My website host server was down for well over twelve hours yesterday, so I was not able to put a post together for today. Will be back tomorrow with new content. My apologies.

Quest Diagnostics to reorganize, lay off 400-600 managers

Quest Diagnostics announced yesterday its plans to lay off between 400-600 managers as it restructures into two main divisions.  The restructuring will be effective January 1, 2013, while the layoffs should be complete by the end of 2013.  Quest says this move will save the company an additional $65 million.

I read somewhere the reorganization and layoffs will decrease the number of layers between the CEO and front line employees to seven from the original ten, but I cannot find the reference to cite that fact-sorry.

The two divisions will be called Diagnostic Information Services and Diagnostic Solutions.  Here is Quest’s description of Diagnostic Information Services:

The Diagnostic Information Services group, which will include the vast majority of the company’s revenues, will replace the current Physician Services, Hospital Services and Cancer Diagnostics businesses. It will develop and deliver diagnostic testing, information and services, and be responsible for new test development; sales and marketing; routine and esoteric laboratories; and field operations.

The addition of three new senior leaders was also announced yesterday: 

Everett V. Cunningham-Note:  Pitched in the minors for the Texas Rangers

Everett V. Cunningham will join the company October 15 to become Senior Vice President, Commercial. Mr. Cunningham was most recently Regional President, Established Products, Asia for Pfizer, Inc., where he has served in a series of sales leadership and general management roles over the past 21 years.

 

John B. Haydon

John B. Haydon will join October 22 to become Senior Vice President, Operations. Mr. Haydon is currently Executive Vice-President and Global Head of Operations and Business Excellence for Philips Electronics.

 

 

 

 

Jeffrey S. Shuman

Jeffrey S. Shuman will join October 22 as Senior Vice President, Chief Human Resources Officer. Mr. Shuman was most recently Senior Vice President: Chief Human Resources and Administrative Officer for Harris Corp.

 

 


Source:  Quest Diagnostics | Press Release

 

MADISON, N.J., Oct. 11, 2012 /PRNewswire/ – Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic testing, information and services, launched a major management restructuring aimed at driving operational excellence and restoring growth. In addition, the company appointed senior leaders to head its new Commercial, Operations and Human Resources functions.

The key element of the organization change will be to eliminate existing business structures and replace them with two new business groups, Diagnostic Information Services and Diagnostic Solutions. The changes are scheduled to take effect by January 1, 2013.

“The new organization will allow us to aggressively drive operational excellence and improve our customer focus, which will, over time, enable us to restore growth,” said Steve Rusckowski, President and Chief Executive Officer.

With the launch of the new organizational structure, Quest Diagnostics will be able to focus more on customers, speed decision making and accelerate cost reductions.  As a result of eliminating complexity and empowering its employees, the company expects it will be able to eliminate three management layers, or approximately 400 to 600 management positions, by the end of 2013, thereby contributing about $65 million in savings to the previously announced cost reduction goal of $500 million associated with its Invigorate program.  Quest Diagnostics has about 42,000 employees.

The Diagnostic Information Services group, which will include the vast majority of the company’s revenues, will replace the current Physician Services, Hospital Services and Cancer Diagnostics businesses. It will develop and deliver diagnostic testing, information and services, and be responsible for new test development; sales and marketing; routine and esoteric laboratories; and field operations.

In conjunction with today’s announcement, three senior leaders were appointed to key positions:

Everett V. Cunningham will join the company October 15 to become Senior Vice President, Commercial. Mr. Cunningham was most recently Regional President, Established Products, Asia for Pfizer, Inc., where he has served in a series of sales leadership and general management roles over the past 21 years.

John B. Haydon will join October 22 to become Senior Vice President, Operations. Mr. Haydon is currently Executive Vice-President and Global Head of Operations and Business Excellence for Philips Electronics.

Jeffrey S. Shuman will join October 22 as Senior Vice President, Chief Human Resources Officer. Mr. Shuman was most recently Senior Vice President: Chief Human Resources and Administrative Officer for Harris Corp.

“Everett Cunningham and John Haydon are experienced, results-oriented individuals who bring the knowledge and experience needed to drive operational efficiency and help restore growth,” said Mr. Rusckowski. “Jeff Shuman is a recognized leader in human resources, with a proven record of delivering transformational change. I am excited to welcome all three to Quest Diagnostics.”

In addition, Quest Diagnostics announced that several senior leaders will be leaving the company. Richard Mahoney, Vice President, Healthcare Information Services; Joan Miller, Senior Vice President, Oncology and Neurology Services; and David Norgard, Vice President, Human Resources, plan to leave the company by year-end. Joseph Benage, Vice President, Insurer & Employer Services, will leave in 2013.

“I would like to personally thank Dick, Joan, Dave and Joe for their years of service to Quest Diagnostics and the many contributions that they have made to this great company,” Mr. Rusckowski said.

The management restructuring, including the reduction of management layers, will accelerate savings under the company’s Invigorate cost-reduction initiative, and is expected to add between $15 million and $20 million to the previously disclosed charges.

Quest Diagnostics is the world’s leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is a pioneer in developing innovative diagnostic tests and advanced healthcare information technology solutions that help improve patient care. Additional company information is available at: www.QuestDiagnostics.com.

Comments

  1. RunFastDieYoung says:

    They gonna have to restructure to survive. Physician’s selling practices=less business. They better concentrate on becoming a speciality lab and give up on the bread and butter testing.

    • A says:

      Obviously many physicians are selling their practices to hospitals, like you say. What I haven’t seen yet (and maybe it’s simply because my area hospitals are not doing it) is hospitals reducing their lab overhead by turning them into immediate response labs with a modicum of tests (CMP, CBC, troponin, etc) and send everything else to Quest or LabCorp and client bill for it where allowable by state law.

      The hospitals would make a killing, both on the revenue side and the expenditure side, unless I’m missing something.

      Maybe that is the big reference labs’ next big move…start marketing client billing to hospitals instead of just physicians and clinics.

      Thoughts?

      • RunFastDieYoung says:

        If 88305 is cut too severely I worry many hospitals will do away with the AP side and client bill that stuff to some miserable sweatshop. Right now the AP side is still pretty profitable, even at moderate volume.

        In my area, the large hospitals are consuming other hospitals and physician offices at an alarming rate. Labcorp and Quest keep buying up the remaining independent labs and consolidating them but they have lost significant volume and laid off many.

        • A says:

          I doubt every hospital will do this, especially those with active frozen section services. In addition, with ACOs coming down the pipeline, time is money, and every day a surg path specimen is delayed while a patient is waiting in house is money lost.

          But only time will tell, I guess.

  2. dr.cosell says:

    Working for Quest must be a last resort for an anatomic pathologist. I’d be happy to hear from those with opposing views.

  3. dr st paula says:

    True, true, true. in my opinion other shake ips on their way too. this is just the beginning. hospital consolidated billing which became effective on july 1 is hurting big commercials labs. any clinical group now owned by hospital which is billing as hospital outpatient or inpatient place of service 21 or 22 falls under hospital consolidated billing. could potentially spell cuts of 1 to 2 percent of their collections gone and growing. due to approach of ACOs ….thank you obamacare…more clinics are being bought out by hospitals and the lab work including routine CP and AP goes back to the hospital. first they will cut managers then pathologists or pathologists salaries then shut labs with redundancy at big box labs and fire the regular folk. do they really need that many employees? there is tons of redundancy and when u cut people u lose your customers next because your service suffers. i feel most sorry for the pathologists that may be out of work with their enormous student loans from med school. i guess they will have nowhere to go but undercut each other reading inhouse slides for even less or beg the hospital to take them as an employee. this is all because pathologists never fought hard for their specialty or the future of the specialty. this website should be filled with comments from concerned pathologists but most pathologists dont have a clue about how they get remunerated for all their years of hard work and training. they will end up like Canadian pathologists and make what a tech makes in this country but paid a fortune to go to med school. so dumb to give it away for an employee spot. well now you will be let go and u r oo old and niche to find another job. so apathetic that nothing can motivate u. to fight for leadership in your specialty of laboratory medicine not even being unemployed or working for peanuts. doctors should be running labs not bean counters and IT guys. it is about the patient people. what does a bean counter or IT weenie know about that? they know NOTHiNG about patient care or the hippocratic oath. there is NOT one dioctor in the list of managers?!? not one token pathologist with business sense in the group. not even a PhD masquerading as a physician? or a med tech who worked there way up the ranks of corporate America? how sad. really. thank u for letting me share my opinion!

    • A says:

      Thank you for the comment…and for scaring me as to my professional future :)

      I hope the outlook is not nearly as dim as this.

  4. dr st paula says:

    excuse me PhD masquerading as a physician. they are not physicians or are they trying to write scripts too and run around in a white coat. we allowed them to do pathology with no medical school or internship either. these are all scope of practice issues that we lost long ago. very simple stuff …lab work is done on patients. patients should be taken care of by physicians. PhDs are not physicians. if they wanted to do pathology they should have applied to med school or done a dual degree.

  5. dr st paula says:

    let me clarify PhDs should not be allowed to medical direct a lab and they are in some states. we need to only allow pathologists MD DO to medical direct a lab. a GI GU or derm doc is not qualified to medical direct a lab.

  6. dr st paula says:

    sorry to use fear to motivate people who dont need motivating. obviously the pathologists who read this blog are the smarter ones who already know what going on in the lab industry; corruption, capitation and kickbacks. i was told by a tech who builds inhouse labs today that his labs are better because he has nearby pathology groups managing them and the slides are the same quality as labs that take outside referrals. could someone please explain to me how it is not a kickback for a path group to build and manage an inhouse lab for the slide reads or other interpretations??? what crooked lawyer found a loophole here? that is a kickback. the paths are building and managing the lab and giving away the TC to obtain the PC. why is the san antonio path group allowed to run the oncopath inhouse lab TC in return for the molecular or histology interpretations. and now this same inhouse lab is going to get other oncologists to send the molecular to their inhouse lab. if you take outside referrals u no longer fit the ancillary office exception to the stark law. so are they oncologists or are they now doing labwork now too? molecular is just an unlimited cookie jar for them. shame on u oncopath. greedy oncologists. its not enough to take all your kickback from the pharma companies. why not do lab self referrals too? the derms, GI, GU, ENT and now the oncologists. bunch of greedy unethical overutilizers destroying the specialty of pathology with the help of greedy hosp based path groups like those fee splitters in san antonio.

    • A says:

      I agree with you, kickbacks are everywhere. But they’re only kickbacks if you call them that. Lawyers, MHAs, MBAs have different words they use to describe what is at its essence a kickback, and they are getting away with it.

  7. dr.cosell says:

    Is Dr. St Paula implying that he/she would not enter into an agreement to take the PC fee and give away the TC fee if he/she had the opportunity?

  8. dr.cosell says:

    Dr. St Paula’s silence is deafening.

  9. Bazza says:

    I should be laid of real soon, I worked for Quest for for 10 years. I hardly every did any work, made excellent money and now I’ll retire. Thanks!!

  10. Bazza says:

    I should be laid of real soon, I worked for Quest for for 10 years. I hardly every did any work, made excellent money and now I’ll retire. THey are going to pay me for 6 more months too!! Thanks!!

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