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Public Health and Medicine From a Financial Perspective

Updated: Jun 12, 2020

Section 1 – Financial overview of Public Health and Medicine

The current state of the American medical financial system incorporates funding into multiple areas of application. As of 2019, the United States spent $3.5 trillion annually on healthcare. Of this total, nearly 3 percent is characterized as “non-clinical” or public health related, coming out to about $105 billion. These monies are disbursed through various governmental vectors such as the Center for Disease Control and Prevention as well as the Health Resources and Services Administration. Overall, the primary purpose of the national healthcare expenditure is largely for clinical care research and Medicaid and Medicare (the largest vectors). By way of public health planning or programming, limited funding is available for primary prevention and an even smaller pot is available for population-based interventions.

Section 2 – Monetary Impacts in Practice

Cost sharing for the price of executing public health and healthcare programs exists; however, it is heavily dependent on state and local governments. For example, of the $105 billion that is disbursed annually for non-clinical vectors, about 15% percent is attributed to the federal government, where the remaining 85% is made up by state and local governments. Historically, this disparity did not exist. In 1970, 44% of funding was provided by the federal government and 56% came from state and local governments. In practice, this translates to capacity gaps as funding for programming, training, and education is limited. Taken together, less public health staff and decreased public outreach programming contributes to policy fragmentation, as municipalities with higher funding can more effectively execute.

Section 3 – Long Terms Impacts of Funding Dearth

Public health departments have been chronically underfunded, where funding was only delivered in times of crisis, as notably demonstrated by the $2.2 trillion-dollar C.A.R.E.S Act which provided nearly $180 billion in funding for hospitals and public health centers directly. This circumstance establishes a limited collective memory for decision makers, since critical infrastructure degrades as time from crisis increases. Additionally, strategic planning cannot occur as federal funding for public health occurs on an annual basis – like much non-entitlement spending. The compounded impacts of economic downturns lead to a cessation of critical programs such as immunization and tobacco control. Outside of public health programming, workforce impacts are realized through the loss of nearly 35,000 public health jobs in local health departments since 2008. Combined state and local losses since 2008 top 52,000.

Section 4 – Conclusion

From a bottom up perspective of a mid-sized state’s challenges, scaled to the national perspective, an additional $22 billion dollars of perpetual national funding would be needed. Since C.A.R.E.S related funding is crisis specific, much of the allocated monies will expire after use. In order to fully service the United States population, a per-capita model of spending should be adopted. The current state-by-state framework creates a disparate operating environment, as per-capita spending can be at or below the national average of $45.05 or as high as $202.77, in Hawaii. Thus, in order to reach parity among the states, doubling the current federal contribution is required.

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