Understanding Changes Understanding Changes in Local Public Health Spendingin Local Public Health Spending

Glen Mays, PhD, MPHDepartment of Health Policy and ManagementUniversity of Arkansas for Medical Sciences

Longitudinal change in spending and mortalityLongitudinal change in spending and mortality

•Half of all gains attributable to medical spending •$36,300 per year of life gained•What can we say about public health spending?

Cutler et al. NEJM 2006

Geographic variation in spending and mortalityGeographic variation in spending and mortality

Medical spending varies by a factor of more than 2 across local areas

Medicare enrollees in high-spending regions receive more care but do not experience lower mortality

What can we say about public health spending?

Fisher et al. Annals 2003

Some research questions of interest…Some research questions of interest…

How does public health spending vary across communities and change over time?

Are changes in spending associated with changes in population health outcomes?

What is the value of public health spending?

Variation in Local Public Health SpendingVariation in Local Public Health Spending

05

%1

0%

15

%

Fra

ctio

n o

f A

ge

nci

es

$0 $50 $100 $150 $200

Expenditures per capita, 2005

Gini = 0.472

Change in Local Public Health Spending, Change in Local Public Health Spending, 1993-20051993-2005

05

%1

0%

15

%

Fra

ctio

n o

f A

ge

nci

es

–$50 $0 $50

Change in Per Capita Spending (Current Dollars)

–$10–$20–$30–$40 $40$30$20$10

35%

65%

The problem with public health spendingThe problem with public health spending Federal & state funding sources often targeted to

communities based in part on disease burden, risk, need

Local funding sources often dependent on local economic conditions that may also influence health

Public health spending may be correlated with other resources that influence health

Medicaid9%

Medicare2%

Fees6%

Federal direct

7%

Federal pass-thru

13%

State direct23%

Other12% Local

28%

Sources of Local Public Health Agency Revenue, 2005

NACCHO 2005

Example: cross-sectional association Example: cross-sectional association between PH spending and mortalitybetween PH spending and mortality

165

170

175

180

185

190

195

200

205

0

20

40

60

80

100

120

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Quintile of public health spending/capita

Pub

lic h

ealth

spe

ndin

g/ca

pita

Public health spending/capitaHeart disease mortality

Deaths per 100,000

Example: cross-sectional association Example: cross-sectional association between PH spending and Medicare spendingbetween PH spending and Medicare spending

5800

6000

6200

6400

6600

6800

7000

7200

0

20

40

60

80

100

120

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Med

ical

spen

ding

/per

son

($)

.

Publ

ic h

ealt

h sp

endi

ng/c

apita

($)

.

Quintiles of public health spending/capita

Public health spending/capita

Medicare spending per recipient

Addressing the problem with spendingAddressing the problem with spending

1. Cross-sectional regression: control for observable confounders

2. Fixed effects: also control for time-invariant, unmeasured differences between communities

3. IV: use exogenous sources of variation in spending

4. Discriminate between causes of death amenable vs. non-amendable to PH intervention

PH spending Mortality

Unmeasured disease burden,

risk

Unmeasured economic

distress

+ +

+_

Approaches

Data used in empirical workData used in empirical work

Financial and institutional data collected on the national population of local public health agencies (N≈3000) in 1993, 1997, and 2005

Residual state spending estimates from US Census of Governments

Residual federal spending estimates from Consolidated Federal Funding Report

Community characteristics obtained from Census and Area Resource File (ARF)

Analytical approachAnalytical approach

Dependent variables– Age-adjusted mortality rates, conditions sensitive to

public health interventions (infant mortality, heart disease, cancer, diabetes, influenza)

– Counterfactual mortality rates (alzheimer’s, unintentional injuries)

Independent variables of interest– Local spending per capita, all sources– Residual state spending per capita

(funds not passed thru to local agencies)– Direct federal spending per capita

Analytical approach: IV estimationAnalytical approach: IV estimation Identify exogenous sources of variation in

spending, unrelated to outcomes– Governance structures: local boards of health– Centralized state-local PH administration

Controls for unmeasured factors that jointly influence spending and outcomes

PH spending Mortality

Unmeasured disease burden,

risk

Unmeasured economic

distress

Governance

Analytical approachAnalytical approach

Agency characteristics: type of government jurisdiction, scope of services offered, governance, state-local administration

Community characteristics: population size, rural-urban, poverty, education, age distributions, physicians per capita, CHC funding per low income

State characteristics: Private insurance coverage, Medicaid coverage, state fixed effects

Other Variables Used in the Models

Factors associated with local public health Factors associated with local public health spendingspending

Variable Coefficient 95% CI

Local board of health (1=Yes) 0.145** (0.099, 0.196)

Centralized structure (1=Yes) -0.234** (-0.364, -0.102)

Population size (log) -0.136*** (-0.168, -0.103)

Income per capita (log) 0.196** (0.001, 0.392)

Local tax burden (% of income) 0.234** (0.032, 0.436)

**p<0.05 ***p<0.01Hierarchical logistic regression estimates controlling for community-level and state-level characteristics

Multivariate estimates of association Multivariate estimates of association between spending and mortalitybetween spending and mortality

*p<0.10 **p<0.05 ***p<0.01

Cross-sectional model

Fixed-effects model

Outcome Elasticity St. Err. Elasticity St. Err. Elasticity St. Err.

Infant mortality 0.0516 0.0181 ** 0.0234 0.0192 -0.6854 0.2668 ***

Heart disease -0.0003 0.0051 -0.0103 0.0040 ** -0.3216 0.1600 **

Diabetes 0.0323 0.0187 -0.0487 0.0174 *** -0.1439 0.0605 **

Cancer 0.0048 0.0029 * -0.0075 0.0240 -0.1131 0.0566 **

Influenza -0.0400 0.0200 ** -0.0275 0.0107 ** -0.0252 0.0362

Alzheimer’s 0.0024 0.0075 0.0032 0.0047 0.0051 0.0472

Injury 0.0007 0.0083 0.0004 0.0031 0.0013 0.0086

IV model

ConclusionsConclusions

Local public health spending varies widely across communities

Governance and administrative structures appear influential in spending decisions– Local governing boards – Decentralized administrative structures

Growth in spending is associated with reductions in mortality from leading preventable causes of death

LimitationsLimitations

Aggregate spending measures– Average effects– Role of allocation decisions?

Mortality – distal measures with long incubation periods

Confounding—unmeasured factors tightly correlated with public health spending?