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A cost containment check list; here's what to look for in reviewing five key aspects of laboratory operations for greater cost-effectiveness.

Cost containment efforts under prospective payment, as at any other time, require us to ask exactly where the clinical laboratory is ripe for financial savings. Answers will come from a systematic review of the following organizational components: personnel, operations, instruments, expandable supplies, and education programs.

The review and the development of more cost-effective ways of running the lab should involve as many employees as possible. Widespread participation, especially during the planning process, results in better solutions. It also strengthens staff commitment to those solutions. That's extremely important because cost containment means tightening up, and frequently a greater load must be handled by each individual if the number of FTEs is cut.

The review is largely carried out by section supervisors, who in turn ought to seek suggestions from bench technologists. The laboratory manager or chief technologist coordinates activities.

Many articles and books have dealt with the actual mechanics of cost accounting and cost-benefit analysis. Our purpose here is to stimulate ideas and provide guidelines for the laboratory that is just starting to investigate cost containment measures. Here's a checklist covering each component of the review.

* Personnel. Workload often fluctuates tremendously, within shifts and from shift to shift, but many laboratories are not aware of the exact trends. The tendency is to maintain staffing at past levels by automatically filling positions that become vacant. A close comparison of work schedules and productivity data is likely to produce surprises. It can dispel preconceived or outdated notions about a section's peak hours and point up instances of overstaffing and understaffing.

Thus, a supervisor may conclude that the section no longer needs a full crew at certain hours. This can lead to staggered hours. This can lead to staggered hours, split shifts, a flexible-time approach, or a decrease in staff size. The laboratory would move toward a key cost containment goal: maximum productivity.

Employee classifications and job descriptions should also be examined. Broadening the range of functions gives the laboratory more flexibility in scheduling and in meeting workload fluctuations.

Within the limitations imposed by regulatory agencies, a laboratory could rely to a greater extent on noncertified and nonlicensed personnel and on MLTs in place of MTs for certain duties. A laboratory assistant, for example, may prove as competent as a certified medical technologist in setting up microbiology cultures, a job that, according to regulatory definition, does not require interpretive skills. Decisions of this sort do not necessarily thin the ranks of technologists. In fact, the lab may relieve MTs of some tasks in order to have them share managerial duties--an alternative to hiring added supervisory personnel.

On an ongoing basis, all vacant positions should be carefully reviewed prior to rehire. Consider workload changes in the lab since the position was last filled, productivity data, scheduling needs, desired qualifications, and part-time options versus a full-time replacement.

Finally, the managerial staff should upgrade its administrative and supervisory skills to maximize cost containment as well as financial performance. Look at supervisors' capabilities in assigning staff, setting schedules, tracking overtime, grasping the meaning of financial reports, meeting or improving on budget projections, and so on.

If supervisors are held responsible for keeping tabs on costs, they must receive pertinent financial and personnel utilization data. And the data must be timely, complete, and easy to interpret.

* Operations. Specimen pickup and delivery schedules, test procedures, and methods of reporting results should be examined to guarantee minimum turnaround time. With prospective payment, inpatient length of stay must be kept down as much as possible. Extra costs incurred directly or indirectly through laboratory delays are no longer reimbursed.

A cost-benefit analysis of in-house testing--including assessments of test result quality and clinical relevance--is essential for decisions concerning tests available on-site. Ten requests per month has been suggested as the minimum volume for a procedure performed in a hospital laboratory, but there are additional considerations: The level of test difficulty, and the related question of staff ability to maintain technical expertise at a marginal volume, also influences in-house testing decisions. Among other factors to consider are the outdating of reagents, quality control, and how the test affects work flow and staff scheduling.

Exact supply and labor costs should be determined for each procedure. Costs assigned to one procedure should not be allowed to absorb part of the costs for another.

* Instruments. Again, cost-benefit analysis is vital. Does a test have sufficient clinical relevance? If so, how can the laboratory perform it more cheaply and quickly? The answer may be to acquire a new instrument or to develop a more effective protocol on an instrument already in use.

How many different protocols can be adapted to a particular instrument? What are the space and training needs for new instruments, and the continuing labor needs? What's the potential for future applications? How many requests and referrals will be generated from new instrumentation?

Should the laboratory purchase or lease? For years rental and lease agreements have been gaining favor, but now there may be a swing toward increased purchasing. The most notable exception is in cases where the technology is changing rapidly. No laboratory wants to be stuck with an out-moded instrument.

Review specifications when renewing or entering into instrument contracts. Check parts and labor terms in warranties, the warranty effective date (when the order was placed versus when the instrument is installed), and how long it will take to get service after a problem is reported. Before buying or renting an instrument, ask the company for a list of laboratories currently using it. These labs will be frank about operational problems, downtime, quality of service, and overall performance. Often, a new customer can demand a modification of contract terms based on the experience of other customers.

At the same time, the laboratory should review its preventive maintenance programs. Are procedures and schedules adequate to avert instrument problems? Do maintenance records document how problems are resolved? Do they identify potential problems? To reinforce these steps and prolong instrument life, a laboratory can hold refresher sessions for the entire staff on instrument use and maintenance.

* Expendable supplies. Efficient record keeping is a must in connection with supply storage. Stock on hand should be keyed to workload needs; a large inventory and an inadequate turnover rate tie up laboratory funds. Centralized storage, as opposed to scattered holdings of identical supplies, helps control inventory. Stock should also be rotated to avoid outdating.

Bulk discounts or contract bids may be obtained for common supplies. Also look into cooperative purchasing opportunities with other laboratories. All supervisors should be consulted to make certain that group purchases are compatible with their sections' methods. Even if large-volume buying is not appropriate, shop around for lower prices.

When planning for new instruments that require test kits, make sure the manufacturer can meet the laboratory's needs. In the event of back order delays, the lab would have to revert to other means of testing or send out the specimens. The best way to check is with other laboraties using the same system. Shelf life on kits should be assessed with an eye toward possible instrument down-time, expected frequency of testing, volume discounts, and rotation of stock.

In most institutions, the responsibility for generating and approving supply purchases is assigned to specific individuals, often at the supervisory level. Proper review will prevent wasteful expenditures. All staff members should know who has purchasing authority.

* Educational programs. Workshops, seminars, and in-services should be evaluated in terms of cost and benefit to the laboratory. Do staff members share what they have learned with others? Does the information mesh with the laboratory's needs? Is it useful--not too simple or too esoteric?

Supervisors usually assess educational programs. In some hospitals, requests to attend meetings are channeled through an education committee. A laboratory heavily involved in teaching and consultants may have a very large education budget. Elsewhere, the amount spent on education may be much less critical to cost containment efforts.

These are among the highlights that laboratory management should examine in order to meet the financial challenges of the 1980s. As the review process continues, other areas begging for improvement may be discovered. Certainly, perceived needs and the potential for change will vary among labs. The main point is that we can't go on with business as usual. Make any change for the better and the result will be a more cost-effective operation with no decrease in overall quality.
COPYRIGHT 1985 Nelson Publishing
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Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Author:Garcia, Lynne S.
Publication:Medical Laboratory Observer
Date:Apr 1, 1985
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