Creating Value After a Reimbursement Cut

Dynamic Healthcare Solutions was engaged by private equity owners after CMS cut reimbursement materially for a primary service of this leading independent anatomical and dermatopathology lab company. The cuts significantly reduced the company’s EBITDA, erasing equity value and threating debt service. The company was an aggregation of high quality acquired regional labs and affiliated pathology practices that had not been integrated.

Action Steps

Elevated effective leaders at the company to key Operations, Finance and Sales positions

  • Identified KPIs and developed reports to raise awareness and accountability
  • Streamlined the organization to lower costs and be more productive
  • Created Medical Advisory Committees to engage doctors in optimizing quality and customer service levels and to share best practices
  • Created an Operations Advisory Committee of the best lab management teams and key corporate staff to identify best practices and promulgate them across the organization
  • Integrated to create one organization from many separate ones, developing a shared company identity and vibrant team culture
  • Centralized key corporate functions for efficiency, including Procurement, which introduced a common formulary to benefit from economies of scale
  • Developed from scratch a new, highly profitable line of business providing stored, de-identified tissue samples for pharmacy research
  • Identified stronger leadership for many lab operations and sales positions
  • Focused on optimizing the performance of each lab
  • Acquired and integrated into the group a number of additional labs, growing revenue and EBITDA and creating value


The company’s performance improved dramatically and resulted in the successful sale of the company to a strategic buyer with attractive returns for investors.