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Summary
The Institute of Medicine (IOM) Committee on Public Health Strat-
egies to Improve Health was asked to address three topics related to
population health in the United States—measurement, law and policy, and
funding—in the context of the reform of the medical care system outlined
in the Affordable Care Act. In its first and second reports, For the Public’s
Health: The Role of Measurement in Action and Accountability and For the
Public’s Health: Revitalizing Law and Policy to Meet New Challenges, the
committee added its voice to a growing consensus that population health
improvement depends on addressing the multiple determinants of health ef-
fectively (IOM, 2011a,b). Much has been learned about the actual or distal
(as opposed to the proximal) causes of death and disease, including social
and economic conditions that impair health and make it hard to avoid
health risks. Therefore, it is no longer sufficient to expect that reforms in
the medical care delivery system (for example, changes in payment, access
and quality) alone will improve the public’s health. Large proportions of the
U.S. disease burden are preventable. The failure of the health system1 (which
includes medical care and governmental public health) to develop and de-
liver effective preventive strategies is taking a large and growing toll not
only on health, but on the nation’s economy. That is evident in the nation’s
poor health performance and high per capita health expenditures compared
1The health system, as envisioned in the committee’s previous reports, comprises govern-
mental public health, medical care, and other actors that have the ability to influence health
(IOM, 2011a,b).
1
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2 FOR THE PUBLIC’S HEALTH: INVESTING IN A HEALTHIER FUTURE
with those of its high-income peers (Commonwealth Fund Commission on
a High Performance Health System, 2011; OECD, 2010b).
Data collection, reporting, and action—including public policy and
laws informed by data and quality metrics—are needed to support activities
that will alter the physical and social environment for better health. In the
present report, For the Public’s Health: Investing in a Healthier Future, the
committee continues the arguments presented in its first report: to the detri-
ment of society, its fixation on clinical care and its delivery eclipses attention
to population-based activities that offer efficient and effective approaches
to improving the nation’s health.
Viewing U.S. health problems through a funding lens reveals two is-
sues: (1) insufficient funding for public health and (2) dysfunction in how
the public health infrastructure is funded, organized, and equipped to use
its funding.2 The solutions that the committee proposes in this report are
intended to address both issues. Chapter 1 provides an introduction and
context for the report. In Chapter 2, the committee describes how the
governmental public health system and its financing can be reformed. The
two-part Chapter 3 discusses the administrative changes needed to facilitate
more efficient and rational allocation and use of funds in public health, and
the research needed to help the public health infrastructure to become more
knowledgeable about and effective in its use of funding. Chapter 4 offers
recommendations for providing funding that is sufficient, stable, and sus-
tainable to permit optimal functioning of the public health infrastructure.
Although the report focuses largely on the funding of governmental public
health activities, the committee recognizes that a far broader societal ap-
proach to improving population health is necessary. It would extend to an
array of stakeholders and societal strategies to improve the conditions and
environments that influence health (such as education, employment, and
housing). Stakeholders, some described in the committee’s other reports
as actors in a multi-sectoral health system, include non-health government
agencies, businesses, philanthropic organizations, and community-based
organizations. Their contributions to health improvement include policy
actions, financial support, and a variety of interventions. First, however,
the nation’s health investments require change to achieve better value for
money. Solutions that have been proposed include
• C
ontrolling administrative waste.
• R
emedying sources of excess cost and other inefficiencies in clinical
care, while improving quality (IOM, 2011c).
2In Chapter 2, the committee revisits the multi-sector health system that it described in its
first report and describes the evidence-based solutions that will help the nation to achieve better
health outcomes and realize greater value from its investments in health.
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3
SUMMARY
• A
chieving universal coverage (this involves increased cost for basic
services but also savings achieved by intervening earlier and broad-
ening coverage) (CBO, 2008, 2009; IOM, 2003).
• I
mplementing population-based health improvement strategies (in-
cluding action on non-health factors that are known to influence
health outcomes).
The first three solutions have been discussed in detail by prior IOM com-
mittees, the IOM Roundtable on Value & Science-Driven Health Care, and
many others (Berwick et al., 2003; CBO, 2009; IOM, 2003, 2011c). The
present committee has examined the fourth solution, although focusing
mostly on the governmental public health enterprise and its contributions
to population health.
ESSENTIAL INGREDIENTS FOR A RENEWED PUBLIC
HEALTH ENTERPRISE AND A HEALTHY NATION
Solving the system challenges described in this report will empower pub-
lic health to “bend the curve” on health risks, contributing to a decrease in
the volume of people who require medical care for preventable conditions,
and in a broader sense, leading to improved population health outcomes.
Steps to renew the public health enterprise include
• E
nsuring adequate and sustainable funding for governmental public
health, which is able to generate information about the influences
on population health and lead or support interventions to address
them.
• R
eforming how governmental public health infrastructure is funded
and operates, for example, changing how funds are allocated to
align spending with need and escaping “siloed” funding of lower
priority activities; articulating the boundaries, linkages and finan-
cial flows between state, local, and federal programs; and creating
a new chart of accounts that is integrated into a sound management
information system.
• U
sing public health knowledge to help reform the delivery of clini-
cal care quality with an emphasis on efficiency, appropriateness,
and integration with public health’s population-based efforts.
To address the lackluster health outcomes and unsustainable health care
expenditures of the United States, a critical first step is to focus national
efforts by setting a national target for health system performance on two
key measures: longevity and per capita health spending. Comparing life
expectancy and health spending can help in assessing value realized for
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4 FOR THE PUBLIC’S HEALTH: INVESTING IN A HEALTHIER FUTURE
money; in this analysis, U.S. performance is disappointing. Although U.S.
spending on health goes far beyond the threshold of diminishing returns, life
expectancy and other key measures of health status lag behind those of other
high-income nations (Darzi et al., 2011; OECD, 2010b). Excessive spending
on medical care also presents opportunity costs—less money remains for
investment in other socially important activities, such as education. Bring-
ing health expenditures more in line with other wealthy nations will free
up resources that can support other U.S. objectives that improve not only
the health of Americans, but their quality of life. The committee proposes
a modest target for health improvement. Based on current data, the United
States would need to add an average of approximately 1.33 years to the life
expectancies of 50-year-old women and 0.90 years to the life expectancies
of 50-year-old men (NRC, 2011; OECD, 2010a). These estimates, however,
do not reflect the fact that comparable countries will continue to make gains
over time, thus, the committee recognizes that the current gap in years that
needs to be closed is less than the increase that will be needed to bring U.S.
life expectancy to a level comparable to the average among its peers.
Recommendation 1: The Secretary of the Department of Health and
Human Services should adopt an interim explicit life expectancy
target, establish data systems for a permanent health-adjusted life
expectancy target, and establish a specific per capita health expen-
diture target to be achieved by 2030. Reaching these targets should
engage all health system stakeholders in actions intended to achieve
parity with averages among comparable nations on healthy life
expectancy and per capita health expenditures.
REFORMING PUBLIC HEALTH AND ITS FINANCING
To achieve a more effective national public health effort, the nation will
have to change how it allocates health expenditures in general and public
health funds specifically. Spending on population-based public health pre-
vention efforts is a very small proportion of overall national health expen-
ditures. The allocation of public health spending also is not commensurate
with need or with achieving the greatest value: conditions responsible for
the highest preventable burden of disease are considerably underfunded. In
addition, public health funding is inflexible, uncoordinated, and fragmented.
To transform how funding is allocated and used, the federal departments
and agencies that fund state and local public health departments—the De-
partment of Health and Human Services (HHS), the U.S. Department of
Agriculture, the Environmental Protection Agency, and others—could make
administrative rule changes and procedural changes in the existing funding
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5
SUMMARY
streams (such as contracts, grants, and cooperative agreements) to enable
more flexible, rational, and efficient use of resources.
Recommendation 2: To ensure better use of funds needed to sup-
port the functioning of public health departments, the committee
recommends that
(a) The Department of Health and Human Services (and other
departments or agencies as appropriate) enable greater state
and local flexibility in the use of grant funds to achieve state
and local population health goals;
(b) Congress adopt legislative changes, where necessary, to allow
the Department of Health and Human Services and other agen-
cies, such as the U.S. Department of Agriculture, the necessary
funding authorities to provide that flexibility; and
(c) Federal agencies design and implement funding opportunities
in ways that incentivize coordination among public health
system stakeholders.
Public health lacks an organizing concept for the cross-cutting capa-
bilities that every public health department needs to be effective, and this
attests in part to the fragmented and rigidly siloed nature of much public
health funding. All health departments need capacity in, for example, in-
formation technology, policy analysis, and communication which cross-cut
programs. It would be inefficient and ineffective to build separate systems
and capacity for different programs rather than having what the committee
has termed foundational capabilities that apply to all programs. Moreover,
the committee developed the concept of a minimum package of public
health services, which includes the foundational capabilities and an array
of basic programs that no health department can be without (see Chapter
2). Although this package is built on the well-known and long-established
concepts of the Three Core Public Health Functions and the Ten Essential
Public Health Services, it is intended to make more specific the services that
every community should receive from its state and local health departments
and to inform public health funding decisions. It is also intended to serve
as a framework for program and financial management, including the de-
velopment of charts of accounts. Communicating to the American public
the nature of and need for a minimum package of public health services
could enhance people’s understanding of the critical nature of population-
based approaches (what communities get for their investment), and their
understanding of the package as an instrument to ensure a standard level
of health protection for all communities.
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6 FOR THE PUBLIC’S HEALTH: INVESTING IN A HEALTHIER FUTURE
Recommendation 3: The public health agencies at all levels of
government, the national public health professional associations,
policymakers, and other stakeholders should endorse the need for
a minimum package of public health services.
The passage of health care reform, which makes coverage available to
a broader cross-section of the population, raises the question of the role of
some public health departments as clinical care providers. That responsibil-
ity has a complex history, and there are advantages and disadvantages to
the public health role in direct provision of care. In large measure, however,
public health agencies must be freed to focus more intensively on delivery
of population-based services. Circumstances may make it more appropri-
ate for public health agencies in some jurisdictions to provide specific kinds
of clinical services directly. Examples might include specialized programs
that have a population health component, such as tuberculosis or sexually
transmitted disease control and specialized services delivered in community
settings, such as nurse home visiting or community health worker health
promotion activities, and in localities that do not have an infrastructure to
serve at-risk (uninsured and underinsured) populations. Aside from these
exceptions, transitioning clinical care out of public health will give health
departments the opportunity to forge new and stronger partnerships with
the health care delivery system by applying their unique knowledge and
skill sets to help clinical care to improve its performance from a population
health standpoint.
Recommendation 4: The committee recommends that as clinical
care provision in a community no longer requires financing by pub-
lic health departments, public health departments should work with
other public and private providers to develop adequate alternative
capacity3 in a community’s clinical care delivery system.
INFORMING INVESTMENT IN HEALTH
Building a stronger and more transparent public health system re-
quires a financial management and services research infrastructure that is
consistent among jurisdictions and capable of producing accurate data on
program activities, especially those tied to the minimum package of public
health services. Challenges to a better understanding of revenues and expen-
ditures in public health agencies include the lack of a universally accepted
definition of what constitutes public health activity. There are differences
3Adequate capacity refers not merely to the ability to provide services of similar breadth,
quality, and accessibility (such as cultural competence) but to the ability to provide care to the
overall community as opposed to patient-by-patient.
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7
SUMMARY
in local and state practice (for example, some health departments include
environmental health, others do not), and there are gaps in what and how
financial data are collected and reported.
Recommendation 5: The committee recommends that a technical
expert panel be established through collaboration among govern-
ment agencies and organizations that have pertinent expertise to
develop a model chart of accounts for use by public health agencies
at all levels to enable better tracking of funding related to program-
matic outputs and outcomes across agencies.4
The Affordable Care Act authorized a program of research related to
many of the issues raised in this report,5 but funding and infrastructure de-
velopment for this program is not yet available. The committee recommends
steps to achieve a strengthened research infrastructure, including dedicated
funding of up to 15 percent of total public health funding. That level of in-
vestment is benchmarked alongside high-growth, high-adaptation industries
that rely on research and development innovations to sustain them.
Recommendation 6: The committee recommends that Congress
direct the Department of Health and Human Services to develop
a robust research infrastructure for establishing the effectiveness
and value of public health and prevention strategies, mechanisms
for effective implementation of these strategies, the health and
economic outcomes derived from this investment, and the compara-
tive effectiveness and impact of this investment. The infrastructure
should include
• A dedicated stream of funding for research and evaluation.
• A national research agenda.
• Development of data systems and measures to capture research-
quality information on key elements of public health delivery,
including program implementation costs.
4Agencies and organizations would include HHS, public health departments, ASTHO,
NACCHO, the Public Health Accreditation Board, and the National Association of State
Budget Officers.
5“This section would require the Secretary, through the CDC Director, to fund research on
public health services and systems, to include (1) examining evidence-based prevention prac-
tices relating to prevention, including comparing community-based public health interventions
in terms of effectiveness and cost; (2) analyzing the translation of interventions from academic
settings to real world settings; and (3) identifying effective strategies for organizing, financing,
or delivering public health services in community settings, including comparing state and lo-
cal health department structures and systems in terms of effectiveness and cost. Such research
would have to be coordinated with the TFCPS” (Patient Protection and Affordable Care Act
§4301, 42 USC §300u-15).
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8 FOR THE PUBLIC’S HEALTH: INVESTING IN A HEALTHIER FUTURE
• Development and validation of methods for comparing the ben-
efits and costs of alternative strategies to improve population
health.
Research infrastructure would be shared among three HHS agencies—
the National Institutes of Health, the Agency for Healthcare Research
and Quality, and the Centers for Disease Control and Prevention—and
a national research agenda needs to include a prioritized list of topics to
be addressed by the research. Development of data systems and measures
to capture research-quality information (and training of staff to do so) is
needed at the national, state, and community levels. The information would
include expenditures, workforce size and composition, and the volume,
intensity, and mix of activities produced.
On the basis of what is known about what public health agencies can
and cannot afford to do and the imbalance in national spending on clinical
care compared to population-based health services, the committee concludes
that the nation does not invest sufficiently in public health. The informa-
tion available, however, does not allow the committee to determine with
any precision what portion of the nation’s health spending is needed to
support population-based public health efforts. Improvements in the track-
ing of revenues and expenditures in public health and the enhancements in
research and evaluation described above will inform the determination of
public health funding needs better, but a nationally guided effort is needed
to review information as it is developed and to make recommendations for
an optimal balance. As the minimum package of public health services is
established and the resources required to deliver them are ascertained, the
public will gain a deeper understanding of how and in what settings public
health action at the population level can create greater value and efficiency
than can clinical care. This also will inform investment in the public health
system and the appropriate allocation between clinical care and population
health.
Recommendation 7: Expert panels should be convened by the Na-
tional Prevention, Health Promotion, and Public Health Council
to determine
• The components and cost of the minimum package of public
health services at local and state and the cost of main federal
functions.
• The proportions of federal health spending that need to be in-
vested in the medical care and public health systems.
The information developed by the panels should be included in the
council’s annual report to Congress.
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SUMMARY
FUNDING SOURCES AND STRUCTURES
TO BUILD PUBLIC HEALTH
The committee concluded that funding for governmental public health
is inadequate, unstable, and unsustainable. There is also considerable im-
balance between federal contributions and state and local contributions to
public health activity in the United States. The National Health Expendi-
ture Accounts estimate that federal contributions amount to just under 15
percent of the $77.2 billion in governmental public health spending ($11.6
billion) in 2009 (CMS, 2011). The $77.2 billion in total governmental
public health spending represents a mere 3 percent of the nation’s overall
spending on health. Although the data available to estimate the need are
characterized by weaknesses and limitations (including inconsistent defini-
tions of public health), the committee made several calculations to arrive at a
figure that could serve as a starting point for dialogue on the funding needed
to strengthen and advance the governmental public health infrastructure.
Recommendation 8: To enable the delivery of the minimum pack-
age of public health services in every community across the nation,
the committee recommends that Congress double the current fed-
eral appropriation for public health, and make periodic adjustments
to this appropriation based on the estimated cost of delivering the
minimum package of public health services.
As discussed in Chapter 2, public health agencies will continue to play
a role in assuring the availability of clinical care in their communities. As
recommended in the committee’s first report (IOM, 2011b), public health
departments could work to form partnerships with medical care entities
and share information derived from clinical data sources to identify health
priorities in their communities. Public health can also collaborate with the
clinical care system to inform Americans about the appropriateness, quality,
safety, and efficiency of clinical care services delivered in their communities.
Reducing the role of governmental public health in direct clinical service
delivery could free up general state or local funds in public health budgets
that have been allocated to provision of care—apart from funding streams
that are specifically allocated for clinical care, such as state or local Med-
icaid. The newly available funds could be used to build data capacity and
other essential public health services in localities. As coverage for health
care is extended to the entire population in the course of implementing
health care reform, public health departments need to be able to retain for
their population-health mission general state and local resources that were
previously used to cover clinical care.
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10 FOR THE PUBLIC’S HEALTH: INVESTING IN A HEALTHIER FUTURE
Recommendation 9: The committee recommends that state and
local public health funding currently used to pay for clinical care
that becomes reimbursable by Medicaid or state health insurance
exchanges under Affordable Care Act provisions be reallocated
by state and local governments to population-based prevention
and health promotion activities conducted by the public health
department.
The annual appropriations process and frequent fluctuations in funding
(such as funding cuts interspersed with increases due to bioterrorism and
stimulus legislation) are reducing the ability of public health departments
to prevent disease, promote health, and protect the health of their com-
munities in the face of a wide array of threats. The committee reviewed a
variety of options for raising funds to support an adequate level of annual
funding for governmental public health. A national tax on medical care
transactions, which exists in a number of states and has been used to raise
funds to expand access to medical care in Minnesota and Vermont (Michael,
2011; PHPG, 2012), meets the committee’s three criteria for evaluating po-
tential funding sources: ability to raise sufficient funds, pertinence or a link
to population health, and low likelihood of deleterious economic effects.
Recommendation 10: The committee recommends that Congress
authorize a dedicated, stable, and long-term financing structure
to generate the enhanced federal revenue required to deliver the
minimum package of public health services in every community
(see Recommendation 8).
Such a financing structure should be established by enacting a na-
tional tax on all medical care transactions to close the gap between
currently available and needed federal funds. For optimal use of
new funds, the Secretary of the Department of Health and Human
Services should administer and be accountable for the federal share
to increase the coherence of the public health system, support the
establishment of accountabilities across the system, and ensure state
and local co-financing.
CONCLUDING OBSERVATIONS
This report has several key messages. First, the committee echoes
the widespread concern in the health sector about the increasing costs of
medical care and the poor value realized. The United States is first in health
spending but far from its peer nations in health outcomes. The committee
calls on the nation in the next 20 years to achieve outcomes and cost levels
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11
SUMMARY
that are comparable with the average of other wealthy nations. That will
require changing how the nation invests its health funding. Second, the
committee reiterates the finding in its first report that population-based
prevention efforts are critical for improving population health and that the
public health infrastructure of federal, state, and local health departments
is qualified to implement or support such efforts. Third, the public health
infrastructure is not funded adequately to carry out its mission, and the ways
in which funding is allocated and used require retooling and the application
of knowledge derived from better financial information and research. In-
vestment of dividends in the nation’s economic productivity and ultimately
many small and moderate changes could lead to a more sustainable future
for national health spending and could increase healthy-life expectancy.
Finally, the committee revisits the notion of a multisectoral health system
and reasserts the need for greater collaboration between public health and
its clinical care counterparts to improve the outcomes of clinical care and
the field’s contributions to population health.
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