Public Health System Incentives in the Affordable Care Act: Institutional, Health and Economic Effects

Objectives:  The Affordable Care Act created new inducements for hospitals, insurers, employers, and others to contribute to community-wide disease prevention and health promotion practices collectively referred to as public health activities.  These inducements include tax incentives for hospitals and employers, pricing incentives for insurers, and direct federal spending through the Prevention and Public Health Fund, potentially changing the structure of public health delivery systems and expanding the implementation of strategies that improve population health.  This study uses panel data from the 1998-2014 National Longitudinal Survey of Public Health Systems to examine: (1) the extent and nature of change in inter-organizational contributions to public health activities; and (2) the effects of these changes on access to services, preventable mortality and resource use. 

Design and Methods:  Our retrospective cohort design follows 360 U.S. metropolitan communities over time using survey data collected initially in 1998 and again in 2006, 2012 and 2014.  Local public health officials report on the availability of 20 recommended public health activities in the community, the organizations that contribute to each activity, and the perceived effectiveness of each activity.  We classify communities into one of seven categories of system capital based on a cluster analysis of the scope of public health activities contributed by each type of organization, along with network-analytic measures of inter-organizational connectedness in performing activities (density, degree and betweenness centrality). We link survey data with outcome measures that include county-level cause-specific mortality rates and measures of public health and medical care expenditures from secondary data sources.  Fixed-effects models with instrumental-variables are used to estimate changes in preventable mortality and expenditures attributable to changes in system capital, while controlling for both observable and unmeasured confounders.

Results:  Communities with the highest levels of system capital based on scope of activities and inter-organizational connectedness increased from 24% of the sample in 1998 to 37% in 2006, but fell to 31% in 2012 and recovered only modestly in 2014. In total, 36% of communities gained system structure over 1998-2014 as indicated by their cluster category, while 45% lost system capital.  Increases in system capital were associated with statistically-significant reductions in infant mortality and deaths due to cardiovascular disease, diabetes, and cancer, but no effects were observed on residual mortality measures used as counterfactual tests. System capital had nonlinear effects on public health resource use, with expenditures declining at the highest levels of system capital.  Instrumental-variables models and lagged models produced even larger effect sizes.   

Conclusions:  Comprehensive and highly-integrated public health systems appear to offer considerable health and economic benefits over time.  The ACA has led to a modest recovery in system capital after significant losses during the Great Recession.  Opportunities exist for improving population health through further gains in public health system capital, such as through the IRS hospital community benefit provisions and the Institute of Medicine’s call for a minimum package of public health services.