Consolidating Local Health Departments in Ohio: Impacts on Externally Generated Revenues

In recent years, practitioners and scholars have been discussing ways to improve our nation’s public health infrastructure (Institute of Medicine, 2011). The majority of Local Health Departments (LHDs) serve fewer than 50,000 persons (NACCHO, 2014) and it has been argued that the minimum efficient scale for local health departments involves service to about 100,000 persons (Santerre, 2009). Recent studies have also suggested that consolidating LHDs may yield expenditure reductions and cost savings (Morris et al, 2013; Hoornbeek et al., 2012), as well as potential service improvements (Mays et al, 2006).       

However, relatively little attention has been paid to the impacts of consolidation on the ability of LHDs to attract external revenue to support their operations.  Some may argue that consolidation is likely to have positive impacts on external revenues due to likely expansions of LHD capacities and geographic areas covered, while others may argue that there is little reason to believe that consolidation will have these kinds of effects. 

This presentation will share the results of a mixed method study to assess the impact of LHD consolidation on external revenues.  We use data submitted to the State of Ohio between 2001 and 2011, as well as interviews with local health officials to evaluate the impacts of consolidation on non-local revenues.  We find that consolidating LHDs may experience reductions in non-local revenues in the short term and that this effect may disappear after about two years.  We also discuss the implications of our findings for efforts to consolidate LHDs in the future.