Cost Reduction

To meet the needs of a growing laboratory, making the right choice for manufacturing vendor, instrumentation platform and testing menu can be complicated. Depending upon a multitude of variables such as the size of the laboratory, staffing configurations and client needs, decisions can take a laboratory manager in a variety of directions.

Cost reductions in reagents and supplies can often be gained by consolidating platforms to one manufacturer across departments (hematology and chemistry, for example). However, if the vendor has an excellent hematology line but the chemistry testing line does not give the test menu needed or does not meet capacity or turnaround time requirements of the client, the cost reduction strategy can result in dissatisfied clients and lost revenue.

All platform decisions should first start with an evaluation of client needs. The laboratory’s marketing focus can steer the manager to good decisions based upon the current client mix and the future goals of the organization. Not only evaluating the test order utilization but the client’s expected turnaround time will immediately identify if a certain instrument is a good fit for the laboratory.

The second consideration should be the versatility of the platform. Does the test menu currently offered, meet the needs of the laboratory for basic testing? Also, does the manufacturer offer an expanding test menu that will grow to meet the testing needs of the laboratory? New test development is vital to make sure that the instrumentation purchased does not become obsolete as soon it is un-boxed and installed. Does the manufacturer system offer open channel testing (user defined test options) to expand the instruments capability to meet the unique needs of the laboratory?

After taking these variables into consideration, there are many cost reduction strategies that can be used to make the most of a laboratory’s purchasing power. Depending upon the laboratory’s situation, instrument purchase, instrument rental, reagent rental all can be considered in the purchase of an instrument. Contract pricing can be an effective way to lock in reagent and supply expenses for the life of a contract. When purchasing an instrument, make sure the cost per reportable and return on investment homework is completed to know how one vendor price compares to another. Even if there is no serious consideration of a rival vendor, knowing the pricing of a competitor will give the laboratory an advantage when negotiating an instrument purchase. Also, when negotiating reagent pricing, know your numbers. Evaluate your utilization over several months so that you do not under estimate or overestimate the reagent usage. This will ensure that the laboratory gets the best reagent price but does not fall short on a reagent commitment.

It is definitely true that consolidation of testing to one vendor platform can have a financial reward. Automation systems, LIS interfaces, reagent shipping and other ancillary supports can be shared. Tech time is optimized by learning one platform and training, competency can be uniformly handled.

Service agreements, reagent pricing contracts and cost per reportable pricing can also be negotiated in an instrument purchase contract as a cost control measure.