American Pathology Partners, Inc.: Thanasis Papaioanu, Chief Information Officer and Chief Development Officer

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As healthcare undergoes a paradigm shift of historical proportions, an underlying theme of partnership as opposed to ownership has taken over the traditional relationships of hospitals and physicians with ancillary health services.

American Pathology Partners, Inc., is an example of this partnership trend. With headquarters located in Brentwood, Tenn., AP2 was founded and capitalized in early 2008 and owns and operates local and regional anatomic pathology labs in partnership with pathologists.

Currently, AP2 has three primary partners—UniPath in Denver, Colo.; Eastern Carolina Pathology in Wilson, N.C.; and Palm Beach Pathology in West Palm Beach, Fla.

For the love of pathology

Thanasis Papaioanu, co-founder, chief information officer, and chief development officer of AP2, said that he and his original partner, Edward Dooling, were both lab professionals who loved every aspect of pathology from the clinical side to the business side to the various industry dynamics.

Based on their experience, they saw an opportunity to consolidate a very fragmented area of the healthcare sector and provide a better product than what the larger national labs were able to produce. This led to the development of the partnership model in which the business side and pathologists work collaboratively as partners as opposed to the more traditional model where pathologists are employees.

“We thought maybe it was an opportunity to marry what makes a national laboratory successful and a potent competitor with what makes a local lab successful and take the best of both worlds, and you have a laboratory where we can create more value for our physician clients and their patients as well as our pathologist partners,” Papaioanu said.

He added, “We describe ourselves as a nationwide network of laboratories with a local, regional, or super-regional focus.”

Once AP2 acquires a lab, that lab continues to operate under its original brand name, thus enabling the lab to maintain the identity it has already built up within its community or region. Papaioanu describes the approach as distributed and decentralized. AP2 supports its network laboratories from its “centers of excellence,” offering subspecialty services that are hard to replicate locally, such as flow cytometry or molecular diagnostics.

“We work with pathologists as partners,” Papaioanu said. “They are not employees. What we are trying to spread is independence. We want our pathologists to be independent, and we do not want to manage their affairs. They are separate self-managed entities, and it is a radical departure from what has been happening in our industry. We work with them very collaboratively in developing and organically growing the business after a transaction.”

In addition to clinical and technical support services, AP2 also provides business support services  to its partner labs. According to their website,,  partnering with AP2 gives that lab greater access to growth capital, sales and marketing, information technology services and support, senior management support, human resources, and a host of other services.

Founded on the heels of crisis

AP2 has taken risks from the beginning, and these risks have paid off in growth, despite the volatile nature of the economy during its 2008 founding. In fact, AP2’s first acquisition came in December 2008, mere months after the U.S. financial system had collapsed.

“We were very pleased that we were able to do that, and we are very happy with our investors that  have remained calm in the midst of a very difficult financial situation for everybody,” Papaioanu said. “And I think that speaks to the very solid business plan that we have put together.”

Currently, the biggest challenges AP2 is facing are internalization of pathology by specialists (e.g. urologists and gastroenterologists) and the uncertain reimbursement environment in healthcare.

Regardless, Papaioanu’s goal is to grow AP2 to a point where it covers the entire nation. In the next three to five years, he predicts that AP2 will have a nationwide footprint.

Devoted to their constituencies

In addition to providing support services for its lab partners, Papaioanu explained that AP2 has two additional constituencies—physician offices and hospitals. At this time, they have close to 16 hospital partners to whom they provide lab services, and for the tests that they don’t perform in-house, AP2 works with other laboratories.

“We are here to provide high-quality laboratory services,” Papaioanu said. “High quality does not just mean performing a test better. It means also providing a high level of service and a better user experience than what physicians and their staff have been accustomed to.”

AP2 exists, he said, to serve both physicians and hospitals. While most venture-backed laboratories in the industry focus on the outpatient market and physician offices, AP2 places a heavy emphasis on hospitals. Papaioanu said AP2 likes hospitals and is there to serve hospitals, viewing them as equally important as their physician-office business.

For Papaioanu and AP2, it’s about partnership for the sake of high-quality healthcare, no matter what the marketplace may bring. He is dedicated to his belief in the partnership model and passionately sees it as the doorway to the future.

“As a model, it’s not an easy model,” he said. “It’s like a marriage, working with a partner that you don’t have full control over. It’s a lot of give and take and you have to interact and relate in a different way than if they were employees. It’s more difficult, it takes more work, more effort, more energy, but at the same time, it’s a healthier situation for the pathologist, the business side, and ultimately, the clinician and their patients.”

-by Pete Fernbaugh

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