Practices Partnering with National Labs

Lately some of the practices I work with have been approached by national lab companies that want to “partner” with them.  It seems these national firms want to market for the local pathology groups with the focus on the national partner gaining the reference lab work and doing the technical component.  That gives the local pathology group the professional component and access to the national partners EMR platform.  

My thoughts on this are mixed.  I’ve seen other business partnerships like this and the truth is that these are seldom balanced. One partner usually has the upper hand and holds control over the minor partner.  My fear is that my groups will be the minor partner.

On the surface this seems like an interesting offer.  If you are a small pathology practice or independent lab and you have little or no marketing, then this scenario may possibly work for you.  You gain some marketing exposure, new outreach work and a link to an EMR that may desperately be needed.  

But on the other hand, if you already have some market share and are aggressively growing your business it doesn’t seem to make sense to partner with anyone.  Consider the risks:  First you have to open your current market to the new national lab.  What if they’re not well received by your clients?  What happens when they have issues and failures, and you are now tied to this lab by reason of your choice?  

Next, what happens if this national lab sells to someone else?  Maybe your new “partner” will not be so kind and they will actively market to your current clients and take away business.  Also, what are the negative outcomes that come with sending the technical work away from your current technical provider (i.e. your hospital)?  This relationship may suffer. 

Finally and most importantly what do the numbers say?  Remember as a business owner your primary job is to keep the business prosperous.  Often these types of relationships are built on volume.  This means higher specimen volume at a lower payment per specimen.  Think about it? Is it better to have fewer specimens at a higher rate or more specimens at a lower rate?  The answer is not so simple.  

If you have an independent lab and you are looking to sell within the next two or three years then maybe you should gain market share to look bigger and juicier for the sale.  If you are not looking to sell then you are simply working harder and not smarter.