An Assessment of the Economic Impact of Local Boards of Health on West Virginia's Economy

Abstract

West Virginia, as is true for the nation as a whole, spends far less on public health interventions than on curative care. In 2008 the United States spent approximately $2.4 trillion on healthcare, of which approximately $72 billion was allocated for public health activities—obviously a very small percentage (Centers for Medicare and Medicaid Services, U.S. Department of Heath and Human Services 2010). In West Virginia the 2006 per capita budget allocation for Local Boards of Health (LBH) for Basic Public Health Services was about $6.91, and total public health funding was between $63 and $91 per capita depending on the definition of public health. At the same time, Medicaid expenditures by the State are approximately $269 per capita with total Medicaid expenditures around $995 per capita. The difference in funding for Medicaid is almost 10 times the amount allocated to public health. The funding differences between curative care and preventive care may not be the result of the public's lack of understanding of the benefits of prevention, but rather its focus on short term rather than long term economic benefits. For a state like West Virginia, in which per capita income is below the national average, Medicaid is good business for the State's economy. Far too often public health funding is viewed as a drain from a state's budget not as an economic contributor to the state's economy. As a result, the funding of LBHs is almost always insufficient. The authors were interested in evaluating the economic impact of Local Boards of Health on West Virginia's economy. Although the authors recognize that the greatest economic benefits of public health are the costs averted through prevention and early detection, they believe that if LBH produce a positive economic multiplier State officials may view public health allocations in a more positive light. To assess the impact of LBH in West Virginia, spending data for each was collected. The direct, indirect, and induced spending resulting from public health activity was considered. The results were modeled using the IMPLAN (IMPLAN Professional 1999) regional input–output simulation software to assess the multiplier effects of direct LBH spending. Findings suggest that LBH produce a positive economic multiplier similar to other service industries in West Virginia. The inferences from this investigation focus on West Virginia however it is possible to make a reasonable argument that the fundamental issues are similar for states with similar economies.