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A mere 3 percent of U.S. health-care spending is invested in preventing health problems, although 75 percent of the nation’s health-care costs are related to preventable conditions, according to a new report released Wednesday by the American Public Health Association (APHA). But plans are in motion to reverse that trend. A key component of the Affordable Care Act (ACA), and thus a program whose future is in limbo until the Supreme Court rules on the law, is the Prevention and Public Health Fund, a funding stream that is slated to pump billions of dollars into federal, state and local prevention efforts.

The Prevention Fund has already invested $1.25 billion into public health initiatives during fiscal years 2010 and 2011 (see the interactive table below for state allocations), according to the APHA analysis. Another $1 billion is budgeted for FY 2012 and, under the ACA, the fund would increase to $2 billion annually by FY 2016. Although some advocates are frustrated over the shifting of prevention money to fill gaps in other health programs (as Governing documented when President Barack Obama’s FY 2013 budget was released earlier this year), APHA found ample evidence that the Prevention Fund is making an impact in expanding preemptive public health activities.

Nationally, more than $385 million has been funneled to broad community-based preventive efforts, such as tobacco cessation programs and healthy living initiatives. Another $480 million has focused on public health infrastructure and workforce development (such as training centers); $220 million has gone toward clinical prevention programs like increased immunization drives; and $165 million has been spent on research. California ($90.6 million), New York ($62 million) and Massachusetts ($42.7 million) have received the most funding, while Delaware, North Dakota and South Dakota rank at the bottom with less than $2 million each.

“This small but critical component of the Affordable Care Act is already working in communities across the country,” said Georges Benjamin, APHA’s executive director, in an email. ““It is through these lifesaving funding measures that we can help build a sustainable public health system and begin to fundamentally transform the nation’s health system.”

Individual states and localities are seeing a significant impact from the Prevention Fund’s investments, according to the APHA analysis. Virginia has benefitted from the National Public Health Improvement Initiative, which funds information technology upgrades and other improvements to make service delivery more efficient. The state has already realized $1.2 million in annual IT savings and increased enrollment in its Medicaid Family Planning Program by 32 percent.

In Iowa, state officials have used Community Transformation Grants to increase the number of dental offices capable of providing blood pressure and tobacco use screenings, expected to reach an additional 300,000 people in regions with the highest stroke mortality rates. Early results are promising: the state has had a growing number of referrals to its public tobacco quit-line, according to APHA. Iowa has also invested Prevention Fund money toward making its rural communities more friendly for walkers and bikers, improvements that are expected to benefit another 300,000 residents in those areas.

Research suggests efforts like those facilitated by the Prevention Fund could yield substantial returns. A study conducted by a pair of University of Arkansas professors and published in the August 2011 edition of Health Affairs concluded that a 10 percent increase in public health spending by cities and counties could lead to a 1.1 to 6.9 percent drop in mortality rates for preventable causes. A 2009 report by Trust for America’s Health, an independent advocacy group, estimated that a $2.9 billion investment in preventive health initiatives could lead to more than $16 billion in annual savings within five years.

As with all elements of the ACA, however, the Prevention Fund’s future is in limbo until the Supreme Court rules on the law’s constitutionality. If the law were upheld or only the individual mandate were reversed, the fund would likely continue as planned. If the entire law were overturned, however, it remains to be seen whether there would any effort to reinstitute the program. Congressional Republicans have already proposed defunding it, and the White House shifted some of the money to other health sectors in its FY 2013 budget, much to the chargin of public health advocates. Obama also proposed cutting the Prevention Fund by a combined $4 billion over the next 10 years.

“Without solid prevention, we aren’t going to keep costs under control,” Paul Jarris, executive director of the Association of State and Territorial Health Officials, told Governing at the time. “We have to make the case that this is good health policy and good fiscal policy.”

That perspective reflects a growing consensus that prevention initiatives will require more funding to make an impact and stem the growth of health-care costs (expected to reach nearly 20 percent of the national gross domestic product by 2020). Reforms to Medicaid and private insurance have a role to play in containing spending, but many policy analysts stress that prevention efforts offer an opportunity to permanently reverse the steady increase of health-care costs by creating a healthier population.

The National Institute of Medicine endorsed that viewpoint in a set of recommendations released earlier this year. The institute urged the federal government to increase federal funding for prevention programs by $12 billion annually -- a doubling of FY 2009 levels.

“To improve health outcomes in the United States, we will need to transform the way the nation invests in health to pay more attention to population-based prevention efforts,” the institute’s authors wrote in a brief introducing their findings, ”and remedy the dysfunctional manner in which public health funding is allocated, structured, and used; and ensure stable funding for public health departments.”

Prevention and Public Health Fund State Allocations: FY 2010-2011

NOTE: Figures listed are in millions.