Uncertainty on the Molecular Level

Group Fuchsia:Heather Jacobson, Jessica Landin, Will Liu & Brian

Wiggs

The Problem

• Reduce Operational Costs• Improve Patient Satisfaction

How can the laboratory meet these objectives?

Currently…..

HPVs, HSVs, CT/NGs and specimens for Vaginitis Panel are outsourced to

Average 5 day testing TAT

Costs lab an estimated $46.9 million/yr

•Possible solution….

• Expand laboratory to include a molecular testing department (provide testing for HPV, HSV, CT/NG)

Reduce Outsourcin

g Costs

Expand Services

Reduce Turnaround

Time

Improve Patient

Satisfaction

Maximize Employee Resources

Uncertainty Present in Solution

Demand by test type

Number of tests to run

Number of instruments needed

Number of FTEs

Modeling Methods Used to Explore Uncertainty

Optimization

Simulation

Basic Spreadsheet Modeling (NPV, 5 Yr Forecast)

Sensitivity Analysis

Inputs

Demand

Optimization

Goal of Optimization…

Help determine how many tests can run per day per instrument

How many FTEs needed

Help define action plan

Sensitivity Table created "by hand" by changing the number of FTEs and running solver each time, and then recording the test run cycles.Optimal Breakdown of Run Cycles (by test types):

HPV HSV CT/NG Vaginitis Panel1 FTE 336 12 0 0 2 FTE 336 360 0 0 3 FTE 336 360 0 2088 4 FTE 336 360 0 4133 5 FTE 336 360 202 4133 6 FTE 336 360 202 4133

Sensitivity Table created "by hand" by changing the number of FTEs and running solver each time, and then recording the in-house test volumes.

Optimal Breakdown of Tests (by types):

HPV HSV CT/NG Vaginitis Panel1 FTE 29568 1056 0 0 2 FTE 29568 31680 0 0 3 FTE 29568 31680 0 12528 4 FTE 29568 31680 0 24798 5 FTE 29568 31680 13736 24798 6 FTE 29568 31680 13736 24798

Breakeven Analysis

Goal of Breakeven Analysis…

Help to quantify each test that would have to be performed in-house in order to breakeven from the initial investment

Simulation

Goal of Simulation…

To address the high degree of uncertainty related to test volume

To determine the distribution of net saving based on the probability distributions of test demand volumes

NPV, 5 Year Forecast

Goal of NPV/5 Yr Forecast…

Determine NPV of cost savings over next 5 years

Sensitivity Analysis of 5 YR Forecast

5

FH should lease the Rapid Capture system and purchase the remaining equipment.

To optimize cost savings testing must be prioritized: (1)HPV, (2) HSV (3) Vaginitis (4) CT/NG

•Conclusions and Recommendations

FH should expand laboratory services to run the 4 tests thereby reducing costs by an avg $38 M.

5 FTEs should staff the molecular department

Staffing in department must be flexible with demand

1

2

3

4

Continued…

FH should advertise the expanded services/quicker TAT 6

•Conclusions and Recommendations

7 After implementation, test demand must be monitored so adjustments can be made if necessary

Significant Learnings Store all givens on one sheet for easier range name

maintenance and cleaner formatting

Important to clearly define your objectives: Net profits (not applicable) vs. Net savings

Do not create all of the analysis models at once (e.g. create shells for optimization, breakeven, simulation, and NPV all at once)

Optimization• If solver cannot identify a solution, simplify your

optimization model and re-evaluate your constraints

• When there are multiple optimal solutions, solver may reach one that is not the most optimal solution. You have to be cognizant of that possibility and adjust the trial values to ‘help’ solver calculate the most optimal solution.

Significant Learnings

Simulation• To eliminate the constant refresh of the rand()

function, change formula options to ‘manual’

NPV• Using logic statements to determine in-house test

completion across the 5 years• Two of the tests were already at maximum based

on resource constraints determine during optimization

• Sensitivity analysis completed during optimization for test prioritization

Continued…