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Thinking of selling the hospital laboratory?
...think again

Clinical laboratories are experiencing the fear factor as Fig.1 shows that laboratory tests are the most frequently
labs stand by and watch declining reimbursements and ordered diagnostic procedures and account for 80%
narrowing profit margins. The major commercial vendors of the patient’s medical record. Once the lab is off-site,
see the advantage of the unpredictable future facing many the hospital will give up their financial advantage to
clinical labs. The large commercial labs count on volume, contain cost. Now that today’s labs are moving from
and now that physician practices are moving under the a volume-based fee-for-service model to a model based
umbrella of health systems, this leaves the commercial on quality and value reimbursements, lab management will
vendor accountable to answer to their stakeholders. need to ensure the patient is receiving the right test at the
Finding alternative ways to grow volume is imperative lowest cost for the best result.
for these vendors to remain the industry heavyweights.
What better way to ensure their stake in the market than
to suggest outsourcing the hospital laboratory services.
Hospital administrators are then approached with large
payout incentives and are guaranteed a smooth turnkey
operation. The attractive inducements offered by the
vendors play a key role for executives to weigh the overall
cost even if it means performing fewer tests. Indeed, lab
outsourcing can bring a considerable amount of upfront
cash into the health care system, but not without a few
tradeoffs. After the move, the hospital will notice the first
few years are good. At some point, the realization
of the partnership may not be aligned with the
hospital’s core values.

Editorial