Laboratory Industry Report

Outreach laboratories are enjoying 20 percent to 27 percent profitability, based on contribution margin or pretax income, compared to Quest Diagnostics’ 13.7 percent and LabCorp’s 17.8 percent for 2008, according to results from the 8th Annual National Outreach Survey, conducted by Washington G-2 Reports and Chi Solutions. Revenue per requisition is also up to $65.95 for 2008, compared to $43 for Quest (Madison, N.J.) and $38.38 for LabCorp (Burlington, N.C.). However, the survey of over 150 respondents found that outreach programs still have significantly higher days sales outstanding (DSO) and bad debt rates compared to the national competitors—two metrics under close scrutiny during this economic environment.