Quest Diagnostics 2014 Annual Report Download - page 16
Download and view the complete annual report
Please find page 16 of the 2014 Quest Diagnostics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.
SURFHVVHVDQGWREHWWHUIRFXVWKHUDS\EDVHGRQSDWLHQWDQGWXPRUVSHFLILFJHQHWLFPDUNHUV'HPDQGDOVRLVJURZLQJWRZDUG
FRPSUHKHQVLYHFDUHPDQDJHPHQWVROXWLRQVWKDWVHUYHSDWLHQWVSD\HUVDQGKHDOWKFDUHSURYLGHUVE\LPSURYLQJFOLQLFDOGHFLVLRQ
VXSSRUWDFFHVVWRSDWLHQWGDWDLQFUHDVLQJSDWLHQWSDUWLFLSDWLRQLQFDUHPDQDJHPHQWSRSXODWLRQKHDOWKPDQDJHPHQWDQG
LPSURYLQJFOLQLFDORXWFRPHV7KHUHLVLQFUHDVLQJIRFXVRQDFFHVVWRSDWLHQWGDWDDQGGDWDGULYHQLQVLJKWV
Customers and payers.2XUFXVWRPHUVDQGSD\HUVLQFOXGLQJSK\VLFLDQVKHDOWKSODQV,'1V$&2VHPSOR\HUVDQG
RWKHUVKDYHEHHQFRQVROLGDWLQJDQGGLYHUVLI\LQJ)RUH[DPSOHDQLQFUHDVHGQXPEHURIKRVSLWDOV\VWHPVDUHFRQVLGHULQJ
HVWDEOLVKLQJRUKDYHHVWDEOLVKHGKHDOWKLQVXUDQFHSODQVDQGKHDOWKLQVXUDQFHSODQVLQFUHDVLQJO\DUHFRQVLGHULQJSURYLGLQJRUDUH
SURYLGLQJKHDOWKFDUHVHUYLFHV&RQVROLGDWLRQLVLQFUHDVLQJSULFLQJWUDQVSDUHQF\DQGEDUJDLQLQJSRZHUDQGHQFRXUDJLQJ
LQWHUQDOL]DWLRQRIFOLQLFDOWHVWLQJ3K\VLFLDQVLQFUHDVLQJO\DUHHPSOR\HGE\KRVSLWDOV\VWHPV,'1V$&2VRUODUJHJURXS
SUDFWLFHVLQWHJUDWHGZLWKKHDOWKFDUHV\VWHPVLQVWHDGRIRUJDQL]LQJSK\VLFLDQRZQHGSUDFWLFHVZKLFKLVFKDQJLQJWKHG\QDPLFV
IRUZKHWKHUFOLQLFDOWHVWLQJLVSHUIRUPHGE\DKRVSLWDORUDQRQKRVSLWDO9DOXHEDVHGUHLPEXUVHPHQWLVFRQWULEXWLQJWRFKDQJHV
LQWKHKHDOWKFDUHV\VWHP$&2VDQGSDWLHQWFHQWHUHGPHGLFDOKRPHVDUHJURZLQJDVDPHDQVWRGHOLYHUSDWLHQWFDUH+HDOWK
FDUHVHUYLFHVLQFUHDVLQJO\DUHEHLQJSURYLGHGE\QRQWUDGLWLRQDOSURYLGHUVHJSK\VLFLDQDVVLVWDQWVLQQRQWUDGLWLRQDOYHQXHV
HJUHWDLOPHGLFDOFOLQLFVXUJHQWFDUHFHQWHUVDQGXVLQJQHZWHFKQRORJLHVHJWHOHPHGLFLQH,QDGGLWLRQIHGHUDOKHDOWKFDUH
UHIRUPOHJLVODWLRQDGRSWHGLQHQFRXUDJHVWKHIRUPDWLRQRI$&2VDQGUHTXLUHVLPSOHPHQWDWLRQRIKHDOWKLQVXUDQFH
H[FKDQJHVZKLFKLVUHVXOWLQJLQFKDQJHVLQWKHZD\WKDWVRPHKHDOWKFDUHVHUYLFHVDUHSXUFKDVHGDQGGHOLYHUHGLQWKH8QLWHG
6WDWHV3DWLHQWVDUHDOVRRXUFXVWRPHUV,QFUHDVLQJO\SDWLHQWVDUHHQJDJHGLQWKHLURZQKHDOWKFDUHDQGDUHEHDULQJUHVSRQVLELOLW\
IRUSD\PHQWIRUWKHVHUYLFHVWKDWZHSURYLGHWRWKHP
Pricing Transparency7KHUHKDVEHHQDWUHQGWRZDUGJUHDWHUSULFLQJWUDQVSDUHQF\LQWKHKHDOWKFDUHPDUNHWSODFH7KLV
WUDQVSDUHQF\FRPELQHGZLWKLQFUHDVHGSDWLHQWILQDQFLDOUHVSRQVLELOLW\IRUPHGLFDOFDUHLVHQKDQFLQJSXUFKDVLQJVRSKLVWLFDWLRQ
DQGFKDQJHVLQEHKDYLRULQWKHKHDOWKFDUHPDUNHWSODFH
Competition.7KHFOLQLFDOWHVWLQJLQGXVWU\UHPDLQVIUDJPHQWHGLVKLJKO\FRPSHWLWLYHDQGLVVXEMHFWWRQHZ
FRPSHWLWLRQ&RPSHWLWLRQLVJURZLQJIURPQRQWUDGLWLRQDOFRPSHWLWRUV,QFUHDVHGKRVSLWDODFTXLVLWLRQVRISK\VLFLDQSUDFWLFHV
HQKDQFHSK\VLFLDQWLHVWRKRVSLWDODIILOLDWHGODERUDWRULHVDQGPD\VWUHQJWKHQWKHLUFRPSHWLWLYHSRVLWLRQ1HZLQGXVWU\HQWUDQWV
ZLWKH[WHQVLYHUHVRXUFHVPD\PDNHDFTXLVLWLRQVRUH[SDQGLQWRRXUWUDGLWLRQDODUHDVRIRSHUDWLRQV
Reimbursement pressure7KHUHLVDVWURQJIRFXVLQWKH8QLWHG6WDWHVRQFRQWUROOLQJWKHRYHUDOOFRVWRIKHDOWKFDUH
+HDOWKFDUHPDUNHWSDUWLFLSDQWVLQFOXGLQJJRYHUQPHQWVDUHIRFXVLQJRQFRQWUROOLQJFRVWVLQFOXGLQJSRWHQWLDOO\E\FKDQJLQJ
UHLPEXUVHPHQWIRUKHDOWKFDUHVHUYLFHVLQFOXGLQJEXWQRWOLPLWHGWRDVKLIWIURPIHHIRUVHUYLFHWRFDSLWDWLRQUHYLVLQJWHVW
FRGLQJFKDQJLQJPHGLFDOFRYHUDJHSROLFLHVHJKHDOWKFDUHEHQHILWVGHVLJQSUHDXWKRUL]DWLRQRIODEWHVWLQJUHTXLULQJFR
SD\VLQWURGXFLQJODEVSHQGPDQDJHPHQWXWLOLWLHVDQGSD\PHQWDQGSDWLHQWFDUHLQQRYDWLRQVVXFKDV$&2VDQGSDWLHQWFHQWHUHG
PHGLFDOKRPHV,QOLJKWRIFRQWLQXHGSUHVVXUHWRUHGXFHV\VWHPLFKHDOWKFDUHFRVWVKRVSLWDOVPD\FKDQJHWKHLUDSSURDFKWR
SURYLGLQJFOLQLFDOWHVWLQJVHUYLFHV:KLOHSUHVVXUHWRFRQWUROKHDOWKFDUHFRVWVSRVHVDULVNWRRXU&RPSDQ\LWDOVRFUHDWHV
RSSRUWXQLWLHVVXFKDVDQRSSRUWXQLW\IRULQFUHDVHGSURSHUXWLOL]DWLRQRIWHVWLQJDVDQHIILFLHQWPHDQVWRPDQDJHWKHWRWDOFRVWRI
KHDOWKFDUH:HEHOLHYHWKDWLWDOVRFUHDWHVJUHDWHURSSRUWXQLWLHVIRUKLJKYDOXHORZFRVWSURYLGHUVOLNHRXU&RPSDQ\DV
FRPSDUHGWRRWKHUSURYLGHUV
Healthcare utilization,QWKHSDVWIHZ\HDUVJURZWKLQKHDOWKFDUHXWLOL]DWLRQLQWKH8QLWHG6WDWHVKDVYDULHG7KHUH
PD\EHPDQ\IDFWRUVFRQWULEXWLQJWRWKLVUHVXOWLQFOXGLQJVOXJJLVKHPSOR\PHQWJURZWKXQGHUHPSOR\PHQWLQWKHZRUNIRUFH
SDWLHQWVGHOD\LQJPHGLFDOFDUHDQGLQFUHDVHGSDWLHQWILQDQFLDOUHVSRQVLELOLW\IRUPHGLFDOFDUH+RZHYHUIHGHUDOKHDOWKFDUH
UHIRUPOHJLVODWLRQDGRSWHGLQFRQWDLQHGSURYLVLRQVHOLPLQDWLQJSDWLHQWFRVWVKDULQJIRUSUHYHQWLYHVHUYLFHVDQGDGGLWLRQDO
SURYLVLRQVWKDWZHEHOLHYHKDYHLQFUHDVHGWKHQXPEHURISDWLHQWVWKDWKDYHKHDOWKLQVXUDQFHLQFOXGLQJ0HGLFDLGDQGWKXV
EHWWHUDFFHVVWRGLDJQRVWLFWHVWLQJ
Legislative, regulatory and policy environment.*RYHUQPHQWRYHUVLJKWRIDQGDWWHQWLRQWRWKHKHDOWKFDUHLQGXVWU\LQ
WKH8QLWHG6WDWHVLVVLJQLILFDQWDQGLQFUHDVLQJKHDOWKFDUHSD\PHQWUHIRUPLVDWRSLVVXH7KH)'$KDVDQQRXQFHGJXLGDQFH
LQLWLDWLYHVWKDWPD\LPSDFWWKHFOLQLFDOODERUDWRU\WHVWLQJEXVLQHVVLQFOXGLQJE\LQFUHDVLQJUHJXODWLRQRIODERUDWRU\GHYHORSHG
WHVWV/'7V)HGHUDOKHDOWKFDUHUHIRUPOHJLVODWLRQDGRSWHGLQKDVFUHDWHGVLJQLILFDQWXQFHUWDLQW\DVKHDOWKFDUHPDUNHWV
UHDFWWRFKDQJHV)RUH[DPSOHDSSUR[LPDWHO\KDOIRIWKHVWDWHVKDYHRSWHGLQWR0HGLFDLGH[SDQVLRQDQGHPSOR\HUVPD\
GLVFRQWLQXHRIIHULQJJURXSKHDOWKLQVXUDQFHWRWKHLUHPSOR\HHVVKLIWLQJPRUHSHRSOHWRH[FKDQJHSURGXFWV
Globalization.7KHUHLVDJURZLQJGHPDQGIRUKHDOWKFDUHVHUYLFHVLQHPHUJLQJPDUNHWFRXQWULHV2SSRUWXQLWLHVDUH
DULVLQJWRSDUWLFLSDWHLQWKHUHVWUXFWXULQJRUJURZWKRIWKHKHDOWKFDUHV\VWHPVRXWVLGHWKH8QLWHG6WDWHV'HPRJUDSKLFFKDQJHV
JOREDOO\DOVRPD\FUHDWHRSSRUWXQLWLHV
48(67',$*1267,&6)250
.