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Are clinical labs next in the deregulation revolution?

What's the purpose? Why now? What is Macro Systems? Who is Michael Kenney and how objective is he?

These are some of the questions being asked by laboratorians following the Department of Health and Human Services award of a $135,000 contract to Macro Systems titled "Assessment of Clinical Laboratory Regulations."

On the surface, the circumstances surrounding the study would seem to be as bland and bureaucratic as its title. "Mainly, we just want to have right facts on hand should the policymakers ask us about this subject," says one of the project's supervisors in the Off ice of the Assistant Secretary for Planning and Evaluation.

As for Macro Systems, this is just one of 40 short-term health policy studies the Silver Spring, Md., think tank has tackled since it began in 1966.

Says chairman Matin Kotler: "Our job is to collect empirical data, list major alternatives (to existing regulations), and analyze their implications. But our role as contractor isn't o make policy." That, he adds, will be up to areview task force representing the Assistant Secretary's office, the Centers for Disease Control, and the Health Care Financing Administration.

Sounds logical enough. But the reason behind the study and who's conducting it have more than routine implications for clinical labs everywhere. Actually, the spark came from President Reagan, whose first State of the Union message vowed to "reduce Government paperwork and deregulate private enterprise." The ignition came from the Office of Management and Budget when it ordered HHS to create a better regulatory planning mechanism. The combustion came when the HHS Undersecretary's Regulatory Review Group told the planning bureaucracy to select clinical labs as one of several spheres in the HHS orbit that might run more smoothly (and require fewer Federal reimbursement dollars) if regulations were lessened.

In fact, when HHS policymakers learned of a recent doctoral dissertation on the topic, they arranged for the author to be named study project director under the Macro Systems contract.

Enter Michael Kenney, a 47-year-old public policy analyst and chief of health planning for the Trust Territory of the Pacific Islands before enrolling at the University of California at Berkeley to earn a doctorate in public health. Kenney studied under Professor Richard Bailey, who authored a landmark book titled "Clinical Laboratories in the Practice of Medicine." When Bailey found himself too busy to handle a request to study clinical lab regulations, he asked if graduate student keeny was interested.

The request had come from the California Association of Bioanalysts. CAB's concern was the regulation requiring that Medicarecertified labs be run only by persons with medical or other doctoral degrees. Although the 1971 rule accepted non-doctor lab directors who were practicing at that time, it had discouraged newcomers to the profession. The association was sure that objective research would prove that proficiency of state-regulated labs is at least equal to those directed by doctors.

Kenney found the question intriguing ("because it represented a public policy issue no one had studied before") and challenging (because it would allow him to hone the very analytical techniques he'd been studying) and convenient (because he was shopping for a dissertation topic).

Part I of the thesis focused on whether Medicare-certified, statelicensed "nondoctoral" laboratories varied in performance from other Medicare-certified, state-regulated labs headed by: 1) pathologists; 2) other MDs or PhDs; 3) a combination of doctors and non-doctors. As a data base, he used 1983 proficiency test results from the American Association of Bioanalysts and the American Society of Internal Medicine. Conclusion: "There is no pattern of statistically discernible differences in performance among the licensed groups."

In Part II, Kenney compared the performance of 47 state-regulated non-doctor labs with 69 unregulated physician office labs. Using five hematology and five chemistry analytes for comparison, he found "statistically discernable differences" in proficiency between the two types of labs in nine of the 10 analytes. "In all nine cases, the nondoctoral-directed laboratories performed at a higher level of proficiency," he wrote.

But whether the findings would apply beyond California is still debatable, Kenney adds. "It would seem that one doesn't need a doctorate to run a proficient lab in California because the state regulatory system is so strong that it confers quality assurance. That may not be so elsewhere."

Despite such caveats, the dissertation was scarcely finished when the Centers for Disease Control asked Kenney for more research that would include hospital labs and other categories for comparison. In a report issued in June, he identified "a statistically significant relationship between the scope of services performed in a laboratory and the accuracy of the work done. Generally, the greater the scope of lab services, the greater the proficiency."

Kenney also buttressed his earlier finding (see "Part I, above") by reporting "no pattern of statistically significant difference" in performance between full-service hospital labs and full-service independent labs directed by non-docotrs. Finally, he found more evidence that unregulated medical office labs "consistently perform at a lower level" than regulated lab categories.

What next? Kenney says the team from Macro will proceed in three stages: 1. "Compare Federal and state regulations to see where they agree, disagree, or leave gaps. For example, the Clinical Laboratory Improvement Act doesn't differentiate between thospital and independent labs, but Medicare does. Question: Should these differences be allowed to continue" Or should they be merged or unified or dropped altogether?"

2 "We'll look for expanded evidence on the efficacy of these requirements. Do they help or harm quality? We've begun a literature search at CDC, HCFA, and the National Library of Medicine. We'll also be asking professional organizztions and any of your readers who may have existing empirical evidence along these lines. And where there are no empirical data, we'll be seeking the best professional judgment that we can."

3. "The work program requires us to come up with alternatives that Government might consider. This would include a cost of existing regulations and our estimates as to what alternatives will cost."

"I really don't care what I happen to find," Kenney insists. "I just want to get at the truth. I think I can do that because I'm not a member of any clinical lab organization. And if there's some sort of hidden agenda on the Government's part, they certainly haven't told me about it."

Indeed, anyone at HHS who is hoping to parlay a doctoral thesis into a national policy toward deregulation could be in for a surprise. For example, further damaging evidence against the quality of medical office labs could turn the tide oward further regulation rather than toward complying with the mandate flung at HHS by President Reagan.

One can also envision a major impact by the study on HCFA's apparent intent to create a competitive bidding system among clinical labs for Medicare business. If the study helps pinpoint the costs of regulation, it may show that when laboratories are subject to differing sets of regulations (or the lack of any), some will be forced into higher operating costs that will unfairly handicap them in bidding for Medicare contracts.

One thing is certain: The scope of the study is too grea for its present paramenters. HHS chose an eight-month duration and a $135,000 budget because these are the maximums under which it can execute a quick contract and bypass complex bidding procedures. But insiders already say that the questions raised by HHS are simply too broad to be answ red in eight months.

Thus we predict a much larger successor to "Assessment of s Clinical Laboratory Regulations" that could take up to five years and embroil the profession in its most intensive debate ever. That's why we thought you should get acquainted early with Michael Kenney and Macro Systems.
COPYRIGHT 1985 Nelson Publishing
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Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Publication:Medical Laboratory Observer
Date:Aug 1, 1985
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