Local Government 

Responsibilities 

In Health Care 

U.S. Advisory Commission 

on Intergovernmental Relations 

Washington, DC 20575 

M-192 

July 1994 
U.S. Advisory Commission on 

Intergovernmental Relations 

800 K Street, NW 

South Building 

Suite 450 

Washington, DC 20575 

(202) 653-5640 

FAX (202) 653-5429 

ii U.S. Advisory Commission on Intergovernmental Relations 
EXECUTIVE SUMMARY 

Local governments have a large and growing role in national health care, and they must 

be included in any plans for implementing reforms. Whether policies and standards are set 

by the federal and/or state governments, local 

governments deliver many health services, especially those directed at vulnerable populations. 

Unless local officials are involved early in 

planning for implementation of health care reforms, unnecessary delays and problems may 

result, with serious effects on people who depend on local governments for health care services. 

In this report--local Government Responsibilities in Heolfh Core-ACIR reviews local expenditures for health care, their relation to 

health care reform, and the needs for additional 

information. 

Highlights 

0 Local governments spend an estimated 

$85 billion per year on health care services-about one of every eight dollars 

spent by local governments. The biggest 

expenditures are for: 

(1) locally owned and operated hospi- 

(2) employee health care, $31.1 billion 

(3) retiree health care, $2.6 billion 

tals, $32.8 billion (1992); 

(1993); 

(1993); 

U.S. Advisory Commission on Intergovernmental Relations iii 
(4) public health services, $13.7 billion 

(1992); and 

(5) local share of Medicaid, $4.6 billion 

(1993). 

Local government spending on health is 

growing rapidly. In just one year (1991 

to 1992), spending on hospitals and 

public health increased 9.1 percent and 

8.9 percent, far exceeding the overall 4.9 

percent increase in local government 

spending. 

Counties, cities, and special districts in 

41 states and the District of Columbia 

own and operate 1,405 acute care hospitals. In addition, local governments in 

25 states operate 195 institutions that 

provide hospital-related services. These 

governments spent over $30 billion in 

1991, or an average of $21.3 million per 

hospital owned. 

Local public hospital spending is financed predominantly from charges- 

$22.8 billion or about 75 percent in 1991. 

The charges are paid by Medicare, 

Medicaid, other third-party payers, and 

self-payers. The remaining $7.2 billion 

was financed by a combination of local 

own-source revenues and federal or 

state intergovernmental transfers. 

Local governments spent $13.7 billion 

on public health services in 1992. State 

aid financed about $6.4 billion of local 

Dublic health mending. I Y 

0 Counties are the principal providers of 

public health services, at an estimated 

cost of $9.1 billion in 1991. Cities followed at $2.9 billion and special districts at $.6 billion. 

Counties have some responsibility for 

Medicaid financing in 22 states. Counties in 15 states spent $4.6 billion on 

Medicaid in 1993. The local shares 

range from about 50 percent in Arizona 

and New York to 1 percent or less in five 

states. 

Local governments have more than 10 

million full-time and part-time employees. These governments provided 

health insurance for approximately 9.1 

million employees in 1993, at an estimated cost of about $31 billion. 

0 

0 

0 Local governments provide health insurance for an estimated 1.6 million retirees at a cost of about $2.6 billion. 

There are wide variations between states in 

the health care services local governments provide and in how they are financed. For example, 

in Texas, 160 local governments own and operate hospitals, at a cost of $2.2 billion; Maryland 

has no locally owned hospitals. 

It will be important in considering national 

health care reform to recognize the importance 

of the local government health care role as well 

as the different effects that changes will have on 

local governments depending on the type and 

size of government and the state in which they 

are located. 

iv U.S. Advisory Commission on Intergovernmental Relations 
PREFACE AND ACKNOWLEDGMENTS 

National debates about health care reform 

are focused primarily on the roles of the federal 

and state governments in financing, administering, and regulating health care systems. The 

roles of local governments have received little 

attention. In part, this is because it is hard to 

evaluate how reform proposals will affect the 

large numbers of local governments with their 

diverse health care responsibilities, about 

which there is a lack of information. Nevertheless, health care reform will affect local governments, and they will play a role in effective 

implementation. This report reviews the information that ACIR has collected about local 

expenditures for health care, and discusses the 

need for additional information. 

The report was written by Philip M. Dearborn, Director of Government Finance Research 

at the Advisory Commission on Intergovernmental Relations. He was assisted by Jill Gibbons, ACIR Finance Analyst. 

The Commission would like to thank all 

those who reviewed and commented on the report, or provided other information, especially: 

Cathie Eifelberg, Government Finance Officers’ 

Association; Dave Garrison, U.S. Department 

of Health and Human Services; John Goetz, 

Moodys Investors Service; Thomns Joseph, National Association of Counties; Ann Kernpinski, 

American Federation of State, County, and Municipal Employees; Sue Madden, Public Health 

Foundation; Marie Monmd, American Federation of State, County, and Municipal Employees; 

Doug Peterson, National League of Cities; Nanp 

Rawding, National Association of County Health 

Officials; Lisa Rovin, U.S. Department of Health 

and Human Services; Mary Uyeda, National Association of Counties; and Heniy Wuls, U. s. Bureau of the Census. 

Joan Casey edited the report. The charts were 

prepared by Mark Schreiner, an Intern at ACIR. 

Stephanie Richardson and Cheryl Fortineau assisted in preparing the report for publication. 

The Commission and its staff take full responsibility for the contents of the report, 

which was approved by the Commission on 

June 17, 1994. 

William E. Davis 111 

Executive Director 

U.S. Advisory Commission on Intergovernmental Relations v 
vi U.S. Advisory Commission on Intergovernmental Relations 
CONTENTS 

Introduction .......................... 1 

Local Government Hospitals ........... 3 

Number. Type. and Expenditures ...... 3 

Revenues ........................... 3 

Relation to Health Care Reform ...... 4 

Information Needed ................. 5 

Local Government Employee 

Health Care Costs ................... 7 

Coverage of Employees .............. 7 

Self-Insurance Plans ................. 7 

Relation to Health Care Reform ...... 8 

Information Needed ................. 8 

Local Government Retiree 

Health Care Costs ................... 9 

Coverage of Retirees ................. 9 

Information Needed ................. 9 

Public Health Services ................. 11 

Spending on Public Health ........... 11 

Revenues ........................... 12 

Information Needed ................. 12 

Local Government Medicaid 

Responsibilities ..................... 13 

Extent of Local Responsibility ........ 13 

Cost-Sharing Formulas ............... 13 

Relation to Health Care Reform ...... 14 

Conclusion ........................... 15 

Notes ................................ 16 

Bibliography .......................... 17 

Appendix ............................. 18 

Charts and Tables 

Chart I -Local Governments 

Chart 2-Local Hospital and Public 

Health Spending Leads All Other 

Increases from 1991 to 1992 

Chart 3-Counties Operate the Most 

Hospitals. Cities Spend the Most 

Spent $84.8 Billion for Health ...... 

....... 

.. 1 

.. 2 

Per Hospital ........................ 4 

Health Coverage .................... 7 

Chart 4-Local Government Employee 

Table I -Hospitals Owned and Operated 

by Local Governments. 1991 .......... 

Table 2-Local Government Hospital 

Expenditures Financed from Charges. 

1991 ............................... 4 

Table 3-Local Government Estimated 

Costs for Employee Health Insurance . 8 

.Table 4-Changes in Public Health 

Expenditures. 1991.1992. State 

and Local Governments .............. 11 

Payments ........................... 13 

3 

Table 5-Local Government Medicaid 

U.S. Advisory Commission on Intergovernmental Relations vii 
viii U.S. Advisory Commission on Intergovernmental Relations 
INTRODUCTION 

Local governments spend an estimated $85 

billion per year on health care, based on the 

latest years for which information is available 

(see Chart 1). This means about one of every 

eight dollars spent by local governments is for 

health-related activities, including (1) protecting 

the health of the community, (2) providing health 

care for low-income and uninsured residents, (3) 

providing health benefits for their employees and 

retirees, and (4) helping states finance Medicaid. 

Chart 1 

Local Governments 

Spent $84.8 Billion for Health 

(in billions of dollars) 

$2.6 

Local spending on health services is a large 

and rapidly growing budget component. Spending on two key services, hospitals and public 

health, increased 9.1 percent and 8.9 percent, 

respectively, from 1991 to 1992. These were the 

two fastest growing services of local governments, far exceeding the overall 4.9 percent increase in spending (see Chart 2 and Appendix 

Table 1). State governments' average health insurance premiums were reported to have risen 

about 10 percent in 1993, and local governments 

probably experienced a similar increase.' 

Local governments have a large and growing 

role in national health care, and they must be 

included in any plans for implementing reforms 

to that system. While overall policies and standards may be set by the federal and state governments, it is local governments that deliver many 

health services, especially those directed at vulnerable populations. 

To meet their responsibilities, local governments will need to adjust their budgets and 

operational plans. Unless local officials are 

involved in planning for implementation early 

in the process, delays and unnecessary problems may result, and people who depend on 

local governments for health care services may 

be affected. 

There are wide variations between states in 

the health care services local governments provide and in how they finance those services. For 

example, in Texas, 160 local governments own 

U.S. Advisory Commission on Intergovernmental Relations 1 
Chart 2 

Local Hospital and Public Health Spending 

Leads All Other Increases from 1991 to 1992 

10 

8 

0 

PS 

m 

0 

a4 2 

Q) 

P 

c 

C 

c 

2 

a 

and operate hospitals with $2.2 billion in hospital expenditures; in Maryland, there are no locally owned hospitals.2 In considering national 

health care reform, the importance of the local 

government health care role must be recognized, 

as well as the different effects that changes may 

have on local governments depending on their type 

and size and the state where they are located. 

This report examines the five principal areas 

of local government spending on health care: (1) 

locally owned and operated hospitals; (2) employee health care; (3) retiree health care; (4) 

public health services; and (5) local share of 

Medicaid. Ideally, the sources of funding for 

these expenditures would also be shown, but the 

available information does not permit an estimate of how local governments finance each of 

these services. Based on the most recent information available, the estimated annual expenditures for these programs are as follows: 

Hospitals (1992) $32.8 billion 

Employee Health Care (1993) 31.1 

Retiree Health Care (1993) 2.6 

Public Health (1992) 13.7 

Medicaid (1993) 4.6 

Total $84.8 billion 

The nature of each of these services and their 

implications for health care reform will be considered separately. Some of the data and research questions for which answers are needed 

will also be discussed. 

2 U.S. Advisory Commission on Intergovernmental Relations 
~ ~~ ~ ~ ~ ~~~ 

LOCAL GOVERNMENT HOSPITALS 

Number, Type, and Expenditures 

Local governments (counties, cities, and special districts) in 41 states and the District of 

Columbia own and operate 1,408 acute care hospitals, as defined by the American Hospital Association. In addition, local governments in 25 

states operate 195 institutions that provide hospital-related services but are not classified as 

 hospital^.^ Local government direct hospital expenditures totaled over $30 billion in 1991, the 

latest year for which detailed information is 

available, including $2 billion of capital spending, 

or an average of $21.3 million per hospital owned 

(see Table 1 and Appendix Tables 2, 3, and 4).4 

Table 7 

Hospitals Owned and Operated 

by Local Governments, 1991 

Average 

Type of of ditures Hospital 

Government Hospitals (millions) (millions) 

Number Expen- per 

County 618 $13,643 $22.1 

Special Dislrict 528 9,342 17.7 

City 262 7,035 26.9 

Total 1,408 $30,020 $21.3 

Source: U.S. Department of Commerce, Bureau of 

the Census, 1992 Census of Governments 

(unpublished), and Government Finances 

7990-97 (Washington, DC, 1993). 

Although cities operated the fewest hospitals, they tended to be larger institutions with 

average expenditures per hospital of $26.9 million, compared to $22.1 million for county hospitals and $17.7 million for special districts. There 

are wide variations among states. In New York, 

the 21 city-owned hospitals, including 14 in New 

York City, averaged $151.8 million in expenditures per hospital. In contrast, 26 county hospitals in Nebraska averaged just $3.5 million per 

h~spital.~ As would be expected, the states with 

large geographical areas and low population 

densities tend to have a lower average spending 

per hospital, but there are some exceptions. For 

example, the 45 county hospitals in Texas each 

averaged $26.5 million in spending, while 5 

county hospitals in Massachusetts averaged 

$11.9 million.6 

Overall, a relatively small number of large 

local hospitals accounts for a large share of total 

local spending. Of the 1,408 hospitals, 111 county 

and city hospitals, or 7.9 percent, account for 

$14.7 billion, or 48.9 percent of the total local 

hospital expenditures. New York City hospitals 

account for $3.1 billion, over 10 percent, and Los 

Angeles County hospitals account for another $1.4 

billion, or almost 5 percent of all local hospital 

spending (see Chart 3 and Appendix Table 9.’ 

Revenues 

The revenues to finance local hospital 

spending came predominantly from charges, 

which totaled $22.8 billion, or about 75 percent 

US. Advisory Commission on Intergovernmental Relations 3 
Chart 3 

Counties Operate 

The Most Hospitals 

Cities Spend the Most In 

Number Per Hospital Millions 

of of 

Hospitals Dollars 

700 

600 

500 

400 

300 

200 

100 

0 

County District Cities 

Hospitals Owned 

Average per Hospital 

30 

25 

20 

15 

10 

5 

0 

Table 2 

Local Government 

Hospital Expenditures 

Financed from Charges, 1991 

(millions) 

Percent 

Recovered 

Type of Expen- from 

Government ditures Charges Charges 

County $13,643 $9,691 71 .O% 

Special 

District 9,342 9,043 96.8 

City 7,035 4,102 58.3 

Total $30,020 $22,836 76.1 

Source: U.S. Department of Commerce, Bureau of 

the Census, Government Finances 1990-91 

(Washington, DC, 1993). 

of the costs in 1991 (see Table 2).s No details are 

available about who paid the charges, but they 

would include Medicare, Medicaid, other 

third-party payers, and self-payers. Disproportionate share payments from Medicare and 

Medicaid were undoubtedly a significant portion of some hospitals’ charges, but no information is available about the payments or which 

hospitals received them. The remaining $7.2 billion in spending was apparently financed from 

local own-source revenues, although some revenues could have come from federal or state intergovernmental transfers, which cannot be 

identified from Census data? 

Special districts depend almost entirely (96.8 

percent) on charges to finance their hospitals, 

but, usually, they serve a local region and are 

self-supporting (see Appendix Table 6).1° 

City-operated hospitals recover on average 58 

percent of their costs from charges, but this is 

distorted by the data from hospitals in New York 

State, which average only32 percent. In 24 states, 

the aggregate charges for city-operated hospitals 

equal more than 90 percent of costs.l* 

Relation to Health Care Reform 

Several features of local government hospital 

services may be relevant to health care reform: 

Local governments own and operate a 

large number of hospitals. 

Local responsibilities vary widely among 

states, with nine states having no local 

government hospitals and ten states having more than 50 local hospitals each. 

Locally owned and operated hospitals 

vary widely in size, with a few very large 

urban hospitals and a large number of 

smaller hospitals. 

Most hospitals, especially those owned 

by special districts, rely almost entirely 

on charges, but a few apparently rely on 

general government taxes and revenues. 

It is not possible to determine who pays 

the charges. 

The diversity across states means that 

changes made by the federal government in na4 U.S. Advisory Commission on Intergovernmental Relations 
tional health care delivery systems will have disparate effects on local government hospital 

services. For hospitals that rely heavily on 

charges, including disproportionate share payments, reform could substantially alter or reduce 

those charge payments. For hospitals that do not 

rely mainly on charges, federal legislation has the 

potential to increase such revenues and reduce 

local governments’ need to provide support from 

general revenues, assuming that government-owned and nongovernment hospitals are 

treated the same way. 

Information Needed 

More information is needed about the financing of local government hospitals, particularly about the sources of charges and 

noncharge revenues. There also is no information readily available about how much local 

governments may borrow to purchase or construct hospitals. 

Better information is needed about the 

roles of local public hospitals, including why 

they are an important component of the health 

care systems in some states and localities, 

while others elect not to provide them. Data on 

the characteristics of patients served, especially the numbers of indigent and uninsured, 

would be helpful in evaluating the role of locally owned and operated hospitals and how 

health care reform will affect them. 

U.S. Advisory Commission on Intergovernmental Relations 5 
6 U.S. Advisory Commission on Intergovernmental Relations 
~~~ ~ ~ ~ ~ ~~~ ~ 

LOCAL GOVERNMENT EMPLOYEE HEALTH CARE COSTS 

Coverage of Employees 

Local governments had 9.4 million full-time 

and 1.4 million part-time employees in 1990. The 

U.S. Department of Labor estimates that in 1992 

about 90 percent of these full-time employees 

and about 43 percent of part-time employees-about 9.1 million local government employees -had health insurance provided by their 

employer (see Chart 4).12 Local governments 

were estimated to pay the total cost of family 

coverage for 35 percent of those covered and of 

individual coverage for another 27 percent. For 

Chart 4 

Local Government 

Employee Health Coverage 

(9.12 Million Employees Covered) 

the remaining 38 percent of employees, local 

governments paid a portion of the costs.” 

The average annual premium estimated for 

covered state employees in 1993 was $5,039 for 

families and $2,244 for individual^.^^ Assuming 

that local government premium costs were comparable, the total 1993 cost for employee health 

insurance was probably about $31 billion (see 

Table 3). 

Recent developments in local government 

employee coverage may have significance for 

health care reform. Between 1990 and 1992, the 

percentage of employees covered by traditional fee-for-service plans dropped from 61 percent to 43 percent. The drop was split between 

preferred provider plans, up 10 percentage 

points to 27 percent, and health maintenance 

organizations (HMOs), up 7 percentage points 

to 29 percent. The remaining 1 percent had 

other types of plans.15 

Self-Insurance Plans 

About 21 percent of state and local government employees receiving health insurance in 

1990 were covered by governments that self-insure.16 There are several types of self-insurance 

arrangements, including (1) pay-as-you-go, (2) a 

government-owned trust fund from which 

benefits are paid, and (3) care in government-owned facilities. Commercial carriers or 

other contractors often administer these 

self-insurance programs. 

U.S. Advisory Commission on Intergovernmental Relations 7 
Table 3 

Local Government Estimated Costs for Employee Health Insurance 

Employer Employees Covered 1993 Average Annual Total Cost 

Coverage Share (millions) Cost Per Employee (millions) 

Family 100% 3.19 $5,039 $1 6,074 

Individual 100% 2.47 2,244 5,543 

Family Partial 1.95 3,371 6,574 

Individual Partial 1.51 1,896 2,863 

Total 9.12 $31,054 

Source: AClR computations based on US. Department of Labor, Bureau of Labor Statistics, Employee Benefits in 

State and Local Governments, 1990 (Washington, DC, 1992); and Segal Company, 1993 Survey of State Employee Health Benefit Plans (Atlanta, 1994) 

A smaller number of local government employees is covered through insurance pools 

sponsored by state municipal leagues or other 

local government organizations. The total number of employees enrolled is not available, but 

the National League of Cities (NLC) estimates 

that 86,755 public employees and their dependents are covered by municipal league health 

pools in 14 states.” These pools provide coverage for employees of 2,677 local governments, 

1,903 of which have less than 25 employees. Only 

12 governments have more than 500 employees. 

NLC estimates that 68 percent of those covered 

live outside metropolitan areas. 

Although only a relatively small number of 

employees is covered, the pools are significant 

because they offer reasonable coverage for 

smaller and rural local governments. The median annual cost for individuals was $2,064; for 

families, $5,568. These amounts are about the 

same as the average estimated premiums for 

state government employees.18 

Maine’s Municipal Employees Health Trust, 

for example, covers more than 7,500 enrollees 

from more than 300 local governments. Over 80 

percent of the enrollees are estimated to come 

from jurisdictions with fewer than 75 employees. 

All employees in the participating governments 

who work 20 hours a week or more are eligible to 

join the trust pool. The benefits are comparable 

to those typically offered by comprehensive 

plans, and the plan provides both fee-for-service 

and managed care options.lg 

Relation to Health Care Reform 

In implementing national health care reform, it will be important to recognize that most 

local governments provide access to insurance 

coverage for their employees and pay a substantial share of the costs. This means that mandatory employer coverage and substantial employer 

cost-sharing may affect local governments less 

than some other employers. It also means that 

existing arrangements that meet employee 

health care needs should be disrupted as little as 

possible. 

Information Needed 

Additional information would be desirable 

about the characteristics of (1) local government 

health care coverage of part-time and temporary 

employees; (2) types, sizes, and regional variations in coverage; and (3) the health care coverage portion of local government budgets. 

8 U.S. Advisory Commission on Intergovernmental Relations 
LOCAL GOVERNMENT RETIREE HEALTH CARE COSTS 

Coverage of Retirees 

In addition to employees, many local governments provide health care coverage for their retirees. An estimated 58 percent of state and local 

retirees received employer-financed coverage, 

with about half receiving full payment.*O In 1990, 

there were 4.0 million beneficiaries of state and 

local retirement systems.21 Assuming that the 

ratio of local government beneficiaries to state 

government beneficiaries is about the same as 

the ratio for employees, then 71 percent or 2.8 

million are local government retirees, of whom 

about 1.6 million probably receive health care 

benefits. For state government retirees over age 

65 with Medicare coverage, the average cost in 

1993 was $1,452 for individuals and $2,868 for 

families.22 

Assuming that half of the local government 

retirees with coverage receive full payment and 

the rest receive 50 percent, with an annual average cost of $2,160, the total annual cost to local 

governments would be about $2.6 billion. This 

understates the cost somewhat, because it does 

not reflect higher costs for early or disabled retirees who are not eligible for Medicare. Police 

and fire service retirees are especially likely to 

fall into these categories. 

Information Needed 

Better information is needed about coverage 

of retired employees, especially the costs for 

those who do not qualify for Medicare, and the 

numbers receiving individual and family coverage. It also would be desirable to have better 

information about the differences in costs 

among local governments resulting from variations in early retirement policies, such as those 

for police and fire personnel. 

U.S. Advisory Commission on Intergovernmental Relations 9 
10 U.S. Advisory Commission on Intergovernmental Relations 
PUBLIC HEALTH SERVICES 

Spending on Public Health 

Local governments spent $13.7 billion on 

public health services in 1992, or almost as much 

as the $15.6 billion of direct health expenditures 

by state governments. State aid financed $6.4 

billion of local health spending, leaving local 

governments to finance $7.3 billion. Because of a 

13 percent decrease in state aid in 1992, local net 

expenditures increased 39 percent, from $5.3 billion in 1991 to $7.3 billion in 1992 (see Table 4),23 

The definition of public health used by the 

Census Bureau includes outpatient services 

(nonhospital), research and education, categori 

Table 4 

Changes in Public Health 

Expenditures, 1991 -1 992 

State and Local Governments 

(thousands) 

Percent 

Type 1991 1992 Change 

State Direct $14,119,717 $15,638,464 10.8% 

Local Direct 12,585,887 13,706,016 8.9 

Total 26,705,604 29,344,480 9.9 

State Aid 7,292,105 6,359,903 -12.8 

Net Local 5,293,782 7,346,113 38.8 

Net State 21,411,822 21,998,367 2.7 

Source: U.S. Department of Commerce, Bureau of 

the Census, Government Finances 1990-91 

(Washington, DC, 1993). 

cal health programs, treatment and immunization clinics, nursing, environmental health, 

ambulance service, mosquito abatement, and 

school health (if not a school expenditure). However, because of differences in the way local governments classify expenditures, it is not possible 

to determine exactly what is included as public 

health expenditures. 

For example, emergency medical services, 

ambulance transportation, and prisoner health 

care are usually classified by local governments 

as expenditures for public safety, not as public 

health. Similarly, expenditures for long-term 

care, mental health services, substance abuse, 

and preventing health risks through regulation 

may be reported in other categories. There are 

no reported amounts for health services provided by independent local school districts, and 

such services may be recorded as public health 

expenditures of the general government or as 

educational expenditures, depending on which 

government provides the service. 

The share of direct public health expenditures paid by local governments varies widely 

from state to state. In Rhode Island, less than 2 

percent of public health spending is local: the 

rest is state direct expenditure. At the other extreme, Wisconsin’s local governments spend 

over 79 percent of the total (see Appendix Table 

7).24 In seven states, local governments spend less 

than 10 percent of total public health expenditures, but in seven other states, local governU.S. Advisory Commission on Intergovernmental Relations 11 
ments spend over 60 percent of the For 

the District of Columbia, because of its unique 

status, all spending is classified as local. 

Among local governments, counties are the 

principal providers of public health services, although in New England and some other states, 

cities and special districts play an important 

role. Based on 1991 information, county governments spent $9.1 billion, or 73 percent of total 

local public health spending, followed by cities 

with $2.9 billion and special districts with $.6 

billion (see Appendix Table 8).26 

Revenues 

The sources of funds for local public health 

spending are state aid and locally raised revenues. It is not possible to determine how much 

state aid may be passthrough federal aid, or how 

much local funding is from charges or other 

nontax sources. State aid in 1991 financed 58 

percent of local public health expenditures, but 

in 1992, it dropped to 46 percent (see Appendix 

Table 9).*’ This dramatic change was caused primarily by a reassignment of financing responsibilities in California that saw state aid decline 

from $2.5 billion in 1991 to $1.0 billion in 1992. In 

general, state aid for public health averages 

about 50 percent, with wide differences among 

states. In eight states, state aid for health purposes exceeded local government reported expenditures, apparently because some aid went to 

nonprofit or quasi-government providers.28 

Using a very narrow definition of local public health expenditures that totaled only $4.1 billion in 1989, the Public Health Foundation 

reported that states were the source for 28.1 

percent and the federal government for 15.5 percent of local public health financing. The remaining expenditures were financed from local 

general revenues (33.6 percent) and other 

sources, apparently charges (22.8 percent).B The 

foundation considers local health departments 

in some states, Virginia for example, to be technically or legally state agencies, even though they 

are reported by the Census Bureau to be local 

agencies. 

Assuming that the financing ratios reported 

by the Public Health Foundation would be about 

the same for the larger local expenditures reported by Census, local governments would have 

received about $2.3 billion from federal aid in 

1992. 

Information Needed 

A vital part of health care reform proposals 

relates to improving public health prevention 

services. While local governments are obviously 

important providers of these services, their role 

is hard to evaluate without more specific data. 

Information is needed about the specific purposes of public health expenditures and how 

they relate to state and federal grants for health. 

It also would be desirable to know the sources of 

local funds spent for public health services. 

12 U.S. Advisory Commission on Intergovernmental Relations 
LOCAL GOVERNMENT MEDICAID RESPONSIBILITIES 

Extent of Local Responsibility 

Local governments are not responsible under federal law for any portion of Medicaid 

funding. However, states may require local governments to share in financing the nonfederal 

share of Medicaid program Counties 

have partial responsibility for Medicaid financing in 15 states, and are reported to have some 

Medicaid responsibilities in seven other states 

(see Appendix Table Total Medicaid expenditures by local governments in the 15 states 

from which data could be obtained was $4.6 

billion in 1993. The local share of nonfederal 

spending in these states varies from a high of 

about 50 percent in Arizona and New York to 1 

percent or less in Ohio, Colorado, Pennsylvania, 

South Dakota, and Wisconsin (see Table 5).32 If 

the other seven states require local payments, it 

appears the amounts would also be negligible, 

based on the reported responsibilities. 

New York counties and New York City accounted for $3.85 billion, or 83.9 percent, of total 

local Medicaid spending. Arizona and North 

Carolina followed, with $180 million and $165 

million, respectively, for local Medicaid costs. 

The five states where local governments spend 1 

percent or less on nonfederal Medicaid costs 

accounted for $29.6 million, or about .1 percent 

of the 

Cost-S hari ng Formulas 

The local cost-sharing formulas for Medicaid vary widely. New York counties pay 50 perTable 5 

Local Government 

Medicaid Payments 

(thousands) 

Total Local 

Local Nonfederal Percent 

State Payments Medical of Total 

Arizona $180,938 $325,344 

Colorado 1,638 356,529 

Florida 114,527 1,535,277 

Iowa 65,871 297,434 

Minnesota 128,423 820,172 

Montana 69,363 

New Hampshire 41,767 198,489 

New York 3,853,543 7,708,736 

North Carolina 164,941 712,367 

North Dakota 6,422 70,117 

Ohio 1,841 1,555,971 

Pennsylvania 18,058 1,906,388 

South Dakota* 503 56,476 

Utah 7,148 97,540 

Wisconsin 7,540 721,829 

Total $4,593,160 $16,432,032 

55.6% 

0.5 

7.5 

22.1 

15.7 

21 .o 

50.0 

23.2 

9.2 

0.1 

0.9 

0.9 

7.3 

1 .o 

28.0 

* Counties in South Dakota contribute to ICF/MR an( 

mental health residents in state inpatient facilities 

The state considers this a county welfare program 

not part of Medicaid. 

Source: Library of Congress, Congressional Re 

search Service, Medicaid Source Boo, 

(Washington, DC, 1993), and informatior 

from state Medicaid offices. 

U.S. Advisory Commission on Intergovernmental Relations 13 
cent of the nonfederal share for all medical 

services and 28 percent for long-term care service~.~~ In other states, county Medicaid payments typically are for administrative costs, 

long-term care, or mental health services, and 

not for general services. Counties in Colorado, 

Montana, and Ohio are responsible only for a 

portion of administrative costs related to eligibility determination. Minnesota and North Carolina counties contribute 100 percent of the 

nonfederal share for administrative costs, but 

also are responsible for 10-15 percent of the 

nonfederal share for all other client services.35 

In five states, including New York, counties 

are responsible for long-term or nursing home 

care. Arizona counties pay 100 percent of the 

nonfederal share of long-term care for the elderly and disabled, as well as a variable portion of 

acute care services. Florida counties pay 35 percent of the costs for nursing home residents and 

inpatient hospital stays between 13 and 45 days. 

Counties in New Hampshire and Pennsylvania 

pay 60 percent and 10 percent, respectively, for 

nursing home costs. 

County payments in the remaining states for 

which responsibilities could be confirmedIowa, South Dakota, Utah, and Wisconsin-are 

tied specifically to mental health services. Wisconsin and Utah counties pay 100 percent and 16 

percent, respectively, of the nonfederal share for 

mental health services. Iowa counties match federal funds for costs associated with intermediate 

care facilities for the mentally retarded (TCF/ 

MR) as well as 50 percent of the nonfederal share 

of certain mental health “erihancements.” South 

Dakota counties also pay a portion of the ICF/ 

MR and for inpatient mental health residents.36 

Relation to Health Care Reform 

Changes in the nonfederal share of Medicaid 

costs as a result of health care reform have little 

potential for affecting local governments, except 

in a few states. Because local governments in 

some states have responsibility for a portion of 

costs related to specific services, such as nursing 

homes or mental health, federal changes in cost 

sharing for these services could affect their 

shares of these Medicaid costs. 

14 U.S. Advisory Commission on Intergovernmental Relations 
CONCLUSION 

Local governments play a major role in providing health care services and need to be considered in implementing any reform of national 

health care systems. While it is possible to 

estimate overall health care spending by local 

governments, the exact nature of many responsibilities cannot be determined from existing data, 

including their vital role in providing health care 

to vulnerable populations. 

It is clear, however, that changes in the national health care system may have very different effects on local governments, depending on whether 

they operate hospitals, provide generous health 

care coverage to employees and retirees, are responsible for delivery of most public health services, or share in Medicaid costs. For some local 

governments, there may be few effects, but for 

many others, the effects may be substantial. 

U.S. Advisory Commission on Intergovernmental Relations 15 
NOTES 

The Segal Company, 1993 Survey of State Employee 

Health Benefit Plans (Atlanta, 1994), p. 1. 

US. Department of Commerce, Bureau of the Census 

(Census), Government Finances, 1990-91 (Washington, DC, 1993), p. 89. 

Census, 7992 Census of Governments (Washington, 

DC, 1994), unpublished. 

Ibid. and Government Finances 1990-91, p.45. 

Census, County Government Finances, 1990-91 and 

City Government Finances, 7990-91 (Washington, DC, 

1993), Table 5. 

County Government finances, 1990-91, Table 5. 

Ibid. and City Government Finances, 1990-91, Table 5. 

Government Finances, 1990-91, p. 45. 

Ibid. 

lo Ibid. 

l1 Ibid., Table 29. 

l2 US. Department of Labor, Bureau of Labor Statistics 

(BLS), News Release, February 1994, pp, 6-7. 

l3 BLS, Employee Benefits in State and Local Governments, 1990 (Washington, DC, 1992), Table 97. 

l4 ACIR computations based on BLS, Employee Benefits 

in State and Local Governments; and Segal, 1993 Survey of State Employee Health Benefit Plans. 

l5 BLS, News Release, p.l. 

l6 BLS, Employee Benefits in State and Local Governments. 

l7 National League of Cities, An lntroduction to State Municipal League Health Pools (Washington, DC, March 

1994), p. 1. 

la AClR computations based on An lntroduction fo State 

Municipal League Health Pools. 

l9 Maine Municipal Employees Health Trust, Basic 

Benefits Outlines and Rate Sheets (Augusta, March 

1994), p. 1. 

2o BLS, Employee Benefits in State and Local Governments, Table 58. 

21 Census, Finances of Employee Retirement Systems of 

State and Local Governments, 1989-90 (Washington, 

DC, 1992), p. 30. 

22 Segal, 7993 Survey of State Employee Health Benefit 

Plans, p. 1. 

23 Census, Government finances, 1990-91, p. 45, 

24 Census, Government Finances, 1991 -92lPreliminary 

Washington, DC, 1994), p. 51. 

25 Local governments in Delaware, Hawaii, Maine, Massachusetts, New Mexico, Rhode Island, and Vermont 

spend less than 10 percent of the total. Local governments in California, Iowa, North Carolina, Ohio, Oregon, Pennsylvania, and Wisconsin spend more than 

60 percent of the total. 

2E Census, Government Finances, 1990-91, p. 45 

27 Census, Stare Government Finances, 1991 and 1992 

(Washington, DC, 1993), p.30. 

2a Alaska, Delaware, Hawaii, Maryland, Nebraska, North 

Dakota, Oklahoma, and Wyoming. 

29 Public Health Foundation, Public Health Agencies, 

1991: An Inventory of Programs and Block Grant fxpenditures (Washington, DC, 1991), p. 4. 

30 In 1991, AClR recommended transferring local Medicaid administrative and program costs to the states. 

ACIR, Medicaid: Intergovernmental Trends and Options (Washington, DC, 1992), p, 4. 

31 U.S. Library of Congress, Congressional Research 

Service, Medicaid Source Book: Background Data 

and Analysis (Washington, DC, 1993), p. 142; and National Association of Counties (NACo), Medicaid Cost 

Share Formulas, 1994 (Washington, DC, 1994). States 

with partial Medicaid responsibility are Arizona, California, Colorado, Florida, Indiana, Iowa, Michigan, 

Minnesota, Montana, Nevada, New Hampshire, New 

Jersey, New Mexico, New York, North Carolina,North 

Dakota, Ohio, Pennsylvania, South Carolina, South 

Dakota, Utah, Virginia and Wisconsin. 

32 AClR telephone survey of state Medicaid offices, May 

1994. 

33 AClR computations based on information from state 

Medicaid off ices. 

34 In 1991, AClR recommended transferring the cost of 

long-term care to the federal government under Medicare. Medicaid: Intergovernmental Trends and Options, p. 4. 

35 NACo, Medicaid Cost Share Formulas, 1994. 

36 Ibid. 

16 U.S. Advisory Commission on Intergovernmental Relations 
B I B LIOC RAPHY 

Maine Municipal Employees Health Trust. Basic 

Benefit Outlines and Rate Sheets. Augusta, March 

1994. 

National League of Cities. An Introdiiction to State 

Municipal League Health Pools. Washington, DC, 

March 1994. 

Public Health Foundation. Public Health Agencies, 

1991: An Inventory of Programs and Block Grant 

Expenditures. Washington, DC, December 1991. 

The Segal Company. 1993 Survey of State Employee 

Health Benefit Plans. Atlanta, 1994. 

U.S. Government 

Advisory Commission on Intergovernmental Relations. 

Medicaid: Intergovernmental Trends and Options. 

Washington, DC, 1992. 

Department of Comrncrce, Bureau of the Census. 

Washington, DC. 

City Government finances, 1990-91. June 1993. 

County Government Finances, 1990-91. July 1993. 

Finances of Employee Retirement Systems of State 

and Local Governments, 1989-90. May 1992. 

Government Finances, 1990-91. November 1993. 

1992 Cems of Governments (unpublished). May 

1994. 

Stute Government finances, 1991. September 1992. 

Department of Labor, Bureau of Labor Statistics. 

Washington, DC. 

Employee Benefits in State and Local Governments, 

1990. February 1992. 

News Release. February 1994. 

Library of Congress, Congressional Research Service. 

Medicaid Source Book: Background Data and 

Analysis. Washington, DC, January 1993. 

U.S. Advisory Commission on Intergovernmental Relations 17 
APPENDIX 

Appendix Table 1 

Local Government Expenditures 

(thousands) 

Functions 

Percent 

199 1 1992 Change 

Hospitals 

Health 

Corrections 

Cash Assistance 

Other 

Interest 

Judicial and Legal 

Solid Waste 

Public Education 

Police 

Other Welfare 

Financial 

Utilities 

Retirement 

Housing 

Fire 

Sewerage 

Higher Education 

Libraries 

Highways 

Parks 

Administration 

Total 

$30,020,230 $32,763,018 

12,585,887 13,706,016 

9,549,735 10,299,607 

11,579,659 12,445,781 

60,853,414 64,625,209 

28,840,718 30,538,367 

9,458,228 9,999,159 

10,176,810 10,695,447 

215,645,345 226,695,276 

27,986,386 29,398,934 

13,513,022 14,192,999 

8,002,408 

70,782,014 

9,826,143 

14,888,493 

13,796,137 

18,842,867 

13,188,706 

4,160,502 

26,025,310 

13,186,590 

8,393,509 

74,129,500 

10,254,023 

15,429,918 

14,266,864 

19,230,004 

13,424,522 

4,221,73 1 

26,117,042 

12,954,377 

$622,908,604 $653,781,303 

9.1% 

8.9 

7.9 

7.5 

6.2 

5.9 

5.7 

5.1 

5.1 

5.0 

5.0 

4.9 

4.7 

4.4 

3.6 

3.4 

2.1 

1.8 

1.5 

0.4 

-1.8 

5.0% 

Source: U.S. Department of Commerce, Bureau of the 

Census, Government Finances, 7990-97 and 

Government Finances, 1991-92 (Washington 

DC, 1993). 

Appendix Table 2 

Local Government Hospitals Owned and Operated, 1992 

Special 

State County City District 

Alabama 2 9 35 

Alaska 5 

Arizona 3 

Arkansas 21 6 

California 31 4 55 

Colorado 8 2 18 

Connecticut 

Delaware 

District of Columbia 2 

Florida 6 1 23 

Georgia 1 86 

Hawaii 

Idaho 19 2 9 

Illinois 7 9 22 

Indiana 43 3 

Iowa 42 22 

Kansas 31 14 22 

Kentucky 13 2 3 

Louisiana 49 6 

Maine 1 2 

Maryland 

Massachusetts 5 13 1 

Michigan 16 14 8 

Minnesota 13 34 18 

Mississippi 49 7 

Missouri 15 6 16 

Montana 5 5 

Nebraska 26 6 7 

Nevada 4 1 4 

New Hampshire 

New Jersey 7 

New Mexico 8 3 

New York 7 21 

North Carolina 22 1 7 

North Dakota 

Ohio 15 1 7 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

Total 

24 32 

3 1 16 

20 6 

6 5 

21 9 

45 12 103 

2 2 2 

A 

Total 

10 4 

8 8 

6 18 262 528 1 

46 

5 

3 

27 

90 

28 

0 

0 

2 

30 

87 

0 

30 

38 

51 

64 

67 

18 

55 

3 

0 

19 

38 

65 

56 

37 

10 

39 

9 

0 

7 

11 

28 

30 

0 

23 

56 

20 

0 

0 

26 

11 

30 

160 

6 

0 

4 

38 

11 

14 

16 

,408 

Source: US. Department of Commerce, Bureau of the Census, 1992 Census of Governments (unpublished). 

18 U.S. Advisory Commission on Intergovernmental Relations 
Appendix Table 3 

Hospital Expenditures 1991 

(thousands) 

Special 

State County City District Total 

Appendix Table 4 

Local Government Average 

Expenditure per Hospital, 1991 

(thousands) 

Average 

State County City District Hospital 

Special pef 

Alabama 51,135 105,243 649,972 806,350 

Alaska 31,479 3 1,479 

Arizona 205,089 2,828 5,952 213,869 

Alabama $25,568 $11,694 $18,571 $17,529 

Alaska 6,296 6,296 

Arizona 68,363 71,290 

Arkansas 7,351 6,868 7,243 

California 93,014 74,366 30,716 54,114 

Colorado 3,413 85,382 8,705 12,670 

Connecticut 

Delaware 

District 

Arkansas 154,365 41,207 195,572 

California 2,883,437 297,465 1,689,357 4,870,259 

Colorado 27.302 170.763 156.682 354.747 

Connecticut 

Delaware 

District 

Florida 754,387 

Georgia 9,342 

Hawaii 

Idaho 98,431 

Illinois 500,000 

Indiana 747,997 

Iowa 261,095 

Kansas 125,335 

Kentucky 122,617 

Louisiana 638,351 

Maine 6 

Maryland 264 

Massachusetts 59,275 

Michigan 292,643 

Minnesota 249,604 

Mississippi 496,946 

Missouri 157,196 

Montana 10,468 

Nebraska 92,443 

Nevada 174,240 

New Hampshire 

New Jersey 270,425 

New Mexico 102,403 

New York 741,526 

North Carolina 647,533 

North Dakota ' 245 

Ohio 524,419 

Oklahoma 103,795 

Oregon 6,407 

Pennsylvania 72,655 

Rhode Island 

South Carolina 649,687 

South Dakota 4,251 

Tennessee 805,701 

Texas 1,191,145 

Utah 16,391 

Vermont 

Washington 5,247 

West Virginia 28,301 

Wisconsin 296,862 

Wyoming 64,157 

Total 13,643,139 

of Columbia 

Virginia 21 

201573 201573 

0 

357,065 357,065 

36,848 1,307,570 2,098,805 

45,431 2,292,801 2,347,574 

0 

of Columbia 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

125,731 

178,533 

36,848 

45,43 1 

742 

56,851 

26,660 

5,936 

8,288 

69,960 

26,984 

5,111 

19,885 

17,623 

5,966 

3,620 

13,668 

13,485 

12,387 

26,527 

17,553 

12,072 

11,861 

11,071 

3,001 

4,158 

24,102 

39,067 

10,117 

140,326 

35,326 

1,483 

73,281 

150,718 

120,735 

72.754 

53,427 

18 2,3 3 6 

38 

44,442 

36,438 

17,991 

153,341 

755,617 

898,753 

381,830 

242,531 

246,027 

741,688 

37,160 

264 

504.004 

667,019 

784,700 

64,188 

409,630 

5,181 

71,429 

15,583 

6,217 

4,043 

9,432 

13,028 

8,142 

50,239 

5.488 

86;972 

103,337 

19.163 

5;197 

43,486 

17,223 

19.163 

2,020 

12,146 

8,996 

444,729 

294,287 

196,124 

167,242 

149,974 

80,089 

338,972 

6 

102,460 

11,855 

18,290 

19,200 

10,142 

10,480 

2,094 

3,556 

43,560 

38,632 

12,800 

105,932 

29,433 

34,961 

4,325 

2,136 

34,210 

21,021 

5,768 

23,892 

24,996 

0 

10,011 

18,832 

19,538 30,006 

52,520 17,186 162,149 

27.887 14.794 216.921 

6,404 

3,908 

2,455 

3.699 

8,753 

5 14 5 14 27.887 

3,041 273,466 

8,880 111,283 

3,187,614 3,929,140 

25,571 386,686 1,059,790 

245 

2,960 

55.241 

151,791 

25,571 

26,221 

10,268 

18.593 

26,221 

328,576 

18.593 

79,335 629,975 

432,371 

95,297 120,297 

85,863 

n 

11,334 

5.956 

27,390 

7,721 

131208 6,O 15 

53,273 702,960 

15,235 19.486 

100,554 

106,830 

1,705 

6 

12,099 

113,938 

10,992 

11 

7,034,816 

32,484 

709 

38,367 

26,470 

8.196 

8.879 27,037 

1,771 

30,209 

13,803 

3,591 

63,115 

12,301 

12,931 

21,990 

9,775 

906,255 

910,531 2,208,506 

3,448 21,544 

6 

240,338 252,458 

462,204 467,451 

3,047 

11,173 

8,903 

853 

8,840 

1.724 

60,085 

142,239 12,163 

307,854 

92,238 156,406 

4,043 

29,686 

8,020 

28,485 

2,748 

11,530 

9,342,275 30,020,230 

Total $22,076 $26,850 $17,694 $21,321 

Source: U.S. Department of Commerce, Bureau of the 

Census, Government Finances 1990-91 (Washington, DC, 1993). 

Source: U.S. Department of Commerce, Bureau of the 

Census, Government Finances 1990-91 (Washington, DC, 1993). 

U.S. Advisory Commission on Intergovernmental Relations 19 
Appendix Table 5 

County and City Governments with Hospital Expenditures 

Exceeding $10 Million in 1991 

State County Expenditure City Expenditure 

Alabama 

Arizona 

Arkansas 

California 

Colorado 

District of Columbia 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Jefferson 

Maricopa 

Pima 

Washington 

Alameda 

Contra Costa 

Fresno 

Kern 

Los Angeles 

Merced 

Monterey 

Riverside 

San Bernandino 

San Joaquin 

San Luis Obispo 

San Mateo 

Santa Clara 

Sonoma 

Stanislaus 

Ventura 

YO10 

Dade 

Escambia 

Hillsborough 

Polk 

De Kalb 

Fulton 

Cook 

Hamilton 

Porter 

Polk 

Calcasieu 

Jefferson 

St. Tammany 

Middlesex 

Norfolk 

Worcester 

Berrien 

Ingham 

Kent 

Oakland 

Saignaw 

Wayne 

Hennepin 

Jackson 

Douglas 

$5 1,135 

156,410 

41,765 

33,646 

66,123 

91,986 

87,464 

1,406,297 

97,835 

72,365 

93,045 

133,212 

120,663 

36,809 

64,411 

163,226 

93,791 

47,547 

59,603 

19,458 

166,630 San Francisco 296,532 

442,050 

15,977 

224,197 

32,019 

23,617 

76,878 

468,796 

37,869 

69,376 

56,070 

24,259 

218,335 

72,237 

17,678 

19,288 

10,418 

17,148 

94,223 

22,930 

10,464 

21,890 

104,621 

176,616 

79,364 

18,552 

Colorado Spring 89,901 

Denver 80,862 

District of Columbia 357,065 

Jacksonville 18,171 

Indianapolis 127,348 

Baton Rouge 22,232 

Terrebone Parish 49,611 

Boston 

Cambridge 

Quincy 

Springfield 

Flint 

Kansas City 

St. Louis 

Lincoln 

230.806 

50;158 

63,189 

15.362 

1731629 

27,766 

18,450 

44,666 

20 U.S. Advisory Commission on Intergovernmental Relations 
Appendix Table 5 (cont.) 

County and City Governments with Hospital Expenditures 

Exceeding $1 0 Million in 1991 

State County Expenditure City Expenditure 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

South Carolina 

South Dakota 

Tennessee 

Clark 

Bergen 

Burlington 

Camden 

Essex 

Hudson 

Middlesex 

Union 

Bernalillo 

Dona Ana 

Erie 

Monroe 

Nassau 

Rockland 

Westchester 

Catawba 

Cumberland 

Pitt 

Cuyahoga 

Hamilton 

Portage 

Summit 

Trumbull 

Comanche 

Allegheny 

Charleston 

Lexington 

Richland 

Spartanburg 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin Marathon 

Milwaukee 

Hamilton 

Montgomery 

Shelby 

Sumner 

Bexar 

Dallas 

El Paso 

G alveston 

Harris 

Lubbock 

Nueces 

Tarrant 

Totals 

Number of Hospitals 89 

148,362 

110,236 

13,205 

20,464 

52,369 

54,262 

43,544 

31,442 

17,408 

54,008 

126,7 18 

37,082 

241,635 

55,838 

236.132 

39;25 1 

87,332 

147,036 

276,376 

52,082 

54,450 

17,562 

20,683 

58,192 

72.161 

23,574 

79,583 

163,951 

137,280 

172,333 

40,250 

201,408 

31,788 

163,999 

230,511 

61,451 

29,576 

307,261 

8 1,928 

62,859 

105,237 

23,876 

244,297 

$9,687,285 

New York 

Norman 

Philadelphia 

Nashville 

Austin 

Norfolk 

22 

3,118,581 

46,248 

15,493 

49,836 

88,405 

11.394 

$4,995,705 

Note: Includes only counties with population over 100,000, and cities over 75,000. 

Source: U.S. Department of Commerce, Bureau of the Census, County Government Finances1990-91 and City Government Finances 1990-91 (Washington, DC, 1993). 

U.S. Advisory Commission on Intergovernmental Relations 21 
Appendix Table 6 

Local Government Hospital Charge Payments as a Percentage 

of Total Hospital Expenditures 1991 

Special 

State County City District Total 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

District of Columbia 

Florida 

Georgia 

Hawaii Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshirc 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

National 

35.0% 

64.9 

97.7 

39.5 

95.7 

93.9 

104.2 

22.8 

100.8 

87.0 

96.7 

95.7 

98.3 

75.5 

85.0 

63.5 

103.3 

85.5 

81.2 

85.8 

89.1 

51.4 

95.0 

58.0 

101.9 

75.4 

88.5 

84.3 

20.4 

93.3 

97.9 

101.1 

45.4 

100.2 

98.6 

63.5 

118.2 

101.4% 

90.9 

43.2 

106.6 

56.2 

72.3 

103.1 

17.8 

51.9 

99.7 

100.0 

96.9 

52.5 

107.1 

106.6 

96.7 

114.7 

98.3 

68.8 

90.8 

90.8 

110.5 

80.4 

106.9 

95.0 

32.3 

100.0 

82.0 

100.2 

100.6 

88.5 

89.8 

90.9 

100.0 

86.5 

99.8 

91.2 

98.6% 

51.2 

128.3 

89.2 

86.7 

91.0 

106.7 

95.6 

89.7 

100.8 

103.1 

100.4 

56.8 

99.2 

87.5 

103.6 

95.9 

85.0 

94.2 

101.1 

94.1 

107.2 

87.7 

113.4 

85.9 

95.4 

79.4 

94.9% 

90.9 

64.3 

99.6 

71.3 

81.6 

103.1 

0.0 

17.8 

88.6 

90.8 

105.0 

47.6 

92.7 

93.3 

98.4 

96.8 

100.6 

100.6 

0.0 

69.6 

89.4 

67.4 

105.1 

87.1 

85.3 

94.5 

90.3 

0.0 

50.8 

94.2 

37.2 

99.1 

0.0 

78.9 

97.4 

94.6 

18.0 

0.0 

94.4 

90.6 

99.9 

65.1 

102.3 

0.0 

86.0 

94.3 

99.5 

64.5 

95.3 

71.0% 58.3% 96.8% 76.1% 

Source: U.S. Department of Commerce, Bureau of the 

Census, Government Finances 1990-91 (Washington, DC, 1993) 

Appendix Table 7 

Local and State Government 

Public Health Direct Expenditures, 1992 

(thousands) 

State Local State Total Local 

Percent 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

$170,710 

50,203 

121,838 

61,656 

3,524,250 

119,203 

73,790 

6,689 

District 

of Columbia 167,682 

Florida 23 1,65 1 

Georgia 319,794 

Hawaii 13.475 

Idaho 271716 

Illinois 279,431 

Indiana 89,093 

Iowa 122,021 

Kansas 103,936 

Kentucky 142,835 

Louisiana 43,346 

Maine 7,902 

Maryland 220,30 1 

Massachusetts 60,279 

Michigan 991,626 

Minnesota 292,081 

Mississippi 53,512 

Missouri 129,640 

Montana 28,05 1 

Nebraska 33,390 

Nevada 36,953 

New Hampshire 15,905 

New Jersey 214,452 

New Mexico 16,006 

New York 1,210,891 

North Carolina 623,590 

North Dakota 7,303 

Ohio 1,023,274 

Oklahoma 59,273 

Oregon 257,644 

Pennsylvania 805,014 

Rhode Island 1,827 

South Carolina 81,374 

South Dakota 8,101 

Tennessee 127,465 

Texas 643,020 

Utah 86,146 

Vermont 2,809 

Virginia 252,226 

Washington 253,196 

West Virginia 54,786 

Wisconsin 424,947 

Wyoming 13,713 

$382,895 

100,575 

311,303 

124,276 

1,599,984 

179,533 

286,592 

107,683 

0 

1,324,556 

216,350 

209,161 

55,796 

869,774 

289,554 

73,326 

84,030 

110,27 1 

340,244 

98,563 

339,614 

792,357 

759,63 1 

262,520 

125,082 

324,749 

73,021 

45,050 

54,103 

100,451 

402,629 

179,979 

1,311,122 

199,661 

22,209 

396,30 1 

191,525 

126,047 

3 10,03 1 

146,268 

383,275 

44,332 

317,892 

5 13,427 

6 1,562 

42,225 

448,297 

654,915 

98,858 

112,05 1 

34,814 

$553,605 30.8% 

150,778 33.3 

433,141 28.1 

185,932 33.2 

5,124,234 68.8 

298,736 39.9 

360,382 20.5 

114,372 5.8 

167,682 100.0 

1,556,207 14.9 

536,144 59.6 

222,636 6.1 

83,512 33.2 

1,149,205 24.3 

378,647 23.5 

195,347 62.5 

187,966 55.3 

253,106 56.4 

383,590 11.3 

106,465 7.4 

559,915 39.3 

852,636 7.1 

1,751,257 56.6 

554.601 52.7 

1781594 30.0 

454,389 28.5 

101,072 27.8 

78,440 42.6 

91,056 40.6 

116,356 13.7 

617,081 34.8 

195,985 8.2 

2,522,013 823,251 48.0 75.7 

29,512 24.7 

1,419,575 72.1 

250,798 23.6 

383,691 67.1 

1,115,045 72.2 

148,095 1.2 

464,649 17.5 

52,433 15.5 

445,357 28.6 

1,156,447 55.6 

147,708 58.3 

45,034 6.2 

700,523 36.0 

908,111 27.9 

153,644 35.7 

536,998 79.1 

48,527 28.3 

Total $13,706,016 $15,638,464 $29,344,480 46.7% 

~~ 

Source: US. Department of Commerce, Bureau of the 

Census, Government Finances 1990-97 (Wash- ington, DC, 1993). 

22 U.S. Advisory Commission on Intergovernmental Relations 
State 

Appendix Table 8 

Local Government 

Public Health Expenditures, 1991 

(thousands) 

Special Local 

County City District Total State 

Appendix Table 9 

State Aid to Local Governments 

for Public Health, 1992 

(thousands) 

State Aid 

Local Health State as Percentage of 

Expenditures Aid Local Expenditure 

Alabama $73,253 

Alaska 16,398 

Arizona 98,731 

Arkansas 43,318 

California 2,260,541 

Colorado 57,172 

Connecticut 

Delaware 5,215 

District 

Florida 285,939 

Georgia 302,772 

Hawaii 4,880 

Idaho 22,616 

Illinois 128,119 

Indiana 35,130 

Iowa 94,395 

Kansas 78,494 

Kentucky 114,242 

Louisiana 18,998 

Maine 241 

Maryland 174,864 

Massachusetts 1,271 

Michigan 844,512 

Minnesota 190,338 

Mississippi 46,583 

Missouri 60,872 

Montana 22,292 

Nebraska 22,822 

Nevada 31,615 

New Hampshire 462 

New Jersey 113,681 

New Mexico 5,233 

New York 658,754 

North Carolina 614,103 

North Dakota 3,466 

Ohio 808,758 

Oklahoma 28,858 

Oregon 210,208 

Pennsylvania 475,723 

Rhode Island 

South Carolina 67,962 

South Dakota 3,787 

Tennessee 87,090 

Texas 215,570 

Utah 70,739 

Vermont 

Virginia 142,216 

Washington 206,056 

West Virginia 39,851 

Wisconsin 342,203 

Wyoming 9,144 

of Columbia 

$7,384 

36,010 

6,298 

6,386 

330,411 

47,684 

74,725 

43 1 

163,988 

54,619 

2,831 

9,647 

2,296 

111,892 

43,290 

24,009 

15,607 

19;956 

21,895 

7,259 

56,404 

58,785 

102.378 

261009 

2,394 

48,210 

3,002 

8,508 

4,488 

12,526 

84,645 

9,410 

616,326 

5,554 

3,114 

115,324 

24,572 

7,685 

263,458 

2,808 

2,437 

3,458 

30,794 

212.526 

11629 

3,396 

98,122 

19.172 

2;441 

61,156 

2,093 

$59,670 

114 

276,424 

2,66 1 

17,977 

4,402 

642 

2,661 

15,217 

557 

20,659 

168 

56 

6 

2 14 

5,606 

408 

3,493 

2,661 

144,646 

2,579 

5 18 

5,056 

563 

$140,307 

52,408 

105,143 

49,704 

2,867,376 

107,517 

74,725 

5,646 

163,988 

358,535 

305,603 

14,527 

24,912 

244,413 

78,420 

118,404 

94,743 

136,859 

40,893 

7,500 

231,268 

60,056 

946,890 

231,564 

49,534 

129,741 

25,294 

3 1,330 

36,271 

12,988 

198,382 

14,643 

1,275,080 

619,663 

6.794 

929;688 

53,430 

218,301 

742.674 

2;808 

73,060 

7,245 

117,884 

572.742 

74;947 

3,396 

240,856 

230,284 

42.292 

403;359 

11,800 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

District 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

of Columbia 

$170,710 

50,203 

121,838 

61,656 

3,524,250 

119,203 

73,790 

6,689 

167,682 

231.651 

319;794 

13,475 

27.716 

89;093 

122,021 

103,936 

142.835 

43;346 

7,902 

220,30 1 

60,279 

991,626 

292,081 

53,512 

129,640 

28,05 1 

33,390 

36,953 

15,905 

214,452 

16,006 

1,210,891 

623,590 

7,303 

1,023,274 

59,273 

257,644 

8050 14 

1,827 

8 1;374 

8,101 

127.465 

6431020 

86,146 

2,809 

252,226 

253,196 

54.786 

4241947 

13,713 

$11,224 

70,310 

49,037 

55,085 

1,049,744 

26,495 

16,434 

12,779 

0 

91,934 

277,752 

17,458 

5,947 

65,910 

43,765 

43,147 

64,888 

92,905 

2,462 

5,566 

23 1,869 

35 

583,440 

130,164 

28,894 

8,409 

11,615 

98,419 

1,595 

626 

72,219 

1,620 

667,568 

313,995 

17,175 

342,527 

70,802 

164,108 

683,122 

19,345 

688 

876 

38 1,14 1 

48,522 

16,435 

108,104 

8,957 

327,115 

17,676 

6.6% 

140.1 

40.2 

89.3 

29.8 

22.2 

22.3 

191.0 

0.0 

39.7 

86.9 

129.6 

21.5 

23.6 

49.1 

35.4 

62.4 

65.0 

5.7 

70.4 

105.3 

0.1 

58.8 

44.6 

54.0 

6.5 

41.4 

294.8 

4.3 

3.9 

33.7 

10.1 

55.1 

50.4 

235.2 

33.5 

119.5 

63.7 

84.9 

0.0 

23.8 

8.5 

0.7 

59.3 

56.3 

0.0 

6.5 

42.7 

16.3 

77.0 

128.9 - Total $13,706,016 $6,359,903 46.4% Total $9,139,487 $2,879,442 $566,958$12,585,887 

Source: US. Department of Commerce, Bureau of the 

Census, Government Finances 1990-91, and 

State Government Finances 1990-91 (Washington, DC, 1993). 

Source: US. Department of Commerce, Bureau of the 

Census, Government finances 1990-91 (Washington, DC, 1993). 

U.S. Advisory Commission on Intergovernmental Relations 23 
Appendix Table 70 

State Medicaid Cost Share Formulas 

Arizona 

California 

Colorado 

Florida 

Indiana 

Iowa 

Michigan 

Minnesota 

Montana 

Nevada 

Counties pay loopercent of the nonfederal 

share of long-term care for the elderly and 

physically disabled and a variable portion 

of acute care services. 

Counties contribute 2.5 percent of administrative costs. 

Counties pay 40 percent of the nonfederal 

share of administrative expenses related to 

eligibility determination. 

Counties pay 35 percent of cost or $55 per 

month for each nursing home resident and 

35 percent of cost for inpatient hospital 

stays between 12 and 46 days. 

County tax levies provide approximately 50 

percent of the nonfederal share for Medicaid administrative costs at the county level. 

Counties contribute to a “Medical Assistance to Wards” fund used to pay the nonfederal share of Medicaid for wards of the 

county office or juvenile court who are not 

eligible for AFDC foster care. 

Counties match federal funds for ICF/MR 

and MM/MR/DD (approximately 36 percent of total in FY 1993) and 50 percent of 

nonfederal share for certain mental health 

“enhancements.” 

Counties pay 10 percent of the nonfederal 

share for Medicaid mental health services 

delivered by county community mental 

health agencies. Counties with medical 

care facilities (nursing homes) provide a 

variable maintenance of effort payment 

for Medicaid patients in the facility. 

Countiespay 100 percent of the nonfederal 

share of administrative expenses related to 

client services. Counties also loan funds to 

the state for a share of the state’s benefit 

payments (4.53 percent of total in 1993). 

Countics pay 18 percent of the nonfederal 

share for eligibility personnel costs. 

Counties pay 100 percent of the nonfederal 

share of long-term care for the aged, blind 

and disabled whose net monthly income 

exceeds $714 but is less than the maximum 

percent of the Supplemental Security Income Federal Benefit Rate (SSUFBR). 

Counties are required to pay the total administrative costs for the federal match 

program. 

New Hampshire Counties Day 100 Dercent of the nonfederal 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Pennsylvania 

South Carolina 

South Dakota 

Utah 

Virginia 

Wisconsin 

share of ihhe Medicaid Audit Unit. Counties pay 61.5 percent of the nonfederal 

share of long-term care and 50 percent of 

the nonfederal share of all other services 

(31.3 percent of total in 1993). 

Counties fund the nonfederal share of administrative cost for eligibility determinations of non-SSI Medicaid applicants. 

Counties contribute 7 percent of the total 

Medicaid budget through the use of intergovernmental transfersused by the state as 

Medicaid match. 

Counties pay 50 percent of the nonfederal 

share, except for long-term care, for which 

they pay 28 percent of the nonfederal share. 

Counties pay 15 percent of the nonfederal 

share for all seMces (5.11 percent of total in 

1993) and 100 percent of the administrative 

expenses related to eligibility determination. 

Counties pay 13.1 percent of the nonfederal share except for ICF/MR, clinic 

services and waived home and communitybased services for MR and A/D related 

recipients. 

Counties pay a maximum of 10 percent of 

the nonfederal share of Medicaid eligibility costs. 

Counties pay 10 percent of the nonfederal 

share for county nursing homes plus $3 per 

invoice. 

Counties provide $13 million to support 

Medicaid through a formula prescribed 

by law. 

Counties pay $60 per month for each ICF/ 

MR resident and $200 per month for each 

mental health resident in state inpatient 

facilities. 

Counties match the amount paid by the 

state for mental health services (24.71 percent of the nonfederal share in 1993). 

Counties are responsible for part of the 

nonfederal share of eligibility determination costs. 

Counties pay the nonfederal share for certain mental health programs, such as com- munity support services and targeted case 

management (39.6 percent of total in 1993). 

Source: National Association of Counties, County Health Policy Project 1993, and information from State Medicaid Offices. 

24 U.S. Advisory Coinmission on Intergoverninental Relations 
I 

Recent ACIR Publications 

kation of Interstate Mail Order Sales: 1994 Revenue Estimates. SR.18. 1994 ...................... $8.00 

Child Care: The Need for FederaI.State.Loca1 Coordiuation, A.128. 1994 ........................... $10.03 

Jtate and Local lhvel Taxes. M.189. 1994 ...................................................... $8.00 

Load Government Autonomy: Needs for State Constitutional, Statutow. and Judicial Clarification. 

A.127. 1993 ............................................................................. $10.00 

Characterislics of Federal Grants4n-Aid to State and Local Gmrnments: Grants Funded FY 1993. 

M.188. 1994 ............................................................................. $10.00 

Directory of Intergovernmental Contacts. SR.17. 1993 ............................................ $10.00 

High Performance Pnblfc Work A New Federal Infrastructure Invesfment Strategy for America. 

SR.16. 1993 ............................................................................. $10.00 

Metropolitan Organization: Comparisons of the Allegheny and St . Louis Case Studies. SR.15. 1993 ... $8.00 

Federal Grant Programs in Fiscal Year 1992: Their Numbem. Sizes, rmd Fragmentation Indexes 

in Historical Perspective. SR.14. 1993 ...................................................... $10.00 

RTS 1991: State Revenue Capaeity and Effort, M.167. 1993 ....................................... $20.00 

State Lam Governing Local Government Structure and Administration. M.186. 1993 ............... $10.00 

Federal Regulation of State and Local Govennnents: The Mixed Record of the 1980s. A.126, 1993 ...... $15.00 

The Role of General Government Elected Oflieials in Crimlnal Justice A.125. 1993 ................. $25.00 

............................ $15.00 

Guide to the Criminal Justice System for General Governmeat El . 1993 ........ $8.00 

State Solvency Regulation of ProperQ-Casualty and Life Insurance Co 992 ......... $20.00 

Intergovernmental Decisionmaking for Environment aqd Public Works, A.122, 1992 ................. $10.00 

Federal Statutory Pre~~~ption of State and Local Authodts History. hnto~ andIssues. A.121. 1992 ... $10.00 

Toward a Federal Infrastructure Strate gg. and Options. A.IZ0. 1992 ......................... $8.00 

Medicaid: Intergovernmental Trends and s. A.119.1992 .................................... $10.00 

Local Boundarg Commissians: Status 

LOCRI Government Boondaries, 1% ................................................. $8.00 

Meiropolitan OrgUirzatioO: The Albgheay CounQ Case. M.181. 1992 ................................ $10.00 

The Changing Public Sectop: Shins in Governmental Spending and Emplnyment, M.178. 1991 ........ $15.00 

Coordinating Water Resources tn the Federal System: The Gmunhter.Surface Water Connection. 

Interjurisdictional Tax and Policy Competition: Good or Bad for the Federal System? M.177. 1991 .... $10.00 

Tbe Structure of State Aid to Elementary and Secondary Education, M.175. 1990 ................... $10.00 

Representative Expenditures: Addressing the Negkfed Dime&n of Fiseal Capadtg M.174.1990 ....... $20.00 

Mandates: Cases in State-Local Relations. M.173. 1990 .......................................... $10.00 

Intergovernmental Regulation of Telecommonications. A.115. 1990 ................................ $10.00 

Local Revenue Diversjfidion: $8.00 

$8.00 

$5.00 

$5.00 

Stafe Taxation of Banks: Issues and Options, M.168.1989 ........................................ $10.00 

State Regulation of Banks in an Era of Deregulation. A.110. 1988 .................................. $10.00 

State Coastitutim in the Federal System: Selected Issues and Opportunities for State Initiatives, 

A.113. 1969 .............................................................................. 515.00 

Residential Community Assodations: 

Private Governments In the Intergovernmental System? A.112, 1989 ........................... $10.00 

Questions and Answers for Public Officials, M.166, 1989 ....................................... $5.00 

Disability Rights Mandates: Federal and State Compliance with Employment Proteetions 

The National Guard: Defending the Nation and the States, A.124. 

Roles in Fermin& Adjusting and Dissolving 

A.118. 1991 ............................................................................. $15.00 

Rural Economies. SR.13. 1990 ............................................................. Local Sales Taxes. SR.12, 1989 ............................................................. Laral Income Taxes. SR.lO.1988 ........................................................... User Charges. SR-6. 1987 ................................................................. 

and Architectural Barrier Removal. A.111. 1989 ............................................. $10.00 

Assisting the Homeless: State and Local Responses in an Era of Limited Resources. M.161. 1988 ..... $10.00 

Devolving Selected FederalAid Highway Programs and Revenue Bases: A Critical Appraisal, 

The Orgauizatioh of Local Public Economies. A.109. 1987 ........................................ A.108,1987 .............................................................................. $10.00 

$5.00 
What is ACIR? 

The Advisory Commission on htergovernmental Itelations (ACIR) was cre- ated by the Congress in 1959 to monitor the operation of the American federal 

system and torecommend improvements. ACIR is a permanent national biparti- san body repmsenting the executive and legislative branches of federal, state, and 

local government and the public. 

The Commission is composed of 26 members-nine representing the federal 

14 representing state and local government, and three representing the 

resident appoints 2D-three private citizens and three federal executive 

officials directly, and four govenmrs, three state legislators, fow mayors, and three 

elected county officials from slates nominated by the. Na 

tion, the National Conference of State Legislatures, the 

U.S. Conference of Mayars, and the National Associat 

Senators are chm by the Resident of the Seffate and the three Representatives by 

the Speaker of the House of Representatives. 

Each Commission member serves a two-year term and may be reappointed. 

As a continuing body, the Commission addresses specific issues and problems the resolution of which would produce improved cooperation amdng gov- ernments and more effective functioning of the federal system. In addition to 

dealing with important functional and policy relationships amoqg the various 

governments, the Commission extensively studies critical governmental finance 

issues. One of the long-range efforts of the Co ission has been to seek ways to 

improve federal, state, and local governmental practi 

equitable allocation of resources and increased effc 

In selecting items for the research program, the 

relative importance and urgency of the problem, its 

of view of finances and staff available to ACIR, and 

mission can make a fruitful contribution toward 

After selecting specific intergovernmental issues for investigation, ACIR follows a multistep procedure that awures review comment by rcpresentativen 

of all points of view, all affected levels of govern technicalexperts, andintezested groups. The Commission then debates each issue and formulates its policy 

position. 

Advisory Commission on Intergovernmental Relations 

800 K Street. NW 

South Building, Suite 450 

Washington. DC 20575 

Phoney (202) 653-5640 

F/Lx- (202) 693-5429