A free AACC webinar slated for May 27 will explore how lab leaders can change the perception of hospital laboratories from that of a cost center to one of a value generator. By operating more like businesses that provide a vital service, labs will be able to engage senior executives in helping hospitals meet their initiatives.
“The Need for a New Type of Lab Leader” will feature Charles Wilson, vice president of operations at Robert Wood Johnson University Hospital in New Brunswick, New Jersey. The session is supported by LabLeaders.com.
“The primary focus of this discussion will center around the need for the laboratory to know and understand the finances and reimbursement associated with the operations of the clinical laboratory,” Wilson told CLN Stat. “Most lab administrators default this responsibility to the finance department, which generally lacks the resources to track low-margin, high-volume lab claims effectively. Their limited resources are generally used to work up the large inpatient, surgery, and radiology denials, leaving lab claims to go unpaid.”
Because of this, most laboratory directors are unaware of how much money their operations are making or losing. “Lack of this understanding compromises the ability of the lab director, especially for labs which are making money, to influence decisions among top leaders in regards to needed resources,” Wilson said. “As a result, far too many laboratories are classified and relegated as cost centers as opposed to revenue producers. In short, lab administrators must understand and know their costs, margins, and relevant factors affecting reimbursements.”
In order for lab leaders to run their operations more like businesses, they should incorporate meaningful financial discussions into internal meetings and ongoing operational assessments, Wilson explained. “These discussions have to go beyond simply discussing costs. It is impossible to cut your way to prosperity.”
That’s not to say that how laboratorians do their jobs is less important than the money they make doing so. “Most laboratorians associate our value with the quality of the work that we perform, which is extremely important,” Wilson said. “Senior-level decision makers associate our value with quality and the ability to generate revenue.”
Better engaging senior healthcare executives starts by speaking their language, Wilson explained. “When we submit proposals for ‘state of the art’ instruments with five pages of techno-jargon, this alone is not enough to move the decision favorably. What has to accompany this is a full return-on-investment as to how this instrument will impact things such as length of stay, decreased infection rates, earlier discharges, increased testing capacity, etc., all of which have dramatic impacts on bottom-line revenue,” he said. “Additional staff requests should be accompanied by a 3- to 5-year pro forma that outlines how the additional staff will translate into additional dollars (revenue) via increased testing by the laboratory.”
Attendees can expect to leave this session understanding that high-quality lab testing is no longer effective in driving favorable decisions by senior administration. “Our testing excellence must be accompanied by an improved understanding of all financial parameters associated with laboratory operations,” added Wilson. “We must know our costs, not just our budgets. Only the lab administrator knows what it takes to run each of the tests in their laboratory.”
Register online for this 1-hour webinar.