Quest Diagnostics 2005 Annual Report Download - page 20

anatomic pathology services is approximately $7 billion per year. We estimate that cytology represents
approximately $1 billion per year of this market, and that tissue pathology represents approximately $6
billion per year of this market. With the aging of the population and the increased incidence of cancer,
we believe that the tissue pathology business is growing more rapidly and is more profitable than the
cytology business. We are one of the leading providers of anatomic pathology services in the United
States. We have traditionally been strongest in cytology, specifically in the analysis of Pap tests to detect
cervical cancer. We led the industry in converting Pap testing to the use of liquid-based technology, a
more effective means of screening for cervical cancer. We are also leading the industry in educating
physicians about human papilloma virus (HPV) molecular testing. The American College of Obstetricians
and Gynecologists (ACOG) and the American Cancer Society recommend women over 30 are screened
for HPV in addition to a Pap test. We intend to continue to expand our anatomic pathology business,
particularly in tissue pathology. In conjunction with our physician sub-specialty focus, we have been
enhancing our anatomic pathology capabilities and service offerings and are adding specially trained sales
representatives. We generated approximately $550 million in net revenues from anatomic pathology
services during 2005.
•Innovation Leadership: We intend to build upon our reputation as a leading innovator in the clinical
laboratory industry by continuing to introduce new tests, technology and services. As the industry leader
with the largest and broadest network and the leading provider of esoteric testing, we believe that we are
the best partner for developers of new technologies and tests to introduce their products to the
marketplace. Through our relationships with the academic community, pharmaceutical and biotechnology
firms and emerging medical technology companies that develop and commercialize novel diagnostics,
pharmaceutical and device technologies, we believe that we are one of the leaders in transferring
technical innovation to the market. Our innovation activities are focused on:
-Gene-Based and Other Esoteric Testing Capabilities: We intend to remain a leading innovator in the
diagnostic testing industry by continuing to introduce new tests, technology and services. We believe
that gene-based and other esoteric tests are the fastest growing area within the diagnostic testing
industry. We believe that we have the largest gene-based testing business in the United States, with
over $660 million in net revenues during 2005, and that this business is growing approximately 10%
per year. We believe that the unveiling of the human genome, the discovery of new genes and the
linkages of these genes and the proteins they produce with disease will result in more complex and
thorough predictive and diagnostic testing. We believe that we are well positioned to benefit from this
growth. We intend to focus on commercializing diagnostic applications of discoveries in the areas of
functional genomics and proteomics.
-Information Technology: We continue to invest in the development and improvement of information
technology products for customers and healthcare providers. We develop differentiated products that
provide more convenient ordering and reporting of laboratory tests and better access to patient-centric
information. We believe that these products enhance the value we provide to our customers and result
in increased customer loyalty. Our Care360TM products, including our Care360 Physician Portal, enable
doctors to order diagnostic tests and review laboratory results from Quest Diagnostics online. In
addition, the Care360 Physician Portal enables doctors to electronically prescribe medication, view
clinical and administrative information from various sources, file certain documents into a
patient-centric health record maintained in our repository and share confidential information with
medical colleagues in a manner consistent with the Health Insurance Portability and Accountability Act
of 1996, or HIPAA. The Care360 Physician Portal and related Care360 products allow us to replace
older technology products that we currently provide to many physicians and thereby streamline our
support structure. Demand has been growing for our information technology solutions as physicians
have expanded their usage of the Internet. By the end of 2005, approximately 45% of our orders were
being transmitted via the Internet.
The Care360 Physician Portal was developed by MedPlus Inc., or MedPlus, our wholly owned
healthcare information technology subsidiary. MedPlus’ ChartMaxx威 patient record systems and
Care360 connectivity system are designed to support the creation and management of electronic patient
records, by bringing together, in one patient-centric view, information from various sources, including
physician’s records and laboratory and hospital data. We intend to expand the services offered through
our portal over time through both internal development and the formation of strategic relationships.
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