Lab Soft News: More on the Convergence of Pathology/Lab Medicine with Radiology

The idea of convergence (or even merger) of pathology and lab medicine with radiology is causing a bit of a stir. I posted a previous note entitled Ten Reasons for Merging Pathology/Lab Medicine with Radiology that addressed this topic as well as a follow-up note (see: More on Merger Between Pathology/Lab Medicine and Radiology). I will also be lecturing on this topic at Lab InfoTech Summit to be held on March 5-7.

The Washington G2 Report recently published an article about this same topic (see: The Merging of Radiology & Lab Medicine: An Idea Whose Time Has Come?) that describes the experience of Dr. Richard Friedberg who helped to establish " a diagnostic service line" (pathology + radiology + nuclear medicine) within the VA system. Dr. Friedberg is mentioned in one of my previous notes. Below is a portion of this article that discusses Dr. Friedberg's experience in the VA system and also some of his ideas about future directions (boldface emphasis mine):

At the VA Atlanta Healthcare Network, radiology, nuclear medicine, and pathology have been combined under one Diagnostic Medicine Service Line since 1997. "We started with a capital procurement group for radiology and pathology, and as we looked for synergies across the network, it became clear that running the laboratory and radiology services on a much larger scale would give us economies of scale and allow for more streamlining," says Richard Friedberg, M.D., Ph.D., chairman of the Department of Pathology at Baystate Health (Springfield, MA), medical director of Baystate Reference Laboratories, and a professor at Tufts University School of Medicine. Dr. Friedberg worked at the VA in 1997 and helped develop the service line.

"We found that radiologists and pathologists have much more in common than they ever realized," he explains. "They both interact with the healthcare system in the same way—performing and interpreting tests and reporting the results. When we put them together, we found that it worked very well." While the merger of imaging and lab medicine has not gained widespread acceptance outside of the VA, Dr. Friedberg believes that is about to change....Dr. Friedberg believes that a company like Quest Diagnostics or LabCorp may explore development of diagnostic testing centers that offer both lab and diagnostic imaging tests.

I have previously discussed integrated diagnostic centers like Fleury Diagnostics in Brazil that combine laboratory testing with medical imaging and caters to a very high-end clientele (see: Fleury Diagnostics: A Brazilian Lab Powerhouse). I have also written a number of notes about Sonic Healthcare which is a global diagnostic company that combines reference labs with radiology practices. Canyon Ranch is another example of a high-end spa that is now promoting health packages that combine lab testing with medical imaging studies under the supervision of a physician.

I do not personally believe that companies such as Quest or LabCorp will have much success in integrating medical imaging with their current point-of-collection activities in patient service centers (PSCs), if they choose to "explore" such a business model. This despite the fact that these facilities could could theoretically be expanded to accommodate such procedures. My reasons for this opinion are the following:

These large national reference labs are in the "lab" business and not in the "medical diagnostic" business; they deliver test results to clinician clients who then render diagnoses.
The business model of companies such as Quest and LabCorp is based on high test volumes and low margins; the current feud between the two, if anything, will put more pressure on their respective bottom lines. Medical imaging, at least as presently practiced, is a relatively low volume and high margin business.
These reference labs have physicians as clients but they are not what I would consider physician-centric companies. I believe that this is a culture necessary for a successful patient-oriented medical diagnostic company to emerge in the U.S.