Public Health Financing: NewPublicHealth Q&A with Marthe Gold and Steven Teutsch

Apr 11, 2012, 1:39 PM, Posted by NewPublicHealth

A new report released this week by the Robert Wood Johnson Foundation-sponsored Institute of Medicine Committee on Public Health Strategies to Improve Health calls for significant reforms to refocus America’s public health system toward prevention of the chronic diseases that are taking a toll on the nation’s health and economy.

The report, For the Public’s Health: Investing in a Healthier Future, is the final in a series that is intended to help guide efforts by public health leaders, policymakers and other stakeholders to address the nation’s health challenges in the 21st century and beyond. The committee’s 10 recommendations include one that is focused on setting national targets for life expectancy, and another on establishing a basic array of programs and services that would enable every health department to provide a standard level of health protection in the communities they serve. The committee also recommended creating a stable, dedicated funding source. They favored a medical care transactions tax, and examined other taxes as well as less traditional funding sources such as community benefits, social investment bonds and collaboration with community development financial institutions.

NewPublicHealth spoke with Marthe Gold, MD, MPH, chair of the report committee and professor and chair of the Department of Community Health and Social Medicine at the Sophie Davis School of Biomedical Education of City College, and Steven Teutsch, MD, MPH, vice chair of the committee and Chief Science Officer for the Los Angeles County Department of Public Health, about the committee’s recommendations.

>>Read our earlier Q&A with Marthe Gold on the second report in the IOM series, titled For the Public’s Health: Revitalizing Law and Policy to Meet New Challenges.

NewPublicHealth: What’s the big picture on the committee’s report and the recommendations around public health financing and how do you hope it will be used?

DPH-Marthe-Gold Marthe Gold, Institute of Medicine and Sophie Davis School of Biomedical Education of City College

Marthe Gold: Public health activities and strategies that can prevent disease and promote health are chronically underfunded in the country. The consequences of this underfunding are poor health and poor well-being for Americans. This plays out in a hugely expensive medical care delivery system that’s called on increasingly to treat conditions that are largely preventable. Obesity is a prime example of this. The expense of the medical care delivery system is interfering with the nation’s economy and its productivity.

This report focuses on strategies to develop more evidence-based understanding of population health needs and to finance the public health infrastructure in the U.S. so that we can bend the curve on risk for the health of Americans. The committee has recommended a two-pronged approach, one which calls for more effective and efficient use of the money that’s already in the system, but also noting that more resources are clearly needed. The committee is hoping with the release of this report, the government at all levels will heed the call to reconsider how we think about investments in health. We also hope that the report will contribute to efforts to create a broader public understanding of the factors that contribute to and detract from health.

NPH: One of the major recommendations is setting a national target for the public health system’s performance on two key measures—longevity and per capita health spending. What is the thinking behind this recommendation?

Marthe Gold: The United States is an outlier, to its detriment, among the 34 countries that currently comprise the Organization for Economic Cooperation and Development (OECD). The committee thought it was critical that as we set goals and objectives for health in this nation, for example, through our Healthy People process. This will help us raise the visibility of our under-performance in health and our over-investment in medical care. The expense of our clinical care delivery system interferes with our ability to invest in other activities including education, housing, the environment, and family support, which all have been associated in peer nations with superior health outcomes. Our average ratio of expenditures on medical care compared to other social services, for example, has been documented to be below one, whereas for the OECD countries overall, the ratio is a two to 1 social services to medical care spend.

NPH: What is the basic package of public health services everyone in every community should have access to?

Teutsch Steven Teutsch, Los Angeles County Department of Public Health

Steven Teutsch: The committee believes that there’s a basic set of services that needs to be available to every resident of the United States, and that simply is not the case now. The committee actually recommends two things. One is that that basic package of services be defined so that we’re clear on what those services need to be. And then we discuss how that can be funded.

That basic package of services includes a set of fundamental capabilities that every public health department needs in order to do its job, and those are things like monitoring the health of the population, being able to develop appropriate policy, and communicating effectively. In addition, each public health department needs to deliver a set of programmatic activities that are required to meet the needs of the public. That would include tobacco programs, maternal and child health, and immunizations. All together that would constitute a minimum package of services that would be available in every community across the country.

NPH: To provide this level of health protection, the committee recommended a significant increase in federal funding for public health—roughly double the current allocation. Can you describe the committee’s thinking about the role of the federal government in funding public health, and the considerations that went into this estimate?

Marthe Gold: It’s a matter of moving what is now about $11.7 billion to about $24 billion -- a rather small amount when thought about in the larger context of the $2.5 trillion we spend on medical care in this nation. As of now, the best estimate of the federal share of total public health funding is just 15 percent, whereas for clinical care funded by Medicare and Medicaid, the federal share is 83 percent. The federal contribution now is a far smaller proportion than in relatively recent history. The committee could find no reason why the federal interest in the health of populations should differ so markedly from its interest in the medical care of individuals.

NPH: The report also suggested different approaches to raising needed federal funds. Can you elaborate on that?

Marthe Gold: The committee favored a medical care transaction tax because, one, they felt a tax on medical care that supports population health is a coherent way to connect two major players in the U.S. health system that need to continue to align their strategies and pool their skills and resources. Second, a modest fee on medical care usage can provide ample funding. Merely half of one percent of the currently $2.5 trillion clinical spend would raise the funds the committee presents as an initial ask to the federal government. Third, given annual increase in medical care costs of 3 percent to 5 percent, this amount is unlikely to be overly burdensome. The committee noted that medical care transaction taxes, which have been used to increase access to care, have been used successfully in Vermont and Minnesota, and therefore, felt that this could work well.

NPH: What changes are needed in the public health system to improve health?

Steven Teutsch: There are a number of important things that are needed. The report talks about the need to take advantage of the resources that we have currently in the system and to use them more efficiently. We talk about the need to have a better understanding about how those resources are expended and how they can be used optimally, as well as the research to understand how resources can be used better.

NPH: The report also calls for better research to support the value of public health as well as the best and most efficient way to structure and deliver public health services. What kind of research does the committee think is most needed to move its vision for the public health system forward?

Steven Teutsch: Several types of research are needed and public health needs to have the infrastructure in order to deliver relevant information to decision-makers. We need research so we actually know which interventions work, how well they work and their value. We need to know how different interventions compare to each other, which is what we would call comparative effectiveness. And then we need to understand how the system can work more efficiently; we would call that public health systems and services research. This would enable us to build a public health system that uses the resources as optimally as possible.

Comparative effectiveness research is now underway through the Patient-Centered Outcomes Research Institute, but that work currently excludes population-based research. We strongly believe that they need to be much more inclusive so that we actually look at the kind of interventions, whether they’re in clinical or public health, that yield the greatest value and the greatest health benefit.

NPH: Another recommendation is to transition clinical care out of public health. What is the rationale for this?

Marthe Gold: The committee was mindful of the important roles that many public health agencies play in assuring medical care infrastructure for communities and populations within them that are poorly served by the medical care delivery system. And although clinical service delivery by public health departments has declined over the years, still approximately half of all health departments provide a range of clinical services. They often gain political and financial support from the communities they serve, and sometimes the financial support subsidizes some of the population-based health activities that are critical but less tangible to the public.

The Committee understands the importance of maintaining an adequate clinical care infrastructure, but it hopes that public health departments will be able to end the direct delivery of clinical care and assume the role of assuring that people in communities have adequate access to quality care. This evolution of roles would allow public health departments to focus more sharply on the unique skills that they have in the areas of assessment, analysis, policy development, communication, and building partnerships in order to accomplish change. We think that by clarifying what public health does and does not do, the health system is going to be able to both differentiate public health from clinical care and integrate them more effectively. We think the public health system can provide information to the public and to the medical care system about the burden of disease and the performance and appropriateness of care delivered by the clinical care system. We’d like to see those analytic capacities strengthened and used by the medical care delivery system.

NPH: How do you believe the recommendations in this report could change the public health system?

Steven Teutsch: The committee sincerely hopes that these recommendations are actually going to be taken to heart and acted on because we think they could have a profound impact on the effectiveness of the public health system. We see that happening in a number of different ways. One, we think these changes, if enacted, would allow public health to get back to its roots to deliver population health services and would enable public health to integrate its services much better with the clinical care system. We believe that there would be greater efficiency in how public health can use the resources that it currently has available to improve health. And as the financing increases to levels that allow it to really do its job, we believe that we would have a much more effective public health system that not only would contribute to a healthier population, but also to a more productive and competitive economy.

This commentary originally appeared on the RWJF New Public Health blog.