Innovative Financing Approaches to Support State Public Health: Where We've been and Priorities for Further Development

Public health agencies have seen unprecedented budget cuts to federal, state, and local funding in recent years, and state health agencies (SHAs) have reported job losses and reduced or eliminated services to critical public health programs. With increasingly limited resources to support the public health system, SHAs are looking to innovative financing approaches to maximize and sustain funding. Three such strategies can help address these: 1) Medicaid administrative claim reimbursement, 2) community benefit, and 3) budget justification strategies including zero-based and performance-based budgeting. These strategies have been tried to varying degrees in public health agencies; however, SHA approaches and lessons learned have been largely undocumented.

The Association of State and Territorial Health Officials (ASTHO) supports peer networks comprised of specific sets of state and territorial health agency staff to facilitate the collection of relevant information, identification of best practices, and sharing of ideas and experiences. ASTHO, with support from the Centers for Disease Control and Prevention (CDC), convened members from diverse states within two such peer networks representing chief financial officers and senior deputies to attend a roundtable to explore these approaches. The roundtable conceptualized state finance and policy perspectives and established a framework from which other SHAs can learn and replicate. 

Outcomes of the roundtable included increased knowledge and understanding of emerging innovative financing topics; assessment of the political, financial, and operational feasibility of undertaking each approach; and priority setting within and across states to build on methods that have been tried and research to date. Based on findings and recommendations, defined steps were identified to implement the next generation of pilot demonstrations.