CEO SUMMARY: Laboratory administrators in 15 Bay-area hospitals created their own plan to expand the available pool of trained med techs. Using a detailed analysis of the demographics of the problem, along with a financial analysis of non-action, they convinced CEOs of 15 hospitals to invest $1.5 million in a five-year training program.
EDITOR’S NOTE: This is the first of a two-part series on how hospital lab administrators in the San Francisco Bay Area, working with the regional hospital association and local educators, developed and funded a program to train med techs.
IT TOOK JUST NINE MONTHS for a group of hospital laboratory administrators in South San Francisco Bay to develop a plan to expand the supply of med techs, present it to their hospital CEOs, get a five-year funding commitment of $1.5 million, and enroll students into training programs.
“This was a major accomplishment for our participating lab administrators,” stated Susie Lu. “In a proactive way, we studied the problem and developed a budget with measurable outcomes and a return on investment (ROI). When presented to our hospital CEOs, it was accepted with few changes.”
Lu is Vice President of Clinical Labs and Pathology Services at Stanford University Medical Center and the Lucile Packard Children’s Hospital. In January 2001, she, her management team of Louis Tam and Tom Fish, and Barbara Harrelson, Regional Vice President of the Hospital Council of Northern and Central California(HCNCC) initiated the first organizational steps for this project.
Within California, the number of students entering med tech training programs had declined. “Beginning in 1992, most hospitals in Northern California stopped accepting interns in their laboratories,” recalled Lu. “This was due to budget constraints and sev- eral other factors. However, by 1999, hospitals recognized the need for more med techs and again became interested in accepting interns.
“But the training pipeline between our schools and the hospitals had withered,” she continued. “There were few resources devoted to recruiting new students, mak- ing the situation ripe for action.”
Just two hospitals attended the first organizational meeting. “We had a training model to follow,” said Lu. “Jane Vargas, Lab Administrator at Community Hospital of Monterey Peninsula (CHOMP) in Monterey and part of the the Central Coast Regional Laboratory Network (CCRLN), had obtained grant money for MLT training three years ago. In collaboration with a local community college, CCRLN established an educational program that trains MLTs locally.
“Our goal in the San Francisco Bay area was to increase the overall supply of CLSs and MLTs,” noted Lu. “We went about it in several steps.
“The first step was to develop a business model. It had to include funds for recruitment, for such things as a CLS/MT Program Education Coordinator and even legislative access. As this work progressed, we invited additional hospital lab administrators to attend our meetings,” said Lu. “Interest grew in our project.”
There were three existing training programs that became part of this proposal. Hartnell College in Salinas, De Anza College in Cupertino, and San Jose State University (SJSU) are participating. SJSU established additional new courses for CLS/MLT training and new students were enrolled in the Fall 2002 term.
“The next step was to sell this training program to the hospital CEOs,” said Lu. “Our strategy was straightforward. First, we compiled detailed information about the existing shortage of laboratory technical professionals and why demographics would worsen this problem over time.
Estimate Of All Costs
“Second, we developed a thorough analysis of the added costs that hospitals currently pay because of the inad- equate numbers of med techs,” added Lu. “This included recruitment costs, extra charges because tests must be sent out, overtime, temporary help, and the like.
“The third piece was the training budget,” she continued. “This detailed the expenses required to provide hospital internships for CLSs and MLTs at participating hospitals.
“Fourth, we developed an ROI analysis. It was important that the hospital CEOs see that investing in med tech recruitment and training was a smart use of scarce capital,” concluded Lu.
After crunching these numbers, the med tech training consortium could demonstrate the following costs for a hospital lab staffed with 50 med techs: 1)At an attrition rate of 11%, recruitment and on-site orientation/training costs are $162,000 per year; 2) Overtime due to unfilled positions [at 5%] costs $195,000 per year; and 3) lab staff shortage causes a 5% increase in send-out tests [25,000 tests] creating a negative impact on the hospital of $530,000, along with increased TATs that negatively affect patient care.
Collectively, the analysis showed a hospital with 50 med techs in the lab and an 11% attrition rate spends about $887,000 per year because of labor turnover and the inability to fill 100% of authorized technical positions in the lab.
“We estimated that, if a hospital was willing to support the education of two interns in its lab, it would spend about $189,000 over two years,” explained Lu. “However, annual downstream savings would be approximately $605,000. The hospital’s ROI for educating two interns would be 31% per year!
Getting CEOs’ Buy-In
“When the final proposal was complete, meetings were held with laboratory directors and their senior hospital administrators,” she continued. “The objective was to align the thinking of the lab administrator and his/her COO. The COO was specifically asked to provide these materials to the CEO and brief the CEO in advance of the Hospital Council Meeting.
“During the Hospital Council Meeting in January 2002, we showed the hospital CEOs four funding options. We wanted them to find a solution they could support. Our funding options were based on: 1) number of CLS’s currently employed at each hospital, 2) number of interns accepted per year; 3) number of billable tests; and, 4) number of occupied beds.
“The formal presentation at the Hospital Council was short and sweet because all the CEOs had been prebriefed,” she said. “There was common agreement that this was the right thing to do. They made the decision to fund the med tech program for five years.
Equal Funding By Hospitals
“In a further sign of support and agreement, the CEOs decided to equally share the costs among their hospitals, despite the four funding options we suggested.”
Fifteen hospitals committed funds to train clinical laboratory scientists and 13 hospitals committed funds to train medical laboratory technicians. “Even hospitals with labs that had been downsized committed money to train med techs,” stated Lu. “The hospital CEOs want to enlarge the overall number of med techs in our region. They went forward with the under- standing that there is no guarantee that a certain number of newly-trained med techs will end up working in their hospital’s laboratory.”
Hospital lab administrators were not the only advocates for this CLS/MLT training program. At HCNCC, Regional Vice President Barbara Harrelson played a key role in getting the attention of the hospital CEOs. Among the colleges, Sally Veregge of San Jose State University coordinated activities among the participating educational institutions.
Labs Can Duplicate Program
THE DARK REPORT notes that hospital labs in almost every community in the United States can duplicate the success of their peers in the San Francisco Bay Area. Funding for MT/MLT recruitment and training can be obtained from hospitals—but only if lab directors make the case in a rational and business-like way, including a financial analysis and return on investment.
The projections developed by these hospital lab administrators included facts about local and national lab staffing trends, the annual costs of med tech attrition for each hospital, and projected costs to train CLSs and MLTs. These costs were summarized and a return on investment (ROI) was provided to the hospital CEOs. When done, the CEOs found it easy to approve funding.
In part two of this series, THE DARK REPORT will provide information about how hospital administrators and college educators played a role in gaining approval for the CLS/MT training program.