Public health benefiting from new U.S. stimulus law: Health departments may see boost

With a new federal economic stimulus law in place, the U.S. public health system is welcoming a billion-dollar infusion expected to not only create and retain jobs, but to boost critical prevention activities.

Signed by President Barack Obama in mid-February, the $787 billion American Recovery and Reinvestment Act of 2009 establishes a $1 billion Prevention and Wellness Fund aimed at curbing chronic disease rates, providing immunizations and stemming hospital-associated infections. Specifically, the $1 billion includes $300 million for the Centers for Disease Control and Prevention’s immunization grant program, $50 million to support activities targeting health care-related infection rates, and $650 million to carry out community-based prevention and wellness strategies related to chronic disease. While as of early March, discussions were still under way as to how exactly the funds will be distributed, the $1 billion represents the “largest single infusion of additional resources ever made available to the U.S. public health system,” said Corinne Husten, MD, MPH, interim president of the Partnership for Prevention.

“While it wasn’t as much funding as we had hoped for, it can still make a real difference in terms of jobs and programs to make America healthier,” she said.

To be distributed at the discretion of the new U.S. health and human services secretary, the public health funds are expected to help mitigate critical work force losses at health departments nationwide. According to recent surveys conducted by the National Association of County and City Health Officials, local health departments have lost 7,000 workers due, in part, to budget constraints, with such losses expected to continue throughout 2009. The new stimulus funds, however, will help health departments keep and hire new workers to carry out the legislation’s chronic disease prevention goals. The funds, Husten said, can have a “twofer” effect: creating and retaining jobs while investing in prevention activities that save health care dollars.

“(Health departments) are losing jobs at a rapid pace and we need to keep that (public health) infrastructure strong,” Husten told The Nation’s Health. “There’s a real opportunity with this money to show the potential for better health outcomes.”

Even though there is a two-year window to distribute the public health stimulus funds, advocates expect the money to go out sooner rather than later to provide a quicker stimulus effect. Urging that the bulk of funds go to state and local health departments, Husten said she hopes the funds are not spread so thin that officials are unable to document better health outcomes. Hopefully, the funds will be directed toward proven interventions that have wide reaches, she said, adding that the “challenge is to try to focus the resources in a way that, at the end of the day, we’ll be able to show positive health impacts.” Husten noted that while there are no signs that the extra stimulus funds will displace public health dollars in the annual federal budget, how the new funds are used will make a difference.

“If this money isn’t spent in a way that not only shows job creation and health impact, then down the road there’s a danger that people will say this money didn’t result in anything worthwhile,” Husten said. “If we don’t spend this money smartly, it could jeopardize funding two, three years from now.”

In addition to the $1 billion for prevention and wellness, the economic stimulus law supports a number of other public health priorities. The law directs more than $7 billion toward programs at the U.S. Environmental Protection Agency, including those that address drinking water quality and pollution reduction. Five-hundred million dollars will go to programs focused on strengthening the health work force, including the U.S. Health Resources and Services Administration’s National Health Services Corps and the Title VII and VIII programs, which provide scholarships and loan repayments for the education and training of health professionals. The stimulus law also invests $2 billion into community health centers, provides $500 million to the Indian Health Service, offers billions to support health information technology efforts and includes $20 billion for the nation’s Supplemental Nutrition Assistance Program, previously known as the Food Stamp Program. Among the first stimulus funds to go out, Obama announced in early March the release of $155 million in stimulus funds to support 126 new health centers and create thousands of new health-related jobs.

Medicaid, which currently provides health care coverage to almost 60 million low-income residents, received a temporary $87 billion increase in federal funds via the stimulus law. With most states struggling with budget shortfalls and rising unemployment, demands on Medicaid programs are only expected to rise. As such, the new federal Medicaid funds require states to maintain their respective Medicaid eligibility standards that were in place as of July 1, 2008, and stay in compliance with prompt payment standards. The stimulus law also prohibits states that receive the additional Medicaid funds from putting the money into a “rainy day” or reserve fund.

Edwin Park, JD, a senior fellow with the nonprofit Center on Budget and Policy Priorities, which focuses on policies affecting low- to moderate-income families, predicted that without the stimulus funds, there would “almost certainly have been large and harmful cuts to Medicaid in eligibility and services.” During the current and coming debates on national health reform, Park called for creating a permanent mechanism that would automatically increase federal Medicaid funds in accordance with certain economic indicators.

“Medicaid is a countercyclical program: When the economy declines, when taxes decline, the demand for Medicaid goes up,” he told The Nation’s Health. “And unfortunately, when times get bad, Medicaid often winds up on the chopping block right when people really need it.”

For more on the U.S. economic stimulus law, visit www.recovery.gov.

• Copyright The Nation’s Health, American Public Health Association