Dive Brief:
- Quest Diagnostics said Wednesday it has agreed to buy University Hospitals’ outreach laboratory services business.
- University Hospitals is a nonprofit health system with more than 20 hospitals, 50 health centers and 200 physician offices in northern Ohio. The nonprofit has 50 lab service locations in Ohio.
- News of the deal comes six weeks after Quest agreed to buy OhioHealth’s outreach laboratory services. The takeovers are part of a string of acquisitions Quest has made in recent months.
Dive Insight:
The University Hospitals deal is aligned with the M&A strategy that Quest CEO James Davis sketched out on an earnings call with investors in July. Davis said Quest’s focus in the second half of 2024 would be on outreach tuck-in deals “in markets where our share position or access to independent labs is waning.”
That thinking informed Quest’s earlier acquisition of assets from OhioHealth. Davis said the takeover of the assets, as well as a deal with Allina Health for labs in Minnesota and Wisconsin, would broaden Quest’s presence in parts of the U.S. where the company has had limited access to providers due to the “predominance of health systems.”
Quest said buying assets from University Hospitals will broaden access in Ohio to its test menu, network of patient access sites and health plan coverage.
Davis said in a statement that health systems transfer lab assets to Quest to “improve operating efficiency and ensure continued access to affordable care,” adding that the company’s scale and specialization can enhance quality, innovation and affordability.
Quest in June completed a deal to buy PathAI’s diagnostic laboratory and in July announced a move to acquire Canadian laboratory business Lifelabs for about 1.35 billion Canadian dollars (about $985 million).