Not Only How Much But How: The Importance Of Diversifying Funding Streams In A Reimagined Public Health System

Abstract

Revenue diversification may be a synergistic strategy for transforming public health, yet few national or trend data are available. This study quantified and identified patterns in revenue diversification in public health before and during the COVID-19 pandemic. We used National Association of County and City Health Officials’ National Profile of Local Health Departments study data for 2013, 2016, 2019, and 2022 to calculate a yearly diversification index for local health departments. Respondents’ revenue portfolios changed fairly little between 2016 and 2022. Compared with less-diversified local health departments, well diversified departments reported a balanced portfolio with local, state, federal, and clinical sources of revenue and higher per capita revenues. Less-diversified local health departments relied heavily on local sources and saw lower revenues. The COVID-19 period exacerbated these differences, with less-diversified departments seeing little revenue growth from 2019 to 2022. Revenue portfolios are an underexamined aspect of the public health system, and this study suggests that some organizations may be under financial strain by not having diverse revenue portfolios. Practitioners have ways of enhancing diversification, and policy attention is needed to incentivize and support revenue diversification to enhance the financial resilience and sustainability of local health departments.