Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — Investor Day (November 2018)
31 slides from Quest Diagnostics's investor day presentation, Nov 29, 2018
Slide 1: Driving Operational Excellence
Driving Operational Excellence Jim Davis EVP, General Diagnostics
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: Delivering the promise of a superior customer experience at lower cost
Delivering the promise of a superior customer experience at lower cost $ Superior Customer Experience Cost Excellence Customer Specimen Acquisition Testing Transparent Digital Specimen Medical Collection Reporting Convenient Flawless Specimen Claim Transport Billing It’s not an “either / or” imperat
Slide 4: Proven track record of results with more opportunity ahead
Proven track record of results with more opportunity ahead Annual Target 2018 & Beyond = ~3% Total Cost Productivity $ Millions Highlights • Over 40 health plans using $210 $1,420 advanced estimation connectivity $220 • Collected over $100M in cash at our Patient Service Centers $240 vs. Goal of • I
Slide 5: Since we last met in 2016 …
Since we last met in 2016 … Improved Experience Improved Efficiency Re-Collections 25% Missing Information 23% Failed Draws Fast and correct Billing Honoring appointments From 85% to Revised Reports 20% Keeping Our Commitment 95% of target Medical Quality Clinical turn-around time From 92% to Employ
Slide 6: Reducing Denials and Patient Concessions
1 2 Reducing Denials and Patient Concessions $ Reduce Denials and Patient Concessions Digital Experience DRIVE Standardize & Optimize Automate 4 3 6 Confidential | Internal Use Only
Slide 7: Taking risk out of the patient billing process
Taking risk out of the patient billing process ~ 6% ~$300M Net Denials Concessions Quest Taking 100% Provider Quest performs all Quest attempts to orders test tests ordered bill payor and patient … will we be paid? of the Risk Denials Old World Concessions Risk New World Goal Provider Quest works El
Slide 8: Why tests are denied and why we have ~$300M in Patient Concessions
Why tests are denied and why we have ~ $300M in Patient Concessions Why Payers Deny Patients Don’t Always Pay Gross Denials ≈ 11% Disputes 39% Responsibility Administrative Requirements 1.7% Annual Revenue Non-Covered Opportunity Test 25% Test Coverage Net Denials & Benefits 4.5% Rate ≈ 6% $120M Uni
Slide 9: The key to transforming to the new world is an electronic order
The key to transforming to the new world is an electronic order Electronic Order Rate 100% Electronic orders help create a Consumer Experience • Analyze the order before the specimen is collected 72% 55% • Alert the physician to order irregularities right away 41% $50M • Outreach to the patient with
Slide 10: Changing the norms
Changing the norms When Quest does the Draw • Receive electronic order or digitize the paper order Specimen Sources • Activate real-time tools “Client Bill” Excluded • Is the patient in the plan? • Is the test covered? 100% = 120M 100% = $300M • Adjudicate: Deductible, Co-Insurance, Pricing • Presen
Slide 11: Digitize Everything
1 2 $ Reduce Denials and Patient Concessions Digital Experience Digitize Everything DRIVE Standardize & Optimize Automate 4 3 11 Confidential | Internal Use Only
Slide 12: The Power of Digitization: good for clients, patients, employees
The Power of Digitization: good for clients, patients, employees … and productivity Old World New World Welcome Touch this screen to check in Active in 2,200 PSCs Nationwide 12 Confidential | Internal Use Only
Slide 13: Patients and Employees see wait time
Patients and Employees see wait time 13 Confidential | Internal Use Only
Slide 14: Benefits our managers and employees
Benefits our managers and employees Real-time Monitoring 50 40 Walk-in 30 Wait Time 20 Appointment Wait Time 10 Volume 0 8:00 AM 6:00 AM 7:00 AM 9:00 AM 1:00 PM 12:00 PM 10:00 AM 11:00 AM 14 Confidential | Internal Use Only
Slide 15: Know where to go and when
Know where to go and when Popular Times for Tuesday 7a 9a 11a 1p 15 Confidential | Internal Use Only
Slide 16: Appointments and pre-registration enables a Consumer Experience
Appointments and pre-registration enables a Consumer Experience 16 Confidential | Internal Use Only
Slide 17: Confirmation by text and email with out-of-pocket expectation
Confirmation by text and email with out-of-pocket expectation 17 Confidential | Internal Use Only
Slide 18: Everyone Wins
Patient Patient Operational Employee Convenience Satisfaction Efficiency Satisfaction Are they busy? I see how long 15 min per Everyone I need to plan I’ll wait … transaction ➔ knows their my day have something 10 min per place in line to watch transaction: – I don’t have $60M to referee in labor va
Slide 19: We are advancing our Physician services with Quanum Lab Services Manager
We are advancing our Physician services with Quanum Lab Services Manager Rapid adoption of our new self-service channels Calls per requisition down 10%+ since 2016 19 Confidential | Internal Use Only
Slide 20: Digitization is a $120M opportunity
Digitization is a $120M opportunity Potential Transformation Impact, est. Patient Pre-Registration and Believe 20% of phlebotomy Appointment Scheduling time is in handling data $ 60M Client drawn paper orders eRequisitions transcribed in lab $ 25M Patient and Employee Satisfaction: Calling for suppl
Slide 21: Standardize and Automate our processes
1 2 $ Reduce Denials and Patient Concessions Digital Experience DRIVE Standardize and Standardize & Optimize Automate Automate our processes 4 3 21 Confidential | Internal Use Only
Slide 22: We are working with multiple suppliers, putting new innovations to work
We are working with multiple suppliers, putting new innovations to work Case Study in Action: Immunoassay 6 suppliers Improvements in Immunoassay platforms allows shift away from 'Best of Breed' approach 7 platforms Intend to consolidate and simplify fleet for greater throughput, more autonomy a
Slide 23: Driving toward a standard operating platform
Driving toward a standard operating platform Regional Sites 100% on Qsuite Standard Denver Reduce one-off system support New Mexico 2015 Sacramento Simplify organization and regional management San Jose Florida Faster customer on-boarding Birmingham 2016 Baltimore Multiply the benefits of best-pract
Slide 24: Saving 35,000 specimens overnight
Saving 35,000 specimens overnight West Hills Lab 24 Confidential | Internal Use Only
Slide 25: Seamless re-routing and on-time delivery
Seamless re-routing and on-time delivery Sacramento Las Vegas 25 Confidential | Internal Use Only
Slide 26: Optimization
1 2 $ Reduce Denials and Patient Concessions Digital Experience DRIVE Standardize & Optimization Optimize Automate 4 3 26 Confidential | Internal Use Only
Slide 27: Our drive for Continuous Improvement yields real results
Our drive for Continuous Improvement yields real results and we continue to see more opportunity Example, Lab “A” Specimen Accessioning Situation Action Results Only 50% of requisitions for • Held first End-to-End Kaizen • Now reaching 95% to target PDM tests met turn-around • Seven dedicated teams
Slide 28: Our North region consolidation enabled our first automated lab
Our North region consolidation enabled our first automated lab 28 Confidential | Internal Use Only
Slide 29: We are now executing our East region strategy into our next state of the art lab
We are now executing our East region strategy into our next state of the art lab Consolidates Three Doubles Average Hub Labs Throughput >15% Improved 30% Greater Productivity Capacity 29 Confidential | Internal Use Only
Slide 30: Key takeaways
Key takeaways Proving how a digital transformation benefits our customers and our Company Simplifying how customers engage with us also simplifies how Quest operates Ample opportunity to generate 3% total cost productivity in the short and medium- term horizons 30 Confidential | Internal Use O
Slide 31: Investor Meeting
Diagnostics” K (@ ) Quest INVESTOR MEETING