Funding Formulas for Public Health Allocations

Federal and State Strategies

States with local health departments are more likely to use public health funding formulas to determine the resources allocated for specific public health activities; the use of formulas, is related to the federal government providing a higher percentage of a state’s public health funds.

In 2009, the authors enlisted the executive director of the Association of State and Territorial Health Officials (ASTHO) to release an online survey of state health departments’ funding strategies.

The basic requirements of a funding formula are that it be simple, stable and accurately representative of need. State health departments use a variety of instruments to finance local agencies and have a range of structural centralization.

Key Findings:

  • Sixty-seven percent of state health departments use funding formulas.
  • The primary reason for not using funding formulas is lack of local health departments.
  • States find it difficult to create formulas that balance the needs of rural versus urban health departments.

The authors of this study assert that funding formulas are inherently subjective, a view that differs from the general line of the National Academy of Sciences Panel on Formula Allocations. Statistics and formulas, states this report, “are products of social, political and economic interests that are often in conflict.”