The Department of Legislative Services (DLS) recently released a report titled “Survey of Local Health Departments in Maryland” which examined the funding of local health departments in the State.  The report focused specifically on: (1) how local health departments (LHD) finance public health services; (2) the impact of federal health care reform on LHDs; and (3) the regionalization of public health services in the State.

DLS made the following findings:

1. First, DLS found that, while State Core Funds make up only a small portion of LHD revenues, local jurisdictions’ reliance on these funds is likely to increase as funding for State-only safety net programs continues to decline under federal health care reform. It is critical that LHDs are funded not only adequately but also equitably to limit disparities in public health services.
2. DLS also found that, despite recent legislative attempts to remove barriers to contracting between LHDs and private entities, LHDs continue to experience difficulties in contracting with third-party insurers. To the extent that LHDs continue to act as direct service providers after federal health care reform is fully implemented and fewer individuals are insured, LHDs’ ability to contract with and bill third-party insurers is critical.
3. Finally, DLS found that, while a majority of LHDs are either considering or actively pursuing voluntary public health accreditation, lack of funding is a primary barrier to many. DLS advises that regionalization of public health services is a potential tool for overcoming financial barriers to accreditation and for ensuring that public health services are consistent throughout the State.

To address these findings, DLS is recommending that additional research be performed to determine whether the current distribution of funds under the Core Funding Program is effective and whether LHDs could benefit from the regionalization of public health services.  DLS also recommended Joint Chairmen’s Report language to address ongoing efforts to remove barriers to third-party billing.

A previous blog series on Conduit Street also highlights LHD challenges.  This six part series provided an introductory overview of local health departments; specifics on services provided, organizational structure, and funding; the history of local health departments and the core funding formula; an overview of the current formula and recent challenges with respect to budget and legal interpretation; and formula shortcomings with respect to compensation related adjustments.  The following recommendations were made with respect to the funding of local health departments.

1.  As the State’s fiscal condition improves, funding to LHDs should be restored and a new base established to ensure funding levels are commensurate with the needs of constituencies across the State.

2.   Considering the new statutory interpretation with respect to inflationary increases, legislation should be introduced to clarify that inflationary increases should provide for cumulative growth, not one year’s growth in inflation and population.

3.   Amend the current statute to base a portion of the annual change in the State share of Core Funds on the percentage change in State salaries and fringe benefits.  Examples of  changes in salaries and fringe benefits would include salary increments and COLAs as well as increases in the State share of retirement and health insurance costs.

4.  Amend the current statute (or adopt language in the annual budget bill) to require COLAs and other compensation-related adjustments to be equitably distributed to all LHDs.