Public Health Spending and Medicare Resource Use: A Longitudinal Analysis of U.S. Communities

Objective: To examine whether local expenditures for public health activities influence area-level medical spending for Medicare beneficiaries. Data Sources and Setting: Six census surveys of the nation's 2,900 local public health agencies were conducted between 1993 and 2013, linked with contemporaneous information on population demographics, socioeconomic characteristics, and area-level Medicare spending estimates from the Dartmouth Atlas of Health Care. Data Collection/Extraction: Measures derive from agency survey data and aggregated Medicare claims. Study Design: A longitudinal cohort design follows the geographic areas served by local public health agencies. Multivariate, fixed-effects, and instrumental-variables regression models estimate how area-level Medicare spending changes in response to shifts in local public health spending, controlling for observed and unmeasured confounders. Principal Findings: A 10 percent increase in local public health spending per capita was associated with 0.8 percent reduction in adjusted Medicare expenditures per person after 1 year (p <.01) and a 1.1 percent reduction after 5 years (p <.05). Estimated Medicare spending offsets were larger in communities with higher rates of poverty, lower health insurance coverage, and health professional shortages. Conclusions: Expanded financing for public health activities may provide an effective way of constraining Medicare spending, particularly in low-resource communities.