Warren Hospital

A Case Study in Successful Laboratory Restructuring


Warren Hospital (WH) is a 214-bed, community-based facility located in Phillipsburg, New Jersey. The laboratory is staffed with 50 full-time equivalents (FTEs) and produces approximately 800,000 reportable results annually.


Through an ongoing partnership, Chi and WH worked together to meet the laboratory restructuring goals, achieving the following impact on operations:

  • Restructured management staff (11 managers/supervisors to three).
  • Reduced 12 FTEs through attrition, representing a savings of over $630,000 annually.
  • Implemented a new laboratory information system.
  • Consolidated workstations and cross-trained staff.
  • Exceeded national quality norms as measured by CAP Q Probes and Q Tracks.


WH utilized Chi Solutions, Inc. (Chi) to conduct a laboratory operations assessment to determine opportunities to reduce costs and improve productivity in the laboratory. A benchmarking analysis with peer comparison indicated that a reduction of 12 FTEs (25%) was needed to achieve a 50th percentile ranking. Working in partnership with WH, Chi facilitated the restructuring of the laboratory by introducing strategies to redesign and reduce staffing, improve facilities for efficiency, and increase volume and productivity through outreach development. All staff reductions were made through attrition.

“This has been a wonderful journey with Chi. It was a seamless transition for our employees, managers, pathologists, and hospital. We continue to enjoy the savings as well as the opportunities ahead of us.”
Jeff Kelly, Sr. Vice President, Administration
Warren Hospital


WH achieved remarkable improvement in both productivity and cost performance.

Productivity based upon Reportable Results (RR) per Paid Hour greatly improved from the 10th percentile to the 75th percentile of the peer group. New outreach growth helped to achieve these impressive productivity gains.

Productivity based upon Reportable Results

Salary and supply expense benchmarks far exceed the targeted 50th percentile goal with salary cost per reportable result at the 97th percentile and supply cost per reportable result at the 89th percentile.

Salary and supply expense benchmarks.png

Next Steps

WH continues to work in partnership with Chi in further expansion of its outreach program operating under the name of Pinnacle Laboratory. This program has been launched providing services in three key areas: dermatopathology, physician office clients, and long-term care facilities. The primary goal is to tap into the laboratory’s spare capacity and excellent reputation to provide a new source of revenue, enhanced productivity, and lower unit costs. The revenue base is expected to exceed $12 million within five years.