OhioHealth outsources lab work to Quest Diagnostics
OHIO, UNITED STATES — OhioHealth Corp., Central Ohio’s largest hospital system, has announced a significant shift in its laboratory services by outsourcing part of its operations to Quest Diagnostics Inc.
The move, part of a $200 million deal, reflects a growing trend among healthcare providers aiming to enhance efficiency and reduce costs.
Quest Diagnostics, a leading national laboratory company, acquired select assets of OhioHealth’s outreach laboratory services. These services cover lab testing at locations such as doctor’s offices, urgent care centers, nursing homes, and public blood draw stations across OhioHealth’s expansive 50-county service area.
Despite the transition, OhioHealth retains ownership of its hospital labs for inpatient and outpatient care, as well as specialized testing for surgical and oncology specimens.
Addressing capacity and cost challenges
An OhioHealth spokeswoman explained the decision: “National labs, like Quest, have significant product offerings that we don’t have. Additionally, OhioHealth does not have the capacity to manage the high volume of tests and expanding our central laboratory would require a significant capital investment.”
The outsourcing arrangement is expected to lower out-of-pocket costs for patients while maintaining robust lab services within OhioHealth’s hospitals. Tests are now processed at Quest’s Pittsburgh facility, leveraging its advanced infrastructure.
Impact on employees and locations
The transition has affected staffing and operations at OhioHealth’s outreach labs. While about 75 employees remain with the hospital system, approximately a dozen positions were eliminated. Quest extended job offers to most workers at the affected sites.
Currently, only four OhioHealth lab service locations remain under direct management in Athens, Nelsonville, and Mount Gilead. Quest now operates several other outreach lab stations previously run by OhioHealth.
Part of a broader healthcare trend
This partnership aligns with a national trend of hospitals outsourcing lab services to companies like Quest and Labcorp to cut costs and improve efficiency. In a similar move, Quest recently acquired outreach lab services from University Hospitals in Cleveland.
“Health systems are increasingly turning to Quest because of our unique ability to deliver laboratory testing that is innovative, accessible, and cost-effective,” said Jim Davis, CEO of Quest Diagnostics.
OhioHealth reported record revenue of $6.39 billion for the fiscal year ending June 30, with an operating income of $422.5 million—a 6.6% margin—highlighting its strong financial position amid this strategic shift.
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