Article

How to Effectively Analyze Lab Costs

December 3, 2024
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Healthcare labs have traditionally seen most of their work come from hospitals and physician offices. However, that’s now changing as corporations, schools, individuals and integrated delivery networks are utilizing labs for testing, screening and related services.
 
This diversified client base can be good for labs’ business, but it also has a drawback. A lack of visibility into these various customer types can create barriers to achieving operational efficiency and maximizing profitability—two important factors in today’s lab environments. That’s why a modern approach to cost analysis is needed to help labs lower costs, reduce waste and improve efficiency.

5 WAYS TO UTILIZE DATA IN THE LAB

Laboratories serving non-acute healthcare providers need current, accurate and trusted data to make informed decisions. The lab—like other aspects of a clinical business—needs the ability to gather, integrate and analyze data. Organizations that can fully optimize their data see five high-value benefits:

  1. Uncover hidden costs created by test kits that are sent out, but never returned. This allows for better resource allocation and cost management by giving lab stakeholders visibility into the expense of test kits. The insights can also inform strategies for shipping test kits.
  2. Create data points to fully optimize the ratio of test kit output to inflow. The data gives stakeholders an understanding of the number of kits being sent out and related costs, versus the number being returned for testing. Labs can use the data to ensure their resources are used efficiently, reducing waste and enhancing overall lab productivity.
  3. Identify profitability on a shipment-by-shipment basis. Timely data offers a granular view into individual shipments to identify which are the most profitable—and which are or are at risk of losing money or not meeting profitability expectations.
  4. Simplify workflow management to remove constraints on lab staff. Data can automate routine tasks and optimize scheduling, which reduces the manual workload on lab staff and streamlines workflow management. This simplification allows staff to focus on more complex tasks and improves overall efficiency and productivity within the lab.
  5. Maximize efficiency of the testing process by having the most optimal delivery times. Labs benefit from ensuring timely processing and reducing delays, which together lead to faster results and improved patient care.
 
ENABLING DATA-DRIVEN IMPROVEMENTS ACROSS THE LAB

The power of data can enable lab-wide benefits, including driving improvements in test kit logistics. Benefits include:

  • Lowering costs through benchmarking. Data offers a proven way to monitor lab performance over time and against peer organizations to make strategic improvements. Tracking a lab’s performance and using benchmarking data can pinpoint areas of overspending. Similarly, analyzing data and gaining visibility into lab operations can identify new ways to save across all areas of the lab, including logistics.
  • Mitigating waste through segmentation. Labs need to eliminate unnecessary testing and support the shift to value-based care. Data allows labs to identify waste and fully utilize test kits to improve profitability. Detecting waste begins with looking at the ratio of specimen kits sent out but not returned to the lab, which then become sunken costs. Labs can use analytics to determine who to send the kits to and the best way to send them in order to encourage the kits to be returned. In addition, performing data analytics enables labs to determine which shipments are the most profitable—a shipment with five specimens is typically more profitable than a shipment with one.
  • Using near real-time data to drive operational efficiencies. Efficiency is increasingly important as labs face staffing shortages and must optimize limited resources. Leveraging data to gain full visibility into shipments can improve workplace management by knowing when and where delays are likely to occur. Likewise, taking a data-driven approach to shipment tracking can help labs plan their staffing needs more efficiently to align with their workloads.
 

“Labs that partner with a group purchasing organization have the advantage of expertise and competitive contracts to efficiently manage operations for full transparency and enhanced margins.”

FINDING OPPORTUNITIES IN SHIPPING AND LOGISTICS

The right data, visibility into lab operations and implementing best practices can improve lab profitability while enabling new efficiency and informing strategies for sending out test kits. 

Labs that partner with a group purchasing organization have the advantage of expertise and competitive contracts to efficiently manage operations for full transparency and enhanced margins.

For example, Provista supplier Cardinal Health™ OptiFreight® Logistics enables members to ship test kits and other items using the most optimal methods possible. OptiFreight® Logistics can create tailored approaches for Provista members’ shipping and logistics programs by going beyond basic shipping solutions to offer near real-time tracking and comprehensive analytics to enhance transparency and efficiency.

With its extensive network and expertise, the logistics management company helps Provista members navigate the complexities of logistics, leading to reduced costs and improved turnaround times. This tailored support allows labs to focus on their core business while trusting that their logistics needs are handled with precision, reliability and cost optimization. 

 

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