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Quest Diagnostics Buys California Hospital Outreach Lab

NEW YORK (360Dx) – Quest Diagnostics on Friday confirmed it has purchased the outreach laboratory services of Dignity Health Sierra Nevada Memorial Hospital for undisclosed terms.

A Quest spokesperson said the acquisition does not affect inpatient or outpatient lab services at the Grass Valley, California-based hospital. "This transaction with Dignity Health Sierra Nevada Memorial Hospital is the latest example of how Quest is uniquely able to empower health systems to optimize their laboratory services."

The deal is the latest by Quest in a string of lab-related purchases by the clinical laboratory giant. A little more than a week ago, Quest said it entered into a nonbinding letter of intent to acquire the outreach lab service business of Cape Cod Healthcare. In mid-June, the firm said it was acquiring two Texas clinical labs and forming a precision oncology center of excellence.

The moves come as new regulation called the Protecting Access to Medicare Act is set to take effect on Jan. 1, 2018. The regulation, which will result in some cuts in clinical laboratory reimbursements, is widely seen as a potential driver of consolidation in the clinical lab space, with Quest and Laboratory Corporation of America as the main beneficiaries.

LabCorp has also been active in the M&A front in 2017 and in May completed its buy of Mount Sinai's Clinical Outreach Laboratories' assets, and of Pathology Associates Medical Laboratories.