General Concepts and Administrative Issues

The laboratory plays a central role in health care. Anecdotal evidence suggests that laboratory results impact up to 70% of medical decisions. While quantitative studies supporting this claim are lacking ( ; ), the clinical laboratory remains a vital tool in the practice of diagnostic medicine. It is of considerable note that although the laboratory is a $100 billion business, annual laboratory costs account for less than 2% of total health care dollars spent, offering high clinical value at relatively low cost ( ; ; American Clinical Laboratory Association, 2018). While laboratory testing currently seems to be a relative bargain (0.9% annual growth rate from 2012–2017), an estimated 2.7% annual growth rate is anticipated through the year 2022 ( ). Laboratory test menus have become dynamic, expanding to accommodate the ever-increasing number of new diagnostic tests in response to available advanced technology. In the area of genetic testing, as of August 2017, there were about 75,000 tests available representing approximately 10,000 unique test types. That number is expected to grow about 28% annually through 2020, creating a $7.7 billion worldwide industry ( ). Implementing new test modalities and technology will increase expenditures and increase the pressure on laboratory leadership to control costs and guide appropriate test utilization ( ).

The purpose of the laboratory is to provide physicians, other health care professionals, and patients with the necessary information to (1) detect a disease or the predisposition to a disease; (2) confirm or reject a diagnosis; (3) establish prognosis; (4) guide patient management; and (5) monitor the efficacy of therapy. The laboratory also plays a leading role in education, research, information technology design and implementation, and quality improvement. To achieve quality goals and ensure a well-functioning laboratory requires skilled personnel who not only understand state-of-the-art technologies but also financial management, business, marketing tactics, and human resource practices. This chapter will discuss key administrative concepts and issues that serve as the basis of sound laboratory practice. Committed leadership with skills to guide staff is crucial to a well-managed laboratory that generates accurate and timely laboratory results. A more detailed discussion of these topics is available elsewhere ( ; ; ).

An organization is only as good as its people, supervised by skilled managers but guided by visionary leaders. While leaders can be managers, not all managers are effective leaders, yet all should aspire to gain such expertise. The terms leadership and management are often used interchangeably but represent different qualities ( Table 1.1 ). Leadership provides the direction of where a group (or an organization) is going, whereas management provides the “road” to get there. Lewis Carroll pointed out that, “If you don’t know where you are going, any road will get you there.” This simple concept reminds us that leadership must be visionary and set clear goals with strategic objectives and that leaders ensure that the right things are done. Management is more tactical in practice. Managers implement objectives, control budgets, organize staff, and ensure that things are done right. Good leaders use learned management skills, while great leaders employ both skills and their innate characteristics to effectively grow their organization ( ). Effective managers use a variety of talents to work with people to get things done. Achieving organizational goals requires an optimal mix of skilled, dedicated, and task-oriented leaders and managers working with committed staff.

Leadership skills manifest as patterns of behavior that engage others to complete tasks in a timely and productive manner. The Situational Leadership model ( ) describes four key styles: supporting, directing, delegating, and coaching. A supportive leader provides high support but low direction in accomplishing duties. A directive leader presents rules, orders, or other defined instructions, but limited support. The former approach offers flexibility and encourages creative problem solving. The latter approach offers concise and detailed instructions from the leader on how to complete a task by independently solving the problems and making all the decisions. A delegating leader provides low support and low direction, allowing competent (generally, more experienced) staff to assume accountability and responsibility to complete the goals. The coaching leader provides high support and high direction by guiding individuals to make real-time decisions with appropriate support and corrective actions as needed. Most leaders adopt a combination of styles as appropriate to different situations but periodically default to one of the four styles to achieve desired results ( ).

Good managers use a variety of human, financial, physical, and informational resources to meet an organization’s strategic goals in the most efficient and effective manner. Some basic managerial responsibilities are listed in Box 1.1 . Managers can be stratified as first-line managers (supervisors, team leaders, chief technologists), middle managers (operations managers, division heads), and top managers (laboratory directors, board of directors, and the various C-suite [top-level] executives). Each managerial level dictates the daily activities and skill sets required for that position. Top-level managers concentrate on strategizing and planning for the next 1 to 5 years, while first-line managers are more concerned about completing the day’s work. A top-level manager may or may not possess technical skills that a first-line manager uses every day. Middle managers may straddle both areas to some degree by engaging in a variety of activities that may be strategic as well as tactical.