Developing a budget for the laboratory.

Cost accounting is the basic "tool" for identifying the expenses associated with laboratory operations. A budget is a planning tool that allows the director and manager to visualize the evolution of expenses, assets, liabilities, and revenues over a period of time. It is a quantitative annual plan of activities and programs that helps an organization measure the progress toward its financial goals on a periodic basis. A knowledge of how to develop and understand a budget is essential for every director and manager.

Laboratory manager's financial handbook. Cost accounting: the road map to financial success.

Cost accounting is the most basic element of the laboratory's financial management structure. Historically, cost accounting in the nonmedical world referred to accumulating and assigning costs to units of production and departments, primarily for inventory valuation and income determination. In the health industry, microcost accounting is distinguishable from macrocost (management/internal) accounting and serves multiple purposes. Microcost accounting pertains to gathering and providing information for decision making. The range of decisions include managing recurring operations, making nonrecurring strategic decisions, and formulating major organizational policies. Macrocost accounting fulfills the legal requirements of reporting to stockholders, auditors, governmental agencies, and other external parties.

Laboratory manager's financial handbook. The laboratory's importance to the financial stability of a health-care organization.

From a financial standpoint, one of the most valuable assets in the survival of a health-care organization is the clinical laboratory. Laboratory directors, managers, and supervisors have indicated their overwhelming need to understand finance, especially cost management, to CLMA and to the author at national meetings and workshops, Tremendous financial pressures are being applied in health-care organizations across the country. Two strategic factors in their successful move into the 21st century are more appropriate test utilization and cost control in the laboratory.

The mobile laboratory in alternative site testing.

The establishment of mobile or portable laboratories as one strategy for delivery of laboratory services at alternative sites is evaluated. The mobile laboratory may be used to replace centralized laboratory testing in areas of critical need, such as critical care areas of the hospital in which relatively large numbers of tests are needed quickly. Other possible areas of use include outpatient clinics and other outreach settings in which care of the patient may be hastened by the availability of laboratory data on a real-time basis. In such areas where a need is established, mobile laboratory testing may be performed economically and may enhance the position of the medical technologist as a hands-on clinical caregiver.

Economic tools for the pathologist.

Whether or not it is generally accepted by medical care personnel within the hospital or the laboratory, the laboratory is a business within a hospital. If the laboratory is free-standing, with a corporate ownership, then a laboratory is a business by itself. Even if it is a part of a nonprofit organization (more than two thirds of American hospitals are nonprofit), a laboratory must be able to generate more gains (profits, assets, contribution margin) than losses (liabilities, costs). With the growing volume and complexity of laboratory tests in the United States, the onerous surge of regulatory restrictions, decreasing capital, decreasing physician's reimbursement, increasing salary and operating costs, it is now time for the pathologist to add new tools to his/her customary "tools of the trade," such as surgical knives, microtomes, analyzers, and microscopes. These new tools are the economic tools of cost analysis, productivity analysis, ratio analysis, utilization review, and capital asset analysis. The pathologist of the future must not only provide patient care diagnostic expertise, but must also be a successful manager of human, fiscal, and operational resources to survive in an economic environment that demands knowledge of the principles of successful laboratory management. In addition to a general review of economic and financial "tools," this article describes techniques that have been developed during the past several years by the Laboratory Fiscal Management Committee of the College of American Pathologists that analyze, condense, and interpret general macro-indicators of laboratory cost and operational functions. These indicators are generic and can be quickly understood and utilized by every pathologist practicing in a private, commercial, or public laboratory setting.

Consolidating ancillary testing in multihospital systems.

This article introduces a new initiative that allows medical centers to establish uniformity and quality management of laboratory diagnostic testing performed in on-site and outreach locations for hospitalized inpatients and ambulatory care patients. This article also reviews the requirements of the Clinical Laboratory Improvement Amendments of 1988 (CLIA '88) and how they affect ancillary testing sites.

Matrix effects on proficiency testing materials. Impact on accuracy of cholesterol measurement in laboratories in the nation's largest hospital system.

The objective of this collaborative study with the Department of Veterans Affairs (VA), College of American Pathologists (CAP), and the Centers for Disease Control and Prevention (CDC) was to quantitate the matrix-induced biases of cholesterol measurements on the CAP Comprehensive Chemistry Surveys materials used in proficiency testing (PT). A total of 174 VA Medical Centers outpatient clinics and clinical laboratories participate in the VA-CDC National Cholesterol Standardization and Certification Program. This study was conducted in 112 VA laboratories that have been standardized for measuring cholesterol accurately (within +/- 3.0% of the CDC reference-method values) using fresh, unfrozen, unadulterated human serum samples. Fresh serum samples and 1990 CAP Surveys materials were sent by overnight mail, and the laboratories were asked to analyze them simultaneously in triplicate in a single analytic batch run. The results showed significant matrix-effect biases with the CAP Surveys materials with six of the eight major peer groups, despite the fact that accuracy of cholesterol measurements was maintained with fresh serum samples. The magnitude and direction (positive or negative) of the matrix-effect biases were instrument, reagent, and method specific using the following peer groups: du Pont Dimension (-8.9%); Beckman CX4, CX5, and CX7 (-5.5%); Kodak Ektachem 400, 500, and 700 (+4.4%); Instrumentation Laboratory Monarch (-3.1%); Baxter Paramax (-2.4%); Technicon SMAC and RA (+1.3%); Hitachi/BMD 704 through 747 (+0.4%); and Abbott Spectrum (-0.3%). The CAP PT materials used currently do not behave in a manner identical to fresh human serum when measuring cholesterol on many, but not all, analytic systems. The observed biases due to "matrix effects" with PT materials will cause incorrect conclusions about the accuracy of many laboratory procedures performed on fresh patient specimens. This matrix-effect phenomenon will severely hamper interlaboratory accuracy transfer, standardization efforts, and monitoring performance of a laboratory's testing accuracy with the use of the current survey materials used in PT programs. Collaborative efforts are needed to (1) improve PT fluids to analytically behave more like fresh, human serum; (2) improve instrument design and reagent formulation; and (3) select methods and methodologic parameters that are more "robust" and less sensitive to the exact character of processed calibrators, quality control, and PT materials.

Cost analysis in the toxicology laboratory.

The process of determining laboratory sectional and departmental costs and test costs for instrument-generated and manually generated reportable results for toxicology laboratories has been outlined in this article. It is hoped that the basic principles outlined in the preceding text will clarify and elucidate one of the most important areas needed for laboratory fiscal integrity and its survival in these difficult times for health care providers. The following general principles derived from this article are helpful aids for managers of toxicology laboratories. 1. To manage a cost-effective, efficient toxicology laboratory, several factors must be considered: the laboratory's instrument configuration, test turnaround time needs, the test menu offered, the analytic methods used, the cost of labor based on time expended and the experience and educational level of the staff, and logistics that determine specimen delivery time and costs. 2. There is a wide variation in costs for toxicologic methods, which requires that an analysis of capital (equipment) purchase and operational (test performance) costs be performed to avoid waste, purchase wisely, and determine which tests consume the majority of the laboratory's resources. 3. Toxicologic analysis is composed of many complex steps. Each step must be individually cost-accounted. Screening test results must be confirmed, and the cost for both steps must be included in the cost per reportable result. 4. Total costs will vary in the same laboratory and between laboratories based on differences in salaries paid to technical staff, differences in reagent/supply costs, the number of technical staff needed to operate the analyzer or perform the method, and the inefficient use of highly paid staff to operate the analyzer or perform the method. 5. Since direct test costs vary directly with the type and number of analyzers or methods and are dependent on the operational mode designed by the manufacturer, laboratory managers should construct an actual test-cost data base for instrument or method in use to accurately compare costs using the "bottom-up" approach. 6. Laboratory expenses can be examined from three perspectives: total laboratory, laboratory section, and subsection workstation. The objective is to track all laboratory expenses through each of these levels. 7. In the final analysis, a portion of total laboratory expenses must be allocated to each unit of laboratory output--the billable procedure or, in laboratories where tests are not billed, the tests produced.(ABSTRACT TRUNCATED AT 400 WORDS)

Misuse of therapeutic drug monitoring: an analysis of causes and methods for improvement.

The quantification of serum drug levels provides physicians with an indication of attainment of the desired pharmacologic goals. However, based on the preceding evidence, therapeutic drug monitoring (TDM), which is commonly used in conjunction with the prescribing of anticonvulsants, antiarrythmics, cardiac glycosides, antibiotics, antineoplastics, bronchodilators, lithium, antidepressants, neuroleptics, benzodiazepines, and other psychotropic drugs, is not used effectively for therapeutic intervention in the elderly. In addition to determining if a blood level is within the therapeutic range, TDM can also be helpful in identifying the reasons why a patient is not responding to a prescribed drug or is exhibiting toxic signs or symptoms, as well as in elucidating causes of coma, patient noncompliance, poor absorption, and excessively rapid metabolism. Furthermore, drug blood levels can be an asset in the diagnosis and monitoring of treatment programs for alcohol and drug abuse. Despite the existence of computerized programs for drug level determination in clinical laboratories, and the existence of individualized computer programs for optimizing the choice and dosage of drugs for many categories of patients with a multitude of metabolic and pathophysiologic problems, most physicians still rely on tradition, imitation, and information provided by drug advertising and sales representatives to choose therapeutic regimens for patients. To make proper use of TDM, a physician has to have at least a working knowledge of the basic concepts of pharmacokinetics. This advancing medical science also demands a thorough knowledge of the routes of absorption, distribution, metabolism, and excretion of drugs. Results from TDM determinations indicate how effectively the appropriate amount of drug is delivered to the desired location of action from the site of administration. One of the most common reasons for misuse of TDM results is that physicians order specimens for drug monitoring to be drawn at inappropriate times. Accurate TDM requires that (most) specimens be drawn at trough levels, after steady-state levels have been attained. Trough levels occur immediately prior to the administration of the next dose. Such measurements avoid the absorptive peaking levels that occur shortly (usually) after drug administration. Steady-state levels are attained when the amount of drug absorbed and the amount excreted are essentially equal. This usually occurs after the drug has been administered for approximately five half-lives.(ABSTRACT TRUNCATED AT 400 WORDS)