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