Catapulting the Chasm: Or How to Avoid Wasting a Perfectly Good Fiscal Disaster

Abstract

The nation once again is on the precipice of financial catastrophe, but have we overlooked public health? Juxtaposed against one another, the comparison of health care with public health—one largely overutilized, expensive, and underperforming, the other responsible for eradicating diseases and providing safe food and water—cries out for thoughtful fiscal recalibration. We have examined the recent Institute of Medicine report on public health financing and made actionable recommendations for sustainable public health financing.

THE NATION HAS ONCE AGAIN avoided going over the precipice of yet another cataclysmic financial catastrophe, affectionately termed the “fiscal cliff.” This manmade disaster resembles others in our recent history including the so-called debt ceiling compromise that set the stage for the current crisis and is scheduled to be revisited in early 2013. Although these 2 events share the potential to produce a US fiscal nightmare and a date certain for events to begin unfolding, there is another fiscal cliff our country has waltzed over in virtual slow motion with equally dire consequences.

Over recent decades we have spent lavishly on health care, outstripping expenditures of other developed nations by more than twofold, even as other societal needs have been overlooked.¹ Yet the return on our present $2.7 trillion investment in health has been extremely modest.² Moreover, even a nation as wealthy as ours incurs opportunity costs. The vast resources committed to health care are unavailable to be invested elsewhere: in education, social programs, and vibrant communities—the very investments in social and environmental determinants of health that pay returns in the form of health dividends. Worse, not only do we lead the planet in health expenditures, but we also lag behind most developed nations in health outcomes for communities as well as individuals.² In short, from a value proposition perspective, we spend too much and gain too little.

Even as health care expenditures skyrocket, accounting for an ever growing share of the projected sea of red ink that is the federal budget forecast, public health expenditures stagnate or decline.^3,4 In fact, spending on governmental public health is a rounding error considering the size of the overall health budget, a mere fraction estimated at less than 2.5% of total costs.⁵ Ironically, public health has been triumphant, accounting for the major proportion of US life expectancy gains achieved in the 20th century.⁶ Juxtaposed against one another, the comparison of medical care with public health—one overutilized, expensive, and underperforming, the other responsible for eradicating infectious diseases, decreasing by half the incidence of cardiovascular disease, and providing safe food and water among other societal advances—cries out resoundingly for a thoughtful fiscal recalibration.

INVESTING FORWARD, INVESTING IN A HEALTHIER FUTURE

The most recent Institute of Medicine (IOM) report, For the Public’s Health: Investing in a Healthier Future,⁷ the third in an interrelated suite by the Committee on Public Health Strategies to Improve Health, makes a series of recommendations challenging the unacceptable status quo. Although the report was released amid a turbulent financial recession, like its companion reports, it is intended as a visionary, futuristic blueprint that should transcend the crisis du jour and provide guidance for developing a more sustainable, more capable, and stronger governmental public health system able to protect and promote health for all Americans in a post–health reform world.

For many the report is most notable for its call to double the federal commitment supporting governmental public health, from the present $12 billion annually to $24 billion. Compared with other shared federal, state, and local partnerships—Medicaid for example—the federal share of funding for public health at approximately 15% is incomprehensibly low. A modest transaction tax on medical services, modeled after a similar but larger fee in Vermont, is one alternative the report presents as a means to generate the recommended revenue. Yet as significant as this new infusion of resources undoubtedly would be, the accompanying paradigmatic shift—building a health system on the platform of a strong, high-performing public health infrastructure capable of tackling contemporary health challenges—is equally important. Moreover, the development of a consensus “minimum package” of public health programs and services and a set of “foundational capacities” (infrastructure required to support these programs) that will enable every American in every locality to receive a defined public health benefit is also groundbreaking. Public health accreditation (also a recommendation) is one promising mechanism for developing and monitoring standards for the minimum package and foundational capacities once national consensus has been reached. With the passage and upholding of the Affordable Care Act,⁸ it is inherently logical to establish access to health benefit packages that include both medical care and public health components.

FLEXIBILITY SUPPORTS EFFECTIVENESS AND INNOVATION

The IOM committee did not define the consensus public health minimum package of programs, but its suggested components include many basic programs all public health professionals are familiar with: maternal child health, communicable disease control, and environmental health. The IOM committee also recommended interventions directed at foci of high morbidity and mortality accounting for a disproportionate share of the US burden of illness but that receive limited federal funding, such as chronic disease and injury prevention (Figure 1). Examples of requisite foundational capabilities were likewise offered but left for others to describe more fully: communication, health planning, policy analysis, and information systems (Figure 1). Only some of the foundational capabilities receive limited funding via the categorical grants, but these are restricted to serving specific programs. This inflexibility fails to ensure adequate support of the entire spectrum of public health programs, resulting in pockets of excellence that may not concentrate efforts on the most glaring public health needs of the community.

FIGURE 1—

The Institute of Medicine committee’s consensus public health minimum package of programs and requisite foundational capabilities.

As noted, resources, when available, for the programs and capabilities described are insufficient to meet current needs and are typically allocated through rigid categorical silos that do not facilitate blending of funding streams to enhance the full capacity and capability of all health department operations and services. Disease-of-the-month-club categorical appropriations must be reversed; the ability to blend funding is a necessary precondition for efficient and effective public health practice. Such change is overdue because current allocations do not consider the many common antecedents of disease or the shared risk factors that may predispose one to illness. Finally, blending—as well as increasing—resources will enable health departments to better address the misalignment between categorical funding and the greatest burdens of disease.

PUBLIC HEALTH OVERINVESTS IN CLINICAL CARE

For many health departments across the country, clinical care services provided as part of their assurance role under Essential Public Health Service 7 consume an inordinate share of the limited budget, erecting an insurmountable barrier to the provision of needed population-directed services.⁹ Public health reform coupled with advances in coverage, courtesy of the Affordable Care Act, may liberate health departments from this undue burden of the clinical care opportunity cost. Although health insurance coverage of the entire population remains many years distant, even after full implementation of the Affordable Care Act, the IOM committee recommends that, to the extent possible, public health resources that states and localities currently allocate to the clinical care of individuals (primary care medical home) be redirected to population-based strategies that improve the health of the entire community.

APPLES AND AARDVARKS

The Committee on Public Health Strategies to Improve Health struggled to determine precisely how much is currently spent on governmental public health, using several methodologies to provide estimates. Accounting systems differ widely from state to state and across localities, and as a consequence comparison at the micro and macro level is difficult. To facilitate a better understanding of the costs to deliver similar services throughout the entire country, allowing researchers to track program expenditures and study impact, the IOM committee proposed a uniform accounting system. Such systems are feasible, and hospitals, colleges, and universities use them.

DON’T WASTE A PERFECTLY GOOD DISASTER

We are unable to predict with certainty how Congress and the president will ultimately resolve the current fiscal crisis. However, we propose several actionable steps, many consistent with the American Public Health Association’s policy statements, that should be taken immediately to address the equally urgent health and health care cost crisis.¹⁰ Following the recommendations of the IOM report, the secretary of the Department of Health and Human Services should do the following:

• Convene a working group of Department of Health and Human Services agencies and national public health partner organizations to develop consensus definitions and cost estimates for a minimum package of public health services and foundational capabilities to support it.

• Collaborate across Department of Health and Human Services agencies and the federal government to craft flexible policies to allow current limited federal funding to be used in a more efficient and effective manner.

• Impanel an expert workgroup with state and local representatives to explore the development of a uniform chart of accounts system for public health.

• Recommend to Congress viable alternatives for increasing the necessary federal financial commitment for sustainable funding to support the foundational capabilities and minimum package for public health, including a transactions tax on health care services as one option.

Crisis prevention is often the stated goal of dramatic policy intervention. Before us is a slowly unfolding health crisis, with the United States threatening to fall irreversibly behind other economically developed nations, not for reasons of failed innovation or lack of vision but because of inadequate commitment to prevention and public health coupled with an overreliance on health care as a panacea. For the Public’s Health: Investing in a Healthier Future⁷ sounds the alarm; we should not allow this perfectly good disaster to be wasted.