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Q: blood testing lab economics ( Answered 5 out of 5 stars,   1 Comment )
Question  
Subject: blood testing lab economics
Category: Health > Medicine
Asked by: eliotjacobsen-ga
List Price: $75.00
Posted: 05 Aug 2005 07:25 PDT
Expires: 04 Sep 2005 07:25 PDT
Question ID: 552053
Our company does hormone replacement therapy for adults.  Our patients
typically need blood tests for the following prior to treatment:

1.  Blood lipids, cholesterol
2.  Thyroid (T3, T4, TSH)
3.  Testosterone(total and free)
4.  DHT
5.  Estrogen
6.  IGF-1
7.  DHEAS
8.  PSA (males)

We typically draw the blood samples in our office and send them out to
a lab.  Turnaround time is several day to 2 weeks depending upon the
test.  The cost to our patient is quite high, totalling approx $300
for these tests.

To reduce patient cost and turnaround time, we're considering bringing
the testing in-house and setting up an internal lab.

We have a couple of primary questions:

1.  What would it cost us to set up a lab to do the tests listed
above?  (equipment required, cost.)
2.  What is the technician time required to perform the tests listed above?
3.  What is the going rate for a blood lab technician?

With the answers to these questions, we can build a financial model
for our in-house lab and decide if it's a good investment.

Request for Question Clarification by crabcakes-ga on 05 Aug 2005 09:54 PDT
Hi Eliotjacobsen,

   Where are you located? State, city?

To give you an answer, I would need to know your volume. How many
panels of the tests you listed go out to a reference lab each
day/week?

Do you accept Medicaid and/or other insurance providers?

Thank you.
Sincerely, Crabcakes

Clarification of Question by eliotjacobsen-ga on 05 Aug 2005 17:21 PDT
We're in Salt Lake City, UT.

Current volume is approx 50 requests(each with multiple tests) similar
to those below per week. But we're looking at a new business model
that would dramatically increase that volume to up to 200 per week.

Perhaps the best way to look at this would be to understand what
equipment we need for each test, and the cost and throughput of each. 
Then we can build an excel model what balances equipment purchases
with increasing volumes.

Note:  The estrogen tests will need to be for men and women.  The
tests for me are the "sensitive" assay.  We should add the more
typical tests to this list as well:

9.  Glucose
10. CBC/Chemistry Profile  (detail here: http://www.lef.org/bloodtest/)
11. Progesterone

Clarification of Question by eliotjacobsen-ga on 05 Aug 2005 17:24 PDT
We currently accept Medicaid and other insurance, so we'd better
understand the qualification/approval/insurance requirements.
Answer  
Subject: Re: blood testing lab economics
Answered By: crabcakes-ga on 05 Aug 2005 17:28 PDT
Rated:5 out of 5 stars
 
Hi Eliotjacobsen,

     An exact answer is far too complex, and  greatly exceeds the fee
for this question, but I am providing you with the issues that would
impact setting up a doctor?s office lab.

  I strongly recommend talking to laboratory management experts, such
as Anne Pontius, Laboratory Compliance Consultants, (919) 859-3793,
4900 Waters Edge Dr # 170, Raleigh, NC 27606. I can personally vouch
for LCC.  Or, try Quality America, 1-800-946-9956
http://www.quality-america.com/lab-testing/index.html 

Or UDL
http://www2.umdnj.edu/udlweb/poct_program.htm

These people can give you an idea of the type of compliance you will
be held to, based on your location, volume, and type of patients you
serve,  and insurance you accept. You may quickly change your mind
about opening your own lab, or you may be encouraged to do so!

 As far as instrumentation, I would contact larger lab equipment
suppliers, and see what kind of deal they can provide. You will need
to know which methodology you want to use in testing, and locate that
type of instrumentation and equipment.  Sometimes, free service
contracts are offered with the promise of reagent purchases from them.
Sometimes you can ask for ?freebies? such as tubes, pipettes, etc.,
when purchasing analyzers. Ask for documentation on reliability,
reproduction of results and sensitivity. Price ranges vary, according
to companies. Call a local hospital lab manager and ask for reputable
sales reps in lab equipment and reagents.
  
First, of the tests you listed, do you order qualitative or
quantitative results? There are numerous ?kits? that you can use to
get qualitative results, giving you a range or a ballpark answer. If
you are monitoring these analytes, you will need quanititative
results, which are far more expensive, complex and will require a
medical technologist, not a lab technician. Typically to perform
lipids testing, you?ll need an ultracentrifuge and also a method to
precipitate out proteins. This is a complex testing method.

===============================================================================
What would it cost us to set up a lab to do the tests listed above? 
(equipment required, cost.)
===============================================================================

There are two ways to go about this. 1) Try and purchase one or two
analyzers that can batch test several analytes at once. 2) Buy
individual analyzers that run only one or two kinds of tests. The
advantage of having one or two large analyzers is that the amount of
paperwork, calibration, maintenance etc. is reduced. You can get by
with one or two service contracts. The advantage of having smaller
specialized instruments is that they are cheaper, smaller, and easier
to maintain (generally speaking) but may require different consumables
and several service contracts. Thyroid and lipid testing is more
complex than a simple cholesterol. DHEAS is usually tested using an
immunometric chemiluminescence method, ehich will need it?s own
analyzer and special reagents.There are usually several methodologies
for performing each test. An analyzer rep can discuss the costs and
methodologies with you. Be aware that some methods are more accurate
than others.


Don?t make the mistake of thinking one can load up an analyzer and let
it run large batches of tests, unattended. Analyzers, under the best
of conditions get jammed, run out of reagents, run out of disposables,
water, etc. and stop. They need to be monitored regularly by a tech.
Sometimes small fibrin clots clog up the sample probe, and a tech has
to know what to do to keep the run going.

You?ll also need a supply of DIH2O(distilled water). Some labs
purchase water, others install a filter system. You?ll need a place to
wash glassware and test it?s pH after, if you don?t use disposable
labware.

?For most equipment now on the market, you can expect to pay in the
neighborhood of $40,000 to $60,000 for a new chemistry analyzer and
$12,000 to $20,000 for a hematology machine. (You can either buy
outright or lease.) Manufacturers usually provide immunoassay machines
for free; you pay for the reagents only (at a cost ranging from $2 to
$8 per test).

Cheaper alternatives, however, are on the market. For instance, last
December, Careside Inc. in Culver City, Calif., began offering a new
bench top chemistry analyzer for $9,995 that uses a cartridge to
produce automated test results in 12 minutes.

Another option is to purchase used equipment. According to Mr. Gill
from Baton Rouge, you'll save at least 50% if you buy a refurbished
machine. Be careful to avoid what Mr. Gill calls "spray and pray"
dealers?those who do little more than clean up the machine and pray it
won't break down before the 30-day warranty expires. Mr. Gill said
that he only installs refurbished analyzers that come with the same
one-year warranty he could get on a new one.? This page has loads of
useful information, which, due to copyright restrictions, I may not
post.
http://www.acponline.org/journals/news/feb00/officelab.htm

===============================================================================
What is the technician time required to perform the tests listed above?
===============================================================================
   That greatly depends on your volume and kind of equipment.
Multi-analyzers can run many tests in a short time, but cost more and
need to be monitored. However, while the analyzer is running, the tech
can perform manual analysis of other tests, record QC, temps, etc,
while keeping an eye on the analyzer. Another caveat: each and every
abnormal test MUST be repeated and documented, doubling the cost of
the test to you. Any alert value MUST be called or given to the
physician immediately and documented.

You?ll need to count the time it takes to wait till the samples are
well clotted (for serum samples), centrifuge the samples, aliquot
them(Including accurately labeling the aliquot), send them to the
appropriate area of the lab for testing. Allow time to monitor the
analyzer for fibrin clots, breakdown, etc. Once testing is done, allow
for time to record the results, rerun any abnormal samples (with fresh
serum) dispose of the tested sample and reagents, and restock the
analyzer with consumables. (Whether required by law or not, it?s good
practice to rerun a sample that follows an abnormally high sample,
before the high sample for the second run). Allow time for temps to be
recorded, take stock of consumables, QC to be recorded, etc.

===============================================================================
What is the going rate for a blood lab technician?
===============================================================================
Salaries:

?In Minnesota, the median wage for medical laboratory technologists is
$22.70 per hour, or $3,935 per month. The median wage for medical
laboratory technicans is $17.37 per hour, or $3,011 per month

Nationally, the median wage for medical laboratory technologists is
$3,580 per month ($20.63 per hour). Half of all technologists earn
between $3,030 and $4,230 per month ($17.50 and $24.43 per hour).

Wages are lower for medical laboratory technicians. Their median wage
is $2,420 per month ($13.96 per hour). Half of all technicians earn
between $1,940 and $2,990 per month ($11.21 and $17.23 per hour).

Wages vary by employer and area of the country. The worker's level of
experience, education, and responsibility also affect wages.

Medical laboratory technicians who work full time usually receive
benefits. Typical benefits include sick leave, paid vacation, and
health insurance.?
http://www.iseek.org/sv/13000.jsp?pg=13000&id=100376#9


Regulations and certifications:
Depending on the complexity of testing, you may be required to hire a
medical technologist, and not a lab technician to perform your tests.
Laboratory technicians have a 2 year degree , and carry the initials
M.L.T. on their certification. Medical technologists have a 4 year
degree and use the initials M.T. on their certification. MLTs are
allowed to perform only simple tests without supervision of an MT.

AMT
http://www.amt1.com/

ASCP
http://www.ascp.org/

http://www.pointofcare.net/OhioValley/8-8-02Meeting.htm

?Tests are classified as moderately or highly complex. High complexity
tests have the strictest rules and regulations, and require extra
training for staff. Almost all procedures performed in Andrology and
Embryology laboratories are categorized as high complexity testing.
Examples of high complexity tests are counting the number of sperm in
a semen sample or assessing the viability of human embryos.
The individual responsible for running a Clinical Laboratory must meet
specific criteria in order to be licensed to do their job. They must
have a demonstrated track record of training, testing and supervising
the procedures in their particular specialty. They must have specific
qualifications. For high complexity laboratories, only Physicians,
Pathologists or doctoral level, PhD scientists qualify. These
standards are set in Federal and sometimes State law. These standards
mandate that the individual in charge of the laboratory is able to
ensure accurate and reliable testing, and provide consultations to
Physicians regarding the significance of procedures and test results.
Directors who wish to take charge of a high complexity clinical
laboratory must be licensed and certified by a governing body.?
http://www.infertilitydoctor.com/team/team_faq.htm 


Here?s a more positive view:
?CLIA regulations
One of the largest perceived roadblocks is the hassle and cost
associated with the Clinical Laboratory Improvement Amendments (CLIA)
of 1988, which was finalized in 1992. CLIA sets standards for quality
control, personnel requirements, test management procedures,
proficiency testing and inspections.
"There are a number of physicians out there who just threw up their
hands and said, 'I don't want to mess with it,' " said Andy Gill,
president of HealthCare Technologies, a Baton Rouge, La.-based
laboratory consulting firm that works with physicians.

But physicians who have labs say the regulations are not all that
burdensome. If you're a small practice, one option is to hire a
qualified medical technologist as a consultant to set up a CLIA
compliance manual and related procedures, get the lab running and help
train your own laboratory person.
After a few months, your inside lab person should be able to run the
lab. At that point, you can use the medical technologist as needed to
address specific questions or to come in periodically to ensure all
requirements are being met. You can find certified medical
technologists at your local hospital who moonlight as consultants.
(For a list of consultants who specialize in lab issues, call American
Medical Technologists at 847-823-5169, ext. 226. The list costs $5.)

Experts also say that compliance costs are relatively low. CLIA fees
(including the CLIA certificate and inspection) for moderate to high
complexity labs range from $450 every two years to several thousands
of dollars, depending on test volume. CLIA certificates for waived
labs (those that perform simple tests and are therefore required to
comply with few regulations) cost $150 every two years.
Fees for proficiency testing (proving that your lab can accurately
test samples) typically range from $200 to $2,000 per year. The
College's Medical Laboratory Evaluation (MLE) program provides
proficiency tests and free advice over the phone, as well as guidance
on lab management issues to practices that subscribe to its program.?
http://www.acponline.org/journals/news/feb00/officelab.htm



===================
Laboratory Software
===================
LIS
http://www.emirj.com/MEDCOMLabManager.html

http://www.orchardsoft.com/

http://www.clinlabinc.com/

=============
Lab Suppliers
=============
Fisher Scientific
https://www1.fishersci.com/index.jsp

LSS
http://www.labsafety.com/

Dynalabs
http://www.dynalabcorp.com/wc1/subcategorylist.aspx?catalogid=1&categoryid=1


List of suppliers
http://www.mniguide.com/results.asp?headers=LA0410&source=Google



   Unless you draw a large volume of tests, the cost to set up a lab
would be prohibitive. Running an accurate and compliant lab is far
more than plugging in an analyzer. You need to perform large amounts
of QC, have a redundant system to store all the QC, have expensive
analyzers, expensive consumables (cuvettes, tubes, tubing, reagents,
gloves, pipettes). The reference lab you use now probably supplies
vacutainer tubes, needles, syringes, gauze, etc. at no cost. If you
run your own tests, you will have to factor this cost in to the
overall cost.

Analyzers have to be calibrated regularly, centrifuges must be tested 
monthly with a strobe light, refrigerators used to store reagents must
have the temperature recorded at least once a day, quality control
must be run for each test, depending on volume. Pipettes must be
calibrated often, rockers and mixers must be monitored and calibrated,
thermometers and stop watches must be calibrated and documented.
Proficiency testing must be run 2-4 times a year and are they are very
costly. Most reagents need refrigeration, and they must be maintained
at a constant temperature. Any incubators needed for testing have to
have their temperature and humidity recorded at least once daily.
Analyzers need lamps and tubing changed regularly, with QC run after
each change.

Analyzers must have an emergency back up power (UPS) to preserve data
in the event of a power failure. Room temperature and humidity, and
maybe barometric pressure too depending on your analyzers,  and must
be recorded at least daily.

You will need adequate sinks, with a separate sink for disposing of
certain waste products and another for handwashing. You will need an
OSHA approved waste disposal system. You can not throw use testing
supplies in the regular trash. You?ll need OSHA approved containers on
the counters for disposal of pipettes, Kimwipes, cuvettes and
tubes.You will need an emergency eye wash and shower, with a drain.
Depending on laws in your state, you will need a place to store
samples for a period of time. You?ll need somewhere to have your
red-bagged (Biohazard) trash hauled.

Correlation testing is necessary anytime a new instrument is set up.
Running large batches against standards with controls and patient
samples need to be run repeatedly.

Depending on your volume and state, requirements may necessitate you
having a pathologist on retainer, to interpret strange results, and to
be in charge of the lab.

You?ll need to supply PPE (Personal protective equipment), such as lab
coats that close and their laundering, masks, eye shields, safety
goggles, gloves, etc. You?ll need procedure manuals written for EVERY
procedure, including QC, calibration and what to do in case of an
exposure to infectious agents.

You?ll need a very good LIS (Lab information system) that stores
results, and prints out your normal ranges. QC must be backed up, and
an enormous amount of paperwork is involved.

Having supervised both doctor?s office labs and hospital labs, I can
say I would rather not have my labs done in a doctor?s office. A
doctor?s office  and a reference lab I once worked in was where I
learned what NOT to do!

?AVOID LAB TESTING AT THE DOCTOR'S OFFICE 
Having a laboratory test performed at a physician's office may be
convenient, but it presents a far higher possibility of receiving
inaccurate results. The large independent or hospital-based clinical
laboratories are at least subjected to some regulation and external
monitoring, but most states do not have a mechanism for ensuring the
quality of testing performed in physicians' office laboratories.
At present, office laboratories account for approximately 20 percent
of all testing, and surveys show a 15 percent increase is expected in
the next few years. In the best of circumstances, a laboratory would
have specially trained personnel and a mechanism for regular testing
of unknown specimens from an outside reference laboratory. The process
provides an external monitoring system by which the accuracy of the
testing is measured against the standards set by the U.S. Centers for
Disease Control and the National??
You?ll need to register, for free to read the rest of this article?
http://static.highbeam.com/h/healthfacts/september011988/avoidlabtestingatthedoctorsofficebecauseofhigherro/


?"And when new practice management took a look at the costs of
reagents, personnel, quality control, licensure, proficiency testing,
machine rental, etc., we found the office was paying three times for a
CBC compared with what a good local referral lab charged to do the
test," Dr. Sweet says. The referral lab now picks up the specimens and
provides same-day turnaround on the CBCs and a computer-based system
for clinicians to retrieve results.?

?The Michigan Medical office lab uses medical technologists rather
than lab assistants because "the former bring a tremendous amount of
experience and the ability to know whether a lab result is believable
or not," says Dr. McNeil, who taught medical technology at the
university level for years before becoming a physician.?
http://www.cap.org/apps/docs/cap_today/feature_stories/0305pol.html

==========
Resources:
==========
JCAHO
http://www.jcaho.org/

http://www.jcaho.org/dscc/index.htm

CLIA (If you accept Medicaid/Medicare)
http://www.cms.hhs.gov/clia/

http://www.cms.hhs.gov/clia/certypes.asp

OSHA
http://www.osha.gov/SLTC/laboratories/


?The federal Clinical Laboratory Improvement Amendments (CLIA), which
requires certification of all sites performing clinical laboratory
testing, was passed in 1988. Prior to 1988, the only laboratories that
were regulated were those that did interstate testing, or independent
laboratories and hospitals that wanted Medicare reimbursement. CLIA
changed the picture dramatically by including all sites where testing
was being performed, such as doctor's offices, clinics, health
departments, etc.

The legislature passed the Medical Test Site (MTS) Licensure law
(Chapter 70.42 RCW) in May 1989 to allow the state to regulate
clinical laboratory testing. The rules to implement the law (Chapter
246-338 WAC) were adopted in October 1990.

In September 1992 the federal regulations to implement CLIA became
effective. CLIA allowed equivalent State programs to apply for
exemption from Federal regulation. Washington State applied for
exemption in October 1992. In October 1993, Washington became the
first state to have its clinical laboratory licensure program judged
by the Federal Health and Human Services Centers for Medicare and
Medicaid Services (CMS) as equivalent to CLIA and was granted an
exemption. This exemption from CLIA retains the regulatory activity at
the state level, rather than federal, where it is more accessible and
responsive to local needs.?
http://www.doh.wa.gov/hsqa/fsl/LQA_Home.htm

HIPAA 
http://www.cms.hhs.gov/hipaa/

http://www.ocius.biz/hipaa/faq.html

Again, unless you have a very large volume, it would probably be
cheaper, more efficient and accurate, to send your labs out. I would
recommend a hospital lab as opposed to a reference lab, for quality.
If you do use a reference lab, send a split sample, labeled as a phony
patient to the same lab, and compare results ? divide one patient
sample, and send it with two distinct names. Document results, and do
this regularly to check the quality of the reference lab. I would meet
with the laboratory manager of a local hospital and see if you can
send your samples there and negotiate a good price. Having your
esoteric tests may assist them in having enough samples to run more
frequently and economically!

As far as your turn-around-time (TAT), your bottleneck is probably
transmission of results. See if the hospital lab will set up a
computer transmission of results so you can see the results as soon as
they are done. Waiting for a courier to bring results can add a day to
the TAT.  Esoteric tests (such as DHEAS, estrogen) that are low in
volume, or those that are very expensive to run, may be held until it
is economically feasible to perform a batch run, causing a delay. Even
if you DO set up your own lab, you will want a back up lab should you
have equipment malfunction or too large a volume on a given day.

I hope you found this answer helpful. If not, or if any part of my
answer is unclear, please request an Answer Clarification, before
rating and closing this answer. I will be happy to respond and assist
you further with this question.

Sincerely, Crabcakes



Search Terms
============
Costs running lab
Setting up + Doctor?s lab
OSHA
CLIAA
JCAOH
Med tech salaries
Setting up lab + office
Personal knowledge of field

Clarification of Answer by crabcakes-ga on 05 Aug 2005 18:06 PDT
Hi again,

  I posted my answer in a window already open, and did not see your clarification.

Adding CBCs to the menu will certainly add to your initial outlay.
You'd need a slide stainer, a GOOD quality binocular micoscope, a cell
analyzer, reagents, pipettes to dilute lipemic samples as well as WBC
counts over 99,000 and platelet counts over 600,000 (or the threshold
of the analyzer). Doing manual diffs would finitely require a
pathologist to be available to review slides with blasts, or other
pathogenic cells. You would need slide boxes to store the blood films
for as long as is required in Utah. Again, you will need an
experienced MT to run CBCs - you want that person to be able to read
the analyzer's histogram, detect fibrin clots in a sample, and be a
good microscopist. Hematology analyzers put out  alot of liquid waste,
so you'll need a reliable drain and good tubing.

I can't give you exact prices for analyzers as there are numerous kinds and sizes
 out there. This site is selling used hematology analyzers. (Some are
REALLY old!) You will need to call to get a quote. Coulter is the
first cell counter and one of the most reliable brands of hematology
analyzers today.
http://www.labequip.com/itemcatalog/stkno/11574/SYSMEX-M-2000/AUTOMATIC-BLOOD-CELL-COUNTER.html

This site explains the principle of cell counting.
http://www.gmi-inc.com/CliniLab/Coulter%20Multisizer%203%20Counter.html

Other cell counters:
http://www.asapmed.com/Homepict/homepict_1.html

This company sells reagents for hematology analyzers. I have used this
brand and it is good and a less expensive alternative to Coulter
brands.
http://www.streck.com/pdf/Flyers/Hematology/Streck_Flyer_CoulterCounters_320228-4.pdf

Regarding glucose, a good multianalyte analyzer can run cholesterol,
triglycerides, and glucose. Some can also run the HDL if you have
pre-precipitated it. Some of these analyzers may be able to run some
of the thyroid tests too.

I wish I could be more specific, but you will need to speak to
analyzer sales reps about prices.

I don't think 400 samples a week will warrant the cost of setting up
your own lab. I don't know anything about taxes and depreciation, but
I know you can depreciate the equipment, which is a plus.

Again, please request an Answer Clarification if you don't understand
any part of this answer.

Regards, Crabcakes
eliotjacobsen-ga rated this answer:5 out of 5 stars and gave an additional tip of: $25.00
A great effort, crabcakes!  Thank you so much.

Comments  
Subject: Re: blood testing lab economics
From: crabcakes-ga on 05 Aug 2005 18:35 PDT
 
Thank you so much for the stars and the generous tip!
I just came to post some info on a chemistry analyzer
http://www.medicaldesign.com/articles/ID/655

By the way, if you find a GOOD sales rep, most chem analyzers can be
set up to run the tests YOU want, within limits of course!

Sincerely, Crabcakes

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