Welcome to the
Quest Diagnostics Third Quarter 2020 Conference Call. At the request of the company, this call is being recorded. The entire contents of the call, including the presentation and question and answer session that will follow are copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without the written consent of Quest Diagnostics is strictly prohibited. Now I'd like to introduce Sean Bevec, Vice President of Investor Relations at Quest Diagnostics.
Go ahead, please.
Thank you, and good morning. I'm here with Steve Ruszkowski, our Chairman, Chief Executive Officer and President and Mark Guiden, our Chief Financial Officer. During this call, we may make forward looking statements and will discuss non GAAP measures. We provide a reconciliation of non GAAP measures to comparable GAAP measures in the tables through our earnings press release. Actual results may differ materially from those projected.
Risks and uncertainties, including the impact of the COVID-nineteen pandemic, that may affect Quest Diagnostics' future results include, but are not limited to, those described in our most recent Annual Report on Form 10 ks and subsequently filed quarterly reports on Form 10 Q and current reports on Form 8 ks. The company continues to believe that the impact of the COVID-nineteen pandemic on future operating results, cash flows and or financial condition will be primarily driven by the pandemic's severity and duration, the pandemic's impact on the U. S. Healthcare system and the U. S.
Economy and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic, which are drivers beyond the company's knowledge and control. For this call, references to reported EPS refer to reported diluted EPS from continuing operations and references to adjusted EPS refer to adjusted diluted EPS from continuing operations. References to base testing volumes or base business refer to testing volumes excluding COVID-nineteen molecular and serology testing volumes. Finally, growth rates associated with our long term outlook projections, including total revenue growth, revenue growth from acquisitions, organic revenue growth and adjusted earnings growth, our compound annual growth rates. Now here
is Steve Ruskowski. Well, thanks, Sean, and thanks, everyone, for joining us today. Quest had a very strong 3rd quarter, benefiting from continued demand from COVID-nineteen testing as well as the rapid recovery from healthcare utilization. We have performed over 22,000,000 COVID-nineteen molecular and serology tests to date more than any other provider. We've also developed and introduced several new innovations that are contributing to enabling the country's ability to return to work, the classroom and the athletic field.
I'm extremely proud of all that Quest Diagnostics has accomplished through the COVID-nineteen pandemic. I want to thank our 47,000 employees for their hard work and dedication. So this morning, I'll discuss our performance for the quarter, our role in the COVID-nineteen pandemic and update you on our non COVID face business. And then Mark will provide more detail on the 3rd quarter results and in our updated financial outlook for the remainder of the year. Our financial performance in the 3rd quarter was very strong.
For the quarter, total revenue grew by more than 42% to $2,790,000,000 Earnings per share increased by more than 164% on a reported basis to $4.14 and nearly 145 percent on an adjusted basis to $4.31 These results reflect continued demand for COVID-nineteen testing and continued recovery in our base testing volumes as healthcare systems resume non urgent care and elective surgeries. Organic base testing volumes orders declined high single digits in July and improved through the quarter to mid to high single digit decline in September versus the prior year. Demand for COVID-nineteen testing came from several areas. Clinical testing borne by healthcare providers as the virus spreads throughout much of the country, especially for non COVID 19 pre surgical patients and people with high risk populations like nursing homes and prisons. In retail testing, in our extended network access points such as our drive thru sites offered across the country by CBS and Walmart.
Workplace testing has employer sought to return employees to the job in their offices. University testing to facilitate return students to campus life including sports and our consumer testing, direct testing offered by Quest Direct. We've also demonstrated innovation and agility in bringing COVID-nineteen testing to our nation. In the quarter, we were granted an emergency use authorization or EUA to offer unobserved self collection. We were the 1st provider to receive the EU Enter the Pandemic or specimen pooling.
And then finally, we teamed up with Walmart and Drone UP to pilot a program for contactless delivery of specialty kits using drones. Also in the quarter, we announced an initiative along with our Quest Diagnostic Foundation to address and reduce healthcare disparities in underserved communities, including those impacted by COVID-nineteen. This value based commitment builds on our existing work with federally qualified health centers and will focus on serving people of color, elderly and underserved populations and locations throughout the United States. FlexPants to donate testing services in front of a range of initiatives estimated to total more than $100,000,000 Our goal is to improve access to testing, drive awareness of value of diagnostic innovations and managing health. Now before updating you on our base business, what I'd like to do is on comment on our recent CMS change to Medicare payment for COVID-nineteen testing and our decision to return the CARES Act funding to the government.
So in conjunction with our trade association, we've been currently reviewing the new reimbursement policy for high throughput COVID-nineteen blood pressure testing from CMS will impact laboratory and patients we service. Last week's announcement removes uncertainty that was an overhang on COVID-nineteen testing reimbursement. Finally, we're grateful for the CARES Act funding from last spring, which provided us with an important time of great uncertainty for our country. Now, several months into the pandemic, we no longer required this funding. And as a result, we believe returning these funds to the government now is the right thing to do.
We're making progress on our strategy to accelerate growth in the base business. So as a reminder, the 5 elements of our strategy to accelerate our to grow more than 2% per year through strategically aligned accretive acquisitions, expand relationships with health plans and hospital health systems, offer the broadest access to diagnostic innovation, be recognized as the consumer friendly provider of diagnostic information services and then finally support population health with data analytics and extended care services. Now I'll share a few highlights from our strategy to accelerate growth. Our M and A pipeline remains strong. Since the Q2, we closed our acquisition of Mid America Clinical Laboratories or referred to as MAPLE, which is in Indiana and we did a couple of Our recent acquisitions have been performing well during the pandemic.
For example, our Memorial Hermann outreach acquisition announced earlier this year as well as this recent MAPL acquisition have driven growth in both COVID-nineteen testing and our base business. We've also seen growth in Advanced Diagnostics from our acquisition of Blueprints Genetics. The 2nd growth driver, expanding relationships with health plans and hospital health system is also delivering. Our hospital and reference testing volumes excluding COVID-nineteen have returned to growth year over year. Given the challenges that hospitals are facing, we expect many more to be open to discussions about how Quest can help them achieve their lab strategy.
So in Professional Lab Services this year, we have logged a record amount of bookings, represent larger and longer term agreements than in the past. We also continue to make progress on our health plan strategy. Within the UnitedHealthcare Preferred Lab Network, we're helping United reduce out of TLN lab spending through the previously announced 0 out of pocket benefit. In addition, United has added enhancements that reduce the administrative burden for ordered physicians and patients related to those tests requiring pre authorization. And then in August, we entered into a new strategic relationship with Anthem in 12 states.
We're working with AFM to improve quality and efficiency in delivery of laboratory services. And then finally, additionally, we're working with major national payers to enable their members to access COVID-nineteen testing to request relationships with major retailers. We made progress on the 3rd element of our strategy to accelerate growth by offering the broadest access to innovation. In the quarter, we launched 3 new combined COVID-nineteen and respiratory virus tests, reducing time for physicians to diagnose by identifying nearly 20 viral and bacterial infections from a single swab. We also launched our automated next generation sequencing solution that enabled individuals to access useful genetic testing insights about hereditary diseases at consumer price points through Ancestry Health.
Finally, we grew our direct to consumer services in the quarter. Quest direct test offerings continue to resonate with consumers. In the quarter, we launched our COVID-nineteen active infection test, offering consumers the choice of using an at home kit or getting this specimen collection done at a drive thru location. Also, we made remarkable progress in the search of sign ups to our MyQuest patient portal. Today, roughly 13,000,000 patients have a MyQuest account to make appointments and receive their results through their smartphone or their computer.
In the Q3, on average more than 100,000 patients per week signed up for this service. This is more than double the rate we've experienced before the pandemic. And now the second part of our 2 point strategy is to drive operational excellence. We continue to pursue our goal to reduce our costs base by 3% per year. We also see more opportunities ahead to drive further productivity gains while at the same time enhancing our customer experience and overall service levels.
So here's a couple of examples. We have standardized on the Siemens immunoassay platform in 14 of our 18 regional laboratories. This solution drives workflow efficiencies and has enabled more than a 50% reduction in our equipment footprint. We are still in the early stage of this realized savings, but so far we're pleased with its progress. And then also our new flagship laboratory in Clifton, New Jersey is being prepared to go live in early 2021.
When complete the state of the art facility will be the most highly automated in our laboratory network and will represent the final regional labs to be converted to our standard operational IT system, which we call Qsuite. This will mark the combination of a multiyear initiative to simplify, streamline and standardize our regional laboratory operations. Now I'd like to turn it over to Mark to take you through results and update you on our outlook.
Mark? Thanks, Steve. In the Q3, consolidated revenues were 2,790,000,000 dollars up roughly 43% versus the prior year. Revenues for Diagnostic Information Services grew approximately 44% compared to the prior year, which reflected significant demand for COVID-nineteen testing services, offset by a modest decline in base testing volumes. Volume measured by the number of acquisitions increased 19.7% versus the prior year with acquisitions contributing approximately 3%.
We continue to experience improving performance in our base business in the Q3. Orders for organic base testing compared to our pre pandemic business declined high single digits in July and improved to a mid to high single digit decline in September versus the prior year. For the entire Q3, base testing volumes declined roughly 5% versus the prior year and benefited from recent M and A and the new PLS wins that Steve highlighted earlier. We also experienced a significant contribution from COVID-nineteen testing during the Q3, performing approximately 9,900,000 molecular tests and 1,500,000 serology tests. We exited the 3rd quarter averaging approximately 93,000 COVID-nineteen molecular and 11,000 serology tests per day.
Revenue per acquisition increased 20.9% versus the prior year, driven largely by COVID-nineteen testing. This was partially offset by Reported operating income was $718,000,000 or 25.8 percent of revenues compared to $313,000,000 or 16 percent of revenues last year. On an adjusted basis, operating income was $831,000,000 or 29.8 percent of revenues compared to 349,000,000 dollars or 17.9 percent of revenues last year. The year over year increase in operating margin was driven by the strong revenue growth in the 3rd quarter, reflecting the relatively high drop through on incremental volume in our business. Reported EPS was $4.14 in the quarter compared to $1.56 a year ago.
Adjusted EPS was $4.31 compared to $1.76 last year. Cash provided by operations was approximately $1,460,000,000 year to date through September 30 versus $895,000,000 in the same period last year. Cash from operations through the 3rd quarter includes approximately $138,000,000 of provider relief funds under the CARES Act. As a result of our strong financial position, we are planning to return the entire CARES Act funding we received, which Steve noted earlier. Additionally, we are accelerating the redemption of our senior notes in April of 2021.
We will use the proceeds of the bond offering that we completed in May 2020 to repay these notes. We expect to complete the early debt redemption in November. Turning to guidance, we raised our full year 2020 outlook as follows. Revenue is now expected to be between $8,800,000,000 $9,100,000,000 an increase of approximately 13.9% to 17.8% versus the prior year. Reported EPS expected to be in a range of $8.22 to $9.22 and adjusted EPS to be in a range of $9 to $10 Cash provided by operations expected to be at least $1,750,000,000 and capital expenditures are expected to be approximately 400,000,000 dollars We continue to operate under the uncertainty caused by the COVID-nineteen pandemic, continued recovery in the base business as well as demand for and duration of COVID-nineteen molecular testing are significant swing factors that remain challenging to forecast.
With that high degree of uncertainty in mind, please consider the following. The midpoint of our full year outlook generally assumes base testing volumes to remain modestly below last prior year levels as we exit 2020. COVID-nineteen testing volumes averaging nearly 90,000 tests per day for the molecular test and 10,000 tests per day for the serology test in Q4. COVID-nineteen molecular reimbursement generally stabled with recent trends. Our performance through mid October is slightly above these assumptions.
But again, our guidance reflects the uncertainty of the current environment. Finally, as Steve mentioned, we are currently in the early stages of launching our recently announced initiative with the Quest Foundation to reduce health disparities in underserved communities. As we move forward, we expect to exclude the costs associated with this multiyear initiative in determining our adjusted results. While we aren't prepared to share a detailed outlook for 2021 today, I'd like to offer some considerations for next year. First, we are likely to have an easy compare in our base business for much of the year, especially in Q2.
2nd, demand for COVID-nineteen testing is likely to persist well into 2021. We believe that molecular PCR testing will continue to play a very a very important role in diagnosing, tracking and tracing active COVID-nineteen infections and that there will eventually be a growing need for serology testing as vaccines and additional therapies come to the market. 3rd, we are working to understand the details of the recent CMS announcement regarding COVID-nineteen molecular reimbursement for 2021. And finally, as a reminder, there will be no Medicare reimbursement cut under PAMA in 2021 given the 1 year delay included in the CARES Act. I will now turn it back to Steve.
Well, thanks, Mark. And to summarize, we have a very strong Q3 and have performed over 22,000,000 COVID-nineteen molecular serology test to date. We've also developed and introduced a number of new innovations along the country to get back to work into the classroom and on to the athletic fields. We've seen further signs of recovery in healthcare utilization as our base testing volume continued to recover rapidly throughout the Q3. And finally, again, I'm extremely proud of all that Cross Diagnostics has accomplished throughout this very difficult time.
And I thank all the 42,000 people at Quest Diagnostics for all their hard work and dedication. Now we'd be happy to take any of your questions. Operator?
Thank you. We will now open the First question is from Anne Hynes with Mizuho Securities. Your line is now open.
Hi, good morning.
Good morning, Anne.
Good morning, Anne.
How's everything? So I just want to touch back on your comments, Mark, about the reimbursements for next year. I know that a little still is unknown. But just for modeling purposes, maybe can you talk about your current turnaround time, what you expect your molecular capacity to be by that time in January? And should we assume would you need to make any more further investments to be able to get that $100 reimbursement per molecular test?
And my second question is just about cash flow. Obviously, it's very elevated because of all the testing.
What do you expect how
do you expect to deploy that, once you're able to and maybe about timing of the cache deployments since it's very elevated? Thanks.
Yes. Let me start with the operational piece of that, Ann. First of all, we're running about capacity of 200,000 tests per day, even though what you heard from our guidance is we're running less than that in terms of actual results. And we've done that for two reasons. 1 is to be prepared for the fall where we're anticipating further demand for COVID-nineteen testing.
And then secondly is when we have more capacity, when we result less, it helps us with turnaround time. So I'm happy to share that right now we're averaging less than 2 days for testing for COVID-nineteen. Now what I'll also say as I said in my early introductory remarks, we're trying to understand the exact guidelines, and I'm sure there'll be more detail from CMS in terms of recovery excuse me, reimbursement changes. When we're looking at turnaround times, we're looking at it today from specimen collection to results and that's also by calendar day. And there'll be more specificity based on this from CMS, but there'll be more clarity around that.
So we're performing well. We've got good capacity versus our demand and we're not stopping there. We're actually increasing our capacity as we speak. We're working out some of the last capacity we can get out of some of the new systems we put in place. And secondly, as we're looking at applying cooling to some of our IBD platforms.
So that should get us to eventually coming out of this year at 250,000 per day versus the 200 today. So we should be able to meet the demand and keep our turnaround times at the level I've already indicated. So Mark?
Yes. So just to add to that, Ann, the devil is in the details. We need to understand exactly when the clock starts on turnaround time. Based on where we think it should end up, we expect to be in very good shape around meeting the criteria. We at this point assume we have to get more than half of those tests turned around in 2 days or less, but obviously we need clarification and certainty around that.
And that's for obviously Medicare, And we still have to work through some of the issues with the commercial payers as well to understand how it's going to work with them. So that's why we're cautious in terms of committing too much to what this business is. We're optimistic as we look at we're repaying the debt early from April that we issued in as a pre issuance in May shows our confidence returning $138,000,000 which of course is deducted from our projection when I at least $1,750,000,000 We're expecting a very strong cash year. And Steve mentioned, we have a very strong M and A pipeline. And as I've said many times to investors, I would prefer to do M and A because when we do it, we're highly confident that that's a better return for our shareholders.
So we do have very strict criteria. We have to find deals that meet those criteria. So I'm optimistic that we will deploy a chunk of that for M and A. And then at some point, you can expect us to return to our normal capital strategy as we move forward throughout the calendar year or early next year.
Great. Thanks.
Next question is from Steven Baxter with Wolfe Research. Your line is now open.
Hi. Thanks for the question. I wanted to ask you about the progression of core volumes through the quarter. I believe you said August core volumes were down mid to high single digits and then in today's release, I think it also has the September exit rate at about the same level down mid singles to high singles. So this really seemed to suggest that the baseline volume returning to normal slowed a little bit.
Is that consistent with what you guys have actually experienced? And if so, what do you think needs to happen to see it improve further? If it's not, what's the nuance that I'm missing? And then just to put a finer point on it, does guidance assume that you see a continued improvement from the September exit rate or basically a continuation at that level? Thank you.
Sure. Thanks for the question, Stephen. As we mentioned, volume improved from July. But really September versus August, it was fairly flat. So yes, there was a little stagnation and improvement in the base volumes, not completely surprising given the recent uptick in COVID again.
So it hasn't gotten worse for us, but it did not continue its improvement. And that's why when I talked about what we expect in Q4, we don't expect full recovery anytime this calendar year. So obviously, we have a very broad range, dollars 300,000,000 So within that range, there's multiple variables. But in terms of the base business, we're not counting on in the middle of that a complete recovery. We're not expecting it to move materially away from where it's been the last lower end and upper end of the range lower end and upper end of the range depending on that along of course with COVID testing as well, where they go from that midpoint.
So not counting on anything, but certainly improvement could lead us toward that upper end. And if it eroded a little bit, it could lead us toward the lower end of our guidance.
Yes. And we're watching that carefully. If you go back and hear what I said, we started off July in high single digits. And then also as I indicated in September, it was mid to high. So slight improvement there, but we're watching it as the we entered the Q4 and as we sit here in the Q4 in October.
Next question is from Ricky Goldblasser from Morgan Stanley. Your line is now open.
Hey, Ricky. Good morning, Ricky.
So I had a question on the gross margins. You came in meaningfully higher than us. Clearly, we're seeing the benefit of the return of core volumes. But can you maybe help us quantify of the gross margin that we saw in the quarter, what is coming from the return of core versus realized price for COVID testing? We understand the reimbursement, but also we're hearing you talk a lot more about direct to consumer
to consumer does come with a higher price point. Certainly there are other expenses that go with direct to consumer. We've actually invested incrementally in some marketing to drive awareness and so on. But from a gross margin perspective, the consumer testing is higher than our core business. But recall, even though we feel good about that business, it's still a very small part of our overall enterprise.
And then between COVID and VACI, obviously, we don't get into gross margins on specific test offerings. But the one benefit I will point out on COVID is that there's no patient responsibility. So when you think about it and I don't have the precise numbers, but just let's say, because our overall enterprise about 20% of our revenues come from patients. If we collect as we've shared $0.30 if we're $0.70 on the dollar, you can imagine that there's about a 6% higher margin on that particular business because it's 100% reimbursed by payers instead of having any patient responsibility. So there is some benefits in the gross margin by the COVID that really is unrelated to price and really has everything to do with the coverage policies and not having that inability to collect all the money that we're due.
Great. And just one follow-up if I may. You gave us some early puts and takes for 2021. We're starting to hear some companies that are accelerating hiring in preparation for next year. When you think about the increased need for serology associated with COVID vaccine, etcetera, Should we assume step up in costs related to increased hiring in preparation for that?
Yes. So Ricky, we have managed our workforce carefully over the last 6 to 9 months. As you recall, in the Q2, we had to bring down our workforce. So we furloughed over 6,000 people. We reduced work schedules.
We cut salaries including ourselves and Mark and our Board. And then we saw a steady recovery in our base business coupled with the COVID testing that we've done. So we've restated salaries. We've brought back full work weeks and we brought back the vast majority of the furloughed employees. And actually we've hired people.
So we've hired people where we need to hire people, particularly in areas like specimen processing. You can see what the volumes we're seeing. You have to have a lot of people to receive all these specimens to sort it out before they go on their lab. But I'll tell you, we're still being very, very careful before we add another person. We're being very careful in overhead and Mark can go through exactly what's
in
our expenses, but we've been very limited in hiring in our expense categories. And we'll continue to be very prudent with our hiring for our overhead within our laboratory operations and our operations in general. And the reason for that is we want to make sure we don't get ahead of ourselves. We feel we got good leverage in the Q3 as we speak. And we believe we have a workforce in place to manage the demand we're getting right now.
And we're with the exception of some of the volume based jobs as I mentioned. And so as we get into deeper into the 4th quarter, so modest hiring, we're back to full workforce and we're
continue to monitor demand next year at this point.
Next question?
An interesting enough is the last point is we do have attrition in some of our jobs. So we're somewhat just trying to keep up. There are other options for
Next question is from Ralph Giacobbe from Citi. Your line is now open. Great, thanks. Good morning. Good morning, Ralph.
I want to go back to the sort of reimbursement comments and specifically in your prepared remarks on the CMS reimbursement tweak and it
removing
as you know in the Q3 about the emergency order that's in place extended to October. We were hopeful that the rate would continue at $100 and it's our expectation given that the new rate changes with the incentive that we outlined will take place on January. So therefore, we're assuming the $100 for reimbursement for the remainder of this year. But up until we've heard this, there was some uncertainty about 2020. And then secondly, in 2021, remember the original rate was at $51 and it went up to $100 And so therefore the new reimbursement that's being spoken of again is if you get the turnaround time for 2 days you're at $100 if you don't it's $75 So that removes some of that uncertainty of it going reverting back to
where it was before we
got the bump from $51 to before we got the bump from 51 to 100. So Mark, do you want to take it on the commercial side? Yes. Generally, it's in the negotiation, Ralph. We
We have provisions in our contracts for new tests and certainly the high throughput COVID-nineteen molecular test is one
of those. So there is
no provision for it to fall automatically to any sort of relationship to CMS or what have they are. And even once they get rolled out, we see a roll. So whether it's a level of testing we're seeing today or something a little less, we expect there to be a meaningful amount of COVID testing, including the PCR testing throughout a reasonable part of next year.
Yes. Just to add to that, remember with the economy and we saw this back in
the Great Recession, whatever happens in
the economy will affect access. And so access is important to us
in the insured device.
And the second is consumer confidence. And we know a large portion of the population is paying for out there in their own pocket and therefore they're going to take twice of neutralizing it. So we are thinking about that as we think about Model 20 21. Now with that said, if you look at where we are with our base business versus where it was and you think about the math in the full year, it should be an easy comparison as Mark said in his comments about 'twenty one. Even if it's down versus 'nineteen, just to
look at the comparison of what
the full year will be for 2020 versus 2021 given where we are right now, that makes for an easy comparison. And as far as PCR remember, we brought up our first PCR test on March 9 and we've been ramping rapidly. So we have not got a full year of PCR. We're getting our stride. We're building capacity because we do anticipate more demand.
Winter is coming, and we're all anticipating more demand as we enter the winter, clearly in the Q1. And then we'll start to see hopefully some of the vaccines. As we all know, those won't be broadly deployed immediately. And the pandemic and the virus will be with us for a large portion of 'twenty one. And so if you think about the full year of 'twenty one for COVID-nineteen versus what we did in 2020, there's still going to be a lot of volume for testing.
And you have the full 12 months versus essentially a half year for PCR in 2020. So something to think about as you do your models.
Yes. And to Steve's point, for this year, based on our guidance expectations, we see our base volume down organically in the high teens. So even if it's down a couple of 100 basis points in 2021, it will still be an easy compare for the full year.
Last question is from Mike Nuschow with Evercore ISI. Your line is now open.
Thank you. Going back to the geographic differences on the core volume rebound you mentioned. Just wondering if you're seeing fluctuations tied specifically to where there are new COVID outbreaks, like is there patient behavior changing and affecting the core business when cases spike in the seat? Or is that variation just more correlated to how far along local economies are into reopening? Is there volatility at a local level?
Or is
it just some states are bouncing back faster than others?
Yes. Well, it's 5 states. I mean, the big four states, California shutdown first and we saw a steady rebound. They're still not to pre pandemic levels, particularly in some of the large cities like LA. If you go into Texas, we actually saw a good rebound in Texas.
We have a great presence in Texas, both in Houston and Dallas. And despite some of the flare ups we saw in the summer, they still continue to be in the range of where we were pre pandemic. If you look at Florida, went down in the spring into the summer. There's still issues in Florida. We're still not where they were pre pandemic.
And then if you go to the Northeast, New York and you go to Boston and Connecticut, actually we've seen some nice steady recovery with the exception of, as we've indicated earlier, New York City, but specific to the borough of Manhattan. We still have a ways to go to recovery there. So we're watching those, particularly related to infection rates. But what we have said is going to be flare ups, interestingly enough, like in the state of Texas and Florida in the summer months, it did not have a negative of a consequence to our base business as we saw back in the spring. And so we're watching it carefully.
But so far, we're getting there. And then again, it's manageable to that clinical franchise element of this because some portion of the volume effects are related to these specific businesses like prescription drug monitoring. And there's other issues related to what it takes to get those back to pre pandemic levels that are not related to the geography at all.
Yes, I can't say they're precisely negatively correlated, but actually that would be my representation. The areas with the lowest positivity rates like New York, actually you're down the most.
So we haven't seen a
huge parallel movement between spikes and COVID over the last several months and a downturn in utilization that actually has kind of gone the opposite direction.
Okay. So thank you all for your questions. We appreciate your support on this call today in general, and we wish you all a great day.
Thank you for participating in the Quest Diagnostics Q3 2020 conference call. A transcript of prepared remarks on this call will be posted later today on Quest Diagnostics' website at www.questdiagnostics.com. A replay of the call may be accessed online at w.questdiagnostics.com/investor or by phone at 1-eight hundred-three thirty seven-six thousand five hundred and sixty eight for domestic callers or 402-220-9660 for international callers. Telephone replays will be available from approximately 10:30 a. M.
Eastern Time on October 22, 2020 until midnight Eastern Time November 5, 2020. Thank you. Goodbye.