Dive Brief:

• LabCorp has formed an exclusive preferred laboratory testing relationship with the Texas Association of Community Health Centers (TACHC), giving it access to more than one million patients.

• The extension of the 25-year relationship between LabCorp and TACHC runs counter to the prevailing trend, which has been defined by insurers ending long-running exclusive deals.

• However, the small size of TACHC relative to the accounts LabCorp is now sharing with Quest Diagnostics means the agreement is unlikely to have a big effect on the balance of power in the clinical laboratory testing industry.

Dive Insight:

The past 12 months in the clinical laboratory industry have been characterized by a move from sole partner relationships toward deals that give insurers and providers access to services from two or more companies. Aetna and UnitedHealth delivered the totemic deals of the trend by ending their exclusive relationships with Quest and LabCorp, respectively, creating fresh competition for services covering around 70 million patients.

Horizon Blue Cross Blue Shield of New Jersey, a smaller regional insurer, followed suit but others have bucked the trend. This week, LabCorp revealed it has struck a deal to be the exclusive preferred lab for the 75 community health centers and 500 service locations covered by the non-profit TACHC.

The deal will enable LabCorp to provide laboratory services to the more than 1 million patients who are treated at the community health centers that are members of TACHC. These health centers have worked with LabCorp for more than 25 years but TACHC is nonetheless hoping to get something new out of the revised agreement.

"We expect that the use of data analytics will help us better address health trends across the populations we serve and that new programs for chronic diseases will have a positive impact on the lives and health of our patients," José E. Camacho, executive director of TACHC, said in a statement.

The data analytics initiative will seek to identify population health trends. Armed with these insights, LabCorp and TACHC think health centers can run targeted outreach programs that discuss screening, monitoring and treatment options for certain widespread health conditions. TACHC also plans to offer LabCorp’s Litholink clinical decision support programs to members that care for patients with chronic kidney disease or diabetes in a bid to improve outcomes and cut costs.

LabCorp's focus on services that are peripheral to its core testing offering is indicative of the nature of competition for the clinical laboratory testing market. With little scope to use pricing to gain share, LabCorp and Quest are working to differentiate their service offerings through analytics, improved consumer experiences and other features.