COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Services Agency

DATE:

March 5, 2002

BOARD MEETING DATE:

March 19, 2002

TO:

Honorable Board of Supervisors

FROM:

Nancy Steiger, CEO of Hospital and Clinics

SUBJECT:

Appropriation Transfer Request and Salary Ordinance

Recommendation

1.

Approve an Appropriation Transfer Request in the amount of $54,586 for FY 2001-02 to transfer funding from contract laboratory services to Salaries and Benefits and other Service and Supply accounts, in order to bring currently contracted laboratory services in-house.

2.

Execute an amendment to the Salary Ordinance to add four positions for the San Mateo County Health Center (SMCHC) laboratory to provide laboratory services to the North County Health Center, the South San Francisco Health Center, the Daly City Youth Health Center, the Coastside Health Center, the Public Health Mobile Clinic, and the AIDS Program Edison Clinic.

Background

The SMCHC laboratory currently provides services to the hospital, the 39^th Avenue clinics, and south county clinics (Fair Oaks, Willow, and Belle Haven). In December of 2001 your board approved an agreement with Quest Diagnostics Clinical Laboratories to provide laboratory services for the Division of Hospital and Clinics (for the North County, South San Francisco, and Daly City Youth Health Centers), the Public Health Mobile Clinic, the AIDS Program Edison Clinic, Correctional Health, and Mental Health Services. Your board waived the Request for Proposal process at that time in anticipation of this proposal. Under that agreement Quest provides specimen collection materials, specimen transport services, laboratory analysis of specimens, electronic transfer of laboratory results into the county's data system for hospital and clinics, customer service and consultation services. The current contract with Quest is for the term of July 1, 2001 through June 30, 2002.

Health Services has a second contract in place with Quest to perform lab tests that are not performed at SMCHC because of the specialized and expensive equipment required. The services provided under that agreement would not be affected by this proposal. The SMCHC laboratory has the capacity to provide all the services recommended to be done in-house.

Discussion

Health Services has completed a careful analysis of lab services that indicates significant savings could be realized by having the SMCHC laboratory provide services for the three north county clinics, the Public Health Mobile Clinic and the Edison Clinic. This expansion of service will require an additional 4.0 FTE laboratory positions, additional supplies in the laboratory and the affected clinics, and a contract for courier services. The 4.0 FTEs will include1.0 Medical Technologist II and 3.0 Laboratory Assistants. The ordinance will require a second reading at the meeting of your Board on March 26^th.

A contract for courier services is now being prepared. It is anticipated that it will go to the County Manager for approval by late March. Courier services under this contract will be provided to the three north county clinics as well as to the three south county clinics. Currently county transportation drivers provide courier services for the south county clinics. Routine specimen pickups will be made twice a day and a stat service will be available. Courier services will not be necessary for the Public Health Mobile Clinic or the AIDS Program Edison Clinic. ISD will set up and train clinic staff to receive test results online. This change in laboratory service is planned to begin on May 1^st of this year.

It is advantageous for Mental Health clients to continue to have access to the more numerous Quest lab sites in order to maximize use of services. Therefore, Mental Health Services clinics will not be included in this changeover.

This proposal was reviewed and approved by the Hospital Board of Directors in December 2001. Cost projections for this proposal have subsequently been updated based upon the most current spending trends.

Vision Alignment

The recommended action keeps the commitment to Ensure Basic Health and Safety for All and goal number 5: Provide residents access to healthcare and preventive care. The action contributes to this commitment and goal by implementing a more cost effective and efficient means of providing necessary laboratory services.

Fiscal Impact

The projected annual cost to provide these services at SMCHC is approximately $353,471. Projected annual reimbursement is $117,098 from Medi-Cal and other sources of reimbursement, based upon the actual payer mix from the affected sites. The net cost will be $236,373, which is the cost for services to people without insurance. Currently, contract payments to Quest for services to people without insurance is projected to total $298,417. The difference is projected net savings to the County of $62,044. This ATR transfers $54,586 from the allocation for contracted laboratory services to salaries and benefits, supplies, training, and ISD. This will pay for initial one-time costs and fund this service for May and June of this fiscal year.