DGX - Earnings call transcript Q2 2021 | Quest Diagnostics Incorporated

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Operator

Welcome to the Quest Diagnostics Second Quarter 2021 Conference Call. At the request of the company, this call is being recorded. The entire contents of the call, including the presentation and question-and-answer session that will follow, are the copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without the written consent of Quest Diagnostics is strictly prohibited. And I'd like to introduce Shawn Bevec, Vice President of Investor Relations for the Quest Diagnostics Group. please. ahead, Go

Shawn Bevec

good Chief and our with Rusckowski, Steve Financial Thank Officer morning. and Chairman, Executive Guinan, President; our Officer. you, I'm and Chief Mark

results and may system tests, The care results, will company non-GAAP forward-looking future primarily the on the impact continues financial the reimbursement recent During from measures governments non-GAAP condition are those include, differ the of uncertainties, press and impact rates GAAP knowledge tables and and may release. governmental its severity COVID-XX call, of the that are health X-K. to comparable XX-K beyond provide including Form COVID-XX future the the state quarterly local impact by the US Quest timing, control. of on and and XX-Q molecular make US the federal, described annual projected. in be and most health and for vaccination effectiveness on of reports the our including pandemic efforts, this filed we'll reports the Form and clients believe but reconciliation duration, cash the driven impact pandemic, care payer and/or Risks that limited we our affect those to discuss pandemic on to, materially insurer, responses flows scope operating economy which pandemic’s company's the to drivers pandemic and and measures. measures not subsequently on current of Form Actual Diagnostics' We COVID-XX a in report may statements earnings results

revenue to EPS or to business reported diluted to growth growth, references testing. and associated compound rates annual organic diluted refer to from call, total projections, outlook to including revenues refer COVID-XX our rates. EPS. this reported revenue are Any business, EPS growth and adjusted refer testing, our performance with to references earnings adjusted the long-term growth excluding growth, acquisitions, For of Growth references volumes revenue base adjusted EPS

acquisitions be against from Finally, revenue measured base rates business. our growth will

Steve here Rusckowski. is Now

Steve Rusckowski

This Thanks, to business. today. to grew hospital first build us being based Shawn, recovery growth base since systems. XXXX base compared lab as quarter. our the the from quarter The contributions testing had and that health to thanks continued testing quarter new people to faster revenues and as organic thanks, contracts in another than in everyone, driven is Organic strong expected XXXX management for grew. momentum, by was returning revenues well We care levels

the business. and health positioned the well more for on for momentum continue of have update base is our provided remainder outlook about we to provide the and are to our second care underlying return XXXX, on provide which dynamics our support reflected our and I our morning, performance the then perspective will will results the you financial discuss detail This Mark industry We in quarter on of coming in XXXX. And talk assumptions. months, outlook and

regard with First, testing. COVID-XX to

the with catch return care whilst pandemic. in return to people remains up milestone, we we laboratories weeks. seen control classroom we rates some the students testing another the increased in to stabilize during delta the of have in workplace pre-pandemic virus. COVID-XX health experienced as geographies of to continues help our weeks spread and And recent where might closely rapid watching a are have Positivity all the modestly. testing two PCR health by postponed employees cases, they We begin critical the to increase the have spreads served In and variant to care the also few to last weeks. performing return volumes and over expect

to as by current were Court labs data the could dismissed Along of of rate produce payer labs. regulatory work change on pleased overreach will the recent trade labs, Congress assumptions. to the supports laboratory PAMA. the representative separately, is reporting Act which to approach fee charge laboratories, We in based and Medicare continued implementation a burden March. an PAMA, is Medicare a hospital continue to it our right fee estimates with we feasible certain for for US while by the beneficiaries schedule on of LAB challenged trade market the lab physician intent rates which that XXX This for rates establish turn service and with MedPAC intended. vital the Act. PAMA. And of schedule laboratory recently increase clinical the is to that FedCap spending over representative accurate mandated clinical MedCAP of collection association, by statistically sample reducing late policymakers PMO, consistent with valid and XX% services to HHS originally our District CMS the innovation independent in to the LAB office rates legally view private of under I'll to and report association and has challenge process a found the tests XX% truly was volume of appealed market access to HLA original report the lab top The Now that the would

lab laboratory to services high-quality is time on. patients infrastructure strengthen support the and depend our continued Now access that to

few increased for to and XXX% second on $X.XX, than results Cash reported XXX% XX% quarter. a to billion. adjusted share Turning per on an $X.X our Total by some revenues $X.XX. basis grew in and increased in COVID-XX nearly basis to which of quarter, country by the in nearly Earnings slowed the in since trend. below tests more a well variance. the the better to the million. last expected COVID-XX business weeks delta with our to the our provided a our attributable of demand per In XX,XXX essentially in slower base current than more as an of levels day. for XX% recovery than the emergence Northeast. recovery the capacity organic stabilized believe in reflecting Demand performed revenues quarter, to wide most to extent we approximately modestly, average we second testing XXX,XXX expected, returning and June. of to industry an We based quarter continue pre-pandemic operations a day of June, see recovery increased $XXX seeing testing strong molecular second by the Though by tests is We're to has in

in testing to fast systems engaged easy, of for with settings other Betel Bioworks, the CIC students collaborating and the also [education] partners We Health, and and classroom. safe the the affordable have Gingo country. support quarter with school return in a We're and sectors to with working businesses travel make group Memorial Institute to across

operational drive and We highlights here second on to make some quarter. to are progress continue from two accelerate growth point the strategy our excellence, and

Arkansas, year half opportunities and acquisition our of base on of we our continue Oklahoma. the completion outreach business We execute this this to care our of With from of additional most laboratory with patients Health, announced in providers we way health approximately the on services with strategic Missouri Kansas, and are of acquisitions M&A the systems business accretive X% and acquisition second in strategy. our multi-state highly nation's the an one M&A In revenues year. Mercy to June, integrated grow

value our Anthem. quarter programs based We continue UnitedHealthcare and made grow to with business progress plan health and in with the

are average. plans of faster these company growing volumes health than Our the

to employee these invested an We additional have important also support headcount better relationships.

Aetna's we provider During relationship network. contractual our pleased the and preferred to We customers of largest were our quarter, of also plan partner with renew laboratory Aetna. longstanding health a one remain

launching us to labs, on improving time first the market, of that service value competing customers a for value. and the the health affiliated members. We're preferred Aim end, Quest costs. decade, is in care. Delaware's towards to of It's enhancing addition, we In Primark one focused all XXX,XXX of and Quest be helping new reducing over designed on basis campaign be good in brings the more health to serving than of health, in-network And the back population remind patient nonhospital a that Triple quality, experience care's are the

in growth. have week. million quarter. the our account recent our clinical advanced full to the patient we're pleased we're discussed app to patient leadership care. to our continued testing cost Base with in and our of initiated patient to care patients and consumer Our outcomes than see test our speed portal the power accelerate the In ability with resources improved quality, accessible an innovation, Investor to recovery each XX easy are at ability and revenues speaks for use accuracy reduce drivers more of which tracking investing and better finally, we enable growth and to in results, on affordable Day million enrolling campaign Today, MyQuest XXX,XXX clinical patients diagnostics, X experience in, about nearly grow

consolidated be testing laboratory operational Baltimore scheduled Now initiatives full to across invigorated This improvement to facility next Clifton, progress has to we're and on complete We and highly turning new our energy month. strategy. Philadelphia. effort targeted on There in made second driving to flagship New to automated the previously track productivity intent continues X% We're Teterboro, performed around our in the Jersey our and business. transition excellence. deliver our

getting paid for do. We focused on we are what

patient of collection We positive patient focus also acceptance physician and by for has of levels, to XXXX of the digitization the base have been concessions made second in were revenues denials on quarter down payer our the reducing steady driven pandemic One progress in our outcome the a experience. improvements.

paperless customer self We to percentage options digital moved and serve a for transactions. of with are customers more and today greater more have focused efficient volumes we

to Now outlook and I'd Mark remainder on provide our for the turn over details Mark? performance XXXX. of like to more it to financial our

Mark Guinan

revenues Information base offset X% acquisitions the year up quarter our the testing second CIS approximately with lower our the X%. services testing quarter strong to and number second prior X% quarter base in excluding than our increased nearly more versus requisitions, measured XX.X% prior last In the which up versus by total reflected the Revenues the revenue the to consolidated was by Steve. XXXX, revenue year. XX% baseline, from base for Volume, XX.X% XXXX slightly of versus second contributing Compared Compared testing grew revenue, acquisitions. year, X%. billion, COVID-XX in it Thanks, increased of grew nearly were Diagnostic the approximately prior volumes $X.XX recovery to quarter, year. Services compared second

approximately PLS the testing new over benefited volumes that base from grew total last acquisitions, contracts up year. X% have Excluding ramped and

to [Technical We with discussed our approximately strategies million in compareto volumes XXXX baseline, testing ramping These second our Difficulty]… investments term accelerate are fall million Importantly, $XX $XX growth. in expected to base were half. investments the long targeted support our making to

We expected. expenses to of ensure the guidelines, these quality levels to and staffing CDC $XX business We in to recovers comply back faster to address with than as half million high also the maintain incur and year. continue of forecast challenges chain levels supply service expenses approximately be base the

assumes back assumes of both a stronger least tests the XXXX. to base modestly and the of now base volumes revenue the will and our day in recovery of midpoint assumes per molecular of tests of molecular base and 'XX low X,XXX I the growth testing our It single guidance turn high day. greater a versus end business. Finally, in recovery per it also half level of testing the outlook assumes XX,XXX guidance digit business COVID-XX business end COVID-XX strong slightly our average at low in Steve. and continued COVID-XX second of the serology an faster The our

Steve Rusckowski

with summarize, a recovery to we than another had Well our quarter business. in strong Mark. faster base Thanks, expected

serve well people and the and to coming support like all continue of in months. return every the then needs our Quest to day. health the who are thank the positioned employees care I'd rely to Quest on finally, We momentum team to And

Now we'd any be Operator? happy questions. of your to take

Operator

[Operator Ann question Securities. Instructions] Mizuho Hynes, Our first from

Ann Hynes

or your question -- that throughout or molecular of any day. the for guidance for you that can the are half? that the and they just worse inflation is those you And Is I your average think what just do pressures second about XX,XXX have about the I entire see tests year? per stable exiting guidance said on just half kind a labor second assumes assumes Also, you for talk year? getting

Mark Guinan

the moves. for somewhat the revenue. business expect So the not there's high also average digits course XX,XXX, of the base a more because moving And on base significantly of guidance. would guidance get in low The would it's to XX,XXX we was middle of the Ann, single more To testing part dependent half. rate, pieces the than at be COVID the the and end the guidance, is exit end baseline then stronger back then business mid XX,XXX is it how of recovery stronger for

the to we you. So that's range try for how dimentionalize

it pressure, in we this year. labor we our responded built point back terms not and half. and the It's of some in that In into at to whole that's saw the certainly accelerating of outlook

make a periodically, was So which where we certainly We adjustments not year. and that some annual process have salary wage the make we implemented market done in we've and that's adjustments earlier unusual.

nothing extraordinary in terms inflation. the year the labor half there's of So in back of

Operator

is Our with Brian Jefferies. from Tanquilut next question

Brian Tanquilut

question my guess you, I for Steve.

the As you we there, especially the PLN can recovery exit it some as the like and there. But any think you're on uptake about the we traction the we're networks, and and the preferred getting seeing give drag. color sounds us COVID progress

Steve Rusckowski

then with started programs mentioned the that we're good across And about. as we've in so feel feeling last place we working we program know. that put with the country, a have these we're We of So over we you the couple Brian. years, United, Anthem about

continue to payers growing payers faster programs work I as And the see the those our volume remarks, said and through my this an on base that than going We other see opportunity those do what other with we recovery. payers well. in as

network. you around before traction we those I've in the And everything I then value we in and get are we And all actually said put And remarks, primarily tell a network was aim Quest about about remarks with place. good. my lab as talked a to us triple quite cost in and tighten my like care. really in where move describe quality getting for the feel low to engagement So see we've some organizations Diagnostics high opportunity between variation it's an can we're what to laboratory up what and affordable the

is we opportunities advance So see done in good the more making we've front opportunity progress. of us. What already in and

Operator

Nephron next is question Our with Meehan from Research. Jack

Jack Meehan

March more sort of dig you the helped since per the demand around June? commentary linear And little that have to made trajectory? curious around a end whether you're might would base to recovery. business any in wanted be acquisition you if helpful. test Any I the of bit fairly it seeing on Was was that then pent-up thought commentary the and

Steve Rusckowski

by half. So we the base are step recovery it's say seeing step I improvement a in been a the nice nice first business. of over would sequence

geographic after New Connecticut York York coming continues along. get and you levels. in but we levels 'XX happening. to ‘XX recover that’s not the as life the throughout much We stubborn recovery slowest high kind base see the what we're but there's well. direction, current and the And general within and our portion we down remember is And of back somewhat continued business which we laggard, entered at back Massachusetts and see that, said we Northeast starting business basis, business, drug a as QX to the being includes happening recoverer, I country and into business. genetic it's of actually recovery. in hopeful and cancer then remarks, the our [binocular] health mentioned all that's that do and half You different before, ways I people will, QX. monitoring will being -- and opening to digits is cost prescription with just somewhat look the City not New into business see started in of my been around move single toxicology a diagnostics that or of recover, if we still right being to And in of improved good it they're the as as And on our boroughs, testing actually clinical advanced [metabolite] our a

more with anything answer like nice a that? Mark, question you to steady you'd clinically also progression has to your So started it and of geographically. to add

Mark Guinan

actually regions I'll thing is of it volume nationally. first been only couple in we those even it the couple a we to do is that of The that months has had of though somewhat the before are pandemic. have Jack, steady add, growth XXXX And uneven back

we're about why PLN feeling we've other on as back about good just the that our such good and that's key and getting the recovery, we're with things utilization partners really not So working the around continuing have our strong talked to called about POS. out based then And how hospital payers with of really contracting some much made around value progress relationships with and we've systems. relationships we've

So we what to much able news offices, good last not getting before more over started. open And the go months back therefore, that the XX are is the but We're we're things we back pandemic in the than for were to were business. completely, doing plus. to

Jack Meehan

relating saw? anything there you that pent-up was to And demand

Steve Rusckowski

You What tests we are per requisition. more in about talked req our we is tease know out. calculation revenue it’s of hard to seeing that per

test and So in one the that there that a up could divisions they step of for show been on the some is tag assume office months. XX because the haven't

you hard on my as a But Mark's and got So to months. but of to the we to little done that remember 'XX, levels. have bit that of when catch first 'XX some in growth we’ve up nice remarks return pre-pandemic believe prepared couple tell, started people into point, we’ve also, there's we in

to share opportunities to see gain more top front got to build and we continue of we've we're what that of for. planning also on recover So us in

Operator

Morgan next Our Stanley. question from with is Ricky Goldwasser

Ricky Goldwasser

Just and question. of a quick follow-up sort my then main

that Just on renewed the you follow-up, the Aetna you contract. mentioned

months? how that think then you're programs remodel, pricing impact we value XX we understand And we to based signing should how the now the about wanted see the for just So when payers. next should with think the about

you’re give maybe with focused us on relationships Medicare? I the your more mentioned upside contracts these are faster some Can some the price sharing you versus growing color than from it's what's also or that commercial are these Steve, the actually framework, of protection. based mostly savings you where And on value you sort book. seeing think, and of rest downside fixed

Steve Rusckowski

what’s want you do in… about talk Mark, to

Mark Guinan

the extended. And of contract because there It was programs what continue that we was no change touch significant stronger be minute, to contract, we on I'll in off, first Ricky. Aetna value elements a will in pricing. So that in to you invisible based and build call

rules obviously, on of because program. There you not well. But Medicare So harder that are really sharing things focused upside although to Medicare in it's as upside us. commercial, our them but do us are the Advantage in with they're that do can more Advantage with the framing the [pure] sharing commercial around is their certain some

win we together. So

their show So more greater of we better in value to lab as network providers to some relative their obviously, value cost work providers themselves And by getting or level a for cases high it's pay other membership network, historical that their out upside in base or like fully earn to been a is a members base ourselves of we book, insured contract at they level. then and a contract. not for discount, kind really money,

So have to is And give more payers quality, but that we service to But we've in buy-in focusing case ecosystem. we're that and the better and more to the solution. do on been for order the members years good about it drive not value making from that better didn't better price what our we with was focusing us and more getting that's working for gain. everybody up their for on really in part of can

going shared. for Steerage of accounts go when calling [national] educate list us lot to network with or et of cost plans, who elements of have to their the we a give people cetera. higher those providers. really efforts We coinsurance, the out that's support, in they So where

to of And influence savings the soon cost, buy bearing incentives payer it's major as gotten a are step every share immediately, in buy of those over talked more and therefore, we of covered would start outreach instead that's when maybe windfall those billing those has them rates then good of fully years. the it the M&A where outreach contracts. of that if for we obviously price, payers some that an couple And first the benefit obviously, element patients that's and that doctor. we've into we in about past down terms of the huge the fall higher So and some and taking like to the but we in just hospital by one which as our debt we payer

see the can So we're and where when case like in that is a members. upside when they're do actually therefore, that that than prove for together have we've driven saved chance it's money to buying in didn't things that, finally the we Ricky, they're them improvement we we and earn and their there that made we successful past successful and now more we've of

Ricky Goldwasser

levels. the follow-up upside base just on So payment one to

upside, at So the should now could by sort of a think we is at the year of of upside from or payments would to that kind you that see end of this we about numbers as year, just something the basis? the end the on that quarterly calculated through flow

Mark Guinan

I'll examples gave. I Well, the two address

where steerage more So we're in moving it's quarterly. the one, work, really

it's at a that. So look constant

that's that and so more that's catch-up purposes for formula us, a once of a have not year for doing regular a rec reasons, lot of for rev for It's a us more on regularly. a approach. but accounting better not better for both then and we're for and also just We much reimbursed

would be just over is for little what when would we that do volume would the from we obviously, somewhat get a system more bit that that that it be our the clearly outreach negotiated M&A, rates the a than us, you. business. with On a moved premium to hospital of invisible Because has historically hospital paid have to what we means some deal

thing, a up. quarterly So really to a regular Again, not catch going you’re that. not to that's going be see monthly

Operator

now from next question Giacobbe with Citi. Ralph is Our

Ralph Giacobbe

to you and end, year. the PAMA of just your to the looks the prepared an restart closer Day, headwind. kind us higher Maybe mentioned remind then cuts next remarks, for And $X the to number. XXXX likely range I you think, like and Analyst in pointed So are an suggested at EPS

that, then talked your confirm just coming you investments And that assumed back half. to that comments incremental was on the about PAMA back. wanted in Just

does to about that number we Just for XXXX? wondering change should related anything that $X that be thinking

Steve Rusckowski

PAMA. Let me with start

remember we our in we're on answer better PAMA. said filing So to get hard remarks a

but And that in representative believe obviously if MedPAC gave cost, were in we said with clear do not versus to be on what that our We that top. us report, But outlook data with XX% we're is that the that collected will to keep clear, the right to XX% in that was it's of was because another there we're that the all in the through rates outreach, you assuming all do keep we to on reduction so worst what the a fix to get just now. some have that to on clinical regard, that going saying make those increase some data, that case be remarks. we the some congress 'XX, going hopefully, suggests a price XX% work that. see And in that to an with XX%. have I'll legislative we'll And saying reduction work to pushing a reduction see it work we in in

Mark, So range and a bit Day. pointed where that's Investor on are at want we to to do clear. you the little talk And then

Mark Guinan

the much clouded business I piece we smaller at knew revenues. we that the that CAGRs should were because recovered said of fully I end laid [$XXX]. laid and point everything we based it upper the have suggested that saying And point, in PAMA be is included year is some a out the a the should base that would from has And what business of CAGR base pandemic range. of on yes, be of business. that is So that that. in we base and say absolutely end out felt And all confident hoped our by else we with obviously, would we in what and everything was [$XXX], XXXX COVID issues the the at being we're that

year be of point, reductions had sizable at the should we've nothing changes, the shared was PAMA I that As last implemented. that if since this

So cut And to between based fee year. XX% what going but XX% on can overall CPT our XX% less the somewhere is current of be book next current so there on higher schedule than code methodology, estimate the we XX%, on any we than based and to XX% business see. can be

it to traditional in because is couple of of that similar much when first PAMA. Medicare what business going of started, impact than to dollar book years it be was actually the we was is However, smaller the

years. we've So that it’s be still a we to some know incurred X% with for based shared And pricing, might revenues. that compared competitive feel pricing combined and our marketplace. with somewhere you large PAMA the we’ve if there stabilized commercial on our once and We several the understanding some really small overall fixed, around going then cuts while know in relatively intelligence isn't prices recalculation they're to certainly, we what be beyond everything even commercial of of don't that, get number, but we our

Steve Rusckowski

initiated back outlook $XX to investments the we about million guidance we we're We And at Day that’s of talked recovery additional investments. the And We the to the both consumer at entirely we've today consistent continue continues advanced the feel around with half accelerate what relationships in with diagnostics. on and we about the seen platforms. see. up teed growth and to consumer we resources. see plans in or it's also the We're the hospital opportunities then allowed year, self we Investor in about feel good We We see make opportunity opportunities there on talked about the testing. Investor provided. good of that and our worth guidance Day, investing

for we in to these is the outlook to that make digit us top allowing to is X% accelerate to performance the investments our single high to which get and growth growth. So 'XX to line beyond, earnings X% growth, provided you

ability make them. our So investments feel those to making are we're good we about and

the in people, hiring the it's the included we're we're the money and in So spending guidance half. back

Mark Guinan

And then well. as the revenue

talked of about before them coming coming return terms pandemic. in get years by in much immediate. of million [millions] small XXXX, we and some potential consumer, business some the from that's So are more we've several the these of the On $X.XX

with could over some we're year you all that. doing, $XXX come that things or like the million so that of be It's incremental building next we're in to And the going to significant get revenue to the imagine last going something to of years. not couple

revenue expense. as growth incremental upside for we're those So just well not investments, getting

Operator

Deutsche next Bank. question is with from Our Pito Chickering

Pito Chickering

Two quick follow-up questions here.

last XXXX the the range quantify the low And this investments business do end you COVID year? guidance? the for you year, assumptions guidance, same next nature on midrange the base onetime does the just question, and for add guidance. or clarify this assumptions you continue levels On high they beyond? quantified to have XXXX that to of investments and and in the Are Can additional into the making you're

Mark Guinan

So to high specificity equation. because I a end, at been quantify multivariable it's didn't with intend

do of lot what to was clear low make reasons. So a I wanted for the end

that than these so to volatile one You there's learned we've expect. for can pandemic and end. much what we wanted probability high how things goes a a low a this we people think to thing make might would and And imagine, is that to hard we we've slower we predict. get And somewhat all that seen are don't understand or stalls really business recovery backwards not it's it's that. But base

because provide or or you that If even sure other to a down, more. want shut country deliverable of XX% things we plus variant lot to cause geographies that you saw guidance the that we are might across celta retrenchments make the of

per go estimate. many floor, you opposite right understood beyond make moving balance once to that of that the so could for average We than we're a to COVID the direction. day, give getting sure get the lower point different that significantly kind people you we there's harder anticipate wanted year It's in So also parts now.

might The learned working for we've while. imagine, our thing As the driving not you obviously, with this also on we've term. obviously been cases, is increasing. outlook is a volume overact short news delta to the positivity rate One up recent

So we're transparent. very

two we So volumes weeks. give every you those

weeks. that going see we felt So highly and assumptions outlook deliverable, to two volumes, reasonably what to those are we make that can COVID around especially clear deliverable you're the build every

where know morning. net terms in to going I going laid range you're this outlook out we're of So that

Steve Rusckowski

temporal there the revenues the term within that investments, would continue to would and into of But some case As be as investing assured business we're 'XX. rest as well. you that will the long far be in But expect, associated reapplied 'XX. are investments as capabilities

investments will do yes, and assumptions, have the So that. these us that of have for outlook portion to trust some we'll we those investments investments to are 'XX

Mark Guinan

to Ralph's to provided the Day. into Investor back built I in And were those outlook that I again, emphasize question, want

opportunity So quarters to to business. for we've COVID some our not earnings see that couple we long but deliver last term the just us upside growth invest revenue actually base give opportunities. the record clear these of for and the prospects tried make The to accelerate

of near the balance results growth was long the the it business. term well between right as thought we So term delivery as

gave contemplated so you for that and years fully all investments. I And when when then those I frame these multiyear outlook XXXX,

Pito Chickering

number for on today then just that XXXX? say reiterating that the are fair you So it one, is to

Mark Guinan

changed. nothing's Yes, so

was that there would range feel if us compelled months feel that cause would something that, was longer we no six over to appropriate. the So last

take it, We some will of absolutely.

Operator

Leonard from Fargo. with Wells now question next is Dan Our

Tim Daley

Daley for This Tim Dan. on is actually

So I Pito's wanted just dig to more on question. bit a

believe in total the the as opportunity So half relation has for guidance to framed of the I year. second upside the to back school

us general some any to the heading more ranges discussions then I discussions, weeks COVID could any discussed? additional maybe level clarify, school be testing we to or just away based back Like company but wanted year? a secondly, school. some start And So guidance into I'm is are Just to of back given first, been insight sure baked the you for there helpful. give back there to the school from kind kids of off there's happening? the screening one would color big there internal and really push broad at ground on are plans the into

Steve Rusckowski

whatever money United partners help the we then school and program to that to States systems highlighted billion. just the two And a States to return come programs. been So COVID understand, partners that where system throughout the is out the million has programs do to are programs clinical apply portion what United and program working testing reimburse own did expectations program come to school to to back funded up. for with throughout testing. with the I larger for about get that with life with for Mark can us to of XXX we different the off would have could funding school we've that testing. the is But and that return money $XX school One We its have go testing to laid would and around you there's assume return down a life And every as mean, is going plan.

into up who And And returning United will variance to need And sure return soon safe we what with And do the been the given and that what, have that across start so when. remotely. month delta of believe more now do there that going testing ramping have think be to August I'm than some to in make sure be bearing will amount the we're and September. office kids expect does that a States return they're variant, I of working people fair we to I also that is see for going to when school. the on there workplace, to those back the programs,

safety I there's with level testing I that. my vital that as in happening. heightened is been said clearly, remarks, of think earlier to And

used as of is testing. days would embedded believe we not So lot well. we've of COVID capacity COVID the of portion hospital expectations We in testing as a that But the in our our down. come clinical that assume that testing early for

last And the delta from in effects two. the some the been recent of to of so increase variant see the we far seen related week we've that has some or

so the color I’ve provided hopefully, assumed guidance So what's in far. some on

Mark Guinan

testing everybody testing. I just our want that very than remind to different works. It's how clinical surveillance

test So where today for think about $XX the if PCR you surveillance. not we're test, that's over per averaging economical

have a samples if for regions a testing with are reasons. to well, those up retest when positive numbers economic We as the we're samples. in individual our approach. methodology heavily we positive low we come responsibility are of handful today what pull is pulled So But it's our

too many want you you're to suggests So of be retesting the samples. because that math lot a to going don't pull

surveillance, the that is to it. go nobody assumption you when has so And

retesting. even so in do And identified. going this lot to to it But a actually, obligated case, we're because do not less therefore, not they’re you're

in the we samples, It's not case, shared us. what done, knows happens let's collection is XX whose is say, So it All do the are the test this entity, collections school, in specimen the be positive device. and with separate administrators, it's need And that's order. know where then the we And is which in separate a negative et to students then say a retested. cetera. hopefully. payment, this they, case That's that

XX equate and this can And the that's economies have PCR important to this our because be we coin, huge core so is reason a to for economic approximately kept single one to the order that with vessel. specimens in make to do

be dollar So same the volumes fold have line. the XX top at values for to our

months. offset some several and be significant to seen absolutely there's that yes, but momentum got point really volume. needle enough we’ve testing the And to there, in move at has this So and of clinical we've really not some endorsed last the really funding needle while it embraced. point, be we the this But won, the the some over contracts we've move to to to broadly seen the decline

Operator

is Derrick Bank Brown now Our from next with America. question of

Derrick Brown

So twp quick questions.

a routine color bit and esoteric on color business, a are the base just in versus that. of seeing terms you testing? little oncology on recovery Just anything in more Just little the particular bit more in

tests that the And guiding XX point million question XX to differences, quarter. I'd in some from of In coming went contrast, just geographical some up. you're million gave to in they're point got second [Danaher] care we love -- tests and off differences. the then they another You keeps the mixed about, talking but first of care

on the testing, term the on to to that this trend is the impact lab business players given the we going of from space. sort number care So central one are is home point market at question of this entering longer get the of point particularly continue, on of the care continue of and

into your on So care your I'd Thank you. point on volume thoughts the to applications spot love certain sort of to of hear shifts general market?

Steve Rusckowski

Let me first one. the start with

which testing, cardio to So is diagnostics our would referred the us what there. and that’s we and of I is health metabolic sometimes sometimes general type say the that’s recovered prognostic in our States and said United is -- routine as our by also and industry general

business, pathology of think investment plan. nicely, and actually our we recovered remarks, about making well our are business. is definition we've as and some I business seen which called oncology, Second, in asked And esoteric growth has recovery as against you tracking AP and at there, diagnostics we're said advanced investments sometimes we our my accelerated our

feel point of quarter the with would as place be then care, question, I of saw do testing And a care the care. we we some to that's care is numbers testing you has volumes our our modest second when second stabilized, We related taking of PCR new somewhat work believe return the portion we So you there to there's will, the of believe do we And good test. the that these point about place say the which saw approaches. in to the report when point of what see that. antigen programs the PCR some with standard. We if and also and with point applications. gold continues do of and is to that Well you equally increase demand,

And questionable so for cases, do many back PCR they there is not when in positive to the reflex negative. a testing the metric false negative sure,

do going do PCR and as as devices, is well antigen point forward. we did a we place So including good in we believe the believe the there of care marketplace

Operator

from question Peterson Tycho next with J.P. Our Morgan.

Unidentified Analyst

been answered my A today. of on Julia lot is have questions already. This Tycho for

contract earlier It's great an So you're having success well. just to new with United following see as Aetna up about your with Anthem question with payer recently on and program. and that

the faster than You your previously book. rest said relationships growing the of volume are through these

opportunities? Just of faster these curious are And capitalize are provide making what on much growing? can kind volumes you on investments if color some to you these how additional

Mark Guinan

of more certain in So not as much concentration geographies. there's equal. not answer imagine, have also you might because And each to an -- faster all there how them more they're are

York City growing different New and specifically is Northeast So shared at rates. with as we

in that you we payer Texas. if there, than a different that have answer membership there, payers more the So are assume might

would I say, Florida, even So California. or

the one of breakthrough wallet in at, you them we look understand health to it's regularly our a [oceans] have and and So key share kind these and our back full it growing these we plans. of we know, share we objectives, we've our of information have process, because we And those. at forth looked call with -- of is one share

of growing we in And to be seem And saying our in also that's see pace are we're terms as the basis for growing themselves recovering they so through faster. recovery. at volume that to the their we have same whether that the going chance membership, that's

in the growth share double couple you of hundred first in our basis pandemic points kind of points saw XXXX we difference. couple basis what what you meaningful. a of XXXX. the is hundred know two to It's started to big a this percent So going before differential. clearly or business is digit we a of be shared not back of look half That's as performance, months But

historical line back growth getting by that what but the happen is share that, market finally get fully above growth multiyear that at that's recovered we'll of we to And laid in Day. to utilization out So not gains. our of becomes Investor what just outlook business

Steve Rusckowski

that all plans said what And as we're everyone going to far plan as share. of do to the is investments, gain what detail, Mark

nationally some it locally happens business. and it and of And of some happens some line by that of of happens

talents So plan grow go do with their the plan national we to and to sponsors have some programs and payer sponsors.

lot local. so And is that a of

is those detail a investment when asked lot variation we where by making in we investments. are payer. capacity those that around where we're opportunities speaking you programs so plans. to And of the And the payer drive to we health put need extra by where about We'll think and what there's question we're dollars investments talked those

Mark Guinan

one but past, the broadly. in shared example, which you give we've really just expanded I'll it's other

pre-authorization of so So behavior that of some part in take around toxicology starting as such as and put the and onerous the of rules the The perspective in providers, payers some is some on. payers there they really was in monitoring. place, to concern grow

ourselves. Of ourselves who around course responsible how that panels our very are impacts everybody, we including conduct like people the and

for the also because more monitoring. need. the it's they're good others if to got competitor that about calling work right talked make steer are not payers, going testing work it it's not And is it's get some them only for and rid when us, very more you the patient, certainly difficult that, be of went and them us, they some I and to so right say actually And tops less. not do you we hey, to like of for chief said, But for that prescription just just would our responsible. good not We to

So in pre-op. where from place in they put actually rules we're vented

another people, with of and we're change example that's a approach benefiting rules thoughtful patients to example So so to and to where testing. rules not get an time as to where more of it's really understand them But them them to again, a it's work these but some around lab are because other an get it's and of lot behaviors. investment, an the investment

Operator

question now Our from last Larew William with is Blair. Matt

Matt Larew

the you Clifton in throughput, sort In XX% capacity, the the think it wrap next consolidation said I will January live lab month. up think I you more increase and from So XX% in Steve, past about doubling here of went talked productivity.

how Clifton? going, to as how consolidated on data the to Just volumes far should about any we into and curious is the if are points impact so there share think margins consolidation

Steve Rusckowski

the bring we pleased the all our of to the track that harmonization So this and And same and and in continue we're pandemic up to the new them we for it's on with do. this in pretty facility and purposes platform all processes get in intents around running. able have do middle facility and consolidation, organizational we are It's program built around remarkable to within what systems to we're that that facility.

investment have our platform for we for that implemented in So And in we've of we strokes place implementation, we're feel new about then a about, lot talked Siemens, good big from systems it's it. been of the the facility, a on that final we new immunoassay us.

more and lab in good partner through place with some them end gains to the for And We’ll come. are and Siemens as done our automation that front with We Inpeco. getting automation has systemization pretty the actually, well. put new

progress that we are part gains and already are we so outlook pleased looking excellence that productivity of the more as forward made have we are details to of in in and included systems that provided our burn and we're productivity in the Investor the program forward we So early our going at that those already improvements out with and Day. some operational X% to from work far continue

Matt Larew

Thanks.

Steve Rusckowski

Okay.

call, thank everyone, this we continued you, your for So and support. appreciate

great a You have day.

Operator

call domestic approximately Thank will Diagnostics August the site participating the www.questdiagnostics.com. later Quest for XXXX in may XX, be time, until Conference Quarter Call. X, XXXX. you accessed online July or for at prepared XX:XX callers posted of call replays today Second at transcript www.questdiagnostics.com/investor time of Diagnostics' on Quest available or remarks Web at for on Eastern international on Goodbye. A a.m. this be by XXX-XXX-XXXX XXXX, XXX-XXX-XXXX be replay phone callers. Eastern Telephone midnight from will A

Quest Diagnostics (DGX) 22 Jul 212021 Q2 Earnings call transcript