Larceny in the Labs

Bound to the bedside, many U.S. doctors no longer perform tedious lab tests themselves, rely instead on commercial laboratories for analysis of patients' blood, tissue and urine samples. So heavy is the demand for private lab services that New York City alone has 425 clinical laboratories, a few of which are highly automated, use punch cards and assembly lines to grind out as many as 600 urinalyses and 2,500 blood tests a day. Big outfits like New York's Allstate Medical Laboratories have branches in other cities and employ aggressive door-to-door sales staffs. To boost business, they offer physicians cut-rate contract deals (e.g., all the tests you want for $75 a month), even solicit mail-order trade from doctors thousands of miles away.

Cracking down last week with maximum publicity, New York City's tough Department of Health charged six private labs--including Allstate*--with violations of the city health code, withdrew their operating permits. Allstate, said the Health Department, was primarily a mail-order house which farmed out specimens to subcontractors for testing. In other labs, investigators found insanitary conditions, faulty records, improper advertising, inadequate observation and controls.

In the Kitchen. On taking over the New York City Health Department's Bureau of Laboratories a year ago, Dr. Morris Schaeffer, 54, a quiet and methodical veteran of ten years with the U.S. Public Health Service, began a discreet investigation of the city's commercial labs. His 20 hired investigators popped up unannounced at laboratory doors, demanded on-the-spot analyses of specially prepared blood samples. The results shocked even Dr. Schaeffer: "Only one out of four laboratories could perform a proper blood typing and grouping. Only one out of three could do a correct blood chemistry test." In one lab, "a ridiculous apartment kitchenette," a Schaeffer inspection team discovered a technician conducting prothrombin time tests--sensitive measurements of the blood's clotting process--with a broken stopwatch.

Irritated by advertising brochures that falsely claimed "Our laboratories approved by the City of New York," Dr. Schaeffer decided to concentrate on the big, mass-production contract labs. He found: P: Blood sedimentation tests, which must be performed within 24 hours after the sample is drawn, were run by some labs on blood samples mailed to New York by doctors as far away as Los Angeles. P: Urinalysis was speeded up by scrapping standard tube tests, substituting urine-spotted slides. Spots often dried before they could be tested, and poorly numbered slides occasionally were mixed up. Result, says Dr. Schaeffer: "A strong tendency to fabricate results."

P: Automatic testing machines were employed to determine cholesterol content of blood specimens, a job which these machines, according to Schaeffer, "are not yet capable of performing accurately." P: Coagulation tests at one laboratory were conducted on blood samples collected in special tubes supplied to doctors by the lab; the tubes contained oxalate, a chemical agent which prevents coagulation. P: For the sake of speed, some labs resorted to "sink tests," simply poured samples down a drain and blandly reported "negative" results to the doctors who had requested analysis.

P: New York's health code requires each laboratory to hire a licensed physician or an experienced technician as its director. But a single doctor can direct as many as three separate labs, and some physicians sell their names for use on laboratory letterheads. Reported going price for an absentee director: up to $600 a month.

The Big Lure. Since doctors who patronize shoddy, low-cost labs clearly run high risk of diagnostic error, what is the big labs' big lure? Though doctors shy away from admitting it, the answer is speedy service at supermarket savings. Small, painstaking laboratories charge about $25 for a single rabbit test for pregnancy; contract labs offer an unlimited number of tests for a monthly fee which can work out to less than a dollar a test.

And at least one contract laboratory, Dr. Schaeffer found, openly suggests in its advertising brochures that doctors can increase their income by subscribing to its flat-rate service, then charging unknowing patients "discretionary" fees ranging as high as those they would pay for personalized lab service.

*Allstate's Chicago branch, opened with an all-out advertising barrage last spring, was also ordered closed last week for operating without a city license. The firm has no connection with Allstate Insurance, a wholly-owned subsidiary of Sears, Roebuck.

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