Quest Diagnostics Incorporated (DGX - Free Report) and Regional Medical Center (“RMC”) recently entered a collaborative agreement to deliver high-quality laboratory services. Under this partnership, the laboratory management services will be provided by Quest Diagnostics, which is one of the key global providers of diagnostic information services. RMC is a 286-bed acute-care hospital based out of Orangeburg, South Carolina.
About the Partnership
Through this partnership agreement with RMC, Quest Diagnostics aims to deliver comprehensive, innovative patient care, particularly catering to health issues in South Carolina. Under the terms of this agreement, all the managerial proficiency, lab equipment, reference testing, supplies and procurement processes will be provided to RMC by Quest Diagnostics itself.
RMC is looking to upgrade the quality of patient care by accessing state-of-the art diagnostic equipment offered by Quest Diagnostics. From Quest Diagnostics’ point of view, the collaboration will help the company improve quality of patient care.
The clinical laboratory services market is projected to surpass a worth of $146 billion, at a CAGR of 5.2% during the 2018-2024 period. Considering the abundant opportunities, the RMC partnership is strategically-timed for Quest Diagnostics.
Recent Tie-Ups by Quest Diagnostics
Of late, Quest Diagnostics has been focusing on partnerships with health care leaders which are opening up opportunities, improving patient experience and reducing overall cost of care. This apart, the company has inked health plan contracts with hospital systems.
In this regard, the company recently signed an expanded partnership agreement with UnitedHealthcare, a business of UnitedHealth Group, to operate as a preferred national laboratory for all of the company’s members starting Jan 1, 2019.
In February, Quest Diagnostics partnered with Houston healthcare to deliver high-quality lab services. Last November, New Jersey-based Horizon Blue Cross Blue Shield added Quest Diagnostics as its in-network provider of diagnostic information.
Over the past year, Quest Diagnostics’ stock has underperformed the industry it belongs to. The stock has lost 17.7%, while the industry has risen 7.9%.
Zacks Rank & Key Picks
Quest Diagnostics has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are ABIOMED, Inc., (ABMD - Free Report) , Varian Medical Systems, Inc. (VAR - Free Report) and Masimo, Inc. (MAS - Free Report) I). Notably, each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ABIOMED’s long-term earnings growth rate is expected at 27.67%.
Varian’s long-term earnings growth rate is projected at 8.00%.
Masimo’s long-term earnings are estimated to grow 15.60%.
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