This section describes how state PHLs are responding to health market changes, including the growth of managed care. The types of responses range from specific subcontracts for select services negotiated between some state PHLs and private laboratories and/or MCOs, to various types of public-private collaborations (e.g., formation of public-privat
A third reported impact of non-managed care health market change has been the erosion of disease reporting efforts. Several states reported that large, national reference laboratories with regional testing centers pose a threat to the national disease surveillance effort. Michigan's PHL director noted that private, out-of-state laboratories are of
Another reported effect of non-managed care health market changes has been an increase of PHL testing volume for very specialized, expensive tests. PHLs commonly perform tests that are clinically and epidemiologically important, but, due to high cost and low volume, are not commercially viable. Often characterized as the free-rider effect, PHLs re
The most commonly reported adverse effect of non-managed care health market change was the reduction in specimens being sent to the PHLs for laboratory testing. Of the 15 PHLs reporting a reduction in testing volume, 8 attributed the decrease to increased presence of private laboratories, 2 attributed the decrease to both private laboratories and
In addition to the direct pressures that PHLs report from the presence of managed care, there are a number of other health market forces that may be contributing to the uncertainty of the laboratory services marketplace for PHLs.
Public Health Laboratories and Health System Change . Improved Collaboration With Private Constituencies
A few PHLs in our informal poll reported positive impacts from the growth of managed care. According to our informal poll results of PHL directors, among the positive impacts identified by PHL directors were increased collaboration between the PHL and the state health agency, and an increase in specialized types of reference testing by the PHL.
Several PHL directors reported concern related to difficulty in obtaining reimbursement from MCOs for testing services rendered for their members. For example, Florida's PHL director reported that some managed care clients seek treatment at a county health department without authorization from the managed care organization, have tests performed by
The most frequently reported impact of managed care was a reduction in the number of specimens submitted to the laboratory for testing. Seventeen of the 49 PHL directors (35%) reported that managed care had led to a decrease in the number of specimens sent to the laboratory. Reports of testing decrease as an impact of managed care were directly re
The presence and growth of managed care has posed significant financial and organizational challenges to the clinical laboratory market as a whole. Because managed care organizations (MCOs) emphasize cost reduction, often have limited (or exclusive) arrangements with suppliers and service providers, and may tend to treat, not test, public health o
This section characterizes the impact of managed care and health market change on the practices of PHLs, and describes how PHLs are responding to uncertainties in the clinical laboratory marketplace. While our findings are based on information from all the sources described in the methods section, the poll of PHL directors has been particularly us
The growth of managed care is forcing clinical laboratories to produce rapid, efficient testing services and to focus on cost reduction. The clinical testing services market is highly competitive, with large independent reference laboratories increasing the standard in terms of technology, speed of testing, and price.
Virtually all interviewees believe that automation can increase the efficiency of a laboratory. Automation of the commercial reference laboratory market is a well established industry whose vendors include Cerner Corporation, Citation, MediQuest, SMS, and SunQuest Information Systems, Inc. Commercial LIS systems were originally designed to assist
Public Health Laboratories and Health System Change . Universal Coding Systems for Clinical Laboratories
The creation of a standardized set of codes to describe laboratory tests and their results is a necessary prerequisite to efficient information exchange, and there have been a number of efforts to establish such codes. While laboratory services have been included in the establishment of general medical standards (e.g., ASTM, SNOMED, HL-7), the log
The growth of managed care has had a significant impact on the operations and profitability of clinical laboratories during the past five years. Cost reduction is the major driving force in the industry, and laboratories are in the process of planning strategically to adapt to these changes. As a result, the key market trends in clinical testing s
Nationwide, the clinical testing market generates $30 billion in sales annually, and currently there are approximately 150,000 clinical laboratories in the United States (including PHLs). Clinical laboratories typically fall into one of three major categories: hospital-based laboratories, independent reference laboratories, and physician office la
As the private sector counterparts to PHLs, and also as an increasing source of competition, private clinical laboratories are a central element of the PHL operating environment.
1 MeSH is the controlled vocabulary of some 18,000 terms used by the National Library of Medicine for its bibliographic databases, including MEDLINE and HealthSTAR. MeSH is a hierarchical controlled vocabulary arranged in a tree structure, in which broader MeSH headings lead to more specific MeSH headings. 2 Institute of Medicine, Committee
Public Health Laboratories and Health System Change . Centers for Disease Control and Prevention and PHLs
Because of the close tie between the PHL core laboratory functions and the disease surveillance and epidemiology functions of the CDC, the greatest potential for collaboration between PHLs and the federal government lies within the CDC. The PHL relationship with the CDC is robust, and one that is important for national disease surveillance.
The PHL is a central part of the public health infrastructure. PHLs support the public health infrastructure in each of the three core public health functions. Descriptions of PHL activities within these core functions have been previously described by the CDC and the ASTPHLD: 3, 4, 5
Public Health Laboratories and Health System Change . Policy Context and Background: Environmental Scan
The purpose of this environmental scan is to provide some general context on public health laboratories and the laboratory services marketplace. In this section, we report on the components that constitute the laboratory services marketplace. We describe the PHL's role as part of the public health infrastructure; provide an overview of PHL activit