Give your office lab a free physical with software from the College
So this past summer, Dr. Perryman turned to the College's Office Laboratory Check Up program to examine the financial performance of his office lab. It turned out that the chemistry machine that he had been using for four years was costing about $1,000 more per year than it brought in, so he got rid of it and plans to eventually buy a profitable replacement.
Without appropriate data, it's no easy task to determine whether to start a lab, keep an existing one going, replace equipment or purchase additional machines. Profitability hinges on such factors as test volumes, reimbursements, the type of machines and reagents a lab is using and compliance costs.
The College's Check Up software, which is being offered free of charge to ACP–ASIM members for a limited time, performs exactly those types of calculations automatically. Physicians fill in practice-specific information like their percentage of Medicare billings, existing lab equipment, leasing costs, personnel and facility costs, and the procedures they typically perform.
The program, which is offered by the College's Center for A Competitive Advantage (CCA), calculates annual revenue, cost of production and net profit for each laboratory procedure, as well as total profit margins. The program also calculates "what if" scenarios to help determine how much you would earn or lose by buying additional equipment or bringing additional tests in-house. A 48-page manual provides information on basic lab economics and how to maximize laboratory profitability.
To help College members assess the financial benefits of running an office lab, the CCA has temporarily posted Office Lab Check Up on its Web page (www.acponline.org/cca). Members may download the software and guide free of charge until March 31. (The normal member price is $99). If you have difficulty downloading the software, call 800-338-2746, ext. 4539. Nonmembers may order the product for $175 by calling 800-522-3285.
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