Assessing the value of 40 years of local public expenditures on health

Abstract

The US public and private sectors now spend more than $3 trillion on health each year.While critical studies have examined the relationship between public spending on health and health outcomes, relatively little is known about the impact of broader public-sector spending on health. Using county-level public finance data for the period 1972-2012, we estimated the impact of local public hospital spending and nonhospital health spending on all-cause mortality in the county. Overall, a 10 percent increase in nonhospital health spending was associated with a 0.006 percent decrease in all-cause mortality one year after the initial spending. This effect was larger and significant in counties with greater proportions of racial/ethnic minorities. Our results indicate that county nonhospital health spending has health benefits that can help reduce costs and improve health outcomes in localities across the nation, though greater focus on population-oriented services may be warranted.