The United States must invest more in its chronically underfunded public health system and spend public health dollars more efficiently, according to a new report from the Institute of Medicine (IOM). Although the nation spends more on health care than other countries—almost $2.5 trillion in 2009—it scores lower on life expectancy and other key measures of the population's health status. Public health departments provide the initiatives, services, and expertise needed to prevent or diminish the impact of chronic diseases that drive the bulk of U.S. health spending. Yet only a small fraction of U.S. health dollars goes to government-administered public health—just 3.1% in 2009, according to research cited in the report—which amounts to $251 per person in public health spending, compared with $8,086 per person in medical care spending.

The report is the third in an IOM series examining ways to strengthen the U.S. public health system. Two previous reports addressed the role of measurement and the role of law and policy. According to the current report, For the Public's Health: Investing in a Healthier Future, viewing U.S. health care problems through a funding lens reveals two issues: insufficient funding for public health and dysfunction in how the public health infrastructure is funded, organized, and equipped to use its funding. The solutions proposed are intended to address both issues.

The report recommends that the U.S. Department of Health and Human Services set new goals for life expectancy and per-person health spending as a critical first step in framing efforts to achieve better overall health outcomes. Setting these targets will engage medical care and public health professionals in a shared effort to maximize the value of the nations' investment in its health system and ensure that public health skills and knowledge are applied to medical care issues relevant to population health.

To guide more appropriate allocation of funds, the report calls for the National Prevention, Health Promotion, and Public Health Council to oversee development of a minimum package of public health services, specifying the services that every community should receive from its state and local health departments and determining how much money is needed for every public health department to provide this minimum package. Although current data do not allow a precise calculation, the report recommends that federal spending on public health should be doubled from its current level of about $11.6 billion per year to approximately $24 billion as a starting point to meet the needs of public health departments.

Instituting a transaction tax on medical care services seems the most promising way to raise the additional funds, the report notes. The funds raised should be used to improve environmental and social conditions that promote health and prevent diseases and that are largely outside the medical care system's ability to influence. Both Minnesota and Vermont have successfully used this approach to expand access to care.

Other resources will come from a shift in the activities of public health departments. Currently, about half of local departments provide basic medical care, particularly to low-income, uninsured residents. As the Affordable Care Act takes effect, Medicaid and state health insurance markets will begin reimbursing clinical care for persons currently served by public health departments. The report recommends that the funds freed up by this shift should be allocated to public health departments to use for activities that promote health and prevent illness and injuries, further reducing expenditures for medical care.

“The country's failure to maximize the conditions in which people can be healthy continues to take a growing toll on the economy and on society. As the backbone of the health system, public health departments could help communities and other partners engage in efforts and policies that lead to better population health,” said Marthe Gold, M.D., M.P.H, of the City College of New York, chair of the IOM committee that wrote the report.

The 244-page report, sponsored by the Robert Wood Johnson Foundation, is available on the IOM Web site at iom.edu.