Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — Investor Day (March 2023)
28 slides from Quest Diagnostics's investor day presentation, Mar 16, 2023
Slide 1: Optimizing Operations to Drive Growth
Optimizing Operations to Drive Growth Cathy Doherty Senior Vice President, Regional Businesses
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE The statements in the following presentations which 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 cu
Slide 3: Key highlights
We have a strong track record of delivering Invigorate savings while improving the customer experience Key highlights Opportunities remain along our value chain to continue to deliver ~3% in annual productivity savings Our path includes: • Productivity improvements through automation and AI • Gettin
Slide 4: Delivering the promise of a superior customer experience
Delivering the It’s not an “either/or” Superior promise of a Customer Cost imperative… Excellence superior Experience customer We are delivering experience at on BOTH lower cost Confidential | Internal Use Only 4
Slide 5: Invigorate helps address headwinds, increases capacity and improves productivity
Invigorate helps address headwinds, increases capacity and improves productivity $ Millions INVIGORATE PRODUCTIVITY SAVINGS $ Millions $230 $2,550 $230 $225 $210 $240 $1,640 $1,645 '11-'18 2019 2020 2021 2022 Total Excludes the benefit of COVID Confidential | Internal Use Only 5
Slide 6: Key productivity levers support savings while delivering excellent customer experience
Key productivity levers support savings, while delivering an excellent customer experience Patient Services Logistics Patients served 16% Non-productive 31% per FTE per day stops Patient Experience Metrics Net Promoter Score Customer Satisfaction Lab National Customer (NPS) (CSAT) Operations Service
Slide 7: Invigorate will continue to deliver operational efficiency through four initiatives
Leverage Reduce automation denials and and AI write-offs Invigorate will continue to deliver operational efficiency ~3% while improving the Annual Productivity customer experience Savings through four major initiatives Select Enhance and retain the digital talent experience Confidential | Internal U
Slide 8: Invigorate will continue to deliver operational efficiency through four initiatives
Leverage Reduce automation denials and and AI write-offs Invigorate will continue to deliver operational efficiency ~3% while improving the Annual Productivity customer experience Savings through four major initiatives Select Enhance and retain the digital talent experience Confidential | Internal U
Slide 9: Our Strategy
Our Strategy Continuous implementation of automation and AI to achieve increased quality and productivity Confidential | Internal Use Only 9
Slide 10: We're making progress along our automation journey
We’re making progress along our automation journey End-to-End Lab Automation Fully automated sample handling after ) accessioning Core Clinical Micro Modular Automation Automation has led to lab Automation in specific tests productivity and processes to enable increased productivity improvements and
Slide 11: An example of modular automation
An example of modular automation We are replacing manual urine aliquoting with an automated solution FROM: Manual TO: Automated (allows for different containers) Annually ~80 FTEs Working with manually process and strategic partners to aliquot 10M non- deliver custom standard urine cups solutions Co
Slide 12: Our AI applications focus on the core of our business
Our AI applications focus on the core of our business Lab testing Customer service Data extraction Process and flow productivity efficiency AI support for image and AI to recognize and convert AI to help us optimize process AI to minimize client wait graph interpretation in handwritten or printed te
Slide 13: AI is automating processes in mass spec testing interpretation
AI is automating processes in mass spec testing interpretation Reducing non-value-added work, improving medical quality and boosting productivity From 100% manual review of chromatogram to AI rules-based logic 50% productivity improvement in review time 80% reduction in total number of reviews Confi
Slide 14: Microbiology full process automation: from 8 steps to 2 steps
Microbiology full process automation: from 8 steps to 2 steps Pre-Automation 8 steps 1 2 3 4 5 6 7 8 Specimens Manual Plates loaded Plates offloaded Plate Plate reading VITEK2/MS Specimens scanned manually sorted streaking/WASP into incubator from incubator triaging / one at a time target and AST an
Slide 15: Invigorate will continue to deliver operational efficiency through four initiatives
Leverage Reduce automation denials and and AI write-offs Invigorate will continue to deliver operational efficiency ~3% while improving the Annual Productivity customer experience Savings through four major initiatives Select Enhance and retain the digital talent experience Confidential | Internal U
Slide 16: Significant opportunity to reduce denials and patient concessions of ~$550M
Significant opportunity to reduce denials and patient concessions of ~$550M DENIALS PATIENT CONCESSIONS 100% = ~$370M per year Gross Denials ~13% Administrative Other Requirements 1.1% Non- 4% covered test 16% Net Denials Test Coverage 6.5% Rate ~7% Co-pay or & Benefits Patients 38% deductible 0.6%
Slide 17: Improve billing accuracy to reduce denials and increase cash
Improve billing accuracy to reduce denials and increase cash ~ 7% Collect billing Quest attempts Payer • Pays claim Net Denials info from to bill payer response • Denials ✓ Coverage patient or and patient • Patient ✓ Eligibility provider … will we be paid? responsibility ~$370M Annual Bill Patient T
Slide 18: We've made progress on several fronts
We’ve made progress on several fronts Electronic orders Collection of patients’ open Payment information at time-of invoices service 82% 72% 57% 50% 46% 42% 2018 2022 2018 2022 2018 2022 • Analyze the order before the • Proactive notification increases • Outreach to the patient with specimen is coll
Slide 19: We continue to partner to change coverage policies
We continue to partner to change coverage policies • Expanded hemoglobin A1C policy to cover a wider range of risk factors • Lobbied to cover CMA (Chromosomal Microarray Analysis) testing • Removed prior authorization requirements for non-invasive prenatal screening and cystic fibrosis testing • Red
Slide 20: Invigorate will continue to deliver operational efficiency through four initiatives
Leverage Reduce automation denials and and AI write-offs Invigorate will continue to deliver operational efficiency ~3% while improving the Annual Productivity customer experience Savings through four major initiatives Select Enhance and retain the digital talent experience Confidential | Internal U
Slide 21: We know what matters most to our customers throughout their journeys
We know what matters most to our customers throughout their journeys Patient Awareness Visit prep Visit Results Payment Ongoing relationship Healthcare Provider Investigate Onboarding Visit Results Billing Ongoing & choose relationship Confidential | Internal Use Only 21
Slide 22: We have made progress addressing their needs through a complete digital experience
We have made progress addressing their needs through a complete digital experience Patient Scheduled appointments Pre-registration 80% 23% Healthcare Provider Online Online specimen supply pick-up ordering 178% 20% Improvements since 2020 Confidential | Internal Use Only 22
Slide 23: We are continuing to enhance the digital experience
We are continuing to enhance the digital experience… Patient Digital Enhanced Check-in Engagement • Schedule • Proactive appointment at communications check-in • Improved pre- • Capture insurance registration and ID Healthcare Provider Enable Speed of Business Centralized Portal Technology • Automat
Slide 24: Introducing an omni-channel strategy for our contact centers
…and introducing an omni-channel strategy for our contact centers Patients call us for many reasons We’ve made significant progress 100% = 8.5M calls in 2022 Other MyQuest Chatbot Live chat MyQuest Total 11% support number 18% interactions interactions 72% 260% inquiries of calls 44% 21% 19% Results
Slide 25: Invigorate will continue to deliver operational efficiency through four initiatives
Leverage Reduce automation denials and and AI write-offs Invigorate will continue to deliver operational efficiency ~3% while improving the Annual Productivity customer experience Savings through four major initiatives Select Enhance and retain the digital talent experience Confidential | Internal U
Slide 26: Wage inflation and frontline retention impact productivity and increase costs
Wage inflation and frontline retention impact productivity and increase costs Market data Focus on frontline turnover Percent of annual turnover ~20-25K 5.1% 28% medical technologists Wage inflation shortage currently in for the 12-month 23% 1 the US period ending in 14% 2 December 2022 Q4 Q3 Q4 Q4
Slide 27: Attracting, developing and retaining frontline talent
Attracting, developing and retaining frontline talent will help address critical shortage and increase productivity • Expand phlebotomy school certification program • Reduce time to hire through improved technology 92% Improved candidate • Expand early career operations rotation program experience r
Slide 28: Key takeaways
We have a strong track record of delivering Invigorate savings while improving the customer experience Key takeaways Opportunities remain along our value chain to continue to deliver ~3% in annual productivity savings Our path includes: • Productivity improvements through automation and AI • Getting