Public hospital pathology--at what cost?

Public hospital laboratories have in the past fended off financial scrutiny and accountability on the grounds of their complexity and lack of compelling need. However, the cost of providing diagnostic laboratory services has now come under intense scrutiny because of budget reductions and options for private sector competition. Costing of pathology services is not difficult, but their organisation and outputs do have unique features that need to be understood and defined to ensure that the costing model used provides robust data that accurately reflects how resources are consumed. The cost data generated for diagnostic services can then be compared to the various benchmarks widely used for activity-based funding, such as the Commonwealth Medical Benefits Schedule and the pathology component of the AN-DRG Service Weights System, while the requirement and funding for other activities can be rationally determined.