How Can a Quality Management System Help Labs Mitigate the Cost of Medicare Cuts?

According to the Dark Daily, “To offset the loss of revenue from the price cuts to Medicare Part B clinical laboratory tests, labs will need to aggressively—but wisely—slash costs to balance their budgets.” They predict that community labs will be at greatest risk of financial failure as a result of these cuts. Rural and modest sized community hospitals will also be in peril.

One way to reduce costs in the laboratory is the effective implementation of a quality management system. The health care economic environment is such that laboratory funds should only be spent on quality activities that bring about good diagnosis of disease and treatment of patients. Redoing work that was done incorrectly the first time wastes money.

The concepts and applications presented in CLSI’s QMS20, Understanding the Cost of Quality in the Laboratory, can be used to identify and promote the costs of quality management and detect and remove the costs of waste and error. Waste has a considerably negative effect on any operating budget, and laboratories rarely have a realistic idea of how much of their limited resources are being lost to the cost of poor quality.

Although Medicare cuts are a clear threat to the lab’s operating budget, implementing a quality management system is one way to offset the financial burden presented by this challenge.