For the Public's Health Investing in a Healthier Future (2012) / Chapter Skim
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4 Funding Sources and Structures to Build Public Health
4 Funding Sources and Structures to Build Public Health
Pages 101-126
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Well-functioning public health departments are central to building a healthy population. However, estimating with precision the level of funding needed to support public health adequately is difficult for several reasons.
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noted that different states classi fied tobacco control activities under primary care, under "enhanced public health services," and under "health promotion." Public health data in NHEA include epidemiologic surveillance, immunization the cost of a defined "package" of public health services for every state and locality requires both an agreement on what the package is and a better understanding of how the governmental public health infrastructure will shape itself to deliver the package. Some of those difficulties were described by the committee that authored the 2003 Institute of Medicine report The Future of the Public's Health in the 21st Century.
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CURRENT PUBLIC HEALTH FUNDING Public health spending may be reported as a percentage of national health spending (used by NHEA) , as a percentage of national gross do
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However, interpreting all the estimates2 presents challenges related to the variation in how public health expenditures are defined, to the gaps in data reported by public health departments, to administrative differences in how data are collected or reported, and to methodological limitations, such as in how data are aggregated. Several sources have estimated that 3 percent of total national health spending goes to support nonclinical health or "public health" improvement efforts (Brooks et al., 2009; CMS, 2011; Miller, 2011; Miller et al., 2008)
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They calculated that "spending of state and local public health agencies constituted 2.37 percent of all U.S. health spending for 2004" and 2.32 percent for 20056 (Beitsch et al., 2006, pp.
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Pressures on Current Funding Public health departments have a history of chronic underfunding and unstable budgets (Baker et al., 2005; HHS et al., 1994; TFAH, 2008; Sessions, 2012)
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. Since 2008, 34,400 jobs in local health departments (about one-fifth of the local public health workforce)
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would bring total state public health spending to $23.9 billion, nearly $12 billion more than (or twice as much as) the total current state spending on public health.
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Sufficient, stable, and dedicated funding is needed to help public health agencies to perform the core public health functions of assessment, policy development, and assurance and to ensure that all communities have access to the minimum package of public health services -- the array of foundational capabilities and basic program areas described in Chapter 2. To reach that goal, funders will need to ensure that funding streams are coordinated, that there is flexible support for 9In its 1999 report, Best Practices for Comprehensive Tobacco Control Programs, CDC outlined formulas for its per capita spending recommendation, using nine elements of a comprehensive program.
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In a second, bottom-up model, foundational capabilities are a decentralized responsibility of states and localities, and funding is obtained through a matching mechanism whereby states and localities demonstrate that they have the foundational capabilities in place to get additional funds to provide the basic programs. Federal funding is needed both to augment services provided by state and local public health agencies and to add additional services where the minimum package is not provided.
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.10 Given the ideally supportive role of the federal government in the process of building up funding for public health, it seems appropriate to increase federal contributions first, to lead the way for state and local participation. NEW FUNDING SOURCES Reallocation of State and Local Funds Now Used for Clinical Care As discussed in Chapter 2, public health agencies will continue to play a role in assuring access to and quality of clinical care in their communities, but as insurance becomes more widely available and clinical care more accessible, the role of governmental public health as a direct service provider is likely to diminish.
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Although the savings in clinical care delivery could plausibly be claimed for other government services or for reduction in taxes, redirecting the savings to provide additional resources for the public health departments' population health mission will pay health and economic dividends in the long term. Recommendation 9: The committee recommends that state and local public health funds 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 public health departments.
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if extended in its known to contribute to better current form (according to a health outcomes; would not Congressional Budget Office have a large negative effect on estimate) the economy Excise taxes -- paid at the $0.01 per ounce of sugar- Could be linked explicitly to time of purchase of specific sweetened beverage would public health and may have goods raise $1.8 billion annually additional effects on risk in California and $1 billion behaviors in New York, Florida, and Although alcohol and Texas other "sin" taxes may A national excise tax of affect particular vulnerable $0.03 per 12 ounces of populations disproportionately sugary beverage would yield (Commonwealth Fund, 2007)
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. While there could be objections that the tax increases health care costs, it has the potential to reduce the need for clinical care Property tax Property tax is levied in all Highly visible tax; not related 50 states (at a rate ranging to public health; funds are from 0.65 percent in already allocated otherwise, Alabama to 2.57 percent in so tax would have to be Texas in 2007)
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; for population health state level) a 1 percent tax would yield interventions to prolong and $580 million, a 1.5 percent improve quality of life tax $870 million, and a 2 percent tax $1.16 billion annually Intangibles tax -- a tax Varies by state; only Not related to public health imposed by states or 10 states implement an and not widely used in the intangible property tax;b localities on the value of United States; some consider such assets as stocks, bonds, only four have an intangibles this an "antigrowth" tax money market funds, and tax on business and personal because of its effect on annuities property that also applies businesses if they hold large to intangible property amounts of their own or other (such as funds on deposit, companies' stock promissory notes, rights of court judgments, stock certificates, and bonds)
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as basis of linkages between Internal Revenue Service public health and clinical care; "A 2009 IRS study showed requirement that nonprofit hospitals can reap benefits that not-for-profit hospitals hospitals use their tax from investing in healthier spent an average of 9% exemption to return benefit communities; hospitals of their total revenues to their communities) c may prefer to use the funds on community benefits." differently "The study also found that 58% of the not-for-profit IRS does not require that hospitals spent 5% or less hospitals partner with public of their total revenues on health departments (only that charity care and that slightly they receive a public health more than one-fifth of the input)
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. The government could use funds raised by Medicare payroll taxes to support public health activities, particularly those aimed at preventing chronic diseases that will cost Medicare billions of dollars to treat in the future (this would require congressional action and clear evidence of potential savings but does meet the committee's criteria)
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The last three of the potential funding sources described in Table 4-1 are somewhat different from the rest in that they represent public–private funding mechanisms and leverage government funding or government's financial interest to raise private sector funds or bring other private sector resources to bear on population health improvement. See Box 4-2 for a discussion of an international public–private model of funding public health, in this case specifically health promotion.
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. Among other public health purposes, the tax could be used to strengthen the efforts of public health departments to support their clinical care counterparts in becoming more efficient and effective and to further public understanding of and expectations for clinical care.
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The nation's priorities regarding the financing of clinical care are crystal clear -- there is a dedicated, stable, long-term, and vast outlay of funds. Public health practice and population health improvement activities deserve similarly adequate and dedicated funding to help meet the nation's pressing health challenges.
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15Comparisons with other nations' public health spending are similarly difficult because each country has its own definition of public health. The international efforts to standardize systems of health accounts appear to have been focused on the delivery of clinical care and much less on public health activities.
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. In 2011, 18 percent of local public health departments reduced or eliminated maternal and child health services programs (NACCHO, 2011a)
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2011. Public Health Spending in the National Health Expenditure Accounts.
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2012. The Patient Protection and Affordable Care Act: Opportunities for Public Health Agencies and Population Health.
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2011. Prevention and Public Health Fund: Reducing Long-Term Health Costs.
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