Revenue Generation as Budget Strategy: Predictors of Per Capita Local Health Department Non‐Local

Government Revenues

Senay GoitomRobert M. La Follette School of Public Affairs

Andrew M. Reschovsky, PhDRobert M. La Follette School of Public Affairs

Susan Zahner, DrPH, RNSchool of Nursing

Acknowledgments• Support for this research was provided by a

grant from the Robert Wood Johnson Foundation’s Public Health Practice-Based Research Networks program, and

• A Health Policy Assistantship funded by grant #1UL1RR025011 from the Clinical and Translational Science Award program of the National Center for Research Resources, NIH

Effect of Economic Crisis on LHDs Housing collapse and “Great Recession” have led

to steep budget cuts at all levels of government In Wisconsin, as in many other states, recent budget

deficits have been closed primarily through cuts in spending

In Wisconsin, constraints have been placed on LHDs in the form of property tax levy limits

This will impact the single largest source of revenue for LHDs

Rationale Given the constraints facing local governments,

non-local government sources will become increasingly important

This study represents a first step in understanding the factors affecting these revenue sources

Local Health Departments in WI In Wisconsin, 94 LHDs provide public health

services including: Communicable disease control

• Immunization• Investigation of disease outbreaks• Education

Chronic disease prevention and control• Wellness programs

Environmental health• Water testing• Restaurant and lodging inspections

Research Question What community and LHD characteristics affect

growth of non-local government revenue?

Description of Data Panel dataset

92 health departments• Representing 70 counties and 42 municipalities

2002-2009 Total panel size N=746

Includes data from the following sources: Wisconsin Department of Health Services Local Health Department

Survey (2002-2009)• LHD Revenue Data

• Local Health Department Inventory• Data on Services Provided

Demographic Data Wisconsin Department of Revenue

• Equalized Property Value Data• Property Tax, Sales Tax, Shared Revenue Data

Local Health Department (LHD) Financing in Wisconsin

In Wisconsin, LHDs receive revenue from the following sources:

County/municipal sources (e.g. taxes)

Fees for services Federal grants State grants Private grants Donations from individuals

Focus of this presentation

Sources of Non-Local Government Revenue

Fees for services Restaurant and private well inspections Medicare and medicaid reimbursements

Federal Grants Maternal and Child Health Block Grant WIC

State grants Childhood lead Well Woman programs

Private grants Donations from individuals

Percent of Total Revenue 2002-2009Share of Total Revenue (%)

mean SD min max

Tax Revenue 51.4 16.1 0 100

Federal Grants 21.8 12.4 0 75.7

Fee for Services 17.8 11.6 0 61.1

State Grants 7.5 7.3 0 53.9

Private Grants 1 2.3 0 26.5

Donations 0.4 2.3 0 46.1

Regression Model We are looking at why some health departments are

obtaining more revenue than others

Where:

is non-local government sources of revenue is a vector of community characteristics

is a vector of LHD characteristics

corresponds to a vector of time dummy variables

Estimation Method Log transformation where appropriate (dependent

variable and some RHS variables) Lag structure

Include one and two year lagged values of dependent variable

Pooled OLS regression Robust standard errors using LHDs as clusters

Summary Statistics of Variables in Final Modelmean sd min max

Per capita non-local government revenue 13.58 9.29 0.00 90.78

LHD population (1000s) 59.91 81.45 4.59 595.96

Per capita personal income (1000s) 34.03 5.32 21.00 62.16

Per capita EQV (1000s) 87.36 42.70 35.45 359.99

Under-18 poverty (%) 15.26 6.93 2.70 51.10

Over 65 (%) 14.69 3.34 9.16 26.04

County health ranking (z-score) 0.13 0.86 -1.73 3.00

Share of total services (%) 50.90 13.42 6.57 78.20

Majority of BOH non-elected (0,1) 0.43 - 0 1

DHS inspection agent (0,1) 0.59 - 0 1

Regression Results-Community Characteristics

  Full Model No Lags Final Model (with lags)

county unemp. rate -0.0189 (0.0281) -0.0546 (0.0667)    

county poverty rate 0.0227 (0.0200) 0.0587* (0.0335)    

county under 18 pov. -0.0264** (0.0123) -0.0680*** (0.0205) -0.0121** (0.0049)

county health ranking 0.0730* (0.0409) 0.0686 (0.0677) 0.0512* (0.0287)

per capita EQV 0.0550 (0.0925) 0.1207 (0.1638) 0.0697 (0.0542)

per capita pers. inc. -0.5319** (0.2612) -1.6301*** (0.5314) -0.3148* (0.1733)

county pop. non-white 0.0006 (0.0038) 0.0010 (0.0083)    

county pop. under 20 0.0025 (0.0125) -0.0081 (0.0272)    

county pop. 65+ 0.0182 (0.0135) 0.0451 (0.0286) 0.0058 (0.0061)

Standard errors in parentheses* p < 0.10, ** p < 0.05, *** p < 0.01

Regression Results (cont’d)-LHD Characteristics

  Full Model No Lags Final Model (with lags)

Local gov’t GPR 0.0177 (0.0654) -0.0438 (0.1282)    

Non-local gov't rev. (L1) 0.4558*** (0.0801)     0.4702*** (0.0722)

Non-local gov't rev. (L2) 0.2369*** (0.0383)     0.2438*** (0.0348)

LHD population -0.1006** (0.0490) -0.2800*** (0.0935) -0.0811** (0.0349)

pct of tot LHD services 0.0054*** (0.0017) 0.0187*** (0.0030) 0.0054*** (0.0017)

Indp LHD indicator 0.0176 (0.0589) 0.0282 (0.1403)    

County LHD indicator -0.0362 (0.0816) 0.0732 (0.2138)    

BOH non-elect. Indicator 0.0333 (0.0387) 0.1529 (0.1000) 0.0191 (0.0288)

Indp BOH indicator -0.0223 (0.0564) -0.0549 (0.1414)    

DHS inspec agnt indicator 0.0569 (0.0359) 0.1403 (0.0995) 0.0622** (0.0288)

Constant 4.3313 (4.9239) 17.2202** (7.8844) 3.8235** (1.7124)

ObservationsAdjusted R2

4060.722

4140.543

4120.734

Standard errors in parentheses* p < 0.10, ** p < 0.05, *** p < 0.01

Interpretation of Regression CoefficientsVariable Unit change

Percent change in non local government revenue

Under 18 poverty rate +1 percentage point -1.2%

County Health Ranking + one standard deviation +5.2%

Per capita personal income +1% -0.3%

Non-local government revenue (lagged one year)

+1% +0.5%

Non-local gov’ t revenue (lagged two years)

+1% +0.2%

LHD population +1% -0.08%

% of total services +1 percentage point +0.5%

LHD is DHS Inspection Agent

N/A +6.4%

Policy Implications Two variables point to possible strategies for

health departments Percent of total services Whether the LHD is an agent of DHS

The model suggests that changes that increase the number of services provided by LHDs have a positive, statistically significant association with revenue

Contact information Senay Goitom

goitom@wisc.edu 312-520-7115

Andrew Reschovsky reschovsky@lafollette.wisc.edu 608-263-0447

Susan Zahner sjzahner@wisc.edu 608-263-5282