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March 15, 1985

Identifying Costs of Medical Care: An Essential Step in Allocating Resources

JAMA. 1985;253(11):1586-1589. doi:10.1001/jama.1985.03350350080025

Financial constraints are imposing an urgent requirement on American medicine to control the increasing costs of medical care. Valid data on "true" costs are required to make optimum trade-offs between qualityavailability and cost of medical services; unfortunately, these data are generally lacking. Standard accounting procedures provide information on expenditures for items such as utilities, pharmaceuticals, and payroll; however, these procedures cannot identify personnel costs related to a specific medical service. The Laboratory Workload Recording Method developed by the College of American Pathologists offers a proved method for calculating personnel costs in performing each type of procedure in the clinical laboratory as well as projected costs of alternative management actions. Similar principles could be applied in other areas of health care.

(JAMA 1985;253:1586-1589)