Monday, December 11, 2006

Lab Corporation of America and the $200,000,000.00 Spin

While perusing the internet I had the opportunity to read an interesting article at Lab Soft News about the Lab Corporation of America, United Healthcare contract which becomes effective at midnight January 01, 2007. The current contract is with Quest Diagnostic which walked away from the table a few months ago due to unreasonable demands made at the last minute by United Healthcare which the executives at Quest Diagnostics believed would harm not only that company, but indeed the entire industry.

According to what I read at
Lab Soft News it appears to me, Snake Oil Sam, that Lab Corporation of America is attempting to put a spin on the issue of the $200,000,000.00 writing it off as “transition fees.”

Perhaps it is the intended goal of Lab Corp. using a term like “transition fee” to cloud and confuse the issue so as to soften the political effects standing before the executive board of that company, due to the potential financial blow in the distance caused by their signing a bad contract. Now I have to ask a very simple but obvious question. What really is this transition fee?

Are the executives at Lab Corp. currently attempting to downplay a very serious screw up made by that team in their haste to acquire a contract which Quest Diagnostics had already written off as bad business practice?

As I have already pointed out the $200,000,000.00 figure is simply a guarantee which will protect United Healthcare from lab test re-directs to other laboratories outside of the contract between United Healthcare and Lab Corporation of America.

Face the facts, there is no such thing as a transition fee of $200,000,000.00 and furthermore if that company agreed to pay United Healthcare such a large amount of money calling it a “transition fee” in order to obtain the contract then besides being something that would in all likelihood be highly illegal, they appear to be even worse off than I had realized. Perhaps it is time for someone in governmental authority, say like the Justice Department of the United States of America to make inquiry into this matter.

So I think that it is time for Lab Corporation of America to be honest with everyone and issue a press release to the media stating exactly what the amount of $200,000,000.00 represents to that company as it is related to the contract and the reason for its existence.

The answer will be just as I have already stated it. And I believe that Quest Diagnostics is at this point in time assuring the doctors with whom they now conduct business that the idea of re-directing that business “out of network” to Quest Diagnostics after the new year and allowing Quest Diagnostics the privilege of continuing to provide first rate service as they have always done will prove a simple and painless matter to the medical professional.

I believe that Quest Diagnostics has every intention of obtaining as much of that $200,000,000.00 figure from Lab Corporation of America as possible since some of that business might go to other worthy labs as well.

After that amount is depleted then Quest Diagnostics and others will be able to bill United Healthcare directly for any amount of charges permitted by law remaining beyond the initial $200,000,000.00.

The only thing that is a certainty in this situation is that Quest Diagnostics is clearly dedicated to making any transition of specimens out of network with specimen re-directed to Quest Diagnostics as transparent, painless and cost effective as possible for those doctors and medical facilities choosing to remain with Quest Diagnostics sans contract.

It is clear to me that Quest Diagnostics has every intention of continuing to resolve issues of concern to their clients and continuing to remain the
laboratory of choice for millions of Americans.

Snake Oil Sam
Snake Oil Sam Internet Media Publishing © 2006

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