States' use of formulas for public health funding allocations: Policy, practice, and political aspects

Public health funding formulas have received less scrutiny than those used in other government sectors, particularly health services (e.g., Ryan White AIDS programs) and public health insurance (e.g., Medicaid). Little is known about states' strategies to allocate public health funds. We conducted a mixed methods survey with state chief financial officers to determine their use of funding formulas for public health distributions. We sought information on state health agencies' use of funding formulas for specific public health activities; sources of funding; formula attributes (inputs, adjustors); formula development (e.g., whether a formula was mandated in statute or regulation, developed by the health department, the role of stakeholders); and assessments of political and policy considerations related to formula-based allocations. Results show that states' use of funding formulas is correlated with the number of local health departments and with the percentage of public health funding provided by the federal government. States use a variety of allocative strategies, but most commonly employ a “base-plus” distribution. State health departments have varying experiences and degrees of sophistication in their use of funding formulas. Metrics for risk, need, burden of disease, and performance may not be current, readily available, or robust. The effects of varied metrics and adjustors in formulas is not well understood. Formula development and use is seen as politicized, with questions arising regarding allocations' fairness. Information for decision-making is central to good public health practice, including the development of formulas for funding allocations. Federal public health should work with state and local partners to achieve this end. States' experiences and best practices should be disseminated, along with policy guidance on formula development.