Quest deploys new technology to deal with market headwinds

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Although automation and artificial intelligence have long been recognized as a way to improve operational efficiency in clinical laboratories, an industry-wide staffing shortage is creating an added motivation to incorporate more technology.

Even before COVID-19, clinical laboratory staffing levels were tight. Then, the stress and burnout during the height of the public health emergency led to a surge of health care workers leaving the field as part of the Great Resignation – including technologists, laboratory scientists and laboratory technicians. Many labs are still struggling to maintain staffing, and the U.S. faces a shortage of roughly 98,700 lab technologists and technicians, according to employee benefits manager Mercer.

In a November 2022 survey conducted by the Health Industry Distributors Association, 68% of laboratory executives said one of their biggest priorities is investing in new technology, such as automation and artificial intelligence, as a solution for portions of the workflow that are routine, repetitive and high volume, thereby helping to ease the staffing shortage burden.

At Secaucus-based Quest Diagnostics, it’s just one of many market forces that is shaping the company’s post-pandemic business strategy. During its most recent earnings call Feb. 2, Chief Executive Officer and President Jim Davis said Quest, like many companies, is up against “significant inflation and wage pressures,” as well “tailwinds from recent Medicare reimbursement changes … and declining COVID-19 revenues.”

As a result, Quest is doubling down on efforts to drive productivity and expand margins in its base business, he said.

As part of its plan to accelerate growth, the company – which is one of the largest testing providers in the country – is taking steps such as lab platform consolidation and forging more value-based contracts. It is also adopting “greater use of automation and artificial intelligence” across its network of 30-plus labs, Davis said.

He went on to note the launch of an automation conversion project at its lab in Lenexa, Kan., which built upon work already done at Quest’s state-of-the-art facilities in Clifton and in Marlborough, Mass.

By using the technology in complex medical areas like cytogenetics and microbiology, Quest said it has allowed for faster, more accurate and more efficient data analysis, which means the results get back to providers and patients sooner.

It’s also eliminated certain manual, labor-intensive steps of the test preparation process, enabling staffers at Quest’s labs to dedicate their energy to more critical tasks. Along with streamlining operations and reducing costs, automation can give staff more opportunities to work up to their training and license level, rather than focusing on routine items.

“By increasing productivity and efficiency, automation can add value to the dedicated workforce that makes the lab what it is,” said Quest’s Executive Director of Enterprise Automation Miguel Aldana. “The people behind the automation are the heart of the lab. With tools like automation enhancing their work, enhanced automated features can be expected to continue to help laboratory staff have more high-quality time back in their day.”

Throughout 2023, Quest will continue rolling out the technologies at its labs across the country, according to Aldana.

“Quest has long been at the forefront of implementing innovative automation technologies in our clinical laboratories. We introduced one of the world’s first most extensively automated laboratories in New England with our advanced 200,000-square-foot laboratory in Marlborough, Mass., in 2014,” he stated.

At its next-generation facility in Clifton, the lab “implements several of the same technologies, but takes them a step further with new technologies, most notably, using AI to further improve quality,” Aldana said.

Microbiology, which involves analysis of organisms that can lead to various bacteria, viruses and other organisms associated with disease, can be time consuming “because it requires growing enough organism in a culture over time to enable laboratory technologies to detect their presence,” Aldana explained.

“In microbiology, our automation technologies enable touchless processing from specimen receipt to results reporting on a significant portion of cultures for the first time ever, saving time for staff to report results to physicians,” he said.

By increasing automation in the microbiology department, the length of incubation for several culture types was reduced between 25% to 60%, depending on the test, according to Aldana.

“Tasks like specimen loading, barcode labeling and storage were also streamlined, allowing for the reallocation of some remaining responsibilities to different employees throughout the lab. Automation also decreased time spent on negative cultures [negative for disease found] through prescreening processes, allowing technologists to focus on positive cultures,” Aldana said.

Cytogenetics – which involves the study of chromosomes to look for problems, such as missing pieces of the chromosome, that could be associated with diseases like cancer – is “a very labor-intensive area of health care” that “specifically has one highly manual process – the chromosome analysis procedure – which increases costs and turnaround times,” he said.

“By identifying an automation solution to touch just one aspect of the process, we’ve made this step more efficient and are analyzing chromosomes faster. Thus, with these new features, our lab can perform more tests in the same amount of time as before – a 50% increase. The solution means faster and more consistent testing for the doctor and the patient,” Aldana commented.

The company did not specify what the average incubation period or the typical test turnaround time before the use of automation.

At Quest, which annually serves 1 in 3 U.S. adults, Aldana said, “We often say that behind every specimen we test is a life. We believe strongly in providing the best experience to providers and patients we serve. Part of this dedication involves staying abreast of innovation and new technologies that can power better and more affordable care. “We are excited to see what the future holds in this space.”

In 2023, filling and retaining frontline positions continues to be “a key priority” for Quest, Davis said. “Although we have experienced higher than average turnover in some of our job categories, we have taken actions to stabilize our workforce and improve frontline employee engagement and retention,” Davis told shareholders during the fourth quarter earnings call.

He went on to say, “Attrition has a really major impact on your productivity when you’re constantly churning phlebotomists, logistics and specimen processing, so that has stabilized, it’s coming down. We feel good about it and we feel good about the overall productivity plan in terms of offsetting inflation.”

For the quarter ending Dec. 31, 2022, Quest reported revenue of $2.33 billion, down 15% from $2.74 billion during the prior year period. Its base business revenue was up 6.3% to $2.15 billion, while coronavirus testing revenue was down 75% to $184 million for the quarter.

Full-year revenues of $9.88 billion were down 8.4% year-over-year, with COVID-19 testing revenues of $1.45 billion dropping 47.5% from last year. Full-year base business revenues were $8.43 billion, up 5% from $8.02 billion in 2021.

Quest anticipates full-year revenue in 2023 of $8.83 billion to $9.03 billion, consisting of base business revenue of $8.65 billion to $8.75 billion and COVID-19 testing revenue of $175 million to $275 million.