Crain’s Health Pulse
April 3, 2013
HHC, North Shore-LIJ in Laboratory Joint Venture
Two behemoth health systems plan to collaborate on building one of the largest laboratories controlled by a hospital in the country. The lab would be located in New York City and jointly run by the North Shore-LIJ Health System and the city's Health and Hospitals Corp. HHC's board voted last month to approve a resolution allowing the system to enter negotiations with NS-LIJ on details of the joint venture.
The jointly controlled central lab would process routine tests for both hospital systems. It would be operated by a shared management team and staffed by about 700 employees. HHC said there would be no layoffs of current staffers. The system eventually would relocate 162 lab staffers to the new facility.
The public hospital system believes the project can save it $80 million over the first five years and $23 million annually after that. The proposed lab would begin operations in 2014 and would have the capacity to process about 20 million tests annually for HHC and NS-LIJ when fully implemented by 2018.
Under the joint venture agreement, HHC would consolidate its four core lab operations into the new lab, which eventually would process about half of all HHC lab tests. The current four HHC labs and an additional 12 rapid-response labs together perform about 15 million lab tests a year at a cost of about $233 million. HHC would keep its rapid-response labs for tests that require a turnaround of four hours or less.
In making a case for the joint venture at HHC's March board meeting, President Alan Aviles said in a statement that the lab would save millions of dollars "while increasing efficiency, standardizing best practices, and improving quality and depth of services."