Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — Investor Day (November 2018)
25 slides from Quest Diagnostics's investor day presentation, Nov 29, 2018
Slide 1: Accelerate Growth: Partnering with Health Plans and Hospital Health Systems
Accelerate Growth: Partnering with Health Plans and Hospital Health Systems Jim Davis EVP, General Diagnostics Everett Cunningham SVP, Commercial
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE The statements in the following presentations that are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s cur
Slide 3: Health Plan Access and the Physician Marketplace
Health Plan Access and Hospitals and the Physician Marketplace Health System Marketplace
Slide 4: We will convert our new access into strong growth
We will convert our new access into strong growth Best Access in a Decade New Access: Current and Expected Share of Lives +43M ~25% Share Insured ~90% of Lives Lives New Wins ~80% of Lives * ~5% Share 2018 2019 2018 2019 - 2022 * BlueCross BlueShield of Georgia, an Anthem Company. 4
Slide 5: We will convert our new access into strong growth: total opportunity
We will convert our new access into strong growth Best Access in a Decade New Access: Current and Expected Share of Lives +43M ~25% Share Insured ~90% of Lives Lives Total New Wins Opportunity ~80% of Lives ~$4B* ~5% Share 2018 2019 2018 2019 - 2022 * BlueCross BlueShield of Georgia, an Anthem Compa
Slide 6: Our leading market position will be enhanced with our new market access
Our leading market position will be enhanced with our new market access Leading Market Position 100% 98% 96% 97% 91% 88% 88% 75% 81% 80% 82% 74% 50% 50% 31% 25% California(1) Texas Florida New York Georgia New Jersey Population 39 28 21 20 10 9 Total (M) Prior Access New Access (1) Excludes Kaiser P
Slide 7: We believe physicians and patients will choose Quest
VISION We believe physicians and patients will choose Quest. 7
Slide 8: Quest's strong partnership with health plans starts with engagement
Quest’s strong partnership with health plans starts with engagement Health Plans Employer Engagement Member Engagement Physician Engagement Lower cost for payers Lower cost for patients Greater ease for physicians 8
Slide 9: Driving value with employers
Driving value with employers Drug Testing Lab Redirection Wellness CRC Testing Performs drug testing Proven to save 30- Largest health and InSure® ONE™ results for more than 2/3 of 60% on outpatient wellness screening in lower false positives the Fortune 500 laboratory claims company in the U.S., an
Slide 10: Quest's strong value proposition for patients
WHAT DO PATIENTS VALUE? Quest’s strong value proposition for patients Convenient Digital Quick Personal Affordable Access Enablement Service Touch Price $ 10
Slide 11: Quest's strong value proposition for physicians
Quest’s strong value proposition for physicians Patient Ease Simplicity Expertise Experience EASY TEST • Quanum™ solutions • Comprehensive • Comprehensive • Proactive suite health plan coverage test menu communication • Streamlined experience • No hassles for • Medical expertise • Timely problem and
Slide 12: We have strong line-of-sight to top ~25,000 accounts
We have strong line-of-sight to top ~25,000 accounts which hold the new access opportunity Long-Term = 20,000 accounts ~$300M ~300k ~20k ~170k Medium-Term = 40,000 accounts ~$750M ~65k Short-Term = 25,000 accounts ~ $700M Loyalist = 11,000 Mixed = 14,000 100% Reach Since June 1st Touched 5x All US A
Slide 13: SEnzo °
SEnzo ° Clinical Labs, Inc. LabCorp Toll Free: 1.800.371.5227 BE ray orton Se 1 = J NO DRUGS OR MONEY KEPT IN BOX 1toaD AND URI SPECIMENS OMLY Quest Diagnostics” MOUNT SINAI PATHOLOGY ASSOCIATES 212/731-7770 [NO DRUGS OR MONEY KEPTIN BOX [BLOOD AND URINE SPECIMENS ONLY y) Quest Diagnostics”
Slide 14: Hospitals and Health System Marketplace
Health Plan Access and Hospitals and the Physician Marketplace Health System Marketplace
Slide 15: Health Systems are consolidating in response to market forces
Health Systems are consolidating in response to market forces and will need to re-think the role of laboratory in their strategy Growing challenges are forcing Hospitals to reconsider their lab strategy ● Lab costs: supplies, equipment, personnel Decelerating Revenues ● Utilization management: manag
Slide 16: Hospital lab represents a significant cost center
Hospital lab represents a significant cost center Hospital costs (n=2,900) Ancillary department costs Laboratory costs ~14% Pharmacy Operating Room 45% FTEs Outpatient Supplies 25% & reagents ~56% Coronary Radiology (thera) Laboratory 10% Equipment Ancillary Department Recovery room 12% Electro-card
Slide 17: We have a range of proven models to meet our customers' distinct needs
We have a range of proven models to meet our customers’ distinct needs Right relationship, right opportunity, right value Patient access & experience Joint Outreach Venture Lab costs Level of Strategic Value Acquisition Full Lab Menu Management Optimization Supply & Spend Chain & Consolidation Esote
Slide 18: Why hospitals choose Quest for Reference Services
Why hospitals choose Quest for Reference Services Clinical leadership • Most extensive test menu • >1,000 LDTs • R&D excellence…50 dedicated • Rapid turnaround MDs and PhDs times … Esoteric labs in each major region of the country • ~200 dedicated $1B+ • Benchmarking service reps services • ~35 gene
Slide 19: Our Professional Lab Services offering saves hospitals 10-20% on lab costs
Our Professional Lab Services offering saves hospitals 10-20% on their laboratory costs Reference Testing Lab Advanced Data Services Optimization Solutions • Reference • Test menu optimization • Lab Stewardship consolidation • Data Collection / • Network optimization Analytics • Advanced Diagnostics
Slide 20: New prospects expected to add ~50+ bps of consolidated revenue growth each year
New prospects expected to add ~50+ bps of consolidated revenue growth each year # Hospitals: 6 # Hospitals: 2 # Hospitals: 1 # Hospitals: 21 # Hospitals: 5 # Hospitals: 2 # Hospitals: 1 # Hospitals: 3 # Hospitals: 11 # Hospitals: 1 # Hospitals: 20 # Hospitals: 5 # Hospitals: 5 # Hospitals: 10 # Hosp
Slide 21: We have completed nine hospital outreach acquisitions in two years
We have completed nine hospital outreach acquisitions in two years and PAMA will be a catalyst for further activity PAMA cuts take effect 2016 2017 2018 21
Slide 22: There's plenty more opportunity for outreach purchases
There's plenty more opportunity for outreach purchases and we know where it is $200 Hospital Outreach Lab Top 100 institutions $150 40% Revenue, $M Next 200 institutions $100 16% Next 700 institutions 35% $50 Next 2,000 institutions 9% $0 Over 3,000 Hospitals 22
Slide 23: PeaceHealth: Situation, Solution, Results
Situation Solution Results A not-for-profit in Washington, Acquired the lab outreach Worked collaboratively to Oregon, and Alaska business, 20 patient service improve access to important centers and 22 in-office diagnostic insights and 16,000 caregivers; 10 medical phlebotomy sites outcomes centers
Slide 24: Key takeaways
Key takeaways Expanded access to insured lives will accelerate growth Health plans are partnering with Quest to improve quality and reduce health care costs for employers and patients Quest is best positioned to partner with hospitals whether they choose to grow, partner or outsource their lab
Slide 25: Investor Meeting
Diagnostics” K (@ ) Quest INVESTOR MEETING