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Abstract

The ability of local health departments (LHDs) to provide public health services to improve the health of their communities depends to a large extent on their financial resources. More money by itself, however, does not necessarily translate into better population health. LHDs also have to use their resources in an efficient manner to achieve the best possible outcomes. This article first describes two techniques that LHDs can use to assess their efficiency at providing public health services: process costing, a technique used by management accountants, and stochastic frontier analysis, a technique used by economists. Using data for LHDs in Florida, both techniques are then applied to estimate the efficiency at which LHDs provide three types of clinical health services: adult, child, and dental health services. The results show that LHDs’ efficiency varies both within and across agencies. Few LHDs have consistently low costs for all three services examined. Being relatively efficient at providing one type of service therefore does not necessarily translate into being able to provide other, even closely related, services at a low cost.

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