Reduced reimbursements from the federal government and third-party payors have threatened the financial viability of many hospitals. An increasing number of hospitals are losing money from their primary mission of caring for patients. The hospital "industry" is still viewed by many as inefficient. Hospitals are generally not run like businesses, nor is it really possible for them to function in the same manner because they have to provide services, to some extent unpredictable, 24 h a day, 7 days a week. Unlike businesses, they cannot increase the charges to their clients to any significant extent when their costs increase because fees are largely dictated by the federal government. For no other business is there the equivalent of capitation or dictation of prices by outside organizations as there is in the medical business. It is perhaps easier for hospital administrations to assess the productivity of their clinical laboratories than of most other hospital services. The number of tests, the number of staff, and the cost of running the service as determined by the supply and salary budgets can be readily quantified. Furthermore, these factors can be bench-marked against the performance of other institutions. However, clinical laboratories also have to contend with the absurd concept of the "billed test" beloved by the federal government, insurance carriers, and consulting companies lacking laboratory expertise. The "billed" test assigns equal weight to a multitest outpatient panel as it does to a dipstick urinalysis or to an elaborate genetic test that is labor-intensive and may take days to complete. This ridiculous concept makes comparisons of productivity between institutions impossible. Indeed, the billed test concept hides increases in productivity because one billed outpatient test may generate as much work as 12 inpatient tests. Successful efforts by hospitals to reduce their inpatient testing, because of non-reimbursability, then mask any increase in revenue-generating outpatient tests. This dual objective of reducing unnecessary inpatient testing and capitalizing on the potential for outpatient revenue has become a major charge for the responsible clinical laboratory director.
