AP lab sold to Labcorp

[ctnnb1]

The group I work for contracts with a local health system, who recently sold their AP labs (histo, cyto) to Labcorp. I am curious to see if anyone has seen a set up like this and what could be the implications for the pathologists moving forward? There hasn't been any changes to my contract with the group but I'm fresh out of training so less familiar with the business side of things. TIA.

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[KeratinPearls]

Welcome to Labcorp! Take a seat and start signing out these cases (hands you 100 biopsies).

Just kidding around man. I hope you don’t end up a labcorp employee.

 

[ctnnb1]

Welcome to Labcorp! Take a seat and start signing out these cases (hands you 100 biopsies).

Just kidding around man. I hope you don’t end up a labcorp employee.

That is of course my thought as well. Pardon my ignorance but how does labcorp take over coverage of all these hospitals if the pathologists do not accept an employee contract? This is not a super sought after location. Anything the group can do to prevent a labcorp take over or this is beyond our hands?

 

[KeratinPearls]

That is of course my thought as well. Pardon my ignorance but how does labcorp take over coverage of all these hospitals if the pathologists do not accept an employee contract? This is not a super sought after location. Anything the group can do to prevent a labcorp take over or this is beyond our hands?

I’m assuming the existing pathologists have to or you look for another job.

I’ve heard of stories where partners who were making good money get their salaries reduced significantly after being taken over by larger entity. You either take the pay cut or leave.

 

[Alteran]

Something must have changed because LabCorp historically only went after outreach accounts. Perhaps now they think it's a worthwhile investment to take on hospitals that they have to staff for frozen sections and medical directorships.

 

[WEBB PINKERTON]

You getting caught up in Labcorp takeover of Ascension health laboratories in many states? It's weird cause the Ascension health labs north of me are run by Quest. Wonder if that will change someday.

 

[coroner]

You either take the pay cut or leave.

👆This...

what could be the implications for the pathologists moving forward?

Haven't you discussed this with your colleagues/partners? What are their plans?

There hasn't been any changes to my contract with the group but I'm fresh out of training so less familiar with the business side of things.

There may not have to be changes depending on what is in writing in your contract. Either way your group will be losing part, or all of its revenue depending on what chunk of your revenue came from the local health systems labs and what chunk of revenue (if any) did your group have outside of the labs sold. Were all the labs your group contracted with sold to LabCorp?

Anything the group can do to prevent a labcorp take over...?

No. Say, sayonara. What's done is done. If you are absolutely geographically restricted to this area, then take what they offer you. Otherwise, move on to greener pastures.

 

[voxveritatisetlucis]

Why doesn’t the DOJ or FTC start putting a stop to these takeovers on antitrust concerns

 

[ctnnb1]

👆This...

Haven't you discussed this with your colleagues/partners? What are their plans?

There may not have to be changes depending on what is in writing in your contract. Either way your group will be losing part, or all of its revenue depending on what chunk of your revenue came from the local health systems labs and what chunk of revenue (if any) did your group have outside of the labs sold. Were all the labs your group contracted with sold to LabCorp?

No. Say, sayonara. What's done is done. If you are absolutely geographically restricted to this area, then take what they offer you. Otherwise, move on to greener pastures.

Was told that this was going to be a great partnership and our group negotiated good terms but I have my doubts seeing issues starting to appear (i.e. staffing etc).

Yes, all AP labs were sold as they are within one hospital system.

 

[coroner]

Was told that this was going to be a great partnership and our group negotiated good terms but I have my doubts seeing issues starting to appear (i.e. staffing etc).

Yes, all AP labs were sold as they are within one hospital system.

I had a similar situation in my first job out of training. It started off as a great partnership track position. After roughly 1 year (before I made partner), the hospital did not renew our contract and it went to a local competing health care system (not a commercial lab/LabCorp). The senior partner retired, another partner was hired for a year with a significantly reduced salary and eventually fired, and I moved on. The outcomes for private groups experiencing situations such as these is inevitably worse. Sorry it happened to your first job too...

 

[Alteran]

Why doesn’t the DOJ or FTC start putting a stop to these takeovers on antitrust concerns

No one will care about AP services until it noticeably affects patient care.

 

[Zarniwoop]

Not great news, but I'm not sure it should make that much of a difference to take home pay.
Before: TC to hospital / professional to path group
Now: TC to Labcorp / professional to path group
I'm guessing that you're in a state in which Labcorp cannot hire pathologists directly, but still needs to go through a group? In that case the path group will lose its already scant political clout in the hospital, but you shouldn't necessarily be worried for your jobs or take a big hit on salary.

 

[WEBB PINKERTON]

Departments will close in the lab. Cytopath and Micro are usually toast first.

 

[caffeinegirl]

This happened to me also with the first job out of training - but it was outreach only. LC offered the pathology group to stay on at about $15/slide. Luckily the hospital work was not included in the sale. The quality of the outreach did plummet with Labcorp, but providers didn't send to any other lab (the existing pathology group set up their own AP lab to compete, but didn't get even a fraction of the business).
Interesting that LC is now going after hospital contracts.
As somebody fresh out of training ...RUN. The fact that you haven't been included in the discussions, and are asking this forum for advice tells you that your current group has already started excluding/ignoring you for major decisions. You will likely NOT make partner due to the revenue loss. You will likely lose your job when the current partners figure out that the losses.
LC can come in and make these deals when the current pathology group has a weak relationship with hospital administration. This is a BIG red flag for any private practice. I would start looking for another place to work ASAP.

 

[Napoleon1801]

Something must have changed because LabCorp historically only went after outreach accounts. Perhaps now they think it's a worthwhile investment to take on hospitals that they have to staff for frozen sections and medical directorships.

Nearly the exact same thing happened with a hospital account in our market as well. The local LabCorp group pitched the hospital when we were up for renewal. LC was hoping that some of our group would defect, but all of us told them to go pound sand. Two months in the hospital is sending weekly updates on the transition and their garbage TATs due to their understaffed service.

Luckily we have several other accounts, but this was a surprising hit. We thought we had a solid reputation, but LC has lots of COVID money to throw around and they (along with Quest) are going on a buying spree.

 

[Alteran]

Two months in the hospital is sending weekly updates on the transition and their garbage TATs due to their understaffed service.

Luckily we have several other accounts, but this was a surprising hit. We thought we had a solid reputation, but LC has lots of COVID money to throw around and they (along with Quest) are going on a buying spree.

I would be curious if any non-pathologists are reading this and what their thoughts are. But in my anecdotal experience, clinicians by and large either have no concept of what quality in pathology looks like or simply don't care, especially if they're making a buck or two off of it. Also anecdotally, clinicians only seem to care about quality and start to ride you hard when they're looking to dump you and just need an excuse to refer somewhere they have a vested interest in.

 

[caffeinegirl]

I would be curious if any non-pathologists are reading this and what their thoughts are. But in my anecdotal experience, clinicians by and large either have no concept of what quality in pathology looks like or simply don't care, especially if they're making a buck or two off of it. Also anecdotally, clinicians only seem to care about quality and start to ride you hard when they're looking to dump you and just need an excuse to refer somewhere they have a vested interest in.

Completely agree 100%. Pathologists provide a service, and our customers are other clinicians. This is not a field where you are highly regarded due to clinical expertise - it's all about $$ and customer service.

 

[KeratinPearls]

Ca$h is King.

 

[Med Director New England]

Couple of thoughts on this: this is not uncommon at all (even for LC) to bid on the entire hospital contract. Quest /Ameripath has many more hospital contracts but LC has plenty & both are growing.

I suspect LC will offer to contact with you for oversight rather than employ you and leave you the hospital AP PC intact & offer you the outreach back at sub Medicare for the PC. This is the typical playbook. Your lab managers and likely your lab staff and phlebotomy will become LC employees. If they were in a union that will go away. But gotta agree with others how were you not in on these discussions when the deal was in motion. That is more concerning to me.

There could be positives. LC may offer additional outpatient / outreach type of work at a contracted per part price. Any headaches you had managing union employees (if this is the case) will go away. You will also have content experts available to help trouble shoot all the little things that can come up in the CP world.

GL with the Transition and please update how things end up going.

EDIT - I wrote above ^^ thinking LC was taking over everything including CP lab(s). Really AP only ?

 

[ctnnb1]

Couple of thoughts on this: this is not uncommon at all (even for LC) to bid on the entire hospital contract. Quest /Ameripath has many more hospital contracts but LC has plenty & both are growing.

I suspect LC will offer to contact with you for oversight rather than employ you and leave you the hospital AP PC intact & offer you the outreach back at sub Medicare for the PC. This is the typical playbook. Your lab managers and likely your lab staff and phlebotomy will become LC employees. If they were in a union that will go away. But gotta agree with others how were you not in on these discussions when the deal was in motion. That is more concerning to me.

There could be positives. LC may offer additional outpatient / outreach type of work at a contracted per part price. Any headaches you had managing union employees (if this is the case) will go away. You will also have content experts available to help trouble shoot all the little things that can come up in the CP world.

GL with the Transition and please update how things end up going.

EDIT - I wrote above ^^ thinking LC was taking over everything including CP lab(s). Really AP only ?

Thank you and everyone else for their input. This is very helpful info and sounds like the current situation at my hospital based my understanding (you are correct LC took over CP as well). While I’m not thrilled about what happened, it’s good to know that this is more common than I had thought and that things can play out in a number of ways.