Abstract
BACKGROUND: Policy strategies for reforming the U.S. health care system to control costs and improve health outcomes include the possibility of expanded support for public health activities that are designed to prevent disease and promote health on a population-wide basis. These activities include efforts to monitor and report on community health status, investigate and control disease outbreaks, educate the public about health risks and prevention strategies, develop and enforce laws and regulations to protect health, and inspect and assure the safety and quality of water, food, air and other resources necessary for health. The Patient Protection and Affordable Care Act of 2010 (ACA) authorized the largest expansion in federal support for public health activities in decades—a projected $15 billion over 10 years through the Prevention and Public Health Fund. Considerable uncertainty exists regarding the overall health and economic value of investments in these activities, and specifically their ability to offset future medical costs. One manifestation of this uncertainty is the considerable variation in public health investments across local communities. We exploit the extensive cross-sectional and longitudinal variation in local public health spending to estimate its impact on preventable mortality and on medical care spending over a 15 year period.
METHODS AND DATA: A longitudinal cohort design is used to analyze changes in spending patterns and population health within service areas of the nation’s 3000 local public health agencies over the period 1993 to 2008. The National Association of County and City Health Officials (NACCHO) collected data on the organizational and financial characteristics of these agencies through census surveys fielded in 1993, 1997, 2005, and 2008. We linked these data with contemporaneous information on population characteristics, federal and state spending, cause-specific mortality rates, and area medical spending estimates from the Dartmouth Atlas of Health Care. Multivariate regression models for panel data are used to estimate how changes in public health spending affect mortality from preventable causes and medical care spending levels, using instrumental-variables to control for unmeasured factors that jointly influence spending and outcomes. To identify valid instruments for this analysis, we exploit variation in local governance and decision-making structures that help to determine public health investments but have no direct effects on medical care resources or population health outcomes.
RESULTS: Sixty-two percent of communities experienced real growth per-capita public health spending over the period. Increases in local public health spending were associated with significant reductions in preventable mortality rates, particularly for infant mortality and deaths due to cardiovascular disease, diabetes, cancer, and influenza (p<0.05). After controlling for other factors, mortality rates fell by between 0.5 percent and 4.3 percent for each 10 percent increase in public health spending (p<0.05) over 15 years. Meanwhile, medical care spending per person fell by 0.8 percent for each 10 percent increase in public health spending per capita (p<0.05). Communities that increased per-capita public health spending offset 87% of these expenditures via reduced medical costs over the 15 year period, resulting in a cost per life-year gained of less than $1000.
CONCLUSIONS: Communities with larger growth of public health spending experienced larger reductions in mortality from leading preventable causes of death and slower growth in medical spending over 15 years. Increased federal investments in public health may provide an effective way of reducing geographic disparities in population health and slowing the growth in medical costs, particularly if investments are targeted to communities with historically low levels of public health spending.
Document Type
Presentation
Publication Date
6-11-2012
Repository Citation
Mays, Glen P., "Estimating Medical Cost Offsets Attributable to Public Health Spending" (2012). Health Management and Policy Presentations. 44.
https://uknowledge.uky.edu/hsm_present/44
Included in
Econometrics Commons, Health and Medical Administration Commons, Health Economics Commons, Health Policy Commons, Health Services Administration Commons, Health Services Research Commons
Notes/Citation Information
A presentation at the American Society of Health Economists Biennial Meeting in Minneapolis, MN.