Basic Concepts for Making Informed Financial Decisions for the Clinical Laboratory Part 2: Instrument Selection, Cost Justification, and Implementation
Continuing Education Credits
This course provides insight into a number of areas to address when considering and then purchasing analytical instruments for the clinical laboratory. Several processes are addressed including needs assessment, instrument selection, financial analysis, methods of acquisition, and implementation.
Objectives
- Develop a plan for capital equipment acquisition and perform a basic needs assessment.
- Set minimum standards of performance for potential equipment to be purchased.
- Perform a work station analysis.
- Perform an organized market search for a new instrument.
- Describe an appropriate financial analysis process for the capital equipment being considered for purchase.
- Perform an operations cost comparison study.
- Determine the cost per test of the instrument by using the straight line depreciation method.
- Calculate the break-even point and interpret the results for an instrument purchase being considered.
- Calculate the break-even point and interpret the results for an instrument purchase being considered.
- Calculate the break-even point and interpret the results for an instrument purchase being considered.
Course Outline
- Introduction
- Introduction
- Development of a Capital Equipment and Acquisition Plan
- Which of the following is a valid reason for purchasing a new analytical instrument?
- Determine Need for Tests and Analytical Instrumentation
- Needs Assessment for Replacement of a Current Instrument
- Needs Assessment for an Instrument That Will Provide Additional Tests Available to Providers
- Determine the Need for a Test
- What makes a test valid to a provider?
- Financial Viability and Need
- Determine essential system and instrument criteria for a Prospective Analytical Instrument
- Determine Minimum Performance Criteria
- Examples of Application Characteristics
- Examples of Methodology Characteristics
- Examples of Performance Characteristics
- Examples of performance characteristics for a test include:
- Operation Review
- Workstation Analysis
- Market Search for an Instrument
- Introduction to the Market Search
- The Request for Proposal (RFP)
- True or False: The RFP is only valuable to the person selecting an analytical instrument.
- Financial Analysis
- Introduction to Financial Analysis
- Revenue Analysis
- Revenue Analysis
- Instrument cost determination
- Determine Instrument Cost Per Test
- A new instrument costs $50,000. The instrument is to be depreciated over 5 years, and 10,000 patient reportable tests are run per year. What is the cost per test for this instrument?
- Operations cost comparison study
- Operations Cost Comparison Study
- True or False: A cost comparison was done between three instruments considered for the laboratory. One instrument cost per test was $0.30 per test less than the other two. This should automatically be the instrument chosen by the purchasing decision maker.
- Introduction to financial measures for decision making
- Introduction to Financial Measures for Decision Making
- Which of the following is an assessment of the risk of a purchase of a new instrument for the laboratory?
- Break-Even Point
- Break-Even Point Explained
- Operating Leverage
- Operating Leverage (OL) Explained
- Return On Investment Indicators
- Financial Indicators for Equipment Purchase
- Net Present Value Example
- Internal Rate of Return (IRR)
- Which of the following financial indicators provides a potential percentage return for a prospective purchase of an analytical instrument for the laboratory?
- Method of Purchase
- Method for Purchasing an Instrument
- Implementation Plan for an Analytical Instrument
- Implementation of an Analytical Instrument
- References
- References
Additional Information
Level of Instruction: Basic
Intended Audience: Medical laboratory scientists, medical
laboratory technicians, laboratory supervisors, and laboratory managers. This
course is also appropriate for MLS and MLT students and pathology residents.
Author Information: Dr. A. Wayne Bruce has B.S. and M.S. degrees in Medical Technology and a Doctorate in Higher Education Administration and Statistics from the University of Minnesota. He has served as Director of a Clinical Laboratory Science program for 25 years and as Laboratory Director and Technical Consultant for over 35 years. He most recently was an Associate Dean at the Northern Ontario School of Medicine. Dr. Bruce was the President of Bruce North Country Consulting Services, LLC, and consulted with clinical laboratories on laboratory finance, start-up, management, and accreditation. He has numerous publications, including a book on quality assurance for the clinical Laboratory and a financial management manual for the Thompson Publishing Group.
The author has no
conflict of interest to disclose.
Reviewer Information:
Larry Brace, Ph.D., MLS(ASCP)SH, has over 40 years of experience as a medical laboratory scientist. He holds a B.S. degree in Medical Laboratory Science, an M.S. degree in Clinical Pathology from Michigan State University, and a Ph.D. degree in Pharmacology from the University of Illinois at Chicago. He has been an Associate Director of the Medical Laboratory Science program at Michigan State University, a Professor of Medical Laboratory Science, and a Professor of Pathology at the University of Illinois at Chicago (UIC). He was also the Director of Core Laboratories at UIC until his retirement. Dr. Brace has published over 40 articles in scientific journals and has nearly 100 presentations (abstracts and podium presentations) at national and international scientific meetings.
Joshua J. Cannon, MS, MLS(ASCP)CMSHCM received his Bachelor
of Science and Master of Science in Medical Laboratory Science from Thomas
Jefferson University in Philadelphia, PA. He holds Medical Laboratory Scientist
and Specialist in Hematology certifications through the ASCP Board of
Certification. He was a professor at Thomas Jefferson University for seven
years before transitioning into his current role as Education Developer at
MediaLab. His areas of expertise and professional passions include clinical
hematology and interprofessional education.
Course Description: This course provides insight into several areas to consider when considering and then purchasing analytical instruments for the clinical laboratory. Several processes are addressed, including needs assessment, instrument selection, financial analysis, methods of acquisition, and implementation.