A discussion site for folks interested in improving the quality of medical laboratories. Most will be the thoughts and vents of a long time player in the medical laboratory quality from many perspectives, complex and basic laboratories, developed and developing countries, research and new knowledge.
Sunday, March 6, 2016
Another look at costing Quality-2016
we have been talking about Costs of Quality in our course this past two
weeks.This has been a long time topic
of interest in medical laboratories.Most literature about Costs of Quality, while being informative, has been pretty
generic, and a challenge to apply to the medical laboratory.The most recent document by CLSI “QMS20-R: Understanding the Cost of Quality in the
Laboratory; A Report”, now about 2 years old does a pretty good job.After reviewing if for a year along with some other choices, we decided
to add it to our course bibliography this year, which means we provide on-line access
to it (with the assistance of CLSI) for the course participants.
QMS20_R is pretty faithful to Juran, which is
both good and bad; good because it provides some insights into how the
traditional model can be translated into medical laboratory language.Where it lets down is that it is limited only
to direct laboratory costs, which is really only part of the picture.
For example, in the community based out-patient
setting, when a wrong thing happens and a patient has to be recalled, the
direct costs include the time to call the patient, the time to draw the sample,
the associated reagents and supplies, and the IT costs to create an amended
But in the modern western world,all that represents perhaps as low as 30
percent of the total costs because it does not include those costs borne by the
patient including their time, and potentially work losses, and travel costs to
the laboratory.While all this may seem to be
pretty inexpensive for an able, mobile retired person who lives within a short walk or
easy bus ride to the laboratory, the costs are a lot higher when a person has to take off work,
and drive down to the laboratory or take a cab.(In my city, the hospitals charge $3.50 per half hour for parking! With
even a normal wait and processing that’s about 45 minutes and at least $7.00
just for parking, and can get to $10-15 in a real hurry.)And what happens if
the person is a parent taking care of a child at home who has to find a
sitter.All these costs are borne by the
patient and family. Without trying too hard, this can accumulate to over $200 very quickly. The laboratory may
have to pay the costs of the repeat test, so they cannot bill for the actual
testing, but imagine if the patient also submitted a bill for their
IF the average out-of-pocket expenses were closer to $25 per event, a large laboratory would be responsible for about $27,000 worth of patient-borne expenses a year. And that is a lot more than the laboratory would save by cutting back Quality Control by 50 percent or cutting out all proficiency testing.
And supposing the physician seeing the first
result, and believes it to be true, and arranges for more tests, or a
consultation or a procedure.Fine if the
person has full insurance coverage (not really) but again there are more
out-of-pocket expenses that don’t get counted, unless this all leads to
And QMS20_R doesn’t take into account its own
in-house expenses associated with stress or strain (mild injury) that can be
associated with error.Staff related stress and strain
are compounding factors that can (and often do) lead to more errors and more
So the document is a good step in the right
direction, but continues to leave hidden uncounted costs.
But why raise these external costs if no one is
asking or demanding the laboratory to cover them.Those are costs that fall under the category “not
my problem”.But they are the laboratory’s
problem if they don’t trigger a problem solving solution as opposed to a
cost-cutting solution, like reducing QC or Quality Assessment.That may save money but it only makes the
problem worse, and the costs never go away.
And this is why the Juran approach will never be
completely appropriate for the medical laboratory setting.The Juran model works in industry and services where at a certain point
customer intolerance for poor service kicks in and the customer goes away, and
the business leans or fails.
In our insurance leveraged healthcare industry, left to our
own devices, medical laboratories can live in the blissful zone of
indifference.The death knell to Quality
is having an endless supply of new patients, with no obvious consequence for
bad behaviour and not apparent benefit for good.