Cost analysis of routine laboratory testing in blood centers

L. M. KLINE, L. I. FRIEDMAN, AND M . L. SEVERNS

The direct costs of ABO, Rh, D", syphilis, and antibody screening tests were investigated. Questionnaires from 58 blood centers were analyzed to compare cost-effectiveness among methods of testing and annual collection volume aswell as differences in cost of thevarious methods of testing within the same-size center. W e found that "expensive" automated equipment cannot be justified on the basis of direct costs in centers processing less than 100,OOO units of blood per year and that there is a wide variation in costs among centers using the same equipment. TRANSFUSION 1986;26:227-230.

A QUESTIONNAIRE was sent to 63 Red Cross Blood Service centers/ subcenters (automated and unauto- mated) as well as to two Canadian Red Cross centers and 12 automated centers that were not part of the Red Cross system. The questionnaire was designed to obtain information on the direct costs of ABO, Rh, D", and syphilis testing and antibody screening. All questions pertained to fiscal year 1982/ 1983.

Materials and Methods The questionnaire asked for the yearly cost of reagents

(R), disposables (D), maintenance, and service contract costs for each test. Hourly salary(inc1uding benefits) and the total number of man-hours per week allocated to testing were requested and used to compute the labor cost (L). The actual cost of each piece of equipment was supplied by the appropriate manufacturer. The equipment cost (E) included the amortized cost of the equipment (purchase price over 7 years) and the maintenance and service contract costs (parts and labor at a fixed yearly cost). Other information, such as number of yearly blood collections, method of testing, non- interpretation rate (NTD), and down-time, was also requested. (NTD rate is the frequency of occurrence of insufficient or contradictory data that prevents an appropri- ate blood type from being assigned).

When costs that deviated substantially from the rest were reported, follow-up calls were made to the center involved to verify or to reassess the cost. The reported annual costs (R+D+E+L)foreachcenterweredivided by the numberof units of blood collected to determine the cost per test. The data were analyzed by dividing the centers into four groups based on yearly blood collection volume: fewer than 50,000 to 100,000; 100,001 to 200,000; and more than 200,000.

The data were entered into a computer (VAX-l1/780 Digital Equipment Corp., Marlborough, MA) and analyzed using a statistical package (RS/ 1 BBN Software Products, Cambridge, MA). When comparisons between groups were made, the data first were tested to determine whether they

From the Product Development Laboratory, Biomedical Research and Development, American Red Cross, Bethesda, Maryland.

Contribution no. 658 from the American Red Cross. Received for publication February I I , 1985; revision received

June 21, 1985, and accepted June 26, 1985.

were normally distributed using the Kolmogorov-Smirnov test.' If two groups were tested for equivalence and the data were normally distributed, the t-test2 was used to analyze the data; otherwise, the Mann-Whitney U test' was used. If more than two groups of data were being tested for equivalence, and if the data were normally distributed, analysis of variance (ANOVA)' was used to analyze the data. Otherwise, the Kruskal-Wallis test' was used. Linear regression3 was used to determine the relationship between two variables, and the chi-square test2 was used to compare the rates of occurrence of variables.

Results Of the 73 centers polled, 58 responded. No differences in

rates of reporting occurred among size groups or among methods of ABO/ Rh testing (p>0.9, chi-square test). This indicated that there was no sampling bias due to differences in return rate in any category. The mean cost of all methods of testing for each test procedure within a group is shown in Table 1.

ABOI Rhl LY testing For routine ABO/ Rh testing, 14 centers reported using

manual tube, seven used manual microplate, 14 used auto- analyzers (AA, Technicon Instruments Corp., Tarrytown, NY) 9 used AutoGroupers Model 16C (AG16C, Tech- nicon)? 3 used MiniGroupamatics (MG) or dual MGs (Kontron Blood Bank Systems, Everett, MA): 5 used the Groupamatic 2000(G2000, Kontron), and 6 used the Group- amatic 360 (G360, Kontron)! Recently, automated systems became available that perform blood grouping in micro- platessv6 (MicroBank, Dynatech Laboratories Inc., Alex- andria, VA and MicroGroupamatic, Kontron). These in- struments are relatively new so no data on actual costs were available; hence, all costs related to their use were estimated. Reagents, supplies, and D" testing costs were assumed to equal the cost of manual microplate testing. The cost for a complete system was estimated at $55,000 (1982/ 83, US) and 10 percent of the cost was estimated for a service contract cost. Labor was assumed to be two oper- ators per system, 80 samples per hour, 260 days per year, with 1 hour for setup/cleanupat a salary of $10.00 per hour per technologist.

Since many of the automated blood grouping instruments provide D" as well as ABO/ Rh test results, the total cost included ABO/Rh/D". If D" testing was performed man- ually, the cost for the center's manual D" test (tube [n=41] or

227

TRANSFUSION Vol. 26, No. 3-1986

KLINE, FRIEDMAN, AND SEVERNS 228

I.*'

.. ? : 1.1-

il - -

9.8..

0.4.-

0.01

Table 1. Test cost (dollars, 1982-3, US) by collection volume

Yearly Collection Volume

0

t V

0 0

t A 0

+ + t o o 0 V V

o o n o o +t 0

0 2 0 . 0 0 0

* a *

0

0

* 0 0 k + + 0

0

O N

Methods <50,000 50-100.000 100-200.000 >200,000

ABOIRhID' Manual Tube Manual microplate Autoanalyzert AutoGrouperS MG G-2000 G-360 Auto microplates [ systems/center]

Antibody screening Manual tube Manual microplate

Syphilis testing R PR

0.95 (9)' 0.69 (3) 0.52 (1)

1.76 (2)

1.14 [11

0.22 (12)

0.22 (12)

0.27 (2)

1.06 (5) 0.50 (4) 0.64 (9) 1.13 (2)

1.58 (3) 1.35 (2)

[1 I 0.32 (1 2) 0.19 (9)

0.72

0.26 (15)

0.67 (4)

0.77 (1) 0.83 (7)

0.68 (2)

[21

0.18 (12)

0.72

0.23 (4)

0.23 (11)

1.04 (4) 0.68

[31

0.48 (1 ) 0.29 (3)

0.31 (4)

(n)-number of responses. t Equipment costs not included. $ Service contract cost not included. 5 All costs for the automated microplate system are estimated.

microplate [n=4]) was added to the ABO/Rh cost. No statistical difference in test cost between tubeand microplate D" methods could be found, although this may be due to the small number of centers using the microplate method.

The total cost of ABO/ Rh / D" testing for each center that responded is plotted against annual collection volume in Figure I . The average values for equipment, labor, dispos- ables, and reagents for each of the test methods, broken down by center size, are shown in Figure 2. Since auto- analyzers are no longer sold, only the maintenance cost is reported for these instruments. Since no centers purchased service contracts for the AG16C, only direct maintenance costs were included. No relationship was found between center size and maintenance cost (p=0.25, linear regression).

There was a wide variation in costs within each test method, but analysis showed that there was no significant

1.4,

I A t 1.04

V

V

relation between center size and the costs of labor, dispos- ables, and reagents for any test method (p<O. I , linear regres- sion). The AG16C and the G360 were the only test methods that showed a significant relationship between total test cost and center size: as the size of a center increased, the total test cost decreased (pX.05, linear regression). Amortization of equipment had the single most significant influence on this relationship (p<O. 10, linear regression).

Yaarlr Collestian Voluma

F I G . I . Total cost per ABO/Rh/D" as a function of yearly collection volume for the following test methods: manual tube (+), manual microplate (*), autoanalyzer (0), AutoGrouper 16C (O), MG (A), GZOOO (0). and G360 (V).

0-60.000 60,ooo-1oo.000 ioo.ooi-~oo.ooo saoo.ooo

Mean cost of ABO/Rh test components by test method as a function of group size. The number at the top of each bar is the number of centers in that group ("est" indicates that the costs are estimated). The label under each bar is the test method: MT = manual tube, M M =manual microplate, AA = autoanalyzer, AG = AutoGrouper 16C, MG = MiniGroupamatic, G2 = Group- amatic 20o0, G3 = Groupamatic 360, and AM = automated micro- plate system.

Yearly Collection Volume

FIG. 2.

TRANSFUSION 1986-Vol. 26. NO. 3

- t

i;

: 0.1.. - - 0.I . .

COST ANALYSIS OF LABORATORY TESTS

0

0 0 0 0

0 0

0

0 0

0 0 0 OO

o o o o 0 0 o o o o B o o

0

0 0 0

229

0.6.-

0.4-

Our survey indicated that the use of manual microplate technology is the least expensive method for ABO/Rh testing in centers that collect less than l00,OOO units per year (p<O.OS. f test). Centers that collect fewer than 100,OOO units per year and use expensive automated equipment (MG, AG16C, or (32000) have the highest cost per test (p<O.OS, Mann-Whitney U test). All of the centers that collect more than lOO.000 units per year used automated or semi- automated equipment. For centers that collect 100,OOO to 200,000 units per year, the G360 was significantly more expensive (p<O.OS, t test) than the other instruments, largely due to the cost of the instrument. When these data were collected, all centers that tested more than 200,000 units per year used the G360.

The mean NTD rate for all automated equipment was 5.4 percent. There was no correlation between NTD rate and equipment used (p<0.37, ANOVA). Differences probably corresponded to differences in equipment operation within each center. The higher the NTD rate, the less cost-effective a n instrument became (p=0.023, linear regression). Un- scheduled down-time correlated positively with the degree of automation of a piece of equipment. For example, the semi- automated AA had the least unscheduled down-time (p=O.O4, Kruskal-Wallis test) of 0 to 4 hours/month, whereas highly automated instruments such as the AG16C and the G360 had unscheduled down-time of up to 50 hours per month.

Screening for unexpected antibodies Thirty-seven centers reported using manual tube and 18

centers used manual microplate methods for screening tests (3 centers did not respond). Ten centers reported mainte- nance/ service contract costs for antibody screening. The average cost was $0.015 per test (1982/83, US) or less than 5 percent of the total cost of the test. Therefore, this cost was excluded from the total cost.

The mean cost per test for both methods in each size group is shown in Table I . Figure 3 demonstrates the wide range of variability in the total test cost. There was no statistical relationship between cost per test and center size or between manual tube and manual microplate test costs (p>0.05, Mann-Whitney U test).

0

0

““1

0

0

0

LO.000 100,000 160.000 IOO.OOO 210.000 600,000 0.01

Y e a r l y C o l l e c t i o n Volume

FIG. 3. Total cost (dollars) per antibody screening test as a function of collection volume for manual tube (0) and manual microplate (0) methods.

O ” 7

1 . 0

D.6

I 0.4 1

“1 O O

0 SO.000 100.000 160,000 100.000 2k0.000 100.000 *SO:O00 0.01

Yearly C o l l e c t i o n Volume

FIG. 4. Total cost (dollars) per RPR syphilis test as a function of collection volume.

Syphilis testing Forty-two centers used the rapid plasma reagin (RPR)

card test, three centers used the Veneral Disease Research Laboratory (VDRL) test, nine centers used the automated reagin test (ART), one center used the AG 16C (three centers did not respond). Because of the lack of data for other test methods, only the cost data for RPR testing were analyzed. Five centers reported maintenance costs; no centers reported service contract costs. As the average maintenance cost was less than $0.01 per test (1982/83, US), it was not included in this analysis.

Table 1 shows the mean cost per test of the R P R method within each of the four size groups. Figure 4 displays the cost per test as a function of yearly collection volume. There was no significant relation between test cost and center size (p>0.05, Mann-Whitney U test).

Discussion The single factor that had the greatest effect on test

cost was amortization of equipment. Facilities that are planning to acquire automated equipment should consider carefully the lifetime of the equipment in their environment. This was indicated by the inordinately high direct costs for “expensive” automated equipment (over $100,000, 1982/83, US) in centers that process less than 100,000 units per year. In centers that test less than 50,000 units per year, no currently available auto- mated equipment can be justified on the basis of direct costs. We have assigned a 7-year life span based on the recommendations of the various manufacturers (Kontron, Technicon, and Dynatech).

The decision to change a test method should not be made on the basis of direct costs alone. Indirect costs, such as those for renovation, staffing changes, improved workflow, and other factors, such as the ability to interface to automated data management systems, equipment reliability and test accuracy and consistency must also be as~essed.’.~

230 KLlNE, FRIEDMAN, AND SEVERNS TRANSFUSION Vol. 26. No. 3-1986

The wide variability in reported costs within a center size range reflects not only true differences in costs, but also the inability of many centers to analyze their own costs properly. Most of the cost estimates that were corrected in follow-up calls were initially high. This may indicate that centers tended to overestimate their testing costs. Since incorrect estimation of costs is not likely to be linked to the type of equipment used or to the size of the facility, the relationships between costs are probably correct. An analysis of the true costs of performing these tests awaits the introduction of rigorous cost accounting in blood centers.

Acknowledgements We appreciate the time and effort blood center staff took to

respond to the questionnaire.

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4. Muller A, Garretta M, Hebert M. Groupamatic system: ovcr- view, history of development and evaluation of use. Vox Sang

5. Severns ML, Schoeppner SL, Cozart MJ, Friedman KI, Schan- field MS. Automated determination of ABO/ Rh in microplates.

6. Bowley AR, Gordon I, Ross DW. Computer controlled auto- mated reading of blood groups using microplates. Med Lab Sci

7. Svoboda RK. Mechanisms for cost containment: administrative considerations. In: Smith DM, Judd WJ, eds. Blood bankingin a changing environment. Arlington: American Association of

8. Friedman LI, Denler WA. Equipment procurement process. In: Seligson D, ed. CRC handbook series in clinical laboratory science. Section D: blood banking. Boca Raton: CRC Press, Inc.,

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Linda M. Kline, BS, MT (ASCP), Research Assistant, Product Development Laboratory, Biomedical Research and Development, American Red Cross, 9312 Old Georgetown Road, Bethesda, MD 20814. [Reprint requests]

Leonard 1. Friedman, ScD, Laboratory Head, Product Develop ment Laboratory, Biomedical Research and Development, Ameri- can Red Cross.

Matthew L. Severns, PhD, Scientist, Product Development Laboratory, Biomedical Research and Development, American Red Cross.