Public Health Laboratories and Health System Change . Increase in Volume of Some Expensive Tests

10/06/1997

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 report that commercial laboratories, in attempting to conserve resources, rely on PHLs to perform some esoteric tests at no cost. Wisconsin's PHL hypothesized that commercial laboratories basically drive prices down in a price sensitive market, thereby leaving the PHL with the most expensive tests to perform. The four PHL directors reporting an increase in testing volume attributed this increase specifically to hospital consolidation. Several PHL directors documented the case of tuberculosis testing as a prime example of this trend. New Hampshire's PHL noted that the hospital laboratory consolidation resulted in an increase in its testing volume for TB, and that one of the independent laboratories in NH discontinued its in-house TB testing function as a result. Michigan's PHL has also experienced increases in clinical TB specimens, and suspects that the reason for the increase is that the state PHLs do not charge fees for tests associated with diseases of public health importance.