The impact of government decentralization on county health spending for the uninsured in California
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The impact of government decentralization on county health spending for the uninsured in California Richard Scheffler · Richard B. Smith
Received: 31 July 2006 / Accepted: 28 August 2006 / Published online: 26 September 2006 © Springer Science+Business Media, LLC 2006
Abstract We analyze Program Realignment, California’s 1991 policy of decentralizing control of health, mental health, and social services, from the state to the counties. Drawing from the economics literature on intergovernmental transfers and using data constructed for this study, we analyze the impact of Realignment on uninsured health spending. We find a change in the pattern of spending on indigent health services by counties following decentralization. Our results suggest, however, that county-level governments maintain a level of commitment to social-service spending that recent studies indicate may be lacking at the state level. Keywords Federalism · State and local budget and expenditures · Public health JEL Classifications H72 · H77 · I18
Introduction The past decade has seen a shift in control of health and social programs for the poor from the federal to state governments. While there is still considerable debate about the proper mix of federal and state authority in the delivery of these basic income and health programs, researchers are only beginning to assess the impact of
R. Scheffler Health Economics and Public Policy, School of Public Health and Goldman School of Public Policy, University of California, Berkeley, USA R. B. Smith (B) Department of Economics, College of Business, University of South Florida St. Petersburg, 140 Seventh Avenue South, St. Petersburg, FL 33701, USA e-mail: [email protected] R. Scheffler · R. B. Smith Nicholas C. Petris Center on Healthcare Markets and Consumer Welfare, University of California, Berkeley, USA
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Richard Scheffler, Richard B. Smith
this shift in control. Nonetheless, as Winston (2002) notes, there is a particular need to have reliable evidence on the impact of the devolution of public services, because populations that rely on these services have varying political and policymaking influence at sub-federal levels of government. The process of devolving public programs at the national level—commonly referred as the “new federalism”1 —resembles, on a larger scale, a policy that was implemented over a decade ago in the country’s most populous state, California. In 1991, Program Realignment (i.e. Realignment) transferred authority for the state’s major safety-net programs, including mental health, social services, and general health, from the state to the counties. California’s form of decentralization is similar to that described by Rivlin (1991), in which local jurisdictions draw from a larger, shared revenue base, but have control in allocating resources among various public services. While Scheffler, Wallace, Hu, Garrett, and Bloom (2000) have looked at the impact of Realignment on mental health services, this is the first study looking at its effect on general health services for th
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