There are (at least) three major issues facing public health finance. Let’s talk about it.
The accuracy of the Public Health Activity Estimate is in question. Those and other data quality issues have impeded accurate accounting of public health expenditures. Enhancements are needed for how public health expenditure data are defined and tracked.
Back in December, the CMS Office of the Actuary released the official Public Health Activity Estimates, showing a substantial decline in national public health spending between 2020 and 2021.1 That decline, if real, should be a point of concern to all of us in the public health community—even after accounting for reasonable uncertainty that follows COVID response. This week, in a new commentary in a special supplement to Health Affairs that focuses on COVID-19 and public health, we offer a broader view on the state of financial considerations in the US public health system.2
The US governmental public health system—which includes federal, state, and local agencies—has been chronically underfunded at all levels, particularly with respect to population-based services and infrastructure. Responsibilities and authorities to deliver services differ across the nation, leading to complex funding paradigms and discordance among funders and policy makers for resourcing public health. The COVID-19 pandemic illuminated, and continues to illuminate, gaps in public health infrastructure in communities across the nation.
Our commentary, joined by Betty Bekemeier and Paul Kuehnert, focuses on three key issues: chronic underinvestment in governmental public health; data quality issues and inadequacy of tracking for public health expenditures; and challenges in estimating resources needed to fully implement foundational services.2 Each issue presents a substantial barrier toward securing sustainable investments in public health infrastructure. We close the commentary by offering a brief set of recommendations for making public health services more financially sustainable and accountable, among other recommendations.
Public health spending has varied dramatically over the years, perhaps no more dramatically than in the past several years over the pandemic. While national health spending tracked in the National Health Expenditure Accounts (NHEA) has risen dramatically over the past half-century, the estimated proportion of spending toward public health (the Public Health Activity Estimate [PHAE]) has remained essentially flat over this period (see Figure). The decline mentioned in the first paragraph is also visible, with health care expenditures rising at the same time. Substantial, sustained investments are needed to assure delivery of necessary public health services across the nation.
Figure: National Health Spending and Public Health Spending
Inadequacy of Data Quality and Tracking
National health spending estimates have been shown to have conflated personal health care expenditures and population health spending and have likely overestimated governmental public health spending; the accuracy of the PHAE is in question.3,4 Those and other data quality issues have impeded accurate accounting of public health expenditures. Tracking mechanisms are similarly inadequate as there is no nationally consistent approach toward tracking local and state public health expenditures. Enhancements are needed for how public health expenditure data are defined and tracked.
Challenges in Estimating Necessary Resources
Challenges also persist in estimating the resources needed at state and national levels to deliver Foundational Public Health Services (FPHS). The FPHS are the suite of skills, programs, and activities that must be delivered by the public health system everywhere for the health system to work anywhere.5 Estimating resources needed to deliver such services across a state or system of health departments is a difficult process but has been completed by a handful of states.6 Tools have been developed—jointly by the Public Health National Center for Innovations and University of Minnesota Center for Public Health Systems—to assist individual health departments and public health systems in assessing capacities and costs associated with delivering FPHS. For the national public health enterprise to fully move into the 21st century, additional participation is needed to assess resources needed to deliver the FPHS across the nation.
Overall, we contend that there is a great need for standardization and accountability in public health finance to demonstrate the value of, and most effective delivery for, a baseline of public health services that every community should expect. This will require participation across governments and sectors to invest time and resources to prepare for the next public health emergency. Otherwise, the cycle of panic, neglect, repeat will continue, forever.
- Leider JP. What does it mean that the national Public Health Activity Estimate decreased 21% between 2020 and 2021? Something. Probably. The Wide World of Public Health Systems. https://jphmpdirect.com/2022/12/22/what-does-it-mean-that-the-national-public-health-activity-estimate-decreased-21-between-2020-and-2021-something-probably/. Published December 22, 2022. Accessed March 13, 2023.
- Orr JM, Leider JP, Kuehnert P, Bekemeier B. COVID-19 Revealed Shortcomings Of The US Public Health System And The Need To Strengthen Funding And Accountability. Health Affairs. 2023; 42(3): pp. 374-382.
- Sensenig AL, Resnick BA, Leider JP, Bishai DM. The who, what, how, and why of estimating public health activity spending. J Public Health Manag Pract. 2017;23(6):556–9 PubMed.
- Leider JP, Resnick B, Sensenig AL, Alfonso YN, Brady E, Colrick IP, et al. Assessing the public health activity estimate from the National Health Expenditure Accounts: why public health expenditure definitions matter. J Health Care Finance. 2016;43(2):225–40.
- Public Health National Center for Innovations. Revising the Foundational Public Health Services in 2022 [Internet]. Alexandria (VA): PHNCI; 2022 [cited 2023 Jan 18]. Available from: https://phnci.org/transformation/fphs. Accessed March 13, 2023.
- Lee TP. Assessing the Capacity and Cost of Public Health Systems to Implement the FPHS. Public Health National Center for Innovations. https://phnci.org/transformation/fphs. Published August 29, 2022. Accessed March 13, 2023.
Jason Orr is a Researcher with the Center for Public Health Systems. He is experienced in policy analysis and mixed-methods research as well as systems design, systems analysis, and engineering project and risk management. He holds a BS in Chemical Engineering and an MPH from Kansas State University and is a doctoral candidate in Systems Engineering at Colorado State University. He has academic interests in topics related to public health services frameworks (eg, Foundational Public Health Services); collaborative service delivery (ie, cross-jurisdictional or cross-sectoral collaboration); and other public health systems transformation and innovation initiatives.
JP Leider, PhD, is the Director of the Center for Public Health Systems at the University of Minnesota School of Public Health, and a member of the JPHMP Editorial Board. He is available at leider (at) umn (dot) edu.