VISION AND MISSION STATEMENT

Health Line Clinical Laboratories will employ skillful professionals in laboratory science, engineering, information technology, sales and service provision and accounting to drive state-of-the-art systems that deliver timely, accurate, efficacious and cost-effective clinical laboratory testing services to medical professionals and their patients.





HISTORY

HLC has grown from it’s inception as one of the first new clinical laboratories to be licensed by the State of California and the U.S. Department of Health and Human Services pursuant to the implementation of regulations promulgated by the Clinical Laboratory Improvement Amendments of 1988 (CLIA), to become the largest and most-rapidly growing privately held commercial laboratory business in the State of California. The laboratory received its first California and federal CLIA license in September 1994 and soon began serving approximately 35 clients in central Los Angeles County from a 2500 sq. ft. office suite in the Media Center of Burbank, California. Insightful services such as custom panel design, reflexive test ordering algorithms as well as unique and innovative reporting systems, packaged with an unsurpassed level of personalized service spelled success from the outset.

Revolutions in information technology in the early 1990’s made possible tremendous strides in the capabilities of laboratory information systems (LIS) that not only packed enormous computing power in smaller and more cost-effective packages, but also made it possible for smaller computer systems to handle online real-time connectivity to a new era of more automated clinical laboratory instrumentation. For HLC, the timing was right to build a small, yet incredibly powerful laboratory facility that incorporated state-of-the-art instrumentation, connectivity that ensured quality while reducing labor and featured virtually all of the functions that multi-million dollar LIS systems in large laboratories boasted, but could also be implemented more flexibly. Cost-effectiveness, reduced layers of management and strong marketing potential for satisfying the needs of a demanding physician clientele were all fostered by newly emerging technologies that powered the early growth of HLC.

Given these substantial roots, HLC never lost that drive to be on the cutting edge of new technology. HLC was among the first providers of amplified DNA probe assays for sexually transmitted diseases in California. HLC has been the proving ground for many of today’s most powerful analytical equipment and has continually been an industry leader in reporting technologies. HLC was the first clinical laboratory in California to pioneer Internet delivery of laboratory report data with interactive interpretive information to physicians and their patients.

Maintaining our leadership role in laboratory reporting technology has been a key factor in our success by providing a powerful tool to support the back-end logistics necessary to deliver competitive turnaround of reports as well as enabling a unique service for business differentiation. Interactive graphical display of result data via the Internet, supported by substantial test interpretation and correlation content, supplied a unique platform that enhanced physician-patient communication and provided a valuable new marketing tool. Use of the Internet to generate an transmit orders for clinical laboratory testing, first offered in 1999, have now been substantially enhanced to make systems faster, logically more powerful and useful for clients, while tremendously improving internal operating efficiency by eliminating on-site data entry in the laboratory, while reducing medical errors and the downstream labor necessary to interact with the client to rectify problems or supply missing billing or demographic information needed to complete the billing process.

By May of 1997, HLC had expanded its geographical service boundaries throughout Southern California and the growth of the business necessitated moving clinical operations to a 12,000 sq.ft. commercial facility one block from the Burbank, Glendale, Pasadena Municipal Airport, a move vitally important to future growth. The Burbank Airport is a small, easily accessible facility that is a major hub for independent commercial air couriers as well as a few major public airlines. Within minutes, samples arriving from virtually any part of California can be delivered directly to the processing department in our central facility and, within a few hours, automated testing can be completed. These logistics made possible geographic expansion progressing first from the San Joaquin Valley beginning in 1997 with the opening of patient service centers in Bakersfield and Fresno. Two years later, in 1999, our geographic expansion in central California brought us into the Sacramento area where well-placed patient service centers in Sacramento, Carmichael and Roseville provided the infrastructure to support efficient provision of services to new clients throughout the central valleys. In 2001, HLC began its northern California expansion into the San Francisco Bay Area, concentrating first in the City of San Francisco, expanding into the Peninsula with patient service centers in the San Jose area in 2002.

Simultaneous with geographical expansion, test repertoire was expanding dramatically and new technologies were being incorporated to meet client demand for improved turnaround of more esoteric test procedures. In 2000, HLC began developing its molecular biology facility that would enable expansion of genomic testing to include polymerase chain reaction (PCR) testing for DNA amplification and detection. Focusing initially on detection and quantification of infectious disease (HIV, hepatitis C and hepatitis B viral nucleic acids), expansion into significant human gene-based inherited disease detection is progressing rapidly. Developing and mastering these technologies is vital to continued expansion in testing repertoire, since genomic testing represents the most significant growth opportunity ever seen in the clinical laboratory industry. In May, 2004, HLC was designated a Molecular Center of Excellence by Roche Molecular Systems, worldwide patent holder for polymerase chain reaction (PCR), the most widely utilized genomic technology in the world today.

HLC net revenue increased 96% from 1999 to 2000 and an additional 65% in 2001. All growth has been organic growth since our inception. No acquisitions of other laboratory businesses have boosted net revenue numbers, speaking largely to the success of our internal growth strategies of measured geographic expansion with internal testing repertoire growth to maintain technological advantage. HLC had deservedly earned the title of the fastest-growing major clinical laboratory service provider in California.

In 2002, our continued success once again necessitated a physical move of our central testing facility. Mindful of the importance of logistics in our ability to serve a geographically disbursed clientele, we selected a 66,000 sq. ft. facility nestled next to the Interstate 5 freeway a few blocks from the Burbank Bob Hope Airport as our new central laboratory. Dr. Shoji Maruyama, a world-renown expert in laboratory automation has joined our management team as Vice President of Technical Engineering to design and coordinate the retooling of this new facility into a showcase for laboratory automation, efficiency and cost-effective quality laboratory production. We have also expanded service provision to Arizona with the establishment of several patient service centers in the Phoenix area.

New technologies to identify genes associated with inherited diseases such as cystic fibrosis, allowing prospective parents to determine their risk of bearing afflicted offspring and provide alternative that should significantly reduce the incidence of these diseases and the human loss, pain and suffering which they cause, as well as powerful new diagnostic procedures for difficult-to-diagnose sexually transmitted diseases caused by the Herpes simplex virus, types I and II, were successfully launched in 2004.

The 2004 fiscal year also brought significant cutbacks in reimbursement for laboratory service providers in California. Medi-Cal, the Medicaid system for the State of California, has revised reimbursement schedules, eliminated coverage for certain test procedures and limited the frequency that specific tests may be ordered resulting in reductions in excess of 25% statewide. Scheduled Medicare reimbursement increases have been scrapped and replace with a five-year moratorium on fee increases for laboratory service providers. Private insurance companies continue to demand pricing equivalent to the dropping fees of the public indemnity programs. All of these features have forced significant cutbacks in Health Lines prior growth plans.


FUTURE

Our dedication to providing direct, personalized customer service, innovation in process engineering and incorporating and enhancing new technologies has been the formula for success at HLC.

Genomic testing that can predict the success of drug treatment regimens for HIV-1 and hepatitis C through genotyping techniques will also bolster new test offerings. Gene sequencing technologies associated with genotyping studies will also bear significant scientific fruit for the future.

Finally, the Information Technology field offers many opportunities for Health Line to provide unique and exciting new avenues for clinical laboratory reporting, ordering, interpretation and information sharing with an increasingly demanding public. Health Line has now deployed its SNAP computer systems to receive, print, archive and retrieve long-term laboratory data while simultaneously expanding its Internet objectives with on-line ordering, diagnostic medical necessity reviews, automated ABN form generation and eligibility checking will soon be the wave of the future in laboratory services.