negative blood type. The team discovered three patients with the blood type and no mutation, “Suggesting that sometimes blood disorders can also cause the antigen to be suppressed,” Science Alert added. The researchers also discovered that AnWj isn’t present in newborns but arrives sometime after they are born.
“Interestingly, all the AnWj-negative patients included in the study shared the same mutation. However, no other cell abnormalities or diseases were found to be associated with this mutation,” Science Alert said.
The discovery that “the Mal protein is responsible for binding AnWj antibodies” could lead to new clinical laboratory tests to screen for patients at risk from blood transfusions, AABB noted in its news release.
Facing the Challenge
Scientists had to overcome many challenges to uncover the details of this blood type. The complexity of the protein further hindered their efforts.
“MAL is a very small protein with some interesting properties which made it difficult to identify, and this meant we needed to pursue multiple lines of investigation to accumulate the proof we needed to establish this blood group system,” said Tim Satchwell, PhD, senior lecturer and cell biologist at the University of the West of England, in the University of Bristol news release.
“Resolving the genetic basis for AnWj has been one of our most challenging projects,” Nicole Thornton, head of IBGRL Red Cell Reference at NHSBT told the AABB. “There is so much work that goes into proving that a gene does actually encode a blood group antigen, but it is what we are passionate about, making these discoveries for the benefit of rare patients around the world.”
It’s hard to pinpoint how many individuals will benefit by testing for the blood group, Tilley told the BBC. Nevertheless, “the NHSBT is the last resort for about 400 patients across the world each year,” the BBC reported.
While more research needs to be done, the initial discovery is promising and may lead to new clinical laboratory tests to identify individuals who could be severely harmed should they receive the wrong blood type during a transfusion.
New guidelines come on the heels of recommendations covering post-market modifications to AI products, including those incorporated into systems used by clinical laboratories
Artificial intelligence (AI) is booming in healthcare, and as the technology finds its way into more medical devices and clinical laboratory diagnostic test technologies the US Food and Drug Administration (FDA) has stepped up its efforts to provide regulatory guidance for developers of these products. This guidance will have an impact on the development of new lab test technology that uses AI going forward.
In December, the FDA issued finalized recommendations for submitting information about planned modifications to AI-enabled healthcare products. Then, in January, the federal agency issued draft guidance that covers product management and marketing submission more broadly. It is seeking public comments on the latter document through April 7.
“The FDA has authorized more than 1,000 AI-enabled devices through established premarket pathways,” said Troy Tazbaz, director of the Digital Health Center of Excellence at the FDA’s Center for Devices and Radiological Health, in a press release announcing the draft guidance.
This guidance “would be the first to provide total product life cycle recommendations for AI-enabled devices, tying together all design, development, maintenance and documentation recommendations, if and when finalized,” Healthcare IT News reported.
“Today’s draft guidance brings together relevant information for developers, shares learnings from authorized AI-enabled devices, and provides a first point-of-reference for specific recommendations that apply to these devices, from the earliest stages of development through the device’s entire life cycle,” said Troy Tazbaz (above), director of the Digital Health Center of Excellence at the FDA Center for Devices and Radiological Health, in a press release. The new guidance will likely affect the development of new clinical laboratory diagnostic technologies that use AI. (Photo copyright: LinkedIn.)
Engaging with FDA
One key takeaway from the guidance is that manufacturers “should engage with the FDA early to ensure that the testing to support the marketing submission for an AI-enabled device reflects the agency’s total product lifecycle, risk-based approach,” states an analysis from consulting firm Orrick, Herrington and Sutcliffe LLP.
Another key point is transparency, Orrick noted. For example, manufacturers should be prepared to offer details about the inputs and outputs of their AI models and demonstrate “how AI helps achieve a device’s intended use.”
Manufacturers should also take steps to avoid bias in data collection for these models. For example, they should gather evidence to determine “whether a device benefits all relevant demographic groups similarly to help ensure that such devices are safe and effective for their intended use,” Orrick said.
New Framework for AI in Drug Development
On the same day that FDA announced the device guidelines, the agency also proposed a framework for regulating use of AI models in developing drugs and biologics.
“AI can be used in various ways to produce data or information regarding the safety, effectiveness, or quality of a drug or biological product,” the federal agency stated in a press release. “For example, AI approaches can be used to predict patient outcomes, improve understanding of predictors of disease progression and process, and analyze large datasets.”
The press release noted that this is the first time the agency has proposed guidance on use of AI in drug development.
These include “bias and reliability problems due to variability in the quality, size, and representativeness of training datasets; the black-box nature of AI models in their development and decision-making; the difficulty of ascertaining the accuracy of a model’s output; and the dangers of data drift and a model’s performance changing over time or across environments. Any of these factors, in FDA’s thinking, could negatively impact the reliability and relevancy of the data sponsors provide FDA.”
The FDA also plans to participate in direct testing of AI-enabled healthcare tools. In October, the FDA and the Department of Veterans Affairs (VA) announced that they will launch “a joint health AI lab to evaluate promising emerging technologies,” according to Nextgov/FCW.
Elnahal said the facility will allow federal agencies and private entities “to test applications of AI in a virtual lab environment.” The goal is to ensure that the tools are safe and effective while adhering to “trustworthy AI principles,” he said.
“It’s essentially a place where you get rapid but effective evaluation—from FDA’s standpoint and from VA’s standpoint—on a potential new application of generative AI to, number one, make sure it works,” he told Nextgov/FCW.
He added that the lab will be set up with safeguards to ensure that the technologies can be tested safely.
“As long as they go through the right security protocols, we’d essentially be inviting parties to test their technology with a fenced off set of VA data that doesn’t have any risk of contagion into our actual live systems, but it’s still informative and simulated,” he told Nextgov/FCW.
There has been an explosion in the use of AI, machine learning, deep learning, and natural language processing in clinical laboratory diagnostic technologies. This is equally true of anatomic pathology, where AI-powered image analysis solutions are coming to market. That two federal agencies are motivated to establish guidelines on working relationships for evaluating the development and use of AI in healthcare settings tells you where the industry is headed.
New care model uses a ‘virtual nurse’ to interact with the patient in ways appropriate to the level of care
Clinical laboratories and pathology groups aren’t the only healthcare organizations currently experiencing critical industrywide shortages. A chronic nursing shortage is prompting hospitals like Covenant Medical Center in Lubbock, Texas, to invent unique ways to circumvent this issue while still managing to provide exemplary patient care.
Covenant, an affiliate of Providence—a 51 hospital/1,000 clinic healthcare network spanning Alaska, California, Montana, New Mexico, Oregon, Texas and Washington—piloted a hybrid nursing model called “Co-Caring.”
The model “uses virtual nursing to care for patients and support the bedside team through two-way audio and video telehealth technology,” according to a Providence news release. This allows nurses to focus on more vital roles, such as administering medication and assessing patients’ conditions, while day-to-day tasks are performed by assistants and virtual nurses.
After operating successfully for one year at a 30-bed unit within the 381-bed Covenant, the Co-Caring model was expanded to 10 other units in hospitals operated by Providence where it reduced the workload for bedside nurses, increased caregiver collaboration, and resulting in financial benefits for the facility.
“This pilot is not about one unit in one hospital,” Julie Wright, RN (above), who at the time was a Nurse Manager at Covenant, in a Providence news release. “It is about taking the first steps to changing how we care for our patients. We are working on creating an environment where burnout is the exception and not the rule, and where joy is the expectation.” Clinical laboratories might use a similar approach to enable pathologists and clinical laboratory scientists to dedicate their time to higher-value tasks. (Photo copyright: LinkedIn.)
Elevating the Practice of Nurses
“The past three years dramatically transformed our industry and workforce in ways that accelerated the modernization of care,” said Providence SVP and System Chief Nursing Officer Sylvain Trepanier, RN, in the news release. “Co-Caring represents an innovative solution to one of healthcare’s most pressing issues—the increased need for nurses, which for the United States is currently estimated at more than 200,000 new nurses required each year to account for population growth.”
“By creating a new team that would share responsibility and accountability with a nurse that would be working virtually, we have people showing up every day doing the work that they love to do and removing some of the barriers that they had in doing it the old traditional way,” Trepanier told the Catholic Health Association of the United States (CHAUSA).
“Quite frankly, when we embraced this, even if we could cover our costs and it would be cost neutral, it would be a great proposition,” he continued. “The pleasant surprise of this is that we’re elevating the practice of nurses, the technicians feel a part of the team, and the patients are having a good experience. We’re having great operational outcomes and decreasing the total cost of care.”
Virtual Nurses
Virtual nurses are utilized through a bi-directional audio/video telehealth platform to support the bedside team in caring for patients. These virtual nurses assist with tasks like admission processes, discharge preparation, pre-procedural checklists, and medication reconciliation. Interdisciplinary Team Meetings, which include the virtual nurses alongside charge nurses, physicians, and case managers, are held daily to ensure the best patient care.
The Co-Caring model increased patient and caregiver satisfaction while simultaneously having positive financial significance. The first-year turnover rate (FYTO) among registered nurses decreased by 73% and by 55% for all staff involved in the program. Covenant was also able to decrease the amount of travel nurses it needed, which enabled it to hire more nurses, CNAs, and PCTs.
“On a 30-bed unit, we ended up having a return on our investment of roughly $450,000,” Trepanier told CHAUSA. “Our patients are happier, our nurses are happier, and we’re decreasing our total cost of care, which is what everyone should be after.
“If we don’t do this, we are going to run out of time in healthcare,” he continued. “I recognize that not everyone has the resources and not everyone has the capability of pulling something off like that. I also am very cognizant that the status quo is not an option. For the sake of our patients and for the sake of the health of the communities that we serve, we all need to lean in and figure out how to approach the work differently.”
Lessons for Clinical Laboratories
This innovative approach identifies which tasks need to be performed by skilled individuals and which can be done by lesser qualified personnel. Tasks are then assigned accordingly. Clinical laboratories may be able to take advantage of similar types of opportunities.
By reorganizing workflows, pathologists and clinical laboratory scientists could devote their time to higher value tasks, while the lesser tasks could be performed by pathology assistants. At a time when the number of laboratory professionals appears to be decreasing, it is imperative that lab managers develop ways to operate labs more efficiently.
The CDC suggests that hospitals treating patients for flu symptoms perform clinical laboratory tests for avian influenza A within 24 hours. This additional testing will pinpoint the specific type of flu infecting an individual patient and help prevent further spread of the bird flu virus.
“It’s the subtyping that takes us from knowing that a virus is in the general bucket of ‘influenza A’ to knowing more specifically whether it’s a garden-variety seasonal version of influenza A or, more rarely, a novel version of influenza A like H5N1,” CDC Principal Deputy Director Nirav Shah, MD, JD, told CNN.
According to the CDC, a panzootic of pathogenic avian H5N1 flu virus is currently affecting wild birds, poultry, dairy cows, and other animals throughout the country. There have been 67 total cases of bird flu identified in humans in the US since 2022, with 66 of those cases occurring in 2024.
The risk of humans contracting bird flu are low but is elevated among those who work closely with wild birds, poultry, and dairy cattle. The incidences of the flu virus in animals continues to increase, so CDC says it is important to identify potential bird flu cases in humans in a timely manner.
This demonstrates recognition by the CDC and the clinical laboratory profession that advances in molecular diagnostics and genetic testing now make it feasible for many hospital labs to perform these tests in-house on relevant patients. Such molecular testing is less expensive and produces a faster answer today, compared to just a few years ago.
This call for more lab tests in hospitals is also recognition of the value near-patient testing has from a public health perspective. Historically, it was regional and local public health labs that were sent specimens for testing from patients identified as having an infection that were a public health concern.
The good news is that this expands the role of hospital laboratories for all the right reasons. The downside is that hospital labs will probably see many test claims for these assays not be paid promptly by payers—or paid after unnecessary delays.
“The system right now tells us what has already happened. What we need is to shift to a system that tells us what’s happening in the moment. That is what we are doing today,” Nirav Shah, MD, JD (above), CDC principal deputy told CNN. Hospital and clinical laboratories will likely see an increase in orders for molecular and genetic testing for influenza A. (Photo copyright: Centers for Disease Control and Prevention.)
CDC Recommendations to Clinical Laboratories
The CDC alert also acknowledges that most individuals infected with avian flu were exposed to the virus via the handling of infected dairy cows or poultry in unprotected workplaces. There are no known cases of human-to-human transmission of the disease.
Most cases of avian flu in humans have been clinically mild and the patients quickly recover. However, on January 6, the CDC announced that an elderly patient with underlying health conditions in Louisiana who was previously hospitalized with severe avian influenza A illness had passed away. This case was the first confirmed death in the US attributed to the illness.
The CDC’s Health Advisory makes the following recommendations to clinical laboratories:
Subtype respiratory specimens that are positive for influenza A, but negative for seasonal influenza A virus subtypes, and forward those specimens to a public health laboratory within 24 hours.
Refrain from batching specimens for consolidated or bulk shipment to public health laboratories if that process could result in shipping delays.
Notify public health officials if a hospital or clinical lab does not have access to influenza A virus subtyping and arrange for a public health or commercial lab with this testing capability to perform the analysis.
Clearly link specimens to clinical information from the patient to ensure the prioritization of severely ill and ICU patients.
Immediately contact local public health authority if a positive result for influenza A (H5) virus is obtained using a laboratory developed test (LDT) or another A (H5) subtyping test to initiate time-critical actions.
The CDC’s Health Advisory also states public health laboratories should complete influenza A subtyping assays within 24 hours of receipt and report those results to the CDC, as required.
“One of the motivators of accelerating testing [is] so that we are, again, able to faster see difference between signal and noise, given that the volume of hospitalizations is going up as expected in a rather routine flu season,” Demetre Daskalakis, MD, MPH, director of the CDC’s National Center for Immunization and Respiratory Diseases (NCIRD), told CNN.
Preparing for more Bird Flu in Humans
According to the CDC, approximately 100,000 Americans have been hospitalized with type-A flu this season. The agency expects another 100,000 hospitalizations due to the virus before the end of this year. CDC is tracking flu infections on a weekly basis. Data can be reviewed on its website.
Other government organizations also are developing methods intended to curb the spread of the influenza virus. The federal Department of Agriculture recently launched a national program to test for bird flu in untreated milk. And the US Department of Health and Human Services (HHS) allocated $211 million in new funding to address emerging infectious diseases.
On January 17, the HHS announced it would give $590 million to Moderna to “accelerate the development of mRNA-based pandemic influenza vaccines and enhance mRNA platform capabilities so that the US is better prepared to respond to other emerging infectious diseases.”
“The funding will allow us to bring the benefits of mRNA vaccine technology to bear against a wider array of emerging threats,” said HHS Assistant Secretary for Preparedness and Response Dawn O’Connell, JD, in the announcement. “mRNA technology can be faster to develop and easier to update than other vaccines making it a helpful tool to have against viruses that move fast and mutate quickly.
Hospital laboratories and public health labs should prepare for a spike in test orders for avian influenza A as this year’s flu season progresses. As bird flu increases in animals, it increases the possibility that the disease might infect humans.
Judge decides injuries claimed by pathologists are not antitrust injuries and that plaintiffs have no standing to bring antitrust lawsuit
Four pathologists who filed an antitrust lawsuit alleging their former employer “engaged in a series of unfair and deceptive practices” in an effort to maintain a monopoly on clinical pathology services in central Iowa had their lawsuit dismissed by a federal judge. The plaintiffs appealed the decision. Two related state lawsuits are still pending, one in which the plaintiffs are the defendants.
It is common for pathologists in a community to leave one pathology practice and either establish a new practice or join a nearby practice. What is less common is litigation that involves the original group practice and the departed pathologists.
Thus, this example of lawsuits and counter lawsuits is interesting because it creates court rulings about the strengths and weaknesses of the arguments asserted by both plaintiffs and defendants in situations where pathologists leave their employer but continue to practice in the same community.
The court decisions in these cases demonstrate how judges are handling these issues involving antitrust allegations, market share, and non-compete agreements.
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” wrote federal judge Rebecca Goodgame Ebinger, JD (above), in her order granting defendants’ motion to dismiss. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally.” Clinical laboratories and anatomic pathology practices can learn from the decisions handed down in this court case. (Photo copyright: Wikipedia.)
Pathologists Accuse Defendants of Suppressing Competition
In their original complaint, which was filed May 13, 2024, in the US District Court for the Southern District of Iowa, the plaintiffs said that, beginning in 2021, IPA “strongly pressured” them to sign an employment agreement that would have prevented them from launching a competing practice in the Des Moines area. They refused to comply, but “the administrator of these corporations told these pathologists that the Agreement was in effect even though they had not signed it,” the complaint states.
On October 2022, they informed IPA that they intended to leave to form their own pathology practice, according to the complaint.
The new practice, Goldfinch Laboratory in Urbandale, Iowa, began offering pathology services in February 2023.
“Prior to the formation of Goldfinch, IPA was the only independent pathology practice in central Iowa that was not exclusively tied to one source of referrals,” the complaint states. In addition, “it was the only independent pathology practice in central Iowa that offered dermatopathology services.”
After they notified IPA and RLC of their intention to leave, the plaintiffs alleged that the employer engaged in a series of efforts to “suppress competition” and monopolize the local market for pathology and dermatopathology services.
Plaintiffs Allege Defendants’ Behavior Could Have Harmed Patients
The pathologists were barred from entering IPA’s offices, leaving potential referring physicians with the impression that “these pathologists were no longer practicing,” the complaint states, and preventing them from “maintaining on-going relations with potential referral sources.”
IPA, the complaint alleges, “refused to share biopsy slides with Goldfinch pathologists when those slides were required for continuity of care of the patient—even though this practice was contrary to the standard of care and could well have caused harm to patients.” The complaint characterized this as “an effort to induce referral sources not to make referrals to Goldfinch.”
The plaintiffs also alleged that IPA and RLC made “false and deceptive statements to dissuade referral sources from making referrals to Goldfinch,” for example by claiming that legal problems would force the practice to close.
Given their “monopoly power” in the local market, the plaintiffs argued, IPA and RLC “were able to charge supracompetitive prices for their services.” A $1.4 million contract with one hospital corporation was “in the top 5% of Part A contracts in the United States,” the complaint alleges, and rural hospitals paid “at least 400% of the actual Medicare fee schedule amount for the technical component of pathology services for Medicare patients.”
Defendants’ Response to Allegations
In their motion to dismiss the suit, the defendants argued that Goldfinch was “a classic ‘disgruntled competitor’” that had not demonstrated an “antitrust injury” as defined by federal and state law.
“Goldfinch’s owners used to work for IPA and RLC, voluntarily left, and now seek to litigate their personal financial losses under the guise of federal and state antitrust claims,” the motion states.
The defendants also argued that Goldfinch lacked standing to file an antitrust claim.
Goldfinch “alleges the ‘antitrust practices’ of IPA and RLC are harmful to patients and other payers for pathology and dermatopathology services,” the motion states. “But patients and payers are quite capable of noticing and seeking redress for the alleged harms and Goldfinch need not do so on their behalf.”
In addition, the defendants argued, Goldfinch failed to adequately define a “plausible” product market or geographic market that was subject to the alleged monopoly power.
“Goldfinch’s alleged geographic market is vaguely ill-defined as ‘central Iowa,’” the motion states. “But there is a difference between the service area and a geographic market.” The motion cited an earlier decision in which the US Court of Appeals for the Seventh Circuit “deemed a relevant market for a pathology practice to be nationwide.”
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” she wrote. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally. These injuries, instead, are a result of Defendants’ alleged actions targeting Goldfinch and demonstrate an injury to Goldfinch as a competitor—the loss of some patients and referral sources.”
She also agreed with the defendants that Goldfinch lacked sufficient standing to bring an antitrust claim, and that the plaintiffs had failed “to adequately allege a relevant market for pathology and dermatopathology services.”
Goldfinch filed a Notice of Appeal on Jan. 10.
State Lawsuits Pending
Meanwhile, both parties are awaiting a decision in a state court lawsuit in which the Goldfinch partners are the defendants, according to the Iowa Capital Dispatch.
IPA filed the suit late in 2022, shortly after learning that the four pathologists planned to leave and start their own practice. It alleged “breach of contract, breach of the common law duty of loyalty, civil conspiracy and tortious interference,” Iowa Capital Dispatchreported at the time, claiming that the pathologists were improperly attempting to lure clients away.
In a related case, Goldfinch pathologists Milless and Halverson have filed a state discrimination lawsuit against their former employer, “alleging they were paid $200,000 to $350,000 annually, which they claim was far less than what some of the less qualified male doctors were paid,” Iowa Capital Dispatch reported. That case goes to trial in August.
This is a plethora of lawsuits involving pathologists and the pathology practices in the communities where they formally practiced. Pathologists and group pathology managers may find useful insights from a study of the legal arguments made by the two parties, as well as the decisions laid down by judges in these court cases.
