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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.