Management applications of workload recording.
Selection of a new instrument or method is one of the most important decisions made in the laboratory. Many factors influence the choice--an entire textbook could be written on the subject.
On the clinical side, major considerations include diagnostic sensitivity and specificity, accuracy and precision, turnaround time, batch versus Stat operation, and medical utility of data obtained. Technical/operational considerations include through-put, the test menu, walkaway operation, calibration and control frequency, maintenance required, and interface capability. And among the cost considerations are the price of purchasing, leasing, or renting the instrument, and personnel and reagent expenses.
If the instrument meets minimum medical, technical, and service criteria, one can proceed with a comparative economic analysis. Then the more subjective medical and technical criteria may be balanced against the economic advantages of one instrument or another.
This article will deal with one aspect of the economic analysis-- personnel cost associated with an instrument or method. While it will not in itself determine the final choice, personnel cost over a five-year life often represents an instrument's major expense.
My discussion presumes that the reader is familiar with the basic concepts of the CAP workload recording method.1 Earlier articles in this series provide useful background.2, 3 Other publications may also be helpful.4, 5
The bottom line in cost analysis is the dollar cost of producing one patient result or panel. This is usually referred to as the cost per billable test. When comparing two instruments, it is only necessary to contrast direct test costs. Allocated indirect lab costs, such as administration and telephone, and allocated indirect hospital costs, such as space, utilities, and housekeeping, will be equal for both instruments; so they need not be discussed further.
To convert a measure of personnel time (workload units) into a dollar amount, you must determine how much it costs your laboratory to produce a workload unit. The applicable formulas and sample calculations are shown in Figure I.
The CAP WLR method is one of the most effective approaches to micro-costing expenditures for personnel. When the method is used with readily available financial data, precise estimates of the costs of performing each type of lab test are also obtainable.
Continuing on, to determine the personnel cost per billed test, you must first calculate (or estimate) batch size. Adding the required number of calibration/ standard, control, and expected repeat measurements to the number of patient-billable specimens in a single batch yields the total measurements per batch. Next, you multiply this total by the workload units per measurement (the unit value), then by the cost per workload unit, and divide by the number of patient specimens in the batch. The result will be personnel cost per billed test.
Application of the WLR method to instrument selection is best explained through an example. Although the following takes place in clinical chemistry, the principles apply equally to other laboratory sections.
A laboratory is considering acquiring an automated instrument --analyzer A or analyzer B--to meet the increasing demand for Stat electrolytes (Na, K, Cl, CO2), glucose, BUN, and AST. The laboratory currently uses a flame photometer, chloride /CO2 analyzer, glucose/BUN analyzer, and spectrophotometer. Weekly test volumes are shown in Figure II.
For our purposes, this analysis will not take into account the cost of reagents, disposables, standards, controls, maintenance contracts, or instrument cost/lease/ depreciation. These are important considerations, they may vary widely among different instruments, and they would, of course, be calculated before any final instrument decision is made.
In addition, the number of standards, quality control specimens, and repeats will also vary among instruments and will be affected by batch size. For the sake of simplicity, however, I am limiting this example to workload units derived from patient specimens.
Multiplying the weekly test volume data shown in Figure II by the CAP unit values for the lab's current instrumentation, we determine how much time the technical staff now spends running patient specimens (Figure III). Likewise, we can predict the time required to run these same specimens on analyzer A and analyzer B, which also have assigned unit values (Figure IV). It is important to note that the calculations for analyzer B take advantage of its profile mode for the electrolyte panels.
To get each instrument's personnel cost, we multiply total weekly workload units by the cost per WLU (Figure V). A comparison of these cost figures suggests that personnel savings alone would justify purchase of analyzer A or analyzer B. But will the staff time freed up by a new instrument be available for other productive tasks? Laboratories operate many sections and shifts at the minimum level of staffing necessary for workstation coverage. Unless the workplace can be rearranged to permit cross-coverage, no actual dollar savings may result.
Even assuming cost savings via staff reassignment, we must not jump to a hasty conclusion concerning which instrument would be most economical. We still have to incorporate the number (and cost) of standards, controls, and repeats, as well as reagent and consumable use, into the cost analysis. A high reagent cost may easily cancel out the projected savings in personnel cost.
This analysis depends on having the CAP unit value for a particular instrument. Avoid using the "tech time per specimen' figures frequently quoted by instrument vendors. Even if they are measured under real conditions in a customer's laboratory, these figures typically omit the log-in, specimen processing, supervision, daily preparation, and periodic maintenance time included in official CAP unit values.
Figure VI illustrates an idealized scenario of unit value assignment to an instrument. We perform time studies in a clinical laboratory after the initial learning curve is complete to insure that a unit value accurately reflects personnel costs over an instrument's five-year usage span. When sufficient time studies are completed, a unit value is usually adopted, then published in CAP Today within six months. If there is no unit value for an instrument you are considering, encourage the manufacturer and laboratories currently using the instrument to contact the CAP and arrange for the necessary time studies. Write to Barbara J. Barrett, Laboratory Operations Manager, College of American Pathologists, 5202 Old Orchard Rd., Skokie, Ill. 60077, or phone her at (312) 966-5700.
The CAP conducts basic seminars throughout the year on use of the WLR method. A two-day seminar, "Decisive Laboratory Management Today: The CAP Workload Recording Method Applied,' provides detailed instruction and includes many examples of the method's practical application in decision making. The 1987 schedule includes seminars in St. Louis (Sept. 17-18) and New York (Nov. 19-20).
In addition, the members and staff of the CAP workload recording committee, listed on page iii of the 1987 WLR manual, will be happy to answer questions that may arise as you use the formulae and approach outlined in this article. We welcome comments on how we can further enhance the method's usefulness.
1. College of American Pathologists Workload Recording Committee. "Manual of Laboratory Workload Recording Method,' 1987 ed. Skokie, Ill., CAP, 1986.
2. Conn, R.B., and Koch, J. Management applications of workload recording--Part I. MLO 19(4): 39-42, April 1987.
3. Grove, W.E. Management applications of workload recording--Part II. MLO 19(5): 39-43, May 1987.
4. Prak, J. Method and instrument selection, in Laboratory Management Using the CAP Workload Method,' Sodeman, T., ed. Skokie, Ill., CAP, in preparation.
5. Conn, R.B. Method and instrument selection using CAP workload recording data, module VI in manual for "Decisive Laboratory Management Today: The CAP Workload Method Applied,' Skokie, Ill., CAP, 1985.
Table: Figure I Calculating average personnel costs to produce one workload unit
Table: Figure II The lab's weekly test volumes
Table: Figure III Personnel time on current instrumentation
Table: Figure IV Personnel time on proposed instrumentation
Table: Figure V Comparing personnel costs of different instruments
Table: Figure VI Optimal timetable for assigning a unit value to an instrument
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|Title Annotation:||medical laboratories|
|Author:||Aller, Raymond D.|
|Publication:||Medical Laboratory Observer|
|Date:||Jun 1, 1987|
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