How Clinical Testing Labs Can Boost Their ROI
The specialized expertise provided by clinical testing labs is in demand. The U.S. population is aging and requiring more testing, while epidemiologists are also seeing an increase in infectious and chronic diseases.
At the same time, more patients are seeking preventive care, and diagnostic technology is becoming much better. However, labs looking to grow revenue face many challenges. Since the 2014 passage of the Protecting Access to Medicare Act (PAMA), Medicare reimbursement for many routine tests has decreased significantly, which has shifted operations and revenue among many labs.
In 2020, the COVID-19 pandemic also disrupted cash flow, with one report estimating that clinical labs lost $6.8 billion in revenue during the first 12 weeks after the pandemic’s onset, as medical appointments were postponed or canceled for safety.
These factors have required clinicians to be more resourceful and strategic about budgets and what kind of investments they choose to make. However, the methods and techniques adopted by successful facilities provide a useful guide for boosting ROI. Here are some of their tactics.
Build cost-containment measures into financial strategies.
As a clinical lab reading this blog post, you know that when your business is mindful of budgets and expenses, you are often in a better position to grow and weather unexpected financial obstacles.
Building cost-containment measures into financial strategies from the start, before any potential shortfalls occur, is a smart move. It’s important to note that trimming costs doesn’t necessarily mean cutting off spending completely. For example, a 2019 Clinical Lab Manager survey found that 32 percent of clinical labs purchase or are considering purchasing pre-owned equipment.
Streamline existing operations.
Duplicate or unnecessary processes are an obvious source of financial bloat. A 2017 white paper authored by Dr. Liana Romero, a senior director of U.S. Strategic Marketing and Clinical Affairs for Siemens Healthcare US Laboratory Diagnostics, found that six hospitals in a large integrated delivery network made changes such as “standardizing testing protocols to ensure optimal test utilization.”
As a result, the network saved $232,543 annually. Other labs have found that merging with competitors, or being acquired by a bigger lab system, allows them to strengthen operations and expand testing options.
Develop a pipeline of talent.
Employee turnover is another potentially expensive pain point that can hinder clinical testing lab growth because it’s expensive to hire and train staff.
In the coming years, finding enough specialists could be challenging: Between 2019 and 2029, the Bureau of Labor Statistics estimates the healthcare industry will add 22,800 phlebotomist jobs, a 17 percent increase in employment. Working with vendors to nurture a pipeline of phlebotomy talent, and developing policies to encourage employee retention, can help rein in costs to ultimately impact ROI.
Optimize sales activities.
As any sales professional will tell you, recruiting new customers is often a costly and time-consuming proposition. For labs looking to grow, nurturing existing patient relationships is far more efficient.
This starts with providing high-quality care, as busy modern consumers are looking for good customer service and streamlined healthcare. Patients who have a positive experience are also more likely to sign up for expanded or additional products or services. Cross-selling is another easy win for labs, as they are simply generating more business from a regular client.
Keep your marketing updated.
Facilities can also find success with savvy marketing strategies. This doesn’t have to be an expensive ad buy or social media campaign: Even something as simple as having an up-to-date website with testimonials, hours of operation, services and procedures can give labs an edge.
At the end of the day, the most successful clinical testing labs are nimble enough to respond and adapt to changing trends.
Read more about what clinical testing labs are doing to grow and optimize operations (with a positive ROI in mind) in our newly released white paper, “How Top Clinical Labs Grow Their Revenue.”
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