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Quest Diagnostics Inks Lab Service Deal With ReproSource

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Quest Diagnostics Incorporated (DGX - Free Report) has been making headlines on a slew of strategic developments. Following the company’s purchase of aspecialty fertility diagnostic services provider ReproSource, earlier this week, the company has again come up with a new laboratory partnership.

This time, Quest Diagnostics has formed an alliance with Regional Medical Center Health System (RMC), a regional health care provider for a five-county service area in northeast Alabama. RMC currently has 323 inpatient beds at RMC Anniston and 125 acute care beds at Stringfellow Memorial Hospital.

This apart, it has numerous outpatient facilities and physician offices. RMC is currently the largest not-for-profit healthcare provider in Northeast Alabama. The partnership aims at improving Quest Diagnostics’ supply chain efficiency. However, financial terms of the deal remained undisclosed.

Apart from providing supply chain expertise, Quest Diagnostics will also perform laboratory reference testing. More specifically, the company will manage laboratory equipment, supplies and procurement processes for RMC and Stringfellow Memorial Hospital in Anniston, AL, along with providing reference testing for both hospitals. This integration is expected to enhance the quality and value of diagnostic services.

Notably, this development remains aligned with the second element of Quest Diagnostics’ growth acceleration strategy that underlines the company’sinclination toward consistent extension of health plan contracts and tie-ups with hospital health systems.In this regard, the company recently signed an expanded partnership agreement with UnitedHealthcare. This alliance will be active from January 2019 onward under which, Quest Diagnostics will be participating as a national provider of laboratory services for all UnitedHealthcare plan participants.

Share Price Performance

Shares of Quest Diagnostics have underperformed its industry over the past three months. The stock has lost 2.5% versus the industry's 6% rise.

Zacks Rank & Key Picks

Quest Diagnostics currently carries a Zacks Rank #3 (Buy). Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .

Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock currently carries a Zacks Rank #2 (Buy).

Amedisys’ estimated long-term earnings growth rate is 19.4%. The stock sports a Zacks Rank #1 (Strong Buy) at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s projected long-term earnings growth rate is 14.8%. The stock has a Zacks Rank of 2 at present.

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