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Shining a light on PE ownership.

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QU

Quest Diagnostics

healthcare
PE-OWNED

A clinical laboratory services company providing diagnostic testing and health information services.

PE-OWNED

Acquired by Cerberus Capital Management2021-06-01

View PE Firm Profile

What Made It Great

“

Comprehensive diagnostic testing services with nationwide laboratory network

What PE Will Likely Do

Predictions

Reduction in staffing levels, especially highly skilled laboratory technicians and scientists, leading to longer wait times for diagnostic test results and potential for more errors or delays in diagnoses

HIGH LIKELIHOODBased on: Cerberus Capital Management's track record of aggressive cost-cutting and debt loading in acquired companies, which often leads to declines in product/service quality

Shift towards more automated and less personalized testing processes to reduce costs, potentially leading to lower accuracy and reliability of test results

HIGH LIKELIHOODBased on: Common private equity tactics in the healthcare industry, including staffing reductions, billing upcoding, and service line cuts

Closure or scaling back of less profitable testing services, such as specialized genetic or esoteric testing, limiting the range of diagnostic options available to patients

HIGH LIKELIHOODBased on: The critical nature of diagnostic testing services and the potential for patient harm from reduced quality or reliability

Increased billing upcoding and aggressive pursuit of higher-reimbursement tests and procedures, leading to higher out-of-pocket costs for consumers

HIGH LIKELIHOODBased on: The critical nature of diagnostic testing services and the potential for patient harm from reduced quality or reliability

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Announcements of 'efficiency' programs and leadership changes, with assurances that service quality will not be affected

6-12 monthsYOU ARE HERE

“6 to 12 months months”

Staffing cuts begin, with increasing patient wait times and some service reductions

12-24 months

“12 to 24 months months”

Noticeable decline in test result turnaround times, more instances of errors or delays in diagnoses, and higher out-of-pocket costs for consumers

24-36 months

“24 to 36 months months”

Potential closure or scaling back of specialized testing services, further reductions in staffing and quality of care, and potential for significant patient safety issues or scandals

Similar Cases

Other companies that followed a similar path after PE acquisition

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Steward Health Care

Cerberus Capital Management·2010

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Envision Healthcare

KKR·2018

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US Dermatology Partners

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Hahnemann University Hospital

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Sound Physicians

Summit Partners·2019

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What You Can Do

Take Action

Actions

  • Monitor for any changes in wait times, test result turnaround, or unexpected out-of-pocket costs when using Quest Diagnostics services

  • Be aware of any reduction or elimination of specialized testing services and consider alternative providers if necessary

  • Advocate for regulatory oversight and consumer protections to ensure diagnostic testing quality and affordability are maintained

Alternatives

Non-profit health systemsSAFE

Community-focused healthcare

Kaiser PermanenteSAFE

Integrated managed care consortium

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"Quest Diagnostics is now PE-owned. Here's what that means for you."