Comparative analysis of Outsourced versus In-House Laboratory Services: A study on the paradigm of Hospital Laboratory Management

Vijay Kumar Tadia; Isha Saini

Volume : IX, Issue : V, May - 2020

Comparative analysis of Outsourced versus In-House Laboratory Services: A study on the paradigm of Hospital Laboratory Management

Vijay Kumar Tadia, Isha Saini

Abstract :

Introduction: Hospitals have been outsourcing support functions like housekeeping, food services and even supply chain management as these services don�t come under core competencies of the hospital. There has also been growth in outsourcing some of the clinical services in the hospital such as anaesthesia, emergency department, diagnostic imaging etc. Aim & Objective: To do a comparison between outsourced versus in-house laboratory services on the basis of certain parameters. Methodolgy: A longitudinal prospective quantitative study was conducted at two 200 bedded NABH accredited multi-specialty hospitals located at National Capital Region (NCR) in India for a period of 1 year from April 2012 to March 2013. One hospital had outsourced the laboratory services to a NABL accredited laboratory for last seven years and the other hospital had an in-house NABL accredited laboratory. The two hospitals were selected by purposive sampling method. A sample size of 11 laboratory tests was considered from both the hospitals by convenient sampling method. Secondary data related to Costing & Pricing details of 11 tests (from Biochemistry and Haematology department) was collected from both the hospitals, tests were shortlisted by the hospital and information was collected from both outsourced as well as in-house lab services. Quantitative analysis was done using Microsoft Excel. Unstructured Interviews were also conducted with Key Informants like Consultants in Departments of Pathology & Microbiology, Head of the Laboratory Services and Facility Directors of the hospitals. Results: The results for the selected number of tests suggested that the revenue generated for OPD Patients by In-house laboratory was Rs. 2684513.82 and by the Outsourced laboratory was Rs. 8583510. This meant that the revenue generated by outsourced laboratory was more by Rs. 5898996.18. Similarly, the results for IPD Patients suggest that the In-house laboratory generated the revenue of Rs. 5290840 and Outsourced laboratory generated about Rs. 15485400. This meant that the revenue generated by outsourced laboratory was more by Rs. 10194560. The total amount to be invested for conducting tests 11 tests under study was around 67.25 Lakh. There were no direct expenses for the hospital that had outsourced laboratory services, as it had outsourced its entire laboratory services, so these direct expenses were incurred by the outsourced laboratory. Conclusion: There was a significant amount of difference in revenue generated between outsourced and in- house laboratory. It was beneficial for a laboratory to outsource their laboratory as there was a huge amount of cost savings depending upon the type of agreement signed with the outsourced laboratory. The hospital under study had entered into joint venture agreement with the outsourced laboratory and hence the profits were shared between both the parties. There were no direct expenses for the hospital that had outsourced laboratory services, as it had outsourced its entire laboratory services, so these direct expenses were incurred by the outsourced laboratory. When the laboratory services are outsourced in a hospital certain expenses are cut down like there are no expenses on training of staff, arrangement of logistics, caliation cost apart from all the direct expenses like labour cost, material cost and repair and maintenance cost. The total amount to be invested for conducting tests 11 tests under study was around 67.25 Lakh. In order to perform other tests in the laboratory total amount invested is much more than this so outsourcing laboratory services to a reliable NABL accredited laboratory is a wise idea to save money The hospitals have to decide for the In-house or Outsourced laboratory services based on its context and needs without compromising critical patient care needs wherein life saved may be more important than the revenue generated.