A Practical Framework for Calculating the Cost of Each TB Laboratory Test
Tuberculosis laboratories need reliable cost information to plan services, defend budgets, manage supplies, and identify opportunities for efficiency. Yet many laboratories lack accounting systems that can assign expenditure to individual tests. Financial records may combine testing, staffing, transport, maintenance, quality assurance, and administrative activities under broad budget lines.
Developing a simplified method for TB lab cost accounting per test does not require complex software or a full activity-based costing system. A consistent spreadsheet, clear definitions, and a small set of reasonable allocation rules can produce useful estimates. The aim is to understand the resources consumed by a test, not to create a perfect financial model.
A cost-per-test figure is especially valuable when laboratories introduce molecular platforms, expand drug-resistance testing, compare testing algorithms, or prepare procurement plans. It can also reveal costs that are easily overlooked, such as repeat testing, internal quality control, equipment downtime, waste disposal, and staff time spent reviewing results.
Define The Costing Question
Before collecting numbers, the laboratory should decide what the result will be used for. A manager estimating the annual budget may need the average cost of all tests performed. A program comparing microscopy with molecular testing may need the incremental cost of adding one test to the existing workflow. A donor-funded project may require the full economic cost, including equipment depreciation and donated commodities.
The costing perspective should therefore be recorded at the beginning. A useful basic distinction is between recurrent costs and capital costs. Recurrent costs include reagents, consumables, salaries, utilities, maintenance, and quality-control materials. Capital costs include instruments, major renovations, biosafety equipment, computers, and other assets used over several years.
The time period also matters. Use a complete month or year whenever possible, because testing volumes fluctuate. A short period with unusually low workload can make each test appear unnecessarily expensive. The calculation should state whether it represents a budgeted cost, an actual cost, or a blended estimate based on several periods.
Separate Direct And Shared Costs
Direct costs can be linked to a specific test or test batch with reasonable confidence. Examples include cartridges, extraction tubes, reaction plates, pipette tips, specimen containers, labels, and forms. If a molecular assay uses one cartridge per patient, the purchase price of that cartridge is usually a direct cost.
Shared costs support several tests or several laboratory functions. Staff salaries, electricity, water, information systems, equipment maintenance, biosafety monitoring, cleaning, supervision, and external quality assessment often fall into this category. These costs need to be allocated using a transparent driver, such as staff hours, instrument hours, floor space, number of tests, or the proportion of total laboratory activity.
A simple cost center structure can prevent double counting. Separate costs for specimen collection and transport, accessioning, testing, result verification, reporting, and waste management when these activities are materially different. In a small laboratory, some stages may be combined, but the same structure should be applied consistently across the costing period.
Quality management activities deserve specific attention. Document control, competency assessment, internal audits, corrective action, and stock monitoring may not be visible in the price of a reagent, but they consume resources needed for dependable results. The GLI checklists can help laboratories identify routine quality activities that should be reflected in their operating cost categories.
Build A Reproducible Calculation
A practical formula is:
Cost per reportable test = total allocated cost for the period ÷ number of reportable tests
“Reportable tests” should mean tests that generate a valid result for clinical or surveillance use. Invalid, rejected, or repeated tests should not automatically disappear from the calculation. Their resources were consumed, so the laboratory can either include them in total costs and divide by all valid tests, or show a separate loss and repeat-testing adjustment.
For each test method, calculate direct cost first. Add reagent and consumable prices, adjusted for the quantity used per test. If a box contains 100 cartridges and costs $1,000, the nominal cartridge cost is $10. If the laboratory routinely discards two cartridges because of expiry or packaging constraints, the effective cost is higher. A wastage factor can be calculated as:
Effective unit cost = purchase cost ÷ usable units
Next, estimate staff time. Record the minutes required for accessioning, preparation, testing, result review, reporting, and cleaning. Multiply total minutes by the relevant hourly personnel cost, including salary-related benefits where appropriate. When several staff categories are involved, calculate each category separately and add the results.
For shared costs, use a practical allocation basis. If a maintenance contract covers one instrument used exclusively for a test, allocate the relevant annual amount to that method. If electricity supports several platforms, estimate instrument operating hours or use the proportion of tests processed. The allocation rule is less important than documenting it and applying it consistently.
Compare Cost Components Clearly
The following structure can be used as a starting point for a spreadsheet. The figures are illustrative and should be replaced with local prices, workload, salaries, and operating conditions.
| Cost component | Calculation basis | Illustrative amount per test |
|---|---|---|
| Reagents and cartridges | Purchase price adjusted for wastage | $10.50 |
| Disposable consumables | Average items used per test | $1.80 |
| Staff time | Minutes worked × hourly personnel cost | $3.20 |
| Equipment and maintenance | Annual allocated cost ÷ expected tests | $2.40 |
| Utilities and facility costs | Allocated operating cost ÷ tests | $0.70 |
| Quality assurance and waste | Annual shared cost ÷ tests | $0.90 |
| Estimated cost per reportable test | Sum of allocated components | $19.50 |
This approach distinguishes the price of the assay from the cost of delivering a usable result. The reagent may account for the largest share, but staff time, maintenance, quality assurance, and low throughput can materially change the final figure. Reporting both “consumable cost” and “full operational cost” helps decision-makers avoid misleading comparisons.
Capacity utilization should be included in sensitivity analysis. An instrument processed at 20 percent of its potential capacity will carry a higher equipment cost per test than the same instrument operating near planned capacity. The laboratory can model low, expected, and high workload scenarios without changing the underlying cost categories.
A useful spreadsheet should contain separate tabs or sections for assumptions, price data, test volumes, staff time, shared-cost allocations, and results. Each input should have a date and source. This makes it easier to update prices, explain changes, and identify whether a higher cost comes from inflation, lower workload, increased wastage, or a change in the testing process.
Account For Volume And Process Losses
Test volume is often the strongest driver of unit cost. When estimating annual cost, use actual workload data where available and distinguish specimens received, tests started, valid results, invalid results, and reported patient results. These counts are not interchangeable. A laboratory that receives 10,000 specimens but reports 9,200 valid results has a different effective cost than one reporting 9,900 results from the same number of specimens.
Batch-based testing requires additional care. Some consumables are used once per batch rather than once per specimen. If a run requires one control set for every 20 specimens, the control cost should be divided across the average number of specimens per run. If the laboratory commonly runs small batches, the cost per specimen will be higher than the theoretical maximum.
Include repeat testing and failed runs as process losses. Invalid results may arise from specimen quality, power interruptions, instrument errors, expired materials, or procedural problems. A basic loss rate can be calculated by dividing invalid and repeated tests by all tests started. The rate can then be used to adjust reagent and labor consumption.
Cost accounting should support improvement rather than blame. A high cost per result may indicate low demand, but it may also reveal unnecessary repeats, poor stock rotation, excessive batching delays, or equipment downtime. Linking financial data with quality indicators allows the laboratory to target causes rather than simply cutting inputs.
Connect Costs With Quality Priorities
A low unit cost is not automatically a good result. Reducing quality-control material, preventive maintenance, staff training, or biosafety supplies may reduce recorded expenditure while increasing the risk of unreliable testing. Cost analysis should therefore be interpreted alongside turnaround time, invalid rate, proficiency testing performance, stock-outs, corrective actions, and safety events.
The four-phase quality improvement approach promoted by the GLI Quality Tool can help place costing within a broader management system. Laboratories can use the GLI improvement plan guide to connect financial findings with documented priorities across personnel, equipment, documents, assessment, and continual improvement.
Cost targets should also reflect the public health role of the laboratory. A service may be more expensive per test because it reaches remote facilities, provides rapid drug-resistance detection, maintains emergency capacity, or supports surveillance. Before changing a service, compare its cost with its contribution to diagnosis, treatment initiation, infection control, and national tuberculosis objectives. Guidance on aligning quality goals can support this broader interpretation.
Put The Method Into Routine Use
Assign responsibility for maintaining the costing file to one person, with review by the laboratory manager or quality team. Update high-change inputs, such as reagent prices, salaries, exchange rates, and test volumes, at least annually or whenever a major operational change occurs. Keep a version history so that previous estimates remain traceable.
The method can begin with one high-volume test and expand gradually. Start with the largest cost drivers, use documented assumptions, and improve precision where the result could change a purchasing or service decision. A simple model that is updated regularly is more useful than a detailed model that no one can maintain.
The following practices make the calculation more dependable:
- Define the test unit as a reportable valid result and state how invalid or repeated tests are treated.
- Record direct costs, shared costs, capital costs, and quality-related costs in separate categories.
- Use local workload and staff-time data instead of relying only on manufacturer estimates.
- Review wastage, batch size, equipment utilization, and downtime as drivers of unit cost.
- Compare the estimate with quality and service indicators before making budget or workflow decisions.
Once established, cost-per-test accounting becomes a management instrument rather than a one-time exercise. It can support procurement forecasts, technology comparisons, staffing requests, and discussions with national tuberculosis programs. Begin with a transparent spreadsheet, validate the assumptions with the laboratory team, and review the figures alongside quality performance so that every efficiency decision protects the reliability of TB diagnosis.