Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 26, 1995 TAG: 9501260112
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
Carilion Health System announced Wednesday that it will set up a medical laboratory subsidiary and consolidate work done in three of its hospitals, Radford Community, Community Hospital of Roanoke Valley and Roanoke Memorial.
The new company, Carilion Consolidated Laboratories, will be housed at Roanoke Memorial and should be in business by October, said Carilion President Thomas Robertson. It will have its own management and board of directors.
The consolidated facility is expected to save at least $1 million a year in operating costs, he said.
Some of the savings will come in personnel costs.
It is projected that the new company will employ 276 full- and part-time workers, only nine less than the 285 now working in the hospitals' labs. However, there might not be the need for the same number of more-skilled positions, and the jobs that replace them likely will carry lower salaries, according to the proposal for the new company.
"We need to get costs down to compete with commercial labs," Robertson said.
Large managed-care companies often have national contracts with laboratories. When Carilion hospitals became part of a provider network for HealthKeepers and Heritage National Healthplan HMOs, Carilion did not get the companies' lab business.
"We took business out of our own hands," Robertson said.
Ironically, Carilion is a partner with Blue Cross in the Healthkeepers HMO.
The proposal for Carilion Consolidated came out of a study done by representatives of the three facilities along with Chi Laboratory Systems, an Ann Arbor, Mich., consulting firm.
The new company can absorb 60 percent of the lab work now done at Community, 38 percent of Radford's lab work and 49 percent of that done at Roanoke Memorial, said Dorman Fawley, Community hospital president and leader of the study team.
Fawley expects other Carilion hospitals to start using the consolidated lab by early 1996.
Carilion Consolidated will not eliminate the need for in-hospital labs, however, he said. Each hospital still will be staffed with a pathologist and have a blood bank and continue to do tests on tissue and tests needed in emergency situations.
The consolidated lab will result in savings because it will be able to do common tests on fluids like blood and urine in large batches, he said.
In addition to savings on personnel costs, Fawley expects savings in equipment and transportation and courier costs. The larger combined lab also should attract more outside business, he said.
by CNB