The movement toward value-based care has been the major focus of the public and private sectors as a means to control cost and improve health care quality and outcomes. These value-based models are creating more urgent financial incentives and pressures for the health care system to think more about what creates and maintains health, rather than just treating illness. This in turn has led to increasing recognition of the need to move further upstream and address social determinants of health (SDoH).

These financial pressures are not the only urgent reason to rethink our approach to health. For the first time in generations, life expectancy has plateaued and is declining. Much of this rising mortality is attributable increasingly to determinants of health not readily addressed by the health care system. There is now a bipartisan consensus that SDoH are a critical pathway to addressing cost and outcomes.

Adequately addressing the SDoH will require a broad, multi-sectoral approach given the complexity of the challenge. Public health is the natural and historic bridge between the health care system and the community — both in terms of linking the health care system with services and organizations that address health-related social factors and in creating healthy conditions in the community. But the sad truth is, the public health infrastructure is struggling to step up to serve as that bridge. Like other parts of our nation’s infrastructure, it has been chronically underfunded.

A Public Health 3.0 Environment

Investment in public health saves lives and money. With a remarkable track record of success, public health is credited with adding 25 years of life expectancy in the 20th century through interventions ranging from vaccines and cardiovascular disease prevention to motor vehicle safety and smoking cessation.

Despite a shared understanding of the value of public health, as a nation we have preferentially invested in the health care system rather than public health. Of the $3 trillion in health spending in the US, public health receives only at best 3 percent. In fact, the differential in funding may be more significant than previously thought. The Centers for Medicare and Medicaid Services estimates that per capita health care spending is $9,990. This compares to spending on core public health functions of $108.92 per capita inclusive of the federal ($22.66), state ($31.26), and local sources ($55.00). These numbers suggest that there is a more than 90-to-1 differential in funding. Moreover, this national summary data does not reflect the wide variability of state and local investments in public health, with some policy makers at those levels committing to strong public health systems while other public health departments are facing major budgetary shortfalls in meeting core responsibilities. This means that where you live determines the level of public health protection you receive.

As a result, governmental public health is struggling to maintain even its foundational, statutory responsibilities, much less support the emerging needs of addressing the social determinants through partnerships such as with the health care system. This concept of bridging health care and the community is encapsulated in Public Health 3.0, a vision of enhanced and broadened public health practice that goes beyond traditional public health department functions and programs. Cross-sectoral collaboration is inherent to the Public Health 3.0 vision, with health departments serving as the Chief Health Strategist for their communities. Health departments in this role must be high-achieving health organizations with the skills and capabilities to drive such collective action. Pioneering U.S. communities, such as Baltimore, Maryland, are already testing this approach to public health.

A more strategic approach is needed to bring this model to scale nationally. The health of our nation depends on having state and local public health assure that everyone is served by a public health system that offers what are sometimes called foundational public health services — a core set of skills, programs, and activities. This would assure that Americans are protected from threats over which they individually have no control and recognize no geographic boundaries (epidemics, bioterrorist attacks, natural disasters). It would also assure that every community in America is creating the partnerships across sectors—public and private, health and non-health—that will restore value to our health system and make us a healthier, more economically strong nation.

Financing Governmental Public Health

Moving to a Public Health 3.0 model is going to take a shift in how we invest in public health. This effort will be a shared responsibility from all levels of government and civil society. Given the complexity of the US public health infrastructure, it may also mean that no single solution will meet the needs of every community. However, any new or modified approach to financing governmental public health must have a number of key attributes. Specifically, it must:

  • Ensure that foundational public health services are available to all people in America, wherever they may live;
  • Be flexible to allow communities to meet the particular health challenges they face but ensure everyone has equitable access to public health protection;
  • Promote broad outcomes-based approaches to advancing the public’s health, without an overemphasis on any particular disease or program categories;
  • Be predictable rather than crisis oriented, so communities can plan and invest strategically;
  • Support regional approaches and customization that maximize the efficiency of investments;
  • Encourage and incentivize public-private partnerships (e.g., with philanthropy or non-profit hospitals); and, perhaps most importantly,
  • Be data- and evidence-driven in both identifying priorities and investing in solutions.

How can officials ensure the government’s investments will advance these values? There is no single answer, but all investments can and should be guided by the following principles:

1. Public health as a shared responsibility between the federal government and state and local governments

This is enshrined in the Constitution, and by long-standing tradition. As in the Medicaid program, the federal government can address its vital interests by setting minimum standards in exchange for federal public health funding and by using grants and other incentives to support additional public health efforts that meet the priorities of localities. Inherent in this approach should be giving states flexibility to address variability in local government control of public health functions.

2. Federal funding a necessary component

There is a federal interest in ensuring a minimum level of public health infrastructure to provide protection and services in every community across the nation. Where you live should not determine the level of public health protection you receive. Indeed, the federal government cannot achieve even its baseline national security objectives in fighting infectious disease, responding to disasters, or protecting from bioterrorism attacks unless and until every community is served by a public health system meeting foundational capabilities. Similarly, the goal of health care cost containment will not be achieved unless every community has public health capacity to prevent and mitigate costly chronic diseases.

3. Flexibility in exchange for accountability

As state and local health departments agree to meet the standards associated with Public Health 3.0, they should be given more flexibility in the use of federal funds. In exchange for this new accountability, three avenues could open up for states (and local governments): the block granting of related programs, the “virtual” block granting of programs by setting common performance standards and reporting expectations, and/or the permission to allocate a larger share of grants to a special indirect charge that would be devoted to building foundational capabilities.

4. Community empowerment

Public health capacity and needs vary by community — not just by state or county. Saying that zip code matters is not just a rhetorical flourish: as our public health data become more granular, we have come to see that unless we get as local as possible, we will mask problems and disparities and thus delay advancing the health of Americans. Any new system of financing must support the capacity for a very localized response — empowering communities by holding them accountable for overall health improvement, but granting sufficient flexibility so that local problems can be addressed with localized, evidence-informed solutions.

Funding Model Options to Start the Discussion

Ultimately, it will take creative approaches to finance public health 3.0 and fulfill the attributes and principles described above. Taking the health system down a different path where public health contributes to value-based health, will require a broad national consensus among stakeholders. Here are some potential structures for innovative funding of public health in the 3.0 era:

1. Federal incentives for building local public health capacity

The federal government can take a stronger role in incentivizing states to invest more in public health capacity by creating a matching requirement for many federal public health programs. This is not unlike the Medicaid program, where the federal government expects states to be partners in meeting a shared goal.

2. Leveraging new health care financing models

As the health care system increasingly moves toward a value-based approach to financing health care, the incentive to support population level public health initiatives increases. The Centers for Disease Control and Prevention and the Centers for Medicare and Medicaid Innovation should jointly test initiatives that support public health-health care system collaborations using value-based payment models.

3. Identifying new and innovative public-private partnerships that could support value-based public health

There is exciting, but nascent, interest in venture capital approaches to advancing population health and public health capacity through pay-for-success models, including the use of social impact bonds. The ability of any governmental agency to take on risk is very limited, but through partnerships with foundations there may be ways to demonstrate value for private sector investment in population and public health.

4. Broadening potential revenue sources

Investment in public health should not be a zero-sum game. Recognizing that public health contributes to improved health outcomes, a percentage of insurance premiums in each state could be allocated to support state and local public health. Similarly, revenues from a national sugar-sweetened beverage tax could be allocated to public health while encouraging healthier eating just as a federal tobacco tax supported the Children’s Health Insurance Program.

Governmental public health brings value, and with good investment, is known to save lives and improve community health and vitality. On its own, governmental public health has been working to improve its efficiency and effectiveness, innovate into a public health 3.0 model, and be more accountable through actions such as accreditation. But the gap in funding needed to innovate and transform nationally into a modern infrastructure is real. Unless we close that gap, the successful efforts we have seen to date will only be demonstrations of what is possible. Public health will need help from society to create the conditions in which all communities can be healthy.

At the end of the day, we must acknowledge that public health is part of the vital infrastructure of a modern, secure, economically competitive, and just nation. This means that public health will need robust, durable, and flexible funding to save lives not just in disaster but also every day.