SECURITIES AND EXCHANGE COMMISSION
                        Washington, D. C.  20549



                                 FORM 8-K

                              CURRENT REPORT

                   Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934



Date of Report (Date of earliest event reported):  October 23, 1998




                              Lab Holdings, Inc.
                        ----------------------------
                        (Exact name of registrant as 
                          specified in its charter)




    Missouri                   0-16946                 43-1039532
 --------------             -------------           ----------------
 (State or other             (Commission            (I.R.S. Employer
 jurisdiction of             File Number)          Identification No.)
 incorporation)



 5000 W. 95th St. Suite 260
 Shawnee Mission, KS                     66207
 --------------------------           ----------
 (Address of principal 
 executive offices)                   (Zip Code)





Registrant's telephone number, including area code:  913-648-3600
                                                     ------------






                             Page 1 of 12



ITEM 5.    Other Events

  CAUTIONARY STATEMENT UNDER THE SAFE HARBOR PROVISIONS OF THE
        PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        Lab Holdings, Inc. is filing this Form 8-K in order to 
obtain the benefits of the "safe harbor" provisions of the 
Private Securities Litigation Reform Act of 1995.

        Lab Holdings, Inc. is a holding company which owns 
approximately 81% of LabOne, Inc.  LabOne, Inc. operates a 
centralized laboratory and markets insurance, clinical and 
substance abuse testing services in the United States and Canada.  
In this document, Lab Holdings, Inc. and LabOne, Inc. together 
are referred to as the "Company".

        Certain written and oral statements which have been made and 
which may be made from time to time by the Company, or by its 
officers, directors or employees acting on its behalf, that are 
not statements of historical fact, constitute "forward-looking 
statements" within the meaning of Section 27A of the Securities 
Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended.  Such statements include, 
without limitation, any statement specifically identified by the 
Company as a forward-looking statement.  Examples of forward-
looking statements include, but are not limited to: (i) 
projections of revenues, income or loss, earnings or loss per 
share, capital expenditures, the payment or non-payment of 
dividends, capital structure and other financial items, (ii) 
statements of plans and objectives of the Company or its 
management or Board of Directors, including plans or objectives 
relating to the products or services of the Company, (iii) 
statements of future economic performance, and (iv) statements of 
assumptions underlying the statements described in (i), (ii) and 
(iii). Forward-looking statements can often be identified by the 
use in such statements of forward-looking terminology, such as 
"believes," "expects," "may," "will," "should," "could," 
"intends," "plans," "estimates" or "anticipates," or the negative 
thereof, other variations thereon or comparable terminology.

        Forward-looking statements made by or on behalf of the 
Company involve risks and uncertainties which may cause actual 
results to differ materially from those in such statements.  The 
Company cautions investors that any forward-looking statement 
made by the Company is not a guarantee of future performance or 
results.



                             Page 2


        Any forward-looking statement made by or on behalf of the 
Company speaks only as of the time at which the statement is 
made.  The Company does not undertake to publicly update or 
correct any forward-looking statement made by or on behalf of the 
Company.

        The list set forth below of factors which could cause actual 
results to differ materially from those discussed in forward-
looking statements made by or on behalf of the Company is not 
exhaustive.  Other factors not identified herein could also have 
such an effect.

	Important factors which could cause actual results to differ 
materially from those discussed in forward-looking statements 
made by or on behalf of the Company include the following:

The Insurance Testing Market.

	A substantial portion of the Company's revenues and net 
earnings are derived from the Company's provision of risk 
appraisal laboratory services to the insurance industry.  The 
tests performed by the Company are specifically designed to 
assist an insurance company in objectively evaluating the 
mortality and morbidity risks posed by policy applicants.  The 
majority of the testing is performed on specimens of individual 
life insurance policy applicants.  The Company also provides 
testing services on specimens of individuals applying for 
individual and group medical and disability policies. The 
Company's results of operations from insurance testing services 
are subject to a number of risks and uncertainties, including, 
without limitation, the number of life insurance applications 
written in the industry, the policy amount thresholds at which 
insurance companies order tests, the type and cost of tests 
requested by insurance companies (i.e. blood, urine, saliva, 
hair, etc.), innovations in the types and cost of tests available 
for testing which are approved by the Food and Drug 
Administration, the prices which the Company can charge for 
performing tests, the nature and extent of competition in the 
industry and the extent to which insurance companies maintain in-
house testing facilities.  Changes in these factors are generally 
beyond the Company's control and are difficult to predict.  As a 
result of these and other risks and uncertainties, future results 
of the Company's insurance testing operations may be materially 
better or worse than expected or projected.





                             Page 3


Expansion into New Markets.

	The Company's growth strategy entails expanding its 
laboratory testing services to include: (a) testing for the 
healthcare industry and (b) substance abuse testing.  The Company 
began offering testing services in these areas in 1994.

	With respect to testing services for the healthcare 
industry, the Company provides clinical testing services to aid 
in the diagnosis and treatment of patients.  The Company markets 
its clinical testing services to the payers of healthcare - 
insurance companies and self-insured groups - through exclusive 
arrangements with managed care organizations and through the Lab 
Card Program.  The Lab Card Program provides laboratory testing 
at substantial savings, which savings are shared with the patient 
to create an incentive for the patient to direct laboratory work 
to the Company.  Prior to the Company's adoption of the Program 
in 1994, the Program was untested in the marketplace.  The 
Program will be successful only to the extent that the Company 
can continue to convince potential customers of its efficacy and 
value, patients direct laboratory work to the Company and 
competitors do not adopt equivalent or superior marketing 
programs.

	With respect to substance abuse testing, the Company is 
certified by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) to perform substance abuse testing for 
federally regulated employers.  The Company is currently 
marketing substance abuse testing services throughout the country 
to both regulated and non-regulated employers, including Fortune 
1000 companies, third party administrators and occupational 
health providers.

	Although the Company has met with initial success in 
marketing its testing services in the healthcare and substance 
abuse testing industries, there can be no assurance that the 
Company will be able to continue increasing its market share in 
these industries or that the Company's provision of testing 
services in these industries will become profitable.  The 
Company's continued expansion in, and results of operations from, 
these industries is subject to a number of risks and 
uncertainties, including, without limitation, the nature and 
extent of competition, the Company's ability to comply with 
additional regulatory and certification requirements applicable 
to testing in these industries, the extent of future efforts in 
the healthcare industry to control or reduce costs, and the 



                             Page 4


Company's ability to successfully market its services to new 
customers in new markets.

Cost Reduction Efforts in the Healthcare Industry.

	The clinical testing industry has been affected by the 
growth of managed care organizations and the efforts of third 
party payers to control the utilization and costs of health care 
services.  Managed care organizations have become a significant 
force in the health care industry.  Managed care providers 
typically contract with a limited number of clinical laboratories 
and negotiate discounts to the fees charged by such laboratories 
in an effort to control costs.  Many managed care providers have 
used capitated payment contracts, pursuant to which the managed 
care provider and the laboratory agree to a per member, per month 
payment to cover an agreed upon schedule of laboratory tests 
during the month, regardless of the number or cost of those tests 
actually performed.  The effect of capitated payment contracts is 
to shift the risks of additional testing beyond that covered by 
the capitated payment to the clinical laboratory.  As a result of 
the expansion of managed care, many clinical laboratories have 
experienced declines in test utilization and per-test revenue.  
In addition, Medicare, Medicaid and insurance companies have 
increased efforts to control the cost and delivery of health care 
services, including testing services.  These efforts have also 
reduced prices, added costs and decreased test utilization in the 
clinical laboratory industry.  There is a substantial risk that 
further reductions in reimbursement rates of third-party payers 
will occur.  The Company believes that it can effectively compete 
with existing clinical laboratories in providing low cost testing 
services to managed care companies and third party payers.  Even 
if the Company is successful in marketing its services to managed 
care companies and insurance companies, continued cost-cutting 
efforts may further erode the volume of testing and profit 
margins in the industry and adversely affect the Company's 
clinical laboratory operations.

Competition.

	The Company currently services over half of the insurance 
laboratory testing market.  The Company has two other main 
competitors, Osborn Laboratories, Inc. and Clinical Reference 
Laboratory.  The insurance testing industry is highly 
competitive.  The primary focus of the competition is pricing.  
This continued competition has resulted in a decrease in the 



                             Page 5


average price per test charged by the Company.  The clinical 
laboratory testing market is highly fragmented and very 
competitive.  The Company faces competition from numerous 
independent clinical laboratories and hospital-owned or 
physician-owned laboratories.  Many of the Company's competitors 
are significantly larger and have substantially greater financial 
resources than the Company.  The Company competes in the 
substance abuse testing market nationwide.  The Company's major 
competitors are the three major clinical chains, Laboratory 
Corporation of America, Quest Diagnostics and SmithKline Beecham 
Laboratories, who collectively service approximately two-thirds 
of the substance abuse testing market.  The principal methods of 
competition in the clinical laboratory and substance abuse 
testing markets are price and timeliness of service.  The 
Company's competitors may take actions to meet the Company's 
marketing programs and other initiatives, and may be willing to 
accept lower margins and to reduce prices in order to more 
effectively compete in the Company's industries.  As a result of 
such actions, the Company could fail to achieve sales and 
revenues increases or otherwise fail to meet its anticipated 
results.  There can be no assurance that increased competition in 
the Company's industries will not have a material adverse effect 
on the Company's business, financial condition and results of 
operations.

Certification.

	The Company's laboratory is currently certified to conduct 
laboratory testing under the Clinical Laboratory Improvement 
Amendments of 1988 (collectively, as amended, CLIA `88), by the 
Substance Abuse and Mental Health Services Administration 
(SAMHSA) and by all other states that require separate licensure.  
The Company is also accredited by the College of American 
Pathologists (CAP).  Certification and accreditation is essential 
to the Company's business because some of its customers are 
required to use certified laboratories, and many of its customers 
look to certification and accreditation as an indication of 
accuracy and reliability of results.  In order to remain 
certified and accredited, the Company is subject to frequent 
inspections and proficiency testing challenges.  Failure to meet 
any of the numerous certification requirements to which the 
Company is subject could result in suspension or loss of 
certification.  Such suspension or loss of certification could 
have a material adverse effect on the Company.





                             Page 6


General Economic Conditions.

	Demand for the Company's services is dependent on general 
economic conditions.  The Company generally conducts fewer tests 
for the insurance industry during periods of recession.  In 
addition, recessions and economic slow-downs generally result in 
fewer new hires, and therefore may lead to fewer pre-employment 
drug tests for public and private employer customers.  Because 
expenses associated with maintaining the Company's testing work 
force are relatively fixed over the short term, the Company's 
profit margins tend to increase in periods of higher testing 
volume and decrease in periods of lower testing volume.

Fluctuations in Quarterly Operating Results

	The Company's quarterly operating results will be influenced 
by a host of factors, which include those discussed herein and 
the following: regulatory matters; the extent to which the 
Company's services gain market acceptance in new markets; 
competition; changes in the mix of testing services provided in a 
given quarter; changes in pricing policies by the Company and by 
its competitors; acquisition costs and restructuring and other 
charges associated with acquisitions; the Company's success in 
implementing its growth strategy; personnel changes; and general 
economic conditions.  As a result of the influence of these 
factors, the Company's results of operations may fluctuate from 
quarter to quarter, and the Company's results of operations in 
any particular quarter may be materially better or worse than 
expected or projected.

Legal Proceedings.

	In the ordinary course of its business, claims are made 
against the Company by individuals alleging false positive or 
false negative reports.  To date, the Company has not experienced 
any material liability related to these claims, although there 
can be no assurance that the Company will not at some time in the 
future experience significant liability in connection with such 
claims.  The Company believes that its liability insurance 
coverage is adequate for its business.  However, there can be no 
assurance that the Company's existing insurance coverage limits 
will be adequate to protect the Company from any liabilities it 
might incur in connection with its operations.  Any liabilities 
in excess of coverage could have a material adverse affect on the 
Company's business, results of operations and financial 
condition.



                             Page 7


Dependence on Key Personnel.

	The Company is dependent upon a number of key management and 
technical, sales and marketing personnel.  The loss of a number 
of key employees could have a material adverse effect on the 
Company.  The Company believes that its future success will 
depend in part upon its continued ability to attract, retain and 
motivate highly skilled personnel.

Governmental Regulation.

	Operation of Clinical Laboratory.  The clinical laboratory 
industry is subject to significant governmental regulation at the 
Federal, state and local levels.  Virtually all clinical 
laboratories, including the laboratory owned by the Company, are 
required to be certified or licensed under CLIA, the Medicare and 
Medicaid programs and various state and local laws, and may be 
subject to periodic inspections by regulatory agencies.  In 1992, 
the Department of Health and Human Services issued regulations 
implementing CLIA `88 which establish quality standards for the 
conduct of different categories of laboratory tests.  The 
potential penalties for failure to comply with these regulations 
include denial of the right to conduct business, significant 
fines and criminal penalties.  The Company is also subject to 
state regulations which may impose more stringent requirements 
than federal law.  Although the Company has instituted programs 
to ensure that its operations meet all applicable regulatory 
requirements, there can be no assurance that the Company will 
always be able to comply with all of such requirements.  The loss 
of a license, imposition of a fine or future changes in such 
Federal, state and local laws and regulations could have a 
material adverse effect on the Company.  

        Medicare/Medicaid Regulations.  A small portion of the 
Company's revenues from clinical laboratory services are received 
from Medicare or Medicaid programs.  Although the Company does 
not expect the percentage of its revenues derived from Medicare 
and Medicaid reimbursements to increase substantially in the 
future, to the extent that such revenues do increase, the 
Company's results of operations may be affected by Medicare and 
Medicaid reimbursement policies.  In 1984, Congress established a 
Medicare fee schedule for clinical laboratory services performed 
for patients under Part B of the Medicare program.  Subsequently, 
Congress imposed a national ceiling on the amount that can be 
paid under the fee schedule.  




                             Page 8


Since 1984, Congress has periodically reduced the ceilings on 
Medicare reimbursement to clinical laboratories from previously 
authorized levels.  In addition, state Medicaid programs are 
prohibited from paying more than the Medicare fee schedule for 
clinical laboratory services provided to Medicaid recipients.  It 
is impossible to predict if additional Medicare reductions will 
be implemented.

	The Federal government has adopted policies for 
administration of Medicare payments to clinical laboratories for 
the most frequently performed automated blood chemistry profiles.  
The policies establish a consistent nationwide standard for the 
content of automated blood chemistry profiles and require 
laboratories performing certain profiles to obtain and provide 
documentation of the medical necessity of tests included in the 
profiles for each Medicare beneficiary.  The Company incurs 
additional costs in complying with these regulations.

	Future changes in Federal, state and local regulations 
affecting government reimbursement of clinical laboratory testing 
could have an adverse effect on the Company.  The materiality of 
any such adverse effect will depend in part upon the extent to 
which the Company receives its revenues from Medicare and 
Medicaid programs.

	Fraud and Abuse Regulations.  A wide array of fraud and 
abuse provisions apply to clinical laboratories participating in 
Medicare and Medicaid programs.  Penalties for violations of 
these laws include exclusion from participation in 
Medicare/Medicaid programs and civil and criminal penalties.  The 
Office of Inspector General of the Department of Health and Human 
Services has developed a sample Model Compliance Plan.  
Laboratories are being advised to ensure compliance with anti-
fraud and abuse laws and rules governing federally-financed 
reimbursement for laboratory testing services.  Even though only 
a small portion of the Company's business encompasses fee-for-
service Medicare/Medicaid, a Chief Compliance Officer and nine 
Co-Compliance Officers have been appointed.  The Company is in 
the process of developing its own Compliance Plan.

	Drug Testing.  Drug testing for certain public sector 
employees is regulated by SAMHSA, which has established detailed 
quality standards for drug testing on employees of federal 
government contractors and certain other entities.  Certification 
by SAMHSA is essential to the Company's substance abuse testing 
business.  See "Certification."



                             Page 9


	Environmental and Occupational Safety.  The Company is 
subject to various federal, state and local laws and regulations 
concerning the environment and occupational safety and health, 
including laws and regulations relating to the handling, 
transportation and disposal of specimens, infectious and 
hazardous waste and radioactive materials.  The Company is 
subject to extensive regulation relating to workplace safety for 
healthcare employers whose workers may be exposed to blood-borne 
pathogens such as HIV.  Although the Company is not aware of any 
material non-compliance with such laws and regulations, any 
failure to comply could subject the Company to denial of the 
right to conduct business, fines, criminal and civil penalties 
and civil liability.  The Company cannot predict what 
environmental or health and safety legislation or regulations 
will be enacted in the future or how existing or future laws or 
regulations will be administered or interpreted, nor can it 
predict the amount of future expenditures which may be required 
in order to comply with any environmental or health and safety 
laws or regulations.

Dividends.

	The Company has paid quarterly dividends with respect to 
shares of Common Stock over the past several years.  Declaration 
and payment of dividends are subject to the discretion of the 
Company's Board of Directors and may be made only from funds 
legally available therefor.  The Board of Directors reviews the 
Company's dividend policy on a periodic basis.  The Company's 
ability to pay dividends depends upon LabOne's financial 
condition, results of operations and dividend payments.  The 
Company has paid dividends per share in excess of earnings per 
share in recent years.  There can be no assurance that the 
Company will be able to, or will continue to, declare and pay 
dividends with respect to shares of Common Stock.

Single Facility; New Facility.

	The Company's testing operations are contained in a single 
facility located in Overland Park, Kansas.  Although the Company 
has a full-time alternative power source in the event of an 
electrical power shortage and has taken steps to limit the 
possibility of a fire, the facility is subject to risk of fire, 
earthquake, tornado, telecommunications failure and similar 
events.  Even though the Company does carry business interruption 
insurance to compensate for losses which might occur, the 




                             Page 10


occurrence of such an event with respect to the Company's testing 
facility could materially adversely affect the Company's 
business, results of operations and financial condition.

	The Company is arranging for the construction of a new 
testing facility to replace the existing laboratory, warehouse 
and administration facilities.  The facility is expected to be 
completed during the first quarter of 1999.  Completion of the 
new facility in a timely manner is subject to a number of risks 
and uncertainties, including weather and construction delays.

Year 2000 Computer Concerns.

	Year 2000 computer concerns are the result of computer 
programs using two digits instead of four digits to identify the 
applicable year.  Such computer programs may recognize a date 
using "00" as the year 1900 rather than the year 2000.  This 
could result in a system failure or miscalculations, resulting in 
a disruption of operations.  The Company is actively addressing 
Year 2000 computer concerns.  LabOne has established an oversight 
committee which includes management from all parts of LabOne and 
meets periodically to review progress.  LabOne expects to 
complete all internal Year 2000 objectives by the end of the 
first quarter, 1999 and is assessing the Year 2000 preparation 
and contingency plans of its clients and vendors.  Total expenses 
related to this project are not expected to be material to the 
Company.  However, there can be no assurance that the Company's 
adjustments to its computer systems will completely eliminate all 
Year 2000 problems.  In addition, there can be no assurance that 
the systems of clients and vendors will be converted to address 
Year 2000 problems in a timely and effective manner or that such 
conversions will be compatible with the Company's computer 
systems.  A failure to properly address the Year 2000 problem 
could have a material adverse effect on the Company's business, 
financial condition and results of operations.

        Lab Holdings has completed its Year 2000 internal compliance 
program and believes that its limited computer systems are now 
Year 2000 compliant.

Supplies.

	The Company's operations require the supply of insurance 
testing kits, testing agents and other laboratory supplies.  The 
Company has several suppliers for most of these materials.  There 
can be no assurance, however, that the Company will not 



                             Page 11


experience shortages of such materials or be forced to seek 
alternative sources of supply.  In addition, there can be no 
assurance that prices for such materials will remain stable.  Any 
shortages of such materials may result in service delays and 
increased costs which could have a material adverse effect on the 
Company's business, financial condition and results of 
operations.




SIGNATURES

	Pursuant to the requirements of the Securities Exchange Act 
of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned hereunto duly authorized.


                             Lab Holdings, Inc.



Date:  October 23, 1998      By:  /s/ Steven K. Fitzwater
                                  ------------------------------
                                  Steven K. Fitzwater
                                  Exec. V.P., Chief Operating 
                                  and Financial Officer and
                                  Secretary



Date:  October 23, 1998      By:  /s/ Linda K. McCoy
                                  ------------------------------
                                  Linda K. McCoy
                                  V.P., Chief Accounting Officer 
                                  and Assistant Secretary















                             Page 12
[{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 27509}]
{"company-data": {"conformed-name": "LAB HOLDINGS INC", "cik": "0000830158", "assigned-sic": "8071", "irs-number": "431039532", "state-of-incorporation": "MO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-16946", "film-number": "98729703"}, "business-address": {"street1": "5000 W. 95 STREET", "street2": "P. O. BOX 7568", "city": "SHAWNEE MISSION", "state": "KS", "zip": "66207", "phone": "9136483600"}, "mail-address": {"street1": "5000 W 95TH STREET", "street2": "SUITE 260", "city": "SHAWNEE MISSION", "state": "KS", "zip": "66207"}, "former-company": [{"former-conformed-name": "SEAFIELD CAPITAL CORP", "date-changed": "19920703"}, {"former-conformed-name": "BMA CORP /MO/", "date-changed": "19910520"}, {"former-conformed-name": "SEAFIELD CAPTIAL CORP", "date-changed": "19910520"}]}
SECURITIES AND EXCHANGE COMMISSION
                        Washington, D. C.  20549

                                 FORM 8-K

                              CURRENT REPORT

                   Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 23, 1998

                              Lab Holdings, Inc.
                        ----------------------------
                        (Exact name of registrant as 
                          specified in its charter)

    Missouri                   0-16946                 43-1039532
 --------------             -------------           ----------------
 (State or other             (Commission            (I.R.S. Employer
 jurisdiction of             File Number)          Identification No.)
 incorporation)

 5000 W. 95th St. Suite 260
 Shawnee Mission, KS                     66207
 --------------------------           ----------
 (Address of principal 
 executive offices)                   (Zip Code)

Registrant's telephone number, including area code:  913-648-3600
                                                     ------------

                             Page 1 of 12

ITEM 5.    Other Events

  CAUTIONARY STATEMENT UNDER THE SAFE HARBOR PROVISIONS OF THE
        PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        Lab Holdings, Inc. is filing this Form 8-K in order to 
obtain the benefits of the "safe harbor" provisions of the 
Private Securities Litigation Reform Act of 1995.

        Lab Holdings, Inc. is a holding company which owns 
approximately 81% of LabOne, Inc.  LabOne, Inc. operates a 
centralized laboratory and markets insurance, clinical and 
substance abuse testing services in the United States and Canada.  
In this document, Lab Holdings, Inc. and LabOne, Inc. together 
are referred to as the "Company".

        Certain written and oral statements which have been made and 
which may be made from time to time by the Company, or by its 
officers, directors or employees acting on its behalf, that are 
not statements of historical fact, constitute "forward-looking 
statements" within the meaning of Section 27A of the Securities 
Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended.  Such statements include, 
without limitation, any statement specifically identified by the 
Company as a forward-looking statement.  Examples of forward-
looking statements include, but are not limited to: (i) 
projections of revenues, income or loss, earnings or loss per 
share, capital expenditures, the payment or non-payment of 
dividends, capital structure and other financial items, (ii) 
statements of plans and objectives of the Company or its 
management or Board of Directors, including plans or objectives 
relating to the products or services of the Company, (iii) 
statements of future economic performance, and (iv) statements of 
assumptions underlying the statements described in (i), (ii) and 
(iii). Forward-looking statements can often be identified by the 
use in such statements of forward-looking terminology, such as 
"believes," "expects," "may," "will," "should," "could," 
"intends," "plans," "estimates" or "anticipates," or the negative 
thereof, other variations thereon or comparable terminology.

        Forward-looking statements made by or on behalf of the 
Company involve risks and uncertainties which may cause actual 
results to differ materially from those in such statements.  The 
Company cautions investors that any forward-looking statement 
made by the Company is not a guarantee of future performance or 
results.

                             Page 2

        Any forward-looking statement made by or on behalf of the 
Company speaks only as of the time at which the statement is 
made.  The Company does not undertake to publicly update or 
correct any forward-looking statement made by or on behalf of the 
Company.

        The list set forth below of factors which could cause actual 
results to differ materially from those discussed in forward-
looking statements made by or on behalf of the Company is not 
exhaustive.  Other factors not identified herein could also have 
such an effect.

	Important factors which could cause actual results to differ 
materially from those discussed in forward-looking statements 
made by or on behalf of the Company include the following:

The Insurance Testing Market.

	A substantial portion of the Company's revenues and net 
earnings are derived from the Company's provision of risk 
appraisal laboratory services to the insurance industry.  The 
tests performed by the Company are specifically designed to 
assist an insurance company in objectively evaluating the 
mortality and morbidity risks posed by policy applicants.  The 
majority of the testing is performed on specimens of individual 
life insurance policy applicants.  The Company also provides 
testing services on specimens of individuals applying for 
individual and group medical and disability policies. The 
Company's results of operations from insurance testing services 
are subject to a number of risks and uncertainties, including, 
without limitation, the number of life insurance applications 
written in the industry, the policy amount thresholds at which 
insurance companies order tests, the type and cost of tests 
requested by insurance companies (i.e. blood, urine, saliva, 
hair, etc.), innovations in the types and cost of tests available 
for testing which are approved by the Food and Drug 
Administration, the prices which the Company can charge for 
performing tests, the nature and extent of competition in the 
industry and the extent to which insurance companies maintain in-
house testing facilities.  Changes in these factors are generally 
beyond the Company's control and are difficult to predict.  As a 
result of these and other risks and uncertainties, future results 
of the Company's insurance testing operations may be materially 
better or worse than expected or projected.

                             Page 3

Expansion into New Markets.

	The Company's growth strategy entails expanding its 
laboratory testing services to include: (a) testing for the 
healthcare industry and (b) substance abuse testing.  The Company 
began offering testing services in these areas in 1994.

	With respect to testing services for the healthcare 
industry, the Company provides clinical testing services to aid 
in the diagnosis and treatment of patients.  The Company markets 
its clinical testing services to the payers of healthcare - 
insurance companies and self-insured groups - through exclusive 
arrangements with managed care organizations and through the Lab 
Card Program.  The Lab Card Program provides laboratory testing 
at substantial savings, which savings are shared with the patient 
to create an incentive for the patient to direct laboratory work 
to the Company.  Prior to the Company's adoption of the Program 
in 1994, the Program was untested in the marketplace.  The 
Program will be successful only to the extent that the Company 
can continue to convince potential customers of its efficacy and 
value, patients direct laboratory work to the Company and 
competitors do not adopt equivalent or superior marketing 
programs.

	With respect to substance abuse testing, the Company is 
certified by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) to perform substance abuse testing for 
federally regulated employers.  The Company is currently 
marketing substance abuse testing services throughout the country 
to both regulated and non-regulated employers, including Fortune 
1000 companies, third party administrators and occupational 
health providers.

	Although the Company has met with initial success in 
marketing its testing services in the healthcare and substance 
abuse testing industries, there can be no assurance that the 
Company will be able to continue increasing its market share in 
these industries or that the Company's provision of testing 
services in these industries will become profitable.  The 
Company's continued expansion in, and results of operations from, 
these industries is subject to a number of risks and 
uncertainties, including, without limitation, the nature and 
extent of competition, the Company's ability to comply with 
additional regulatory and certification requirements applicable 
to testing in these industries, the extent of future efforts in 
the healthcare industry to control or reduce costs, and the 

                             Page 4

Company's ability to successfully market its services to new 
customers in new markets.

Cost Reduction Efforts in the Healthcare Industry.

	The clinical testing industry has been affected by the 
growth of managed care organizations and the efforts of third 
party payers to control the utilization and costs of health care 
services.  Managed care organizations have become a significant 
force in the health care industry.  Managed care providers 
typically contract with a limited number of clinical laboratories 
and negotiate discounts to the fees charged by such laboratories 
in an effort to control costs.  Many managed care providers have 
used capitated payment contracts, pursuant to which the managed 
care provider and the laboratory agree to a per member, per month 
payment to cover an agreed upon schedule of laboratory tests 
during the month, regardless of the number or cost of those tests 
actually performed.  The effect of capitated payment contracts is 
to shift the risks of additional testing beyond that covered by 
the capitated payment to the clinical laboratory.  As a result of 
the expansion of managed care, many clinical laboratories have 
experienced declines in test utilization and per-test revenue.  
In addition, Medicare, Medicaid and insurance companies have 
increased efforts to control the cost and delivery of health care 
services, including testing services.  These efforts have also 
reduced prices, added costs and decreased test utilization in the 
clinical laboratory industry.  There is a substantial risk that 
further reductions in reimbursement rates of third-party payers 
will occur.  The Company believes that it can effectively compete 
with existing clinical laboratories in providing low cost testing 
services to managed care companies and third party payers.  Even 
if the Company is successful in marketing its services to managed 
care companies and insurance companies, continued cost-cutting 
efforts may further erode the volume of testing and profit 
margins in the industry and adversely affect the Company's 
clinical laboratory operations.

Competition.

	The Company currently services over half of the insurance 
laboratory testing market.  The Company has two other main 
competitors, Osborn Laboratories, Inc. and Clinical Reference 
Laboratory.  The insurance testing industry is highly 
competitive.  The primary focus of the competition is pricing.  
This continued competition has resulted in a decrease in the 

                             Page 5

average price per test charged by the Company.  The clinical 
laboratory testing market is highly fragmented and very 
competitive.  The Company faces competition from numerous 
independent clinical laboratories and hospital-owned or 
physician-owned laboratories.  Many of the Company's competitors 
are significantly larger and have substantially greater financial 
resources than the Company.  The Company competes in the 
substance abuse testing market nationwide.  The Company's major 
competitors are the three major clinical chains, Laboratory 
Corporation of America, Quest Diagnostics and SmithKline Beecham 
Laboratories, who collectively service approximately two-thirds 
of the substance abuse testing market.  The principal methods of 
competition in the clinical laboratory and substance abuse 
testing markets are price and timeliness of service.  The 
Company's competitors may take actions to meet the Company's 
marketing programs and other initiatives, and may be willing to 
accept lower margins and to reduce prices in order to more 
effectively compete in the Company's industries.  As a result of 
such actions, the Company could fail to achieve sales and 
revenues increases or otherwise fail to meet its anticipated 
results.  There can be no assurance that increased competition in 
the Company's industries will not have a material adverse effect 
on the Company's business, financial condition and results of 
operations.

Certification.

	The Company's laboratory is currently certified to conduct 
laboratory testing under the Clinical Laboratory Improvement 
Amendments of 1988 (collectively, as amended, CLIA `88), by the 
Substance Abuse and Mental Health Services Administration 
(SAMHSA) and by all other states that require separate licensure.  
The Company is also accredited by the College of American 
Pathologists (CAP).  Certification and accreditation is essential 
to the Company's business because some of its customers are 
required to use certified laboratories, and many of its customers 
look to certification and accreditation as an indication of 
accuracy and reliability of results.  In order to remain 
certified and accredited, the Company is subject to frequent 
inspections and proficiency testing challenges.  Failure to meet 
any of the numerous certification requirements to which the 
Company is subject could result in suspension or loss of 
certification.  Such suspension or loss of certification could 
have a material adverse effect on the Company.

                             Page 6

General Economic Conditions.

	Demand for the Company's services is dependent on general 
economic conditions.  The Company generally conducts fewer tests 
for the insurance industry during periods of recession.  In 
addition, recessions and economic slow-downs generally result in 
fewer new hires, and therefore may lead to fewer pre-employment 
drug tests for public and private employer customers.  Because 
expenses associated with maintaining the Company's testing work 
force are relatively fixed over the short term, the Company's 
profit margins tend to increase in periods of higher testing 
volume and decrease in periods of lower testing volume.

Fluctuations in Quarterly Operating Results

	The Company's quarterly operating results will be influenced 
by a host of factors, which include those discussed herein and 
the following: regulatory matters; the extent to which the 
Company's services gain market acceptance in new markets; 
competition; changes in the mix of testing services provided in a 
given quarter; changes in pricing policies by the Company and by 
its competitors; acquisition costs and restructuring and other 
charges associated with acquisitions; the Company's success in 
implementing its growth strategy; personnel changes; and general 
economic conditions.  As a result of the influence of these 
factors, the Company's results of operations may fluctuate from 
quarter to quarter, and the Company's results of operations in 
any particular quarter may be materially better or worse than 
expected or projected.

Legal Proceedings.

	In the ordinary course of its business, claims are made 
against the Company by individuals alleging false positive or 
false negative reports.  To date, the Company has not experienced 
any material liability related to these claims, although there 
can be no assurance that the Company will not at some time in the 
future experience significant liability in connection with such 
claims.  The Company believes that its liability insurance 
coverage is adequate for its business.  However, there can be no 
assurance that the Company's existing insurance coverage limits 
will be adequate to protect the Company from any liabilities it 
might incur in connection with its operations.  Any liabilities 
in excess of coverage could have a material adverse affect on the 
Company's business, results of operations and financial 
condition.

                             Page 7

Dependence on Key Personnel.

	The Company is dependent upon a number of key management and 
technical, sales and marketing personnel.  The loss of a number 
of key employees could have a material adverse effect on the 
Company.  The Company believes that its future success will 
depend in part upon its continued ability to attract, retain and 
motivate highly skilled personnel.

Governmental Regulation.

	Operation of Clinical Laboratory.  The clinical laboratory 
industry is subject to significant governmental regulation at the 
Federal, state and local levels.  Virtually all clinical 
laboratories, including the laboratory owned by the Company, are 
required to be certified or licensed under CLIA, the Medicare and 
Medicaid programs and various state and local laws, and may be 
subject to periodic inspections by regulatory agencies.  In 1992, 
the Department of Health and Human Services issued regulations 
implementing CLIA `88 which establish quality standards for the 
conduct of different categories of laboratory tests.  The 
potential penalties for failure to comply with these regulations 
include denial of the right to conduct business, significant 
fines and criminal penalties.  The Company is also subject to 
state regulations which may impose more stringent requirements 
than federal law.  Although the Company has instituted programs 
to ensure that its operations meet all applicable regulatory 
requirements, there can be no assurance that the Company will 
always be able to comply with all of such requirements.  The loss 
of a license, imposition of a fine or future changes in such 
Federal, state and local laws and regulations could have a 
material adverse effect on the Company.  

        Medicare/Medicaid Regulations.  A small portion of the 
Company's revenues from clinical laboratory services are received 
from Medicare or Medicaid programs.  Although the Company does 
not expect the percentage of its revenues derived from Medicare 
and Medicaid reimbursements to increase substantially in the 
future, to the extent that such revenues do increase, the 
Company's results of operations may be affected by Medicare and 
Medicaid reimbursement policies.  In 1984, Congress established a 
Medicare fee schedule for clinical laboratory services performed 
for patients under Part B of the Medicare program.  Subsequently, 
Congress imposed a national ceiling on the amount that can be 
paid under the fee schedule.  

                             Page 8

Since 1984, Congress has periodically reduced the ceilings on 
Medicare reimbursement to clinical laboratories from previously 
authorized levels.  In addition, state Medicaid programs are 
prohibited from paying more than the Medicare fee schedule for 
clinical laboratory services provided to Medicaid recipients.  It 
is impossible to predict if additional Medicare reductions will 
be implemented.

	The Federal government has adopted policies for 
administration of Medicare payments to clinical laboratories for 
the most frequently performed automated blood chemistry profiles.  
The policies establish a consistent nationwide standard for the 
content of automated blood chemistry profiles and require 
laboratories performing certain profiles to obtain and provide 
documentation of the medical necessity of tests included in the 
profiles for each Medicare beneficiary.  The Company incurs 
additional costs in complying with these regulations.

	Future changes in Federal, state and local regulations 
affecting government reimbursement of clinical laboratory testing 
could have an adverse effect on the Company.  The materiality of 
any such adverse effect will depend in part upon the extent to 
which the Company receives its revenues from Medicare and 
Medicaid programs.

	Fraud and Abuse Regulations.  A wide array of fraud and 
abuse provisions apply to clinical laboratories participating in 
Medicare and Medicaid programs.  Penalties for violations of 
these laws include exclusion from participation in 
Medicare/Medicaid programs and civil and criminal penalties.  The 
Office of Inspector General of the Department of Health and Human 
Services has developed a sample Model Compliance Plan.  
Laboratories are being advised to ensure compliance with anti-
fraud and abuse laws and rules governing federally-financed 
reimbursement for laboratory testing services.  Even though only 
a small portion of the Company's business encompasses fee-for-
service Medicare/Medicaid, a Chief Compliance Officer and nine 
Co-Compliance Officers have been appointed.  The Company is in 
the process of developing its own Compliance Plan.

	Drug Testing.  Drug testing for certain public sector 
employees is regulated by SAMHSA, which has established detailed 
quality standards for drug testing on employees of federal 
government contractors and certain other entities.  Certification 
by SAMHSA is essential to the Company's substance abuse testing 
business.  See "Certification."

                             Page 9

	Environmental and Occupational Safety.  The Company is 
subject to various federal, state and local laws and regulations 
concerning the environment and occupational safety and health, 
including laws and regulations relating to the handling, 
transportation and disposal of specimens, infectious and 
hazardous waste and radioactive materials.  The Company is 
subject to extensive regulation relating to workplace safety for 
healthcare employers whose workers may be exposed to blood-borne 
pathogens such as HIV.  Although the Company is not aware of any 
material non-compliance with such laws and regulations, any 
failure to comply could subject the Company to denial of the 
right to conduct business, fines, criminal and civil penalties 
and civil liability.  The Company cannot predict what 
environmental or health and safety legislation or regulations 
will be enacted in the future or how existing or future laws or 
regulations will be administered or interpreted, nor can it 
predict the amount of future expenditures which may be required 
in order to comply with any environmental or health and safety 
laws or regulations.

Dividends.

	The Company has paid quarterly dividends with respect to 
shares of Common Stock over the past several years.  Declaration 
and payment of dividends are subject to the discretion of the 
Company's Board of Directors and may be made only from funds 
legally available therefor.  The Board of Directors reviews the 
Company's dividend policy on a periodic basis.  The Company's 
ability to pay dividends depends upon LabOne's financial 
condition, results of operations and dividend payments.  The 
Company has paid dividends per share in excess of earnings per 
share in recent years.  There can be no assurance that the 
Company will be able to, or will continue to, declare and pay 
dividends with respect to shares of Common Stock.

Single Facility; New Facility.

	The Company's testing operations are contained in a single 
facility located in Overland Park, Kansas.  Although the Company 
has a full-time alternative power source in the event of an 
electrical power shortage and has taken steps to limit the 
possibility of a fire, the facility is subject to risk of fire, 
earthquake, tornado, telecommunications failure and similar 
events.  Even though the Company does carry business interruption 
insurance to compensate for losses which might occur, the 

                             Page 10

occurrence of such an event with respect to the Company's testing 
facility could materially adversely affect the Company's 
business, results of operations and financial condition.

	The Company is arranging for the construction of a new 
testing facility to replace the existing laboratory, warehouse 
and administration facilities.  The facility is expected to be 
completed during the first quarter of 1999.  Completion of the 
new facility in a timely manner is subject to a number of risks 
and uncertainties, including weather and construction delays.

Year 2000 Computer Concerns.

	Year 2000 computer concerns are the result of computer 
programs using two digits instead of four digits to identify the 
applicable year.  Such computer programs may recognize a date 
using "00" as the year 1900 rather than the year 2000.  This 
could result in a system failure or miscalculations, resulting in 
a disruption of operations.  The Company is actively addressing 
Year 2000 computer concerns.  LabOne has established an oversight 
committee which includes management from all parts of LabOne and 
meets periodically to review progress.  LabOne expects to 
complete all internal Year 2000 objectives by the end of the 
first quarter, 1999 and is assessing the Year 2000 preparation 
and contingency plans of its clients and vendors.  Total expenses 
related to this project are not expected to be material to the 
Company.  However, there can be no assurance that the Company's 
adjustments to its computer systems will completely eliminate all 
Year 2000 problems.  In addition, there can be no assurance that 
the systems of clients and vendors will be converted to address 
Year 2000 problems in a timely and effective manner or that such 
conversions will be compatible with the Company's computer 
systems.  A failure to properly address the Year 2000 problem 
could have a material adverse effect on the Company's business, 
financial condition and results of operations.

        Lab Holdings has completed its Year 2000 internal compliance 
program and believes that its limited computer systems are now 
Year 2000 compliant.

Supplies.

	The Company's operations require the supply of insurance 
testing kits, testing agents and other laboratory supplies.  The 
Company has several suppliers for most of these materials.  There 
can be no assurance, however, that the Company will not 

                             Page 11

experience shortages of such materials or be forced to seek 
alternative sources of supply.  In addition, there can be no 
assurance that prices for such materials will remain stable.  Any 
shortages of such materials may result in service delays and 
increased costs which could have a material adverse effect on the 
Company's business, financial condition and results of 
operations.

SIGNATURES

	Pursuant to the requirements of the Securities Exchange Act 
of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned hereunto duly authorized.

                             Lab Holdings, Inc.

Date:  October 23, 1998      By:  /s/ Steven K. Fitzwater
                                  ------------------------------
                                  Steven K. Fitzwater
                                  Exec. V.P., Chief Operating 
                                  and Financial Officer and
                                  Secretary

Date:  October 23, 1998      By:  /s/ Linda K. McCoy
                                  ------------------------------
                                  Linda K. McCoy
                                  V.P., Chief Accounting Officer 
                                  and Assistant Secretary

                             Page 12