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From the Editor’s Desk

        Why pursue laboratory outreach at your hospital?

        The healthcare industry’s financial leaders often ponder   These commercial laboratories are guided by a
        the value of laboratory outreach.  If you’re a hospital CFO   singular mission:  TO ESTABLISH DOMINANCE IN THE
        (or someone who has your finger on the financial pulse   MARKET AREA BEFORE THE COMPETITION CAN REACT.
        of your organization), you might wonder:
                                                                The other side of the competitive arena is composed of local
                                                                hospitals whose laboratory administration recognizes the
        •   What does laboratory outreach                       competitive threat but cannot match the competitors’
             do for my hospital?                                advantages.  This predicament is the result of the competing

        •   Is the potential reimbursement                      priorities within the hospital, which perceives the laboratory
                                                                and the potential outreach business as a cost center that
             really worth the effort?                           requires substantial capital expense to become a competitive
                                                                revenue-generating center.
        •   What’s wrong with the hospital’s
             infrastructure that’s currently in place?          The bottom line:  If your hospital’s current revenue is
                                                                decreasing, you need to find additional sources
        The answers to these questions are crucial              of income.  One way is to increase the utilization of
        to the hospital’s finance group—and give an option      the lab with laboratory outreach.  It’s worth consideration.
        for maximizing lab utilization and overhead expenses
        already paid for by utilizing these resources during
        non-peak hours.

        Each strategic group in the hospital has a unique perspective
        the other groups may not fully understand.  Laboratory looks
        at operational efficiency and expanding business; finance
        looks at profitability and costs; the IT group serves as a reality
        check to ensure any proposed changes are realistic
        and achievable.
        Hospital laboratories traditionally have underutilized
        test capacity.  They have “fixed costs,” to professionally staff
        and maintain the equipment in a laboratory 24/7 to address
        inpatient/outpatient testing.
        Outreach testing primarily impacts the “incremental costs”
        associated with the relatively low cost of performing
        additional tests (reagents and supplies) that translate into
        higher revenue margins for every outreach test run through
        the hospital laboratory.

        Recognizing that the hospital is open to new business
        opportunities that have a positive impact on the bottom line,
        laboratory outreach is a great candidate.  This line of
        business is rapidly shifting into an ultra-competitive
        environment with a winner-takes-all mindset.

        On one side, you have national and local commercial
        laboratories that are well funded and have the right
        technology offering for clients, combined with a sales force
        capable of deeply penetrating the backyard of any hospital
        in the United States.
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