By Winthrop Quigley
Journal Staff Writer
The consultants made it sound so good, so logical in 1998.
The University of New Mexico, Presbyterian and St. Vincent hospitals would combine their laboratories, and in the process save money and even attract new markets.
TriCore Reference Laboratories was created, immediately becoming the 20th largest independent clinical laboratory in America. This year, it will process 3.4 million tests ranging from simple cholesterol checks to life-and-death time-critical enzyme tests for heart attack victims.
But the transition has been far from smooth.
Administrators and doctors at University and Presbyterian hospitals say TriCore is better than the alternatives: retaining separate labs or allowing a national lab to come in and take away local control and jobs.
And it just received a clean bill of health from accreditation inspectors.
But officials and doctors concede there have been problems.
There have been charges of declining patient care and inept management. E-mails by frustrated physicians and staff described long waits for tests, and some even suggested patients endangered by inaccurate testing.
Reports from lab technicians told of specimens left in lock boxes so long they were useless. Memos described patients misdiagnosed as having HIV and of blood improperly typed.
A woman undergoing chemotherapy was incorrectly told she was pregnant. A physician learned hours after he ordered a test that his patient had toxic levels of lithium in her blood.
The Journal recently reviewed dozens of documents, including financial statements, internal e-mails, memos and reports. They depicted a TriCore that was being criticized by those who use it.
For example:
* UNM Hospital physicians complained TriCore's computer system couldn't accurately report epidemiologic results to state health authorities as required by law.
* A UNM Hospital emergency room physician wrote that tests for meningitis and heart attack diagnosis from the lab were taking hours to reach him. "Furthermore, although our concerns are raised daily, nothing ever, seems to change," his Sept. 10 memo says.
* Amy Boule, a UNM Hospital administrator, wrote in an e-mail: "Our utilization is down, expenses are up. We have had a major service degradation ... and major quality degradation..."
* Mary Lipscomb, a TriCore board member and chairwoman of the UNM Medical School pathology department, wrote that UNM faculty "are working harder than they have ever worked before and since (joining TriCore) we have had an erosion of services, almost a meltdown in the residency program..."
As recently as October, some university pathologists proposed TriCore CEO Linda Cole be fired or that UNM withdraw from the company.
TriCore officials say merging the labs and creating TriCore was much more complicated than anticipated.
The taxable not-for-profit corporation employs nearly 700 employees at various sites in Albuquerque and Santa Fe.
"As the saying goes, the devil is in the details," said Steve McKernan, UNM Hospital chief executive officer and TriCore board chairman, of the complex transition.
Officials also blame many of TriCore's problems on the installation of a new computer system that Kathy Foucar, a pathologist with UNM Hospital, described as "basically pure pain."
TriCore and UNM insist that patient care has never been jeopardized and specific care problems have been fixed.
The TriCore board also has decided to hire a new chief medical officer to assist Cole and handle many of the management duties now taken care of by pathologists. Recruiting for the newly created position began this month.
"We think it is actually a very good operation and offers us at UNM tremendous opportunities as we move into the future," said McKernan of TriCore.
Lipscomb, who had criticized TriCore's operation in earlier memos, now says dramatic improvements have been made and that she supports Cole.
She said she and fellow doctors were often simply venting in their e-mails.
"All of the physicians that you're reading e-mails from are similar to me: They have a real scientific bent and they're very impatient people," she said.

Building a contender
TriCore was born July 1, 1998, into a treacherous competitive environment.
It was one of 4,900 independent clinical laboratories in the United States that year, which was 15 percent fewer than in 1996, according to industry research firm Washington G-2 Reports.
There were several reasons for its creation.
Presbyterian and St. Vincent already had built Reference Laboratory. UNM hoped the market talent at Reference Laboratory could sell the university's highly specialized laboratory capabilities into new, national markets.
Andrew Horvath, a Presbyterian-based pathologist and a member of TriCore's board, said Presbyterian hoped the merger would end its annual $1 million investment in laboratory capital equipment.
Meanwhile, UNM needed a new lab. The alternative to TriCore was to build a new $10 million laboratory two miles from the hospital, McKernan said.
"We thought this was a wonderful opportunity for our residents to learn a more modern pathology, a more modern laboratory medicine," said UNM's Lipscomb.
UNM, Presbyterian and St. Vincent all expected the merger to reduce their testing costs by a total of $22 million over five years, according to a 1998 news release.
They contributed cash, facilities and equipment to TriCore. UNM owned 51 percent, Presbyterian 43 percent and St. Vincent the rest.
TriCore's board is made up of representatives of the three owners.
TriCore took over operations of the Presbyterian and UNM hospital laboratories under management services contracts. The company established specialty laboratories within UNM and contracted with university pathologists for services. Reference Laboratory's Stanford NE facility became TriCore's core laboratory for high-volume testing. TriCore took over new office space on Lincoln NE near Interstate 25. The Reference Laboratory system of couriers who picked up and delivered specimens for testing became TriCore couriers.
Linda Cole, a microbiologist and CEO of SED Medical, a competing laboratory affiliated with St. Joseph Healthcare, was hired to run TriCore.

Trouble from the start
TriCore immediately started showing signs of stress. Cost per test, an important measure of operations, increased 13 percent between year-end 1998 and 1999, according to TriCore financial records.
The company lost $462,000 in 1999, and an October 2000 analysis projected it could lose $140,000 this year.
And it had one very ugly Y2K problem.
Without a Y2K bug, linking the computer systems of all the facilities would have been formidable, and it would have begun in 2000, Cole said. Due to the Y2K problem, Presbyterian's central laboratory management system wouldn't survive past Dec. 31, 1999.
Presbyterian went onto the new computer system, called Sunquest, in December 1999. UNM was brought on in May 2000.
The Sunquest installation caused "considerable difficulties" at Presbyterian, according to Horvath.
The computer conversion led to the temporary loss of important financial records that delayed TriCore's ability to send bills, Cole said.
It also led to longer waits for test results. Standards are set for the amount of time it should take to receive different test results. After the conversion, emergency room testing met those standards only 76 percent of the time, and electrolyte testing only 65 percent.
At about that time, the Joint Commission on Accreditation of Healthcare Organizations, a hospital accreditation group, received an anonymous letter that claimed the TriCore labs at UNM couldn't perform HIV testing properly and other testing was so slow it delayed patient care.
By late June, Richard Larson, a pathologist and director of one of the UNM labs, convened a meeting with other TriCore medical directors to sort things out.
"There is a very strong and unanimous belief among the medical directors that there is a staffing crisis ... . This crisis is effecting (sic) our ability to perform testing, increasing our error rate, and preventing us from performing basic (quality assurance and control)," Larson reported in a June 27 memo.
Larson declined to be interviewed for this story.
Another UNM pathologist, Tom Williams, questioned in a June 26 e-mail to Lipscomb and Foucar whether the university should continue in TriCore.
Williams said in a recent interview the lab's product is "information," and the computer installation was making the product much more difficult to deliver.
Foucar added, "That was the one thing we hugely, hugely underestimated was how complex this would be."
Even small things were hard. Tests for Presbyterian were done in slightly different ways from the tests at UNM, she said. Vocabularies were different: What one lab described as a purple-topped tube, the other called lavender. Certain tests had different names at the different labs, she said, and all of the differences had to somehow go into a common computer system.
Meanwhile, some TriCore operations suffered staffing shortages.
In one nontechnical area of the UNM laboratory alone, the staff was 12 people short.
To top it all off, the lab was, and remains, a construction zone. Drills and hammers resound all day, and black plastic drapes separate lab workers from construction workers.
Foucar described in an interview how staff would come to her small, windowless office that resounded with construction noise and would cry.
By August, Boule, a UNM Hospital administrator, in an e-mail expressed "serious concerns re: TriCore... . I don't sense any concern on their part for either financial or quality issues, and slight concern for service issues."
Boule declined to be interviewed for this story.
Lipscomb in a September memo to Foucar proposed three options: TriCore replace chief executive officer Cole, UNM Hospital pull out of TriCore or TriCore give Cole until June 30, 2001, to fix the problems.

Skeptics become believers
As dire as the scenario appeared just two months ago, Lipscomb and several others who expressed concerns insist the major problems have been solved — or are on the way to being solved.
Computer conversion is about complete, managed by a new information systems expert. And, Williams said, the new system is going to look good.
Emergency room testing now meets the time standards a solid 95 percent of the time, and electrolyte testing 94 percent, Cole said.
Cost per test increased another 2.8 percent by July 2000. But McKernan said UNM would have spent more if it continued to operate its lab independently.
UNM is forecast to pay TriCore $14 million for this year's services.
Cole said TriCore's costs make it "absolutely" competitive against other independent labs.
TriCore's new chief medical officer also will be chief operating officer, reporting to Cole, and will come from outside TriCore and its sponsors.
Foucar, a nationally known expert on the pathology of blood and bone marrow, will work to grow TriCore's hematopathology services for clients across the country, Cole said.
In November, the Joint Commission on Accreditation evaluated UNM Hospital and its labs and gave them a clean bill of health.
"I feel quite satisfied that those issues have really been well addressed," Lipscomb said.

ABQ Journal

-- Anonymous, December 24, 2000