In Brief: John Muir Sells Outreach Lab Business; Kaiser Loses $4.9 Million Verdict
John Muir Sells Lab Operations
The two-hospital John Muir Health system in the East Bay has sold its outreach laboratory operations to the nation's second-largest laboratory operator.
The Burlington, N.C.-based LabCorp will take over operations of John Muir's 26 laboratory draw stations in Contra Costa, Alameda and Solano Counties. They operate under John Muir's MuirLab brand. John Muir will also close down its 56,000 square foot core lab that provided services to outreach clients, such as physicians and medical groups. Its two hospital-based laboratories will continue operating owner John Muir's ownership.
"With this sale, our patients will gain access to the broader range of services and lower prices offered by LabCorp,” said Cal Knight, John Muir Health's chief executive officer. "Physicians and patients have frequently complained about MuirLab's pricing. This agreement will lower patients' out-of-pocket expenses and advance John Muir Health's efforts to deliver high-quality care at an affordable cost."
Terms of the sale to LabCorp, a publicly traded company with annual revenues of $5.7 billion last year, were not disclosed.
It's the second big sale of a California hospital operator's laboratory outreach operations this year. San Francisco-based not-for-profit hospital chain Dignity Health sold its outreach operations to New Jersey-based Quest Diagnostics earlier this year.
Industry observers say that hospitals are shedding their laboratory outreach businesses in order to better focus on core initiatives.
Kaiser Loses $4.9 Million Malpractice Case In Arbitration
Oakland-based Kaiser Permanente was on the losing end of a $4.9 million arbitration award involving the treatment of a patient at its San Diego Medical Center.
The arbitration judge awarded Raymond Palmer the money after concluding Kaiser was negligent in his care after he suffered a stabbing injury at a San Diego trolley stop in 2011, according to a report in the San Francisco Business Times.
Palmer suffered brain damage after a breathing tube inserted at the Kaiser facility was dislodged, causing his heart to stop for 13 minutes and resulting in his being permanently disabled.
The arbitration award, which was announced on Aug. 26, includes $250,000 for non-economic damages, the maximum under California law, loss of nearly $588,000 in earnings, and future healthcare costs of more than $4 million.
Health plans such as Kaiser rarely lose arbitration hearings, which are legally binding. Cases are typically overheard by retired judges whose selection is usually heavily influenced by insurers. The results of this arbitration was made public because Palmer's family wanted to call attention to his case, according to the Business Times.
According to Palmer’s attorney, the judgment might have been much higher had he suffered injuries outside of a medical setting, primarily due to the cap on pain and suffering damages in malpractice litigation. A consumer advocacy group is hoping to get an initiative on the November 2014 ballot to try and raise the cap, which has been in effect since 1975 and has not changed during that time.
