Analysis: $10 per person in public health spending can make a major impact
July 27, 2018

ASU professor breaks down where our taxpayer dollars are really going when it comes to health-care spending

With public health expenditure on the decline in the United States, Mac McCullough, an assistant professor in the College of Health Solutions at Arizona State University, set out to determine just where our taxpayer dollars are going and how effective spending on public health systems really is.

In an analysis sponsored by AcademyHealth and the Robert Wood Johnson Foundation, McCullough, also a health economist at the Maricopa County Department of Public Health, found that $10 per capita of public health spending can buy:

• A decrease of 7.4 percent in infectious disease morbidity and a 1.5 percent decrease in premature mortality at the county level.

• An increase of 0.6 percent in the proportion of the population in very good or excellent health.

An additional $10 in overall health spending can lead to:

• A decrease of 0.4 cases of salmonella per 10,000 person years.

• A decrease of 3 to 6 percent of county-level STD rates.

The issue, McCullough said, is that it’s hard to see the benefits of public health spending because we don’t notice when someone doesn’t get sick.

“Spending on public health systems can improve health and save lives because rather than waiting until after someone has a disease, public health works to prevent disease,” he said. And that means paying for “the knowledge and tools needed to live healthy lives.”

McCullough discussed the results of his analysis with ASU Now.

ASU prof
Mac McCullough

Question: What was the overall finding of your analysis?

Answer: The evidence is nearly unanimous that public health spending leads to better health outcomes and saves money. It’s like the old adage that an ounce of prevention equals a pound of cure. Except in this case, the evidence doesn’t specifically identify a single exchange rate, just that $1 of spending on public health systems can lead to more than $1 in savings.

Q: Why do we need more than health-care insurance to ensure public health?

A: As many of us who have had health-care insurance know, simply having an insurance card in our wallet does not guarantee us our health. Modern medicine is truly remarkable in terms of the treatments and cures it can deliver. But many of us would recognize that we need to rely on more than just our visits to the doctor’s office to stay healthy. The public health system is set up for exactly that purpose and should be seen as a critical complement to health-care insurance. For example, even if we have home insurance that doesn’t mean we should completely disregard maintenance and upkeep on our houses.

Q: Is there any evidence to demonstrate the effectiveness of health insurance compared to our nation’s public health system on population health?

A: Public health spending likely totals somewhere around $50 billion. That pales in comparison to the more than $3 trillion spent on health care each year. It’s hard to compare the return on investment for public health versus health insurance because they are designed for different purposes — public health seeks to keep people healthy while health insurance seeks to keep people healthy and also to return people to health when they are sick. But even if we don’t directly compare the two, evidence that public health spending saves lives and saves money should be a powerful impetus for us to seriously consider how and why we only choose to allocate 2 to 3 percent of our total spending for health toward public health.

Q: If public health spending leads to better health outcomes, why is it on the decline?

A: When public health succeeds at preventing disease, that success is often invisible. Statistically speaking, someone reading this likely had their life saved by a vaccination. Someone else may have avoided foodborne illness as a result of food sanitation policies. Countless others benefit from having clean air, clean water and safe places to live and play. That’s remarkable to think of from a population perspective, but the challenge is we will never know who. Another issue is that when public health succeeds at preventing disease and saving money, those savings tend to accrue to other actors in the health care or government sectors. It may be helpful to think of public health as a common good, much in the way that national defense is. We all benefit from it, but the free market tends not to want to invest in it.

Q: What is the benefit of focusing on populations when it comes to improving health?

A: With tobacco-free policies, for example, the health — and financial — impact is substantial. We are probably talking about deaths from lung cancer being reduced by these policies. It’s hard to put a price on a human life, but consider how much we are willing to pay for small reductions in risk of death. New cars contain thousands of dollars of optional safety features demanded by consumers, for example. So the value of preventing a death easily stretches into the millions of dollars per life saved. In comparison, the financial investment required to pass and enforce these policies is relatively modest. So while different parts of the public health system may have different levels of returns on investment, it is fairly easy to see how spending $1 on public health can yield sizable health gains and cost savings.