Aurora Health Care Inc.
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Hospital laboratory consolidation, underway for several years, is having mixed success as the market shifts. For suppliers, things are unlikely to settle down soon. Successful labs claim to be committed to a common vision and to swift action to institute painful changes. But other labs are stymied by politics, lack of top management support, and reluctance to make difficult decisions quickly. Manufacturers' expectations that consolidation would lead to standardization of equipment and a winner-take-all mentality are starting to come to pass. But the customer base continues to be in more flux than expected.
Quest Diagnostics was born into the troubled world of reference laboratories. It is cleaning house internally. But its bigger hurdle, one facing all reference laboratories, may be creating a viable role for itself in a world dominated by new customers with different needs.
As laboratories consolidate and form networks to reduce costs and improve efficiency, some embrace POC whole-heartedly, extolling its ability to save money. Others are eliminating whatever POC testing they currently offer, investing instead in infrastructure to improve efficiency and turn around times in their central laboratories.
Consolidation lowers operating expenses, a factor crucial in remaining competitive. But it cannot directly offset the losses that stem from the ongoing decline in the volume of inpatient testing as more health care services move to the ambulatory clinic arena. Networking, in contrast, allows laboratories to exploit the fixed cost aspects of their business by increasing volume, but it cannot bring down operating expenses enough to make members competitive with highly efficient independent reference la