Preventing Disease in a Categorically Funded Public Health Care System

PrintPrint
January 2008
HCFO

The American public health system is financed by a complex web of federal, state, and local resources. The contributing funding streams are mostly disease or purpose driven, with dollars specifically targeted toward prevention, treatment, and control of a specific disease or purpose (e.g. diabetes or bioterrorism preparedness). However, today's most deadly diseases, including diabetes, cancer, and heart disease, result from the same behavioral and environmental risk factors and may be targeted by similar early intervention and prevention programs. Thus, the public health system's inflexible financing mechanisms- which are often described as 'silos' or 'stove-pipes'- are sorely inefficient, leading to disconnected programs and redundant activities.

Disparate information systems and data collection tools are also a result of this 'siloed' funding, contributing to the implementation of disconnected public health programs and interventions. A streamlined system may enable public health practitioners to tailor spending in order to target disease trends by addressing risk factors within their local communities. In fact, in 2002, the IOM recommended that the federal government and states renew efforts to experiment with clustering or consolidation of categorical grants for the purpose of increasing local flexibility to address priority health concerns and enhance the efficient use of limited resources.1

Program integration that resulted in the 1995 formation of the National Center for HIV, STD, and TB prevention at the Centers for Disease Control and Prevention (CDC) stemmed from recognition of STDs as co-factors for HIV transmission. The resulting organizational change, and co-mingling of the corresponding funding streams, allows for the integrated delivery of similar preventive services that address all three areas.2 Today, a n estimated $277 billion is spent annually on treating the most common chronic diseases, resulting in $1.1 trillion in lost productivity per year.3 Blending direct funding for diabetes, cancer, heart disease, and other diseases with similar risk factors may support integrated service delivery and comprehensive prevention programs.4 Federally initiated efforts to support communities in the development of comprehensive approaches include Cancer Control P.L.A.N.E.T. and the Steps to a Healthier US Cooperative Agreement Program.

To address this inefficiency and the IOM recommendation, CDC is tasking senior management officials- portfolio managers placed in state health agencies as a pilot program of the Futures Initiative- with exploring 'grant bundling' in states. Initial assessments from these portfolio managers reflect widespread acknowledgement of categorical funding's negative impact on states' abilities to address emerging disease trends, pointing to inflexible and inadequate resources, unfunded mandates, and lack of balance between prevention and treatment.5 Grant bundling may be an effective administrative strategy for simplifying and streamlining grant application and management, and reducing the inefficiencies in reporting requirements.6

More recently, investments in preparedness may yield the most valuable lessons for streamlining public health spending. Certainly, preparedness funding is also directed, with resources targeting specific disaster type and response capacity. However, by combining public and private, as well as federal, state, and local resources, efforts are being made to design the infrastructure for public health preparedness around integrated information systems and all-hazards approaches.7 This dynamic system, while necessary to prepare for unforeseen events, may inform increased efficiency and effectiveness of the broader public health system.

Conclusion

Now, in an era of exploding health care costs and rising numbers of uninsured, the public health system is pressed to become a larger safety net. Streamlining the public health system's finance structure may leverage valuable resources, thus reducing costs and improving overall health status. In June, AcademyHealth conducted a stakeholder meeting, Building the Field: PHSR Stakeholder Meeting, to evaluate the public health system's research base, assess its research needs, and examine an agenda for public health systems research ( PHSR ). At this meeting, stakeholders identified several knowledge gaps in system organization, structure, and financing. Several priorities identified for the field were related to funding silos in public health, including: What are the effects of categorical funding on resource allocation? Is there a funding algorithm that can be used to generate budgets for becoming a high performing public health system? To what extent are cost-effective public health interventions adopted and implemented within local and/or state public health systems?8

Strategies for streamlining disease prevention in a categorically funded public health system include utilizing dynamic financing mechanisms, integrating public and private resources, and implementing evidence-based public health interventions. Findings from the following selected grants from HCFO's Special Topic Solicitation in PHSR may provide insights to policymakers working to implement these strategies and enhance the U.S. public health system's financing structure.

Title: Informing the Design of Funding Allocation Formulas in Public Health
Grantee Institution: Emory University
Principal Investigator: James W. Buehler, M.D.
Grant Period: January 2008 - December 2009

The researchers will examine formula-based allocation strategies in public health practice. In particular, they would assess the impact on funding allocations of various formula design options, including the use of different indicators of target population need, the cost of providing services, state or local resource availability, and various approaches to combining indicators in formula calculations. The will also study the policy implications associated with using different indicators or strategies, including measures of population health disparities and approaches to assuring equity versus equivalency in funding allocations. The objective of this project is to generate practical guidance for public health program managers seeking to make informed choices when developing allocation formulas to best serve program goals.

Title: Assessment of Training Needs for Public Health Financial Managers
Grantee Institution: University of Kentucky
Principal Investigator: Julia Costich, Ph.D., J.D.
Grant Period: January 2007 - June 2008

The researchers will examine competencies of financial managers in state and local public health departments. A national sample of public health finance officers, and the senior public health officials to whom they report, will be surveyed. The survey will gather information on their self-assessment of current knowledge and performance in relation to public health finance competencies, as well as their preference for educational formats. Using newly issued competencies in public health financial management as benchmarks, the researchers would identify areas of need, mechanisms for delivering training, and potential funding sources. The objective of this project is to identify professional development needs for financial officers in state and local public health agencies.

Title: Public Health Funding and Population Health
Grantee Institution: University of Washington
Principal Investigator: David E. Grembowski, Ph.D.
Grant Period: January 2007 - December 2007

The researchers will examine the relationship between local health department expenditures and county-level disparities in mortality and infant mortality rates for Black and White racial/ethnic groups. They will also estimate whether changes in expenditures are associated with changes in those rates over time. The objective of this project is to inform the debate about the level of resources that should be allocated to public health systems rather than to medical care or other determinants of population health.

Title: Structural Capacities, Processes and Performance of Essential Public Health Services by Small Local Public Health Systems
Grantee Institution: University of Wisconsin
Principal Investigator: Susan Zahner, Ph.D.
Grant Period: February 2006 - January 2009

What factors influence the performance of small local public health agencies (LPHA) in Wisconsin ? The researchers will identify key factors by determining the contributions of specific structural capacities and processes in providing three public health services: 1) monitoring health status, 2) mobilizing community partnerships, and 3) developing policies and plans. The objective of the study is to gain insight into specific factors that can improve the quality of small local public health systems in order to assist policymakers and administrators with targeting resources and technical assistance.

Title: Causes and Consequences of Change in Local Public Health Spending
Grantee Institution: University of Arkansas for Medical Sciences
Principal Investigator: Glen Mays, Ph.D., M.P.H.
Grant Period: March 2006 - August 2007

What are the causes and consequences of changes in local public health agency spending? In particular, they will address the following questions: 1) How have local health spending levels and funding sources changed over the past decade? 2) How have disparities in spending levels changed among communities defined by population size, rural/urban location, socioeconomic and racial/ethnic composition, and structural characteristics of the public health system; 3) To what extent have economic, demographic, and policy-related factors precipitated change in local public health spending levels and funding sources over this period; and 4) To what extent are changes in local public health spending associated with changes in local population health status and disease burden. The objective of the study is to assist policymakers at the federal, state, and local levels in crafting desirable strategies for funding local public health services and to provide insight into the effects of changes in spending on population health, correcting existing gaps and disparities in the allocation of resources.

Title: Regionalization in Local Public Health Systems: Variation in Rationale, Implementation, and Impact on Public Health Preparedness
Grantee Institution: RAND
Principal Investigator: Michael Stoto, Ph.D.
Grant Period: February 2006 - April 2007

What is the effect of regionalization of public health structures? The researchers used four comparative case studies to 1) document the variation in the rationale for creating regional public health structures, 2) understand how these structures have been organized, implemented, and governed, and 3) assess the current and likely impact of regional structures on public health preparedness and public health systems more generally. The case studies address coordination, standardization, and developing regional capacity. The objective of the study was to provide a better understanding of the regionalization of pubic health systems in order to inform the many state and local health departments currently developing regional structures.

1 Committee for the Study of the Future of Public Health, 1988. The Future of the Public's Health in the 21 st Century. Washington, D.C.: National Academy Press.
2 Ward J.W. and K.A. Fenton. "CDC and Progress Toward Integration of HIV, STD, and Viral Hepatitis Prevention," Public Health Reports, Vol. 122, Supplement 2, 2007, pp. 99-101.
3 DeVol R. et al. An Unhealthy America: The Economic Burden of Chronic Disease-Charting a New Course to Save Lives and Increase Productivity and Economic Growth, The Milken Institute, October 2007.
4 For examples of creative financing mechanisms to reduce chronic disease, see Prentice B. and G. Flores. "Local Health Departments and the Challenge of Chronic Disease: Lessons Learned from California," Preventing Chronic Disease, Vol. 4., No. 1, January 2007.
5 CDC Portfolio Assessment Prospectus Reports, Department of Health and Human Services, Centers for Disease Control and Prevention, Portfolio Management Project, October 2006.
6 Rebuilding the Public Health Infrastructure: Final Report and Recommendations of the Governmental Public Health Implementation Team, CDC Futures Initiative, October 2004.
7 Katz A., A. B. Staiti and K.L. McKenzie. "Preparing for the Unknown, Responding to the Known: Communities and Public Health Preparedness," Health Affairs, Vol. 25, No. 4, July/August 2006.
8 Prioritized research questions stemming from the meeting can be found in Advancing Public Health Systems Research: Research Priorities and Gaps at http://www.academyhealth.org/programs/ProgramsDetail.cfm?ItemNumber=2077.... Advancing Public Health Systems Research: 2007 Stakeholder Meeting Summary, a review of the meeting discussion, and Advancing Public Health Systems Research: Strategies for Moving the Field Forward, an examination of strategies for advancing the field of PHSR, are also available there.