New Research: Investing in Public Health May Reduce Medicare Spending

Investments in public health programs appear to reduce spending in the Medicare program, providing an economic benefit for seniors and the federal budget as growing numbers of baby boomers join Medicare. Results from a new study published in the December issue of the journal Health Services Research by our research team at the University of Kentucky suggest new directions for containing costs by aligning medical and public health programs.

Public health programs aim to prevent diseases and injuries within the public at large, such as those caused by tobacco smoke, poor nutrition, inadequate physical activity, contaminated food and water, or exposure to infectious diseases like influenza. Logic dictates that these programs, if effective, may reduce the need for costly medical care, particularly as people age and accumulate health problems. But research confirming the existence and the size of this effect, which economists and policy analysts call a medical cost offset, has not been available until now.

Estimating Public Health’s Medical Cost Offsets

The new study tracks hundreds of U.S. communities over the period 1993-2013. We measured the amount of money spent annually by local public health agencies in each community, and linked these data with measures of Medicare spending per beneficiary in the same local areas, along with detailed information on demographic, economic and community characteristics. Using an advanced statistical methodology known as instrumental variables analysis, we estimated how public health spending influenced Medicare spending over time, while controlling for other factors that tend to obscure the true causal relationship between these two types of spending.

The results show that Medicare spending per beneficiary fell by about 1 percent for each 10 percent increase in public health spending per resident, with larger offsets observed in low-income and medically underserved communities. These findings suggest that the federal Medicare program could realize an average of $1.10 in savings for each $1.00 invested in local public health activities over time.

Figure: Estimated Impact of a 10% Increase in Public Health Spending Per Capita

Implications for Policy and Practice

A large body of research examines the causes and consequences geographic variation in Medicare resource use – work led by scholars at Dartmouth and elsewhere. Most of the empirical research has focused on supply-side factors and, to a lesser extent, patient preferences. This study is the first to suggest that public health programs and resources may contribute to this variation in important ways.

Local public health agencies appear to generate important but largely hidden economic benefits for their communities, alongside the more visible health benefits. Consequently, medical providers who participate in Medicare’s value-based payment models like accountable care organizations and shared-savings programs should explore the roles that public health agencies can play in helping to improve outcomes and contain costs.

One challenge highlighted by the study’s findings is the so-called “wrong pocket” problem that can undermine incentives to invest in public health programs. Many public health agencies are funded predominantly by state and local government contributions, but the Medicare savings generated by their work accrues to the federal government. Resolving this problem will require new models for public health financing, such as including public health agencies in Medicare’s shared savings models.

The study cannot rule out the possibility that other factors may contribute to the observed connection between public health spending and Medicare savings in local communities. For example, communities that choose to invest in robust public health programs may support other social and community resources that help to constrain Medicare spending, such as better housing and transportation options for seniors. Nevertheless, the study’s strong research design and analysis make this possibility less likely to affect the results.

For More Information

The study was conducted as part of the Robert Wood Johnson Foundation’s Systems for Action national research program, which studies new models for aligning the work of medical, social, and public health sectors in ways that improve health and wellbeing. The study appears in the December 2017 issue of Health Services Research, in a special theme issue featuring research on the economics of public health services.  For more information, contact me at


It’s Hurricane Preparedness Week, How Strong is Health Security Where You Live?

The U.S. has experienced relatively mild hurricane seasons in recent years, and this trend may continue in 2017 according to some models. Hurricane season reminds us of just one of the many types of events that can threaten the health status of large groups of people in the U.S. each year. These events – including storms, fires, floods, infectious disease outbreaks, and infrastructure failures – are uncertain as to their exact location, timing, geographic scale, and intensity. For this reason, health security experts recommend that all states and communities maintain a broad spectrum of health protections that help to keep people safe and healthy regardless of the type of hazard that may occur. Unfortunately, the latest results from a national index of health security indicates that these protections are far from equal in strength across the U.S.

The National Health Security Preparedness Index uses big data and analytics to summarize the strength of health security protections across the U.S. and to track changes over time. The latest results show trends for the period 2013 through 2016 for every U.S. state and the nation as a whole. The comforting news is that health security has trended upward steadily for the nation as a whole. The troubling news is that some people enjoy much stronger protections than others based solely on where they live. For example, the Index shows that residents of the Deep South experience health security levels that fall significantly below the national average, despite their history of exposure to hurricanes and other damaging storms. Across the U.S., states with higher poverty levels, larger rural populations, and lower rates of health insurance coverage tend to fall below the national average on measures of health security.

The Index was created by the U.S. Centers for Disease Control and Prevention, and is now supported by the Robert Wood Johnson Foundation. Last week we shared insights from the latest Index results at the Preparedness Summit 2017 in Atlanta, one of the largest convenings of health security stakeholders in the U.S.

Whether or not you live in a region vulnerable to hurricanes, you have many reasons to care about health and social systems and their ability to protect people when hazardous events occur. For this reason, you will want to visit the Index website and explore its data and measures. And you can join the health security Innovator Challenge by devising a novel way to use the Index in stimulating actions that strengthen health security.

Defragmenting Health and Social Systems: Pitch Your Research Idea Now

The Robert Wood Johnson Foundation’s Systems for Action research program announced our 2nd call for proposals for new research last month. The May 5 deadline for brief proposals is fast approaching, but you still have time to pitch your idea. With this call we will build upon the strong cohort of intramural and extramural studies launched last year through the S4A program, which aim to answer a fundamental and urgent question:

How can we better align delivery and financing systems for medical, social, and public health services in ways that improve health and health equity?

Research shows us with increasing clarity that social, economic, and environmental conditions strongly influence health and health equity for individuals, families, and communities. But we also know that services and supports designed to improve these conditions—such as housing, transportation, education, income and employment assistance, child and family supports, and legal and criminal justice services —are often disconnected from the medical services and public health programs tasked with improving health. As a result, people experiencing adverse social, economic and environmental conditions are more likely to develop costly and preventable health conditions, but they are less likely to benefit from the medical and public health services available to them. We need more scientific evidence about productive and feasible ways to defragment our medical, social, and public health systems in order to solve these coordination problems.

For colleagues who have a special interest in the organization and economics of public health services, the S4A program is a golden opportunity for studying the ways in which public health strategies can help to connect the dots between the medical and social service needs faced by individuals and communities. All of the research supported through S4A pursues an overarching focus on how system alignment strategies can help to achieve health equity by activating key drivers represented in the RWJF Culture of Health Action Framework.

This year we seek research proposals in two different categories: (1) a category for exploratory and developmental studies and (2) a category for full research studies that examine impact and effectiveness.

Submit your research idea today!

What’s Foundational to Population Health? Using Research to Inform Post-Election “Keep or Kill” Decisions

Post-election policy debates concerning the future of the Affordable Care Act focus heavily on the 20 million people who gained health insurance coverage under the law. But the future of less-visible components of the law – especially its population health provisions – may be equally important to the nation’s long-run health and economic wellbeing. Which provisions should be scaled up or down as U.S. policymakers revisit health reform over the next four years?

The ACA stimulated a surge of new interest in the science and practice of improving population health. The aim of this work is to improve health status for large groups of people and entire communities, rather than doing so one patient at a time through an expensive and fragmented medical care system. This work includes upstream strategies for keeping people healthy in order to reduce the flow of patients into the medical system with preventable health conditions. The ACA established population health improvement as a central component of the Triple Aim strategy on which many of the law’s payment and delivery system reforms are based. Since then, hospitals, health systems, insurers, pharmaceutical manufacturers, information technology companies and large employers have created new organizational units devoted to population health. And public health professionals and preventive medicine specialists also claim large swaths of territory in the population health frontier.

Despite this enthusiasm, population health strategies remain controversial due to their heterogeneity and lingering uncertainties about their effectiveness. Over the past 6 years, a wide array of population health initiatives have been developed and tested, including those supported by the ACA’s Prevention and Public Health Fund and the Center for Medicare and Medicaid Innovation. What is lacking in the emerging field of population health is a coherent description of the essential ingredients, backed up by sound research. What capabilities does every community need in order to succeed in improving health status for the population at large? A 2012 National Academy of Medicine study called for additional research to define this set of foundational capabilities and to quantify the resources required to establish these capabilities in every community.

This month the journal Health Affairs published results from one of our new studies that sheds light on this question by combining information from a long-running national survey of communities, “hard” data on health outcomes, and strong econometric methods. Specifically, our study examines whether certain combinations of population health activities lead to improved health outcomes when implemented over time by community organizations.

Measuring Population Health Activities

We followed a national cohort of more than 300 communities over a 16 year time period to examine the extent to which community organizations work together in implementing a set of activities designed to improve health status in the community at large. The population health activities measured in this study are based on practices long recommended by the National Academy of Medicine and other scientific and professional advisory groups. These activities include conducting regular assessments of health status and needs in the local area, developing shared priorities and plans for health improvement, educating community residents and leaders about health priorities, investing resources in shared health priorities, and evaluating the results of these investments. These activities are reflected in many current national guidelines and model practices for health improvement, including CDC’s Community Health Improvement Navigator program, the Robert Wood Johnson Foundation’s Foundational Public Health Services framework, and the U.S. Department of Health and Human Services’ Public Health 3.0 framework.

Prevalence of Population Health Activities in U.S. Communities

We used cluster analysis methods to classify communities into comparison groups based on the spectrum of population health activities implemented in each community and the constellation of organizations engaged in implementing these activities. Communities that implement a broad spectrum of population health activities through dense networks of collaborating organizations are classified as comprehensive delivery systems for population health activities, while the remaining communities were classified either as conventional or limited delivery systems based on their spectrum of activities and collaborative networks.

Estimating Outcomes Attributable to Population Health Activities

We linked survey data on population health activities in more than 300 communities with county-level health outcome measures indicating deaths from potentially preventable conditions during the period 1998 to 2014. We also linked these data with a rich set of measures reflecting community demographic, socioeconomic, and health resource characteristics. Collectively, these data allow us to track how the spectrum of population health activities in each community changes over time, and how these changes relate to health outcomes. Using the method of instrumental variables analysis, we generate causal estimates of how changes in population health activities impact community mortality rates after adjusting for other determinants of health in the communities.

By carefully analyzing data spanning 16 years, the results showed that deaths from preventable causes such as cardiovascular disease, diabetes, influenza and infant mortality declined significantly among communities that implemented a broad spectrum of population health activities through dense networks of collaborating organizations. Preventable deaths were more than 20 percent lower in the communities with the strongest networks supporting population health activities, compared to communities with less comprehensive networks. These differences in mortality persisted after controlling for a wide range of demographic, socioeconomic, and health resource characteristics in the communities, including using causal estimation methods that control for unmeasured community differences.

Drawing Conclusions about What Is Foundational

These results give us the clearest picture yet of the health benefits that may accrue to communities when they build broad, multi-sector networks to improve population health. Achieving better outcomes in this study was not simply a matter of implementing widely-recommended activities involving assessment, planning, priority-setting, resource deployment, and evaluation. Communities needed to implement a broad spectrum of activities and engage a full range of partners in these activities in order to reduce mortality. The results suggest that strong collaborative networks help communities arrive at the best decisions about how to invest limited resources in high-impact health solutions.

The population health activities examined in the study include those now incentivized through the federal Affordable Care Act and related health reform initiatives. Tax-exempt hospitals are required to conduct community health needs assessments in their local service areas, develop community health improvement plans, and report annually on their expenditures related to community benefit activities. And state and local public health agencies are required to undertake similar activities in order to meet voluntary national accreditation standards. The communities that achieved significant reductions in mortality in this study, however, progressed beyond health assessment and planning activities to include shared investment of resources along with monitoring and evaluation activities.

Perhaps most importantly, the communities that achieved sizable reductions in mortality appeared to do so by engaging broad networks of organizations in implementing population health activities rather than relying on independent and uncoordinated efforts. The network effects appear to be major drivers of these results, which are consistent with a growing body of research indicating that community networks can function as force multipliers.

Taken together, these results suggest that foundational ingredients of population health activities include mechanisms that:

· Engage dense networks of stakeholders across the medical, health and social sectors

· Support recurring cycles of community health assessment

· Develop shared priorities and plans for health improvement

· Educate community residents and leaders about health priorities

· Invest resources in shared health priorities

· Monitor and evaluate the results of investments

We recommend that these key ingredients receive careful consideration in the post-election “keep or kill” policy debates about the future of ACA’s population health components.

What Can We Say about Cost and Value?

A complete understanding of the value of population health activities to society requires estimates of both benefits and costs. Estimating the resources required to implement population health activities is beyond the scope of our Health Affairs study, which focused only on estimates of health impact. Nevertheless, post-election “keep or kill” debates about ACA and population health are likely to focus heavily on costs as well as benefits.

We recently conducted a related study to generate first-generation estimates of the costs required to implement Foundational Public Health Services as recommended by the National Academy of Medicine and as defined by a Robert Wood Johnson Foundation supported expert panel process. The services defined and measured in this new costing study do not perfectly match the population health activities measured in our Health Affairs study, but the two sets of measures are closely aligned conceptually. As a result, it is instructive to compare the health impact estimates from our Health Affairs study with the cost estimates from the costing study.

Results from the costing study indicate that full implementation of foundational population health activities in every U.S. community would require $26.3 billion per year in 2016 dollars, a total that is about 70% larger than the estimated $15.4 billion currently spent on these activities in 2015-16. Combining these cost estimates with the mortality reduction estimates produced in the Health Affairs study (and making some conservative assumptions about how mortality reductions translate to life expectancy gains), we estimate that the cost per life-year gained through investments in population health activities is on the order of $7,200 – a number that implies foundational population health activities are potentially a very wise investment.

Of course these estimates of value are very crude back-of-the-envelope calculations, requiring further analysis and refinement. Our research team along with many others are continuing to study these issues with the hope of informing ongoing decisions in health policy and health systems. Our research is part of the new Systems for Action research program created by the Robert Wood Johnson Foundation as part of its national action framework for building a Culture of Health. Based at the University of Kentucky, Systems for Action supports research that evaluates mechanisms for aligning medical care, public health, and social services in ways that improve health and wellbeing.

I invite you to stay up to date on the research progress by following this blog, the Systems for Action website, my research archive, and my twitter feed.

Equal Protection? What Zika and Big Data Reveal About Emergency Preparedness Across the U.S.

Equal protection is a principle worth striving for in emergency preparedness as in other spheres of human endeavor. My new blog post for the National Health Security Preparedness Index uses the big data included in that Index to explore inequities in health protection. Not every American community will experience Zika transmission. But every community needs the ability to prevent, detect, and manage emergencies in ways that minimize morbidity and mortality. Read more here.

Preparedness levels since 2013 have varied widely across domains and states.

New Research Opportunity Focuses on System Interactions, Intersections, and Spillovers

Science tells us with increasing precision that health and well-being in American communities is shaped by a complex web of determinants and contributing factors extending far beyond the reaches of the medical care sector. The physical environment, human and social capital, and economic opportunities and constraints exert a profound influence on health at molecular, person and population levels. One consequence of this fact is that actions taken outside of the health sector can have profound and even profoundly unintended consequences on health and well-being, and these effects are often distributed unevenly across society. Efforts to solve a transportation or housing or education problem, for example, may shift exposures to health risks and protective factors in ways that persistently alter the health trajectories of affected population groups. Economists and other social scientists refer to these phenomena variably as interactions, synergies, externalities, or spillovers across sectors, institutions and systems.

Unfortunately, our knowledge about these system spillovers is incomplete and still evolving, and so our ability to manage these spillovers in ways that optimize population health outcomes and minimize health inequities remains quite limited. The result is our current constellation of fragmented approaches for delivering and financing medical care, public health, and social and community services in the U.S., and our many missed opportunities for collective actions in improving health.

Earlier this month the Robert Wood Johnson Foundation (RWJF) announced a new funding opportunity to help build scientific knowledge about how to solve these systems problems as part of its $25 million investment in research to build a Culture of Health. The Systems for Action research program will develop a rigorous body of applied scientific work that reveals how best to align, coordinate, and integrate the many delivery and financing systems that shape health and well-being in American communities, including but not limited to the medical and public health sectors. This new work is not starting from scratch, but rather it builds from the strong foundation of health services research (HSR) and public health services and systems research (PHSSR) that has helped us understand and improve delivery and financing systems found within the health sector.

We invite you to review the research agenda developed for this exciting new program, along with the new funding opportunity announcement. Join us this Friday December 18 from 1-2pm for a webinar on the new research opportunity (registration required).

Midlife Public Health Crisis: Economists Discover What the Epidemiologists Missed

Amid the hustle of the APHA Annual Meeting this week some may have missed the striking new paper on the declining health status of middle-age white Americans by Princeton’s Anne Case and her colleague/spouse this year’s Nobel prize winning economist Angus Deaton. Making elegant use of some of our key national health datasets, the researchers show that a confluence of mental health problems, chronic pain, inability to work, and substance abuse track closely with an escalation in suicides, alcohol and drug deaths since the turn of the 21st century. Most shockingly, these trends have been sufficiently persistent and large to drive up all-cause mortality at midlife among white non-Hispanic Americans during the period 1999-2013. The dramatic rise in mortality and midlife distress among those age 45-54 was concentrated among those with fewer years of education.

The rise in mortality and decline in life expectancy among such a sizable demographic group over a relatively brief time frame is nearly unprecedented in the 21st Century American population. Case and Deaton note that only the HIV/AIDS epidemic has done this much damage to public health in modern times. The demographic timing of this health shock during prime working and earning years also means that the economic consequences are considerable and likely to contribute to a sluggish U.S. economy.

These new findings on the declining fate of white mid-life Americans, combined with our existing knowledge about the persistent health disparities faced by racial and ethnic minority groups in the U.S., should be a call to action for those of us who study public health delivery and financing systems. It is not clear who if anyone is being well served by our status quo approaches to protecting and improving population health. Surely we can find ways of retooling the U.S. public health system so that it becomes more responsive and more effective in detecting and addressing key population health dynamics.

Such retooling will require strengthening the public health system’s engagement with and influence on larger social, economic, and environmental systems that shape health and wellbeing, which are likely at the heart of America’s midlife crisis. Check out our new Systems for Action Research Agenda for ideas on how systems and services research can help us get there.

I invite you to comment on this blog, tweet at me, nudge me on linkedin, and follow my research archive.