Public Health Laboratories and Health System Change . Impact of Other Health Market Change on PHLs


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.

The major concerns focus on potential privatization of public health functions, trends in the private clinical laboratory market (e.g., emergence of large reference laboratories, hospital laboratory consolidation), and diminishing fiscal viability of some PHL testing services. Specifically, PHL stakeholders proposed three main hypotheses on the possible impact of change in the non-managed care health market on the functions of PHLs:


  • PHLs will lose testing volume as some privatization of laboratory functions occur, with subsequent outsourcing of testing services to private clinical laboratories.
  • PHLs traditionally playing a large role in disease reporting fear a lack of responsiveness to disease reporting requirements on the part of large, independent reference laboratories, especially in cases where specimens are processed at regional branch laboratories outside of the originating geographic state of the specimen.
  • PHLs may have increased testing volume for select services such as tuberculosis testing without a commensurate increase in laboratory revenue.

Figure 16: Impact of Other Health Market Changes

Figure 16: Impact of Other Health Market Changes

Our poll results found that PHL directors believe that non-managed care health market changes are having adverse effects on PHL practices and functions. Of the 49 PHL directors responding, 27 reported some impact on laboratory function due to non-managed care health market changes, with PHL directors from 20 states (41%) reporting adverse impacts on laboratory functions due to these changes (see Figure 16 above).