LabCorp operates a nationwide network of testing locations and patient service centers. In addition they also work with hospitals and physician’s offices that give LabCorp the blood samples for testing. Laboratory Corporation of America is the official name of the company but it is more commonly known as LabCorp. It is a public company that is listed in the New York Stock Exchange, is part of the Standard and Poors 500 (S & P 500) and is a reference laboratory company that has grown rapidly through acquisitions and by being the lowest bidder to government contracts, HMOs and insurance companies.
Here’s how LabCorp was created in cronological order.
National Health Laboratories Incorporated began operations in 1978. It was a national blood and pathology laboratory owned by the Revlon Health Care Group. In 1988 National Health Laboratories became a publicly-traded company on the NASDAQ exchange. Revlon retained 24% ownership of the company. In 1990 the company’s revenues reached US$500 million and it had profits of over $70 million. The company began paying a cash dividend to its shareholders. In 1991 National Health Laboratories moved from the NASDAQ OTC exchange to the New York Stock Exchange.
In 1991 the company became embroiled in Operation “Labscam,” a nationwide crackdown on fraud in the health-care system, initiated by the U.S. Attorney’s Office in San Diego, California. The charges were that the company and others routinely submitted false claims to the government health-care agencies Medicare and Medicaid for unnecessary tests which physicians had never ordered. By 1992 it became the first of the companies to be prosecuted in the government operation.
The company settled with the government and paid $80 million in a settlement agreement with state and federal governments related to the LABSCAM investigation. The total payments made by National Health Laboratories in the settlement under the indictment came to $111 million that year, and ultimately $173 million.
On March 8, 1994 National Health Laboratories Inc. reorganized as a holding company called National Health Laboratories Holdings Inc. On May 4, 1994 the company announced that it would acquire Allied Clinical Laboratories, Inc. By the end of 1994 the company had run into financial difficulty as it struggled through the economic weakness. On April 28, 1995 National Health Laboratories Holdings Inc. merged with Roche Biomedical Laboratories, Inc. and changed its name to Laboratory Corporation of America Holdings. It began trading under its new New York Stock Exchange ticker symbol LH.
By 2000 LabCorp had generated revenues of $1.9 billion and had over 18,000 employees. By 2005 LabCorp’s revenues was over $3.3 Billion and in 2006 the revenues increased to $3.6 Billion. In 2007 revenues reached $4.1Billion.
Today it is one of the largest blood testing companies in the United States. They continue to grow by being the lowest bidder. Recently the company announced that they expect revenues to be impacted by the weak economy. In addition, the company has had employee and quality problems that have affected their goodwill with patients, doctors, medical centers and hospitals.