Introduction
It had been a long time coming when in 2010 the Obama administration and a Democratic Congress passed by a single vote in the Senate and by legislative sleight-of-hand in the House a historic reform of US health care, the Affordable Care Act (ACA). The changes leveled the playing field in health insurance by requiring all Americans to buy and all sellers to sell to all comers, mandated that large and mid-sized employers provide insurance or pay fees for government coverage, and ended preexisting condition exclusions in health insurance policies as well as a plethora of other industry abuses that companies indulged in to protect themselves from adverse selection, moral hazard, and an inevitable death spiral if they enrolled too many sick patients. Access to care was expanded by the ACA through these market reforms, through broadened Medicaid coverage in states that chose to accept a generous offer of federal support for expansion, and through state or federal exchanges that sold comprehensive policies at reasonable premiums made affordable by subsidies based upon a sliding scale of income.
But the Republicans hated the ACA (which they dubbed Obamacare) in part because of the way the law was passed namely, by avoiding the necessity of a confirming Senate vote that would have fallen one vote short of ending a fatal filibuster. (A liberal Democratic senator had died and been replaced by a Republican after the bill left the Senate, so there was no chance of passing it there again if the House made too many changes.) But conservatives also hated the law because, in their view, it inappropriately expanded the role of the federal government into areas they believe are better
left to the private market or state governments. Thus, when the Republicans took over the House after the 2012 election, they began a series of nearly 60 votes to repeal Obamacare. The votes won a majority in each Republican House time after time, even though President Barack Obama was sure to veto the bill. But while Republicans knew they were shooting legislative blanks, they also thought that the vote might garner favor with supporters without causing much pain to some constituents. Nonetheless, when President Donald J. Trump took office in 2017, supported by Republican control of both houses, the repeal failed because three Republican senators balked. Two could not support the damage it would do to their constituents who were happy with their ACA coverage, and one was offended by the closed-door drafting of the bill that led to the repeal vote. Given the tiny majority the Republicans had in the Senate, the repeal went down in defeat, just one vote short.
Still, President Trump vowed to keep his campaign promise to repeal Obamacare, and he set about doing as much as he could with his executive authority. Thus, Congress terminated the ACA mandate that all Americans buy insurance, the president ended some subsidies that made many poor Americans able to afford insurance, and granted states authority to offer less comprehensive and shorter-term policies than called for by the ACA all of which also served his purpose of undermining public approval and confidence in the ACA. In addition, by delaying announcement of whether insurance carriers will be paid back for subsidies they are required by the law to grant to low-income people, he created uncertainty expected to drive some insurers out of the market. Other orders restricted funds and time for open enrollment and outreach enrollment assistance to eligible people, barred regional office staff from participating in open enrollment events, invited governors to request waivers of ACA requirements, allowed employers to opt out of contraception coverage if they have religious or moral objections, and directed federal agencies to find additional ways to permit sale of insurance that does not meet ACA standards.
To appreciate the full potential harm to the ACA of these efforts, it is important to understand one simple reality of insurance: For a company to avoid bankruptcy because too many sick people enroll, it must be careful that
people who are not sick also enroll. Those who enroll with a company become its “risk pool.” If the risk pool gets too sick, the company must raise its prices, with the effect that the least sick people now refuse to buy insurance, even as the sickest can’t afford to go without it. Consequently, the pool gets sicker as only those who are sick or very much fear getting sick enroll at high prices. This is called the death spiral of insurance: As rising premiums drive out first the well and then the less sick, the pool becomes sicker and sicker and premiums go higher and higher.
The ACA protected insurers against a death spiral by requiring everyone to buy comprehensive policies and by preventing insurers from setting prices based upon medical need. The changes made by President Trump and federal agencies at his direction has had the effect of eroding the strategies designed by law to guarantee that the insurance risk pools include healthy and younger people and are not dominated by sick and older people. The result has been an inevitable shrinking of the risk pool in many counties, a sicker, more expensive group of buyers willing to buy insurance, flight from those markets by insurance companies that fear that costs will exceed premiums, and requests by remaining insurers for much higher premiums. With access to insurance coverage beginning to narrow and the number of uninsured rising again from the historic lows reached following implementation of the ACA, the pool has been becoming sicker as only the sickest patients have been willing to pay the higher premiums.
If you are a supporter of health insurance for everyone, this is very bad. If you believe that the federal government had no business usurping the states’ role in health insurance regulation, then these steps that undermine the ACA and may cause it to fail in many counties means less federal overreach. These divergent views generally reflect political alignment: Most Democrats want the ACA preserved and improved; many Republicans want it to shrink, one way or the other. President Trump wants it gone. That is what he promised in his campaign.
If Democrats were to regain control of Congress, they might be able to put some fixes back in place, provided President Trump did not veto them something he would likely do unless Congress offered deals on other administration priorities.
Yet come what may with the ACA, there are still significant problems with American health care. Our costs continue to far outstrip those of comparable nations, our drug prices are far higher than those of other countries, and our care intensity varies widely from hospital to hospital, city to city, and state to state, with much of the care rendered proving ineffective and probably wasteful.
But there are hopeful signs. Some incentives for improvement were adopted in another new, less salient, law: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). In a rare instance of both bipartisan cooperation and acceptance by the physician community, Congress passed a major reform of the way Medicare pays physicians and other providers, hoping to move their payment incentives away from volume and toward effective performance. The goal of the law is to ensure that more providers follow best practice guidelines, rendering only care of proven effectiveness for the patient’s condition, reporting diagnoses and treatments to electronic health records systems, innovating while avoiding unnecessary expense, and achieving markers of quality and cost-conscious performance. Meeting standards means earning bonuses. Departure from standards, excessive volume, high cost care, and other unreformed behaviors lead to fines. How tough the performance standards will be and how hard the fines will bite will be greatly influenced by regulations to be written by an executive agency, the Centers for Medicare and Medicaid (CMS). Critics feared that force of the law would be blunted by the Trump administration.
Such is the way of American policymaking in health care. What we pay for health care, how much we rely upon market competition versus regulation, how much we accept differences in the quality of health care, how much excessive, unneeded, and potentially harmful care we tolerate and pay for, and how some of us run into financial and other access barriers when we try to get care are all aspects of health policy and are shaped by many forces. These include the president, Congress, federal agencies, physicians, drug companies, unions, hospitals, medical equipment makers, insurance companies, managed care organizations, patient advocates and other interest groups, state legislatures and state bureaucracies, and all of us consumers of health care who demand that we have access to all the care that is available,
whether we need it or not. Republicans tend to favor market solutions and fear bureaucratic interference in medical decision making. They worry that an overbearing federal government will create a dependent class. Democrats criticize the market approach as unrealistic, given the many restraints on competition, and worry that it will produce barriers to insurance and care, which will create a divided society consisting of the nonpoor who are in good health and the poor who are in ill health. Policies change between administrations of different partisan persuasion, though frequently ideas from one administration are adopted by another. Republican President George W. Bush won passage of Medicare prescription drug coverage, an idea that had been pushed by his predecessor, Democrat Bill Clinton. President Obama’s ACA adopted market exchanges to sell ACA policies, an idea long favored by Republicans. Or did Republican Senator Marco Rubio (FL), who pushed the state legislature to fund a small health exchange in his home state when he was leader in the of Florida’s House of Representatives, get his idea from the Republican-derided “health alliances” offered in President Bill Clinton’s failed 1994 health insurance plan?
US health care policy reflects the complex cultural, political, economic, social, historical, and institutional forces that shape it. This book explores how government makes health policy, including the partisan political forces that influence decisions. Most health care in the United States is delivered by the private sector, but because public policy pays for and regulates so much of this care, health policy is vitally important. Moreover, private payers for health care tend to mimic the payment approaches of public policy, so public policy’s reach extends even farther into the private portion of health care policy another reason that foes of large government oppose the potential distortions that they fear will result from government insurance. Because so much of health care is outsourced and becomes the income stream of privatesector providers, claims processors, makers of health care products, and others, private interest groups have a huge stake in public policy and find it a good bargain to spend rather lavishly on lobbying and other strategies aimed at influencing public health care policy.
Most industrialized countries pay for most of their citizens’ health care publicly. We place more faith in private payment and attendant market
competition to reduce prices and improve access and quality. In general, it has not worked, in part because our delivery system restricts competition in a number of ways: Some providers or insurers dominate their markets, many drugs enjoy patent protection, which they are then able to extend through a variety of means, consumers are not well equipped to act as informed buyers, and interest-group lobbies resist cost and price disclosure, disclosure of performance data, and regulatory efforts.
Our federal system continues to require a partnership between the federal and state governments in health care provision and reform. Often this leads to new ideas bubbling up from the states to the federal realm. Yet, partisanship can sometimes be a barrier to cooperation. When it came time to implement major reform programs such as the ACA-mandated expansion of Medicaid in every state, 27 of them sued the federal government and received a favorable ruling from the US Supreme Court saying the states could not be forced to expand their programs. So many Republican states did not expand. And many accepted President Trump’s invitation to impose more restrictive qualifications upon those seeking Medicaid, including requirements that they be employed or looking for work, earn incomes lower than the maximums set for eligibility by the ACA, be tested for drug use, pay higher deductibles for emergency care, and limit time participating in the program. Creative state officials are likely to come up with additional ideas for CMS to consider, and President Trump has made it clear that he wants CMS to do what it can to approve state requests, including those that may threaten the viability of the ACA.
This book examines the US experience with governing health. It is a political science book about health care policy written by political scientists, who, as former journalists, respect the role of the news as a first draft of history. Accordingly, we combine political science theory with a heavy reliance upon timely news reports of the continuing saga of health care policy. A theme of the book concerns health policy as the product of the US government’s unique ways of combining several forces:
the increasing, and increasingly pervasive, power of ideological polarization and party politics;
the need for members of Congress to constantly seek reelection, claim credit, trade votes, and overcome uncertainty in their policy choices; the waxing and waning persuasive power of the presidency, promising much, sometimes delivering, but often disappointing; the discretion exercised by the bureaucracy in its role as agent of the president, Congress, the courts, its clients, and the public; the pervasive and well-financed influence of the burgeoning army of special health interests, the coalitions they form, the millions they spend, and the strategies they employ to frame issues and shape health policy to their liking; the growing tests of strength between traditional health policy interests and ideologically motivated campaign donors; the continuing struggle of the states, torn between being supplicants, seeking more financial support from the federal government, and being sovereigns, desperate to control their own health policy destinies while trying to hew to partisan persuasions; and the challenge of effective problem definition, the choice of solutions, and various models of the policy process, all incomplete but each capturing an aspect of the insights we need if we are ever to predict policy outcomes.
The first edition of Governing Health grew out of a frustration with the absence of a text written by political scientists for use in health politics classes. Sociologists and economists have authored or contributed to a small number of worthy volumes bringing their own disciplines’ perspectives to the topic of health politics and policy, and although they have much to offer, a gap remains. Politics is more than the sociology of institutions or the workings of economic self-interest. Politics is about power, and the making of health policy is nothing if not the wielding of power. Institutional rules endow some actors with more power than others, differential endowments of other types give some interests more power than others, and the fleeting saliency of the issues themselves sometimes gives one side more bargaining power than another. This book illuminates how institutions and the policymaking process wield power over health policy.
The intended audience is students of health policy who need to understand that problems as well as solutions are political and must be treated as part of the policy process; health policy analysts who want to become more adept at gauging the political feasibility of their proposals; health professionals who seek a better understanding of how policy is made and how they might change it; health system managers who are savvy enough to see that in a system in which nearly half the money and most of the paperwork burden come from government, they need to understand how government makes its policies; and political scientists who seek illustrations of how the principles of government work in a policy arena with all the ingredients of political conflict: saliency, huge financial stakes, powerful interests, and venues in all the institutions of government. We present a comprehensive synthesis of political science research on the institutions of government and the policy process, as well as an extensive review of the policies that have governed health care for more than a generation. We try hard to keep the book as interesting as the health care policy debate really is by illustrating political science concepts with contemporary examples of changing policies, partisan fights, implacable ideologies, congressional posturing and one-upsmanship, indefatigable policy entrepreneurs and pleading patient advocates, correcting and corrupting interest-group influence, compliant and defiant bureaucrats and state actors, upbraiding court decisions, and presidents whose popularity enhances or hobbles their ability to lead this army of passion and plunder.
We begin each chapter with a comparison that shows how different the institution under study looked during various periods when new presidential administrations began their policymaking quests, each one ushering in a new era of public health policy.
President Lyndon Johnson in 1965 rode the crest of a Democratic wave of power and ideas and a growing consensus that elderly and poor Americans, at least, deserved a health care subsidy. But he stretched the compromise by eliminating means testing from his Medicare proposal and set the stage for waste and excess use of care with his payment methods.
President Ronald Reagan in 1981, elected with a mandate to shrink and
constrain government-supported health care, welfare, and social services, oversaw the passage of a major Medicare expansion program to cover catastrophic events and costs.
President Barack Obama in 2009 took health care policy by the horns, shepherded a legislative victory that made major expansions of coverage, major reforms of the insurance industry, and some modest inroads toward cost control and quality improvement, but even with a Democratic Congress was unable to produce the comprehensive, costsaving health care reform he promised in his campaign.
President Donald Trump promised repeal of the Obama plan and was strongly supported by a Republican Congress committed to doing so, but then failed in a narrow showdown with senators of his own party. He went on to demonstrate that the presidency has considerable power to do many things that may lead to the failure of Obamacare in many of the nation’s health care markets, acting through tweets, executive orders, regulatory relaxation, and directives to executive agency leadership and staff, as well as taking advantage of the president’s unique ability to frame issues and sway public opinion.
Chapter 1, “The Policy Process,” introduces health care policymaking and illustrates how it touches our lives. We start by comparing the plights of two sisters who live in Florida and experience health policy in different ways in order to show that policy really does affect patient access, care, and financial burden. We provide an overview of the ACA and President Trump’s changes to some of its key provisions, as well as a summary of some of the major health policy initiatives that have brought us to our present system. We note the influence of other policies, including the Emergency Medical Treatment and Active Labor Act (EMTALA), on access to care and on workman’s compensation and thereby illustrate that health policy comes from many quarters and takes many shapes. We contrast public and private policy. We describe the essential role of problem definition in policy formation and identify some of the sources of demand for policy change. We review models of public policymaking, including the Garbage Can model, advocacy coalitions, and institutional analysis development, among others. We review
categories of public policy including procedural, regulatory, morality, economic, comprehensive, incremental, and others in a discussion replete with examples. We consider the importance of issue framing and causal attribution in policy analysis, again with examples. We discuss solution options and the necessity of considering market versus public options and criteria and looking at the elements of market failure most relevant to the health care market. We note the importance of ideology in evaluating market failure and the historical, institutional, and partisan preference for marketbased solutions wherever possible. We discuss equity, technical feasibility, administrative burden, and political feasibility as evaluation criteria for solution options and review the criticisms of the ACA, which contrast fairness with functionality and argue that subsidizing the premiums of sicker populations with higher premiums on those who are young and healthy will drive the latter out of the market, undercutting viability.
We note that legislators vote only on policies not on outcomes, why this is so, and how this practice explains the ambiguity of some public policy. We explore how policies occasionally have unintended consequences and may at times even worsen the lives of those whom they were intended to make better.
We review patient coverage options in such programs as Medicare and their implications for treatment sources and co-payment requirements, along with the gaps in Medicare coverage and the options for filling them. We identify proposals for major revisions of such programs as Medicare and Medicaid.
We discuss the role of research in policymaking and where data come from. We describe procedures of the Centers for Disease Control and Prevention (CDC) for compiling basic health information such as birth and death certificates, tracking infectious disease outbreaks and seeking to prevent or control them, providing health education, and responding to vaccine shortages and antibiotic-resistant bacteria. We note how many of these basic public health functions differ in their implementation from state to state.
We catalogue the points of contention that have perennially plagued each major health reform proposal, including who will bear the cost burden and
what the appropriate role of government should be. We examine factors that help to explain the success of some policies and the failure of others, including saliency, timing, problem definition, institutional endowments, balkanized supporters, and others.
Finally, we describe the implementation process, the players involved, and factors that can make or break it. Each aspect is illustrated with examples from health policy options that have been considered and accepted or rejected.
Chapter 2, “Congress,” describes the structures and functioning of Congress and the motivations of its members. Its theme is that Congress was intended to be, and sometimes still is, the dominant branch of government. The chapter begins with a review of the ideas of the framers, who conferred on the legislative branch enormous powers and many binding constraints.
We describe shifts in power of party and institutional leadership and the roles and responsibilities of committees and subcommittees, which have long had special importance in health care policymaking. We also note that as partisan polarization has increased in recent years, conference committees have given way to more informal, leadership-crafted deals between the two Houses.
We devote considerable attention to the effects of party polarization on the ability of the houses to legislate, comparing partisanship in Congress and partisanship in the country and how it is manifested in the electoral process. We describe fundamental differences between the House and Senate, as well as the key role of leadership and its increasingly difficult job of holding together a majority in a party often split into factions.
We describe in detail the powerful role of committees and subcommittees in shaping health policy, focusing in particular on the House Ways and Means Committee, the Senate Finance Committee, the House Energy and Commerce Committee, and the Senate Health, Education, Labor, and Pensions Committee.
We chronicle the bill-drafting process, including debating, amending, and voting, a bill’s path from subcommittee to committee and its movement from house to house (as well as statistics showing the low likelihood of any given bill becoming a law, thanks to the many gatekeeping points in the law-
making process). We review the contentious and complementary relationships between presidents and Congress in periods of one-party dominance and the more frequent circumstance of divided government.
We detail the factors important to members considering whether or not to participate on an issue, how active to be, how to vote, and how to take cues on issues in which they are not heavily vested. We describe the congressional enterprise as well as the day to day work of a member of Congress. We explore the competition for members’ favor among interest groups, party and White House demands on them, their responsibilities and responses to constituents, and the pressures members feel to constantly raise money for reelection and produce a voting record that will help them in their quest to get reelected.
We review the models of congressional organization, why they are necessary to the body’s function, and how they manifest in rules and norms of behavior. We contrast Senate and House rule differences and their consequences, as well as the changes introduced to the filibuster.
Budgeting, the increasingly dominant task of a deficit-swelling Congress, is closely examined; we step carefully between the concepts that are likely to continue to characterize the process and the changing rules and terms that complicate it. We explain and illustrate deficits, debt, and the dire predictions that accompany their ever-steeper upward slopes. We explore the contentious reconciliation process, which can bypass the committee process and has long been a principal vehicle for modifying health policy.
We explain regular order, its frequent absence, how that happened, and why its continuing absence matters. We explain earmarks, their rise, stratospheric further rise, and eventual fall, the emergence of letter marks, phone marks, and the other incarnations of pork.
We discuss how Congress interacts with other institutions including federal agencies, states, and the judicial system.
Chapter 3, “The Presidency,” starts with the sources and scope of presidential power and the high-stakes rivalry that characterizes the relationship between the presidency and Congress even in the best of times. Focused as the book is on health care policymaking, the subject of this chapter is how the president makes choices in domestic problem solving. His
role in setting the agenda, proposing initiatives, and monitoring congressional progress is examined. A theme of the chapter is that there is much truth to the axiom that “a president proposes but Congress disposes.” The president is much more influential than any of the 535 members who work for or against him, but he is not, in the final analysis, a legislator, even though he can and does use executive orders, memos, suggestions, and uniquely with President Trump—tweets to move policy in directions he has been unable to persuade Congress to pursue. We examine the measures of presidential legislative success, both when he cannot count on a party majority in Congress and when his party controls both Houses. Even then, he must work hard to get enough members to support him in passing a law, and quickly learns to blame Congress or individual members when his proposals fail.
When the president is not of the same party as Congress, oversight hearings occur with great frequency and at times make headlines that castigate bureaucratic agency heads for inaction or actions that members of the majority party in Congress do not like. But when the president and both Houses are controlled by the same party, oversight hearings are rare, and bureaucrats find that they have fewer opportunities to resist their political leaders. Norms are violated, evidence may be ignored, and there is little recourse short of the courts’ ability to rein in policy changes that offend committed supporters of the last administration’s ideas. We review models of presidential organization, the structure of the White House, presidential capital, public support and popularity trends, agenda setting and successes, and limits upon presidential power.
In chapter 4, “Interest Groups,” we describe the zealous huckstering of that diverse congeries of hired guns, savvy professionals, and former members of Congress and their staffs, who have spun through a revolving door from government to lobbying firms and sometimes back again, niche groups, coalitions, political action committees (PACs), super PACs, and groundswell participants who engage in lobbying, campaign financing, and grassroots organizing to try to keep things off the public agenda or shape them to their liking when they cannot. We define and examine PACs and super PACs, 527 groups, bundling, and other strategies for funneling money to members of Congress. We chase the will-o-the-wisp connection between
money and votes and offer some perspectives for examining how and when interest groups get their money’s worth. We review traditional strategies of gaining access and wielding influence, ranging from grassroots movements, to direct lobbying, to in-kind service, to campaigns and more. We chronicle the growth of social media as a lobbying tool, but question whether it has thus far much changed the way things work.
A theme of the chapter is that interest groups are extremely influential— and in many instances the controlling influence in health care policymaking. Lobbyists have many resources, including detailed knowledge of policies affecting them or their clients, money, organizing skills, and singularity of purpose, and they are only too happy to show a legislator the correct path toward constituent service and comfortable reelection margins. Another theme is that while interest groups have always been one of the key institutions of government, they do not always or even usually act in the public interest.
We examine how interest groups form and stay together, the dominant role of occupational alliances, and the deliberate or inadvertent role of government itself in sometimes spawning such groups. The interest-group world of today is complex and characterized by both permanent and temporary coalitions that share and complement one another’s strengths and resources. Much of the lobbyist’s work has to do with the unglamorous job of monitoring legislation and providing information. We describe the ways in which these groups move through the many venues of government, as well as the strategies they employ in campaign giving and grassroots campaigning to ensure that they will have access after the election.
Chapter 5, “The Bureaucracy,” takes a sympathetic view of public bureaucracy. Both of us have worked for the federal government as well as groups and firms that support federal and state governments and so know well how agencies work and the enormous capabilities and resources that they enjoy. Bureaucracy here is viewed as a repository of expertise, with detail-oriented people who bring the long view to the policy process and stand ready to serve their multiple masters Congress, the president, the courts, their constituents, and the industries they regulate. We also look at the strategies bureaucrats use to increase their own discretion to pursue their
well-honed views of good policy and the public interest as well as their penchant to please.
The differences between careerists and politicos, the nature of an agency’s political environment, and the importance of its mission are highlighted in a comprehensive review of the fascinating literature that describes how bureaucracies function, their relationship to the other branches of government, and the incentives and constraints that govern their behavior.
Both sides of the argument over whether bureaucrats are getting weaker or stronger are advanced, along with a rich array of examples from health care policy, which leaves the clear impression that bureaucrats influence all aspects of the health care policymaking process, especially their own particular province: implementation. But in the expertise business, where once they were the only game in town, now they are but one of the players.
An important portion of chapter 5 is devoted to regulation and the factors that modulate the degree of success agencies enjoy or suffer in gaining industry compliance. An overarching point is that no matter how green the eyeshades, regulation is political, and agency performance is evaluated with a political yardstick. We examine the health agencies, describe their turf, and weigh their political fortunes in light of past performance and as viewed by important beholders.
Chapter 6, “The States,” traces the evolution of state governments from the good old days of the good old boys of the 1950s and 1960s through their own awakening and federalism’s many redefinitions. The case is easy to make that most states today are savvy, lean, innovative, socially responsible, and politically independent power centers with huge differences in resources, to be sure, but determined to regain their autonomy and not lose their identity. They still want all they can get from the federal domestic budget, but they have grown weary of the federal government’s presuming that Washington knows better how to spend the money to solve problems.
State governments are to be sure political, and like the federal government, many have succumbed to partisan polarization. Nonetheless, a theme of the chapter is that while no one was watching, the states reformed their governance and became important players in health care provision and policy. States are innovators in health policy, and many, if not most, ideas
about health policy reform offered by the federal government began as state initiatives. One message we want to convey is that the future is likely to see more of the same, especially if the federal government removes some of the barriers it has erected to state innovation. However, unlike the federal government, states must balance their budgets, which means making programmatic cutbacks rather than expansions in tough economic times. Unfortunately, interest groups have figured out that when state innovation begins to cut into their profits too substantially, they can appeal to Congress to preempt state law by going forward with a federal program.
Institutions are again a central focus in chapter 6, which examines state-tostate differences and similarities in the areas of budgets, spending, and revenues. The chapter also documents the rapacious effects of Medicaid and other health spending on states’ ability to set their own agendas. We examine the unique state feature known as direct democracy initiative, referendum, and recall and consider its benefits and liabilities. Also discussed is the impact of legislative term limits in more than a dozen states, including several of the nation’s largest.
For those comparing the first, second, third, fourth, and fifth editions, we offer the following guide to changes:
Our first priority was to update theory perspectives, examples, and illustrative anecdotes, keeping older examples only when they were too good to lose and favoring more recent incarnations of theory perspectives over more dated presentations of what may be classic ideas. We dumped a few theory ideas that just weren’t that interesting. We updated statistics concerning budgets and deficits, presidential activities, electoral districts, campaign spending, agency sizes, and the like.
We expanded treatment of PACs and super PACs, updated and expanded upon campaign finance mechanisms and their enormity, reviewed recent research on how to detect the influence of money on policymaking, and report on the evolving role of social media. We describe “the swamp,” efforts to drain it, and actions that have made it bigger.
We report an increasing tendency of federal agencies to ignore or suppress facts when they are inconvenient or unwanted.
We examine the role of the press in reporting on the state of government, as well as the growing use of Medicaid waivers and their expanding role as key instruments of federalism.
We replaced, dropped, or added half the references.
We dropped the case study included in previous editions and moved the policy chapter to become chapter 1 rather than chapter 6.
We updated our prognostications, which, wisely, we had made for the coming 10 years, so that in most cases we were either right or not yet wrong.
The Policy Process
Rosa and her husband moved a few years ago to a beach town halfway down the long eastern coast of Florida. Unaccustomed to managed care and aware of its bad reputation among older people, Rosa initially opted to continue her traditional fee-for-service Medicare coverage. After some persuasion from a friend in her bridge club, she and her husband agreed to call one of the local Medicare managed care firms and hear its pitch. They were amazed to find that the plan would charge a moderate monthly premium and cover a significant proportion of drug costs, an acceptable group of local physicians, and stays at either of the two nearby hospitals in their beach community, all with modest deductibles and no co-payments. Clearly, coverage in the same federal Medicare program differed between fee-for-service and managed care, and it might be still different at a managed care firm other than the one Rosa and her husband chose. For example, she could also choose a plan with a nationwide network of providers for somewhat higher premiums, deductibles, and co-payments.
When she had a minor stroke a few days after joining the managed care plan, Rosa was pleasantly surprised at the range of specialists who were quickly assigned to her case: a neurologist, a neurosurgeon, internists, and a physical therapist. After her first night in the hospital, she was visited by the managed care firm’s medical director, who was taking a special interest in
management of her potentially high-cost case. Had she remained in her feefor-service plan, or had her stroke occurred a week earlier, before she’d made the switch, Rosa would have been worse off in several ways. She would have faced a one-day cost-of-hospital-care deductible, a daily co-payment, a 25 percent co-payment for drugs, a major gap in her drug coverage once she’d spent the limits of her coverage some months after her stroke, and substantial co-payments (in addition to deductibles) for ambulatory care visits to her physicians after leaving the hospital. She would have had a broader choice of physicians not just those who were members of her plan but the ones she had seemed fine and she liked the lower costs and referrals to specialists without having to search for one herself.
Medicare notified Rosa and her husband a few months later that their managed care firm was losing its Medicare contract over some compliance issues. She and her husband went through another round of managed care plan visits and chose another plan, and for the most part they were again satisfied, except with their primary care doctor. At the next open enrollment period a year later, they switched plans again in order to get a different primary care doctor. Luckily, Rosa was assigned to a female internist whom she really liked. When she was again hospitalized, with lung cancer, she was attended by two hospitalists (specialists who practice only in the hospital, not in the community), a pulmonologist, and a rehabilitation specialist. Managed care firms prefer hospitalists to manage their inpatient care to make sure things go well and do not become unnecessarily expensive. The two hospitalists managed all her hospital care, were very responsive to questions, went by their first names, and seemed to take a real interest in her personally. Ultimately, she did not opt for care by an oncologist because her cancer was too advanced for such care to do much good. She had been a lifelong smoker, and some time before, when her internists had asked her to get an x-ray, she had failed to comply.
Meanwhile, across the state, her sister, Mae, lived. She was not yet 65 and who worked for one of the thousands of service industry firms in Florida. If she needed major health care she’d be liable for huge out-of-pocket costs. That is because she was working in a small service industry firm with fewer than 50 employees. Such small firms are not required to provide health
insurance. While the Affordable Care Act (ACA) of 2010 requires larger companies to offer health insurance or pay a fine on behalf of every company employee, her small company was exempt from the requirement. But was she still required to carry insurance herself? About this she was quite confused.
Since 2010, the ACA has required everyone (with a few exceptions) to carry health insurance, but with the 2017 tax reform that requirement was repealed. So the answer is no, but should she buy it anyway? Could she get some financial help? If her income was below 200 percent of poverty, she could qualify for Medicaid in states that chose to take advantage of the Medicaid expansion offer in the ACA and thereby be able to recoup up to 90 percent of costs from the federal government. But Mae and her husband together earned a family income that was close to 250 percent of poverty. Because that was more than the 138 percent of the poverty income ceiling on Medicaid eligibility, she could not get Medicaid, even if her state took the Medicaid expansion, which Florida did not.
She was, however, eligible to receive two kinds of federal subsidies to help her afford insurance from one of the companies that sell policies on the ACA exchange in her market area. One subsidy, based upon her family income, helped keep her premiums affordable. The other, because her income was low, helped keep her out-of-pocket costs of deductibles and co-payments affordable.
President Donald Trump issued an executive order getting rid of the second subsidy, which reimbursed the insurer for the costs of selling a policy so cheaply to someone like Mae. He argued that insurance companies were making too much money to justify a windfall subsidy. But other provisions in the law allowed the insurance companies to make up the loss through increased premiums, while still being subsidized by the same federal government for the second kind of payment. Complicated, of course, but such things happen when the two political parties make conflicting efforts at formulating policy. Democrats wanted the ACA to cover as many people as possible, and thus to subsidize as many as necessary in order to ensure broad coverage. Republicans shun the idea of the federal government subsidizing insurance with taxpayer money. So the result is policy choices that are sometimes in conflict.
Were she to collapse at work, Mae might be able to claim workers’ compensation coverage. If she were in a car accident and injured her back, she might be able to get some of her medical expenses paid by the mandatory medical injury coverage that many states, including Florida, require auto insurance companies to have in their policies. Or if she were rushed to a hospital emergency department after such an accident, the federal Emergency Medical Treatment and Active Labor Act (EMTALA) would require that her condition be diagnosed and stabilized by physicians and staff before they could send her home, but with no plans for or obligations to pursue any follow-up care that she might need. The EMTALA law does not cover that.
She could subsequently get care from a free clinic, such as a federally qualified health center, a federally and state subsidized clinic that provides free care in addition to serving Medicare and Medicaid patients, as well as privately insured patients if they choose to go there.
Of course, if she has no insurance, EMTALA would not stop the hospital from turning over her bill to a collection agency, which would dun Mae repeatedly and quite likely try to garnish her wages to pay the bill. (She would not be alone in her plight: 9 percent of the population still did not have insurance even after the ACA became law, and with President Trump’s and the tax law’s changes, the uninsured rate started rising.) In fact, Medicare and Medicaid agreements signed by the hospital would require it to go after her for payment unless the hospital management wanted to adopt a policy of going after nobody who owed them money; Medicare and Medicaid want to be assured that their patients are not singled out for extra charges due to others not paying their own bills.
Mae’s congresswoman heard about the bad-debt collection policies of hospitals and became concerned that poor people were being inappropriately punished for their poverty. She asked the administrator of the Centers for Medicare and Medicaid Services (CMS) to testify before her House committee to explain how Medicare and Medicaid policies affect bad-debt collection by hospitals. The CMS administrator answered the committee’s questions, many of which were written for the committee members by congressional staff who had read a report on the subject most likely prepared by the Government Accountability Office, the Congressional
Budget Office, or the Medicare Payment Advisory Commission.
For their research in preparing a report of this type, any or all of these agencies or individuals quite likely made use of the extensive Medicare and Medicaid data on use and cost provided by hospitals, as well as cost reports concerning all patients and all expenses and bad debts that hospitals must file regularly if they want to participate in Medicare or Medicaid. Or the researchers might have used one of the many surveys of hospital admissions, discharges, payment sources, and other features paid for with public funds.
Medicare is highly regarded by beneficiaries for its coverage and wide choice of providers. Yet there can be pitfalls. Patients who have chosen a Medicare Advantage Plan (managed care) might have to pay several hundred dollars in hospital co-payments and perhaps other charges. Traditional Medicare would not cost the patient anything after the first day unless the stay lasted more than 60 days. Even then, lifetime reserve days can be used to pay for additional care, though with some co-payment. But, there’s a catch with traditional Medicare: There is no out of pocket limit. The few patients who are very sick but remain alive can wind up bankrupt due to the copayments required, and with no cap on the maximum amount that can accumulate. To avoid that, they could buy a private Medigap policy that covers some things such as some co-payments. Anyone in Medicare Advantage and, thanks to the ACA, everyone in an employer or ACA exchange plan enjoys a cap on annual and lifetime out of pocket costs.
If either sister were discharged to a nursing home, Medicare or an ACA policy might pay for a few days’ stay. A longer stay would have had to be paid for out of pocket, until the patient was poor enough to qualify for Medicaid to cover that portion of the bill that her Social Security and savings or pensions could not pay each month. Death during a hospital stay kicks in other laws. State law would dictate whether the case had to be counted in some kind of published hospital mortality index. The federal mandatory hospital death index was repealed some years ago but the ACA contains a new version. And the federal Centers for Disease Control and Prevention (CDC) would, of course, want to know about the death from a death certificate, so that mortality rates by cause of death and by state and county could be reported. The death might not result in an autopsy, since state laws
vary on whether an autopsy is required in routine cases. Florida leaves the decision to the discretion of the state attorney, if that official thinks a crime may have been committed.
But the hospital might do an autopsy anyway if the death was complicated by a fall out of bed, a drug interaction, or other untoward event, if it had the permission of the family, because the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), a private group operated by hospitals, is a strong proponent of autopsies, and the hospital would not want to risk its state and local licenses to operate as a hospital, or lose its Medicare and Medicaid certification, by becoming careless and losing its JCAHO accreditation. Licensure and certification often require accreditation as one condition among many others. Furthermore, some states might require, as Florida does, that the deceased be transported from the hospital to a burial site under the direction of a funeral director, since the funeral industry has been successful in some states in lobbying the legislature to make it illegal to transport a corpse without involvement of a funeral director.
If neither sister died, after recovering at home they might go out and celebrate, vowing to give up smoking and go on a diet, especially after reading the antismoking, diet, exercise, and other health promotion materials prepared by the CDC and state public health agencies, which their husbands had picked up for them in the hospital cafeteria. Driving home from the celebration, whoever was driving would want to be quite sober to avoid violating state driving laws aimed at preventing motor vehicle–related morbidity and mortality.
This is health care policy in the United States: It is who is and is not eligible to receive subsidized care; what share the individual pays; which types of health care and which services and procedures are covered; who can render care and get paid for rendering it; what government does and does not do when a person needs care but does not have the money to pay for it; who gets financial help with medical care training; what nurses can and cannot do for patients; how wide the doorways of hospital bathrooms should be; what data must be supplied to the federal and state governments; how federal tax policy and workers’ protection laws interact with various health care laws; how federal agencies translate congressional intent into regulations affecting
health care providers and patients; what records must be kept, how they must be kept, whom they can be shared with, and whom they must be shared with; what kinds of educational materials about healthy living are distributed and which behaviors are restricted or encouraged in the interests of improved health status and much, much more.
Health care policies are not unique to government. Hospitals have their own private policies. Some will not perform abortions; others will. Many operate as not-for-profits, while others operate for profit. Many are part of a chain of hospitals owned by investors; some are not. Some have strong datasystem firewalls that protect medical records from unauthorized access; others have weaker ones. In some, bad debts are absorbed graciously, while in others they are collected ruthlessly. Some hospitals have detoxification centers; others do not. Some hospitals treat premature infants aggressively and expend every effort to keep them alive despite risks that the baby will develop major disabilities, while others do little if the babies are below a minimal weight; some hospitals insist infants under a certain weight at birth not be discharged until they gain weight; others discharge them.
Insurance companies, in the interest of reducing liability, may require that all their nursing home clients be accompanied to the bathroom whether they need help or not. Hospitals typically require staff to wear uniforms appropriate to their duties. Sometimes the hospitals provide these for free; others make them free only to physicians. Some clinics require that a female nurse be present during all routine vaginal exams; most do not. Some insurers require a referral before visiting a specialist. Some drug stores will transfer your prescriptions to an out-of-state branch of the same chain, while others will demand an in-state physician’s prescription. These private policies share many characteristics with public policies. They differ in that they do not usually have an explicit public purpose and are not compelled by public authority.
People do not go to jail for violating a corporate policy (but they may be fired for example, for violating corporate policy that forbids one worker to tell another worker what software she is developing for her tech company). Failure to obtain a referral before calling a specialist for an appointment is likely to mean the specialist will refuse to see you for fear that your insurer
will not pay and you will have to be pursued to pay the full bill. The real difference is that government policies are made by government and, as such, are the product of a political process in which public elections are a key determinant of who gets to make policy. In the market place, you can go to another hospital. To change government policy, you must complain, hire a lobbyist, or try to vote the bums out. Private policies try to protect private entities. Public policies are supposed to protect the public, though as the rest of this book reveals, when special interests are permitted to wield strong influence, public policies are sometimes directed more toward protecting private interests than public interests.
Policies: Ambiguities, Effects, Legacies
It would be naive to think that the purpose of health care or other public policy is always obvious. Policy is formed by compromise. Chapter 2 describes how Congress forms an enacting coalition a specific group of members willing to vote for a specific proposal at a specific time with a majority large enough to pass a proposal, sometimes just barely. Things are sometimes left deliberately vague so that many people with different perspectives can see their views represented in the same ambiguity. More detail might lose a vote. For this reason (and also because of incompetence, uncertainty, time pressures, and bad writing), even though policy usually has a purpose, that purpose may not always be easy to figure out. Indeed, the members of Congress who vote for a policy may have many different purposes in mind. Program evaluators find this out early, for health care and every other type of program. Asked to evaluate how well a program is achieving its goals, more often than not the evaluators discover the program does not seem to have any goals. Sometimes it has too many, and some of these conflict, as well. That a program has been running for several months or years on the basis of some vaguely worded rationale may be disturbing to evaluators, but this rarely seems to get in the way of the actors. So an evaluator quickly learns that while no one has articulated goals for the organization, those who work there seem to have some in mind. If they don’t more or less agree among themselves, the organization is unlikely to prosper.
