Loss of Hawaii’s
only genetics lab
causes a stir

It is another 'mom-and-pop'
operation unable to compete
with a big mainland firm

By Helen Altonn
Star-Bulletin

The closure of Kapiolani Health's genetic research laboratory has stirred controversy.

The cost-cutting move caused layoffs here, and its implications for the local medical community are still being debated.

Hawaii's only facility for general genetic testing and research was sold earlier this year to California-based Genzyme Corp. Twelve local employees, including director Tim Donlon, were laid off.

Dr. David Arakaki, senior cytogeneticist who founded the lab in 1959 at the University of Hawaii, said it was busy and did good work but couldn't compete with a large commercial company.

It was a case of a "big bulk outfit vs. a mom-and-pop store," he said.

Genzyme, one of the world's largest biotechnology companies, now has an agreement with Kapiolani for genetic testing services. Specimens are sent to its mainland facilities for diagnosis.

Harry Skidmore, Kapiolani's Health Research Institute vice president, said the medical center maintained its genetics lab for years despite a $250,000 to $500,000 annual loss because "we thought it was important research."

He said the lab lost more than $400,000 last year: Revenues totaled $1.2 million, expenses $1.6 million.

Donlon said, however, the lab was breaking even or making a profit when it was closed. After he took it over in 1992, he said, the lab increased its volume from about 500 tests annually to 2,600.

It also provided services to the Cancer Research Center of Hawaii and agencies, he said. "These services are no longer available. It makes Hawaii, in general, a less competitive place as far as (research) grants."

Skidmore said similar hospital labs have been closing across the country because they aren't profitable and large testing companies can operate them more efficiently.

Discussing the trend in a telephone interview, Dr. Michael Raff, clinical geneticist at the University of Washington's genetics lab, said, "Clearly there are pros and cons."

Smaller labs have trouble because there isn't enough demand for some genetic tests to run them without a loss, he said. But doctors can more easily discuss tests with those performing them in a hospital laboratory, he said.

Dr. Yujen Edward Hsia, a UH pediatrics and genetics professor who started Kapiolani's clinical genetics program, said he was relieved when Donlon was hired because the lab was troubled.

But he said Donlon "had many administrative problems, some of which were foisted upon him by demands to reduce costs. At the same time, Kapiolani Medical Center said they would make genetics a major thrust to their activities in the future . . .

"What Dr. Donlon was trying to do was really impossible," Hsia added. "He was trying to provide a good service under very trying conditions and maintain his research activities."

When it was trying to develop genetics, Hsia said, Kapiolani hired another clinical geneticist, Dr. Berkley Powell. Then came "the managed-care crunch," he said, bringing drastic changes in the medical center's personnel, administration and priorities. Hsia said he pushed for more support for genetics. Instead, support was reduced and the lab finally sold. "It was very shocking for us."

Donlon said when he joined Kapiolani it had a task force with prominent hospital administrators and physicians involved in a "huge momentum to develop genetic services." The task force dissolved under new hospital leadership about 1994, he said.

Skidmore said officials began looking at the genetic lab more than a year ago to see whether it could be financially viable and provide quality genetic testing.

A major concern when Genzyme offered to buy the lab was the time it would take to send specimens to the mainland and get test results, he said.

But, he said, "Their lab in terms of volume and price can do three to four times what our lab does with the same size staffing. They're set up for economies of scale."

Where it took the Kapiolani lab up to 14 days to do some tests, Genzyme can do them in about three days at half the cost Kapiolani had to charge, Skidmore said.

Donlon said the Kapiolani lab had become more cost-effective and was doing tests on prenatal specimens in an average of nine days. "These are tests we worked with the community to develop ... It's hard to measure the loss," he said.

Dr. Greigh Hirata, Kapiolani medical director for reproductive genetics, said he visited Genzyme's New Mexico facilities and was "very impressed. It's almost like a science how efficient they are."

He said he's sorry Kapiolani's lab was closed, but a bigger company offers many benefits. Foremost for patients, he said, are faster test results. "I'm sure it's alleviated a lot of peoples' anxiety."

On the down side, Hirata said, Genzyme doesn't specifically address Hawaii needs. For example, he noted a high incidence of thalassemia (a form of anemia) among southeast Asians here, and Genzyme doesn't perform thalassemia testing. "Those kinds of things we have to work around."

Hsia feels "it's a major disadvantage for us to lose our own lab, which was doing both chromosome and DNA analysis for specific conditions. And it gave us a very useful conduit for arranging to have specimens prepared and sent to a mainland laboratory."

Arakaki cited another disadvantage: "Even with all these electronic gadgets, fax and e-mail and things, I think there is still a need for personal interaction between the physician community and the lab. It's kind of difficult to do on a personal basis with a mainland company."

Arakaki started the genetic testing lab on the Manoa campus doing chromosome analysis for critical patients. It eventually moved to Children's Hospital, then in the 1980s to Kapiolani Hospital.