The flexible budget process--a tool for cost containment.

This past year the authors have been using a new tool to examine and monitor their laboratory's expenditures. Called "flexible budgeting," this process has been used to analyze the cost behavior of all operating expenses, establish budget levels for different levels of activity, and monitor activity based on relative cost rather than simply the number of tests performed. The authors' experience has shown that this tool provides much more information than previous procedures. However, better methods need to be developed for monitoring expenditures so that this information can be used effectively.