Public Health Laboratories and Health System Change . Reduced PHL Testing Volume

10/06/1997

The most commonly reported adverse effect of non-managed care health market change was the reduction in specimens being sent to the PHLs for laboratory testing. Of the 15 PHLs reporting a reduction in testing volume, 8 attributed the decrease to increased presence of private laboratories, 2 attributed the decrease to both private laboratories and hospital consolidation, and 5 did not specify the cause of the testing decrease.

These findings were corroborated by our case studies and interviews. For example, South Carolina's (SC) PHL noted that commercial laboratories had become more aggressive in the market, expanding their product lines to include testing services previously associated with the PHL, consequently leading to a decrease in the PHL's testing volume. However, SC reported that other health market changes such as hospital consolidation did not have an adverse impact on the PHL's function. Also, Oklahoma reported that some county health departments sent specimens to the private laboratories rather than the state PHL based on cost. Other state PHLs, such as Ohio, New Jersey, and Missouri, reported that the combined effect of hospital consolidation and the growing presence of private laboratories (e.g., large, independent reference laboratories, niche specialty laboratories) have led to a decrease in the overall number of specimens sent to their laboratories for testing.

Other PHL directors reported the specific types of testing that were being affected by commercial laboratories and hospital consolidation. In New Mexico, the state PHL discontinued its pap smear testing service because private laboratories were performing most of them. In Minnesota, fungal serologies and testing for cytomegalovirus, which previously had been performed by the state PHL, are now being outsourced to Associated Research and University Pathologists, Inc. (ARUP), a private reference and esoteric testing laboratory in Utah. Finally, Rhode Island's PHL reports that it has lost some (approximately 10%) of its environmental testing volume due to commercial laboratories charging a lower rate for certain environmental tests.