Jul 24, 2008

Stanford puts lab on the market

300 employees being laid off, union says

By Kristina Peterson / Daily News Staff Writer

After moving hundreds of employees into a gleaming, state-of-the-art Palo Alto laboratory roughly a year and a half ago, Stanford Hospital is selling the facility and more than 300 workers could be laid off, officials said Wednesday.

Stanford spokesman Gary Migdol said Wednesday he expects to be able to announce the completion of the sale "in the near future."

Between 300 and 350 employees will lose their jobs after receiving notices 60 days ago, said Myriam Escamilla, an assistant trustee with United Healthcare Workers, the local union that represents Stanford Hospital employees. Migdol said he wasn't able to confirm that number with Stanford's human resources department on Wednesday.

"Right now things are very difficult," Escamilla said. "There's a huge sentiment of betrayal."

It was only in February 2007 that Stanford transferred many of its lab services into an expanded, "world class" 76,000-square-foot clinical laboratory at 3375 Hillview Ave. in Palo Alto, according to a special May 2007 edition of the Stanford "Lab Letter" titled "The Future is Now."

At the state-of-the-art facility, employees perform basic lab tests, such as blood cell counts and urinalyses, and specialized services like surgical pathology, according to the newsletter.

The lab was expanded to handle not only lab tests for Stanford hospitals, but also for many area clinics, private health care plans and government agencies, including Medicare and Medi-Cal, that send out their samples for analysis, according to the lab's Web site.

"Our new spacious laboratory features integrated operations and automated systems providing increased efficiency, precision, productivity and quality," the newsletter stated.

When employees were transferred from their old offices on the Stanford Hospital campus to the Hillview lab, they were asked to give up union membership, said Escamilla, who estimated that roughly 100 of the employees transferred were union workers who rescinded their membership.

At the time, Stanford projected huge revenues coming from the lab and "made promises of great success and fortune," Escamilla said.

But just over a year later, Stanford Hospital Chief Operating Officer Mike Peterson and Lucile Packard Children's Hospital Chief Operating Officer Susan Flanagan sent a March 10 e-mail to all employees of both hospitals announcing "a very difficult decision" to sell the lab's basic testing activities.

The hospital will continue operating its specialized services at Stanford Hospital, Migdol said.

"There have been concerns about the financial viability of the Outreach Lab. After several years of net losses, (Stanford Hospital and Clinics) had to make the tough decision to attempt to sell the basic part of the outreach business," Peterson and Flanagan wrote.

Migdol said the sale will not impact Stanford patients, as the lab will continue to provide tests for Stanford patients. He said outside companies relying on Stanford's lab services should be able to find another provider.

"Because of the number of companies providing high-volume laboratory services at competitive costs nationally, we are confident that our clients will be able to identify other providers," Migdol said in an e-mail. He said the lab's potential buyer will likely provide basic lab testing services as well.

The new owner also may retain some of the lab's present employees, Migdol said. Others may be placed in other hospital lab positions, he said.

But he confirmed that the sale "will affect the employment status of some laboratory employees."

Because the employees are no longer union members, the union cannot advocate for them, Escamilla said. She said many of the workers are doubtful they will be able to quickly land new jobs in the tumultuous economy.

"It's a tight market right now," she said.



E-mail Kristina Peterson at kpeterson@dailynewsgroup.com.