LAB TESTING: Wilson To Make Cuts At Oversight Agency
The Wilson administration is planning cuts at the Laboratory Field Services branch of the state Department of Health Services "at a time when both federal rules and state law require an expansion of the program," the San Francisco Chronicle reports. The agency is responsible for ensuring that laboratory tests "are done correctly and by competent workers at commercial labs and doctors' offices." According to the Chronicle, 80% of medical decisions "originate from the results of diagnostic tests, and testing itself is a $50 billion industry." Michael Volz, former state Public Health Laboratory chief, said, "Anything that delays the actual conducting of laboratory surveys is a direct threat to public health." However, Assistant Deputy Director for Prevention Services Michael Genest said the cutbacks "will be temporary and are necessary because the agency has been exceeding its budget." Genest contends that the problem lies in Volz's management of the laboratory agency. He said, "I never said I wanted this program shut down. I simply lost confidence (in Volz)."
Lack Of Funding
The Chronicle reports that the agency "has been chronically understaffed and underfunded -- and now faces a new round of cuts despite a two-year-old legislative mandate to expand its scope and comply with the Clinical Laboratory Improvement Amendments, passed by Congress in 1988." In addition, the cutbacks are coming at the same time the state is attempting to convince the federal government "that California has the ability to run the program in compliance with federal law but free from direct oversight" from the Health Care Financing Administration. Should the state win the exemption, it would get to keep most of the fees it currently pays the federal government to run the program: "roughly $10 million every two years." Janice Caldwell, associate regional administrator for HCFA, said, "All we can say is, it doesn't look like your going to make it, guys." However, acting lab director Paul Kimsey said he plans to expand the agency after receiving the exemption from the federal government, the Chronicle reports. The state could also choose the turn the entire program over to the federal government. But Kimsey said California "has tougher standards in many areas than the federal government does." He said, "Our people feel very strongly that we can do a better job for the public."
Fee System To Blame
The state contends a primary reason for the budget shortfall is the federal government's fee system. The Chronicle reports that since 1994, California "has requested $11.3 million in federal fees to run the monitoring program, but it has received only $8.2 million -- a shortfall of 27%." Genest said, "We think the feds pocket too much money." However, federal officials say "the California program is more expensive and less productive than the national average." California officials acknowledge that they inspect fewer labs per inspector, but they assert that their inspections are more thorough. According to the Chronicle, the California Medical Association may have made the financial problems of the program worse when "doctors who operate office labs pushed through 'emergency regulations' exempting each lab from $833 in state fees assessed in addition to the federal levy." Kimsey said the lost fees add up to $2.4 million.
The plan to give California exemption from federal oversight of the test monitoring program "would toughen oversight of thousands of small doctors' office labs," the Chronicle notes. The additional scrutiny "was mandated by state lawmakers" and is supported by recent studies that "have cast doubt on the wisdom of letting office labs operate without scrutiny" (Russell, 3/2).