GLOBAL OUTSOURCING OF CLINICAL LABORATORY TESTING IN IRELAND has entered its second phase. The Irish Health Service Executive (HSE) granted Quest Diagnostics Incorporated a contract for an additional two-years of cervical cancer screening tests while awarding 25% of the nation'' annual Pap testing to Sonic Healthcare Ltd. in a similar two-year contract.

These developments are significant, because as long as the Irish outsourcing experience is favorable, it makes it easier for other nations to outsource laboratory testing to lab testing companies located in other countries. But there is another dimension to the lab testing story in Ireland which fascinates me even more. As clients and regular readers of THE DARK REPORT know, the Irish HSE has announced a complete restructuring of laboratory services throughout the country. (See pages 6-8 and The Dark Report, January 25, 2010).

I'd like to make two observations about this ambitious project, which is a typical government health official approach to saving money. First, veteran pathologists and lab managers know all too well that, over the past 25 years, there are more disasters than successes when a government health system decides that it can take out costs by consolidating pathology testing, laying off medical technologists, and reducing the number of labs and blood collection centers serving a community. Certainly the cost of lab testing did go down in the short term in these cases. But it was physicians and patients in these communities who often endured service deficiencies, glitches in the process of consolidating lab testing, and even serious problems in the accuracy and trustworthiness of lab test results.

Second, I'll guess that the Irish Health Service Executive, in developing its "total laboratory consolidation" plan with a consulting company from England back in the years 2004-2007, did not spend much money sending a team of experienced pathologists, laboratory scientists, and healthcare policy makers on a tour to several countries to do first-hand investigations of successful, innovative regional laboratories, along with an on-the-ground visit to some of the larger-and often not-sosuccessful- laboratory consolidation projects.

If this assumption is true, it is an interesting comment on the due diligence of Ireland's healthcare leaders that they would embark on a major makeover of the nation's pathology service without having invested a rather modest amount of time and money to send their laboratory profession's best and brightest out on a factfinding tour of the world's best examples of lab testing. To the contrary, might it be true that the HSE, for the cost of a consulting fee to an English company, has gotten the answer it wanted and is proceeding with a laboratory restructuring and consolidation plan that was likely pre-ordained as early as 2004?

Optimism & Opportunity at Executive War College

This year's gathering was high-energy and marked by a positive outlook for lab testing

CEO SUMMARY: Instead of our annual review of key speakers as a source of emerging trends and common themes, this year we assess the attitudes, opinions, and activities of the pathologists, laboratory administrators, managers, and industry executives in attendance at the 15th Annual Executive War College. These people are the grass roots of laboratory medicine and they are ready to tackle all the coming challenges in healthcare and the laboratory testing marketplace. ALL SESSION AUDIO RECORDINGS ARE AVAILABLE NOW!

Sonic Health Wins Irish Contract for Pap Testing

First nation in the world to outsource 100% of its Pap testing also renews contract with Quest

CEO SUMMARY: Evidently the Irish Health Service is satisfied with its decision to outsource all the nation’s cervical cancer screening tests. In recent weeks, it announced that two international laboratory companies would handle Pap testing for the next two years. Sonic Healthcare, Ltd., won a contract to perform 25% of Ireland's 300,000 Pap tests annually. Quest Diagnostics renewed its contract and will perform the balance. Both lab companies indicate they will build laboratory facilities in Ireland.

Pathologists Can Still Earn Medicare PQRI Incentives

Federal program offers pathologists a 2% bonus during 2010 for reporting required quality measures

CEO SUMMARY: During 2010, the Medicare Physician Quality Reporting Initiative (PQRI) will pay a 2% bonus to pathologists who register and report data on 80% of their cases for the specified CPT codes. However, independent pathology laboratories still cannot participate in the PQRI program. Also, PSA, LLC, reports it can be challenging to audit the Medicare PQRI bonus amount paid at year's end against the actual amount that was billed to Medicare by individual pathologists for the CPT codes included in the PQRI program.

French Company Buys Pittsburgh-Based RedPath

ExonHit Therapeutics acquires Redpath’s proprietary molecular test and its CLIA laboratory

CEO SUMMARY: Here's a deal that is all about proprietary molecular assays and access to new markets. With its purchase of RedPath Integrated Pathology, ExonHit Therapeutics, S.A., of Paris, France, gains a CLIA laboratory and access to the U.S. market, even as the new owner opens the door to the European market for RedPath. As announced by the two companies, ExonHit will spend $22.5 million to acquire RedPath Innovative Pathology and will pay an additional $9.5 million if RedPath achieves certain sales targets.

LETTER TO THE EDITOR: Letter to Editor on EMR Donations, Deeply-Discounted Client Prices

Starting 10 years ago, physicians in Bristol, England alerted NHS officials about problems in lab test accuracy

EMR Donations, Client Bill Issues in Anatomic Path

Federal law has lots to say on EHR donations and discounted client bill pricing to referring docs

CEO SUMMARY: In today's market for anatomic pathology services, local pathology practices are facing tough competition from national pathology companies that are quite aggressive at using EHR donations and discounted client bill arrangements to win new clients. Attorney Jane Pine Wood of McDonald Hopkins identifies federal safe harbor requirements governing EHR donations involving laboratories and referring physicians, then discusses compliance issues triggered by discounted client billing arrangements.

INTELLIGENCE: Late & Latent

PERKIN ELMER PAYS $90 MILLION TO BUY SIGNATURE GENOMICS

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