Most laboratories don't have a lot of money to work with, either to maximize earnings or conserve resources.If you are ever asked to manage a laboratory's budget, here are some steps you can take to cut costs.
Step 1: The laboratory's costs should be monitored.
Log every expense, such as salaries and benefits paid, supplies, equipment, overhead, services, personal costs, fees, fines.Efforts to implement cost-cutting strategies will be guided by the proper accounting of the laboratory's costs.Bigger savings are likely to result from cost cutting efforts at the bigger cost categories.
Step 2: Determine which costs are dependent on volume.
The laboratory's volume is what determines volume dependent costs.Supply costs tend to increase with revenue, because the higher the work load of the laboratory, the more supplies it will need.Fixed costs are the same regardless of the laboratory's volume.Fixed costs include overhead costs such as rent and utilities.
Step 3: Determine the cost for each procedure.
Adding up all the costs associated with certain procedures and dividing by the number of procedures can be used to calculate this.Reducing the cost per procedure is a goal of effective cost-cutting strategies.
Step 4: Determine the reimbursement per procedure.
This can be calculated by adding up all the revenue from the procedure and dividing by the number of procedures over a period of time.
Step 5: Limit the number of tests that are not productive.
It will become apparent which procedures are profitable and which are a drain on the laboratory's resources if you compare the cost per procedure versus revenue or reimbursement.The number of tests should be limited.
Step 6: Discuss proper laboratory utilization with your staff.
Ensure that all criteria for specimen submission, handling, processing, and reporting of results are observed and that everyone understands when certain tests and procedures are indicated.Eliminating unneeded tests and procedures will save money.
Step 7: Laboratory workers should be updated on any changes in operating procedures.
Post the changes in bulletin boards during morning reports, staff meetings, and annual training.Adherence to protocols will help reduce costs.
Step 8: Test procedures should be coordinated whenever possible.
If multiple specimen are sent at the same time, pool them together, and you can run the test on them separately, but the cost will be cut down.Saving time and resources will cut costs.
Step 9: If supplies are unlikely to be outdated, order supplies in bulk.
To calculate the inventory turnover, make sure the time to expiration/obsolescence is below the period of time implied by the turnover.
Step 10: Look for ways to run tests more efficiently.
If a new machine can run twice the number of specimen in a shorter time, it may decrease the cost per procedure and save money.The initial cost of the instrument, reagent costs, training costs and depreciation are all things that should be taken into account when choosing a new machine.Carefully weigh the cost against the savings it brings.
Step 11: Determine which tests to send to a reference laboratory.
Consideration should be given to all costs associated with a specific test or procedure, including the cost of quality control testing, supplies, and training.It may be cheaper to have a test sent out rather than perform it in-house.Testing that requires quick turn-around time may be better performed in-house.
Step 12: The effects of cost-cutting strategies can be monitored.
The effects of such strategies may take months or years to manifest.The expense ratio of the laboratory should be lowered by an effective cost cutting strategy.