Foundation for Blood Research closing its doors
Photo / Tim Greenway
Jane Sheehan, president and CEO of the Scarborough-based Foundation for Blood Research, in one of the labs with Vladimir Koulchin of Chemonex LLC, left, and William Palin, a trustee and scientific director at FBR. Hospital mergers led to a loss of traditional physician and small hospital clients, forcing FBR to close its doors on June 30.
The Foundation for Blood Research, a small, independent and nonprofit blood laboratory that served physicians and small hospitals in Maine for 43 years, closed its doors June 30, as noted on its website, and will auction its land and buildings on Aug. 10, President and CEO Jane Sheehan told Mainebiz.
“We’re like the little local hardware store when Walmart moved into town,” Sheehan told Mainebiz Wednesday before an auction was to be held for FBR’s furniture and laboratory equipment.
Sheehan pointed to the absorption of small hospitals and physicians by large hospitals, and the subsequent move of laboratory testing into those merged facilities, as the main reason for FBR’s demise, which started about five years ago with the health care merger and acquisition trend. Another drag on income was lower reimbursement rates for blood tests due to the Affordable Care Act.
“MaineHealth and others took over small hospitals. They hired physicians who were our customers and moved laboratories into the large hospitals. They bypassed us,” Sheehan said. One example she gave was NorDx, the largest regional laboratory in the state, becoming an integral part of MaineHealth.
The downslide for FBR reached critical mass about one year ago, when FBR could no longer live off of its reserves.
“It was disappointing when it started four to five years ago and we couldn’t get in front of it,” she said.
Diversification too late?
FBR did try to diversify by setting up collaborations and offering space to small biotechnology companies. Mainebiz wrote about its efforts to establish incubator space in April 2015.
Sheehan said the two companies that were in the incubator space already have found alternate space.
FBR is down to a skeleton crew from its maximum employment of 64, with some finding new jobs in the same field, she said. The rest left by attrition over the five-year slowdown.
“We didn’t want to go into bankruptcy. We wanted to have an orderly closing, so we slowly downsized over the past year,” she said. Sheehan, who will be 75 in February, said she will retire, but will do volunteer work. She also has kept her law license active.
Auctioning assets
FBR had tried to sell its building through CBRE | The Boulos Company over the last four months for $1.995 million, but has now decided to auction the 12.9 acres and one large and one small building it owns through Tanzon Auction Properties on Aug. 10 through a reserve auction. FBR’s board is meeting Thursday night to try to establish a minimum price for the closed auction.
Any extra proceeds beyond the lab’s liabilities will go to a similar nonprofit.
Sheehan noted that while FBR was the last independent lab left in the state, there has been a national trend over the past few years for small, independent labs to close, and large labs like LabCorp, Quest Diagnostics and the Mayo Clinic to take over their business. The Mayo Clinic, she said, even moved its smaller Massachusetts lab to its Minnesota headquarters.
She said she sees a big downside in the trend toward large laboratories, because they typically will send blood samples out of state to be processed.
“People came to us because they could always call and get a live person to help walk them through the test results,” she said, adding that even with the mergers and acquisitions, previous physician clients tried to send work FBR’s way. “We’ve been overwhelmed by the number of notes and emails we’ve received.”
“We’re trying to go out on a high note,” she said. “The world around us has changed and we have to move on.”
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