Do public health activities pay for themselves? The effect of county-level public health expenditures on county-level public assistance medical care benefits in California.

This study estimates the effect of county-level public health expenditures in reducing county-level public assistance medical care benefits (public assistance medical care benefits is a measure compiled by the US Bureau of Economic Analysis and includes Medicaid and other medical vendor payments). The effect is modeled using a static panel model and estimated using two-stage limited information maximum likelihood and a valid instrumental variable. For every $1 invested in county-level public health expenditures, public assistance medical care benefits are reduced by an average of $3.12 (95% confidence interval: -$5.62, -$0.94). Because Medicaid in California is financed via an approximate 50% match of federal dollars with state dollars, savings to the state are approximately one-half of this, or $1.56 for every $1 invested in county-level public health expenditures.