Quest Diagnostics Pays $85 Million For Labtech

Quest Diagnostics Pays $85 Million For Labtech

Quest Diagnostics Pays $85 Million For Labtech

The latest 10K annual report from Quest Diagnostics revealed that the company paid $85 million for its acquisition of Labtech Diagnostics (Anderson, SC). The deal, which closed on December 13, 2021, included cash consideration of $80 million and contingent consideration of $5 million dependent upon certain test volume goals. Labtech is an independent clinical lab specializing in allergy testing that serves physicians and patients primarily in South Carolina, North Carolina, Georgia and Florida. Labtech, which has 200 employees, was founded by its CEO/Owner Joseph Labash in 2011.

ARUP And Quest Raise Minimum Hourly Wage To $15

ARUP And Quest Raise Minimum Hourly Wage To $15

ARUP And Quest Raise Minimum Hourly Wage To $15

ARUP Laboratories (Salt Lake City, UT) says that it will increase its minimum hourly wage to $15 effective November 27. All new hires and approximately 600 employees who currently earn less than the new minimum will be paid $15 per hour or more. In addition, about 2,800 hourly employees who already earn more than $15 per hour also will get raises with the higher minimum hourly wage. ARUP has about 4,500 employees, most of whom work in University of Utah Research Park.

Effective November 7, Quest Diagnostics says that it will adjust its hourly rate to $15 for the small number of employees who were below that level. In addition, Quest will make a non-taxable payment ($500 for full-time employees and $250 for part-time and per diem) to approximately 47,500
employees to offset financial challenges due to the pandemic.

Finally, Quest noted that another year of pandemic pressures and travel restrictions have made it very difficult for many of its employees to take their paid time off (PTO). Therefore, Quest said it is providing a payout of most unused PTO for its hourly employees to ensure they don’t forfeit it at
the end of the year.

Recently, Labcorp also announced it was raising its minimum wage to $15 (see LE, September 2021).

Cancer Diagnoses Declined Sharply During First Year of Pandemic

Cancer Diagnoses Declined Sharply During First Year of Pandemic

Cancer Diagnoses Declined Sharply During First Year of Pandemic

New diagnoses of eight common cancers (prostate, breast, colorectal, lung, pancreatic, cervical, gastric and esophageal) significantly declined during most of the first 13 months of the pandemic (March 2020-March 2021), according to a study by Quest Diagnostics published August 31 in JAMA Network Open, Oncology. It is believed to be the largest and most comprehensive analysis of cancer diagnosis rates during the pandemic.

Lockdown measures and fear of going to doctor’s offices and hospitals are believed to have led many people to put off preventative care like routine screenings that could have resulted in diagnosis of cancer during the first year of the pandemic, the study suggests.

The Quest study included 799,496 patients (45% women/55% men) with an average age of 68. Data over four time periods was analyzed: prepandemic, March to May 2020, June to October 2020, and November 2020 to March 2021.

Prepandemic, January 2019 to February 2020, the average monthly number of new diagnoses for the eight cancers was 32,407. During March to May 2020, the monthly average fell by 30% to 22,748 cases. It fell by 10% to 29,304 cases in the next period, June to October 2020. Finally, new cancer diagnoses fell 19% to an average 26,204 cases in the last period, November 2020 to March 2021.

Delayed cancer diagnosis can lead to more advanced disease, more aggressive and costly treatment, and worse outcomes, noted the Quest study.

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ACLA Study Cites Emerging Crisis of Undiagnosed Diseases and Delayed Treatment
A separate study of Medicare claims data found that clinical lab test utilization overall fell by 18% from 2019 to 2020, even when taking into account the large volume of Covid-19 testing conducted in 2020. The study was sponsored by the American Clinical Laboratory Association and performed by Braid Forbes Research (Silver Spring, MD). The analysis compared the volume of CLFS tests for Medicare beneficiaries in the first nine months of 2020 to the volume of tests performed in the same period of 2019. Key findings included:

Cancer testing decreased by 31% on average across key tests, including:

EGFR test volume for non-small cell lung cancer fell by 47%
BRCA test volume for breast and ovarian cancer fell by 35%
Prostate specific antigen (PSA) test volume fell by 16%

Diabetes testing decreased by 29% on average across key tests, including:

A1c test volume fell by 20%
Glucose test volume fell by 36%

Other tests seeing substantial volume declines included chronic kidney disease (-31%), liver disease (-23%), lipid panel (-22%) and drug testing (-21%).

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Diagnostics has completed its previously announced acquisition of the clinical lab outreach business of Mercy (St. Louis, MO) in an all-cash asset transaction (see LE, March 2021). The purchase price has not yet been disclosed. Cain Brothers served as Mercy’s transaction advisor.

Under the deal, Mercy’s clinical lab outreach tests will transition to Quest’s full-service laboratory in Lenexa, Kansas. Mercy’s clinical lab outreach business currently operates from 29 hospital laboratories and two independent clinical laboratories serving providers and patients in Arkansas, Kansas, Missouri and Oklahoma.

Mercy will continue to wholly own and operate its hospital laboratories for tests connected to inpatient and hospital-based outpatient services.

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

On a combined basis, 20 publicly-traded labs reported a revenue decrease of 1.4% to $9.8 billion during the first six months of 2020 (after adjusting for acquisitions), according to financial reports collected by Laboratory Economics.

Among five national clinic al labs (Quest Diagnostics, LabCorp, Sonic, BioReference and Enzo), combined revenue fell by 3.1% (after adjusting for acquisitions). BioReference had the strongest revenue growth, up 18% to $421.8 million, driven by Covid-19 PCR testing. BioReference processed approximately 2.2 million Covid-19 PCR tests during the first six months of 2020.

Among 15 specialty and genetic testing labs, combined pro-forma revenue increased by 7.3%.

Pro-forma revenue growth was fastest at DermTech, up 98.4% to $2.4 million. Other fast-growing companies included Castle Biosciences, up 54.9% to $30.1 million; Guardant Health, up 47.7% to $133.8 million; and CareDx, up 39.6% to $80.2 million.

Top 25 Fastest-Growing Labs by Medicare Part B Volume of Services

Quest Diagnostics Pays $85 Million For Labtech

Quest Diagnostics Mid-Year 2020 Review

Quest Diagnostics Mid-Year 2020 Review

Quest Diagnostics (Madison, NJ) reported net income of $284 million for the six months ended June 30, 2020, down 27.2% from $390 million in the same period for 2019. Overall, Quest’s reported half-year revenue was down 5.1% to $3.649 billion. Looking specifically at Quest’s lab testing business: revenue was down 4.8% to $3.508 billion, including 0.7% gained from acquisitions. Here’s a summary of some key topics discussed during the company’s July 23 conference call with analysts.

Test Volume Trends
Quest reported a 10.2% decline in its requisition volume for the first six months of 2020 versus the same period in 2019. Non-Covid-19 requisition volume fell by approximately 19%.

Quest CEO Steve Rusckowski said volumes were rebounding strongest at primary care offices, including Ob/Gyns, and also for anatomic pathology testing. He said that the weakest volume trends were in life insurance testing, pre-employment drug screening and wellness program testing
for employers.

At the low end of its outlook, Quest is assuming an average 20% decline for its non-Covid-19 requisition volumes through the remainder of the year.

Covid-19 Testing
Quest has performed a total of roughly 8.5 million Covid-19 PCR-based tests year to date through June 30. Quest currently has the capacity to perform up to 130,000 Covid-19 PCR-based tests per day and plans to expand its capacity to 150,000 by early September.

Pooling patient samples for Covid-19 PCR-based tests will help expand capacity. Quest has begun combining four patient samples for pooled testing in locations where Covid-19 positivity rates are less than 5% (e.g., the Northeast). Quest has stated that it plans to bill for four tests when it performs pooled testing on four patient samples.

Meanwhile, Quest has performed a total of more than 2.5 million Covid-19 antibody tests year to date through June 30. Quest is currently performing about 20,000 antibody tests per day, well below its capacity for 200,000.

UnitedHealthcare’s Preferred Lab Network
Rusckowski said that as a member of UnitedHealthcare’s Preferred Lab Network, Quest had secured business from more than 180 out-of-network UHC labs.

Lab Acquisitions
“If anything, the pandemic could be an additional catalyst to help drive industry consolidation. Some transactions in the pipeline that were paused
because of the pandemic are being revisited,” said Rusckowski. Quest acquired Memorial Hermann Diagnostic Labs for $120 million on April 6, and completed its purchase of 100% of the joint venture Mid America
Clinical Labs in early August.

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