CLSI GP11-A-1998

Foreword

Although NCCLS document GP11-A—Basic Cost
Accounting for Clinical Services; Approved Guideline describes
the conceptual foundations of cost accounting and provides an
overview of various techniques for focusing resources to optimize
the benefits of cost accounting for the clinical laboratory, It can
also be used as a model for other healthcare services, such as
nuclear medicine, nursing, and radiology. Additionally, these
healthcare services can apply the common applications provided in
GP11- A for calculating costs for their respective operations.

When the focus on health care gravitated to regulation and
managed care, cost-effective services became a primary emphasis
within the healthcare arena. Laboratories have quickly adopted
management techniques that allow them to maximize resources and
minimize costs. All laboratories find themselves in a competitive
and changing environment that forces them to become more selective
and specific about test costs for special and routine use. It is
critical to a laboratory's financial success in this volatile
economic environment that laboratory managers know how to determine
actual costs and estimate standard costs for tests based on their
own equipment, methods, and test menu.

Cost accounting is an important area of acquired expertise for
laboratory management staff that enables managers to identify costs
for budgeting and control. Healthcare organizations, group
practices, and even physician offices are being asked to look at
many options, including sending laboratory tests to reference
laboratories to reduce costs. Before a laboratory manager makes a
decision to "make or buy" laboratory tests, it is essential to know
what it costs to do a test, once it has been determined that its
medical necessity is appropriate. Many laboratories do not have
formal cost-accounting systems, and most laboratory practitioners
have not been formally trained in accounting principles, which
provided the impetus and inspiration for this work.

By its very nature, cost accounting is a pragmatic discipline, a
rational system for gathering and disseminating information. In
practice, cost-accounting systems range from simplistic to complex,
from hand-posted notebooks to sophisticated electronic equipment.
However, the latter can be overemphasized, and the goals of
improving cost management and laboratory operations under stress
may become secondary to data gathering and analysis. Therefore,
this document is intended to provide elementary instruction for
managers and bench-level staff members to simplify the complexities
of laboratory cost accounting and provide a working document for
improving control of costs and reporting of significant deviations
from standard costs.

Designing a uniform cost-accounting system that is compatible
with the needs of all laboratories is difficult because of the
tremendous variation in their complexity, resource requirements,
and the type of records and information that are readily available.
Therefore, the techniques described in Section 4 were selected for
their general applicability and simplicity of design.

The Area Committee on General Laboratory Practices currently has
two cost management documents in development which will complement
GP11. They are: Cost Analysis at the Point of Care, which
addresses calculation of the cost of use, and the cost benefit of
various testing methods and instruments used at the point of care;
and Total Cost Management, which provides an overview of
the basic principles of total cost management and guidance on
planning and adjusting budget allowances in a capitated
environment.