Sonic Healthcare acquires Propath, while PathGroup buys pathology consultants in other signs of a consolidating market

An estimated 80 pathologists will now work for larger pathology superlabs under the agreements, which will intensify competition for independent anatomical pathology groups

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Consolidation among anatomical pathology groups in private practice continues with news that two large regional pathology groups have decided to sell to larger pathology companies. The first announced transaction took place on December 16, 2021, when Sonic Healthcare of Sydney, Australia revealed that it had acquired Dallas-based ProPath. The sale price and other terms have not been announced.

The second transaction took place last month. On January 24, Nashville-based PathGroup announced that it had purchased Pathology Consultants of Greenville, SC Price and terms of that transaction were also not disclosed.

The consolidation of the pathology continues

The decision by two of the country’s leading regional pathology groups to sell themselves to larger pathology entities confirms that the consolidation trend continues within the pathology profession. It is also a sign that small pathology groups will find it increasingly difficult to compete and remain profitable as new technologies transform the profession of surgical pathology, such as digital pathology platforms.

ProPath was considered a financially strong regional supergroup, as it operates facilities in three states and has 50 pathologists and 500 employees. Sonic noted that ProPath’s annual revenue was around $110 million.

Sonic Healthcare has been a Major purchaser of anatomopathology practices in the United States. In early 2011 it bought Physicians Automated Laboratory, and just six weeks earlier acquired CBL Path for $123.5 million.

Sonic Healthcare also bought Aurora Diagnostics in 2018 for $540 million. This deal brought it 32 pathology practice sites and added 220 pathologists to its roster.

With its acquisition of Pathology Consultants, PathGroup adds 30 pathologists and 100 employees. Prior to this acquisition, PathGroup said it had 225 pathologists.

“We will continue to provide highly specialized pathology expertise, as well as a broad range of clinical and molecular pathology services,” said Ben Davis, CEO of PathGroup. MD, said of the acquisition of Pathology Consultants. (Photo copyright: ProPath)

Maintaining independence becomes more difficult

Pathologists will want to understand why two large regional pathology groups decided to give up their independence and sell to a bigger company. The reasons are many and include:

  • Need money to buy equity from retired baby boomer pathologist partners in group.
  • Challenges in recruiting new pathologists to the group.
  • Need for capital to acquire digital pathology capabilities and other necessary advanced diagnostic technologies.
  • Access to managed care contracts as private health plans continue to shrink their provider networks.

It should be noted that Pathology Residents and Graduate Fellows are tech-savvy and want to work in practices that have all the latest technology in histology, scanning, and digital pathology. This observation contributes to the consolidation of the market.

Michael Robert

Related Information:

Sonic Healthcare Acquires Texas-Based AP Company ProPath

PathGroup Acquires Pathology Consultants, Continuing Expansion in the Southeastern United States

Attention all surgical pathologists: Algorithms for automated primary diagnosis of digital pathology images likely to gain regulatory clearance in the near future

Sonic Healthcare buys clinical pathology laboratory company in California

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