Maternal and Child Health:

Block Grant Funds Should Be Distributed More Equitably

HRD-92-5: Published: Apr 2, 1992. Publicly Released: Apr 2, 1992.

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Pursuant to a congressional request, GAO analyzed the current Maternal and Child Health (MCH) Services Block Grant allocation formula, focusing on: (1) the development of equity standards to reflect the states' comparative needs; (2) the extent that the present MCH funding allocation adheres to such standards; (3) the creation of alternative formulas to distribute MCH funds more equitably; and (4) ways to phase in new formulas with minimum disruption to services.

GAO noted that: (1) the adoption of a formula that balances the beneficiary equity standard and the taxpayer equity standard could substantially improve MCH program equity; and (2) it developed a formula that would redistribute $80.4 million, increasing grants for 26 states and decreasing grants for the 25 remaining states. GAO found that: (1) the current MCH allocation method does not compensate states for their varying concentrations of children at risk or take into account the differences in health care costs from state to state; and (2) in some cases, MCH funding actually runs counter to the two equity standards, because the current fund distribution method directs more aid to states with lower concentrations of low-birthweight babies than to those with higher concentrations. GAO also noted that: (1) it developed two alternative methods for phasing in its new MCH formula; (2) under the first alternative, the overall MCH appropriation would remain the same and the portion of MCH funds distributed under the existing allocation method would be reduced; and (3) under the second alternative, Congress would increase overall MCH appropriations so that the new formula could be phased in without reducing funds currently going to individual states.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress has taken no action on this recommendation.

    Matter: Congress should adopt an MCH formula that improves equity for both intended beneficiaries and state taxpayers by distributing funding among the states according to three factors: (1) the concentration of children at risk; (2) the costs of providing health care services; and (3) the states' ability to finance maternal and child health services from state resources. In adopting a redesigned MCH formula, Congress will need to strike a balance between those two equity standards. GAO weighing of those two concerns in its example of a new allocation formula demonstrates one way in which Congress' preferences could be implemented.

  2. Status: Closed - Not Implemented

    Comments: Congress has taken no action on this recommendation.

    Matter: Congress may wish to determine the way in which the MCH formula would apply to grants to the U.S. insular areas. One way to implement such grants is to fund future levels by the MCH grant percentages that the areas currently receive. Another alternative would be to distribute MCH funds on the basis of each insular area's percentage of total U.S. population.

  3. Status: Closed - Not Implemented

    Comments: Congress has taken no action on this recommendation.

    Matter: A redesigned MCH formula would mean changes for the states, both in the standards for receiving MCH funding and in the amounts received. Congress may wish to consider determining the rate and the way in which those changes would be implemented. Central to this issue would be a choice between holding MCH allocations at the current level or raising them so that no state experiences a reduction in its present level of funding.

 

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