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CAPHLD
Whitepaper
LABOR COSTS ARE LOWER IN PUBLIC HEALTH LABORATORIES
1. Labor costs make up the bulk of any diagnostic test cost in microbiology followed by reagent costs. Pathologists (MD's) employed in hospital or commercial laboratories earn a great deal more in salary, benefits and bonuses than a public health laboratory director at the baccalaureate or Ph.D., level. Salaries for other supervisorial workers in a competitor laboratory may also be higher while at the journeyman level salaries are usually comparable. Frequently higher labor costs are found in hospital or commercial laboratories because of their policy to provide differential shift and overtime pay while public health laboratories are offered compensatory time-off.
- Be sure the CPT codes are the same.
- Be sure the level and details or procedures of testing are the same within the CPT code.
- Be sure that costs include and exclude all the same factors as your competitor.
- Be aware of average cost estimates.
- If you can utilize an unlicensed or uncertified person at the bench be sure to use that minute of cost, not that of a microbiologist's minute.
2. A public health laboratory operates as an outpatient laboratory and has less overhead than a hospital laboratory which may operate 7 days per week and with shift work. Since some hospital departments do not earn income, radiology, laboratory and other selected services may be charging fees to cover costs of non-revenue centers in the hospital.
Overhead costs represent a particularly difficult area for some to calculate. Guesses can be inaccurate and lead to unfair comparisons to other laboratories. Many competitors will not include overhead in their costs because their overhead is probably the same for one or one thousand specimens, anyway.
3. It is important to review and compare the quality of your work to theirs. Microbiology is mostly non-automated, labor intensive, judgmental work. For example, in the area of Mycobacteriology, both Bactec and conventional methods of isolation are needed to produce the most reliable or accurate results. Will a commercial laboratory do the same? And, will they use a sufficient incubation period and provide drug susceptibility testing?
4. When comparing cost:
