John Muir Health is selling its MuirLab clinical lab business, largely concentrated in Contra Costa, Alameda and Solano counties, resulting in the loss of 540 jobs, company officials said Thursday.
The company expects about 150 of those laid-off workers, maybe more, to be hired back by MuirLab's buyer, Laboratory Corporation of America, known as LabCorp. But MuirLab's 56,000-square-foot main lab in Concord, opened in 2008 at 5003 Commercial Circle, will close its doors, spokesman Ben Drew said. The sale is expected to be completed in early November.
Operation of 26 MuirLab "draw stations" throughout the three counties and other parts of Northern California will be transferred to LabCorp. John Muir, which operates hospitals in Walnut Creek and Concord, will continue to own and operate its two hospital-based labs, Drew said.
"Our MuirLab employees have been valuable members of the John Muir Health family, and we will do everything we can to help those not offered a position to find a new job," said Cal Knight, president and CEO of John Muir Health. "Our decisions are not a reflection of their work; rather they are driven by the realities of the lab services market and the broader health care industry."
Terms of the deal were not disclosed.
John Muir Health will offer severance packages to laid-off employees even if they accept a job with LabCorp, Drew said. The system also has plans to assist workers in finding new employment.
The lab services industry has seen significant competition among large companies offering "a broader array of services at a much cheaper price," Drew said.
"Physicians and patients have frequently complained about MuirLab's pricing," Knight said. "This agreement will lower patients' out-of-pocket expenses and advance John Muir Health's efforts to deliver high-quality care at an affordable cost."
In 2012, MuirLab processed more than 2.7 million lab tests.
LabCorp, which has more than 1,800 draw stations across the country, processes about 470,000 patient tests each day and already has infrastructure in place in the Bay Area, Drew said.
Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.