Block grants and state discretion: A study of the implementation of the partnership for health act in three states

This article examines the use of federal funds provided to state health departments under a grant consolidation of eight previously categorical health programs in Michigan, Pennsylvania, and Alabama in a comparative context. The primary question addressed is why the three states chose to describe their allocations of funds within the total health department budget differently, and what political, administrative, and bureaucratic factors explained the differences. Although certain factors were found to be at work in all states (e.g. each had an incentive to concentrate the reported use of federal funds to simplify federal audits) these factors combined with circumstances unique to each state to produce different expenditure patterns. After examining the experience of three states, general hypotheses are developed. For example, it is hypothesized that more volatile changes in allocations will result from grant consolidations in policy areas which do not address basic service needs. Finally the decision-making process with respect to block grant funds is characterized as one in which a small group of professionals determined allocations autonomously with relatively little input from interest groups or other actors within state government; nevertheless, the external political and administrative environment severely limited the possibilities of realistic choice in each of the three states studied.I wish to thank the National Center for Health Services Research which supported this study under grant HS 01495. I am indebted to the state health department officials in Alabama, Michigan, and Pennsylvania who made this research possible. I would also like to thank Leonard Robins, Janet Shikles, William Schmalzreid, Bruce Vladeck, John Kingdon and Robert Baitty for comments on an earlier draft. Of course the views expressed are my own and in no way reflect the positions of the Department of Health and Human Services.