In a recent note about the major strategic challenges facing pathology (see: Strategic Challenges Facing Hospital-Based Pathology & Lab Medicine Groups), I dismissed pod-labs, also known as condo-labs, as one of the top ten challenges. I suggested at that time that this business model would continue to decline because of legal and regulatory challenges. The Dark Daily now brings us some interesting news about the acquisition of UroPath, an AP-condo-lab operation, by HealthTronics (see: AP Condo Lab Operator UroPath is Acquired, Apparent Victim of Medicare Anti-Markup Rules). Also see this related story: HealthTronics Acquires UroPath, LLC. Below is an excerpt from the Dark Daily:
Medicare anti-markup rules implemented last January 1, 2008, have apparently contributed to the sale of UroPath...to HealthTronics ...based in Austin, Texas....UroPath, of Arlington, Texas, is the largest operator of anatomic pathology condominium complexes (pod labs) in the United States....With the implementation of the January 1, 2008 Medicare anti-markup rules, UroPath found itself unable to markup services on Medicare patients over its costs....Should the new Medicare anti-markup rules, in combination with the existing anti-markup rules, undermine the economics of the AP condo lab business model and cause the current urology group owners of the condo labs to close those operations, HealthTronics may believe it has a reasonable business alternative. Because HealthTronics owns an existing anatomic pathology company, it could convince those urology groups to refer their AP specimens to its ClariPath Lab operation.
Interesting sequence of events. Medicare anti-markup rules make the pod-lab business more challenging. The UroPath business model may be difficult to sustain as it is currently conceived. HealthTronics picks up UroPath under the assumption that it can capture much of the UroPath surgical pathology business for its ClariPath Labs operation which functions as a reference surgical pathology lab. Below a bulleted list of what ClariPath views as the strongest features it offers to its clients copied from its home page. Hospital pathologists should take note.
- Rapid results reporting, the day after sample receipt
- Digital lab results available on the web
- Accurate, complete, and easy-to-read reports
- Bar-coded, one-label biopsy kit (ClariKit) to help eliminate error
- Consultation with renowned field experts as needed
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