ARUP's Downstream Cost Calculators

ARUP's Suite of Integrated Services

Many large health care organizations view the laboratory as a silo whose costs can be managed separately from those of other clinical activities. At ARUP, we believe that this basic assumption is flawed.

The true cost of a diagnostic test includes many factors beyond the direct price of performing the test. For example, an apparently inexpensive test, ordered in the wrong clinical setting or at the wrong time, can sometimes lead to expensive follow-up testing or therapy. On the other hand, an apparently expensive test might turn out to be cost-saving if it averts costly procedures.

We believe that pathologists and other laboratory professionals can play an important role in promoting the cost-effective use of laboratory tests. This requires knowledge of the clinical settings in which tests are being ordered as well as of the clinical decisions made based on those results and the cost implications of these decisions.

To illustrate the relationship between testing costs and total clinical (i.e., downstream) costs, ARUP made the following cost calculators available:

The calculators address three very different ways in which laboratory testing can impact overall health care costs. The more expensive but more sensitive Chlamydia trachomatis test, for example, can reduce hospitalization, disease transmission, and infertility workups. Prostate cancer screening, on the other hand, is unlikely to be cost-saving under any set of assumptions; the calculator estimates the downstream costs due to biopsies that result from ordering this initially very inexpensive test. Finally, KRAS is an example of a relatively expensive test that, when used appropriately, can be dramatically cost-saving due to reduction in chemotherapy use.

ARUP’s clients can utilize ARUP’s downstream cost calculators to:

  • Demonstrate to administrators or executives how laboratory testing affects the organization’s bottom line.
  • Increase their lab’s visibility within the health care organization.
  • Illustrate the laboratory’s key role in promoting cost-effective testing.