Tuesday, January 02, 2007

Quest Diagnostics Outlook 2007

Well, with little fanfare the old year has left and with it the contract between United Healthcare and Quest Diagnostics. It is now 2007 and this is the time when the rubber meets the road to borrow a tire company marketing term from bygone days. It is now, today and in the weeks and months to come when executives at Lab Corporation of America and Quest Diagnostics will get a better feel for how things are to shake down.

The people who will determine the matter more than almost anyone are the medical professionals who will have to choose to remain with Quest Diagnostics or simply take the path of least resistance and send the work to the United Healthcare contracted party. It is an issue which has most people in the industry watching closely.

For some it is a test of how much faith is placed in the medical laboratory professionals at Quest Diagnostics to be the laboratory better able to serve the needs of both patient and client. To others it is simply a matter of practicality. When all is said and done, it will likely prove to be the educated consumer as it is they who will ultimately have the final say in the matter.

I believe that most people will want to have their medical specimens tested by the laboratory which they have greatest faith in. The recent advertising being run on radio would indicate that Lab Corporation of America believes that to be the case as they are in my opinion working that angle in the radio campaign. That is how I translate the current campaign.

Quest Diagnostics while attempting the same general scenario has seemed to have backed down on its own campaign of radio advertising a situation which has left me somewhat puzzled. I don’t know quite how to interpret the apparent lack of advertising spots in the New York market.

I am wondering if they have become so confident with their business dealings with the medical professionals which they serve that Quest Diagnostics simply feels no need to continue with the radio campaign at this point in time. Perhaps the timing of the campaign has simply run its course and has done all that it is worth doing at this moment in time. The dynamic for Lab Corporation of America might be slightly different requiring them to continue their radio campaign.

I believe that Lab Corporation of America had hoped to convert far more Quest Diagnostics accounts prior to the end of 2006 than have actually been converted. Perhaps the ability of Quest Diagnostics to retain accounts up to the end of the contract period which is now expired is viewed by Quest Diagnostics as perhaps many medical professionals determining to work out of network and continue sending much United Healthcare work to Quest Diagnostics.

That of course would be a disastrous scenario for Lab Corporation of America as they have within the wording of their contract with United Healthcare committed $200,000,000.00 to protect United Healthcare from leakage.

It is of course also a potential disaster for United Healthcare as anything beyond the first $200,000,000.00 falls directly on the shoulders of the executives of United Healthcare. And with the expense of medical diagnostic testing $200,000,000.00 is not a really large amount of money to burn through in the perspective of a ten year timeframe.

Considering that it is a ten year contract between United Healthcare and Lab Corporation of America that presents a very long and potentially painful period of time for both of those companies. It might very well prove to be a situation which leads to lawsuits and infighting. Oh, to be a fly on the wall.

Of course this is all speculation on my part and only the passing of time, more specifically the next few months will determine what is ahead for all three companies. It shall be interesting to keep an eye on this issue.

Even if the majority of the work does follow the path of the contract, surely Quest Diagnostics will find ways to develop new business opportunities as it has always done in the past. When you make integrity your number one priority all other things always seem to simply fall into place. As long as the playing field is level I am sure that Quest Diagnostics will do just fine without regard to how things develop in the next few months.

The only thing which really still bothers me about this is that sticky little issue of Lab Corporation of America being able to offer their fleet drivers an employee benefit which still appears to me to be funded by the tax payers of the United States of America.

I still don’t understand how a company like Lab Corporation of America can improve their profit margin by making taxpayers like you and me provide a company vehicle to each fleet driver for personal use and write it off as a business expanse when it is clearly not any such thing.

That practice sure sounds like tax fraud to me and I really wish that the Executive at Lab Corporation of America and the accounting department of that fine company would explain to the taxpaying public how, if at all, they justify all of the expense associated with the personal use of those vehicles to the Internal Revenue Service of the United States of America.

Of course the sales and marketing staff at Lab Corporation of America might also want to explain to the medical professionals utilizing their service that above and beyond any cost associated with testing services there is the added expense to each medical professional on a personal level, out of his or her own pocket for the use of gas, tires, oil and mechanic bills to keep that Lab Corporation of America fleet vehicle going to soccer games, football games, vacations and to the market for groceries.

This little Lab Corp. vehicle driver went to market on your dime; this little Lab Corp. vehicle driver went to town on your dime, this little Lab Corp. vehicle driver ate roast beef on your dime and this little Lab Corp. vehicle driver ate none. And this little Lab. Corp. vehicle driver went wee wee wee all the way home on your dime.

Perhaps when the Lab Corporation of America driver walks into the office the receptionist can simply take twenty bucks out of the doctors’ wallet and hand it to the Lab Corporation of America driver.

Remember, when you as a taxpaying American fill up the gas tank just double the price per gallon. One half will be for the gas that you put in your vehicle. The other half will be for the gas you put in the Lab Corporation of America vehicle for personal use.

Someone once said you get what you pay for. She or he was wrong. Sometimes you don’t get what you pay for. Sometimes someone else gets what you pay for. You just get the bill.
Snake Oil Sam
Snake Oil Sam Internet Media Publishing © 2007

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