Public Health Laboratories and Health System Change . Policy Context and Background: Environmental Scan

10/06/1997

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 activities, functions, and organization; provide an overview of the private clinical laboratory services market; and discuss the emerging role of information technology in the laboratory services environment.

Diverse stakeholders in the clinical laboratory market interact with (and affect) the operations of state PHLs (see Figure 6). First, county public health laboratories often work closely with state PHLs. Second, government agencies at the federal level (e.g., CDC, FDA, USDA, EPA, HCFA(now known as CMS)) and state level (e.g., state health agencies) can also interact with PHLs as funders, supervisors, and collaborators. Third, private laboratories (e.g., physician office laboratories, hospital-based laboratories, or large independent reference laboratories), which provide services that may overlap with those functions traditionally performed by state PHLs, are sometimes regulated by the PHLs, and typically have disease reporting responsibilities to the state health agencies. Finally, MCOs, Medicaid/Medicare, and other health care providers can be users or clients of PHL services.

Figure 6: Landscape of the Laboratory Services Marketplace

Figure 6: Landscape of the Laboratory Services Marketplace

Rapid changes in the health care market have profoundly affected the market for clinical testing services, and, consequently, the environment facing PHL services. An important trend in health care has been the growth of managed care, both in terms of the number of traditional staff-model MCOs and, more recently, in other looser managed care models such as IPAs. Managed care places greater emphasis on cost effectiveness and quality monitoring in health care and has prompted an increased demand for patient utilization, cost, and outcomes information. Beyond managed care, consolidation of hospitals and the growth of commercial laboratories have also affected the practices and functions of PHLs.

Environmental factors shaping government involvement in health care also affect PHLs. For example, there is much debate over the issue of privatizing and outsourcing traditional public health functions (e.g., health care service delivery) as spending constraints continue to hamstring state government health programs. A second government factor has been the introduction and growth of managed care in public programs, such as Medicaid, Medicare, and CHAMPUS. A third government factor is the changing regulatory environment for providers of health services (i.e., licensure changes). Finally, initiatives to re-invent government programs (e.g., GPRA) are helping to support the formation of public-private partnerships and encouraging a greater customer focus in government.

Technological change and innovation in the laboratory environment are also affecting clinical laboratories. The advent of the laboratory information system and other advanced technologies is moving clinical laboratories closer to automating their operations. In addition, improvements in laboratory information technology have important implications for better disease surveillance and monitoring in the future.

These key components and forces in the PHL operating environment exert important influences on the PHLs, and each of these components is described in this section. Prior to discussing these environmental factors, we first provide an overview of PHLs, their functions, and their role in the overall public health infrastructure.