The cloud over MT schools: can we justify their cost? – Free Online Library Essay

Sand clear of the blackboard.

In the current fiscal crunch,hospitals are apt to use the budget axe to chop away their medicaltechnology schools. One laboratorian recently published a cost-benefit analysis thatfavored maintaining MT education at her institution. The title of thatarticle posed a question that administrators ask: “How Much Does anMT Program Cost the Hospital?” (MLO, March 1984).

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In other words,”How much would we save if we closed our school?” Recent developments have made that question all but inevitable.Many years ago, most schools paid for themselves. Instruction consumedlittle cost and effort, and students spent most of their time doingminor chores and simple tasks around the laboratory, thus freeing thestaff for more important work.

As registry organizations instituted more rigid requirements,hospital instruction grew more costly and student labor decreased.Meanwhile, third-party payments for hospital care grew tighter,culminating in last year’s debut of prospective payament. As a result, many MT programs face the axe for financial cuts ifnot outright elimination. In our 320-bed hospital, the program’scontinued survival has been called into question by administratorsannually for the past five years.

When we ask how much the school costs the hospital, it seemsobvious that thousands of dollars could be saved each year by ending theprogram altogether. But the situation is a good deal more complex. Foran accurate cost-benefit analysis, we must also consider what the schooland its services are worth–that is, how much it would cost to run afreestanding educational institution offering the same facilities andcurriculum. That cost, we suspected, would differ dramatically from thedollar savings achieved by closing the school.

Our laboratory decided to find out. After we had painstakingly assembled all relevant data, we made a gratifying discovery: Our MTschool was a bargain in terms of what it offered to students.Here’s how we reached that conclusion. Any attempt to determine the exact cost of running a medicaltechnology school involves a tangle of accounting problems. Instructorsdivide their time among lecturing, teaching while performing tests,supervising students, and performing nonteaching tasks. While studentsdo cost the laboratory money, they contribute significantly to patientservice. Clearly it takes two sets of books to pin down complete andaccurate figures. The financial report we produced, which is summarized in Figures Ithrough VI, attempts to answer two key questions: What is our programworth in dollars and cents, or what is its value? And how much would wesave if we closed it? We began by putting a price tag on lectures, as shown in Figure I.

Our pathologists are active participants, principally presenting theclinical aspects of medical technology–the rationale of test selectionand interpretation. Their involvement is essential to developingtechnologists who are true professionals rather than mere technicalpersonnel. Lectures by our lab consultant emphasize recent advances inthe field. Teaching at this level raises the average lecturer’ssalary to $30 an hour. But keep in mind that even if the program closed, pathologistswould still receive the same salry as before.

That’s part of thedistinction between the value of the program and the savings achieved byclosing it down. Also bear in mind that value is important from thestudent’s point of view. If tuition is raised, for example, is thestudent still getting his or her money’s worth? The cost of bench instruction is also shown in figure I. The meansalary for bench instructors includes fringe benefits, which constitutemore than 30 percent of base pay for full-time employees. Figure IIcompletes our cost picture with the salaries for our technical director,the only staff member who works almost exclusively for the school, andour typist. Typing and copying costs are high because students receivecopies of every lecture, a system we use to speed the pace of classtime. All these direct costs are summed up in Figure III. We addedoverhead–caculated, as for the lab itself, at 40 percent ofexpenditures.

What, then, would it cost to run the MT programindependently? According to our analysis, the total required outlay orvalue of the program is $120,862, or $13,429 per student in a full classof nine. We next examined revenues and cost savings attributable to the MTprogram. It was difficult to estimate the amount of clinicallyproductive work performed by students during school hours becausethere’s variation from section to section and from day to day.Figure IV shows the productive time we finally settled on, multiplied bythe starting salary of a CLA-level technician to yield $12,150 worth ofpatient service. After three months’ training, students may apply for part-timeweekend work in the laboratory, performing only procedures for whichthey are qualified, of course. As substitutes for our regular medicaltechnologists, who earn $10.32 per hour, they represent a salary savingsof $2.

22 per hour. Multiply that by more than 1,400 hours of weekendservice a year, and you get $3,100 in annual savings. We also factored in the recruitment and training money we save byhiring our own graduates. We usually replace two employees per year.It costs an estimated $8,800 to recruit and indoctrinate a technologisttrained elsewhere. By tapping our program’s alumni for labpositions, we save $17,600 every year.

Finally, when $15,000 is addedin for tuition and book payments, total school-generated revenues andcost savings come to almost $48,000. By subtracting this estimate of the school’s total revenue andcost reductions from the value of the program, we arrived at a netannual operating loss of $72,929, or about $8,000 per student (seeFigure V). This is not the amount that the hospital would save by closing theschool, however. We estimated the monetary gain from ending the programin Figure VI, and it is a considerably lower sum. In short: If the MTschool were terminated, savings would amount to only $27,352 a year, or$3,039 per student–quite a different figure from the program’sestimated value of more than $13,000 per student.

A note abot our procedures: Some of the data used to arrive at thisconclusion are solidly documented, such as reduced hours for thetechnical director and typist and elimination of guest lecturers, books,and photocopying. The largest cost item, technologist lectures andbenchwork, involved some guesswork, as did our estimate of patient workby students. We had proved our point: Before a hospital decides to do away withits MT program, it must consider nonfinancial as well as financialreasons. Anticipating an administration response, we presented themajor arguments on both sides. These were the main nonfinancial reasonsto terminate the program: * Longer turnaround, reduced service quality.

Phlebotomistsprovide our principal contact with the public. If they aren’thighly skilled, patients complain, and the laboratory’s imagesuffers. Most students, while they tend to learn quickly, experiencesome difficulty at first. Inexperienced phlebotomists can also slowdown an entire department’s work, since they take longer to performeach collection and have a higher rate of missed patients.

In ourlaboratory, students who continue to cause problems are given assistancein developing proper skills and attitudes. * Low demand for technologists. Until a few years ago, most of ourstudents found jobs before completing their training.

Times havechanged. Although the majority of our graduates find employment, theymust spend more time looking for it. In fact, our program now includescoaching in job-hunting and resume preparation.

Some graduates who havestrong ties to the area must accept less attractive jobs. * Rigid scheduling. Under the prospective payment system, workschedules will probably change significantly, with medical technologistsworking more night and weekend shifts. since bench training is highlystructured, instructors may run into trouble scheduling additionalcompensatory time during regular hours.

* Overqualified staff. Since we hire many of our own graduates, wesometimes fill technician positions with technologists. Budgetpressures and the increasing number of simplified or automated tasks maymandate lowering the ratio of technologists to technicians and otherless highly trained employees. On the positive side, we cited some excellent nonfinancial reasonsto continue the program. These reasons tended to be more difficult toquantify: * Job enrichment. It’s well known that students have astimulating and challenging effect on the laboratory staff, keepingpathologists and technologists on their toes. Most instructors enjoytheir role.

If significant personnel cuts become necessary, however,the added responsibilities of teaching may simply be overwhelming. * Recruiting benefits. As we mentioned, the school provides uswith a familiar, capable pool of candidates. We can fill vacanciesselectively at little cost.

* Flexible scheduling. Students can ease scheduling as well ascomplicate it. Without their 1,400 or so hours of part-time work ayear, our permanent employees would face more weekend assignments.Reduced student availability on weekends would create more day-to-dayscheduling problems and possibly a drop in morale. * Creative input. Aside from benchwork, each student completes apractical research project.

These projects enrich both the students andthe laboratory. Many have led to changes in our instrumentation andprocedures. Of the eight or nine student projects initiated every year,we implement about one-third Since we prepared our report, the hospital’s administrationhas decided to authorize the school’s existence for another year.Tuition will be raised 100 per cent, however, from a current $1,500 to$3,000 to help close the gap between revenue and costs, and a further$1,500 increase is planned for the following year. It remains to beseen how this increase will affect school enrollment, but ourcalculations show that the program wil continue to be a bargain forstudents.

For this year, the important point is that the school will survive.An important part of that survival is the ongoing awareness amongstudents and administrators that the value of high-quality technologisttraining should count as much as its cost does.

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