LabCorp targets patients

Drugstores to offer some medical tests

LabCorp has found a new place where it can get its laboratory tests in front of patients -- the local pharmacy.

The Burlington company, the country's second-largest operator of medical testing labs, said Wednesday that it has signed a deal to open patient service centers in 20 Duane Reade drugstores in New York City.

The deal with New York City's largest pharmacy chain is LabCorp's first with a drugstore, but it hopes others will follow. "We think the model would be a good one to expand with similar partners," spokeswoman Pam Sherry said.

The patient centers, which will open over the next few months, will collect blood and urine samples. Laboratory tests will be done at other LabCorp sites. Financial details weren't disclosed.

One advantage of the deal for Duane Reade is the potential to increase traffic in its stores. Patients who come in for a blood test are likely to purchase products on the way out.

Indeed, the partnership is part of a broader trend in which drugstore chains are providing services to lure customers.

This year, Raleigh-based Kerr Drug began adding SmartCare Family Medical Centers, staffed by nurse practitioners and certified medical assistants who can treat minor ills such as colds and allergies. Last year, CVS partnered with Minneapolis-based MinuteClinic to put health-care clinics in its stores.

The potential also exists for LabCorp and Duane Reade to expand their partnership beyond 20 stores, since the drugstore chain operates 250 stores.

"It's a new program," said John Henry, senior vice president and chief financial officer of Duane Reade Holdings. "We'll see how it develops."

Another benefit for LabCorp is that the deal with Duane Reade makes its testing services more accessible and convenient to UnitedHealth Group customers in New York City.

This month, LabCorp won a $3 billion contract to be the exclusive national laboratory for Minnesota-based UnitedHealth, which provides health benefits to 70 million Americans. LabCorp wants to add several hundred centers nationwide to be more accessible to UnitedHealth customers.

LabCorp operates 1,300 patient service centers of its own. At a "significantly larger" number of sites, such as doctor's offices and hospitals, it has contracted to collect samples.

LabCorp's third-quarter profit, announced this week, rose 16 percent to $109.6 million because of higher demand for tests and higher prices. Revenue rose 6.7 percent to $909.9 million.

LabCorp shares fell 14 cents to $68.73 Wednesday. Shares have risen 28 percent this year.