Jurisdiction Size and Local Public Health Spending

Abstract

To examine if a minimum efficient scale (MES) holds with respect to the population serviced by a local health department (LHD) given the congestability, externality, and scale/scope economy effects potentially associated with public health services. A nationally representative sample of LHDs in 2005. Multiple regression analysis is used to isolate the relation between population and spending while controlling for other factors known to influence local public health costs. Data were obtained from the 2005 National Profile of Local Public Health Agencies, a project supported through a cooperative agreement between the National Association of County and City Health Officials and the Centers for Disease Control and Prevention. The MES of a local public health department is approximately 100,000 people. After that size, additional population has little impact on public health spending per capita. Seventy-seven percent of LHDs in the sample fall below the 100,000 MES. Higher levels of government may want to provide financial inducements so that smaller LHDs consolidate or enter into agreements with larger public health organizations to provide services.