Post by luxetvox on Aug 9, 2023 13:01:39 GMT
Labcorp's Base Testing Growth Is Starting to Normalize in 2023
Labcorp's revenue growth decelerated after managed-care contract changes in 2019, though its lab growth has historically exceeded Quest's. The base testing business is projected to grow 11.3-12.6% in 2023 as Covid-19 testing is expected to decline by about $1 billion to an endemic state of roughly $150 million. Higher Covid-19 reimbursement fell off after the end of the public health emergency. (08/08/23)
1. Price, Mix and M&A the Moving Pieces for Diagnostics
Organic revenue growth for Labcorp's diagnostics unit has largely normalized in its base business. The company can once again turn to M&A to boost growth, a strategy which is projected to increase growth by one point per year. A fresh set of PAMA pricing cuts on the horizon could yield more M&A targets, given some small labs and hospitals may seek suitors. Organic-testing volume at Labcorp consistently rose at a low-single-digit pace, in-line with market growth, until the 2019 contract exclusivity changes. Price and mix dynamics have historically been more volatile.
Revenue per requisition, which measures the contribution from test pricing and product mix to total revenue growth, has been a major driver of growth due to the higher than average reimbursement for Covid testing during the pandemic. (08/04/23)
Labcorp's revenue growth decelerated after managed-care contract changes in 2019, though its lab growth has historically exceeded Quest's. The base testing business is projected to grow 11.3-12.6% in 2023 as Covid-19 testing is expected to decline by about $1 billion to an endemic state of roughly $150 million. Higher Covid-19 reimbursement fell off after the end of the public health emergency. (08/08/23)
1. Price, Mix and M&A the Moving Pieces for Diagnostics
Organic revenue growth for Labcorp's diagnostics unit has largely normalized in its base business. The company can once again turn to M&A to boost growth, a strategy which is projected to increase growth by one point per year. A fresh set of PAMA pricing cuts on the horizon could yield more M&A targets, given some small labs and hospitals may seek suitors. Organic-testing volume at Labcorp consistently rose at a low-single-digit pace, in-line with market growth, until the 2019 contract exclusivity changes. Price and mix dynamics have historically been more volatile.
Revenue per requisition, which measures the contribution from test pricing and product mix to total revenue growth, has been a major driver of growth due to the higher than average reimbursement for Covid testing during the pandemic. (08/04/23)