The growing interest in addressing social determinants of health—nonclinical factors influencing health—raises practical issues about the way we budget for collaborative efforts across governmental departments. In particular, the expanding research on the relationship between such factors as housing, transportation, and community services and the health condition of many households indicates the importance of giving program leaders the flexibility and incentive to coordinate resources from multiple sources.
There are obstacles, however. Program leaders and budget officials normally are held accountable only for reaching their own department’s goals, not the goals of other departments. For instance, transportation or housing officials typically are not judged on the effect their budgeting decisions have on Medicaid or Medicare. Indeed, many efforts to address social determinants of health are undercut by similar examples of the “wrong pockets” problem—the predicament that arises when one agency is well placed to invest in achieving an important outcome, but it is another agency that stands to reap most of the financial benefit from the investment.
Fortunately, government at all levels is experimenting with a variety of ways to braid or blend funds from different programs to help achieve a broad purpose, such as improved health, although much more needs to be done. By braiding we mean bringing together funds from multiple programs, with funds from each program tracked by that program’s managers. Blending, which is much less common, means mixing together money from multiple programs and managing those resources as one pot of money.
The federal government has taken several steps to foster budgeting collaboration. To help coordinate housing and medical care to improve the health of homeless people in the United States, for instance, the departments of Housing and Urban Development and Health and Human Services have worked together to fund a range of housing-based services to improve the quality of life and health of low-income elderly recipients of Medicaid.
In some cases, the federal government has found that setting up a special intermediary body is the best way to get agencies to cooperate on planning and funding collaborative action. An example of this approach is the Interagency Council on Homelessness, which was created by statute in 1987. The council is a special body that coordinates homelessness programs across federal agencies and with lower levels of government.
The federal government can also encourage lower levels of government to combine funds across agencies simply by clarifying what types of braiding and blending are permitted. A problem today is that many state and local initiatives are unaware of the flexibility they already possess to commingle federal funds. Some of those who are aware are held back because budget managers fear they might not be complying with federal auditing rules when federal funds are part of the mix, such as initiatives that include the federal-state Medicaid program. There are actually wide opportunities for lower levels of government to braid and blend funds. But the federal government needs to make sure jurisdictions know about these opportunities and it needs to provide safe harbor scenarios and other guidance for states and localities to follow to avoid uncertainty.
The federal waiver process also opens the door for states to explore ways of braiding and blending money to improve health. Section 1115 waivers, for instance, permit states to request changes in Medicaid rules to test innovate ways of achieving the program’s objectives. Recently North Carolina received a 1115 waiver to pilot ways of improving the health of certain beneficiaries with complex conditions by covering a range of nonclinical services not normally included under Medicaid, including housing, food, and transportation. New York and Oregon are among the states that have used Section 1115 waivers to support housing services for their most complex and vulnerable Medicaid populations.
States are undertaking similar strategies to braid or blend funding across programs to improve health, and in several instances are ahead of the federal government. In addition to using federal waivers, for instance, many states have made extensive use of interagency planning groups. For example, more than half the states have now established children’s cabinets, which bring together the leadership from different agencies to coordinate programs and budgets aimed at improving the health, educational, and economic success of children. Maryland is among the leaders at the state level, having established special county-level bodies known as local management boards. Certain of these Maryland county boards are governmental bodies and others are nonprofits; they operate as financial intermediaries, designed to braid and blend federal, state, and even private funds to benefit children.
Some states have gone even further by passing legislation to blend together funding linked to a particular goal, managing the money as a separate streamlined pot. In 1993, for example, Virginia established a single, state pool of funds to support a range of services for at-risk children and families. The fund laced together 7 separate funding streams, including Medicaid dollars, drawn from 4 departments.
Over just a few years, interest in the role of nonclinical social determinants of health has exploded. The volume of research on the influence of housing, transportation, nutrition, and other factors on health is increasing sharply. Health systems are investing in housing and social services and in the technology needed to link patients with such services. Data-sharing practices and evaluation techniques are being refined.
The budgeting process is still a drag on these advances, however, with wrong pockets issues and siloed planning impeding the flexible use of funds. But examples from the federal, state, and local levels show what can be done and often is being done to braid or blend financial resources to achieve cross-sector goals. If we make greater use of such tools to make it easier to combine funds in this manner, we will help to realize the full potential of this broader approach to achieving good health.
About the author: Stuart M. Butler, PhD, is a senior fellow, Economic Studies, at the Brookings Institution in Washington, DC, where he focuses on health care and budget issues. Dr. Butler also serves on the board of trustees for the Convergence Center for Policy Resolution, and the board of Mary’s Center, a Federally Qualified Health Center. (Image: Paul Morigi/The Brookings Institution)
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