Medicine of the Future in America

Evaluating STAT Testing Alternatives by Calculating Annual Laboratory Costs: The Calculating Annual Laboratory Costs Model (CALC) (Part 8)

(f) Indirect Costs: Some costs cannot be traced to a specific test or to a particular piece of equipment. These expenditures are related to the nontechnical aspect of the laboratory (eg, hospital-allocated overhead, administrative expenses), while other costs are for materials used to run the lab, such as office supplies and other generic consumables (Table 4). Hospital accounting systems recover these indirect costs by adding an overhead charge as a percentage of known direct costs. The total cost of providing a service is equal to the direct costs (categories a through e above), plus a proportional share of the indirect costs. This proportion is often calculated by multiplying the total direct cost by an overhead coefficient, which ranges from 25 to 40 percent, but can be as high as 148 percent. The accounting department can provide the indirect overhead coefficient for your hospital. In Table 1, an indirect cost coefficient of 30 percent is used to cover all the nontest specific costs. buy prednisone
Calculate the Annual Testing Cost
The example in Table 1 estimates the cost of moving testing to a new stat lab or to a bedside instrument. Using the assumptions given, servicing the testing load with the bedside testing alternative seems to be more economical (Table 5-A). The cost of labor is higher for the stat lab alternative, while the cost of disposable reagent packs is higher for the bedside testing alternative. If desired, the CALC technique can also be used to adjust for the cost of moving some of the testing load out of the central laboratory, thus realizing a savings in test-specific supplies, as shown in Table 5-B. Similar savings may also be realized in a stat lab for variable supplies if there is a similar shift in location.

Table 4—Indirect Costs for Analyzing Clinical Laboratory Tests

Sales and marketing salaries

Auditing expenses

Administrative and office

Licensure fees

salaries

Legal expenses

Employer payroll taxes

Uncollectible accounts

Free samples

Insurance—fire and liability

Entertainment and travel

Defective work

expenses

Experimental work

Rent and/or depreciation

Other hospital-allocated

Utilities

overhead for cafeteria,

Stationery and printing

library; maintenence, data

Indigent care

processing, etc

Postage

Third-party reimbursement

Freight

losses

Advertising

Continuing education expenses


Table 5—Summary of an Example Determining the Annual Cost of Alternative Site Testing

A—Costs for processing tests in a stat laboratory or with bedside testing performed by nurses or physicians

Stat

Bedside

Cost Categories

Laboratory

Testing Alternative

Site preparation

$ 2,400

$ 0

Equipment depreciation

8,300

5,900

Equipment maintenance

6,900

4,680

Incremental labor

202,800

7,703

Supplies/disposables

59,911

144,321

Direct Expenses

280,511

162,604

0.3 X direct expenses

84,153

48,781

Total Expenses

$364,664

$211,385

B—Costs for moving testing nearer to the turnaround time, including the savings in which will occur in the central laboratory; ir may also result in labor costs if the test load r laboratory lowers staffing requirements

patient to reduce the variable supply costs i some cases, a savings eduction in the central

Central

Bedside

Cost Categories

Laboratory

Testing Alternative

Site preparation

$ o

$ 0

Equipment depreciation

0

5,900

Equipment maintenance

0

4,680

Incremental labor

0

7,703

Supplies

(58,111)

144,321

Direct expenses

(58,111)

162,604

Adjusted direct expenses

104,493

(with transfer of savings

from central lab to bedside)

0.3 x direct expenses

31,348

Total expenses

$135,841

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