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VOLUME 52 | NUMBER 6.1 | DECEMBER 2017


Public Health Spending and Medicare Resource Use: A Longitudinal Analysis of U.S. Communities

Objective: To examine whether local expenditures for public health activities influence area-level medical spending for Medicare beneficiaries.

Data Sources and Setting: Six census surveys of the nation's 2,900 local public health agencies were conducted between 1993 and 2013, linked with contemporaneous information on population demographics, socioeconomic characteristics, and area-level Medicare spending estimates from the Dartmouth Atlas of Health Care.

Data Collection/Extraction: Measures derive from agency survey data and aggregated Medicare claims.

Study Design: A longitudinal cohort design follows the geographic areas served by local public health agencies. Multivariate, fixed-effects, and instrumental-variables regression models estimate how area-level Medicare spending changes in response to shifts in local public health spending, controlling for observed and unmeasured confounders.

Principal Findings: A 10 percent increase in local public health spending per capita was associated with 0.8 percent reduction in adjusted Medicare expenditures per person after 1 year (p < .01) and a 1.1 percent reduction after 5 years (p < .05). Estimated Medicare spending offsets were larger in communities with higher rates of poverty, lower health insurance coverage, and health professional shortages.

Conclusions: Expanded financing for public health activities may provide an effective way of constraining Medicare spending, particularly in low-resource communities.

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