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A Uniform Chart of Accounts for Public Health Agencies: An “Essential Ingredient” for a Strong Public Health System

Bekemeier, Betty, PhD, MPH, FAAN; Singh, Simone, R., PhD; Schoemann, Alexander, W., CPA

Journal of Public Health Management and Practice: May/June 2018 - Volume 24 - Issue 3 - p 289–291
doi: 10.1097/PHH.0000000000000793
State of Public Health

Department of Psychosocial and Community Health, University of Washington School of Nursing, Seattle, Washington (Dr Bekemeier); Department of Health Management and Policy, University of Michigan School of Public Health, Ann Arbor, Michigan (Dr Singh); and Evans School of Public Policy, University of Washington, Seattle, Washington (Mr Schoemann).

Correspondence: Betty Bekemeier, PhD, MPH, FAAN, Department of Psychosocial and Community Health, University of Washington School of Nursing, 1959 NE Pacific St, T502c, Box 357263, Seattle, WA 98195 (bettybek@uw.edu).

This study was supported by grant # 73187 from the Robert Wood Johnson Foundation. The authors gratefully acknowledge the tremendous support of Karl Ensign of the Association of State and Territorial Health Officials for his contributions. The authors are also grateful for the enthusiasm, wisdom, and practical expertise brought to this project by the leaders and staff of their study's 20 participating health departments.

The authors declare no conflicts of interest.

Public health efforts have contributed to substantial improvements in the health of Americans. Yet, experts agree that funding for our public health systems is grossly inadequate.1 Making the case for increased public health funding (indeed, even for averting the “drastic” budget cuts of recent years2) has been hampered, however, by the “paucity of comparable data” regarding what health departments spend on their activities.3–5 Without detailed, comparable financial data systems that public health agencies contribute to and can retrieve information from, leaders lack much-needed information for decision making and for fully understanding the “value and opportunity costs” of public health actions.3

For this reason, the National Academy of Medicine (NAM) considers development of a uniform chart of accounts (COA) for public health agencies at all levels that can produce and accurately articulate “boundaries, linkages and financial flows between state, local, and federal programs” to be an “essential ingredient” for a modern public health system and healthy Americans.4 (p20) State health departments, in particular, interface closely with both federal and local public health agencies as they receive substantial funding from federal sources to support activities and to pass-through to local public health agencies. Yet, the nature of state public health accounting makes it difficult for public health professionals to report how tax dollars were spent.6 At present, no one national uniform financial reporting system exists for state and local health departments. Instead, there are separate efforts that aim to collect and report financial information for public health agencies, including the collection of high-level agency financial data by both the Association of State and Territorial Health Officials (ASTHO) and the National Association of County & City Health Officials (NACCHO) through their respective Profile surveys.7 , 8 In addition, NACCHO has been the curator since 2012 of the Public Health Uniform National Data System (PHUND$), a Web-based financial data collection and analysis portal for local health departments.9

At the state level, a federally funded, voluntary, uniform, and detailed financial reporting system existed for more than 25 years from the late 1970s to the early 1990s, allowing policy makers, public health leaders, and researchers to monitor and compare annual expenditures and revenues by program area.10 In their 2004 article describing the history and demise of this ASTHO Reporting System, Barry and Bialek10 portend a futuristic scenario in which a US president plans major cutbacks to “pork barrel public health programs” that cannot demonstrate what they produce for the tax dollars they receive. Their scenario feels rather omniscient today, as an increasing urgency is felt for the NAM's “essential ingredient” to demonstrate the critical role of public health systems and their accountability to the public.

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The Value of a Uniform COA

A standardized system to measure and report the costs of public health services and their related revenue sources—in the form of a uniform COA—has the potential to greatly improve transparency regarding public health spending, both at the state and local levels. Reported financial information based on a uniform COA can then be used to inform practice, guide the allocation of resources to areas of need, and ensure public health system value with a return on its investments.

Development of a public health uniform COA for local and state agencies was the focus of a project funded by the Robert Wood Johnson Foundation (RWJF) and conducted by the Public Health Informatics Institute (PHII) (Singletary v et al, unpublished report, 2012). Specifically, the PHII team developed a crosswalk methodology for indexing a public health agency's COA to a uniform COA, determined that a uniform COA crosswalk appeared feasible, and suggested that the next step be to refine and pilot their uniform COA crosswalk with state and local health departments (Singletary v et al, unpublished report, 2012).11

With participation from 20 state and local health departments, our RWJF-funded effort took this next step to further develop, refine, and pilot-test PHII's uniform COA and crosswalk methodology, supporting practitioners in crosswalking their financial information from their agency-specific COA to the uniform COA.12 Rather than requiring any changes to the varied financial accounting systems that exist across counties and states, the COA crosswalk methodology builds upon each agency's unique system by having practitioners report the costs of their services and corresponding revenue sources along a defined set of program areas. As part of our pilot, all participating state and local agencies helped complete the development of the actual uniform COA. In addition, 19 of the 20 fully carried out the COA crosswalk and reported detailed and uniform financial data.

Our pilot demonstration of the feasibility of a uniform COA crosswalk was very encouraging, supporting next steps toward scale-up and spread. Nonetheless, for agencies nationwide to make the effort to crosswalk their financial expenditures and revenue data to this uniform COA and for this effort to be sustained, there must be major perceived value to both public health agencies and the public they serve.

Following our data collection and the sharing of interactive online visualizations of the data with participants, we conducted focus groups with participants where they described value in the data for understanding specific state- and local-level spending patterns and for examining state spending across local agencies in their states and relative to other states. They also described the potential for this information to support more informed decision making when allocating limited resources in terms of, for example, how much of a state's communicable disease control dollars are spent on tuberculosis versus immunization or sexually transmitted disease programs.

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The Experience of State Health Departments With the COA Crosswalk

State-level participants had more difficulty producing the granularity of data requested via the crosswalk than their local counterparts. The level of difficulty for state agencies in our pilot, however, varied by state. Large, highly complex agencies tended to experience the greatest challenges when completing the crosswalk. Yet, some state agencies had financial data systems that aligned closely with the structure of the uniform COA and thus experienced fewer challenges with the crosswalk than agencies with less well-aligned financial systems. Despite challenges of completing the COA crosswalk for complex state agencies, our participating state health departments consider the uniform COA to be an important tool for managing public health funding, examining return on investment, monitoring program trends over time, and increasing spending comparability across states.

States from our pilot are also examining ways to increase the precision with which they mapped their financial data to the uniform COA. The uniform COA summarizes discreet funds into programmatically meaningful aggregations, potentially providing states with early signals of changes in public health needs and resources that standard financial reports cannot provide. In the case of diabetes prevention in one participating state, for example, the state agency administers many different diabetes-related funds but has no major financial category for diabetes overall. The structure of the uniform COA could thus provide a means to know how diabetes programs overall are trending or changing over time. The ability to examine state- and local-specific spending on individual lines of service in other areas such as communicable disease control, for example, enables state leaders to better communicate the story of protecting health statewide and articulating both the epidemiological and economic value propositions of public health interventions.

The uniform COA also has a domain called “Capabilities,” which includes such activities as “assessment,” “communications,” and “community partnership development,” among others.12 The value of spending in these crosscutting capability areas was of particular interest to practice partners since these capabilities undergird all program areas, and the majority of our state participants reported a desire to know the total amount their agency spent in these areas as a means to ultimately determine the cost of this crosscutting capacity.13 State participants not only noted that this information could be misconstrued by state legislators, if not properly framed, but also described multitudes of benefits related to financial data measuring capabilities. These benefits included measuring and guiding organizational capacity-building and continual improvement efforts that support and align with public health accreditation, plus making a case for funding.

In considering scale-up of the uniform COA, participants described the need for both state and local public health agencies to contribute. Only through participation at both levels will we have a full accounting of the “linkages and financial flows” that the NAM describes as essential for a functional, effective public health system.4 Our pilot suggests that scale-up of the uniform COA has great promise. For large, complex state health agencies, the experience of our participants suggests that attention needs to be paid to supporting large state health departments in implementing the crosswalk, but the progress made on this so far is promising for broad establishment of a national uniform COA.

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Conclusion

The time is right for instituting a uniform COA with and through our governmental public health agencies. Current federal challenges to the Affordable Care Act and its Public Health and Prevention Fund demonstrate the veracity of Barry and Bialek's10 foreshadowing.14 To demonstrate public health accountability, we need an accurate sense of where our prevention dollars come from, go to, and what we really need for protecting the public's health.2 , 3

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References

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