Laboratory Administration & Management of Pathology Practices
Strategic planning for laboratories

Topic Completed: 21 December 2020

Minor changes: 22 December 2020

Copyright: 2002-2021,, Inc.

PubMed Search: laboratory administration[title]

Richard E. Horowitz, M.D.
David A. Novis, M.D.
Page views in 2020: 266
Page views in 2021 to date: 19
Cite this page: Horowitz R, Novis D. Strategic planning for laboratories. website. Accessed January 22nd, 2021.
Definition / general
  • Pathologists are unique among practitioners of medicine because they are not only expected to be brilliant physicians and make accurate diagnoses but they are also responsible for the overall performance of their laboratory; they:
    • Must establish goals and objectives and determine the organizational structure
    • Are responsible for employees, equipment and supplies
    • Must assure quality and comply with laws and regulations
    • Must show a positive bottom line
  • In other words, pathologists, in addition to being physicians, have to be administrators and managers - they are expected to plan, to lead, to organize and to control the laboratory
Effective Management Encompasses
  • Planning (conceptualize, analyze, develop strategies, budget)
  • Leading (communicate, motivate, ensure understanding)
  • Organizing (administer, decide, delegate)
  • Controlling (establish standards, monitor performance)
The Essence of Planning According to Peter Drucker
  • First answer three basic questions:
    • Who are our "customers"? Patients, doctors, nurses, insurance industry, administrators, employees, students, residents, ACOs?
    • What do each of our "customers" deem important?
    • What is our business? Routine testing, special testing, research, education, inpatient, outpatient, consultation, etc.

  • Then prioritize, because we may not be able to meet all of our customers' wants or needs and some wants may be conflicting:
    • Which of our customers are most important?
    • Which of their need are critical?
    • What our business should be depends on how we prioritize

  • Strategic planning is the tool which is used to translate "What our business should be?" into a logical sequence which culminates in a budget and implementation
Diagrams / tables
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Template for strategic planning

Template for Strategic Planning
  • First, re-examine the philosophy, the purpose and the commitment of the enterprise and its Mission and Vision Statements; a hospital laboratory must function within the parameters of the hospital Mission and Vision, but it may have its own as well
    • The Mission Statement is a public document that answers Drucker's questions: "This is our business, these are our customers and this is what we will do to meet their needs"; The Mission Statement tells customers what they can expect and serves as a compass for each laboratory employee to use as a guide
    • The Vision Statement is a private document which articulates the "dreams" or hopes or yearnings of the hospital and/or laboratory
    • The Goals or Strategic Directions are the finite objectives, targets or end-points to be achieved, based on the Mission and Vision; they should be SMART, i.e., Specific, Measurable, Attainable, Relevant and Timed

  • Next, three Assessments are essential:
    • Does the laboratory have Personnel, Facilities, Financial Resources, Organizational structure and Capacity to implement the Plan?
    • What External forces (Regulatory, Socio-Economic, Technologic Advances) might impact the Plan?
    • What is the state of the "Market"? Are customers' needs changing, what is the competition, what is our pricing strategy?

  • The Assessments should identify the critical issues for the laboratory and then perform a SWOT analysis which examines our Strengths and Weaknesses and our Opportunities and Threats that will determine the direction the plan will take
    • At this point it may well be necessary to re-evaluate the Mission, Vision and the goals

  • Then, on the basis of the above, we decide what to do; specifically we might decide to simply continue laboratory operations without any changes, or change some or all of our current activities or downsize or eliminate activities and/or begin new ones

  • At this point we can distinguish between those things that can be done immediately, those that are planned for the next year and those that are scheduled for the next 3 to 5 years; again, it may be prudent to review and reassess the goals and plan so that we don't create unrealistic expectations

  • Now the time has come to develop the specifics for each section of the laboratory with detailed objectives, a business plan with financial projections and the personnel, capital and expense budgets; during the budget approval process there may again be the need to re-evaluate and re-examine the overall plan

  • Finally the plan is implemented; but it also must be concurrently and continuously evaluated by performing variance analyses of the budgets and determining whether benchmarks for revenue and productivity established in the business plan are achieved

  • The Strategic Planning Process is an ongoing process with continuing reevaluations and reassessments at every step of the way; it is a flexible instrument that is continually reformulated and remolded as conditions change; the step-wise scheme described above is not rigid, but is a logical sequence that may be altered as needed; it is most appropriate for long-range planning, but even when assessing short-range plans, utilization of some of the components of the template, such as market assessment or SWOT analysis can be most useful
Who Should Do the Planning?
  • The Pathologist and strategic planning: there are different points of view:
    • 1. The CLIA director should be proactive in the strategic planning for the clinical lab because most medical decisions are based on lab and pathology results
      • As a result the director should actively work on aligning the lab strategic efforts with the larger institutional strategic goals
      • Alternatively, the director should help set the mission, vision, major goals and directions
    • 2. Others worry that too much pathologist involvement may engender resentment and be counterproductive
      • Of note, pathologists are not required to engage in clinical laboratory strategic planning
        • CLIA does not list strategic planning as a required duty and responsibility of laboratory directors
        • The CAP LAP Director Assessment checklist includes in its description but not in the title of DRA.11200 Director Responsibility-Education/R&D a Phase II requirement that the laboratory director ensures provision of…strategic planning; and lists in the “Evidence of Compliance section, “Records or minutes from strategic planning sessions demonstrating participation and role of laboratory director.”
          • "Ensuring" is different from actually "doing" the strategic planning
          • “Participation” and “role” are not defined
      • Pathologists may provide more value to, and garner greater respect from their employers by:
        • Keeping strategic planners abreast of laboratory trends
        • Providing content to institutional strategic planners
        • Supporting decisions of institutional strategic planners
        • Providing leadership in implementing institutional strategies
  • Others involved in strategic planning
    • Generally, organizations delegate the planning of strategy to owners, chief administrators and board members with fiduciary responsibilities rather than those at the Director level
    • The CEO and CFO of the hospital must be involved to insure that the laboratory planning is synchronized with the hospital's major initiatives
    • The laboratory staff, particularly the Laboratory Manager and the section supervisors need input into the internal assessments, the directions and strategies, into the business plan and budgets if for no other reason than they will be responsible for implementing the plan
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