Pathology Group Organizational Relationships,
Performance, and Contractual Arrangements
Health Care Development Services, Inc. (HCDS) has represented senior hospital and health care system leadership since 1981 regarding laboratory and pathology issues. An important part of our management consulting services includes the analysis and preparation of recommendations concerning pathology contracts, pathology group performance, and organizational relationships including independent contractor versus employee arrangements.
We recently published a Client Alert to advise our clients about projected shortages of pathologists. According to a December, 2013 study published in Archives of Pathology and Laboratory Medicine, it is estimated that the number of active pathologists in the US will decrease by approximately 30% from 2010 through 2030. Given the pivotal role pathologists play in diagnosing disease, projected pathologist shortages have serious implications for patient care. In order to read the Client Alert, please use the following link. http://hcdsinc.com/documents/Client-Alert-Projected-Pathologist-Shortages.pdf.
Our client representation has included the following issues:
- Strategic and business planning
- Organizational relationships
- Financial plan development
- AP laboratory operational improvement
- Review of contractual arrangements for pathology services. Facilitation of defined pathologist responsibilities, compensation, staffing levels, and leadership issues
- Evaluation and assessment of Laboratory Director responsibilities
- Examination of intra-pathology group relationships including technological progress, organizational development, and succession planning.
- Investigation and facilitation of pathology group mergers
- Search for pathology group leaders
The following pathology group client engagements included many of the elements described above.
|
CLIENT |
ENGAGEMENT DESCRIPTION | |
| St. Bernard’s Medical Center Jonesboro, AR |
Review of current contract to provide medical management and laboratory Medical Director services to hospital. Evaluated scope of services, and extent of pathologists’ involvement on laboratory operations. Recommendations for range of FMV for services, and for revised elements of pathology contract. | |
| Sierra Vista Regional Health Center Sierra Vista, AZ |
Over the course of six years, performed several different engagements. One of our analyses helped development fair market value for a contract so the hospital could purchase the technical component of surgical pathology from an independent laboratory owned by the chief pathologist. Other assignments included the evaluation of advantages and disadvantages if the hospital acquired the independent laboratory, and developing a FMV for laboratory Medical Director services. | |
| San Diego Pathologists Medical Group San Diego, CA |
Review of pathology group owned and operated independent laboratory to provide technical component specimen processing services for surgical pathology to large regional health care system. Benchmarking of current pricing to other laboratories providing similar services. Evaluation of internal laboratory costs relative to current pricing. Recommendations to revise pricing mechanisms. | |
| St.MaryHospital and Medical Center Grand Junction, CO |
Review of current contractual arrangements for pathology services including laboratory Medical Director services, and pathologist billing for hospital provided technical services. Analysis of hospital laboratory costs and relationship to charges billed to pathologists for technical component services. Recommendations regarding pricing strategies, and commendations to pathology group for outstanding services provided to patients, the hospital, and the community. | |
| Hartford Health System Hartford, CT |
Several engagements over seven year period to review and evaluate relationship between pathology group and laboratory management and supervisors. Review of extent of responsibilities pathologists provide as laboratory Medical Directors of hospital laboratory, and for independent, off-site laboratory. | |
| Hamilton Medical Center Dalton,GA |
Review of pathology group role as hospital laboratory Medical Directors, and arrangements for pathologist billing hospital provided surgical pathology technical component specimen processing services. Analysis of hospital histology laboratory expenses relative to charges assessed to pathologists. Recommendations regarding pricing arrangements for services. | |
| Alexian Brothers Health System Elk Grove Village, IL |
Facilitation of merging two pathology groups, and development of contract for new group | |
| Southern Illinois Healthcare Carbondale, IL |
Performed peer review of pathology group serving SIH’s three hospitals. In-depth review of pathology group operational and organizational issues including behavior, scope of services, communications, quality and scope of reporting, and other issues. Developed recommendations to improve pathology group relationships with medical staff and laboratory staff, to improve overall operational and functional activities, and to develop a transition plan to recruit a new Chief of Pathology. | |
| Ottumwa Regional Health Center Ottumwa, IA |
Evaluated the scope, quality, and pricing of laboratory and pathology services provided by an independent laboratory owned by the hospital pathologist. Reviewed extent of contractual responsibilities and associated services provided, and determined hospital was ill served by current provider. Recommended that hospital identify alternative providers of laboratory management services, and developed RFP for new laboratory service providers. Assisted client in choosing most qualified provider. | |
| Spectrum Medical Group, Pathology Division South Portland, ME |
Review of possible business opportunities to expand pathology services on regional basis. Facilitation of intra-pathology group discussions regarding strategic and tactical opportunities. | |
| Holland Hospital Holland, MI |
Evaluation and analysis of the quality and scope of pathology services provided by pathology group. In-depth investigation of diagnostic accuracy, level of communication with medical staff and laboratory staff, and ability to improve overall pathology services. Organization and implementation of search to recruit new Chief of Pathology. | |
| Parkway Pathology Group St. Louis, MO |
Assisted large pathology group organize response to a comprehensive RFP at a regional health care system hospital. Developed RFP response language, offered advice on communications with prospective client, and assisted pathology group win the contract. | |
| Bryan LGH Healthcare System Lincoln, NE |
As part of broader engagement to create a health care system owned and operated laboratory, reviewed role and responsibilities of pathology group contracted with commercial laboratory. Examined various organizational relationships, and recommended contracting by health care system directly with pathology group. In later phase, assisted Bryan LGH review scope, quality, and compensation for laboratory Medical Director services provided by pathology group. Recommendations for range of FMV for services. | |
| Hackensack Medical Center Hackensack, NJ |
Review of the scope of clinical and anatomic pathology responsibilities in very large teaching hospital. Analysis of roles pathologists provide as laboratory Medical Directors, and assistance to hospital legal counsel in development of a new pathology contract. | |
| Kaleida Healthcare System Buffalo, NY |
Review of pathology services provided in this multi-hospital health care system. Evaluation of operational and organizational relationships between pathology group and members of the medical staff and laboratory staff. Review of laboratory Medical Director responsibilities and compensation. Recommendations to revise contractual arrangements for extent of laboratory Medical Director duties, and associated payment. | |
| Rex Healthcare Raleigh, NC |
Review of multi-faceted contract between hospital and pathology group. Evaluated extent and scope of services pathologists provide as hospital laboratory Medical Directors, and for regional blood bank. Recommended range of FMV for services, and provided list of performance measures to incorporate into new pathology contract. | |
| Mount Carmel Health System Columbus, OH |
Review of current contract for pathology services, and recommendations for revisions. Developed recommendations for health care system executive leadership concerning pathology group non-compete, FMV compensation, organizational behavior, and other factors impacting relationship between pathology group and MCHS. | |
| Greater Cincinnati Area Pathology Group Cincinnati, OH |
Review of arrangements between a large, diverse pathology group and a commercial laboratory in a joint venture laboratory. Suggestions on how to proceed with difficult contractual issues. | |
| Miami Valley Hospital Dayton, OH |
Review of scope and extent of services pathology group provided as laboratory Medical Directors for hospital-based laboratories, and an off-site independent laboratory. Recommendations for revisions of pathology services, and modifications of pathology contract. | |
| Tri-Health Healthcare System Cincinnati, OH |
Review of existing contract for laboratory Medical Director services. Analysis of extent of pathology groups’ role as hospital laboratory Medical Director, and scope of support for hospital laboratory outreach program. Recommendations for range of FMV for laboratory Medical Director services, and for related outreach program support. | |
| Crozer Keystone Health System Philadelphia, PA |
Several phased engagement to review existing contracts for one group of employed pathologists, and one independent contractor pathology group serving Crozer Keystone Health System hospitals. Evaluation of role pathologists plays at each CKHS hospital, and review of opportunities to expand current responsibilities. Investigation of possible alternative contractual arrangements where each pathology group could merge, and become one organizational entity. | |
| Hamet Medical Center Erie, PA |
Review of commercial laboratory arrangements to manage hospital laboratory and to provide pathology services. Analysis of role pathologists provide based on CLIA and CAP standards for laboratory Medical Director responsibilities. Recommendations to expand scope of pathology services, and to improve relationships between pathology group and medical staff and laboratory supervisors. | |
| Pathology Laboratory Associates Tulsa, OK |
Reviewed opportunities to bring pathologist workload and productivity measurement system to market. Organized market research, product development, and alternative pricing mechanisms to offer in beta trials. | |
| Northwest Pathology Services Eugene, OR |
Analysis of operating costs and pricing arrangements for surgical pathology technical component specimen processing services provided to multi-hospital health care system. Market research to determine benchmarks for pricing other independent laboratories charge hospital clients for similar services. Facilitation of discussions between pathology group and health care system regarding pricing arrangements. | |
| Self Regional Healthcare Greenville, SC |
Review of laboratory operations, and relationships among pathologists, medical staff, and laboratory supervisors. Development of a new pathology contract; the contract in force was antiquated and did not enumerate pathologists’ laboratory Medical Director responsibilities. | |
| Rapid City Regional Healthcare Rapid City, SD |
Reviewed scope of referred testing and pathology services provided by pathologist owned and operated independent laboratory to this multi-hospital health care system. Evaluated service levels, pricing, and pathology group interactions with hospital laboratory personnel. Recommended revisions to service, and pricing. Commended the level of organizational relationship between pathology group and RCRH. | |
| University of Texas Southwest Branch Parkland Memorial Hospital DallasTX |
Review and analysis of various contractual arrangements for the provision of referred testing services between pathology group owned reference laboratory and Parkland Memorial Hospital. In-depth analysis of all clinical laboratories at UTSW Branch, and consideration of how referred testing impacted each laboratory. Helped facilitate negotiations of contractual issues between Parkland Memorial Hospital and pathology practice plan to improve relations, and modify pricing based on FMV. | |
| Martha Jefferson Hospital Charlottesville, VA |
Review of laboratory costs associated with histology laboratory. Analysis of costs relative to hospital charges to pathologists for technical component pricing. Review of existing contract for laboratory Medical Director services, and recommendations for revisions. Several engagements over eight year period. | |
| Puget Sound Institute of Pathology Seattle, WA |
Review of current organizational and financial issues, and discussions with Partners to establish a strategic plan. Development of recommendations regarding the decision making process; organizational reporting relationships; interactions among partners; Board level decision making; financial planning; partnership track; and market considerations. | |
| Wyoming Medical Center Casper, WY |
Review of existing contract for laboratory Medical Director, and recommendations for revisions. Three engagements over nine year period. | |