In Brief: MemorialCare Sells Lab Outreach Business; California Flunks Again On Price Transparency

MemorialCare Sells Lab Outreach Business

Fountain Valley-based MemorialCare Health System has sold its hospital outreach laboratory business to Quest Diagnostics, the nation’s second-largest laboratory operator.

The hospital outreach business pertains to lab testing MemorialCare furnishes to providers outside of its system, such as local physician offices.

Terms of the transaction were not disclosed, and neither Quest nor MemorialCare spokespersons would say how many outreach tests the latter performs every year.

The deal was announced after years of on and off discussions. Quest first approached MemorialCare about a potential outreach sale in 2013, according to a source.

The outreach sale is the third by a California-based healthcare system to a national laboratory in the past couple of years. Dignity Health sold its outreach operations to Quest; John Muir Health to LabCorp. Industry observers say that hospitals have struggled to make such operations profitable in recent years and have shed them to better focus on other facets of care delivery.

  "We are excited about the opportunity to enable a larger number of physicians and patients in southern California to benefit from our diagnostic insights," said Quest Chief Executive Officer Steve Rusckowski in a statement. "This transaction underscores the attractiveness of Quest Diagnostics as a provider of high-quality, high-value diagnostic information services for hospital systems considering strategic alternatives for their outreach businesses.”

California Flunks Again On Price Transparency

California was one of 45 states nationwide to receive the grade of “F” for price transparency surrounding its healthcare transactions, according to a new study by the Catalyst for Payment Reform (CPR) and the Health Care Incentives Improvement Instititute (HCI3).

It’s the third time California has received a failing grade in the study.

Although the issue of price transparency in the healthcare sector has gained traction in recent years, most providers in the U.S. still struggle with providing it, according to the report. Many hospitals and healthcare systems have objected to the use of all-claims databases that could be used to provide specific information on the actual costs of medical procedures.

“Given how little progress there has been with state laws, it’s important to understand the tenuous legal arguments used by some in the industry to keep price information inaccessible to the public,” said Francois de Brantes, HCI3 executive director. “Very few of the commonly used arguments have merit.”

Only one state, New Hampshire, received an “A” grade. However, a new state-operated website was commended by the study as “a prime example of a price transparency website built with consumers in mind.”

The CPR and HCI3 both recommended that regulators and lawmakers push the issue of price transparency harder.

“While we expect the private sector to lead advances in price transparency, there is an undeniable role for states—and we need them to step up,” said CPR Executive Director Suzanne Delbanco.