Impact of federal substance abuse block grants on state substance abuse spending: Literature and data review

Background: The federal Substance Abuse Prevention and Treatment Block Grant (SAPTBG) was established by the U.S. Congress to assist the states in funding substance abuse treatment services. Although the SAPTBG represents about 40 percent of public funding for treatment, how this federal assistance affects state treatment spending is not well understood. Published research has examined this topic, drawing on an approach from public finance economics. Aims of the Study: Based on a review of the literature and data, this paper suggests future avenues of research on the impact of the SAPTBG. Methods: The study reviews the relevant public finance economics literature and the data used in published work on the SAPTBG. Discussion: Current literature examines only the effect of the block grant oil expenditures by state substance abuse agencies. Additional analysis is needed to examine the impact of the SAPTBG on all sources of state funding and expenditures for substance abuse treatment. Ideas for additional research are presented at the end of this paper. Implications for Health Policies: The increasing interest of the U.S. Congress in evaluating the effectiveness of the many federal block grant programs requires that further analysis of the impact of the SAPTBG be undertaken. The analysis and approach in the literature is also instructive for other countries where a central government allocates health care resources to local authorities using a grant.