John Muir Health Sells Clinical Laboratory Outreach Services to LabCorp
Health system also plans to close core MuirLab facility in Concord and will no
longer provide clinical lab services to skilled nursing facilities.
WALNUT CREEK, Calif. -- September 4, 2013
John Muir Health has signed a definitive agreement to sell its clinical
laboratory outreach business (provided through MuirLab) to Laboratory
Corporation of America® (LabCorp®). The transaction is scheduled to close in
the fourth quarter.
Under the terms of the agreement, operation of 26 MuirLab Patient Service
Centers (PSCs) or draw stations throughout Contra Costa, Alameda and Solano
counties and other parts of Northern California will be transferred to
LabCorp, as well as the reference lab services MuirLab provides to other local
physicians and hospitals. LabCorp will also serve as the preferred provider of
reference lab services for John Muir Health and its affiliates. The
transaction with LabCorp does not impact John Muir Health’s two hospital-based
labs, which will continue to be owned and operated by the health system.
"With this sale, our patients will gain access to the broader range of
services and lower prices offered by LabCorp,” said Cal Knight, president and
CEO of John Muir Health. "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."
Upon completion of the transaction, John Muir Health will close MuirLab’s
56,000 sq. ft. core lab in Concord at 5003 Commercial Circle. In addition,
John Muir Health will no longer provide lab services through MuirLab to
skilled nursing facilities.
“These decisions allow us to redirect financial resources that were needed to
support MuirLab into other strategic initiatives that position us for future
growth and help us meet the short- and long-term needs of our patients and the
communities we serve,” said Knight. “It also allows patients to continue to
have convenient access to high-quality lab services through LabCorp.”
LabCorp, which has over 1,800 PSCs throughout the country and processes tests
on approximately 470,000 patient specimens each day, has the existing
infrastructure and capacity locally to absorb the increase in lab work that
will result from acquisition of MuirLab’s outreach business. Upon close ofthe
transaction, some MuirLab employees will have an opportunity to work at
John Muir Health will offer severance packages to impacted MuirLab employees
whether or not they take a job with LabCorp. The health system’s Human
Resources Department has also planned a variety of activities to assist
displaced MuirLab employees in locating employment, including continuing
education programs, outplacement workshops and job fairs.
“Our MuirLab employees have been valuable members of the John Muir Health
family and we will do everything we can to help those not offered a position
to find a new job,” said Knight. “Our decisions are not a reflection of their
work; rather they are driven by the realities of the lab services market and
the broader health care industry.”
John Muir Health started its lab outreach business in 1994 with the MuirLab
facility on Commercial Circle opening in 2008. In 2012, MuirLab processed more
than 2.7 million lab tests.
Hammond Hanlon Camp LLC (“H2C”) acted as the exclusive financial advisor to
John Muir Health on the transaction. H2C is an independent strategic advisory
and investment banking firm serving clients across the country, with an
exclusive focus on health care services and related organizations.
About John Muir Health
John Muir Health is a nationally recognized, not-for-profit health care
organization east of San Francisco serving patients in Contra Costa, eastern
Alameda and southern Solano Counties. It includes a network of 950 primary
care and specialty physicians, more than 6,000 employees, medical centers in
Concord and Walnut Creek, including the county’s only trauma center, and a
Behavioral Health Center. The health system also offers a full-range of
medical services, including primary care, outpatient, lab and imaging
services, and is widely recognized as a leader in many specialties –
neurosciences, orthopedic, cancer, cardiovascular, trauma, emergency and
high-risk obstetrics care. For more information, visit johnmuirhealth.com.
John Muir Health
Ben Drew, 925-947-5387
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