These services typically include tests that are not commercially viable as well as those that are critical to ensuring that emerging infections are identified. Still, PHL viability in generating revenues is a central issue in defining core PHL functions. Public health officials are split on this issue between those who believe that PHLs need to show value, and those who believe that user fees establish a perverse relationship with the private sector and may discourage indigent patients from seeking services. Another fundamental issue is whether direct patient care testing is a core function. Again, the debate centers on whether the state should be engaged in de facto competition with the private sector.
Most neutral observers agree that assurance remains a critical function for PHLs.
While regulators will never be popular with industry, assuring the quality and consistency of testing is a core public function, particularly in the area of infectious diseases. Policy development also needs to change in response to changes in the health care system. The notion of public-private partnerships has come into vogue and, as has been shown in Washington State, can be used proactively by states to help shape the delivery system. Policy development in laboratories also needs to come to terms with the growth of managed care, which is an important policy goal in most states. The Michigan experience demonstrates that states can use managed care contracting to forge a stronger safety net.