Quest Diagnostics snaps up Midwest lab services business
- Quest Diagnostics agreed to acquire the clinical laboratory services assets of Columbia, Missouri-based Boyce and Bynum Pathology Laboratories. Boyce and Bynum's anatomic pathology division and long-term care business are not part of the deal.
- Through a separate agreement, Boyce and Bynum's anatomic pathology division will become the exclusive pathology provider for Quest Diagnostics clients in Missouri and a preferred provider in the greater Midwest region.
- The acquisition is expected to be completed in the first quarter of 2019, and the professional services agreement will go into effect at the same time. Financial terms of the transaction were not disclosed.
Secaucus, New Jersey-based Quest has set a strategy to boost revenue through acquisitions, CEO Stephen Rusckowski said last month on the company's third quarter earnings call. Quest picked up three other laboratory businesses in the third quarter alone.
Such deals are key for the clinical diagnostic services giant in a slow-growth environment characterized by steep Medicare reimbursement cuts for lab testing now phasing in under the Protecting Access to Medicare Act. Last month, Quest lowered its full-year revenue forecast, disappointing investors, as it also copes with non-Medicare pricing cuts, volume challenges and rising bad debts from patients struggling to keep up with higher insurance deductibles.
Rusckowski said the latest deal with Boyce and Bynum is consistent with the company's goal of adding 1% to 2% to annual revenue growth through acquisitions. Quest is making other moves, too, to counter pressure on revenues, including a retail tie-in with Walmart, a long-term contract to operate as a preferred national laboratory for UnitedHealthcare, and efforts to improve operational efficiencies.
Earlier this month, the company announced it would enable customers to integrate lab test results via their MyQuest accounts into Health Records on Apple's iPhones, allowing for lab data to be viewed alongside medical information such as allergies, immunizations and medications.
Buying Boyce and Bynum's lab services business will expand Quest's range of clinical and pathology diagnostic offerings to patients, hospitals and physicians across Missouri and surrounding Midwestern states, Quest said. The relationship also will give patients access to an expanded network of service centers in the Midwest.
In the third quarter, Quest acquired the laboratory assets of Hurley Medical Center in Michigan, Hooper Holmes/Provant Health of Kansas, and Seattle-based PhenoPath. Those deals gave the company expanded capabilities in women's health, molecular oncology and infectious disease.
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