Comparison of two Methods for Estimating the Costs of Environmental Health Services

Provided by LHDs in North Carolina

Simone Singh1 , Nancy Winterbauer2 and Ashley Tucker2

1 University of Michigan Department of Health Management and Policy2 East Carolina University Department of Public Health

Acknowledgements

• We would like to thank the finance officers and environmental health managers who provided cost information for this study.

• Funding for this study was provided by the Robert Wood Johnson Foundation (Grant Number 71131).

Context

• All 85 LHDs in North Carolina are required to provide a defined set of mandated public health services.

• Little is known about the costs of providing these mandated services.

• Cost information would allow practitioners to:– Make better programmatic decisions– Achieve greater efficiency in the provision of services– Establish a fee schedule that ensures adequate revenues– Demonstrate the need for funding

Research Aim

• Estimate the costs of the mandated public health services using different costing methods

• Focus of this study was on the following environmental health services:– Food, lodging and institutional sanitation– Individual on-site water supply

Data and Sample• Data sources:

– Cost survey– NC Department of Health – 2010 and 2013 NACCHO Profiles– Census

• Sample consisted of 15 of the 85 LHDs in NC (serving 18 of a total of 100 counties).

• Data was collected for fiscal year 2012.

Cost Survey

• Based on Substance Abuse Service Cost Analysis Program (SASCAP) developed by RTI.

• Asked participating LHDs for the following information, by service line:– Number of services provided– Direct labor costs– Other direct costs (building, supplies, subcontracts,

miscellaneous)– Indirect costs

Data Collection

• To date, 15 (of 16) LHDs have completed the tool.– Respondents included finance officer and

environmental health manager/staff.– Time required to complete the tool ranged from 2 to

12 hours (median = 4 hours).

• All LHDs received follow-up phone calls to clarify responses and obtain additional information.

Participating LHDs

Characteristics of Study CountiesCharacteristic Study Counties (n=18) Total NC Counties (N=100)

n % N %Population Size         Small (up to 50,000) 7 39 47 47 Medium (50,000 to 100,000) 8 44 26 26 Large (over 100,000) 3 17 27 27Geographic Region         East 5 28 41 41 Piedmont 7 39 35 35 West 6 33 24 24Population Density         Rural (<40) 0 0 10 10 Semi-Urban (40 to149) 12 66 54 54 Urban (≥ 150) 6 34 36 36% of Population classified as Rural

       

< 50% classified as rural 6 34 36 36 ≥ 50 classified as rural 12 66 64 64

Results: Services and Staffing  Number of

Services

Median (IQR)

Number of FTEs

Median (IQR)

Number of Services per

FTEMedian

(IQR)

Food and lodging

2,442(1,107 – 3,339)

4.5(3.0 – 6.0)

495 (350 – 814)

Onsite water and wells

5,704(1,901 – 7,272)

4.5(3.0 – 6.75)

861(481 – 1,745)

Combined7,761

(3,980 – 10,719)9.0

(6.0 – 12.0)655

(437 – 1,109)

Results: Cost Estimates  Total Cost

Median (IQR)

Cost per Service

Median (IQR)

Cost per Capita

Median (IQR)

Food and lodging

$287,624($191,108 - $463,987)

$145($119 - $186)

$3.38($3.06 - $4.77)

Onsite water and wells

$347,153($232,236 - $516,574)

$82($57 - $162)

$4.40($3.24 - $6.90)

Combined$659,873

($423,344 - $971,982)

$105 ($71 - $166)

$8.51($6.68 - $11.67)

Correlation AnalysisFood and lodging Number of

servicesNumber of

FTEsNumber of FTEs 0.67**

(0.006)Cost per service -0.48

(0.07)0.19

(0.51)

Note: Tables show Spearman’s correlation coefficients with p-values in parentheses. ** indicates p<1%.

Water and wells Number of services

Number of FTEs

Number of FTEs 0.43(0.11)

Cost per service -0.75**(0.001)

0.09(0.76)

• LHDs that provided more FL services also provided more WW services.

• LHDs that incurred higher costs per FL service also incurred higher costs per WW service, and vice versa.

Relationship between Volume and Costs

5010

015

020

025

030

0C

ost

pe

r se

rvic

e

0 1000 2000 3000 4000 5000Number of services provided

Food and lodging

Relationship between Volume and Costs

5010

015

020

025

030

0C

ost

pe

r se

rvic

e

0 2000 4000 6000 8000Number of services provided

Onsite water and wells

Cost by LHD CharacteristicsCharacteristic Cost per service

Food and lodgingCost per service

Onsite water and wellsScale of environmental health service provision

Below median (<7,761) $166 $137

Above median (>7.761) $142 $75

Scope of environmental health service provision

Below median (<40%) $232 $242

Above median (>40%) $141 $77

Percent of total funding obtained from local sources

Below median (<70%) $145 $118

Above median (>70%) $151 $80

Cost per Service by Community CharacteristicsCharacteristic Median cost per service

Food and lodgingMedian cost per serviceOnsite water and wells

Population size

Small (<50,000) $154 $105

Med (50,000 – 100,00) $123 $74

Large (>100,000) $175 $118

Population density

Semi-urban (<150/sq mi) $154 $80

Urban (>150/sq mi) $145 $162

Square footage of service area

Small (<550 sq mi) $166 $137

Large (>550 sq mi) $143 $71

Composition of Costs  Food and lodging Onsite water and

wellsDirect costs 93.9% 94.5%

Labor 83.7% 80.2%

Rent 2.6% 2.4%

Supplies 4.8% 6.7%

Subcontracts 0.0% 0.0%

Miscellaneous 1.3% 2.1%

Indirect costs 6.1% 5.5%

Total costs 100% 100%

Cross-Validation of Cost Estimates  Total Cost

Median (IQR)

Cost per service

Median (IQR)

Cost per capita

Median (IQR)

Survey data$659,873

($423,344 - $971,982)

$105 ($71 - $166)

$8.52($6.01- $23.85)

Administrative data$707,404

($183,967 – 1,146,056)

$109($70 - $425)

$8.69($5.50 - $18.14)

Correlation of cost estimates0.88

(p<0.001)0.50

(p=0.056)0.83

(p<0.001)

Limitations• Sample represented a convenience sample and was small.

• Data was collected for one year only.

• Generating cost estimates was complicated as NC LHDs– Use budget procedures that do not easily lend themselves to splitting

program costs;– Generally do not pay rent;– Had difficulty identifying indirect/overhead costs.

• Service lines were aggregate categories of several different services; data did not allow costing each service individually.

• Understanding costs is crucial for decision making regarding how to best organize and finance public health activities at the local level.

• Available data often lack the detail needed to allow practitioners to estimate and benchmark their costs.

• More detailed data can be obtained via costing tools.

• Completing costing tools is challenging due to lack of uniform approach to report financial information and limited personnel.

Implications for Policy and Practice

Research Team• Researchers

– Nancy Winterbauer (Research Co-PI) East Carolina University – Lisa Macon Harrison (Practice Co-PI) Granville-Vance LHD– Simone Singh, University of Michigan– Katherine Jones, East Carolina University – Ashley Tucker, East Carolina University– Patrick Bernet, Louisiana State University

• Advisory Committee– Local Health Departments: Sue Lynn Ledford, Colleen Bridger, and Amy

Belflower Thomas– NC Division of Public Health (DPH): Joy Reed– UNC-Chapel Hill: Dorothy Cilenti (NCIPH)

Thank You!

Contact information:Simone R. Singh, PhDsinghsim@umich.edu

(734) 936-1194