A NEED FOR FINANCIAL ANALYSIS AND RESEARCH

As mentioned in Chapter 1 and discussed in more detail in Chapter 4, the information available about public health funding has considerable limitations. Many governmental public health programs were established in response to specific health threats or as results of new interventions, such as the creation of a specific vaccine or the implementation of new smoking interventions to reduce cancer deaths. The collection of public health program activities has become what a governmental public health department does. But in many locales, public health departments have not been allowed the “luxury” of organizing activities into a coherent whole in which essential capabilities exist to support all programs or in which funding from one program is leveraged in a systematic manner to benefit other programs. The combination of that historical circumstance in funding, a lack of national standards in recording and reporting funding and expenditure data, and variations in the definitions of public health challenges any attempt to obtain accurate expenditure estimates.

Because financial information on public health is difficult to obtain at all levels of government, there is considerable uncertainty about current investment in public health activities in the United States and about the sources of revenue for this investment and the relative contributions of federal, state, local, and private bodies. It is also unclear what those sources purchase in terms of the spectrum of public health activities and infrastructure, how resources are allocated among different geographic areas and population groups, and, perhaps most important, how investment compares with the outcomes of public health activities. Poor financial information systems can breed poor performance because a lack of data and measurement makes it more difficult to evaluate, manage, and improve (Kaplan and Porter, 2011). Without better financial information, policymakers cannot assess the value realized from public health spending, nor can they clearly identify the health and economic consequences of underinvestment. Public health managers are unable to link cost data to their organizational structures, staffing patterns, and service delivery models. This limits their ability to enhance the productivity and efficiency of their operations. Because of a lack of adequate financial information, effective and efficient public health departments go unrewarded, and inefficient agencies face few incentives to improve (Honoré and Costich, 2009; Honoré et al., 2007).

In the United States, the Centers for Medicare and Medicaid Services Office of the Actuary develops the annual National Health Expenditure Accounts (NHEA) on the basis of data from federal and state governments and international standards. Some limitations of the NHEA, including definitional and methodological issues (Sensenig, 2011), are discussed in Chapter 4. Ballinger (2007) and Sensenig (2007, 2011) have shown that NHEA in Canada and the United States, respectively, do not usefully reflect the level of spending on public health, because there are no uniform,



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement