Quest Diagnostics (DGX) Baird Global Healthcare Conference 2025 summary

Legislative and regulatory updates

• A new bipartisan bill, the Results Act, was introduced in both the House and Senate to reform PAMA, aiming for price stability in 2026 and 2027, with new data collection in 2027 and rates effective in 2029.

• The bill proposes using third-party databases for more representative data collection, addressing previous imbalances in hospital and physician office lab reporting.

• Growing support exists for a permanent legislative fix to PAMA, with expectations for resolution by year-end, likely in November or early December.

• Medicaid cuts are expected to have minimal impact in 2026 and 2027, and there is bipartisan support to extend healthcare exchange subsidies for another year.

Diagnostic innovation and growth

• The Haystack test received FDA Breakthrough Device Designation for stage two colorectal cancer, with commercial launch and Medicare reimbursement expected by year-end.

• Clinical adoption of the MRD test is growing, with over 75 users and increasing test volume weekly.

• Advanced diagnostics, including neurological, cardiometabolic, and autoimmune testing, are experiencing high double-digit growth, with consumer health and direct-to-consumer testing also expanding rapidly.

• Revenue per requisition is growing above 3%, driven by new tests and broader prescriber adoption.

Strategic partnerships and capital deployment

• A joint venture with Corewell Health in Michigan will create a new standalone lab, combining both partners' ambulatory business and targeting a $1 billion market, with operations expected to begin in early 2027.

• The co-lab agreement will see Quest manage 21 Corewell hospital labs, with integration starting by late 2024 and full management by early 2026.

• The LifeLabs acquisition in Canada is delivering strong synergies in procurement, know-how, and reference testing, with both organizations benefiting from shared best practices.