August 2008

Grant Results

National Program

Changes in Health Care Financing and Organization

SUMMARY

Determining the value of governmental public health systems — the state and local public health agencies designed to assess and respond to public health threats — remains a challenge. In this 2006–2007 project, Peter Jacobson, J.D., M.P.H., and Peter Neumann, Sc.D., from the University of Michigan School of Public Health and Tufts Medical Center, respectively, explored ways to define and measure the value of governmental public health systems through a literature review and interviews with 46 public health practitioners, policy-makers and academics.

The project was part of the Robert Wood Johnson Foundation (RWJF) Changes in Health Care Financing and Organization (HCFO) national program (for more information see Grant Results). HCFO supports policy analysis, research, evaluation and demonstration projects that provide public and private decision leaders with usable and timely information on health care policy and financing issues.

A Findings Brief on the project is available at the HCFO Web site.

Key Findings
The researchers reported the following findings in the Findings Brief:

  • Defining and measuring the value of public health services is challenging but essential.
  • Governmental public health systems must use appropriate techniques to demonstrate a measurable contribution to society.
  • Cost-utility analysis, which presents the impact of services or programs in terms of incremental costs per incremental quality-adjusted life year, has considerable potential for measuring the value of public health services, but also carries challenges. (A quality-adjusted life year [QALY] is a year of life adjusted for its quality or its value. A year in perfect health equals 1.0 QALY. The value of a year in ill health is discounted. For example, a year bedridden might have a value equal to 0.5 QALY).

Funding
RWJF provided a $124,638 grant for the project from 2006 to 2007.

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THE PROJECT

Determining the value of governmental public health systems — the state and local public health agencies designed to assess and respond to threats to the public's health — remains a challenge. In this 2006-2007 project, Peter Jacobson, J.D., M.P.H., and Peter Neumann, Sc.D., from the University of Michigan School of Public Health and Tufts Medical Center, respectively, explored ways to define and measure the value of governmental public health systems. They set out to determine:

  • How the value of public health services should be defined and measured.
  • Which methodologies should be used to measure the value of public health services.
  • Whether they could develop an analytical framework for measuring value.

The researchers:

  • Reviewed the literature to identify methodologies to measure value in health economics and public and quasi-public systems (education, welfare and port authorities).
  • Interviewed 46 national, state and local public health practitioners and policy-makers, as well as academics, about defining and measuring the value of governmental public health systems.

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FINDINGS

The researchers reported the following in a Findings Brief:

  • Defining and measuring the value of public health services is challenging but essential:
    • Many of the public health practitioners, policy-makers and academics interviewed could not concisely define value in public health services. Instead, they suggested common components of value, such as prevention, quality of services, community input and social justice.
    • Respondents identified lack of core data sets, lack of agreement on outcome measures of value and the inability to demonstrate that investment in public health contributes to decreased death and sickness, as the most common challenges in measuring the value of public health.
  • Governmental public health systems must use appropriate techniques to demonstrate a measurable contribution to society. It is necessary to provide policy-makers and the public with a better understanding of the quantitative value of public health investments. Merely suggesting the inherent value of public health is no longer a compelling rationale to policy-makers.
  • Cost-utility analysis has considerable potential for measuring the value of public health services. Cost-utility analysis presents the impact of services or programs in terms of incremental costs per incremental quality-adjusted life year (QALY). A year in perfect health is considered equal to 1.0 QALY. The value of a year in ill health would be discounted. For example, a year bedridden might have a value equal to 0.5 QALY.

    However, cost-utility analysis has some limitations, and the best approach may be to use cost-utility analysis as a centerpiece for measuring public health value along with other techniques.

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RESULTS

An Analytical Framework for Measuring Value

Based on the findings, the researchers developed the following analytical framework for measuring value in public health.

  • The analytical framework uses a cost-accounting model derived from the project interviews, which best incorporates the important parts of public health value and includes cost-utility analysis. The model assesses the service/program's public health importance along several dimensions, including:
    • Community priorities.
    • Legal and regulatory requirements.
    • Financial impact.
    • The number of people served (as a percentage of the population).
    • Whether the service would be available elsewhere in the community for the same number of people.
    • The impact on death and illness if the service/program was not implemented.
    The framework considers four components to determine priorities:
    • External factors (e.g., whether the service/program is mandated and its effects on death and illness).
    • Internal actions by the local public health agency (e.g., developing a strategic plan or adequate data collection and analysis techniques).
    • Cost-utility analysis to analyze the impact of services/programs (i.e., as a tool for measuring value).
    • Communicating value to policy-makers and the public.

Conclusion

The researchers reported the following conclusion in the Findings Brief:

  • Without a sustained effort to define and measure the value of public health services, the public health system will have an increasingly difficult time competing for scarce public resources. Results from this research suggest that such investment is necessary and can be successful.

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GRANT DETAILS & CONTACT INFORMATION

Project

Measuring the Value of Public Health Systems

Grantee

University of Michigan School of Public Health (Ann Arbor,  MI)

  • Amount: $ 124,638
    Dates: March 2006 to May 2007
    ID#:  056782

Contact

Peter D. Jacobson, J.D., M.P.H.
(734) 936-0928
pdj@umich.edu

Web Site

http://www.hcfo.net

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Report prepared by: Barbara Matacera Barr
Reviewed by: Lori De Milto
Reviewed by: Molly McKaughan
Program Officer: Nancy Barrand

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