Despite efforts by PeaceHealth to discredit an earlier story on the sale of its clinical laboratories to Quest Diagnostic by telling employees it’s a rumor, The Lund Report has verified that the sale will, in fact, take place with a formal announcement anticipated next Wednesday, Feb. 15. Upper management has also scheduled an employee meeting that day.
Around 500 employees who work at PeaceHealth Labs in Springfield could potentially lose their jobs, with the majority of layoffs occurring before the end of April, according to confidential sources. They include phlebotomists whose duties include blood draws and lab work along with couriers. Quest may offer jobs to some of these employees.
Aware that this sale was imminent, PeaceHealth instituted a new severance policy on Jan. 1, 2017, details of which were not immediately available.
One staff member who was unwilling to share their name because of fear of repercussions told The Lund Report they couldn’t understand why such information was being held from employees. “I find this to be very deceiving to those of us who’ve been loyal so many years.”
Marcy Marshall, public relations spokesperson for PeaceHealth, did not respond to requests for comment about the sale.
In anticipation of the sale, Quest has been installing more than 30 computers in PeaceHealth Labs.
The transaction could be in the range of $50 million with Quest paying 1-2 times the net collected revenue. . Once Quest takes over, it will undoubtedly fly specimens to its headquarters in Chatsworth, Calif., and Denver.
“Quest has every economic incentive to move swiftly to change the site of where specimens are being tested to lower their costs,” the source told The Lund Report. “Typically when a laboratory is purchased quickly it means that a hospital system is losing money. I also anticipate there’ll be a noticeable disruption in service by physician offices when this transaction occurs.”
PeaceHealth ended its 2016 fiscal year with a $115.6 deficit but things were looking up in the first quarter of 2017, when assets climbed by $40.05 million, according to an in-depth Lund Report examination of the Vancouver, Washington-based nonprofit’s financial situation.
PeaceHealth operates four hospitals in Oregon, five in Washington and one in Alaska, in addition to its network of clinics, labs and other medical operations.
The Providence Deal
Providence Health & Services is expected to announce the sale of Pathology Associates Medical Lab which it owns in collaboration with Catholic Initiatives, a minority shareholder.
The buyer is Laboratory Corporation of America, more commonly known as LabCorp, an American S&P 500 company headquartered in Burlington, North Carolina. It operates one of the largest clinical laboratory networks in the world, with a United States network of 36 primary laboratories. No other buyers were solicited. Pathology Associates generates about $300 million a year in revenue.
Gary Walker, public relations spokesman for Providence, did not respond to a request for comment by press time.
The deal apparently came together because of the close relationship between Dr. Francisco R. Velázquez, president and CEO of Pathology Associates, David King, CEO of LabCorp and Dr. Rod Hochman, president and CEO of Providence Health & Services.
King earned $26.11 million in the last five years, according to Forbes, and Hochman ranked third among the highest paid healthcare executives in Washington in 2013, earning $1.77 million.
Currently Pathology Associates is among the largest employers in the Spokane area with more than 500 trained medical laboratory technologists and staff who are expected to lose their jobs in the years following the acquisition.
“Spokane will lose both a unique national resource in clinical laboratory testing, as well as a major employer,” a confidential source told The Lund Report.
Following the purchase, the lab in Spokane will be dismantled with specimens moved to existing sites including Seattle. “And LabCorp will optimize its profits, with higher volume,” the source added.
Pathology Associates does business in eight states including Washington, and is among the ten largest labs in the country. By selling the company, Providence will have the opportunity to divert more revenue into its hospitals and clinical services. Providence offers healthcare services in Oregon, Washington, Alaska, Montana and California.
Diane can be reached at [email protected].
