Reference Allocations and Use of a Disparity Measure to Inform the Design of Allocation Funding Formulas in Public Health Programs

The authors of this study propose an evaluation measure they term “proportionality of allocation” (PA)—which compares a given funding formula to two reference indices: one index based on state population size, and another based on the state’s poverty rate. The authors used their measure, PA, to evaluate three hypothetical funding formulas: (1) public health preparedness; (2) smoking cessation; and (3) general wellness. A fourth formula this study considers is that used by the Centers for Disease Control and Prevention (CDC) Preventive Health and Health Services block grant.

Key Findings:

  • When funding allocations are adjusted for aggregate home values in Hawaii and Mississippi (the states with the highest and lowest home values respectively), Hawaii’s allocation went down by 50 percent while Mississipi’s increased 88 percent.
  • The per capita PA value is highest for the CDC block grant formula.
  • For the three hypothetical formulas, the per capita PA values are all near 8 percent.

This study found that different measures of public health funding allocation will be appropriate for different types of health programs. Federal agencies can use a set of metrics to determine whether a given program’s funding matches its need.