by
John R. Fischer, Senior Reporter | August 16, 2023
Tufts Medicine selling lab business to Labcorp. (Photo courtesy of Tufts Medicine)
Tufts Medicine in Massachusetts is selling its laboratory business to Labcorp of North Carolina to avoid defaulting on an $800 million agreement with bondholders. The deal is poised to eliminate jobs for 600 people, but the health system expects most of them will be offered comparable positions with Labcorp.
Affected employees include 242 at Tufts Medical Center in Boston, 251 at Lowell General Hospital, and 81 at MelroseWakefield Hospital. The sale includes Tufts Medicine Outreach Laboratory business and some operating assets,
reported The Boston Globe.
A spokesperson for Tufts Medicine told HCB News they were "quite certain the majority of laboratory employees supporting ambulatory laboratory services will receive comparable job offers with Labcorp."
The sale is meant to create a potential larger strategic partnership that will expand patient specimen collection across Tufts Medicine's network.
The company has been exploring potential collaborations and sales like this, as well as outsourcing “non-core” aspects of the health system’s operations to tamp down expenses and accelerate revenue streams, says CEO Michael Dandorph. In early August, it announced a new partnership with Sturdy Health to increase access to comprehensive specialty care, starting with cardiovascular services.
Should Tufts Medicine fail to avoid a default by the end of September, bondholders have the option to bring in a third party to restructure the health system. NBC News
reported that its financial woes were partially due to the effects of COVID-19.
Back in January, the company laid off 70 employees and eliminated 170 unoccupied positions. It also implemented a partial hiring freeze on administrative jobs and brought in an independent consultant to improve its operations, including by using its new medical record system to refine its billing processes.
It is requesting additional funding from legislators and has opened 12 new medical and surgical beds at Tufts Medical Center and two new outpatient surgery centers in Medford and Chelmsford to bolster its revenue.
EDIT (8/16): A previous version of this article incorrectly stated that the sale would leave 600 people jobless. HCB News apologizes for the error.
