Sentara Health Plans and Quest Diagnostics Form Strategic Collaboration to Extend Lab Access in Parts of the Southeast

Rhea-AI Summary

Quest Diagnostics (NYSE: DGX) and Sentara Health Plans have announced a multi-year strategic collaboration to expand access to laboratory testing for Sentara Health Plans members in Florida and Virginia. Starting January 1, 2025, Quest will become the exclusive independent national laboratory provider for Sentara Health Plans, including commercial and government programs. The collaboration aims to:

1. Extend Quest's patient service center network
2. Educate members and providers on redirecting testing to Quest from higher-cost, out-of-network providers
3. Improve access to high-quality, affordable, and comprehensive laboratory services

This partnership aligns with both companies' goals of delivering quality and affordable care while reducing healthcare costs.

Positive

• Exclusive partnership with Sentara Health Plans for laboratory services in Florida and Virginia
• Potential for increased market share and revenue in the southeastern U.S., particularly Virginia
• Opportunity to expand Quest's patient service center network
• Collaboration on educating members and providers to redirect testing to Quest from higher-cost providers

Negative

• None.

Insights

Healthcare Industry Analyst

This strategic collaboration between Sentara Health Plans and Quest Diagnostics marks a significant shift in the healthcare landscape of Virginia and Florida. By naming Quest as the exclusive independent lab provider, Sentara is likely aiming to streamline its laboratory services and potentially reduce costs. This move could lead to more standardized testing processes and potentially faster turnaround times for results.

The plan to expand Quest's patient service center network suggests an effort to improve accessibility for patients, which could enhance member satisfaction. However, the exclusivity agreement might limit choice for some members who prefer other lab providers. The focus on redirecting testing from higher-cost, out-of-network providers to Quest indicates a clear strategy to control healthcare expenses, which could benefit both Sentara and its members in the long run.

Financial Analyst

This deal represents a significant win for Quest Diagnostics, potentially boosting its market share in the Southeast, particularly in Virginia where its presence has been The multi-year nature of the agreement provides Quest with a stable revenue stream and the opportunity to expand its footprint in key markets.

For Sentara Health Plans, this collaboration could lead to cost savings through economies of scale and more efficient lab services. However, the financial impact will depend on the specific terms of the agreement and the success of efforts to redirect testing from higher-cost providers. Investors should monitor for any disclosure of financial terms or projected cost savings in future earnings reports.

While this news is likely positive for Quest's stock in the short term, the long-term impact will depend on successful implementation and the ability to capture additional market share in the region.

Healthcare Policy Expert

This collaboration aligns with broader healthcare trends focusing on value-based care and cost containment. By centralizing lab services with a single provider, Sentara Health Plans aims to improve efficiency and potentially negotiate better rates. This move could result in lower out-of-pocket costs for members, aligning with policy goals to make healthcare more affordable.

However, the exclusivity agreement raises questions about competition and patient choice. Regulators may scrutinize such arrangements to ensure they don't limit access or create monopolistic conditions in the lab services market. The success of this collaboration could influence other health plans to pursue similar exclusive agreements, potentially reshaping the competitive landscape of diagnostic services in the U.S.

Quest named exclusive independent lab provider for all Sentara Health Plans in Virginia and Florida

SECAUCUS, N.J and HAMPTON ROADS, Va., Sept. 18, 2024 /PRNewswire/ -- Quest Diagnostics (NYSE: DGX), the world's leading provider of diagnostic information services, and Sentara Health Plans, the health plan division of Sentara Health, an integrated, not-for-profit health care delivery system, today announced a multi-year strategic collaboration designed to expand access to high-quality, affordable and comprehensive laboratory testing for members of Sentara Health Plans.

Beginning January 1, 2025, Quest will be the exclusive independent national laboratory provider of clinical laboratory and anatomic pathology services for members of Sentara Health Plans, including commercial and its government programs. The agreement will apply to Sentara Health Plans members in Florida and Virginia, including those in Sentara's Florida-serving AvMed business. 

Sentara Health Plans and Quest will also collaborate on expanding Quest's patient service center network to support patient access in some geographies. In addition, the parties will consider avenues for educating Sentara Health Plans members and providers on the value of redirecting testing to Quest from higher-cost, out-of-network providers.

"Sentara Health Plans' strategic relationship with Quest promises to provide our Florida and Virginia members with innovative and comprehensive laboratory services," said Colin S. Drozdowski, Executive Vice President of Sentara and President of Sentara Health Plans. "Sentara Health Plans and Quest share a common goal to deliver quality and affordable care to our plan members."

"Health plans like Sentara value Quest as a strategic collaborator that can help them reduce healthcare costs while simultaneously enhancing access, innovation, and quality," said Leah D. Timmerman, Senior Vice President, Health Plans, Quest Diagnostics. "We look forward to helping Sentara Health Plans improve access and affordability for its members as we extend into parts of the southeastern U.S., particularly Virginia, where our presence has been limited." 

About Sentara Health
Sentara Health, an integrated, not-for-profit health care delivery system, celebrates more than 130 years in pursuit of its mission - "we improve health every day." Sentara is one of the largest health systems in the U.S. Mid-Atlantic and Southeast, and among the top 20 largest not-for-profit integrated health systems in the country, with 30,000 employees, 12 hospitals in Virginia and Northeastern North Carolina, and the Sentara Health Plans division which serves more than 1 million members in Virginia and Florida. Sentara is recognized nationally for clinical quality and safety, and is strategically focused on innovation and creating an extraordinary health care experience for our patients and members. Sentara was named to IBM Watson Health's "Top 15 Health Systems" (2021, 2018), and was recognized by Forbes as a "Best Employer for New Grads" (2022), "Best Employer for Veterans" (2022, 2023), and "Best Employer for Women" (2020).

About Sentara Health Plans
Sentara Health Plans provides health plan coverage to nearly one million members in Virginia and Florida. Sentara Health Plans offers a full suite of commercial products including employee-owned and employer-sponsored plans, as well as Individual & Family Health Plans, Employee Assistance Programs and plans serving Dual-Eligible, Medicare, and Medicaid enrollees. 

About Quest Diagnostics
Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. We provide diagnostic insights from the results of our laboratory testing to empower people, physicians and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, Quest's diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. Quest Diagnostics annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives and create a healthier world. www.QuestDiagnostics.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/sentara-health-plans-and-quest-diagnostics-form-strategic-collaboration-to-extend-lab-access-in-parts-of-the-southeast-302250985.html

SOURCE Quest Diagnostics

FAQ

When will Quest Diagnostics become the exclusive lab provider for Sentara Health Plans?

Quest Diagnostics will become the exclusive independent national laboratory provider for Sentara Health Plans starting January 1, 2025.

Which states are affected by the Quest Diagnostics and Sentara Health Plans collaboration?

The collaboration between Quest Diagnostics (DGX) and Sentara Health Plans will affect members in Florida and Virginia.

What services will Quest Diagnostics provide to Sentara Health Plans members?

Quest Diagnostics will provide clinical laboratory and anatomic pathology services to Sentara Health Plans members, including commercial and government programs.

How will the Quest Diagnostics and Sentara Health Plans partnership benefit members?

The partnership aims to expand access to high-quality, affordable, and comprehensive laboratory testing for Sentara Health Plans members, potentially reducing healthcare costs.