How to reframe your value to the C-Suite

If you're embarking on consolidation simply to save costs, you may be heading down the same collision course as many labs before. Eyas Hattab and Jeff Myers detail how you can reframe your value by focusing on how the lab can create opportunities to drive revenue.

How to reframe your value to the C-Suite

Eyas M. Hattab, MD, MBA
AJ Miller Professor and Chair
Department of Pathology at University of Louisville

Jeff Myers
Vice President Consulting Services
Accumen Inc.

Video transcript

Eyas Hattab, M.D., MBA:

Cost savings can be a great benefit in laboratory consolidation efforts. However, it cannot be the ultimate goal. That's how I think organizations can get themselves in serious trouble.  

Historically, laboratories have been looked at as cost centers but organizations who do that are missing a huge potential opportunity. That's what I call the opportunity cost for not leveraging your laboratories better. So I think your goal in a laboratory consolidation effort will be to position your institution and your laboratory to be a future revenue driver. 

So the focus has to always be on improving quality, enhancing patient safety and increasing your efficiencies in the laboratory. And if you do that you would realize cost savings. However this is a marathon and not a sprint, so initially you will have to make significant investments in the laboratory whether it's in IT, physical space or new technologies. And if you do those things, cost savings will be realized but it will take time for those to materialize. 

When having the discussion about laboratory consolidation initiatives, this is an opportunity for both the C-Suite as well as the laboratory leadership to understand their motivations behind doing this. Is this about cost cutting? Is it about improving quality and overall efficiencies in the laboratory, is it about standardization? What's in it for us? 

And this is also an opportunity for the laboratory leadership to transition laboratories from being looked at as cost centers into potential revenue drivers for that institution, not just the laboratory. 

Jeff Myers, CPA:

The reality is if you look at the priorities of the executive team over the next 5 to 10 years, certainly the ability to generate revenue growth, cost reduction-all that ties into margin improvement. And most of the strategic plans that are being approved have some connection to the ability to improve operating margin. With what's happening in healthcare and the unsustainable cost curve and reimbursement going down and the uncertainty, there has to be the ability to connect a specific value proposition to that strategic initiative. 

Two areas that I've seen have considerable positive impact in terms of showing value: one is really partnering with the pathology group around test development and that's either in tests that are currently sent out where you can show the opportunity to bring that test in house. And you know that's a place where you can often you know augment that FTE complement because you're showing a reduction in expense from a reference test perspective, OK? 

That's one area and then the other, molecular testing-we all know molecular and microbiology continue to increase at double digit rates year over year. So as we think about new test development, that's a place that I think we are able to partner with the clinicians and really show value to the C-Suite.

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