PeaceHealth Laboratories and Quest Diagnostics:

Frequently Asked Questions

Q. What does the engagement with Quest Diagnostics entail?

A. There are two parts to our agreement with Quest. First, Quest will manage the inpatient
labs that operate within all PeaceHealth medical centers, but PeaceHealth will maintain
ownership of these labs and employ their non-management caregivers. Second, Quest will
acquire PeaceHealths outreach lab services, except in our communities served by critical
access hospitals.

Q. Why is this happening?

A. PeaceHealth Laboratories has been an essential, dynamic and highly valued part of
PeaceHealth for decades, and has produced a rich history in each of our communities.
PeaceHealth Laboratories has developed into a strong example of a centralized healthcare
service for PeaceHealth patients and communities. PeaceHealth Laboratories provides
exceptional service, quality and scope in support of medical and other services provided by
PeaceHealth and many providers and organizations with which we collaborate.

But as youre aware, healthcare is in an era of transformation, including in laboratory

services. Technology advancements, competition, regulations, the need for sustained
capital investment, and other factors have created profound challenges. To most effectively
rise to these demands, many organizations are finding innovative ways to collaborate.

With this in mind, in 2015, PeaceHealth leaders began an extensive assessment of

laboratory services nationally as an essential part of an ethical discernment process. The
aim was to determine the best way for laboratory services to be provided in the most
appropriate, sustainable manner. In other words, a long-term solution was needed to meet
the growing service and technological needs of our communities, as well as the caregivers
and providers with whom we serve.

Q. Why was Quest chosen?

A. We measured multiple potential partners against a range of criteria. Most importantly,
this included alignment with our own culture and core values. Other criteria included
proven expertise in the lab industry, a commitment to innovation and investment in
advanced technologies, and a clear vision for the future of healthcare. After a thorough and
thoughtful review process, it became clear that Quest was the best choice for our
caregivers, providers and patients.
Q. What can you tell me about Quest?
Quest is the nations leading provider of diagnostic information services, serving one in
three adult Americans each year. Quest has a proven track record and offers test services
that are industry-leading in breadth and innovation. Importantly, Quest also shares our
values, has a similar vision for the future of healthcare, and actively supports the
communities it serves. Quest works with many health systems in the United States,
including providing lab management and reference laboratory testing as well as acquiring
outreach lab service operations.

Q. What is the timeline?

A. We expect the agreement to be finalized in the spring of 2017. Until that time,
PeaceHealth Laboratories and Quest will continue to operate independently on a business-
as-usual basis. Meanwhile, PeaceHealth and Quest are committed to ensuring a smooth
transition for our caregivers, providers and patients, as well as our communities.

Q. How will this affect PeaceHealth Laboratories caregivers?

A. While this decision is in the long-term best interest of our communities, it means fewer
caregivers will be needed to carry on the work of PeaceHealth Laboratories. This is why the
decision was very difficult to make specifically because of the impact on the PeaceHealth
Laboratories caregivers whom we respect and admire.

PeaceHealth is committed to providing the highest possible level of respect, assistance and
support services to assist caregivers in this transition. The majority of affected caregivers
will be contacted by the end of next week (Feb. 24) with details of this transition, including
specific timing, job openings, counseling, spiritual care and outplacement support services.
Other affected caregivers will be notified at various times later this year as ongoing
operational assessments occur during the transition period.

Quest is encouraging PeaceHealth Laboratories caregivers to apply for positions to be

posted in Quests West region, primarily in Oregon and Washington. If qualified, they would
be given priority status in the interview scheduling process. Should caregivers choose to
apply for an open position for which they are qualified elsewhere within PeaceHealth, they
also would be given priority status for scheduling interviews.

Q. How many PeaceHealth Laboratories caregivers will be directly affected?

A. In all, this strategic engagement will likely result in a reduction of approximately 500
positions within PeaceHealth Laboratories. Meanwhile, Quest is encouraging PeaceHealth
Laboratories caregivers to apply for up to 275 new positions to be posted in Quests West
region, primarily in Oregon and Washington. If you apply and meet the qualifications, you
would be given priority status in the interview scheduling process. Also, should you choose
to apply for an open position for which you are qualified elsewhere within PeaceHealth,
you would be given priority status when scheduling those interviews.

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Q. Will PeaceHealth providers using outreach services be required to use Quest?
A. No. Assuming the completion of the acquisition, employed and relief contractor
providers of PeaceHealth will be able to continue to refer testing to other laboratory
providers as well as to Quest.

Q. Does this mean PeaceHealth is in financial trouble?

A. No. PeaceHealth is financially strong and stable. The intent of this engagement is to
enhance our services and produce a deeper, more positive impact on the overall health of
our communities.

Q. What does this agreement tell us about the future of PeaceHealth?

A. The agreement underscores PeaceHealths commitment to serve our communities and to
be forward-looking as the healthcare landscape continues to evolve. The intent of this
engagement is to enhance our services and produce a deeper, more positive impact on the
overall health of our communities.