Re: Sale of Bio-Reference - Developing Story
Investments to secure and bolster same store sales
The history of investment into infrastructure also tells the tale of motivation by the senior executives at BRL. The VP's built a long track record of purchasing expensive company cars and a corporate plane rather than bolstering technical staff and instrumentation over the last decade. This mindset changed radically in 2010 with huge policy shifts for in house functions and then again in 2011 as the super STI test volume and its ancillary tests threatened to break the company operationally. Another major shift and company investment is in the area of satellite draw stations. Prior to 2008, it was fairly unusual to find BRL draw stations outside of NY, NJ, PA and MD. However, this process picked up steam in late 2010 in an effort to secure low tech higher volume business in a much broader geographic region. BRL now has branded draw stations at great distances from NJ (Miami and Phoenix), which secures new revenue from an aging client list.
With the BRL market cap heading towards $700M; the pressure on Quest and Labcorp to recapture over $250M/yr in managed care leakage is at fever pitch. Both of the two juggernauts have made gutsy plays in the last 14 months in an effort to shut BRL out of giant pools of patients. In both FL and AZ tens of millions in revenue was placed in jeopardy when Quest and LabCorp got their contracted payers to freeze BRL's claims. Executives responded on the managed care front more forcefully than any other time in their history.