Quest Diagnostics 1997 Annual Report Download - page 7

biomedical sciences, as researchers have found new ways of measuring genes to determine
patientsÕ predisposition to diseases, monitor treatment and prescribe drugs. At Quest Diagnostics,
we strive to take medical discoveries and make them available to our customers in clinically useful
ways that will aid medical decision-making and the delivery of health care. We anticipate that in
the coming years, great progress will be made in the areas of molecular diagnostics for infectious
diseases, oncology and genetics.
To that end, we have taken significant steps on several fronts. World-renowned leaders in the field
are helping us develop this important part of the business. We are investing resources, capital and
expertise in our applied genomics program, which converts medical research into clinical tests and
information. And we have established partnerships with leading biotechnologists and academic
centers to provide our scientists with access to leading edge discoveries as they occur.
The Outlook for 1998
Given the challenges we faced in 1997, what can we expect from the business environment in 1998?
We will continue to face challenges, but we look forward to making more progress in our drive to
become a leading provider of essential health care information and services.
To be sure, we anticipate intense competition and volume pressure to continue. We have been
preparing for months to address the impact of new government-imposed requisition guidelines,
using new American Medical Association test codes, which will further discourage test ordering.
The good news, from an industry perspective, is that the government appears to be leveling the
regulatory playing field. Historically, the large, independent labs have been subjected to more
stringent regulation than hospitals and smaller labs. More equitable treatment can only help us.
Still, the persistence of these trends in the marketplace underscores the importance of accelerating
the progress we made in 1997.
We will stay focused on generating cash in order to remain financially flexible. We will closely
monitor business trends and take appropriate steps to match capacity with volume. We will
continue to exit relationships with customers who are unwilling to compensate us fairly for the
services we provide.
Standardization will remain a critical objective as we speed our evolution from a network of
semi-autonomous businesses to a single enterprise with centralized direction and standardized
processes, practices and offerings. We will continue to build information technology capabilities,
including, like all companies, appropriate preparations for the Year 2000.
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The persistence of these
trends in the marketplace
underscores the importance
of accelerating the progress
we made in 1997.