POLICY CONTEXT AND BACKGROUND: ENVIRONMENTAL SCAN
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
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.
The Public Health Infrastructure
Before discussing the specific activities of PHLs, it is first important to characterize the larger public health infrastructure in which PHLs reside. In a 1988 report entitled The Future of Public Health by the Institute of Medicine (IOM), the report attributed many of the major improvements in the health of the American people to the success of public health measures.2
The services and functions provided by national, state, and local public health agencies cover a broad range of population-based activities and direct personal services. The value of a strong public health infrastructure has been realized in the decline of communicable diseases such as syphilis, improvements in the nation's drinking water, and increased awareness of the importance of environmental health issues.
The public health infrastructure is comprised of an extensive network of federal, state, and local health agencies. On the national level, the agencies of the Public Health Service (e.g., CDC, Health Resources and Services Administration, Indian Health Service), provide federal leadership through policy development and funding. At the next level of government, state health agencies (SHAs) serve as the major link between federal health priorities, funding, and the local delivery of personal and population-based health services. Regardless of their organizational structure, SHAs have a responsibility for ensuring core public health services either directly or in coordination with local health departments. Local health departments and agencies provide the most direct level of public health service through the provision of direct health care services and the support of population-based public health activities.
The public health community has identified three core functions of public health agencies: assessment, policy development, and assurance. The IOM report on the future of public health recommended that public health agencies should be responsible for conducting the following three core functions:
The structures and functions of state and local public health agencies vary greatly. The organizational relationships between local health departments and state health agencies range from independent local health departments that have contractual and financial relationships with an SHA, to local health departments that function as sub-units of an SHA. Although most public health agencies perform some personal and population-based health services, the extent to which public health agencies perform these two types of services differs among states and, in some cases, localities. For example, some states, such as Minnesota, have focused their public health activities on population-based health services (i.e., disease surveillance, health education, and community action planning). Other states, such as Tennessee, have a broader focus on direct health services, investing their resources and personnel into the provision of personal health care.
PHL Structure, Organization, and Activities
The PHL is a central part of the public health infrastructure. PHLs support the public health infrastructure in each of the three core public health functions. Descriptions of PHL activities within these core functions have been previously described by the CDC and the ASTPHLD:3, 4, 5
PHLs differ dramatically in both structure and range of services. All fifty states and the District of Columbia operate their own state PHL.6 Generally, the state PHL operates under the leadership of the state health officer; however, the nature of the relationship between the health officer and the laboratory director varies by state.4 For example, in Oregon, the Center for Public Health Laboratories is one of the five main centers in the Oregon Health Division, and the laboratory director is an Assistant Administrator of the Health Division. In Tennessee, the Division of Laboratory Services is a unit directly under the supervision of the Commissioner of the Tennessee Department of Health. In contrast to these separate laboratory service divisions, Washington State has combined its laboratory services and epidemiology section into a central office called Epidemiology, Health Statistics and Public Health Laboratories; this office is one of the five main bureaus of the Washington Department of Health.
The size of state PHLs in terms of both staffing and funding varies by state. For instance, in fiscal year 1996, the Tennessee State PHL had a staff of 186 full-time equivalents (FTEs) and a budget of $9.5 million; Wisconsin's state PHL had 280 FTEs with a budget of $23 million; and Florida's state PHL had a statewide staff of 354 FTEs and a budget of $21 million (1995-96 budget). The revenue streams of state PHLs also vary in the proportion of funding that comes from federal, state, and other sources. For example, the Michigan and Wisconsin State PHLs receive 60 to 70 percent of their funding from state and federal sources and the remaining funding directly from generation of user fees. In comparison, the Tennessee State PHL receives 95 percent of its funding directly from the state; it collects fees for certain services, but the state PHL passes all revenues through to the general state administration.
Many states also operate regional laboratories that perform certain tests and act as liaisons for sending other samples to the central state laboratory. For instance, both Maryland and Tennessee operate four regional laboratories within their respective states. Regional laboratories may be full service extensions of the central state laboratory or smaller outposts. For example, one of the regional laboratories in Tennessee has a small staff of two FTEs and performs microbiology tests exclusively. In contrast, other states, such as Oregon and Wyoming, operate only one centrally located state public health laboratory.
One major difference among state PHLs is the extent to which state laboratories devote resources to direct patient testing for personal health services versus testing for population-based screening and surveillance. New York's PHL is called the Wadsworth Center, and it devotes one-third of its resources to the laboratory licensure program for private laboratories; one-third of its resources operating as a large basic grant funded research entity; and one-third of its resources for administration, testing, and environmental health monitoring. Other states like Tennessee have traditionally performed direct tests of patient specimens received from local health departments and other public health agencies.
The variations in functions and structures of state PHLs have a direct effect on how laboratories define their role in the public health infrastructure and how current market changes will affect the laboratories themselves. Some state PHLs that have traditionally performed tests for indigent patients seeking care in local health departments have noted that the number of specimens they receive is decreasing as states expand Medicaid managed care programs. In fact, private managed care companies that bid for and receive approval to enroll Medicaid clients often contract with large private laboratories for some or all clinical testing services. Therefore, many of the Medicaid and other indigent patients traditionally treated by local health departments are entering managed care plans where their tests are sent to private laboratories. Consequently, the state also may receive fewer samples for surveillance purposes.
In recent years, the public health community has tried to identify its role and responsibilities at all levels of government. Health care market changes, such as increased managed care penetration, hospital and other health system consolidation, and privatization, have stimulated public health agencies to review their community role and goals. Consolidation in the private laboratory market and increased managed care presence in serving Medicaid populations threaten to impose major changes on the way in which PHLs have traditionally served communities.
Federal Government Role in PHL Activities
Various federal government agencies are currently involved, directly or indirectly, in clinical laboratory issues. From direct oversight of the quality of clinical laboratories to coordination of disease reporting efforts, federal agencies play a vital role in the practices of PHLs. At the present time, the CDC and FDA work most closely with PHLs and have established relationships with PHLs. The EPA and U.S. Department of Agriculture (USDA) also have smaller, indirect roles in PHL activities, and the Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)) (HCFA(now known as CMS)) and the CDC play an important role in maintaining quality standards for all clinical laboratories through the Clinical Laboratory Improvement Amendment of 1988. This section reviews the current role of the federal government in PHL-related issues.
Centers for Disease Control and Prevention and PHLs
Because of the close tie between the PHL core laboratory functions and the disease surveillance and epidemiology functions of the CDC, the greatest potential for collaboration between PHLs and the federal government lies within the CDC. The PHL relationship with the CDC is robust, and one that is important for national disease surveillance.
The Division of Laboratory Systems (DLS) within the Public Health Practice Program Office (PHPPO) at CDC plays an important role in clinical laboratory issues at the CDC. With 90 FTEs -- laboratory scientists, statisticians, computer specialists, physicians, and administrative support personnel --DLS performs many functions on laboratory-related issues and coordinates many laboratory-related activities within the agency (see Figure 7). For example, DLS officials are represented on a newly formed working group on public health laboratory issues at CDC that serves on an advisory committee to the director of the agency. Other centers at CDC such as the National Center for Infectious Diseases (NCID) are also integrally involved in lab activities (see Figure 7).
Figure 7: Coordination of Laboratory Activity between CDC Centers and Division of Laboratory Systems
| Name of CDC Center/Office | Lab-Related Functions | Relationship with DLS/Current Activities | ||
| Office of the Director | N/A | There is an advisory panel to the Director of CDC on issues concerning public health labs. Representatives from all CDC Centers, including the Director of PHPPO. | ||
| Office of Managed Care | N/A | This office is still assessing its role in regard to public health labs. A representative from DLS acts as an advisor on public health labs to the Office of Managed Care. | ||
| National Center for Infectious Diseases (NCID) | Conducts lab and epidemiologic research for
prevention of emerging diseases (lab-based surveillance)
Collects, analyzes, and interprets reports of nationally notifiable infectious diseases and outbreaks submitted by state/local agencies |
This center has the directive to write guidelines for diagnosing infectious diseases and consults with DLS on laboratory testing included in those guidelines. In addition, as part of the DLS responsibility for writing and implementing regulatory standards for the Clinical Laboratory Improvement Act, DLS staff consult the NCID on regulations for infectious disease testing. | ||
| National Center for Environmental Health (NCEH) | Develops lab measurements of exposure to toxicants
Conducts lab assessment of exposure and disease for health studies of toxicants (lead, mercury, dioxin, pesticides) Provides lab support during environmental health emergencies Provides technical assistance, training, and technology transfer to states |
NCEH runs a blood lead program, and consulted DLS on the emergence of new hand-held technologies for field testing of blood lead. | ||
| Epidemiology Program Office (EPO) | Publishes MMWR
Coordinates CDC Surveillance Efforts (collects/analyzes data, sends out epidemiologists during outbreaks) Operates a surveillance telecommunication system between CDC and all 50 states |
This link is not as close as might be expected. EPO consults DLS when the issue concerns the actual management and running of the laboratories. | ||
| National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP) | N/A | This center works jointly with DLS on implementation of the Fertility Clinic Success Rate and Certification Act of 1992. Specifically, DLS is developing and publishing the model certification program, mandated in the law, for embryo laboratories. |
In terms of the types of relationships that have emerged between CDC and PHLs, the CDC's roles in laboratory issues have included: a) laboratory regulation; b) training of PHL personnel; c) disease surveillance; and d) other activities supporting PHLs.
Laboratory Regulation
Among DLS's most central responsibilities is implementing and authoring, with HCFA(now known as CMS), the Clinical Laboratory Improvement Amendment (CLIA) regulations. Congress passed CLIA in 1988 to establish baseline quality standards for all clinical laboratories in the United States. HCFA(now known as CMS) has the responsibility for registering laboratories and collecting fees, while CDC has responsibility for technical and scientific issues related to the regulation, such as test categorization, decisions on waivers, and evaluating the impact of the regulations on the public. HCFA(now known as CMS) and CDC share responsibility for authoring and refining the regulatory standards.
Training of PHL Personnel
DLS sponsors symposia on best practices in laboratory operations. In 1995, DLS sponsored The Institute on Critical Issues in Health Laboratory Practice. The Institute brought together presentations and discussions on different areas of laboratory practice research:7
In addition, DLS also has cooperative agreements with ASTPHLD to conduct laboratory training courses on clinical, environmental, and public health laboratory topics. The National Laboratory Training Network (NLTN), a joint venture of ASTPHLD and DLS, provides laboratory training courses in clinical, environmental, and public health topics to laboratory personnel.
Disease Surveillance
While exhaustive characterization of CDC disease surveillance activities is beyond the scope of this study, it is important to describe briefly the interplay between PHLs and the CDC on this issue. As the national health agency responsible for disease surveillance / epidemiology and disease prevention, the CDC's mission complements those of the PHLs.
PHLs play a critical role in national disease surveillance; the emergence of new infectious agents and the re-emergence of infectious disease threats are focusing attention on the need for a strong public health laboratory infrastructure.8 PHLs, along with other providers, report the occurrence of notifiable diseases to state and local health agencies. Requirements for reporting diseases are mandated by state laws or regulations, and reportable diseases vary by state.
The data generated by PHLs are necessary for monitoring disease trends and evaluating the effectiveness of public health interventions. More specifically, data on a number of infectious diseases are aggregated into a national database at the CDC called the National Notifiable Diseases Surveillance System (NNDSS). A list of diseases included in the NNDSS is provided below in Figure 8. The national data from the NNDSS are published weekly in the CDC's Morbidity and Mortality Weekly Report (MMWR). In addition to the NNDSS, other conditions of public health interest are provided by state health departments to the CDC through supplementary surveillance systems.9
Figure 8: Diseases in the National Notifiable Diseases Surveillance System (NNDSS)
| AIDS
Amebiasis Anthrax Aseptic meningitis Botulism Brucellosis Chancroid Cholera Congenital rubella syndrome Diphtheria Encephalitis Gonorrhea Granuloma inguinale Hansen's disease |
Hepatitis A, B, non-A or B
Legionellosis Leptospirosis Lyme disease Lymphogranuloma venereum Malaria Measles Meningococcal infections Mumps Pertussis Plague Poliomyelitis, paralytic Psittacosis Rabies |
Rheumatic fever
Rocky Mountain spotted fever Rubella Salmonellosis Shigellosis Syphilis Tetanus Toxic shock syndrome Trichinosis Tuberculosis Tularemia Typhoid fever Varicella Yellow fever |
Source: CDC Case Definitions for Public Health Surveillance. MMWR 39(RR-13), October 19, 1990.
The interchange among providers, PHLs, state health agencies , and the CDC is illustrated in the example of the surveillance system for antimicrobial-resistant pneumococci. Figure 9 below shows an idealized flow of information through a computerized, laboratory-based surveillance system. The physician sends the patient's pneumococcal isolate to the PHL, which then performs susceptibility testing to determine the level of resistance of the isolate to various antibiotics. The susceptibility data are recorded electronically into the laboratory's database, which then transmits this information to the state health agency via an HL7 message. The state health agency communicates the local trends for pneumococci back to the physician and to the CDC. Finally, the CDC communicates the national trends on antibiotic resistance of pneumococci back to the state, physician, and public health community.10 Efforts to develop such a system are actively being pursued through a collaboration involving the CDC, Council of State and Territorial Epidemiologists (CSTE), and ASTPHLD.
Figure 9: Idealized Information Flow in Electronic Disease Surveillance System
Source: MMWR, February 16, 1996, p. 8
The CDC is also involved in helping state PHLs respond to disease epidemics and outbreaks. For example, during the 1994 Hantavirus Outbreak in the Four Corners region of the Southwest United States, CDC epidemiologists provided technical expertise in helping the state health agencies determine the cause of the outbreak. In general, the CDC provides as much assistance as the state health agencies request, which can range considerably. For example, during the recent E. coli outbreak in apple juice from California and Washington State, CDC involvement was minimal, while the FDA played a substantial role.
Other
In addition to the aforementioned functions, the CDC provides other ancillary support services for PHLs. For example, DLS often serves as a source of technical support for PHLs. In limited instances, the CDC funds PHL programs through grants. For example, the CDC's National Center for Infectious Diseases (NCID) recently provided a grant to the Washington State PHL and Office of Epidemiology to create an innovative system for electronic disease reporting in hopes of lessening the burden of reporting, improving accuracy, and expediting reporting.
Other Federal Agencies and PHLs
Most federal involvement with state PHLs is via the CDC. In addition, several other federal health agencies operate laboratories related to public health.
FDA, EPA, USDA
The FDA, the USDA, and the EPA may interact with PHLs on food safety and limited environmental issues.11 In general, the USDA focuses on the safety of raw agricultural products, the EPA focuses on pesticides and associated acute toxicity, and the FDA focuses on finished food products (although they may help USDA with analytics in terms of testing). The interactions among the various players are multiple and complex, with shared communications and memoranda of understanding. Figure 10 depicts the interrelationships among these agencies in food safety functions, the primary area of interchange pertinent to this study.
Figure 10: Federal Agencies Involved in Food Safety Activities
The various federal agencies' roles during a food-borne disease outbreak offer some additional guidance for understanding their relationships and responsibilities:
The FDA has primary oversight responsibilities for food product safety and applied nutrition, and for drugs, devices, biologicals, agricultural products, and veterinary products. Given these roles, the FDA activities bear directly upon PHL functions, and the remainder of this section will discuss relevant FDA activities. However, since the FDA is primarily focused on products and enforcement as opposed to medical/clinical testing, they essentially perform different operations than state PHLs, and the level of interaction with them is minimal. In addition, the FDA's role, by statute, is limited to interstate commerce (i.e., they have no purview over intrastate commerce).
The FDA and the CDC often provide assistance to state health agencies during food-borne disease outbreaks, especially those that cross state lines. For example, the FDA played a significant role during the recent outbreak of E. coli in Odwalla apple juice in California and Washington. While the Washington and California SHAs initially responded to the outbreak, the FDA used its regulatory authority to pull the apple juice from store shelves, helped locate where shipments of the apple juice had gone, helped the SHAs in the inspection of apple juice plants, and conducted its own microbiologic tests of apple juice samples to test for presence of E. coli. During the outbreak, the CDC's involvement was minor; it coordinated with the Washington State Office of Epidemiology to confirm the number of E. coli related illnesses.
Most FDA laboratory work is coordinated through field offices with laboratories, and centers around oversight and enforcement. For example, the FDA collects food samples to look for pesticides and pathogens. They also perform some analytical chemistry, often in cooperation with CDC and other agencies, to respond to food-borne disease outbreaks. The FDA also focuses on development of methods for laboratory testing of foods, since it is one of the primary organizations that engages in this activity extensively. Finally, the FDA is currently developing genetic markers and performing analyses that overlaps somewhat with the genetics work of state PHLs. The FDA is performing much less work than it had previously on chemical carcinogens and pesticide residues in food, and now places much more emphasis on more immediate microbiological concerns. In fact, the emphasis of the FDA is currently on acute toxicology, rather than chronic toxicity.
The FDA has eighteen field laboratories across the country that collect food samples and test them. The main emphasis of the laboratories is on food safety regulation, and the FDA central offices coordinate these activities. In addition, there are some food laboratories in Washington, D.C. that develop methods for food surveillance; and these are disseminated to and used by the field laboratories. The central office focuses more on immediate crises (e.g., outbreaks) and less on routine surveillance of industry. In addition, there are several FDA laboratories that serve as national research centers. For example, there is a large toxicology laboratory in Alabama that concentrates on inspecting seafood from the Gulf of Mexico. The FDA's National Center for Food Technology in Chicago also serves as a major testing development site and focal point for creating and overseeing the Hazard Assessment and Critical Control Points initiative, whereby industry implements quality control measures to ensure food safety. Finally, FDA maintains a primary research site (with no regulatory functions), the National Center for Toxicological Research, in Little Rock, Arkansas.
In addition to the activities described above, the FDA is involved with the CDC in a special public health program called the Sentinel Sites Initiative. The purpose of the Sentinel Sites Initiative is to obtain improved estimates of presence of food-borne disease agents. The program is being conducted by the CDC with support (both collaboration and funding) and coordination from the FDA and the USDA. The CDC program is coordinated through state PHLs, but county and city laboratories, private laboratories, and FDA field laboratories are also involved.
Under current surveillance procedures, the CDC collects epidemiologic data on many diseases. The CDC uses estimation techniques to multiply the reported numbers to reflect the likely actual number of cases for a given disease. The Sentinel Sites Initiative aims to improve these estimates by conducting extensive food culturing for four main pathogens (each of which causes similar diarrhea and feverish symptoms):
The culturing, coupled with heightened disease surveillance, is intended to help establish stronger links between the presence of micro-organisms in foods and incidence of food-related illnesses. In turn, these stronger links and better data should allow for more precise estimation of the true incidence of food-borne illnesses, and ultimately the cost of these illnesses to society. The initiative should increase understanding of these diseases and their associated costs, and also help FDA, CDC, and PHLs justify their core functions.
HCFA(now known as CMS) Role In Public Health Laboratory-Related Issues
HCFA(now known as CMS) is the agency responsible for the licensing of all clinical laboratories in the United States, with the exception of research laboratories, through the Clinical Laboratory Improvement Amendments, 1988 (CLIA ' 88). Many state PHLs are the licensing entities for CLIA ' 88, thereby assuming responsibility for assuring the quality of clinical lab testing in the state. Two states (WA and OR) have full exemptions from HCFA(now known as CMS) to operate programs accepted as the equivalent of CLIA ' 88. CLIA ' 88 requires laboratories to obtain certification, and to comply with regulations in six broad areas of laboratory operations:
HCFA(now known as CMS) is responsible for the enforcement of CLIA '88, including the approval of proficiency testing programs, accreditation programs, and state exemption applications for clinical laboratories.12 In order to comply with CLIA ' 88, clinical laboratories must first register themselves with HCFA(now known as CMS). After registration, HCFA(now known as CMS) surveys the laboratory and determines the laboratory's level of compliance with CLIA ' 88 guidelines. Upon determination of compliance, HCFA(now known as CMS) issues a certificate and collects the appropriate fees from the laboratory. In many instances, clinical laboratories can demonstrate compliance with CLIA ' 88 by using a HCFA(now known as CMS)-approved accreditation organization (e.g., Joint Commission on Accreditation of Healthcare Organizations, College of American Pathologists, Commission on Office Laboratory Accreditation).13
(2) Institute of Medicine, Committee for the Study of the Future of Public Health Division of Health Care Services. The Future of Public Health. Washington, D.C.: National Academy Press, 1988.
(3) Dowdle WR. The future of the public health laboratory. Annual Review of Public Health. 1993;14: 649-64.
(4) Association of State and Territorial Public Health Laboratory Directors. Core functions of public health laboratories: a report to the Association of State and Territorial Public Health Laboratory Directors by a task force. Washington, D.C.: Association of State and Territorial Public Health Laboratory Directors, 1995.
(5) Warren NG and Cordts JR. Activities and recommendations by the Association of State and Territorial Public Health Laboratory Directors. Clinics in Laboratory Medicine. 1996;16(3): 731-743.
(6) While our report refers to the D.C. lab as a state lab, its capabilities and operations have traditionally been more characteristic of a local health department lab.
(7) CDC, Division of Laboratory Systems homepage; www.cdc.gov/phppo/dls/institut.htm, 1997.
(8) Dowdle WR. The future of the public health laboratory. Annu Rev Publ Health. 1993;14:649-64.
(9) CDC Case Definitions for Public Health Surveillance, 1990.
(10) MMWR Staff. Defining the public health impact of drug resistant Streptococcus pneumoniae: report of a working group. 1996;45(RR-1).
(11) Skeels M. Public health laboratories build healthy communities. Laboratory Medicine. 1995;26(9): 588-592.
(12) HCFA(now known as CMS) homepage, www.hcfa.gov/medicare/hsqb/clia.htm, 1997.
(13) American Society for Microbiology homepage, , 1997.