Scarce Public Health Funds Block Social Determinants of Health Aid

August 25, 2017 - As value-based care emphasizes preventative medicine, healthcare stakeholders aim to address social determinants of health to improve and maintain outcomes. But the lack of appropriate public health funding at federal, state, and local government levels prevents the healthcare system from developing the necessary infrastructure, a recent Health Affairs blogpost stated.

Former ONC National Coordinator Karen DeSalvo, MD, MSc, and Milken Institute School of Public Health professor Jeffery Levi, PhD, explained in the blogpost that out of the $3 trillion spent on healthcare, only about 3 percent goes to public health.

“Public health is the natural and historic bridge between the healthcare system and the community — both in terms of linking the healthcare system with services and organizations that address health-related social factors and in creating healthy conditions in the community,” they wrote. “But the sad truth is, the public health infrastructure is struggling to step up to serve as that bridge. Like other parts of our nation’s infrastructure, it has been chronically underfunded.”

The industry experts added that the differential in healthcare versus public health funding may be even greater. Per capita healthcare spending is about $9,990, CMS estimates. But spending on key public health functions is roughly $109 per capita, including $22.66 of federal sources, $31.26 of state sources, and $55 of local sources.

The healthcare versus public health funding gap equates to over a 90-to-1 differential in spending.

DeSalvo and Levi pointed out that the national data does not reflect variations in state and local funding mechanisms for public health, indicating that the differential will rise according to zip code.

Without appropriate funding, government-based public health initiatives are failing to maintain their statutory responsibilities let alone address the rising demand to address social determinants of health through healthcare system partnerships, they stated.

To advance public health infrastructure and initiatives, DeSalvo and Levi offered four financing models that address the core values of public health, such as providing foundational public health services to all regardless of location, granting flexibilities to communities to meet specific health needs, incentivizing partnerships between public and private entities, and ensuring initiatives are data- and evidence-driven.

First, the federal government could create incentives for developing local public health capacity. Under this option, the federal government would match state investments for federal public health programs.

The financing structure mirrors the federal matching method in the Medicaid program, which aims to incentivize states to act as partners in achieving a shared goal.

Second, policymakers could establish value-based reimbursement models. CMS and CDC would collaborate to create and test value-based reimbursement arrangements that support partnerships between public health and healthcare system entities.

Third, the federal government could promote private sector investments in public health by identifying innovation partnerships between public and private organizations.

“There is exciting, but nascent, interest in venture capital approaches to advancing population health and public health capacity through pay-for-success models, including the use of social impact bonds,” wrote DeSalvo and Levi. “The ability of any governmental agency to take on risk is very limited, but through partnerships with foundations there may be ways to demonstrate value for private sector investment in population and public health.”

Fourth, policymakers could widen potential public health revenue sources. For example, a portion of health insurance premiums in each state could be reallocated to public health funds at the state and local level.

The federal government could also use revenue generated from a national sugar-sweetened beverage tax to boost public health financing. The tax would also encourage healthier lifestyles.

The industry experts emphasized that potential public health funding solutions may exist. But until policymakers adopt a financing structure to advance public health, successful initiatives may only be examples, rather than national standards.

“At the end of the day, we must acknowledge that public health is part of the vital infrastructure of a modern, secure, economically competitive, and just nation,” they stated. “This means that public health will need robust, durable, and flexible funding to save lives not just in disaster but also every day.”