The case for investing in public health

What do we know about the relative value of public health interventions?

With finite resources available, decision makers need to strike a cost-effective balance between investment in ‘upstream’ public health interventions and ‘downstream’ treatment of ill health. Finding this balance is far from simple. Evidence relating to the effectiveness of public health interventions is limited compared with that for health care treatments. This is partly due to the nature of such interventions. Changes in population health are often the result of multiple small behavioural and environmental changes that are driven by many factors and might not be seen for years.

One way to assess the merit of greater investment in public health is to compare the marginal cost of such interventions with that of health care treatments. If, for example, the cost of a given intervention is lower than that of a treatment, but leads to a similar improvement in population health, then it would support the case for greater investment in public health over health care.

Such comparisons are complicated, as interventions to maintain and improve people’s health do not necessarily equate to reducing future health care costs. Living longer, for example, simply delays the costs associated with late life and death. However, improved health can reduce the lifetime costs of treating disease.

The cost-effectiveness of interventions can theoretically be measured using the cost per quality-adjusted life-year (QALY). Across the NHS, the average cost per QALY of health care interventions is £13,000. An equivalent estimate for public health interventions has not yet been made, although Public Health England plans to fund research into this in 2019.

Public health interventions tend to be assessed on a wider basis than cost per QALY; instead, the overall return on investment (ROI) is often measured. ROI includes long-term benefits to both the individual and society, though it does not estimate cash savings to the Treasury. Public health interventions are assessed in this way as they are often compared with wider policy interventions (such as housing or transport developments), and because improvements in health tend to have long-term consequences. This can make like-for-like comparisons of public health interventions and health care treatments difficult.

Research into the ROI from local-level public health measures suggests a typical return of 14:1. That is, society benefits by an average of 14 times the initial investment into each intervention. There can be a wide range of returns, depending on intervention type and the geographical level (national or more local) at which it takes effect: for example, regulatory measures like smoking bans (typical ROI of 46.5), health protection like immunisation schemes (typical ROI of 34.2), social interventions like working with young offenders (typical ROI of 5.6).

The same study estimates that a cost per QALY of £13,000 is equivalent to an ROI of 3.16. This ROI estimate should be thought as an indication of scale only, and there is certainly room for improvement in the comprehensiveness of public health intervention assessments, because the estimate is lower than those mentioned above (even for local-level social interventions). There is a clear case for greater ‘upstream’ public health investment.

These findings are particularly relevant at a time in which the government has pledged a significant funding boost to the NHS, which provides predominantly ‘downstream’ health care services. That funding boost will sit alongside already announced, real-terms cuts to the public health grant.

Funding public health

Although the case for investing in public health is likely to strengthen as the evidence base improves, there are two fundamental issues that dominate the landscape for local governments.

Greater control of locally raised revenues

The government’s intention is that revenue raised through business rates will remain fully in the hands of local authorities. The trade-off is a reduction in support from the centre via grants – such as the public health grant. Some areas, such as Greater Manchester, are already trialling the approach of full business rate retention.

However, local authorities would not keep full control of the finances they raise. Some of the funding would be redistributed to areas of higher need. It is vital that any funding to support public health is distributed to those with the greatest need, but without creating large reductions in support in any given local area. The ACRA formula is the government's proposed method of determining the distribution of public health funding, but does not suggest the size of the total pot. Our analysis suggests the pot should be substantially bigger than at present and that, even if the ACRA formula is adopted (with differential growth), a more immediate boost to funding is required to offset years of real-terms reductions.

As well as giving local authorities greater control of their funding sources, a reason for this move is to give them an incentive to maximise local tax revenue. However, it is likely that the least-deprived areas, or those with relatively strong growth, will be most able to increase their revenue. This could ultimately widen health inequalities. That’s why it is so important to ensure the appropriate level of funding and fair distribution of funding for public health.

One priority among many funding pressures

Thinking about improving health purely in terms of the public health grant and health care misses out a big part of what makes us healthy. Improving health also requires focus on the social determinants of health, such as education, housing, job quality and physical environment.

Between 2010/11 and 2016/17, local authority budgets have been reduced by 32.6% (excluding adult social care). Although there once may have been a case to seek greater efficiencies in local spending, the mounting reports of councils in significant financial difficulties and cutting back all but the most basic provision suggest funding cuts are reducing the services councils provide. Beyond cuts in service provision, changes to working-age benefits are expected to increase levels of child poverty. Given the strong association between poverty and health outcomes, there is real cause for concern about the impact on people’s health.

The health implications of reductions in services or income may not be immediately apparent. Changes in population health tend to be long term and can be lost when data is viewed as averages rather than for specific groups or local areas.

The consequences of eroding people’s health are likely to prove far more expensive, both to individuals and the state, than the cost of supporting people to stay healthy.

Future Health Foundation research will explore the impact of changes in policy on people’s health, both in the short and long term. However, it is vital that the government considers the impact of such large reductions in local service provision on people’s health.

One QALY is equivalent to 1 year of life in perfect health.

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