PASSAGE of the Omnibus Reconciliation Act (OBRA) of 1981 may have the most far-reaching impact on health care provision and consumption in this country of any legislation since the Medicare and Medicaid amendments to the Social Security Act. Intending to transfer federal funds directly to states for distribution and control, the OBRA included nine block grants, four of which relate directly to the provision of health care. These grants consolidate 22 existing programs and provide for at least a 25% reduction in program funding. The general areas for these new block grants include (1) maternal and child health; (2) alcohol and drug abuse and mental health; (3) primary care, which includes The Community Health Services program; and (4) preventive health and health services.
The potential impact of block grants is directly proportional to the extent to which the federal government has influenced both the supply and demand for health care
Woolley FR, Patrick K. Block Grants: New Federalism or Hot Potatoes? JAMA. 1982;248(1):53–54. doi:10.1001/jama.1982.03330010027025
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