Hidden phlebotomy expenses: exposing and eliminating excess costs

Aug. 17, 2013

Numerous variables complicate the process involved in obtaining a blood sample. Ask any phlebotomist: a routinely simple blood draw is, by no means, guaranteed. Certain categories of patients make venipuncture especially difficult. Critical care patients undergo more frequent testing and make finding an adequate draw site difficult. Younger and geriatric patients are more susceptible to collapsed veins, limiting the sizes of samples. These scenarios create a very specific but commonly overlooked budgetary problem: redraws.

Problems arise downstream too. A hospital laboratory that lacks automation or efficiency can experience delays, long turnaround times, and longer stays for patients—problems that carry a hefty price tag for the institution.

Redraws and root cause analysis

Redraws may contribute to a facility’s “Significant Few” failures—unexpected failures that in turn add unexpected costs to short-term financials, as defined by Robert J. Latino, CEO, Reliability Center, Inc.1 Latino, an educator and author, has been published in numerous training materials and trade magazines on the topic of root-cause analysis (RCA) systems. He outlines a good RCA system as one that includes the methodology and tools to proactively identify and analyze the “Significant Few” failures.

When analyzing the healthcare industry and, more specifically, the phlebotomy procedures of a hospital’s emergency ward, he says, the annual cost of redraws may be overlooked.

“There is typically no category on the hospital balance sheet that will show an annual cost for blood redraws in the ER,” Latino says. “The actual costs are embedded in various categories; so essentially no one sees them as a whole…they are stealth.”

In an economic analysis published by Latino and Reliability Center, a single ER at a 225-bed acute care hospital was redrawing blood 10,013 times a year at an average cost of about $300—totaling more than $3 million annually.

Redesign and ROI

Redraws are just one small piece of the problematic phlebotomy pie—they account for added expenses at the point of care. Test samples must of course travel to the laboratory to be processed, wherein there lies another difficult, but repairable, situation.

Test processing is variable to the design of a facility’s laboratory. Inefficient operations and processes—such as poor physical configurations of equipment, divisions in sections of the laboratory, and tasks performed in multiple locations—can contribute to costly delays.

A laboratory that processes approximately 1.6 million tests annually for a 426-bed community hospital in Southeastern Michigan encountered these exact problems.2 Hospital and laboratory administrators recognized the numerous obvious inefficiencies in test processing and wanted to design a more efficient laboratory.

The hospital began by purchasing automated laboratory processing equipment (e.g., chemistry analyzers) to reduce the number of outsourced tests. This required staff retraining and workflow redesign in order to handle the increased volume of in-house testing (approximately 66,000 tests annually). Even after these changes, however, efficiency remained less than par, largely because laboratory functions still occurred in three separate rooms. About three years after the purchase of the automated equipment, the laboratory moved to one large space, allowing for a reduction in redundancies and staff cross-training.

Did change and redesign produce results for the hospital? Over a period of three years, the laboratory reported a 33% reduction in turnaround times for complete blood counts (despite an increase in specimen volume), a more productive staff even after a 22% percent reduction across three shifts, and a positive return on investment, driven by significant cost savings. After four years, the positive ROI was achieved, driven by a total cost saving of roughly $950,000 a year, including $250,000 from moving test volume from a reference laboratory to the onsite laboratory and $700,000 from enhanced staff productivity.

It pays to bring about much needed change by eliminating wasteful activities and expenses. An examination of point-of-care procedures to improve techniques can prevent costly redraws. When larger overhaul is needed, a daunting project of planning and redesign of laboratory spaces may take years to complete, but could reap significant benefits for the entire hospital.

Ahmad Nasir is a Merchandising Category Manager at MarketLab, Inc., a Michigan-based supplier of unique and hard-to-find products for healthcare professionals in North America. His specialization includes hematology, histology, blood bank, and phlebotomy categories.


  1. Latino, RJ “Root cause analysis: investment or expense?” Reliability Center, Inc., February 25, 2011. http://reliability.com/industry/articles/RCA_Investment_or_Expense.pdf. Accessed July 15, 2013.
  2. U.S. Dept of Health and Human Services. Agency for Healthcare Research and Quality. Innovation profile: laboratory redesign improves staff productivity, leading to reduction or maintenance of turnaround times at greater specimen volumes and cost savings (St. Joseph Mercy Oakland Hospital). http://www.innovations.ahrq.gov/content.aspx?id=2555. Accessed July 15, 2013.