Quest Diagnostics (DGX) 7th Annual Evercore ISI HealthCONx Conference summary

Pricing trends and market dynamics

• Health plan pricing has remained flat to slightly positive, with increased transparency stabilizing rates and reducing variation across payers.

• Multi-source network models have led to broader inclusion of independent labs, improving cost efficiency for payers and employers.

• Health systems are piloting plan designs that incentivize use of independent labs, such as waiving co-pays, to drive savings.

• Health system segment has experienced price pressure post-COVID due to renewed RFP activity and health systems seeking cost reductions.

• Competition in the reference lab segment remains high, with both independents and specialty labs vying for contracts.

Regulatory and policy environment

• Legal challenges to LDT regulation are ongoing, with court decisions expected soon and potential for legislative solutions in the future.

• No new PAMA cuts for 2025, but uncertainty remains for 2026; efforts continue for a permanent Medicare reimbursement solution.

• A shift toward wellness and preventive care is anticipated, potentially increasing demand for diagnostic testing.

Revenue drivers and test mix

• Revenue per requisition is rising due to increased test density and a shift toward advanced diagnostics, especially in brain health and cardiovascular testing.

• Aging Medicare population contributes to higher test volumes and complexity, with test per req growing faster in older cohorts.

• Outpatient procedures, particularly in GI and dermatology, are positive for lab business, while inpatient utilization impact varies by procedure type.