Cost justification of a laboratory information system: an analysis of projected tangible and intangible benefits

A pre- and postimplementation comparison of tangible and intangible benefits of the laboratory information system are presented. The key activities projected to save costs through work reduction were evaluated as a basis for procuring a laboratory information system. Following implementation and four years of LIS operation the individual activities used for justification were resurveyed. The tangible benefits which were measured prior to LIS justification totaled $153,471.84 per year based upon fiscal year 1985-86 dollars. The objective re-evaluation of these activities four years after implementation and operation resulted in a measured $115,326.93 per year savings. The loss of projected savings is directly related to over estimates in the original justification evaluation and personnel behavior. The intangible benefits projected were all realized including a number of intangible benefits which made a significant impact on several departmental and clinical services at our institution.