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Quest Diagnostics (DGX) Expands Extended Care With New Buyout

Quest Diagnostics DGX announced a new investment to broaden capabilities within its Extended Care services. The company announced a definitive agreement to acquire patient engagement company, Pack Health, in an all-cash equity transaction.

However, the financial terms of the deal were not disclosed. However, the transaction is expected to be closed in the first quarter of 2022.

More on the News

Pack Health works on helping patients adopt healthier behavior to improve treatment outcomes. It works to comprehensively address chronic conditions and comorbidities influenced by mental health, lifestyle behaviors, access to care and social determinants of health (SDOH).

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The company has certified health coaches trained for 30 chronic conditions. With the help of a virtual engagement platform, these coaches engage, motivate, monitor and support patients, providing personalized content.

Pack Health, with its clients ranging from health plans to pharmaceutical companies, provides several services, including medication adherence coaching for pharmaceutical companies' patient education programs, diet and exercise coaching for health plans focused on improving population health and quality metrics, and community resource outreach. These help in addressing SDOH, such as food insecurity and transportation access.

Strategic Implication

This latest acquisition is based on Quest Diagnostics’ 2018 acquisition of Mobile Medical Examination Service (MedXM), a provider of home-based health risk assessments and related services. This business is currently recognized as Quest HealthConnect that provides in-person home-based risk assessment and monitoring services that supplement care delivered in clinical settings.

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Zacks Investment Research

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The Pack Health acquisition is expected to broaden this business and strengthen the company’s ability to connect diagnostic insights to actions that generate greater value, outcomes and quality, allowing affordable care.

Growing Market Prospects

Going by CDC data, nearly 90% of annual healthcare expenditures are for people with chronic and mental health conditions. Many of these diseases, including diabetes and heart disease, can be delayed or prevented on early detection and management. SDOH is claimed to influence this.

Going by a January 2022 report by Insider Intelligence, while care received in medical facilities can account for approximately 10% to 20% of health outcomes, the remaining 80% to 90% can be attributed to SDOH. Last year, 93% of U.S. payers and 95% of U.S. hospitals recorded and took into consideration SDOH when interacting with patients.

Latest Extended Care Services Update

In August 2020, Quest Diagnostics and Quest Diagnostics Foundation announced Quest for Health Equity — a $100 million initiative to address and reduce health disparities in underserved communities. The company also helps communities access diagnostic services through a national network of relationships with federally qualified healthcare organizations.

Share Price Performance

Over the past year, Quest Diagnostics has outperformed its industry. The stock has gained 10.2% against the industry’s 46.4% decline.

Zacks Rank and Key Picks

Currently, Quest Diagnostics carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space include AMN Healthcare Services, Inc. AMN, Apollo Endosurgery, Inc. APEN and Laboratory Corporation of America Holdings LH.

AMN Healthcare, carrying a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average. You can see the complete list of today's Zacks #1 Rank stocks here.

AMN Healthcare has outperformed its industry over the past year. AMN has gained 46.5% versus the 57.2% industry decline.

Apollo Endosurgery, carrying a Zacks Rank #2, has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average.

Apollo Endosurgery has outperformed its industry in the past year. APEN has gained 50.4% versus the industry’s 4.8% fall.

Laboratory Corporation surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.7%. The company currently sports a Zacks Rank #1.

Laboratory Corporation’s long-term earnings growth rate is estimated at 10.6%. The company’s earnings yield of 9.4% compares favorably with the industry’s 3.4%.


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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report

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Apollo Endosurgery, Inc. (APEN) : Free Stock Analysis Report

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