Basic Cost Accounting for Clinical Services; Approved Guideline
|Publication Date:||1 November 1998|
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.