Use of Fees to Fund Local Public Health Services in Western Massachusetts A. Shila Waritu, MPH; Maria T. Bulzacchelli, PhD; Michael E. Begay, PhD rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Context: Recent budget cuts have forced many local health departments (LHDs) to cut staff and services. Setting fees that cover the cost of service provision is one option for continuing to fund certain activities. Objective: To describe the use of fees by LHDs in Western Massachusetts and determine whether fees charged cover the cost of providing selected services. Design: A cross-sectional descriptive analysis was used to identify the types of services for which fees are charged and the fee amounts charged. A comparative cost analysis was conducted to compare fees charged with estimated costs of service provision. Setting and Participants: Fifty-nine LHDs in Western Massachusetts. Main Outcome Measures: Number of towns charging fees for selected types of services; minimum, maximum, and mean fee amounts; estimated cost of service provision; number of towns experiencing a surplus or deficit for each service; and average size of deficits experienced. Results: Enormous variation exists both in the types of services for which fees are charged and fee amounts charged. Fees set by most health departments did not cover the cost of service provision. Some fees were set as much as $600 below estimated costs. Conclusions: These results suggest that considerations other than costs of service provision factor into the setting of fees by LHDs in Western Massachusetts. Given their limited and often uncertain funding, LHDs could benefit from examining their fee schedules to ensure that the fee amounts charged cover the costs of providing the services. Cost estimates should include at least the health agent’s wage and time spent performing inspections and completing paperwork, travel expenses, and cost of necessary materials. KEY WORDS: financing, local health departments, public health
services
Local health departments (LHDs) carry out responsibilities delegated to them through state and local laws and regulations to deliver public health services directly to the people. Once limited primarily to the control of infectious diseases, the responsibilities of LHDs have increased dramatically in scope over the past 150 years.1 However, as the responsibilities of LHDs have increased, the resources devoted to them have not increased commensurately,2 leaving some LHDs without the capacity to provide all of the services expected of them.3 The most recent survey of LHDs in the United States conducted by the National Association of County & City Health Officials (NACCHO)4 found that almost all LHDs (92%) performed immunizations and communicable disease surveillance in 2010. The NACCHO survey also found that at least 3 quarters of LHDs directly provided tuberculosis screening (85%), tuberculosis treatment (75%), food service establishment inspections (78%), food safety education (76%), and environmental health surveillance (77%). Fewer LHDs provided Women, Infants, and Children services (64%), HIV/AIDS screening (62%), diabetes screening (44%), injury prevention programs (39%), behavioral risk factor surveillance (36%), housing inspections (30%), and laboratory services (30%). Absence of a particular program within a local agency does not necessarily mean that needed services are unavailable. Some services not provided at the local level are provided by state agencies.5 Also, certain services are not in high demand in some Author Affiliation: Department of Public Health, School of Public Health and Health Sciences, University of Massachusetts-Amherst. The authors acknowledge Valeria P. Carlson, MPH, CHES, of the CDC Health Department and Systems Development Branch for providing background information on local health departments in Western Massachusetts and for her feedback on a previous draft of the manuscript. No external source provided funding for this study. The authors declare no conflicts of interest.
J Public Health Management Practice, 2015, 21(2), 167–175 C 2015 Wolters Kluwer Health, Inc. All rights reserved. Copyright
Correspondence: A. Shila Waritu, MPH, Department of Public Health, School of Public Health and Health Sciences, University of Massachusetts-Amherst, Amherst, MA 01003 ([email protected]). DOI: 10.1097/PHH.0000000000000082
167 Copyright © 2015 Wolters Kluwer Health, Inc. Unauthorized reproduction of this article is prohibited.
168 ❘ Journal of Public Health Management and Practice communities. Therefore, the most appropriate mix of specific services probably varies across LHDs. However, there is widespread agreement among public health professionals that all LHDs should perform certain basic functions. The 3 “core functions”1 and the 10 “essential services”6 of public health have become a foundation for efforts to measure and thus improve the performance of public health systems.7 Various measurement instruments have been developed to assess local public health system performance on the basis of the extent to which each core functions or essential services is being provided. Studies using these instruments to survey different samples of LHDs have found overall mean performance levels of 45% to 73%.8-16 Thus, overall, local public health systems in the United States are reaching roughly only half to three-quarters of target performance levels. Prior research provides evidence as to why some LHDs perform better than others. Local health departments serving larger jurisdictions tend to perform better.13,16-19 Local health departments with more staff or more staff per population also tend to perform better.12,17,20 Although the evidence regarding LHD expenditures and performance is mixed, most studies have found a positive association between either total or per capita expenditures and performance,12,13,17,19-21 while only a few studies have found no association.16,18,22 Furthermore, there is evidence that program-specific funding levels are associated with better LHD performance in those specific areas.23-26 Thus, jurisdiction size, staffing, and funding all appear to be important for LHD performance. Unfortunately, due to the recent economic downturn, funding for many LHDs has decreased, affecting staffing levels and service delivery. According to a series of NACCHO surveys, in each year from 2009 to 2012, at least 41% of LHDs nationally reported having a budget that was smaller than the previous year.27-30 Similarly, in each year from 2008 to 2011, at least 44% of LHDs laid off staff or lost staff because of attrition and did not replace them because of budget constraints.27,28,30-32 Although some LHDs hired new staff during that time, NACCHO estimates a net loss of 12 000 LHD employees nationwide between 2008 and 2010.33 These budget and staffing cuts have affected LHD service delivery. More than half (57%) of LHDs reported making cuts to at least 1 program (meaning they reduced or eliminated services) during calendar year 2011, and 28% made cuts to 3 or more programs.30 Similar program cuts were reported every year between 2008 and 2011.27-29,32 To continue providing needed services, some LHDs that have experienced budget cuts will have to replace lost revenues. Many LHDs that were already struggling to provide essential services before the economic reces-
sion are likely still in need of increased funding. Local health departments obtain funding from many different sources. Currently, approximately 26% of LHD funding comes from local sources, 21% from the states, 20% from federal sources, 13% from Medicaid, 7% from fees, and the rest from other sources.4 Of these, the only source of revenue under LHD control is fees. Many LHDs have the authority to set fees to compensate for the expenses incurred in providing certain services. The extent to which LHDs around the country generate revenue from fees ranges widely. As a percentage of total annual LHD revenue, fees range from 0% in Arizona to 23% in Utah.4 Fees also tend to vary by jurisdiction size, making up a smaller proportion of revenue in smaller jurisdictions.4 This variability suggests that there is potential for at least some LHDs to expand the use of fees to support service provision. Further investigation into the use of fees by LHDs is, therefore, warranted. This study examines the fees charged for public health services by LHDs in Western Massachusetts. In recent years, LHDs in Massachusetts have faced budget and staffing challenges similar to those in many LHDs around the country.34 These challenges are compounded because, unlike in most states where LHDs serve county jurisdictions, almost all cities and towns in Massachusetts have their own board of health. Consequently, many LHDs in Massachusetts serve small jurisdictions and have small budgets, especially in the western, more rural part of the state. Many LHDs in Western Massachusetts have no full-time professional public health staff. While 82% of Western Massachusetts LHDs employ a health agent, only 58% have a public health nurse and only 15% have a health director.35 This lack of resources impacts service delivery. For example, only about 70% of Western Massachusetts LHDs are able to inspect all food service establishments twice annually, as mandated.35 Massachusetts General Laws grant authority to LHDs to set most fees.36 As a result, individual towns decide the types of services for which to charge fees and set the fee amounts. The objectives of this study are to (1) identify the types of services for which fees are charged by LHDs in Western Massachusetts, (2) describe the fee amounts charged, and (3) determine whether the fees charged by LHDs cover the costs of providing selected services.
● Methods Study design A cross-sectional descriptive analysis was used to identify the types of services for which fees are charged and
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Use of Fees to Fund Local Public Health Services
the fee amounts charged by Western Massachusetts LHDs. A cost analysis from the perspective of the LHD was used to estimate the cost of providing selected services in each town. These cost estimates were then compared with the fee amounts charged for those services.
Study population The study population is LHDs in Western Massachusetts, specifically, the 96 towns of the state’s Emergency Preparedness Region 1.37 Data were available for 59 towns. Of these towns, the population ranged from 750 to 53 876, with a median population of 3258. The study sample is similar to towns in Western Massachusetts with respect to jurisdiction size. In the region, 52.5% of towns are considered small (population 10 000). The study sample consists of 40.6% small, 32.2% medium, and 27.1% large towns. Only 9 of these towns meet the basic staffing requirements of 1 or more health agents, 1 or more public health nurses, and 1 or more clerical staff, and are overseen by a health director (whether or not all employees are full time). In 18 towns, the health department employs only a health agent. In other towns, the health agent is either a board of health member or a volunteer.
Data sources This study was an extension of a larger capacity assessment commissioned by the Western Massachusetts Public Health Preparedness Advisory Group to examine the capacity of Western Massachusetts local boards of health.35 Fee schedules, health agent salary, town population, governance, and structure of the health departments were obtained from the capacity assessment data. For the capacity assessment, interviews were conducted from April to August 2009 with public health professionals who worked at health departments or were sitting members of a board of health. Any fee schedules that were not provided during the capacity assessment were obtained from official town Web sites in February 2010. These schedules listed the services for which fees are charged and the amounts charged for each service.
Data analysis All fee amounts were entered manually into a Microsoft Excel spreadsheet38 by town and type of service. Because the specific vocabulary used to classify certain services was found to vary across
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towns, the data were recoded for analysis using consistent terminology. When a fee amount included a base fee plus an additional hourly charge (eg, $100 for the first 2 hours plus $75 for each additional hour), the base fee was used because it is difficult to predict how often additional time is necessary in practice. Services most commonly provided by LHDs were the focus of this study. Descriptive analysis was performed to summarize the types of services for which fees are charged and the fee amounts charged. For each type of service listed in the fee schedules, frequencies were calculated as the number of towns charging for each service. Across all towns charging for each service, minimum, maximum, and mean fee amounts were calculated. To determine whether the fee amounts charged for selected services cover the expense of providing those services, costs for each service were estimated for each town and compared with the fee amount. Costs were calculated as the number of hours typically spent performing any necessary inspection plus the number of hours spent completing the associated paperwork, multiplied by the hourly wage (in 2009 dollars) of the town’s health agent. Table 1 shows the time estimates used for selected services on the basis of previous interviews with LHD staff.35 Cost estimates could not be produced for 19 towns for which health agent wage was unavailable. Travel expenses were not included in these estimates, because it was impossible to determine the distance traveled for each service, given the unique geographic distribution of businesses and residences in each town. Material costs were also not included in these estimates because of a lack of information regarding all the supplies used for each service and the assumption that certain items can be purchased once and reused indefinitely, making the cost per inspection of those items negligible. The estimated costs are based on 1 inspection per fee charged, because it was impossible to determine from the fee schedules how many inspections were intended to be covered by the fee or how often reinspections were required. These calculations, therefore, produce underestimates of the actual cost of providing each service and represent lower bounds. For each service, the estimated cost of providing the service was subtracted from the fee amount charged for the service. A positive difference indicates that the fee amount charged likely covers the estimated cost of providing the service (or that a surplus exists). A negative difference indicates that the fee amount charged does not cover the estimated cost of providing the service (or that a deficit exists).
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170 ❘ Journal of Public Health Management and Practice
Institutional review board approval The protocol for this study was reviewed and approved by the University of Massachusetts-Amherst School of Public Health and Health Sciences Human Subjects Review Committee.
● Results Services charged for and fee amounts charged Fee schedules varied widely in terms of the number and types of services for which fees were charged, the terminology used to classify services, the categories used to determine fee amounts, and the actual fee amounts charged. Regarding the number of services for which fees were charged, fee schedules listed anywhere from 3 types of services to more than 30. An example of the variability in the terminology used to classify services is the case of portable toilets, which were variously referred to as ecology cans, TABLE 1 ● Inspection Times Used to Estimate the Cost of
Providing Selected Servicesa qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq
Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food Milkb Mobile food Food establishment Retail food (1-h inspection) Retail food (2-h inspection) Retail food (3-h inspection) Septic system Septic system (2-h percolation test) Septic system (4-h percolation test) Septic system (6-h percolation test) Other services Camps (4-h inspection) Camps (6-h inspection) Camps (8-h inspection) Refuse hauler permitb Well permit Pools Body art establishment
Time to Perform Inspection, h 1 1 1 1 1 0.5 0 0.5 1 1 2 3 4 6 8 4 6 8 0 1 1 1
a An additional 30 minutes was assumed necessary to complete associated paperwork for all services. b Permit only, no inspection required.
sani-cans, porta-potties, temporary toilets, and chemical toilets. An example of the variability in the categories used to determine fee amounts is the case of food establishment fees. While 32 fee schedules set a single fee for all food establishments, 21 fee schedules set multiple fees, depending on the size of the establishment. The criteria used to classify establishment size also varied across towns. Some towns charged on the basis of the number of seats, some used square footage, and others used annual gross sales, in part because some towns distinguished between retail food establishments and restaurants while others did not. Furthermore, the cutoffs used to classify establishment size varied. For example, in some towns, an establishment with more than 80 seats was considered large, whereas in other towns, an establishment with more than 126 seats was considered large. Across all types of services, the fee amounts charged by different towns for similar services varied widely (Table 2). For example, well permit fees ranged from $15 to $150, septic construction permit fees ranged from $50 to $375, public pool licensing fees ranged from $25 to $625, and food establishment licensing fees ranged from $10 to $1045. Furthermore, some towns made the distinction between inspections and permits while others did not.
Fee amounts charged versus costs of providing services For each type of service examined, there were towns that did not cover the estimated expenses incurred with the fee amounts charged. Table 3 shows the number of towns with surpluses and the number of towns with deficits for selected services. For 17 of the 25 services examined, more towns experienced deficits than experienced surpluses. Services for which many towns experienced deficits were inspection and permit services for camps, frozen desserts, bakeries, bed and breakfasts, and residential kitchens. The only service for which many towns experienced surpluses was septic system tests. For towns with deficits, the average loss for a single service ranged from $12 to $175, but losses for some towns were as large as $600. Differences between fee amounts charged and costs of providing services varied by LHD jurisdiction size. Towns with larger populations were more likely to cover the estimated costs with their fees charged than towns with smaller populations. Table 3 shows the percentage of large, medium, and small towns with deficits for each service. For all but 3 services, a gradient effect was observed, with the percentage of large towns with deficits being the lowest and the
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Use of Fees to Fund Local Public Health Services
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TABLE 2 ● Fees Charged by Western Massachusetts Local Health Departments for Selected Services (2009 Dollars)
qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq
Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food—for profit Temporary food—nonprofit Milk—store Milk—only Mobile vendor—temporary Mobile vendor—permanent Food establishment—single fee Food establishment—multifee Retail food—single fee Retail food—multifee Septic system Septic hauler Septic installer Septic construction Percolation test Plan review Title 5 inspection Other services Recreational camp Refuse hauler Well permit Pools—yearly public Pools—yearly semipublic Pools seasonal public Pools seasonal semipublic Body art—establishment Body art—practitioner
No. of Towns That Charge a Fee
Minimum Charge
Mean Charge
Maximum Charge
34 25 30 23 38 44 41 21 21 6 35 32 21 26 15
$5 $10 $20 $10 $15 $5 $0 $2 $2 $20 $25 $10 $50 $10 $25
$32.06 $69.20 $62.75 $63.04 $81.18 $31.36 $28.48 $14.95 $16.62 $35.83 $62.29 $82.27 $168.53 $67.02 $179.21
$100 $150 $175 $150 $300 $80 $80 $50 $60 $75 $125 $300 $1.045 $200 $1.045
50 51 44 52 15 23
$15 $15 $50 $25 $50 $25
$79.10 $81.86 $140.68 $141.92 $119.33 $76.52
$200 $300 $375 $300 $375 $150
41 33 41 36 29 36 29 28 26
$10 $25 $15 $25 $25 $25 $25 $25 $25
$78.62 $104.64 $56.22 $95.69 $100.52 $83.06 $84.83 $135.89 $106.15
$250 $375 $150 $625 $625 $400 $400 $275 $325
percentage of small towns with deficits being the highest.
● Discussion This study revealed a great deal of variability in the number and types of services for which fees are charged, the terminology used to classify services, the categories used to determine fee amounts, and the fee amounts charged across LHDs in Western Massachusetts. For all types of services examined, there are towns that are charging fee amounts that are unlikely to cover the costs of providing the service. Local health departments serving smaller populations are less likely to charge fee amounts that
cover the cost of service provision than are LHDs serving larger populations. These results are consistent with prior research that found that fees make up a smaller proportion of revenue in smaller jurisdictions.4 These results are also consistent with prior studies that found that LHDs serving larger populations perform better than those serving smaller populations.13,16-19 The question of why LHDs serving different size jurisdictions set their fees differently requires further investigation. When costs are not covered by the fee amounts charged, LHDs are losing money each time the service is provided. These losses can add up to hundreds or thousands of dollars per year for a single LHD. The large number of towns experiencing deficits suggests that many LHDs are not considering the full cost of
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172 ❘ Journal of Public Health Management and Practice TABLE 3 ● Number of Towns With Surpluses or Deficits and Average Losses for Selected Services, by Jurisdiction Sizea
(N = 40) qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food—for profit Temporary food—nonprofit Mobile food vendor—permanent Food establishment Retail food (1-h inspection) Retail food (2-h inspection) Retail food (3-h inspection) Septic system Septic system (2-h percolation test) Septic system (4-h percolation test) Septic system (6-h percolation test) Other services Camps (4-h inspection) Camps (6-h inspection) Camp (8-h inspection) Refuse hauler permit Well permit Pools—yearly public Pools—yearly semipublic Pools—seasonal public Pools—seasonal semipublic Body art—establishment a Large: population more than b Of towns with deficits, 2009
No. of Towns With Surplus
No. of Towns With Deficit
% Large Towns With Deficit, %
% Medium Towns With Deficit, %
% Small Towns With Deficit, %
Average Lossb
2 7 4 5 15 17 16 18 22 14 12 7
38 33 36 35 25 23 24 22 18 26 28 33
85 54 77 77 38 15 31 31 31 31 31 62
100 93 93 87 73 73 67 60 40 67 80 87
100 100 100 100 75 83 83 75 67 100 100 100
− 78.29 − 76.16 − 66.38 − 74.50 − 70.48 − 20.02 − 25.07 − 55.28 − 61.54 − 71.74 − 133.26 − 174.83
31 31 24
9 9 16
15 15 46
20 20 33
33 33 42
− 70.13 − 167.47 − 171.52
2 0 0 24 18 22 17 21 16 20
38 40 40 16 22 18 23 19 24 20
92 100 100 38 62 23 31 23 31 23
93 100 100 40 53 53 67 60 73 47
100 100 100 42 50 58 75 58 75 83
− 103.97 − 160.32 − 222.34 − 12.32 − 33.89 − 38.44 − 42.83 − 37.08 − 41.57 − 44.16
10 000; medium: population 2000 to 10 000; small: population less than 2000. dollars.
service provision when setting fees. Some towns that charge low fees might have reasons for doing so. One possible reason is that LHDs do not necessarily keep the money collected from fees for their own use. In many towns, the money collected from fees is turned over to the local government, and the LHD then receives a set amount of funds budgeted by the town. Local health departments in this situation have little incentive to consider the full cost of service provision in setting fees, as the fees collected may not actually impact the LHD budget. Local governments should examine their budgeting processes to make sure that fees collected to cover the costs of providing certain services are in fact used to support the provision of those services. It is also possible that some communities prefer to use general tax dollars to pay for services that protect the public’s health. Because many in the community
benefit from clean and safe restaurants, pools, camps, and other facilities, it can be argued that the cost associated with performing inspections should not fall solely on the owners or managers of such facilities but should be shared by everyone in the community. However, many LHDs clearly are not obtaining sufficient resources from local taxes to provide mandated public health services. Setting fees at levels that cover the costs of service provision could allow some LHDs to improve services that are currently inadequate. In a recent survey of Florida county health departments, Livingood et al39 found that “county fees” as a source of funding was positively correlated with self-assessed performance on the 10 essential services although fees were not a primary source of funding for any of the essential services. Livingood et al speculated that the use of fees may free up general revenue funds for essential services.
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The use of fees is not going to make up completely for the chronic underfunding of public health agencies. Fees can be used only to compensate health departments for the cost of service provision. Public health infrastructure, surveillance, and many other LHD activities must be supported by other funding sources. The 2012 Institute of Medicine report, For the Public’s Health: Investing in a Healthier Future, examines public health financing in depth.40 The report emphasizes the need for noncategorical funding that can be used flexibly by health departments. The report also underscores the fact that state and local governments face long-term funding problems. The use of fees can be part of the solution.
the actual cost of service provision. These underestimates would have yielded more surpluses than exist in reality. Therefore, the number of towns setting fee amounts that do not cover the costs of service provision is likely even larger than our results indicate. For this reason, the results we report emphasize the deficits, as we can be confident that these represent real losses, whereas a surplus indicates that only the LHD might be covering their expenses. Despite these limitations, this is the first in-depth study of LHD fee schedules and it provides some useful insights.
Limitations
The results of this study suggest that many LHDs do not consider, or even know, the full costs of service provision when setting fees. Further research is needed to examine how LHDs set their fees, especially whether any cost analysis is performed, and, if so, how the costs of providing specific services are typically calculated. If costs are not considered, the losses incurred each time a service is provided can add up substantially. Given the lack of resources and inability to provide adequate public health services experienced by many LHDs in recent years, LHDs might want to reconsider their fee schedules to ensure that the fee amounts charged cover the costs of providing the services. In addition to the health agent’s wage and time spent performing inspections and completing paperwork, cost estimates should include travel expenses, cost of necessary materials, and any other costs incurred related to service provision. As revenue from fees appears to be associated with jurisdiction size, it is particularly important for LHDs like those in Western Massachusetts, serving small jurisdictions with very limited resources, to examine their use of fees to determine whether there is potential for generating additional revenue that would allow essential public health services to be provided more dependably.
One limitation of this study is that data were not available for all of the towns in the study population and, therefore, the study sample might not be representative of all of Western Massachusetts. Because large towns are slightly overrepresented in this study and large towns are less likely to experience deficits than small towns, the results of this study are likely to underestimate the average losses. However, there is no reason to believe that unexamined LHDs differ systematically from included LHDs on any other characteristics related to setting fees. Being limited to Western Massachusetts, where most cities or towns have their own health departments, it is possible that the results of this study cannot be generalized to the United States as a whole, where most LHDs serve county jurisdictions. While national data might look somewhat different from the data presented here, there are many LHDs across the country that serve small, rural populations. Furthermore, the fact that fees make up extremely small proportions of LHD revenue in some states4 suggests that many LHDs around the country are setting fees that might not cover the costs of service provision. Local health departments can benefit from examining their fee schedules and considering whether the fee amounts charged cover the costs of service provision. This study examined fees in place at only 1 point in time (2009). It is possible that some LHDs have updated their fee schedules since these data were collected. Little is known about what factors are considered by LHDs when setting fees. A more recently updated fee schedule is not necessarily more likely to set fees at levels that cover the cost of service provision. All LHDs could benefit from considering whether their current fee schedules reflect the cost of service provision. Another limitation of this study is the lack of complete information regarding the costs of service provision. The estimates used for this study underestimate
● Conclusions
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174 ❘ Journal of Public Health Management and Practice 5. Beitsch LM, Grigg M, Menachemi N, Brooks RG. Roles of local public health agencies within the state public health system. J Public Health Manag Pract. 2006;12(3):232-241. 6. Public Health Functions Steering Committee. Public health in America. http://www.health.gov/phfunctions/public.htm. Published 1994. Accessed August 3, 2012. 7. Corso LC, Wiesner PJ, Halverson PK, Brown CK. Using the Essential Services as a foundation for performance measurement and assessment of local public health systems. J Public Health Manag Pract. 2000;6(5):1-18. 8. Turnock BJ, Handler A, Hall W, Potsic S, Nalluri R, Vaughn EH. Local health department effectiveness in addressing the core functions of public health. Public Health Rep. 1994;109(5):653-658. 9. Miller CA, Moore KS, Richards TB, Monk JD. A proposed method for assessing the performance of local public health functions and practices. Am J Public Health. 1994;84(11):17431749. 10. Richards TB, Rogers JJ, Christenson GM, Miller CA, Taylor MS, Cooper AD. Evaluating local public health performance at a community level on a statewide basis. J Public Health Manag Pract. 1995;1(4):70-83. 11. Turnock BJ, Handler AS, Miller CA. Core function-related local public health practice effectiveness. J Public Health Manag Pract. 1998;4(5):26-32. 12. Freund CG, Liu Z. Local health department capacity and performance in New Jersey. J Public Health Manag Pract. 2000;6(5):42-50. 13. Mays GP, Halverson PK, Baker EL, Stevens R, Vann JJ. Availability and perceived effectiveness of public health activities in the nation’s most populous communities. Am J Public Health. 2004;94(6):1019-1026. 14. Mays GP, McHugh MC, Shim K, et al. Identifying dimensions of performance in local public health systems: Results from the National Public Health Performance Standards Program. J Public Health Manag Pract. 2004;10(3):193-203. 15. Suen J, Magruder C. National profile: overview of capabilities and core functions of local public health jurisdictions in 47 states, the District of Columbia, and 3 US territories, 20002002. J Public Health Manag Pract. 2004;10(1):2-12. 16. Bhandari MW, Scutchfield FD, Charnigo R, Riddell MC, Mays GP. New data, same story? Revisiting studies on the relationship of local public health systems characteristics to public health performance. J Public Health Manag Pract. 2010;16(2):110-117. 17. Kennedy VC. A study of local public health system performance in Texas. J Public Health Manag Pract. 2003;9(3): 183-187. 18. Honor´e PA, Simoes EJ, Jones WJ, Moonesinghe R. Practices in public health finance: an investigation of jurisdiction funding patterns and performance. J Public Health Manag Pract. 2004;10(5):444-450. 19. Mays GP, McHugh MC, Shim K, et al. Institutional and economic determinants of public health system performance. Am J Public Health. 2006;96(3):523-531. 20. Handler AS, Turnock BJ. Local health department effectiveness in addressing the core functions of public health: essential ingredients. J Public Health Policy. 1996;17(4):460-483.
21. Mays GP, McHugh MC, Shim K, et al. Getting what you pay for: public health spending and the performance of essential public health services. J Public Health Manag Pract. 2004;10(5):435-443. 22. Scutchfield FD, Knight EA, Kelly AV, Bhandari MW, Vasilescu IP. Local public health agency capacity and its relationship to public health system performance. J Public Health Manag Pract. 2004;10(3):204-215. 23. Avery GH, Zabriskie-Timmerman J. The impact of federal bioterrorism funding programs on local health department preparedness activities. Eval Health Prof. 2009;32(2): 95-127. 24. Langabeer JR II, DelliFraine JL, Tyson S, Emert JM, Herbold J. Investment, managerial capacity, and bias in public health preparedness. Am J Disaster Med. 2009;4(4):207-215. 25. Porterfield DS, Reaves J, Konrad TR, et al. Assessing local health department performance in diabetes prevention and control—North Carolina, 2005. Prev Chronic Dis. 2009;6(3):A87. http://www.cdc.gov/pcd/issues/2009/jul/ 08 0130.htm. Accessed February 21, 2011. 26. Zablotsky Kufel JS, Resnick BA, Fox MA, McGready J, Yager JP, Burke TA. The impact of local environmental health capacity on foodborne illness morbidity in Maryland. Am J Public Health. 2011;101(8):1495-1500. 27. National Association of County & City Health Officials. Local Health Department Job Losses and Program Cuts. Research Brief. Washington, DC: National Association of County & City Health Officials; 2009. 28. National Association of County & City Health Officials. Local Health Department Job Losses and Program Cuts: Findings From January 2011 Survey and 2010 National Profile Study. Research Brief. Washington, DC: NACCHO; 2011. 29. National Association of County & City Health Officials. Local Health Department Job Losses and Program Cuts: Findings from the July 2011 Survey. Research Brief. Washington, DC: National Association of County & City Health Officials; 2011. 30. National Association of County & City Health Officials. Local Health Department Job Losses and Program Cuts: Findings from the January 2012 Survey. Research Brief. Washington, DC: National Association of County & City Health Officials; 2012. 31. National Association of County & City Health Officials. NACCHO Survey of Local Health Departments’ Budget Cuts and Workforce Reductions. Washington, DC: National Association of County & City Health Officials; 2009. 32. National Association of County & City Health Officials. Local Health Department Job Losses and Program Cuts: Findings from January/February 2010 Survey. Research Brief. Washington, DC: National Association of County & City Health Officials; 2010. 33. National Association of County & City Health Officials. Changes in Size of Local Health Department Workforce: Longitudinal Analysis of 2008 and 2010 Profile Data. Research Brief. Washington, DC: National Association of County & City Health Officials; 2011. 34. Hyde J, Tovar A. Strengthening Local Public Health in Massachusetts: A Call to Action. Cambridge, MA:
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Use of Fees to Fund Local Public Health Services
Institute for Community Health; 2006. http://www .mphaweb.org/resources/strength_lph_6_06.pdf. Accessed August 18, 2012. 35. Western Massachusetts Public Health Preparedness Advisory Group. Western Massachusetts Board of Health Capacity Assessment: Summary Report. Northampton, MA. 2010. http://bcboha.org/wp-content/uploads/2011/04/ Region-1-LPH-Capacity-Report-Summary-Final-Jan-2011. pdf. Accessed August 9, 2012. 36. Massachusetts General Laws. Ch 40, §22F. 37. Massachusetts Department of Public Health. List of cities and towns by emergency preparedness regions. http://
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www.mass.gov/eohhs/docs/dph/emergency-prep/mapcities-and-towns-by-emergency.pdf. Accessed November 8, 2012. 38. Microsoft Corporation. Microsoft Excel [computer software]. Redmond, WA: Microsoft; 2007. 39. Livingood WC, Morris M, Sorensen B, et al. Revenue sources for essential services in Florida: findings and implications for organizing and funding public health. J Public Health Manag Pract. 2013;19(4):371-378. 40. Institute of Medicine. For the Public’s Health: Investing in a Healthier Future. Washington, DC: The National Academies Press; 2012.
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Context: Recent budget cuts have forced many local health departments (LHDs) to cut staff and services. Setting fees that cover the cost of service provision is one option for continuing to fund certain activities. Objective: To describe the use of fees by LHDs in Western Massachusetts and determine whether fees charged cover the cost of providing selected services. Design: A cross-sectional descriptive analysis was used to identify the types of services for which fees are charged and the fee amounts charged. A comparative cost analysis was conducted to compare fees charged with estimated costs of service provision. Setting and Participants: Fifty-nine LHDs in Western Massachusetts. Main Outcome Measures: Number of towns charging fees for selected types of services; minimum, maximum, and mean fee amounts; estimated cost of service provision; number of towns experiencing a surplus or deficit for each service; and average size of deficits experienced. Results: Enormous variation exists both in the types of services for which fees are charged and fee amounts charged. Fees set by most health departments did not cover the cost of service provision. Some fees were set as much as $600 below estimated costs. Conclusions: These results suggest that considerations other than costs of service provision factor into the setting of fees by LHDs in Western Massachusetts. Given their limited and often uncertain funding, LHDs could benefit from examining their fee schedules to ensure that the fee amounts charged cover the costs of providing the services. Cost estimates should include at least the health agent’s wage and time spent performing inspections and completing paperwork, travel expenses, and cost of necessary materials. KEY WORDS: financing, local health departments, public health
services
Local health departments (LHDs) carry out responsibilities delegated to them through state and local laws and regulations to deliver public health services directly to the people. Once limited primarily to the control of infectious diseases, the responsibilities of LHDs have increased dramatically in scope over the past 150 years.1 However, as the responsibilities of LHDs have increased, the resources devoted to them have not increased commensurately,2 leaving some LHDs without the capacity to provide all of the services expected of them.3 The most recent survey of LHDs in the United States conducted by the National Association of County & City Health Officials (NACCHO)4 found that almost all LHDs (92%) performed immunizations and communicable disease surveillance in 2010. The NACCHO survey also found that at least 3 quarters of LHDs directly provided tuberculosis screening (85%), tuberculosis treatment (75%), food service establishment inspections (78%), food safety education (76%), and environmental health surveillance (77%). Fewer LHDs provided Women, Infants, and Children services (64%), HIV/AIDS screening (62%), diabetes screening (44%), injury prevention programs (39%), behavioral risk factor surveillance (36%), housing inspections (30%), and laboratory services (30%). Absence of a particular program within a local agency does not necessarily mean that needed services are unavailable. Some services not provided at the local level are provided by state agencies.5 Also, certain services are not in high demand in some Author Affiliation: Department of Public Health, School of Public Health and Health Sciences, University of Massachusetts-Amherst. The authors acknowledge Valeria P. Carlson, MPH, CHES, of the CDC Health Department and Systems Development Branch for providing background information on local health departments in Western Massachusetts and for her feedback on a previous draft of the manuscript. No external source provided funding for this study. The authors declare no conflicts of interest.
J Public Health Management Practice, 2015, 21(2), 167–175 C 2015 Wolters Kluwer Health, Inc. All rights reserved. Copyright
Correspondence: A. Shila Waritu, MPH, Department of Public Health, School of Public Health and Health Sciences, University of Massachusetts-Amherst, Amherst, MA 01003 ([email protected]). DOI: 10.1097/PHH.0000000000000082
167 Copyright © 2015 Wolters Kluwer Health, Inc. Unauthorized reproduction of this article is prohibited.
168 ❘ Journal of Public Health Management and Practice communities. Therefore, the most appropriate mix of specific services probably varies across LHDs. However, there is widespread agreement among public health professionals that all LHDs should perform certain basic functions. The 3 “core functions”1 and the 10 “essential services”6 of public health have become a foundation for efforts to measure and thus improve the performance of public health systems.7 Various measurement instruments have been developed to assess local public health system performance on the basis of the extent to which each core functions or essential services is being provided. Studies using these instruments to survey different samples of LHDs have found overall mean performance levels of 45% to 73%.8-16 Thus, overall, local public health systems in the United States are reaching roughly only half to three-quarters of target performance levels. Prior research provides evidence as to why some LHDs perform better than others. Local health departments serving larger jurisdictions tend to perform better.13,16-19 Local health departments with more staff or more staff per population also tend to perform better.12,17,20 Although the evidence regarding LHD expenditures and performance is mixed, most studies have found a positive association between either total or per capita expenditures and performance,12,13,17,19-21 while only a few studies have found no association.16,18,22 Furthermore, there is evidence that program-specific funding levels are associated with better LHD performance in those specific areas.23-26 Thus, jurisdiction size, staffing, and funding all appear to be important for LHD performance. Unfortunately, due to the recent economic downturn, funding for many LHDs has decreased, affecting staffing levels and service delivery. According to a series of NACCHO surveys, in each year from 2009 to 2012, at least 41% of LHDs nationally reported having a budget that was smaller than the previous year.27-30 Similarly, in each year from 2008 to 2011, at least 44% of LHDs laid off staff or lost staff because of attrition and did not replace them because of budget constraints.27,28,30-32 Although some LHDs hired new staff during that time, NACCHO estimates a net loss of 12 000 LHD employees nationwide between 2008 and 2010.33 These budget and staffing cuts have affected LHD service delivery. More than half (57%) of LHDs reported making cuts to at least 1 program (meaning they reduced or eliminated services) during calendar year 2011, and 28% made cuts to 3 or more programs.30 Similar program cuts were reported every year between 2008 and 2011.27-29,32 To continue providing needed services, some LHDs that have experienced budget cuts will have to replace lost revenues. Many LHDs that were already struggling to provide essential services before the economic reces-
sion are likely still in need of increased funding. Local health departments obtain funding from many different sources. Currently, approximately 26% of LHD funding comes from local sources, 21% from the states, 20% from federal sources, 13% from Medicaid, 7% from fees, and the rest from other sources.4 Of these, the only source of revenue under LHD control is fees. Many LHDs have the authority to set fees to compensate for the expenses incurred in providing certain services. The extent to which LHDs around the country generate revenue from fees ranges widely. As a percentage of total annual LHD revenue, fees range from 0% in Arizona to 23% in Utah.4 Fees also tend to vary by jurisdiction size, making up a smaller proportion of revenue in smaller jurisdictions.4 This variability suggests that there is potential for at least some LHDs to expand the use of fees to support service provision. Further investigation into the use of fees by LHDs is, therefore, warranted. This study examines the fees charged for public health services by LHDs in Western Massachusetts. In recent years, LHDs in Massachusetts have faced budget and staffing challenges similar to those in many LHDs around the country.34 These challenges are compounded because, unlike in most states where LHDs serve county jurisdictions, almost all cities and towns in Massachusetts have their own board of health. Consequently, many LHDs in Massachusetts serve small jurisdictions and have small budgets, especially in the western, more rural part of the state. Many LHDs in Western Massachusetts have no full-time professional public health staff. While 82% of Western Massachusetts LHDs employ a health agent, only 58% have a public health nurse and only 15% have a health director.35 This lack of resources impacts service delivery. For example, only about 70% of Western Massachusetts LHDs are able to inspect all food service establishments twice annually, as mandated.35 Massachusetts General Laws grant authority to LHDs to set most fees.36 As a result, individual towns decide the types of services for which to charge fees and set the fee amounts. The objectives of this study are to (1) identify the types of services for which fees are charged by LHDs in Western Massachusetts, (2) describe the fee amounts charged, and (3) determine whether the fees charged by LHDs cover the costs of providing selected services.
● Methods Study design A cross-sectional descriptive analysis was used to identify the types of services for which fees are charged and
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Use of Fees to Fund Local Public Health Services
the fee amounts charged by Western Massachusetts LHDs. A cost analysis from the perspective of the LHD was used to estimate the cost of providing selected services in each town. These cost estimates were then compared with the fee amounts charged for those services.
Study population The study population is LHDs in Western Massachusetts, specifically, the 96 towns of the state’s Emergency Preparedness Region 1.37 Data were available for 59 towns. Of these towns, the population ranged from 750 to 53 876, with a median population of 3258. The study sample is similar to towns in Western Massachusetts with respect to jurisdiction size. In the region, 52.5% of towns are considered small (population 10 000). The study sample consists of 40.6% small, 32.2% medium, and 27.1% large towns. Only 9 of these towns meet the basic staffing requirements of 1 or more health agents, 1 or more public health nurses, and 1 or more clerical staff, and are overseen by a health director (whether or not all employees are full time). In 18 towns, the health department employs only a health agent. In other towns, the health agent is either a board of health member or a volunteer.
Data sources This study was an extension of a larger capacity assessment commissioned by the Western Massachusetts Public Health Preparedness Advisory Group to examine the capacity of Western Massachusetts local boards of health.35 Fee schedules, health agent salary, town population, governance, and structure of the health departments were obtained from the capacity assessment data. For the capacity assessment, interviews were conducted from April to August 2009 with public health professionals who worked at health departments or were sitting members of a board of health. Any fee schedules that were not provided during the capacity assessment were obtained from official town Web sites in February 2010. These schedules listed the services for which fees are charged and the amounts charged for each service.
Data analysis All fee amounts were entered manually into a Microsoft Excel spreadsheet38 by town and type of service. Because the specific vocabulary used to classify certain services was found to vary across
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towns, the data were recoded for analysis using consistent terminology. When a fee amount included a base fee plus an additional hourly charge (eg, $100 for the first 2 hours plus $75 for each additional hour), the base fee was used because it is difficult to predict how often additional time is necessary in practice. Services most commonly provided by LHDs were the focus of this study. Descriptive analysis was performed to summarize the types of services for which fees are charged and the fee amounts charged. For each type of service listed in the fee schedules, frequencies were calculated as the number of towns charging for each service. Across all towns charging for each service, minimum, maximum, and mean fee amounts were calculated. To determine whether the fee amounts charged for selected services cover the expense of providing those services, costs for each service were estimated for each town and compared with the fee amount. Costs were calculated as the number of hours typically spent performing any necessary inspection plus the number of hours spent completing the associated paperwork, multiplied by the hourly wage (in 2009 dollars) of the town’s health agent. Table 1 shows the time estimates used for selected services on the basis of previous interviews with LHD staff.35 Cost estimates could not be produced for 19 towns for which health agent wage was unavailable. Travel expenses were not included in these estimates, because it was impossible to determine the distance traveled for each service, given the unique geographic distribution of businesses and residences in each town. Material costs were also not included in these estimates because of a lack of information regarding all the supplies used for each service and the assumption that certain items can be purchased once and reused indefinitely, making the cost per inspection of those items negligible. The estimated costs are based on 1 inspection per fee charged, because it was impossible to determine from the fee schedules how many inspections were intended to be covered by the fee or how often reinspections were required. These calculations, therefore, produce underestimates of the actual cost of providing each service and represent lower bounds. For each service, the estimated cost of providing the service was subtracted from the fee amount charged for the service. A positive difference indicates that the fee amount charged likely covers the estimated cost of providing the service (or that a surplus exists). A negative difference indicates that the fee amount charged does not cover the estimated cost of providing the service (or that a deficit exists).
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170 ❘ Journal of Public Health Management and Practice
Institutional review board approval The protocol for this study was reviewed and approved by the University of Massachusetts-Amherst School of Public Health and Health Sciences Human Subjects Review Committee.
● Results Services charged for and fee amounts charged Fee schedules varied widely in terms of the number and types of services for which fees were charged, the terminology used to classify services, the categories used to determine fee amounts, and the actual fee amounts charged. Regarding the number of services for which fees were charged, fee schedules listed anywhere from 3 types of services to more than 30. An example of the variability in the terminology used to classify services is the case of portable toilets, which were variously referred to as ecology cans, TABLE 1 ● Inspection Times Used to Estimate the Cost of
Providing Selected Servicesa qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq
Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food Milkb Mobile food Food establishment Retail food (1-h inspection) Retail food (2-h inspection) Retail food (3-h inspection) Septic system Septic system (2-h percolation test) Septic system (4-h percolation test) Septic system (6-h percolation test) Other services Camps (4-h inspection) Camps (6-h inspection) Camps (8-h inspection) Refuse hauler permitb Well permit Pools Body art establishment
Time to Perform Inspection, h 1 1 1 1 1 0.5 0 0.5 1 1 2 3 4 6 8 4 6 8 0 1 1 1
a An additional 30 minutes was assumed necessary to complete associated paperwork for all services. b Permit only, no inspection required.
sani-cans, porta-potties, temporary toilets, and chemical toilets. An example of the variability in the categories used to determine fee amounts is the case of food establishment fees. While 32 fee schedules set a single fee for all food establishments, 21 fee schedules set multiple fees, depending on the size of the establishment. The criteria used to classify establishment size also varied across towns. Some towns charged on the basis of the number of seats, some used square footage, and others used annual gross sales, in part because some towns distinguished between retail food establishments and restaurants while others did not. Furthermore, the cutoffs used to classify establishment size varied. For example, in some towns, an establishment with more than 80 seats was considered large, whereas in other towns, an establishment with more than 126 seats was considered large. Across all types of services, the fee amounts charged by different towns for similar services varied widely (Table 2). For example, well permit fees ranged from $15 to $150, septic construction permit fees ranged from $50 to $375, public pool licensing fees ranged from $25 to $625, and food establishment licensing fees ranged from $10 to $1045. Furthermore, some towns made the distinction between inspections and permits while others did not.
Fee amounts charged versus costs of providing services For each type of service examined, there were towns that did not cover the estimated expenses incurred with the fee amounts charged. Table 3 shows the number of towns with surpluses and the number of towns with deficits for selected services. For 17 of the 25 services examined, more towns experienced deficits than experienced surpluses. Services for which many towns experienced deficits were inspection and permit services for camps, frozen desserts, bakeries, bed and breakfasts, and residential kitchens. The only service for which many towns experienced surpluses was septic system tests. For towns with deficits, the average loss for a single service ranged from $12 to $175, but losses for some towns were as large as $600. Differences between fee amounts charged and costs of providing services varied by LHD jurisdiction size. Towns with larger populations were more likely to cover the estimated costs with their fees charged than towns with smaller populations. Table 3 shows the percentage of large, medium, and small towns with deficits for each service. For all but 3 services, a gradient effect was observed, with the percentage of large towns with deficits being the lowest and the
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Use of Fees to Fund Local Public Health Services
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TABLE 2 ● Fees Charged by Western Massachusetts Local Health Departments for Selected Services (2009 Dollars)
qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq
Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food—for profit Temporary food—nonprofit Milk—store Milk—only Mobile vendor—temporary Mobile vendor—permanent Food establishment—single fee Food establishment—multifee Retail food—single fee Retail food—multifee Septic system Septic hauler Septic installer Septic construction Percolation test Plan review Title 5 inspection Other services Recreational camp Refuse hauler Well permit Pools—yearly public Pools—yearly semipublic Pools seasonal public Pools seasonal semipublic Body art—establishment Body art—practitioner
No. of Towns That Charge a Fee
Minimum Charge
Mean Charge
Maximum Charge
34 25 30 23 38 44 41 21 21 6 35 32 21 26 15
$5 $10 $20 $10 $15 $5 $0 $2 $2 $20 $25 $10 $50 $10 $25
$32.06 $69.20 $62.75 $63.04 $81.18 $31.36 $28.48 $14.95 $16.62 $35.83 $62.29 $82.27 $168.53 $67.02 $179.21
$100 $150 $175 $150 $300 $80 $80 $50 $60 $75 $125 $300 $1.045 $200 $1.045
50 51 44 52 15 23
$15 $15 $50 $25 $50 $25
$79.10 $81.86 $140.68 $141.92 $119.33 $76.52
$200 $300 $375 $300 $375 $150
41 33 41 36 29 36 29 28 26
$10 $25 $15 $25 $25 $25 $25 $25 $25
$78.62 $104.64 $56.22 $95.69 $100.52 $83.06 $84.83 $135.89 $106.15
$250 $375 $150 $625 $625 $400 $400 $275 $325
percentage of small towns with deficits being the highest.
● Discussion This study revealed a great deal of variability in the number and types of services for which fees are charged, the terminology used to classify services, the categories used to determine fee amounts, and the fee amounts charged across LHDs in Western Massachusetts. For all types of services examined, there are towns that are charging fee amounts that are unlikely to cover the costs of providing the service. Local health departments serving smaller populations are less likely to charge fee amounts that
cover the cost of service provision than are LHDs serving larger populations. These results are consistent with prior research that found that fees make up a smaller proportion of revenue in smaller jurisdictions.4 These results are also consistent with prior studies that found that LHDs serving larger populations perform better than those serving smaller populations.13,16-19 The question of why LHDs serving different size jurisdictions set their fees differently requires further investigation. When costs are not covered by the fee amounts charged, LHDs are losing money each time the service is provided. These losses can add up to hundreds or thousands of dollars per year for a single LHD. The large number of towns experiencing deficits suggests that many LHDs are not considering the full cost of
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172 ❘ Journal of Public Health Management and Practice TABLE 3 ● Number of Towns With Surpluses or Deficits and Average Losses for Selected Services, by Jurisdiction Sizea
(N = 40) qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq Type of Service Food Frozen dessert Bakery Bed and breakfast Residential kitchen Catering Temporary food—for profit Temporary food—nonprofit Mobile food vendor—permanent Food establishment Retail food (1-h inspection) Retail food (2-h inspection) Retail food (3-h inspection) Septic system Septic system (2-h percolation test) Septic system (4-h percolation test) Septic system (6-h percolation test) Other services Camps (4-h inspection) Camps (6-h inspection) Camp (8-h inspection) Refuse hauler permit Well permit Pools—yearly public Pools—yearly semipublic Pools—seasonal public Pools—seasonal semipublic Body art—establishment a Large: population more than b Of towns with deficits, 2009
No. of Towns With Surplus
No. of Towns With Deficit
% Large Towns With Deficit, %
% Medium Towns With Deficit, %
% Small Towns With Deficit, %
Average Lossb
2 7 4 5 15 17 16 18 22 14 12 7
38 33 36 35 25 23 24 22 18 26 28 33
85 54 77 77 38 15 31 31 31 31 31 62
100 93 93 87 73 73 67 60 40 67 80 87
100 100 100 100 75 83 83 75 67 100 100 100
− 78.29 − 76.16 − 66.38 − 74.50 − 70.48 − 20.02 − 25.07 − 55.28 − 61.54 − 71.74 − 133.26 − 174.83
31 31 24
9 9 16
15 15 46
20 20 33
33 33 42
− 70.13 − 167.47 − 171.52
2 0 0 24 18 22 17 21 16 20
38 40 40 16 22 18 23 19 24 20
92 100 100 38 62 23 31 23 31 23
93 100 100 40 53 53 67 60 73 47
100 100 100 42 50 58 75 58 75 83
− 103.97 − 160.32 − 222.34 − 12.32 − 33.89 − 38.44 − 42.83 − 37.08 − 41.57 − 44.16
10 000; medium: population 2000 to 10 000; small: population less than 2000. dollars.
service provision when setting fees. Some towns that charge low fees might have reasons for doing so. One possible reason is that LHDs do not necessarily keep the money collected from fees for their own use. In many towns, the money collected from fees is turned over to the local government, and the LHD then receives a set amount of funds budgeted by the town. Local health departments in this situation have little incentive to consider the full cost of service provision in setting fees, as the fees collected may not actually impact the LHD budget. Local governments should examine their budgeting processes to make sure that fees collected to cover the costs of providing certain services are in fact used to support the provision of those services. It is also possible that some communities prefer to use general tax dollars to pay for services that protect the public’s health. Because many in the community
benefit from clean and safe restaurants, pools, camps, and other facilities, it can be argued that the cost associated with performing inspections should not fall solely on the owners or managers of such facilities but should be shared by everyone in the community. However, many LHDs clearly are not obtaining sufficient resources from local taxes to provide mandated public health services. Setting fees at levels that cover the costs of service provision could allow some LHDs to improve services that are currently inadequate. In a recent survey of Florida county health departments, Livingood et al39 found that “county fees” as a source of funding was positively correlated with self-assessed performance on the 10 essential services although fees were not a primary source of funding for any of the essential services. Livingood et al speculated that the use of fees may free up general revenue funds for essential services.
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The use of fees is not going to make up completely for the chronic underfunding of public health agencies. Fees can be used only to compensate health departments for the cost of service provision. Public health infrastructure, surveillance, and many other LHD activities must be supported by other funding sources. The 2012 Institute of Medicine report, For the Public’s Health: Investing in a Healthier Future, examines public health financing in depth.40 The report emphasizes the need for noncategorical funding that can be used flexibly by health departments. The report also underscores the fact that state and local governments face long-term funding problems. The use of fees can be part of the solution.
the actual cost of service provision. These underestimates would have yielded more surpluses than exist in reality. Therefore, the number of towns setting fee amounts that do not cover the costs of service provision is likely even larger than our results indicate. For this reason, the results we report emphasize the deficits, as we can be confident that these represent real losses, whereas a surplus indicates that only the LHD might be covering their expenses. Despite these limitations, this is the first in-depth study of LHD fee schedules and it provides some useful insights.
Limitations
The results of this study suggest that many LHDs do not consider, or even know, the full costs of service provision when setting fees. Further research is needed to examine how LHDs set their fees, especially whether any cost analysis is performed, and, if so, how the costs of providing specific services are typically calculated. If costs are not considered, the losses incurred each time a service is provided can add up substantially. Given the lack of resources and inability to provide adequate public health services experienced by many LHDs in recent years, LHDs might want to reconsider their fee schedules to ensure that the fee amounts charged cover the costs of providing the services. In addition to the health agent’s wage and time spent performing inspections and completing paperwork, cost estimates should include travel expenses, cost of necessary materials, and any other costs incurred related to service provision. As revenue from fees appears to be associated with jurisdiction size, it is particularly important for LHDs like those in Western Massachusetts, serving small jurisdictions with very limited resources, to examine their use of fees to determine whether there is potential for generating additional revenue that would allow essential public health services to be provided more dependably.
One limitation of this study is that data were not available for all of the towns in the study population and, therefore, the study sample might not be representative of all of Western Massachusetts. Because large towns are slightly overrepresented in this study and large towns are less likely to experience deficits than small towns, the results of this study are likely to underestimate the average losses. However, there is no reason to believe that unexamined LHDs differ systematically from included LHDs on any other characteristics related to setting fees. Being limited to Western Massachusetts, where most cities or towns have their own health departments, it is possible that the results of this study cannot be generalized to the United States as a whole, where most LHDs serve county jurisdictions. While national data might look somewhat different from the data presented here, there are many LHDs across the country that serve small, rural populations. Furthermore, the fact that fees make up extremely small proportions of LHD revenue in some states4 suggests that many LHDs around the country are setting fees that might not cover the costs of service provision. Local health departments can benefit from examining their fee schedules and considering whether the fee amounts charged cover the costs of service provision. This study examined fees in place at only 1 point in time (2009). It is possible that some LHDs have updated their fee schedules since these data were collected. Little is known about what factors are considered by LHDs when setting fees. A more recently updated fee schedule is not necessarily more likely to set fees at levels that cover the cost of service provision. All LHDs could benefit from considering whether their current fee schedules reflect the cost of service provision. Another limitation of this study is the lack of complete information regarding the costs of service provision. The estimates used for this study underestimate
● Conclusions
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