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Laboratory reengineering facilitates cost management.

J E Ellis¹, L H Moser

¹Ortho-Clinical Diagnostics, Ravitan, NJ, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association

|July 6, 1998

Summary

The Medical University of South Carolina reorganized its laboratory department, consolidating labs and implementing new technology. This strategic change resulted in significant annual cost savings of approximately $1.3 million.

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Area of Science:

Healthcare Management
Laboratory Operations
Health Economics

Background:

The Medical University of South Carolina (MUSC) initiated a change management strategy in 1993.
The goal was to enhance market competitiveness and prepare for potential affiliations.
Reorganization of the laboratory department was a critical component of this initiative.

Purpose of the Study:

To assess the impact of laboratory department reorganization on cost-competitiveness.
To evaluate the financial benefits of consolidating laboratory services.
To determine the effectiveness of introducing new analyzer systems.

Main Methods:

Consolidation of previously separate laboratory facilities at MUSC.
Implementation of a new, advanced chemistry analyzer system.

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Analysis of laboratory operational costs before and after the changes.

Main Results:

Achieved annual laboratory savings of approximately $1.3 million.
Demonstrated improved cost-efficiency within the laboratory department.
Positioned MUSC more favorably for market competition and partnerships.

Conclusions:

Laboratory consolidation and technology upgrades are effective strategies for cost reduction.
Strategic change management in healthcare departments can yield substantial financial benefits.
MUSC's initiative successfully improved its financial standing and operational efficiency.