Research Article| Volume 5, ISSUE 4, P635-651, December 1985

Quantitative Analysis of Cost-Savings Strategies in the Clinical Laboratory

  • James W. Winkelman
    Department of Pathology, Division of Clinical Pathology, State University of New York, Upstate Medical Center, Syracuse, New York 13210
    Professor and Acting Chairman, Department of Pathology, and Director, Division of Clinical Pathology, State University of New York, Upstate Medical Center, Syracuse, New York
    Search for articles by this author
      This paper is only available as a PDF. To read, Please Download here.
      Various strategies for cutting costs in the hospital clinical laboratory are noted, including straight cost cutting, modifications of internal operations, degradation of functions and services, reduced utilization, shared hospital services, and reorganization. Dr. Winkelman defines quantitatively, where data exist, the actual cost savings that the different options have been claimed to produce.
      To read this article in full you will need to make a payment

      Purchase one-time access:

      Academic & Personal: 24 hour online accessCorporate R&D Professionals: 24 hour online access
      One-time access price info
      • For academic or personal research use, select 'Academic and Personal'
      • For corporate R&D use, select 'Corporate R&D Professionals'

      Subscribers receive full online access to your subscription and archive of back issues up to and including 2002.

      Content published before 2002 is available via pay-per-view purchase only.


      Subscribe to Clinics in Laboratory Medicine
      Already a print subscriber? Claim online access
      Already an online subscriber? Sign in
      Institutional Access: Sign in to ScienceDirect


        • Ahlvin R.C.
        Biochemical screening—A critique.
        N. Engl. J. Med. 1970; 283: 1084
        • Altshuler C.H.
        • Bareta J.
        • Cafaro A.F.
        • et al.
        The PALI and the SLIC systems.
        CRC Crit. Rev. Clin. Lab. Sei. 1972; 3: 379-402
        • Amador E.
        Shared clinical laboratories.
        J.A.M.A. 1976; 236: 1162-1165
        • Bater B.
        • Yellin J.A.
        The yield of multiphasic screening.
        J.A.M.A. 1972; 222: 74-78
        • Caceres C.
        By limiting the number of tests ordered and using automated panels, physicians can help the lab reduce unit costs from $250 to $7.
        Lab World. 1980; 31: 45-47
        • Caudill G.
        • Pettit D.
        • Martin B.
        • et al.
        Modifications for expense reduction: Part 5.
        Microbiol. Lab. Med. 1985; 16 (A1-U)
        • Chu R.C.
        • Williams S.V.
        • Eisenberg J.M.
        The characteristics of STAT laboratory tests.
        Arch. Pathol. Lab. Med. 1982; 106: 662-665
        • Cohen D.I.
        • Jones P.
        • Littenberg B.
        • et al.
        Does cost information availablility reduce physician test usage?.
        Med. Care. 1982; 20: 286-292
        • Cole W.G.
        Biochemistry test profiles and laboratory system design.
        Hum. Pathol. 1980; 11: 424-434
        • Conn R.B.
        • Aller R.D.
        • Lundberg G.D.
        Identifying costs of medical care—an essential step in allocating resources.
        J.A.M.A. 1985; 253: 1586-1589
        • Conn R.B.
        • Byrnes R.K.
        Technology transfer: Guidelines for the laboratorian.
        Lab. Management. 1981; 19: 35
        • Conn R.B.
        Clinical laboratories: Profit center, production industry or patient-care resource?.
        N. Engl. J. Med. 1978; 298: 422-427
        • Dahlgren T.E.
        Six hospitals share a central laboratory and save money.
        Mod. Hosp. 1969; 112: 92-93
        • Durbridge T.C.
        • Edwards F.
        • Edwards R.G.
        • et al.
        Evaluation of benefits of screening tests done immediately on admission to hospital.
        Clin. Chem. 1976; 22: 968-971
        • Eisenberg J.M.
        An educational program to modify laboratory use by house staff.
        J. Med. Educ. 1977; 52: 578-581
        • Eisenstaedt W.F.
        A cooperative laboratory: A must for the future.
        Lab Med. 1974; 5: 16-19
        • Everett G.D.
        • deBlois S.
        • Chang L.
        • et al.
        Effect of cost education, cost audits, and faculty chart reveiw on the use of laboratory services.
        Arch. Intern. Med. 1983; 143: 942-944
        • Fattal G.A.
        • Frost Y.
        • Winkelman J.W.
        Operational and financial outcomes of shared laboratory services in a consolidated hospital system.
        J.A.M.A. 1985; 253: 2076-2079
        • Fineberg H.V.
        Clinical chemistries: The high cost of low-cost diagnostic tests.
        in: Altman S.H. Blendon I.L. Medical Technology: The Culprit Behind Health Care Costs? DHEW Publ. No. (PHS) 7903216. U.S. Govt. Printing Office, Washington, D.C.1979
        • Freedman B.
        • Pierskalla W.
        • Beazoglou T.
        Sharing arrangements in the nonprofit hospital industry.
        Health Serv. Res. 1979; 14: 150-159
        • Friedman G.
        • Goldberg M.D.
        • Ahuja J.
        • et al.
        Biochemical screening tests.
        Arch. Intern. Med. 1972; 129: 91-97
      1. GAO/HRD-83-74: Need to eliminate payments for unnecessary hospital ancillary services. Gaithersburg, Maryland, General Accounting Office Report to the Secretary of HHS, Sept. 30, 1983.

        • Garfield S.R.
        Multiphasic health testing and medical care as a right.
        N. Engl. J. Med. 1970; 283: 1087
        • Griner P.F.
        • Glaser R.J.
        Misuse of laboratory tests and diagnostic procedures.
        N. Engl. J. Med. 1982; 307: 1330-1336
        • Harris E.
        Effects of intra and interindividual variation on the appropriate use of normal ranges.
        Clin. Chem. 1974; 20: 1535-1542
        • Hartz S.C.
        A statistical model for assessing the need for medical care in a health screening program.
        Clin. Chem. 1973; 19: 113-120
        • Hoey J.
        • Eisenberg J.
        • Spitzer W.
        • et al.
        Physician sensitivity to the price of diagnostic tests.
        Med. Care. 1982; 20: 302-307
        • Lauenstein K.J.
        • Martin G.B.
        • Winkelman J.W.
        Modifications for expense reduction: Part 1.
        Blood Bank. Lab. Med. 1984; 15: 609-613
        • Lehmann C.
        • Leiken A.M.
        Influence of selective vs. panel chemistry tests on cost and diagnostic time.
        Am. J. Med. Tech. 1982; 18: 833-836
        • Lombardi Jr., Sen. Tarky
        Public-sector support of medical care.
        N.Y.S. J. Med. 1983; 83: 961-963
        • Long M.J.
        • Cummings J.M.
        • Frisof K.B.
        The role of perceived price in physicians’ demand for diagnostic tests.
        Med. Care. 1983; 21: 243-250
        • Ludke H.
        • Martin B.G.
        • Winkelman J.W.
        Modifications for expense reduction: Part 3.
        Immunol. Lab. Med. 1984; 15: 763-765
        • Lundberg G.D.
        • Westlake G.E.
        Cost containment in the clinical laboratory—to be or to seem to be, or when is a nontest a test?.
        J.A.M.A. 1980; 243: 1969
        • Lundberg G.D.
        Laboratory request forms (menus) that guide and teach.
        J.A.M.A. 1983; 249: 3075
        • Lundberg G.D.
        Perseveration of laboratory test ordering: A syndrome affecting clinicians.
        J.A.M.A. 1983; 249: 639
        • Martin A.R.
        • Wold M.A.
        • Thibadeau L.A.
        • et al.
        A trial of two strategies to modify the test ordering behavior of medical residents.
        N. Engl. J. Med. 1980; 303: 1330-1336
        • Maturi V.F.
        Impacts and trends in health care delivery research for the clinical laboratory.
        in: Proc. San Diego Biomedical Symposium. Academic Press, New York1979
        • Moloney T.W.
        • Rogers D.E.
        Medical technology—a different view of the contentious debate over costs.
        N. Engl. J. Med. 1979; 301: 1413-1419
        • Morris M.W.
        • Martin B.G.
        • Winkelman J.W.
        Modifications for expense reduction: Part 2.
        Hematol. Lab. Med. 1984; 15: 670-672
        • Munch P.
        Economic incentives to order lab tests: Theory and evidence.
        in: Hough D.E. Misek G.I. Socioeconomic Issues of Health, 1980. American Medical Association, Chicago1980
        • Nagurney J.T.
        • Braham R.L.
        • Reader G.G.
        Physician awareness of economic factors in clinical decision-making.
        Med. Care. 1979; 17: 727-736
        • Newhouse J.P.
        • Manning W.G.
        • Morris C.N.
        • et al.
        Some interim results from a controlled trial of cost sharing in health insurance.
        N. Engl. J. Med. 1981; 305: 1501-1507
        • Olsen D.
        • Kane R.
        • Proctor P.
        A controlled trial of multiphasic screening.
        N. Engl. J. Med. 1976; 294: 925-930
      2. Portugal, B.: Emerging joint ventures: The hospital and independent lab market. In Lab Reimbursement ’84: Fitting the Pieces Together. Proc. Second Annual Institute on Clinical Laboratory Reimbursement and Policy, Sept. 7–8, 1984, Arlington, Virginia, Washington G-2 Reports, 1984.

        • Schmidt R.P.
        The medical school: Who pays for teaching, research, and the burden of tertiary care?.
        N.Y.S.J. Med. 1983; 33: 961-963
        • Schroeder S.A.
        • Myers L.P.
        • McPhee S.J.
        The failure of physician education as a cost containment strategy: Report of a prospective controlled trial at a university hospital.
        J.A.M.A. 1984; 252: 225-230
        • Shapiro M.F.
        • Hatch R.L.
        • Greenfield S.
        Cost containment and labor-intensive tests: The case of the leukocyte differential count.
        J.A.M.A. 1984; 252: 231-234
        • Simmons H.J.
        The extramural laboratory: A new source of hospital revenues.
        Hum. Pathol. 1983; 14: 104-107
        • Statland B.E.
        • Winkel P.
        • Burke M.D.
        • et al.
        Quantitative approaches used in evaulating laboratory measurements and other clinical data.
        in: Henry J.B. Clinical Diagnosis and Management by Laboratory Methods. Edition 16. W. B. Saunders, Philadelphia1979
        • Townsend J.F.
        • Lucas F.V.
        Six-year program shows benefits of shared laboratory services.
        Hospitals. 1979; 53: 107-112
        • Tydeman J.
        • Morrison J.I.
        • Cassidy M.A.
        • et al.
        Analyzing the factors contributing to rising laboratory costs.
        Arch. Pathol. Lab. Med. 1983; 107: 7-12
        • Weinstein M.C.
        • Fineberg H.V.
        Cost-effectiveness analysis of medical practices: Appropriate laboratory utilization.
        in: Benson E.S. Rubin M. Logic and Economics of Clinical Laboratory Use. Elsevier North-Holland, Inc., New York1978
        • Werner M.
        • Altshuler C.H.
        Cost effectiveness of multiphasic screening: Old controversies and a new rationale.
        Hum. Pathol. 1981; 12: 111-117
        • Werner M.
        • Altshuler C.H.
        Utility of multiphasic biochemical screening and systemic laboratory investigations.
        Clin. Chem. 1979; 25: 509-511
        • Winkel P.
        • Ramsoe K.
        • Lyngbye J.
        • et al.
        Diagnostic value of routine liver tests.
        Clin. Chem. 1975; 21: 71-75
        • Winkel P.
        Patterns and clusters—multivariate approach for interpreting clinical chemistry results.
        Clin. Chem. 1973; 19: 1329-1338
        • Winkelman J.W.
        • Bernstein L.H.
        The unordered test: Cost of the benefit versus benefit of the cost.
        Pathologist. 1985; 39: 12-16
        • Winkelman J.W.
        • Hill R.B.
        Clinical laboratory responses to reduced funding.
        J.A.M.A. 1984; 252: 2435-2440
        • Winkelman J.W.
        • Martin B.G.
        Modifications for expense reduction: Introduction to a series.
        Lab. Med. 1984; 15: 592-593
        • Winkelman J.W.
        Less utilization of the clinical laboratory produces disproportionately small true cost reductions.
        Hum. Pathol. 1984; 15: 499-501
        • Winkelman J.W.
        The state of health in the state of New York—who pays? Public-sector support of medical care: Past, present, and future.
        N.Y.S. J. Med. 1983; 83: 958-966
        • Wong E.T.
        • McCarron M.M.
        • Shaw Jr., S.T.
        Ordering of laboratory tests in a teaching hospital: Can it be improved?.
        J.A.M.A. 1983; 249: 3076-3080
        • Woo J.
        • Eschenfelder P.
        • Winkelman J.W.
        Modifications for expense reduction: Part 4.
        Clin. Chem. Lab. Med. 1984; 15: 763-765