IT IS UNCHARTED TERRITORY FOR CLINICAL LABS AND PATHOLOGY GROUPS. A recession now officially exists in the United States. The last time this nation experienced an extended and painful economic recession was between July 1981 and November 1982, according to Wikipedia.com.
That means it has been more than 26 years since anyone has managed a clinical laboratory during an economic recession! Few of us old-timers are still around to share the experience and wisdom gained during those challenging years. That means an entire new crop of laboratory managers and pathologists are about to undergo their trial by fire. To cope with the poor business environment, they will need good business strategies to keep their laboratories financially solvent and profitable.
Of course, the immediate pressure is to reduce operational costs in the face of slackening test volume, payer reluctance to settle claims in a timely fashion (since they want to hang on to the money), and the inability or unwillingness of larger numbers of patients to promptly and fully pay their bills to their lab test and pathology providers. Fortunately, clients and long- time readers of THE DARK REPORT know that quality management methods, including Lean and Six Sigma, are highly-effective tools to eliminate unnecessary costs while improving productivity and quality.
That covers the cost/operations side of the ledger. The other way to sustain financial stability is to grow the laboratory business in a cost-effective manner. This means expanding lab outreach market share. In speaking to laboratory executives across the country, there is a consistent message: in most regions, well-managed laboratories continue to see strong rates of growth in new client accounts, additional specimen referrals, and net revenue.
Two public laboratory companies offer proof that a well-executed sales strategy still produces good results. Bio-Reference Laboratories, Inc. (BRLI) reported its first quarter of fiscal year 2009 on March 5. It enjoyed a net revenue increase of 13%. Specialty test provider Clarient, Inc. reported its fourth quarter 2008 earnings on March 11. Clarient saw a net revenue increase of 76.4%, along with an increase in specimen volume of 39%.
These two examples should inspire hospital lab outreach programs and pathology groups. Even in a tough economy, a well-executed sales/marketing program can produce growth, along with increased profits!