Public Health Laboratories and Health System Change: Executive Summary

As part of its ongoing research program in public health infrastructure, The Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the Department of Health and Human Services (DHHS) commissioned The Lewin Group to study the relationship between public health laboratories (PHLs) and managed care organizations (MCOs). As the study progressed, it was broadened to include the impact of health system change (including managed care) on PHLs.

Historically, PHLs have had a central role in public health assessment, policy development, and quality assurance. The PHLs have also maintained a strong working relationship with the Centers for Disease Control (CDC) and other federal health agencies on issues of disease surveillance and control, and laboratory quality assurance. Similarly, the laboratories have been closely connected with a range of private sector organizations, most notably hospital and physician office laboratories, where the bulk of patient care testing was performed.

The dynamic health care environment is posing many new challenges for PHLs – changes in both the public and private sector have made it increasingly difficult for the PHLs to fulfill their missions. On the private side, PHLs see managed care and independent laboratories growing in strength, hospital laboratories consolidating, and rapid technological change in both clinical and information technologies. On the public side, PHLs see a re-definition of the public health safety net, reliance on managed care to address public health needs, and increasingly constrained budgets as state coffers have shrunk.

The purpose of this study was to understand how the relationship among PHLs, MCOs, and other stakeholders in the laboratory services market has changed, and the resulting implications for the state and federal government and for the PHLs. Study methods included a structured literature review, interviews with more than 50 public and private stakeholders, an informal poll of state PHL directors, and detailed case studies of three states that have PHLs with relationships to MCOs and/or private laboratories.