259023 Financial Ratio Analysis Supports Decision-Making about Cross-Jurisdictional Sharing among Local Health Departments

Tuesday, October 30, 2012 : 8:50 AM - 9:10 AM

Matthew Stefanak, MPH , Health Commissioner (Retired), Mahoning County District Board of Health, Pulaski, PA
More local health departments (LHDs) are beginning to use financial ratios to analyze their finances and benchmark their financial performance with peer organizations. This presentation will address how financial ratios from the Public Health Uniform Data System (PHUDS) at the National Association of County and City Health Officials (NACCHO) are being used to inform local elected officials in Mahoning County, Ohio about the costs and benefits of LHDs in the County. Local advocates for consolidation had theorized that consolidating LHDs would lead to lower administrative costs and greater success in obtaining state and federal funding, thereby reducing costs for local government. To test this theory we selected two peer groups of Ohio counties that had either (1) combined their LHDs into a single entity or (2) continued to maintain multiple health departments within the county. Financial ratios were generated for each of these peer groups from 2010 Annual Financial Report data submitted by all LHDs in Ohio to the state health department. Local elected officials considering a merger of the two LHDs in the County were particularly interested in these ratios: (1) per capita revenues and expenditures from local government sources, (2) administrative costs as a proportion of total public health expenditures, and (3) per capita state and federal revenues and the proportion of total public health expenditures from these sources. Preliminary analysis of this financial data suggests that Ohio counties with combined LHDs spend fewer local dollars per capita than counties with multiple LHDs. Differences in administrative costs or state and federal revenues between combined and multiple health department counties were not apparent.

In addition to presenting final results of the ratio analysis, the presentation will address how local elected officials used this information in decision-making about health department consolidation in negotiations beginning in the spring of 2012.

Learning Areas:
Public health administration or related administration

Learning Objectives:
1. Explain how financial ratios were used to compare variations in the financial performance of local health departments in Ohio counties that have multiple or combined local health departments. 2. Describe how a financial ratio analysis was used for decision-making about cross-jurisdictional sharing of public health services in Mahoning County, Ohio.

Keywords: Financing, Decision-Making

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: I have recently completed 24 years of service as a county health officer where I used financial ratio analysis as a management tool to improvement the financial performance of my health department and to inform decision-makers in ongoing discussions about merging local health departments in my community. I also serve as a Public Health Uniform Data System (PHUDS) Advisory Committee member at the National Association of County and City Health Officials.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.