Jun 1, 2007 | Laboratory Management and Operations, Laboratory News
Thanks to everyone who participated in our first Dark Daily reader survey earlier this month. We got a fantastic turnout for our first survey and got some great feedback which we will certainly be able to use to improve Dark Daily. As promised, we wanted to share some of the results with you.
• 44% of our readers found out about Dark Daily from The Dark Report, 20% found out from a colleague of theirs, 14% from a Web search, and 13% from the Executive War College.
• 50% of our subscribers have been with us for less than 6 months! Only 10% of our subscribers have been with us for over a year.
• The vast majority of our readers are likely to read their Dark Daily e-briefings Monday through Friday, but not on Saturdays or Sundays.
• 85% of Dark Daily readers thought the frequency of Dark Dailies was just right, with an even split of the rest of our readers thinking there were too many or too few Dark Dailies.
• Our Dark Daily readers’ favorite category was, by far, Laboratory News. A close second was Laboratory Management and Operations. Other notables were Laboratory Sales & Marketing, Laboratory Compliance, Legal & Malpractice, and Laboratory Managed Care, Contracts, and Payer Reimbursement. None of Dark Dailies categories had less than 35% of our audience feeling that the category was not useful.
• The distribution of our laboratory readers is fairly evenly spread among those that work for hospital laboratories, small independent laboratories, large independent laboratories, and laboratory chains (such a Quest Diagnostics and Laboratory Corporation of America).
• We were surprised to discover that some of our most vocal readers are from outside the United States and have requested more items that pertain to an international audience. We will try to comply as we see relevant international laboratory news!
• A number of our readers cited their favorite Dark Dailies as the e-briefings based on the continuing issues resulting from the exclusive national contract between United Healthcare and LabCorp (see Judging the UnitedHealth Decision to Drop Quest Diagnostics in Favor of LabCorp and United Health Disrupts the National Contract Status Quo Between the Two Blood Brothers).
As always, we welcome your personal responses to the survey results, your ideas for other reader surveys, and your ideas for new Dark Daily e-briefings. Thanks again for your participation!
Your Editors,
Robert Michel and Sylvia Christensen
Mar 12, 2007 | Compliance, Legal, and Malpractice, Laboratory News, Laboratory Pathology
Last Friday brought an interesting twist to the question about whether UnitedHealth would follow through and fine doctors $50 for each of their patients who had laboratory tests done at out-of-network laboratories, effective March 1, 2007. The Associated Press published a news story revealing that the New Jersey Department of Banking had requested that UnitedHealth suspend any attempts to fine physicians under this program, pending its investigation in the situation.
The New Jersey Department of Banking said it was “not satisfied with the legality of these protocols” in an article entitled UnitedHealth suspends MD fines in N.J.. The American Medical Association has also expressed concerns about the policy because physicians can’t control where patients choose to get their medical tests. The AMA also noted that this situation is the first time a doctor could be financially punished for a patient’s behavior.
In response to the New Jersey Department of Banking and Insurance’s request, UnitedHealth spokesman Tyler Mason said the suspension was voluntary and will be temporary. He added that the company expects the review to be finished shortly and in a manner favorable to the insurer.
New Jersey regulators are responding to the negative backlash from doctors after UnitedHealth replaced Quest Diagnostics with LabCorp as their preferred laboratory for tests (see United Health Disrupts the National Contract Status Quo Between the Two Blood Brothers) effective January 1, 2007. Although the fine policy has been on file since March 1, there has been no public disclosure of whether or not UnitedHealth has actually exercised their right to fine doctors as of this date.
New Jersey’s action triggers some important new questions. If New Jersey insurance regulators decide that UnitedHealth’s policy of fining physicians in this type of situation is illegal, will this prove helpful to Quest Diagnostic’s in its efforts to hang on to as much UnitedHealth business as possible. Further, if New Jersey insurance regulators determine that such a practice is illegal, would other state insurance commissioners follow this lead and make similar determinations? On the other hand, if UnitedHealth prevails in its legal arguments in New Jersey, will this open the door for other payers to copy UnitedHealth and begin fining physicians whose patients end up getting testing done by out-of-network laboratories?
This newest episode in the three-way contest between UnitedHealth, LabCorp, and Quest Diagnostics demonstrates how the precedents established in this new contractual relationship have the potential to be copied by other national health insurance companies. Unfortunately, many of these types of precedents prove detrimental to the interests in independent lab companies and hospital outreach programs. Stayed tuned for the next chapter in this fast-moving story.
P.S. Keep Dark Daily alerted to developments in your own community. We welcome your news tips. Your local developments help us develop regional and national patterns that can help your laboratory develop effective strategies and responses to all of these trends. Please forward your news to Robert (rmichel@darkreport.com) or Sylvia (sylvia@darkreport.com).
Mar 1, 2007 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology
In the heavyweight championship fight taking place between the two blood brothers, Quest Diagnostics Incorporated has just won the next round. Earlier today, Laboratory Corporation of America issued a terse press release titled: “LabCorp Notified by Aetna of Contract Termination.”
LabCorp acknowledged that “it will no longer be a contracted laboratory provider for Aetna Inc. (NYSE:AET), effective July 1, 2007.” LabCorp further disclosed that it expects the loss of its contract relationship with Aetna to be the primary reason why it expects earnings per share in 2007 will decline from a projected $0.16 to $0.12 in 2007. That’s a 25% reduction.
This breaking development is not a total surprise. Quest Diagnostics found itself excluded from almost all UnitedHealth contracts last October (United Health Disrupts the National Contract Status Quo Between the Two Blood Brothers) and from New Jersey-based Horizon Blue Cross Blue Shield in January. In both cases, LabCorp had negotiated an exclusive relationship.
Now it’s tit for tat. Quest Diagnostics is likely to announce that it has an exclusive national contract with Aetna, effectively denying LabCorp access to Aetna’s 16 million members. Aetna is one of the five largest health insurance companies in the United States.
Each of these national managed care contracts has implications for clinical laboratory management. That’s because both of the blood brothers want to negotiate a national contract with insurer that include terms designed to exclude regional independent laboratories and hospital laboratory outreach programs. To help lab directors and pathologists stay on top of this emerging trend, this year’s Executive War College on Laboratory and Pathology Management has several sessions devoted exclusively to the latest developments in managed care contracting.
In particular, LabCorp’s new CEO, David P. King, will be discussing how managed care companies are altering their strategies for contracting laboratory testing services. This will be a unique opportunity to hear, first hand, what is likely to unfold in the next 24 months. That’s particularly important, since the developments of the past five months are pointing to a managed care contracting environment which is increasingly excludes independent lab companies and hospital laboratory outreach program in favor of the national laboratories.
Stay tuned to Dark Daily for more updates on both this story and this rapidly unfolding trend. Once LabCorp used its exclusive pact with UnitedHealth to break the managed carecontracting status quo between it and Quest Diagnostics, it set in motion forces which are already propelling the laboratory industry into uncharted territory.
PS: To get the latest news and effective strategies dealing with new trends, join us in Miami on May 10-11, 2007 for the 12th Annual Executive War College. You can access the full details using the links below. Take action today to reserve your place.
Early-Bird Discount Registration now available online
Visit http://www.executivewarcollege.com
Download Full Program Agenda
Four Easy Ways to Register:
1. Register ONLINE
2. Call 800-560-6363. Our friendly staff can register you quickly and easily, as well as answer any questions you may have.
3. Fax this complete registration form PDF to 512-264-0969
4. Mail the one page form with payment to:
THE DARK REPORT
21806 Briarcliff Dr.
Spicewood, TX 78669
© 2007 The Dark Group, Inc
Feb 22, 2007 | Uncategorized
I have just finished confirming 49 speakers for this year’s Executive War College on Laboratory and Pathology Management and there is disturbing news to share. It is the collective opinion of these distinguished individuals that a cycle of rapid change has already begun to engulf the laboratory profession in the United States.
In general, most of this year’s speakers can identify at least one trend which threatens the financial security and operational stability of their laboratory organization. Their comments to me reflect a noteworthy difference compared to earlier years. Here is a quick list of the most significant trends which have the potential to be a threat to established laboratories:
• Rapid shift in managed care contracting practices that are likely end up excluding most local and regional laboratories from provider panels, with the new UnitedHealth contract as the leading edge
• Fast-growing numbers of urologists and gastroenterologists taking active steps to create their own in-house anatomic pathology laboratory, also described as the “TC/PC” trend
• Demands by office-based physicians for their laboratory to create interface gateways that support electronic test ordering from the physicians’ EMR (electronic medical record) system and deliver lab test results direction into the patient record in the EMR
• Expectations that imaging giants Siemens and GE, after spending billions to buy Bayer Diagnostics, DPC, and Abbott Diagnostics, are preparing to muscle into laboratory testing and molecular pathology
• Growing acceptance of Lean and Six Sigma quality management methods in laboratories and pathology groups, thus giving these lab organizations competitive advantage over labs which have yet to adopt such management systems
I’m going to stop with these five trends. Most of you can recognize how each can threaten existing lab organizations. Many of you are already implementing strategies within your laboratory to respond to these threats and convert them into opportunities for growth, enhanced profits, and long term financial stability.
Armed with this knowledge, we’ve crafted a total package of insights and solutions at the upcoming Executive War College on May 10-11 to help you with this multiplicity of trends in the lab services marketplace. For example, David P. King, the new CEO of Laboratory Corporation of America will make a major address on “Managed Care Contract for Laboratory Services: Important Changes Lie Ahead.”
In future e-briefings, I will comment on those other important trends identified above. For those of you who would like to see all 49 topics and speakers, visit http://www.excutivewarcollege.com for the complete program.
Yours truly,
Robert L. Michel
Dark Daily Editor
Download the Full Executive War College Agenda (PDF)
Four Easy Ways to Register:
1. Register for the Executive War College Online (Early-bird discount still applies)
2. Call 800-560-6363. Our friendly staff can register you quickly and easily, as well as answer any questions you may have.
3. Fax the Executive War College Registration Form to 512-264-0969
4. Mail the Executive War College Registration Form with payment to:
THE DARK REPORT
21806 Briarcliff Dr.
Spicewood, TX 78669
PS: In the latest issue of The Dark Report, now in the mail to you, our lead stories deal with the rapid turnover of UnitedHealth business from Quest Diagnostics Incorporated and LabCorp’s three-stage strategy for using the UnitedHealth contract to boost its long-term presence in local markets throughout the country. It’s not only interesting reading, but gives regional laboratories a head start in understanding the next competitive cycle that will soon be launched.
Feb 21, 2007 | Compliance, Legal, and Malpractice, Laboratory Pathology
Quest Diagnostics recently filed a lawsuit against Brian Kiesche, a former Quest Diagnostics account sales representative, for downloading a list of New York and New Jersey doctors that detailed the amount of business that Quest did with each doctor. Kieschie apparently downloaded the list shortly before he left the company. The list included customers with the highest volume patients of United Healthcare.
Kiesche resigned from Quest on December 14 and went to work for Laboratory Corporation of America. Quest Diagnostics argues that its ex-employee is using the stolen information to help his new employer to “price products and services at rates designed to undersell Quest Diagnostics” and to “determine which customers to pursue,” based on which are the most profitable and have the largest sales.
Unfortunately for Kiesche, he seems to be caught in the middle of the Battle Royale for UnitedHealth Business between Quest and LapCorp. Had he left a year ago, the fact that he downloaded the lists might have not triggered a lawsuit by his former employer. But because Quest Diagnostics recently lost its contractual business with UnitedHealth to LabCorp, the company is working earnestly to retain its existing business.
Kiesche denies the allegations and says in an affidavit, “although I did download some information,” some of it was already available to the public on the Internet. He denies sharing any of the information with LabCorp. Quest argues that when he joined Quest in 2004, Kiesche signed documents that forbid him to solicit any of the business of a Quest customer for 2 years.
Since the announcement in October 2006 that UnitedHealth had selected LabCorp as its exclusive lab, competitors have regularly raided the sales force of Quest Diagnostics, as many Quest sales reps likely became interested in opportunities with other lab companies. It is believed that Quest Diagnostics has lost a considerable amount of sales talent and knowledge about individual clients, just at a time when such expertise and client relationships would have greatest value to Quest Diagnostics in protecting its existing business.
By suing a former sales rep for violating the terms of his contract, Quest Diagnostics is sending a message to the remainder of its sales force. Sales reps leaving Quest Diagnostics are now on notice that they should carefully review their contract with Quest Diagnostics and make sure that they are not in violation of that employment agreement. Clinical lab sales reps familiar with similar lawsuits are welcome to notify Dark Daily about the details. Just email schristensen@darkdaily.com with information. Also, feel free to forward this e-briefing to others who would find it useful.
