LABORATORY ECONOMICS

At a “gross” level, the economics of a UDT lab could yield significant income for a clinical lab or physician office laboratory (POL). There are several factors at play that impact the veracity of this statement. One, urinary drug confirmations are reimbursed at a higher rate than screening alone. In addition, UDT confirmation is highly unlikely to be legislated out of existence. Two, both pain management and rehabilitation services continue to increase. It is our belief that more localized / regional laboratories will be a fast-growing segment of the testing landscape.

How many samples can one expect to run from a single LC-MS?

For example, a mass spectrometer and related operations could capably handle 2,800 samples per month. Here’s how we arrive at that number: If your developed method can be completely run in 7 minutes and if the LC-MS/MS is set to run overnight and into the morning hours (which is pretty typical for a busy lab), tests can be run up to a maximum of 16 hours per day for a typical month consisting of 21 days. Running tests for more than 16 hours in a day is not recommended. And, if you are anywhere close to 2,800 samples per month, it is highly recommended that having a second mass spectrometer be considered. Ultimately, this is a business decision. Yes, a mass spec is a multi-thousand-dollar investment; however, at 2,800 samples per month, significant cash flow is generated and any downtime becomes both costly and difficult-to-impossible to recover from.

All that being acknowledged, like most start-up operations early cash flow plays an important role. It is very important to bear in mind that, as it is with most start-ups, cash flow can be substantially negative before positive cash flow is generated. We are happy to work with you to run simulations that most closely parallel your situation as you see it unfolding. We recommend doing this with you and your accountant and/or business manager.