RWJBarnabas Health Divests Lab Services

Labcorp has acquired the New Jersey academic health system's outreach laboratory business and some related assets.

New Jersey-based RWJBarnabas Health has closed a deal with life sciences company, Labcorp.

The organizations announced last week that Labcorp acquired RWJBarnabas Health's outreach laboratory business and select related assets, creating a collaboration that will expand physician and patient access to laboratory services. Through the deal, Labcorp will offer RWJBarnabas Health patients expanded health plan coverage, enhanced rural services, and the potential for lessened out-of-pocket lab costs.

In a statement shared with HealthLeaders, representatives from RWJBarnabas Health said that "the decision to divest this business was part of an overall strategic effort to create an integrated Laboratory service line at RWJBarnabas Health that will increase efficiency and consistency, and align our resources to deliver the highest quality, safest testing for our patients and communities."

When asked why the health system is collaborating with Labcorp versus a different organization, the representative said that "[the health system] assessed the capabilities of various providers and determined that LabCorp was the partner best suited to meet our long-term needs."

In the press release that came out on Wednesday, RWJBarnabas Health's COO, John Doll, said "By working alongside Labcorp, we will provide comprehensive testing services and enhance the laboratory service offerings. We are always evaluating how best to serve our patients, clinicians, and physicians. This strategic business decision will provide a high-performing, streamlined outreach network to support our community."

"The communities, physicians, and health systems we serve are central to everything we do at Labcorp," Bill Haas, senior vice president of Labcorp Diagnostic's Northeast Division, said in a statement. "Our expanded relationship … will build on the solid foundation RWJBarnabas Health has developed, and will offer patients and providers enhanced access to high-quality laboratory services, seamless data integration and connectivity, and exceptional value to help improve patient care and outcomes."

Financial and additional terms from the deal were not disclosed.

The news comes one month after Labcorp announced its second quarter revenue results, which was $3.7 billion for the second quarter of 2022, versus $3.8 billion last year for Q2. RWJBarnabas Health announced it had $4.6 million in net assets as of June 20, 2022.

The news also closely follows RWJBarnabas Health and Saint Peter's Healthcare System's decision to call off their merger plans following the Federal Trade Commission's move to block it due to alleged anticompetitive behavior.