A ‘Mess’: Inside the Fallout of Optum’s Local Lab Deal with Quest

In Aftermath of CEO Murder, Let’s Condemn Violence and Seek Solutions

This is the 18th installment in an investigative series, launched in December 2022, about CareMount/Optum/UnitedHealth and broader concerns about corporate medical care.

By Adam Stone

It’s been exactly two years since I began reporting on how corporate medicine, viewed through the lens of Optum – a UnitedHealth Group subsidiary that acquired CareMount – has reshaped our local health care and transformed systems nationwide.

Even though I had to pause the series in May, stepping back from its roughly monthly rhythm to meet the daily demands of publishing print and digital community newspapers, I’ve felt the pull to return to this work often.

Never was that tug as strong as when news broke of UnitedHealthcare CEO Brian Thompson’s ruthless assassination earlier this month – and the disheartening approval it seemed to garner in certain circles, despite the meaningful dialogue that has also separately ensued in other quarters.

I’ll unpack all of that in a few moments.

I’ve learned a lot in the reporting process, since December 2022, including some personal insights I’ll close with at the tail end of this piece.

It’s also been encouraging to see area Optum leaders making what seems to be a genuine effort to improve local care, despite dark systemic forces lurking in the background.

But as 2024 reaches its breathless conclusion, let’s begin Chapter 18 of the series with a local scene from this past summer, when Optum lab workers in our area were receiving encouraging news.

Vision Quest

Long-sought after raises were possibly coming, with management appearing to acknowledge the need for staff to be paid higher wages, medical insiders told me.

The Optum Tri-State chief operations officer even indicated the process was near the finish line, sources stressed.

After roughly six-plus months of conversation, it looked like at least Mount Kisco lab workers would receive the pay hikes, if not staff at other area facilities.

Sources also note how Optum had been pursuing “Project Oz” – plans to construct a large new lab to replace the Brewster and Mount Kisco facilities, with weekly conference calls and planning. (I reviewed internal memos from late August that make detailed reference to project plans.)

Then, in late September, the employees were startled by an abrupt 180-degree turn in plans.

Instead of raises, staff learned the lab services were being sold off to Quest Diagnostics, and the region’s facilities would be closed by March.

I reviewed internal correspondence from the summer where at least one local manager expressed general agreement on the value of the raises, and the strength of the staff, while not yet promising a result.

(Insiders requested anonymity in interviews for this column to speak freely and avoid retribution.)

‘It’s a Mess’

Initially, in late September, lab workers say they were told that the transaction would mean all the facilities would be closing (and their jobs terminated) at locations including Monroe and Middletown (Crystal Run/Optum), Brewster and Mount Kisco (CareMount/Optum) and an Optum site in Lake Success.

However, a day after Optum shared the news widely with staff on Sept. 30, Quest, on Oct. 1, said it would be continuing operations at least in the pathology lab at 110 S. Bedford Rd. Mount Kisco, under its AmeriPath banner, sources said.

Those 15 or so Mount Kisco workers were suddenly offered jobs.

“But because of the confusion and the uncertainty about half of them have left,” an insider told me.

As a result, about 80 percent of the specimens are not currently being processed in Mount Kisco, sources estimated.

(Quest Diagnostics, a Fortune 500 clinical laboratory powerhouse with a market capitalization of about $17.3 billion – boasting 2,250-plus locations nationwide – bills itself as the world’s leading provider of diagnostic information services.)

A source characterized the aftermath of the lab deal as a “fiasco,” stating how “Optum got $300 (million) and it’s a mess.”

Although the local health care professionals I interviewed couldn’t speak with authority on the circumstances that led up to the deal, theories do abound.

One common source of speculation revolves around the apparent deep discontent among corporate brass over Brewster lab workers successfully unionizing last year, and the surge of organizing it seemed to help spur among personnel at other buildings across the region.

I asked a doctor source, through a trusted intermediary, about his general reaction to the lab deal, and he referenced the local organizing effort, totally unsolicited.

“People are saying they sold the lab as a retaliation for the staff going union,” the veteran area physician stated. “I’m not sure that’s something that can be proven, but that’s what the word on the street is.”

Power to the ‘People’

My Examiner colleague Martin Wilbur, our editor-in-chief, reported in October how Optum’s decision to sell its unionized Brewster laboratory to Quest, and lay off 75 workers, had sparked accusations of union-busting by the $500 billion multinational giant.

The sale was “motivated by the company’s desire to avoid its legal obligation to bargain in good faith,” Greg Speller, executive vice president for 1199SEIU, asserted in a statement at the time.

The Brewster union was new and seemed to represent a broader threat to corporate interests.

Initially, in March 2023, the vote to unionize in Brewster narrowly failed, as workers say they were under pressure via repeated visits from corporate types identified by Optum only as the “People Team.”

Unidentified corporate officials would “hover around us in our work space asking us questions,” according to Sarah Bocker, a medical technologist and one of the laid off workers, as quoted in our October news report.

But on Nov. 29, 2023, medical technicians at the Optum Medical Care in Brewster voted 51-22 to unionize with 1199SEIU United Healthcare Workers East, securing union representation at the facility.

I reached out to an Optum spokesperson to seek the company’s perspective who ultimately directed me to remarks the organization previously issued for our mid-October news article.

“We regularly evaluate our business so we can best meet the needs of our customers and patients and deliver on strategic priorities,” the statement read. “As a result, we decided to transition our laboratory testing services to Quest Diagnostics – consistent with industry best practices. Both companies are committed to ensuring a smooth transition for team members and patients. It’s important to note we have exited other businesses this year, which were not represented by a union.”

State of Play

While sources couldn’t confirm motivations around the deal with any certainty, the insiders were able to speak with better firsthand authority on the fallout from the transaction.

Given the possibly hasty nature of the deal, full due diligence to ensure a smooth transition on behalf of local patients was not properly prioritized, observers asserted.

“Computer systems were not being all set up correctly, so orders are not flowing correctly,” a source remarked. “Pretty much everything that could be a mess is a mess.”

The vast majority of the lab work is now being sent to a Quest location in Clifton, N.J., stakeholders also noted. Some specimens are being shipped to other Quest labs in Tennessee, Ohio and Connecticut.

Optum’s Brewster location handled clinical pathology and Mount Kisco focused on anatomic pathology, but the Clifton location, which offers both, lacks the capacity to manage the increased biopsy volume.

Because Clifton can’t accommodate certain necessary specialties, samples must be sent to labs in locations such as Shelton, Conn., Cleveland and Memphis, Tenn. for specific tests like hematopathology and dermatopathology.

‘Emotional Perspective’

Sources spoke highly of Quest’s competency and said those out-of-state labs are probably more than adequate facilities with highly capable staff.

But an insider described the type of reaction health care workers are now hearing from doctors: “‘Where’s my result? Where’s my result? I have an appointment with this patient tomorrow and I still don’t have the report back and it’s been 10 days.’”

Lab test results, before the deal, were usually delivered to patients within just five days, sometimes less, sources said.

“A couple of days in delay in treating cancer is not really a big deal from a medical perspective, but I think from an emotional perspective it doesn’t feel great,” a person within the organization observed.

I also reviewed a company e-mail thread from last Thursday detailing new internal concerns over delays in obtaining timely pathology reports following the deal.

The conversation includes a message from an office manager at Lake Success Gastroenterology (an Optum location now operating under Quest) who requested assistance with “several pathology timing concerns” and sought to escalate the issue for resolution.

Core Strength

Taking the deal at face value, there’s also Optum’s stated desire to focus on delivering medical care while relying on an expert to handle diagnostic testing more efficiently.

An internal Optum Tri-State company e-mail, dated Sept. 30, announced the decision to transition the region’s lab testing services to Quest.

“This decision aligns our core focus of medical care delivery with a diagnostic testing industry expert that can scale and meet our evolving needs,” stated the message from the local organization’s leadership.

However, the Optum Tri-State leadership team ultimately started hearing about the problems over turnaround times.

In fact, I reviewed a company correspondence from earlier this month referencing a local executive’s efforts to contact Quest about the service issues.

Verdict Out

I located a New York State Department of Health (DOH) record detailing Quest’s acquisition of local lab services from Collaborative Care Holdings, LLC, a subsidiary of UnitedHealth Group.

Notice of the proposed transaction was received by the DOH on Aug. 28.

Both sides claim the deal will improve costs, quality, equity, and access.

“The Parties indicate they do not anticipate any adverse impact on patients,” the document states.

Hopefully that assertion proves true in the long term.

But the following should also be emphasized: it must be nearly impossible – even for the most well-intentioned, thoughtful and savvy medical executives – to steer one of these hulking medical ships in a way that truly prioritizes the interests of people, especially when the vessel operates within the larger framework of the United States’ profits-over-patients corporate sick care system.

The challenges run far deeper than the decisions or intentions of individual local executives who might very well be carrying out their responsibilities effectively and thoughtfully.

CEO Murder

As for the heinous execution-style murder of Thompson on Dec. 4 outside the New York Hilton Midtown, I’ll start with some context.

In my October column, written before his killing, I referenced the widely reported allegations he and other top executives faced over insider trading.

In an earlier Stone’s Throw column published on Feb. 26, I was the first to reveal that the Department of Justice had notified UnitedHealth of a new nonpublic antitrust investigation in October of last year – a fact I’d discovered and confirmed through local sources and documents.

The Wall Street Journal expanded on our scoop in a front-page piece the next day, citing my initial reporting.

Concealing information about the antitrust probe from investors and the public, top executives allegedly took immediate action after learning of the inquiry last October, selling more than $120 million of their own UnitedHealth stock at artificially inflated prices as the market remained unaware of the new investigation.

In fact, on Oct. 4, the California Public Employees’ Retirement System (CalPERS) – the nation’s largest state public pension fund, managing more than $500 billion in assets for more than two million members – filed an amended complaint against UnitedHealth, referencing our journalism, and the reporting of The Wall Street Journal and others, to help corroborate various claims.

Court of Public Opinion

But as I stressed in two Examiner+ e-mail newsletters earlier this month, I find not only the crime perpetrated against Thompson to be unambiguously abhorrent. I am also deeply disturbed by our apparent collective loss of humanity, as so many voices implicitly (or explicitly) endorse vigilante violence.

Additionally, viewing this corporate care crisis solely as the work of a few cartoon villains is both wrong and misses the point – there are complex dynamics at play, and oversimplifying the narrative lets systemic forces off the hook.

And no, the slaughter is not justified because it “started a conversation.”

The perpetrator of Thompson’s cold-blooded killing is a murderer, and must be held accountable not just by a court of law, but also in the court of opinion, if we wish to live in a just society.

To excuse murder, no matter the grievances against the victim, is to abandon the moral foundation that makes justice possible, replacing accountability with chaos and reason with barbarity.

There’s no rhetorical “but” to add to the total vilification of violence.

Yet there obviously is an “and.”

And…

It is also true that corporate policies employed by the likes of United (whose market capitalization rivals the GDPs of many mid-sized nations) contribute directly to preventable deaths by denying critical care and necessary treatments.

Is some level of care rationing inevitable in any system, public or private? Certainly – it’s a harsh but unavoidable reality of limited resources, like a triage station on a battlefield.

But do these cold corporate entities cross and then obliterate the line, leveraging vast power to maximize profits at the expense of those most in need?

Yes, of course.

Countless social media posts in recent weeks have highlighted the harsh reality.

For instance, one patient published a plea that CNN’s Jake Tapper later reshared: “I’m at a cancer treatment center getting my 27th dose of radiation. My doctor recommends 35. @UHC refuses to pay for more than 28. This is my Hail Mary to hopefully get them to reconsider.”

(A quick PSA for patients: One tactic to challenge such denials is to request the reviewing doctor’s qualifications, the evidence used to deny the claim and data on similar cases, sometimes getting insurers to reconsider.)

Really Old School

While it’s impossible to strip the conversation of ideological debate, I’ve personally come to conclude that a complementary component to systematic health care reform is already within our hands – individual health care reform, if you will.

While I’ve dabbled with various mindfulness techniques this year as part of a personal and journalistic exploration, I’m particularly excited about what’s on deck: next month, I’ll begin the first of four local training sessions in Transcendental Meditation, or TM.

The technique itself (with ancient Indian roots) is heartily endorsed by modern medicine in hundreds of scientific papers, proven to help reduce blood pressure, lower stress, boost energy, improve sleep and enhance brain function.

A practice now embraced by millions worldwide, it helps people calm the turbulent waves of their thoughts.

It usually delivers calming effects immediately, with profound changes in three months or far less.

Given that chronic stress is a proven killer, this practice can be lifesaving.

Sick Care to Health Care

Here locally, the Westchester/Katonah TM Center supports medical personnel at area medical institutions including nonprofit Northern Westchester Hospital (which remains a community gem, led by its incredible Executive Director Derek Anderson), helping health care workers reduce stress levels.

There’s even a push – spearheaded by the David Lynch Foundation, a group dedicated to promoting Transcendental Meditation – to establish TM as a reimbursable medical intervention through private and public insurance providers, aiming to make it free for people suffering from stress-related disorders.

Why won’t insurance cover a treatment that works with no side effects?

This type of change can’t come soon enough.

Alternative care columns I’ve previously penned (on subjects ranging from the medicinal use of cannabis and psilocybin to the power of energy healing through practices such as Reiki) helped me better understand what holistic care can truly look like in the future, if we combine the best of the West with the best of the East.

An American medical care system that better incentivizes healthy living, like in Japan where the average life expectancy is about 85 years compared to approximately 78 in the United States, could focus on proactive health care and wellness, not just sick care and pills for disease.

Achieving positive, systemic change in the U.S. medical industry will be a long and arduous journey.

But a clear path to personal health care reform lies right in front of us.

I’ll keep you posted.

Adam Stone is the publisher of Examiner Media.