Lab Soft News: Many Big Urology Practices Now Utilize an In-Office Histology Lab and Their Own Pathologist

Laboratory Economics covered in its March issue the increasing tempo of the acquisition of in-office histology labs and pathology services by large urology groups (see: MOST BIG UROLOGY GROUPS NOW HAVE IN-OFFICE LABS). Here is a link to a previous note in Lab Soft News about this shift (see: Corrected Definition for a Pod Lab and a Look at In-Office Labs). Below is an excerpt from the Lab Economics article:

Laboratory Economics contacted 20 big urology groups (i.e., 5+ doctors per group) to try to determine the infiltration rate of in-office histology labs. Fifteen urology groups from our mini-survey indicated they had opened their own histology lab. These 15 groups employ 205 urologists, or more than three-quarters of the total 250 urologists from the 20 groups. Our survey suggests that the in-office histology lab trend is at a late stage for big urology groups. Unless the Stark in-office exception rule is changed, LE [Laboratory Economics] expects that nearly all big urology groups will bring their pathology services in-house. Smaller groups will follow suit as they merge into larger practices. Specific groups building in-office histology labs include The Urology Center (New Haven, CT) [listed below with an asterisk]. TUC has contracted with a pathologist to perform professional services at their practice. Slide preparation services are currently provided by Plus Diagnostics, which will continue to provide the group with molecular testing services and second opinions. The group’s practice administrator tells LE that an in-house lab will reduce turnaround time and improve continuity of care. He also noted the financial benefits. TUC hopes to have the histology lab open by the end of March. [Below is tabular data listing the home city of the urology practices participating in the survey and the number of urologists in the group.]

Tucson, AZ (15 urologists)
New Haven, CT* (6 urologists)
Bonita Springs, FL (16 urologists)
Sarasota, FL (6 urologists)
Atlanta, GA (37 urologists)
Stockbridge, GA (7 urologists)
Lake Barrington, IL (6 urologists)
Fall River, MA (5 urologists)
Fair Lawn, NJ (15 urologists)
Buffalo, NY (23 urologists)
Syracuse, NY (16 urologists)
Eugene, OR (15 urologists)
Nashville, TN (3 urologists)
Amarillo, TX (8 urologists)
Austin, TX (17 urologists)

This phenomenon seems to be a juggernaut at this time, suggesting that small biopsy work from the larger urology practices will continue to diminish for hospital-based pathology practices. Of note, however, is that much of this work has already been directed to private surgical pathology labs. There is only one macro trend that may counteract this movement -- the purchase of some of the large speciality practices by hospitals (see: The Increasing Tempo of Physician Practice Purchases by Hospitals). This has been driven, in part, by medicare policies that reimburse private physician practices less for the same procedures than hospitals. The rationale behind this is that it is necessary to counteract the perceived over-ordering of procedures by physicians to enhance their own incomes. More bad news. The Dark Daily reports that many oncology practices are turning to physician office clinical labs (POLs) to bolster their revenue that is being reduced by third-party payers as part of cost-containment efforts (see: Oncologists Advised to Build Their Own In-Clinic Medical Laboratories).