Public Health Laboratories and Health System Change . Introduction


This study examines the role of public health laboratories (PHLs) in the changing health care market, with an emphasis on delineating the relationship between PHLs and managed care. The topic is becoming the focus of considerable attention, particularly as the growth of managed care continues to alter the landscape of health care, and as emerging infectious diseases remain priority issues in public health. The current and future role of PHLs in this changing health care environment has not been studied systematically.

The Office of the Assistant Secretary for Planning and Evaluation (ASPE), Office of Health Policy, within the U.S. Department of Health and Human Services initiated this study in order to better understand the relationship between PHLs and managed care organizations (MCOs). Of particular importance to the Department is: a) understanding the role of state PHLs relative to new actors in the health care system; b) identifying and characterizing interactions between PHLs and MCOs (e.g., contracts for testing, information reporting and policy development); and (c) defining the unique value of PHLs in the promotion of public health.

There are three target audiences for this study. The first audience is state PHL directors. Our goal here is to compile a resource for this audience on timely PHL policy issues, and to educate those in the managed care community about the role and unique value of PHLs. We highlight existing and emerging arrangements between MCOs and PHLs as a model to help both the public and private sector develop better working relationships.

The second target audience for this study is state policy makers. We seek to inform state health agency (SHA) and regulatory deliberations that center on laboratory services. As state scrutiny of laboratory services and other expenditures on public health intensifies against the backdrop of cost reduction, identifying ways in which the PHLs add value will be critical. We emphasize the unique value of PHLs, as well as the potential for, and feasibility of, public-private collaboration in clinical laboratory services.

The third audience is federal policy makers. Our intent here is to characterize the federal role in PHL-related issues. We report on the interactions between PHLs and federal health agencies. Among the Public Health Service (PHS) agencies, the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) have been most involved in PHL activities, particularly in the area of disease reporting. The Environmental Protection Agency (EPA) also typically works closely with the labs in many states. Other PHS agencies have been indirectly involved in PHL issues (e.g., testing revenues from Medicaid programs have partially supported state PHLs).

To inform these deliberations, ASPE contracted The Lewin Group to review published and other literature on PHLs and health market change; carry out interviews with key laboratory representatives from the public and private sector; and conduct several case studies of states to characterize PHL efforts and experiences with managed care and health system change. Specifically, we focus on four central questions:

  1. What is the role of the state PHL relative to new actors in the health care system?
  2. What are the interactions between state PHLs and managed care organizations (e.g., contracts, collaborations)?
  3. How has managed care's presence in the area of laboratory services changed or affected the practices and/or functions of PHLs?
  4. What are some of the other major health market changes or trends affecting PHLs (e.g., hospital consolidation, privatization)?

To bound our scope of work, we restricted the focus of this study to state PHLs rather than to the full range of PHLs (e.g., local health department laboratories, EPA laboratories). State PHLs are of particular interest currently because: (1) state health agencies (SHAs) are a central part of the public health infrastructure; and (2) many states are currently grappling with issues related to government management and service delivery of health care (e.g., privatization of public health functions). We acknowledge, however, that many other PHLs (e.g., local and federal) serve critical roles in maintaining and enhancing the public health infrastructure, and should be studied as well in the context of further research efforts.

This document is organized into four main sections. First, we describe our study methodology and analytic approach. Second, we provide an environmental scan of PHLs and the factors in the health care market that are currently affecting or may in the future affect PHLs in order to provide ASPE with some context and background of the clinical laboratory landscape. Third, we present our analytical results derived from our literature review, interviews with laboratory experts, informal poll of PHL directors, and case studies of states. Finally, we discuss our conclusions on the current state of PHLs in the health care market and describe the impact of health market changes on the PHLs' practices and functions.