Should We Do It Here?

How do you decide whether to bring a test in-house or to send it out (or continue sending it out) to a reference lab? It’s not an easy decision, and it should be one based on as many facts as you can gather. The bullet points below are the considerations I employ for making this decision.

  • Cost: This is almost always the first consideration. Compare what the test currently costs to send out versus what it will cost to run in-house. If it costs more to run in-house than to send out, then there had better be some pretty over-riding reasons for doing it on-site. There are many items that contribute to the cost to run a test including:
    • Basic bottom line cost of the test – i.e. reagents, kit, etc
    • Technologist time – actual time to run the test, and to report the results if it’s not auto-verified
    • Supplies – test tubes, pipets, controls, calibrators, proficiency testing samples, etc.
    • Cost of instrumentation – determine whether a new instrument is needed or whether the test can go on an existing instrument. Either way, depreciation and service contract costs must be considered.
    • Development – for bringing in a newly released, FDA-approved assay on a current platform available in-house, this cost may be minimal, especially if the company brings it in and verifies its performance. For a laboratory developed test, this aspect of cost may be extensive and needs to be considered.
  • Test volume: The number of these tests that are performed will figure into all the rest of the parameters, including the cost of running it and the tech time involved. In addition, the test volume should be high enough to be able to maintain competency in the techs performing it, as well as to be able to keep in-date reagents on hand and instrument maintenance up to date.
  • Turnaround time (TAT): This is often a big factor in the decision to bring a test in-house. Doctors may request that tests be performed in-house to allow for better patient care. For example drug dosing decisions are not optimal if a drug result takes four days to return.
  • Workflow/tech time: How the new test will fit into the current workflow needs to be considered. Will it require additional technologist time or re-shuffling of coverage of other tests? Will it be a random access test or run in batches a few times a week and how will it impact staffing?
  • Patient care: Occasionally the reason for bringing a test in-house may be related to providing the best patient care, despite costs analysis and impact on the lab workflow and staff. An example is pentobarbital. We brought this test in-house even though we perform less than 50 of these a year because results were needed to make decisions related to continuing life support of not. Under these conditions, a 3 to 4 day TAT is not acceptable.

When all these costs are considered, think about your return on investment (ROI). Determine if you will save your institution money, and if so, over what time period. Sometimes it’s not an immediately obvious ROI, but over time you will save money. Sometimes the ROI is actually improved patient care rather than monetary savings. And sometimes the ROI is simply improved relations with the doctors and clinical staff, and that’s not a trivial ROI.

-Patti Jones PhD, DABCC, FACB, is the Clinical Director of the Chemistry and Metabolic Disease Laboratories at Children’s Medical Center in Dallas, TX and a Professor of Pathology at University of Texas Southwestern Medical Center in Dallas.

Rising Cost of Send Out Tests

More and more in this day and age, the laboratory is encouraged to reduce costs and streamline operations by using available resources in the most effective and efficient manner possible. One of the areas of the lab that is increasingly becoming a problem when it comes to cost reduction is the send out area. Since most labs can now perform the vast majority of their testing on automated chemistry and hematology analyzers, tests that must be performed at reference laboratories are increasingly esoteric, manual, and/or molecular diagnostic tests. And those tests are expensive.

As an example, my own lab sent out about 10 chromosomal microarray (CMA) tests in 2008; that number increased to  400 CMA tests in 2011 and is  on track to be 865 in 2013. At $1400.00 each, the cost to the lab increased from $14,000 to $1.2 million over that time period. And that’s just one relatively inexpensive molecular diagnostic test. Some of the gene sequencing tests can run between $5000, and $10,000 per test.

Labs are trying a multitude of different schemes in order to try to curb these send out test costs. One method that is fairly effective is to have a “gatekeeper” – a person or persons who review and must approve every test that leaves the lab that costs over a pre-set amount. This particular method is probably one of the best for controlling send out costs, but it requires time and commitment on the part of the gatekeeper, and a willingness to interact with physicians who have ordered the tests that may be less than happy than someone is questioning their order.

Another method used for send out cost control is to include some indication of the cost of the test in the computer system. When the test is ordered, the ordering provider is aware of the exact cost of the test. Some institutions are using a dollar sign system to implement this. For example “$” may mean that a test costs under $50 and “$$$$$” may indicate a test costing over $5000, with other levels in between these two.

A third method is to have a lab “formulary.” Any test found in the formulary can be ordered with no problems. Tests that are not included in the formulary must be approved by the lab before being ordered and sent out.

Whatever method a laboratory uses, it is clear that some means of regulating the rising send out costs is going to be necessary for all labs. Until molecular diagnostic tests become automated and routine, they will continue to be expensive.

-Patti Jones