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June 26, 2017 01:00 AM

Quest Diagnostics, Walmart partner to offer lab testing services in stores

Alex Kacik
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    Sipa USA via AP
    A logo sign outside of a facility occupied by Walmart.com in Bethlehem, Pennsylvania on February 26, 2017.

    Wal-Mart Stores and Quest Diagnostics announced a partnership Monday that will bring Quest's laboratory testing services to 15 Walmart locations in Florida and Texas by the end of the year.

    The centers will initially provide testing services, but they may expand to include other "basic" healthcare services over time, the companies said.

    "By providing laboratory testing and healthcare services where people also shop, we will make it easier for Walmart customers and their associates to get the quality diagnostic insights they need in convenient locations," Steve Rusckowski, Quest Diagnostics' CEO, said in a statement.

    George Riedl, president of Walmart Health and Wellness, described Walmart as a "one-stop shop" for everyday health and wellness needs.

    The partnership signals Walmart's continued expansion in the healthcare space and a comprehensive patient-centered focus on healthcare delivery that strives to keep broader populations healthy. The company expanded its efforts to place retail clinics at its stores in 2014 through a collaboration with QuadMed, with a focus on preventive care and management of chronic conditions—some of the biggest drivers of rising healthcare costs.

    Both Walmart and Quest have been trying to embrace more consumerism in healthcare as they look to alternative delivery settings such as retail clinics that aim to increase access, improve outcomes and lower costs. Madison, N.J.-based Quest partnered with Safeway in 2015 to offer diagnostic test centers at their stores.

    "This aligns with Quest's objective to be recognized as a consumer-friendly provider of diagnostic information services by offering access to lab services in convenient locations," said Jason Plagman, an analyst at Jefferies & Co. "From the Walmart side, they have operated retail health clinics in some of their stores for nearly a decade, so we view this as a new twist on that strategy."

    If the partnership is successful, they could expand outside of Florida and Texas, he added.

    This type of nontraditional partnership embodies a rising disruptive change in healthcare, said Rita Numerof, healthcare industry consultant and president of Numerof & Associates.

    "I think it is an important move and creates more angst and momentum to help traditional delivery institutions think of different care models across the continuum," she said. "More of a focus on the consumer is what we need as well as how transparent we are about outcomes and the relative cost."

    The current healthcare business model is bankrupt—change is long overdue, Numerof said.

    "We need a new business model," she said. "We can't keep shaving reimbursement and adding regulation and expect that it will continue to deliver."

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