Quest Diagnostics 1997 Annual Report Download - page 6

We remain committed to managing costs while, at the same time, enhancing the quality of the
services provided. Quality improvement leads to lower costs by reducing rework and errors. Our
Quality Management System for evaluating the quality of work within each unit documented
significant improvement over the course of the year.
Growing the Business
Managing costs is only part of the solution; clearly, no company can shrink its way to greatness.
Throughout the year, positioning the company for future growth remained a top priority.
We aggressively pursued a variety of strategic alliances with leading health care providers. In
Arizona, for instance, we joined with Samaritan Health Systems in a new joint venture, Sonora
Quest Laboratories, that combines our respective lab operations into a single entity that is a strong
leader in a vibrant market.
We are accelerating our efforts, pursuing a wide range of initiatives that we expect will significantly
expand growth opportunities and dramatically extend our customer reach.
In order to strengthen focus and accountability, we restructured the sales and marketing
organization in the fall, dividing it into two functions. One is responsible exclusively for extending
into new areas with significant growth potential, such as large networks and regional health care
providers, while the other concentrates on traditional customers.
Finally, in line with our stated interest in small, strategically significant acquisitions, we acquired
the clinical laboratory assets of Diagnostic Medical Laboratory, a small company with many
facilities throughout Connecticut. The acquisition of DML strengthened our market position while
eliminating duplicate operations.
Innovation
We continue to pursue our third strategic objective, leadership in innovation.
Quest Informatics, which turns laboratory testing data into valuable information, began winning
important contracts with major pharmaceutical firms and managed care organizations eager to
tap into its database of diagnostic insights. Quest InformaticsÕ unique application of data mining
technology was recognized in 1997 with a prestigious Computerworld Smithsonian Award for
visionary use of information technology in the field of medicine.
We also made progress in 1997 toward our goal of developing a world-class capability in the
exciting field of molecular testing. The past decade has brought dramatic breakthroughs in the
Managing costs is only part
of the solution; clearly, no
company can shrink its way
to greatness. Throughout the
year, positioning the company
for future growth remained
a top priority.
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