BILL ANALYSIS Ó AB 2424 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2424 (Gomez) - As Amended April 6, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|14 - 2 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill creates a Community-based Health Improvement and Innovation (CHII) Fund, a program and funding structure to allocate funds to community-based chronic disease prevention, with a focus on health equity priority populations. Specifically, this bill: AB 2424 Page 2 1)Specifies funds are available to reduce health inequity; prevent the onset of priority chronic health conditions, as defined; strengthen local and regional collaborations; and evaluate effectiveness and cost-effectiveness of community-based prevention strategies for priority chronic health conditions. 2)Specifies funds can be used for activities including promotion of healthy diets and food environments, promotion of physical activity and of a safe, physical activity-promoting environment, and prevention of unintentional and intentional injury. 3)Specifies policy, systems, and environmental change approaches shall be emphasized, and that funds cannot be used to fund clinical services. 4)Specifies a target level of annual statewide investment from the fund must be established as a set dollar amount per capita, and allocates funds to the California Department of Public Health as follows: a) Statewide media and communications campaigns, b) Evaluation of program activities, least 5% c) Other program implementation activities, including review and approval of local health improvement plans, the definition of priority chronic health conditions and health equity priority populations based on public health data, AB 2424 Page 3 development of tools that to monitor progress towards improving health and health equity, and related activities, up to 6%. d) A grant program for local health jurisdictions, with a $250,000 base award per three-year funding cycle, with the balance of the funding awarded proportional to the number of residents living below the federal poverty level, at least 50%. e) A competitive grant program for community-based organizations or local public entities, for evidence-based or innovative approaches, at least 30%. 1)Specifies funds shall supplement and not supplant existing funding for community-based prevention activities of priority chronic health conditions, and that participating hospitals and health plan partners must identify monetary or in-kind contributions to local projects. 2)Creates an advisory committee, as specified, and requires the committee to produce a comprehensive master plan for advancing chronic disease and injury prevention throughout the state, to be submitted and revised triennially. FISCAL EFFECT: 1)CDPH would incur one-time costs for staffing, information AB 2424 Page 4 technology, and contracts, likely in the low millions of dollars. Ongoing costs would depend on the total allocation and the number of grants and contracts to be managed. 2)This bill does not specify a funding source or amount, but it is safe to assume a program of the scale envisioned would cost in the tens of millions of dollars GF per three-year cycle, in absence of another fund source. Based on the minimum $250,000 allocated to each local health jurisdiction, which would make up 50% of the funding, as well as the ambitious nature and comprehensiveness of the program, staff estimates cost pressure of $30.5 million GF at a minimum. Assuming a program of this size, $2.8 million would be allocated to communications and media, $1.5 million to evaluation, up to $1.8 million for CDPH administration and oversight, $15.3 to local health jurisdictions to implement community-based health improvement activities, and $9.1 million for competitive grants. 3)A related stakeholder proposal request for a $380 million GF appropriation for a Community Health Improvement and Innovation Fund was discussed in the Assembly Budget Subcommittee #1 on April 11, 2016. This represents nearly a $10 per capita investment, which would support one cycle of a three-year grant program. 4)Research indicates funding evidence-based, community-based chronic disease prevention activities can have a high return on investment in terms of health care cost savings. An ROI analysis is beyond the scope of this estimate, but as this bill focuses on the most costly and preventable conditions, including obesity, heart disease, and diabetes, and assuming the activities were evidence-based and well-implemented, it is reasonable they could lead to improvements in population health and a corresponding a reduction in health care cost growth statewide, and for the state as a large payer. In AB 2424 Page 5 addition, the bill's focus on health equity priority populations is likely to have a significant overlap with the Medi-Cal population, increasing the chances of a positive ROI for the state. Finally, the bill's emphasis on funding systems and policy changes means health-promoting changes adopted pursuant to this program may have a lasting impact. For example, the tobacco control program led to changes in public acceptance of tobacco use, which in turn resulted in policies that are unlikely to be reversed, such as tobacco-free workplaces. COMMENTS: 1)Purpose. The author states that through implementation of the Affordable Care Act and other state actions, the state has improved access to health care coverage. However, despite the staggering monetary and human cost, the state has made very little effort to address the root causes of our high levels of obesity and chronic disease, and our dramatic health inequities. The author states the evidence demands we act to recalibrate our efforts towards improving health, and that California's worsening health status indicates the current level of funding for prevention activities are inadequate to affect meaningful change in obesity and chronic disease on a population basis. This bill sets up a structure for investment to prevent chronic disease with a particular emphasis on communities that suffer worse health status, which will improve health, productivity, well-being and health equity of Californians. Furthermore, this bill focuses on primary prevention-prevention of disease before it occurs-which is shown to be effective and cost-effective, and for which there is otherwise very little funding. This bill is author-sponsored and supported by the Health Officers Association of California, the California Pan-Ethnic Health Network, Health Access, and other groups. AB 2424 Page 6 2)Background. The burden of chronic disease in California is high and growing. Chronic conditions account for 80% of health care expenditures and 80% of hospital admissions. Approximately 60% of health expenditures are on behalf of individuals with multiple chronic conditions. Many chronic diseases and conditions have common, preventable risk behaviors including poor diet, tobacco use, and lack of physical activity. The World Health Organization (WHO) estimates eliminating these chronic disease risk factors could eliminate 80 percent of all heart disease, stroke, and type 2 diabetes worldwide-and 40% of cancers. Over the past 30 years, obesity rates have tripled. Only 40% of the state's adults have a healthy weight, while the other 60% are overweight or obese. One in four California adults do not engage in any physical activity. More than one in ten California adults has diabetes, and over 50% of California adults have either diabetes or pre-diabetes. Nationwide, one in three U.S. children born in 2000 are likely to develop diabetes over their lifetimes. There are also significant disparities in health status by race and ethnicity, education, income, geography, and sexual orientation. 3)Current health spending. Overall health spending in California was $230 billion in 2009. In 2016-17, California is projected to spend nearly $85 billion on health care services in Medi-Cal ($19 billion General Fund), and around $5 billion on behalf of state employees in CalPERS. At this time, the state allocates nearly no state dollars to either state-based or community-based approaches to preventing chronic disease. Most GF dollars for public health and prevention were cut during the Great Recession. In 2008-09, $60 million was cut and in 2009-10 it was $154 million, which eliminated the majority of state prevention funding, including funding for HIV/AIDS prevention, community-based preventative health, sex education, support of local health departments, and other AB 2424 Page 7 programs. The federal Centers for Disease Control and Prevention provides about $62 million across a number of different entities in the state for all chronic disease related activities, including local health jurisdictions. 4)Community-based prevention. Community-based prevention uses a variety of strategies to improve health on a population basis within a community. These strategies often include partnerships with other entities, such as non-profits, local governments, school districts, and hospitals and other community institutions. The CDPH California Wellness Plan, which aims to prevent and control chronic disease, describes a number of strategies. For example, to improve physical activity, one strategy is to increase the number of municipal general plans that contain a health element, with language specific to environments that promote daily physical activity. Another is to increase the percentage of schools that have a joint use agreement for shared use of physical activity facilities, so the school grounds can be leveraged for community sports and recreation after hours. Many strategies have the potential to be lasting changes that impact more and more of the population over time, as people cycle in and are touched by institutions and their policies. 5)Key findings on cost-effectiveness. A recent policy brief by the Robert Wood Johnson Foundation summarizes key findings based on a review of studies published between 2008 and 2013. This brief indicates strategic investments in proven, community-based prevention programs save lives and money. Findings include: Local public health spending saves lives in a cost-effective way. Increased spending by local health departments had large and significant effects on mortality from leading preventable causes of death over a AB 2424 Page 8 thirteen-year period ending in 2005. This relationship was consistent across several different mortality measures, and it persisted after accounting for differences in demographic and socioeconomic characteristics, medical resources, and other community characteristics. The study also found achieving similar health improvements through delivering more health care-for example, by providing more primary care visits- would cost around 15 times more than investing in public health. Low-income communities benefit more. A follow-up to the study above found the positive effects of increased public health spending were 21-44% greater in low-income communities as compared to average communities. Primary prevention can lower costs. A 2011 Urban Institute study concluded it is in the nation's best interest, from a health and economic standpoint, to maintain funding for evidence-based public health programs. Specifically, it showed investments in primary prevention programs will not only help slow the chronic disease rate, but have also been shown to lower private insurance costs and improve economic productivity while reducing worker absenteeism. It notes savings achieved through prevention programs can significantly and quickly outweigh initial, upfront investments. Community prevention is the only health investment that is projected to lower costs. A 2011 study published in Health Affairs showed that a combination of three strategies-expanding health insurance, delivering better preventive and chronic care, and implementing community prevention-is more effective at improving health than any one strategy. Community prevention was the only strategy that slowed the growth in prevalence of disease and injury, and the only strategy that did not increase health costs. Finally, adding community prevention to an insurance expansion is projected to significantly improve health and lower costs over a 10- to 25-year time horizon. AB 2424 Page 9 Substantial return on investment is possible. A 2008 report by Trust for America's Health and the Robert Wood Johnson Foundation showed an investment of $10 per person annually in proven, community-based public health programs could result in a return on investment averaging $5.60 for every $1 invested over 5 years. 1) Staff Comments. Three cities, Berkeley, Pasadena, and Long Beach, operate as their own health jurisdictions. An adjustment to the funding minimum could be made for cities that have their own LHJs in order to maintain equity in a statewide allocation. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081