Aurora Diagnostics Company

Doctors turn to Aurora Diagnostics when they need help making a diagnosis. The company performs anatomical pathology services, studying organ samples and tissue biopsies to diagnose cancer and other diseases. Through a network of almost 20 labs, it specializes in women's health, urology, gastrointestinal pathology, hematopathology, and dermatopathology services. The company performs more than 1.5 million tests a year and has a network of 10,000 referring physicians. While the majority of its clients are clinics and doctor's offices, the company does have contracts with more than 35 hospitals. Aurora Diagnostics also offers a Web-based system to report its findings. The company filed to go public in 2010. Aurora Diagnostics carved out its identity as a provider of anatomical pathology, as opposed to clinical pathology, which studies blood and other body fluids under the microscope. Anatomical pathology only makes up about one-fourth of the entire pathology industry. The industry's two largest publicly traded companies, Quest Diagnostics and LabCorp, both specialize in clinical pathology services. Currently, clinical pathology services make up only 5% of Aurora Diagnostics' revenue. If and when the company goes public, it plans to expand its clinical and molecular (DNA testing) diagnostics services. The majority of Aurora Diagnostics' payments come from private insurance. Medicare and Medicaid make up about one-fourth of its revenues, and about 15% comes from physicians and individual patients. The new Patient Protection and Affordable Care Act (PPACA) and Health Care and Education Affordability Reconciliation Act (HCEARA), signed by President Obama in 2010, don't affect reimbursement for anatomic pathology services, but it does lessen reimbursement for clinical laboratory services by about 3%. However, the new laws increase the number of people covered by public and private insurance programs. Since the company's formation in 2006, Aurora Diagnostics has grown through the acquisition of smaller pathology labs. In 2007 it bought six companies for $300 million, and since 2009 it obtained three more for more than $30 million. Aurora Diagnostics plans to use the proceeds from its $150 million initial public offering (IPO) to fund its growth. The company more than doubled its revenues in 2008, its second year in business, and 2009 was profitable as well. Aurora Diagnostics was formed by CEO James New, the former head of AmeriPath (now Quest's anatomical pathology subsidiary), with backing from private equity firms Summit Partners and GSO Capital Partners. Aurora Diagnostics is the third company Mr. New groomed for the stock market. His first company, RehabClinics, was bought by NovaCare (now the defunct NAHC) in 1994.