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Chapter 40 : Determination of Profitability

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Abstract:

This chapter describes those items that are included in the true costs of a laboratory procedure. Careful systematic consideration of all of types of direct and indirect costs will allow a laboratory to make reasonable decisions regarding price structure for fee-for-service testing services. To determine true costs and revenues, and assess profitability and efficiency, it is necessary to measure resources actually expended, including through amortization, and compare that measurement to amounts actually collected. To assess laboratory profitability, the balance sheet, the income statement, and the cash flow statement are the three primary tools used in the laboratory setting. In addition to these, most laboratories employ the use of key indicators to assess profitability and overall operational efficiency. Key indicators can assess both sides of doing business: income and expenses. Each individual laboratory must be able to operate efficiently within a defined budget and each laboratory manager must continue to seek ways to operate more effectively to decrease overall costs. Decisions regarding whether to implement costly new technologies in a laboratory will have to take into consideration the financial impact on healthcare in a more comprehensive sense as well as the immediate financial impact on a given laboratory. The role of the laboratory is to provide data used for effective management of patients. In doing so, laboratory professionals feel a sense of pride and accomplishment in assisting in patient care that cannot easily be measured in financial terms.

Citation: Baselski V, Weissfeld A, Sorrell F. 2014. Determination of Profitability, p 685-692. In Garcia L (ed), Clinical Laboratory Management, Second Edition. ASM Press, Washington, DC. doi: 10.1128/9781555817282.ch40

Key Concept Ranking

Antimicrobial Susceptibility Testing
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Chlamydia trachomatis
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Influenza A virus
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References

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Tables

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Table 40.1

Comparison of features of traditional laboratory medicine and coordinated laboratory medicine

Citation: Baselski V, Weissfeld A, Sorrell F. 2014. Determination of Profitability, p 685-692. In Garcia L (ed), Clinical Laboratory Management, Second Edition. ASM Press, Washington, DC. doi: 10.1128/9781555817282.ch40

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