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Imagine this. If you're a not-for-profit hospital, reference testing can be an asset instead of an expense. Yes. It's a new way of thinking about outsourced laboratory services. But if you'd like to reduce the cost of esoteric testing while enjoying the excellent quality and service you've come to expect from Warde Medical Laboratory, it's time to consider the co-tenancy model.

How it Works

MCL is a new operational model that replaces the purchase of reference laboratory services with the opportunity to actually own a piece of the laboratory. A modest capital contribution establishes an ownership position. The not-for-profit hospital then becomes a co-tenant who actually owns and uses an undivided interest in the assets of the laboratory.

Smart Math

The more tests performed on the shared laboratory assets, the more money the collective co-tenants save. Each test performed is assigned a relative value unit (RVU). At the end of each quarter, the total number of RVUs performed in the laboratory is divided by the same period's total costs to arrive at a cost per RVU. Each quarter, the owner/user's total RVUs are calculated and multiplied by the cost per RVU. The result is that owner/user's allocated cost of testing.


Each co-tenant is in charge of their own billing for the testing that is done using their share of the equipment, reagents and staff. Owners not only use the assets of the laboratory according to their individual needs, they also bill directly for all services performed with their share of the laboratory.


The governing body of the co-tenancy laboratory is called the "Administrative Committee," and is made up of two representatives from each owner/user. One of these representatives must be a pathologist on the staff of the owner.

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A Co-Tenancy
at Warde

"In January 2008 Baptist Health's annual expense for reference laboratory service had peaked at $1.2 mIllion. This prompted our search for a more cost effective provider and ultimately to the Michigan
Co-Tenancy Laboratory (MCL). By May 2009 our annual expense dropped to $680,000 and the quality of service received clearly improved. We would highly recommend MCL paticipation."

Pamela B Newman,
Director of Laboratory
and Care Advisor,
Baptist Health/Montgomery, AL