18.07.17 Reducing the lab budget by 5% Flashcards
What are the current pressures on the service the NHS provides?
ageing population,
increased incidence of lifestyle-related disease
shift in the public expectation of NHS service
increase in the cost of services
financial and workforce constraints
What are the three general options for decreasing a lab’s budget?
1) Genetics/molecular pathology laboratory service integration
2) Reduction of staff costs
3) Reduction of non-staff costs
Other than efficiency savings, how else might a laboratory’s budget be saved?
Increasing revenue
What must the laboratory ensure when considering efficiency savings?
Ensure that the quality of results and service provided is not compromised in any way.
Give examples of possible laboratory integrations.
Molecular and cytogenetics laboratory integration
Integration of molecular pathology services in to diagnostic centres
Integration of wider pathology with shared workflows e.g. DNA extraction
What was one of the key driver’s promoting laboratory efficiency savings through pathology integration?
Carter review
Give three examples of how integration of services may improve the laboratory’s budget.
- Physical space requirements- finding suitable lab and office space may be difficult (and expensive) unless departments are already co-located
- LIMS requirements- the best savings can be made when LIMS systems are shared and able to cross-talk with other relevant systems such as trust electronic health records. However this requires substantial financial and time investment to set up.
- Management of sample transport/storage etc- critical to establish these processes early to ensure no reduction in quality.
In general (and related to the points above) financial investment is required to make long-term savings through integration of services. It may be that the cost savings to the lab are small, but savings are seen in other aspects of the wider health system- hard to measure.
What % of a laboratory’s budget are consumed by staffing costs?
70-80%
How can a laboratory make amendments to staffing to make efficiency savings?
- Genetic Service integration – cross-training staff in cytogenetics and molecular genetics
- Evaluate skill levels required:
Redistribute work accordingly
Recruit lower band workers and release time from higher band workers
Consider cross-training staff - Not replacing staff wastage, e.g. staff retiring or leaving the lab
- Replacing retiring/leaving staff at a lower pay-scale band
- Not employing staff for maternity leave cover
- Evaluate lab structure and increase efficiency and productivity by restructuring, i.e. staff redundancy/downgrading. However, redundancy pay-offs mean that there would be no initial cost saving.
- Automation of wet lab processes instead of recruiting new staff if work load increases
- Bioinformatic solutions to automate “dry-lab processes e.g. automated clinical reports.
Give four examples of how non-staff costs can be reduced.
- Evaluating your consumable suppliers and looking into alternative cheaper options
- Collaborating with other diagnostic services to generate purchasing consortia
- Re-negotiate or reduce the level of maintenance/repair contracts of equipment or pursue alternative suppliers
- Stop offering a specific test, especially one that either requires costly consumables or is too labour-intensive, or replace it with a different/cheaper/more efficient one
- Reducing number of send away referrals - cost of repatriation may be useful
- Restrict spending on certain areas, e.g. research, purchasing equipment, licensing other providers to do testing for you
- Eliminate waste, by reducing failure/repeat rates, reduce reaction volumes
- Replace expensive kits with in-house ones
- Cut down on stationery e.g. paper
- Review estate costs, if appropriate e.g. rent, utilities, refurbishments
How could a laboratory increase its income?
- Increasing prices competitively. Less relevant in reconfiguration. Can consider additional charging for private testing.
- Developing and offering a new test/service might also generate income. In this case, an initial investment is likely to be needed for reagents and equipment.
- Collaborations with clinical and academic colleagues can give rise to opportunities to apply for research/charity grants which can help with regards to service developments and service delivery. These grants can provide an opportunity for a diagnostic lab to bring in extra funding without relying on the NHS funding bodies. This may be of a particular interest when validating a new assay where a research grant can help cover the initial validation cost
- Offering private services - e.g. testing private patients; collaborating with existing customers/suppliers in return for reduced rate of goods/services – i.e offering report interpretation to a bioinformatics company that provides data analysis; offer help validating new products/instruments especially for CE IVD certification; collaboration with pharma companies
What is the difference between cost and price?
Cost is what it actually costs the department to perform a test in terms of consumables, however price is what the department charges, which includes staff time, maintenance etc.
What should be considered if you are changing a service?
Changes to a service have to be cost neutral, unless you are prepared to write a business plan. If there is a change in price for a service, users must be informed and have the opportunity to move elsewhere, therefore a change in service must remain comparable/competitive in price
What are the options when purchasing equipment?
Buying the item outright, and owning it entirely
Equipment rental contracts – you pay for reagents / maintenance, or pay per test result, but do not own the item – may be a good option when large pieces of equipment are concerned
What is the advantage of a rental contract over the direct purchasing of equipment?
Rental contracts are often a better choice, especially with fast advancing technology (e.g. NGS), as there is often the choice of an ‘upgrade’ when you renew the contract. It can often be easier to obtain grant funding via this method.
