How can we improve laboratory cost management? Find out!

Image of two men in a meeting, talking about laboratory cost management.

In the complex scenario of Diagnostic Medicine, where scientific innovation is intertwined with operational efficiency, cost management is a fundamental part of its sustainable success. 

From purchasing materials to delivering results, each step of the laboratory process requires a delicate balance between financial assets and technical excellence. In this context, effective expense management ensures the economic viability of operations and drives the quality of services offered. 

In this article, we collaborated with Estelamaris Flor, a revenue cycle management billing service provider and  WMB partner with extensive experience in laboratory management, to explore strategies that optimize resources without compromising diagnostic excellence standards and understand how software contributes to this process. Do you need to reduce costs? Then, continue reading and find out more details on the topic! 

The importance of cost management in a laboratory

 

Cost management is crucial to ensuring the financial viability and operationality of the laboratory. It allows managers to: 

• carry out financial control; 
• identify areas of waste; 
• identify savings opportunities; 
• check the bottlenecks; 
• have good input planning; 
• make wise investment choices; 
• have a basis for setting prices;  
• maximize the return on available resources. 

Furthermore, effective asset control (the process of managing and monitoring all tangible and intangible resources in an organization) contributes to maintaining the quality of services provided and competitiveness in the market. 

For Estelamaris, this management becomes essential to maintain the continuity of the laboratory. After all, “it is precisely by reducing expenses that the business profits begin to expand, generating benefits for the company. If we have a higher expense, it will be necessary to pass it on to the cost of the tests, generating customer dissatisfaction”. The consequence is a decrease in competitiveness.  

According to the Implementation Analyst, a laboratory’s main costs are related to automation, materials, employees, energy consumption, and logistics. Thus, good management will ensure the laboratory has an intelligent monetary distribution and profitably allocates consumption. 

Difference between cost control in an outpatient laboratory and a hospital laboratory 

Although both types of laboratories face similar challenges regarding cost management, there are significant differences in terms of the volume of tests performed, the complexity of procedures, the speed of results, and the demand for resources.  

“A hospital laboratory needs to invest in point-of-care (PoC) technologies with high predictive values, medium-sized equipment with high execution speed and interfaces, to guarantee the traceability and reliability of results. After all, hospitalized patients need agility in the delivery of their reports for immediate continuation of treatment”, comments Estelamaris. Strictly speaking, an outpatient laboratory works with slightly longer delivery times for results.  

Another difference is that, while in the outpatient laboratory, most of the results can be released automatically, as they are within the normal range, in the hospital laboratory, most of the results are altered, requiring manual release.  

Therefore, cost control strategies may vary depending on the specific scenario of each type of laboratory.  

Ways to control expenses 

Financial management is essential for the laboratory, but managers may face challenges when not adopting appropriate practices.  

According to Estelamaris, “the biggest challenge is knowing whether the exam performed is not too expensive compared to the competition”.” Furthermore, inappropriate management results in a lack of visibility over expenses. Therefore, it is essential to implement practices that do not compromise the quality of the processes and services provided but have the lowest viable costs. 

According to  WMB’s Implementation Analyst, some measures are essential in this process. Check it out below! 

Create and track a budget spreadsheet. 

This method is complete with creating a detailed spreadsheet with medical data for a better record in which you can mention all laboratory expenses, revenue, supplies cost and patient fee schedules. 

So this sheet is basically used to get a brief overview of the financial transactions in an efficient way. 

Negotiate prices with suppliers. 

Price negotiation is a significant tactic for acquiring the best available value. This could include shopping around among several suppliers, asking for competing quotes, and negotiating volume-based discounts or contract discounts. In that event, the recommendation is to negotiate more extended contracts in return for discounts, say.

Determine spending. 

Automating tasks through technologies, such as adopting a good Laboratory Information System (LIS), significantly improves laboratory performance. 

This includes systematizing processes for analyzing results, tracking samples, scheduling tests, and organizing inventory. By reducing the need for manual work, human errors are minimized, and the use of operational resources is optimized. 

Another essential tool is BI ( Business Intelligence ), which has proven to be increasingly crucial for laboratories. It allows for an overview of the business, with indicators on the screen of a cell phone or any compatible device. With this precise information, it is possible to know which unit has the most movement, which exam offers the most excellent profitability, which health insurance plans bring profits, what patient profile frequents the laboratory, and a multitude of other information. 

Strict monitoring of the use of inputs is required. 

Monitoring the use of supplies is essential to avoid waste and control laboratory expenses. Therefore, it is necessary to monitor the consumption of components, reagents, solutions and other supplies, identify usage patterns and implement measures to reduce waste. 

Hire a Support Laboratory to perform tests. 

Hiring a Support Laboratory can be an effective strategy for expanding the range of services offered without increasing internal costs. 

This allows the laboratory to meet various patient demands without the need to invest in equipment or additional staff training for lower-volume exam types. This practice is also advantageous in terms of agility and flexibility in care. 

Advantages of using laboratory management software 

Software is highly beneficial in many ways, providing the tools and insights needed to drive business success. 

• According to Estelamaris, a system specialized for this purpose provides tools for: 
• reduce operating costs; 
• avoid errors or material exchange; 
• optimize time and laboratory methods; 
• promote the integration of administrative and technical areas; 
• offer greater data security; 

manage indicators and reports. 

Thus, according to the Implementation Analyst, the platform must contain functionalities consistent with laboratories’ needs, such as Laboratory Billing Service, patient and sample traceability, performance management, reporting, process automation to minimize errors and costs, and indicator management. 

6 steps to implementing the ideal solution for your business 

As we can see, asset coordination brings many advantages and implementing a cost management program is key to improving laboratories’ financial and operational viability. 

Implementation can often be complex and challenging, but by following basic steps, it is possible to be successful in this process. According to Estelamaris, this activity should involve: 

choosing good software that can meet all the laboratory’s needs quickly and efficiently;

formation of an involved and engaged team so that there are no negative impacts due to lack of knowledge; 

preparation of a schedule and involvement of the team, preferably multidisciplinary — technical, administrative, and management collection; 

team training for successful implementation; 

data migration; 

post-implementation follow-up. 

The expected impacts of these processes include increased operational performance, reduced unnecessary expenses, improved financial accuracy, and optimized laboratory performance. 

How does  Wise Medical Billing contribute to laboratory cost management? 

With over 40 years in the market,  WMB offers a complete LIS (acronym in English for Laboratory Information System) to help manage laboratory costs:  Wise Medical Billing. 

This solution offers comprehensive management, is efficient, safe, and fully traceable, and enables personalized parameterizations. Thus, ”  Wise Medical Billing acts in the computerization of processes, interfacing instruments and laboratory sectors, optimizing resources, ensuring reliability in the transcription of results and avoiding human errors”, comments Estelamaris.  

The LIS offers secure information exchange and strict cash flow control, ensuring patient traceability — from sample management to billing spreadsheets, where we will have patient information until the delivery of billing batches to operators. 

In addition to this tool,  WMB has other software that complements this solution, providing greater efficiency for laboratories, for example: 

WMB Net: works to disseminate reports safely and quickly; 

WMB Portal: offers a complete environment for those supported, with an area for customer registration, collection, instructions and preparation, logistics and receiving reports in a safe and fast manner; 

 WMB BI: provides a range of reports and indicators on the progress of the laboratory, allowing accurate supervision, from billing to the final delivery of reports, with different views built for the laboratory world.