Case Study

Stanford University Health System

The Client
Part of Stanford Medicine, Stanford University Health System is a leading academic health system and one of the top sources of patient care in the nation. The system is recognized for providing leading clinical innovation across inpatient services, specialty health centers, physician offices, virtual care offerings and health plan programs. They are renowned for breakthroughs in treating cancer, heart disease, brain disorders and surgical and medical conditions.

The Challenge
Stanford University Health System had made aggressive strides to enter the outreach market in the greater San Francisco area. Besides building a state-of-the-art 78,000 square foot lab, the university system had opened 55 patient service centers and entered a managed care contract at pennies on the dollar. The efforts had escalated spending to an unsustainable annual run rate loss of $53 million.

Stanford called in Colaborate to perform a financial turnaround.

The Success
Colaborate began by assessing the scope of the issue. We took over duties as interim lab director, and our immediate priority was to address the losses. Within 90 days, we had resolved the run rate loss and listed the outreach business for sale. Colaborate was able to help Stanford University Health System sell the business line to LabCorp for more than $30 Million.

Once we had assisted in the handoff of the business to LabCorp, we turned the focus to making repatriations of specific tests and to employing best practices for running the hospital lab. Colaborate served as interim lab director for 15 months.

In 2017, U.S. News & Report named Stanford Health System one of the top 10 hospitals in the nation, based on outstanding performance in quality, patient safety, and reputation. They remain one of the best performing labs in the Colaborate academic medical center database.

“We were losing a million dollars a week on our lab ventures when we brought in Colaborate. Within 90 days, we were breakeven; shortly thereafter, Colaborate jettisoned the business to a strategic buyer for more than $30 million.”

- Jerry Maki, Stanford University

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