© 2008 Delmar Cengage Learning. Chapter 7 Federalism Frank J. Thompson and James Fossett

© 2008 Delmar Cengage Learning. 2 Three Periods of (Health Care) Federalism Minimalist period (American Revolution through the Civil War era) –States and federal governments “tested the waters” as to the policy areas in which one or the other could claim dominance –Most health functions were consigned to local jurisdictions

© 2008 Delmar Cengage Learning. 3 Three Periods of (Health Care) Federalism Emergent period (approx ) –Federal government and, particularly, the states entered the health policy arena, through state regulation of the incipient medical profession, and such federal measures as Sheppard-Towner and Hill-Burton

© 2008 Delmar Cengage Learning. 4 Three Periods of (Health Care) Federalism Contemporary period (post-1965) –Witnessed a vast expansion in federal health programs –Increased fiscal entrepreneurialism on the part of the states –Federal grants to states have played a prominent role in this expansion

© 2008 Delmar Cengage Learning. 5 Federal Grant Typology Categorical grants are sums issued to states that must then be used for a specific purpose –Usually governed by a specific statute or statutes

© 2008 Delmar Cengage Learning. 6 Federal Grant Typology Block grants are sums given to states in the interests of achieving a broader goal –Allow states to use them at their discretion

© 2008 Delmar Cengage Learning. 7 Federal Grant Typology Entitlement programs –Opposed to those operating under fixed budgets –Require states (or, in some cases, the federal government) to fund any beneficiary as defined by a specific plan or piece of legislation no matter the cost –Outlays toward such programs can thus only be predicted in a given year, not controlled

© 2008 Delmar Cengage Learning. 8 States as Fiscal Entrepreneurs States normally try to extract as much federal money as possible under such programs as Medicaid

© 2008 Delmar Cengage Learning. 9 States as Fiscal Entrepreneurs Many programs match federal funds to state contributions –So states often devise tricks Collecting payments from localities or hospitals, to (artificially) inflate their state contribution –This, in turn, increases their federal match

© 2008 Delmar Cengage Learning. 10 Devolution and the States With mixed success, recent presidential administrations have attempted to reduce the federal commitment to states Many measures of retrenching devolution allow states greater flexibility in administration of programs –Reducing the federal match in exchange

© 2008 Delmar Cengage Learning. 11 Chapter 7 Summary The nature of the relationship between the states and federal government has changed over time Various types of federal grants to states are chief venues of federalism in health policy

© 2008 Delmar Cengage Learning. 12 Chapter 7 Summary Retrenching devolution has changed the dynamic between the federal government and the states in recent years