Madison N.J.-based lab giant Quest Diagnostics signed a letter of intent to acquire Hyannis, Mass.-based Cape Cod Healthcare's outreach lab services business.
Here are six things to know about the partnership between Quest and CCHC.
1. At present, CCHC is responsible for diagnostic testing within its outreach lab services business, which includes 14 freestanding lab services programs throughout Cape Cod, according to a news release. As part of the partnership, that responsibility will shift to Quest. The lab giant will take responsibility for diagnostic testing at CCHC's freestanding centers. Quest will perform tests at its clinical laboratory in Marlborough, Mass.
2. CCHC said the partnership will not affect lab services associated with inpatient, oncology, emergency department and outpatient services provided at Cape Cod Hospital in Hyannis and Falmouth (Mass.) Hospital.
3. The partnership is expected to affect approximately 55 full-time equivalent positions at CCHC's freestanding centers, as well as at core labs at Cape Cod and Falmouth hospitals. CCHC said affected employees will be able to apply for other CCHC positions.
4. Under the partnership, CCHC will keep approximately 250 existing CCHC lab employees.
5. Overall, CCHC officials said they expect the partnership "to reduce costs while retaining the same high-quality lab testing and diagnostics."
"Our cost of providing these services is higher than those of other competitors in the marketplace; insurers and government payers have demanded that we lower costs and made it clear that they do not expect to continue reimbursing us for the full cost of our testing in the long term," Michael Lauf, president and CEO of CCHC, said. "With Quest as our partner, we can be confident that not only will quality and continuity of services be maintained, but we will also lower costs."
6. The Massachusetts Health Policy Commission must still sign off on the partnership.