Less utilization of the clinical laboratory produces disproportionately small true cost reductions

Abstract

Decreases in true expenses in the hospital clinical laboratory consequent to reduced utilization were estimated from four models. Each category of direct expense was adjusted according to projections and confirmed to the extent possible by actual experience. No projections of reductions in indirect expenses were made. Savings with reductions in utilization of 10 and 50 per cent of a single high-volume automated test amounted to 1.32 and 18.11 per cent of total expenses, respectively. Savings with reductions of 10 and 50 per cent in utilization of all tests amounted to 3.88 and 21.55 per cent, respectively. These modest savings should be important to the financial planning efforts of laboratory managers and institutional administrators confronted with cost-reduction mandates.