Economic tools for the pathologist

Whether or not it is generally accepted by medical care personnel within the hospital or the laboratory, the laboratory is a business within a hospital. If the laboratory is free-standing, with a corporate ownership, then a laboratory is a business by itself. Even if it is a part of a nonprofit organization (more than two thirds of American hospitals are nonprofit), a laboratory must be able to generate more gains (profits, assets, contribution margin) than losses (liabilities, costs). With the growing volume and complexity of laboratory tests in the United States, the onerous surge of regulatory restrictions, decreasing capital, decreasing physician's reimbursement, increasing salary and operating costs, it is now time for the pathologist to add new tools to his/her customary "tools of the trade," such as surgical knives, microtomes, analyzers, and microscopes. These new tools are the economic tools of cost analysis, productivity analysis, ratio analysis, utilization review, and capital asset analysis. The pathologist of the future must not only provide patient care diagnostic expertise, but must also be a successful manager of human, fiscal, and operational resources to survive in an economic environment that demands knowledge of the principles of successful laboratory management. In addition to a general review of economic and financial "tools," this article describes techniques that have been developed during the past several years by the Laboratory Fiscal Management Committee of the College of American Pathologists that analyze, condense, and interpret general macro-indicators of laboratory cost and operational functions. These indicators are generic and can be quickly understood and utilized by every pathologist practicing in a private, commercial, or public laboratory setting.