Health Care Policy and Politics

This article explores the policy making process as applied to the study of health care. The policy process is outlined and defined and then considered within the context of the larger political environment. The unique attributes of health care are identified and discussed in terms of how they contribute to the complexity of healthcare policy-making.

Broadly defined public policy is the recognition of a problem and the subsequent actions of the government to solve the problem. Solutions to the problem, in the form of laws and regulations, are enacted in the legislative branch of government. The laws are put into effect, i.e. implemented, by the executive branch. The laws can be challenged, reviewed, or modified by the judicial branch. This series of steps from problem recognition to solution to implementation is known as the policy process and can occur at any level of government -- federal, state or local.

Health policy is made within every branch of government and at every level of government. At the federal level, health policy addresses issues that affect or can potentially affect every citizen in the nation. Examples include Medicare, which provides health care for every citizen age 65 and over. At the state level, regulatory policies are issued that cover licensure of health care providers and healthcare institutions. At the local level, most of the policies impact public health such as food inspections at restaurants and other public places, sanitation, and immunization. Indoor smoking bans are another example of public health policies that have been enacted. In some states, Ohio for example, local health departments and municipalities have been so successful at implementing indoor smoking bans that the policy was adopted at the state level.

The policy process does not take place in isolation. The larger environment within which the policy process takes place includes biological, cultural, economic, demographic, ethical, and technological influences (Longest, 1994). Within this larger arena are policy communities who exert their power on each phase of the policy process: Stakeholders who are committed to a particular policy solution; competitors who offer alternative solutions; and opponents who oppose specific solutions or prefer the status quo.

The Policy Process

Agenda Setting

Agenda setting, the first stage of the policy process, refers to the when, how, and why an issue comes to the attention of policymakers. John Kingdon in his book, Agenda, Alternatives and Public Policies (1984) describes agenda setting as three concurrent streams of activities: Problems, policies, and politics.

In the problem stream, multiple problems are free-floating, bump and collide, and compete for attention. The problems can be identified in multiple ways; the occurrence of a catastrophic event, economic concerns, or findings in research studies. In health care, for example, problems could be the spread of contagious disease such as HIV/AIDS, a shortage of health providers, or public health reports documenting regional incidence or prevalence of cancer linked to environmental factors. Most recently, health care problems include the rising costs of health care, lack of access to health insurance (in the fall of 2013 there were forty-eight million uninsured Americans), and the lack of access to health services due to geography, e.g. rural areas and inner cities.

The second stream, policy, is the flow of alternative solutions to the problems. There is not necessarily a one to one connection between any given problem and a potential policy solution. Usually, there are multiple solutions for any given issue. Sometimes there are solutions without any corresponding issue. New technologies are an example of this. A technology may exist without an identified suitable application. In health care, the problem of rising costs has been problematic due to the complexity of health delivery services, insurance availability, and increasing technological advances. Some propose that the U.S. adopt a single payer solution where the government is the single payer. The model for this solution is the British Health Service. Managed competition is another solution proposed by Alain Enthoven. In this proposed solution, the federal government sets out the minimum level of services and benefits that health plans will be required to offer. Large networks offering vertically integrated services would then compete to provide them to large groups of consumers. This plan blends a market cost-control approach with a consumer-driven health care delivery model (Longest, 1994).

The third stream is politics or the political environment. Politicians, interests groups, the public, the media, public opinion, and other players in the political arena are in this stream. The healthcare political stream includes patients, providers, the American Medical Association, the American Hospital Association, and other interest groups, businesses, managed care organizations, etc. The politics stream also includes events and issues competing for the public's attention as well as the politicians' attention. For example, in the 2004 presidential candidates' platforms concerning health care, which had been a prominent issue during previous elections, were in a secondary position. In 2012, however, health care reform was again a major issue as President Barack Obama ran for reelection.

Green-Pederson and Wilkerson further explored this idea of attention in a 2006 article comparing agenda-setting attributes in health policy in Denmark and the United States. Their hypothesis was that problems on an agenda may have particular attributes that cause the problems to become the particular focus of political attention. They argue that the issue of healthcare is a particularly salient issue with politicians because no politician wants to be viewed as "opposing health care or access to health care" (Green-Pederson & Wilkerson 2006, p.1041). In addition, they found that healthcare innovation has raised the public's expectations for receiving the latest health care technologies and treatments. Innovation and technological advances are leading contributors to rising health costs, which in turn, puts pressure on politicians to allocate greater resources for healthcare. Although the structure of health care systems and service delivery is very different in Denmark, which has government paid healthcare, and the United States, which has both public and private healthcare, the political attention that healthcare receives is similar.

Although a particular problem or issue may be the focus of political attention, it may not have yet reached the government's decision agenda. According to Kingdon, an issue reaches the policy decision agenda when a connection can be made that links a problem with a proposed solution in the right moment of political opportunity. Kingdon calls this opportunity a policy window of opportunity.

Key to opening the window of opportunity is a policy entrepreneur, an individual or an interest group or association that shapes problem definitions (problem stream), finds links to proposed solutions (policy stream), and identifies political opportunists who are receptive to the proposed solutions (politics stream). In other words, policy entrepreneurs make the connections that subsequently open the policy window and propel the proposed policy solution onto the government's decision agenda, i.e. the formulation phase of policy-making.

Formulation

Policy formulation is the point in the policy process where legislation occurs. The proposed solution is first written in the form of a draft bill (or law) and then introduced by a bill sponsor, a member of either the upper or lower house of the legislative body. The bill is then referred to the appropriate committee for deliberation. All work in legislative bodies is accomplished through committees. Each committee has a particular area of responsibility. The chart below shows the major committees and subcommittees in the U.S. Congress that address health policy issues.

Senate Committees House of Representative Committees Finance Committee: Social Security, Maternal and Child Health, Medicare and Medicaid, Subcommittee on Medicare and Long-Term Care Ways and Means Committee: Subcommittee on Health, Social Security, Medicare Part A Labor and Human Resources Committee: Public Health Service, Food and Drug Administration, National Science Foundation Energy and Commerce Committee: Subcommittee on Health and the Environment, Public Health Service, Maternal and Child Health, Medicare Part B, Medicaid Appropriations Committee: Subcommittee on Labor, Health and Human Services, Education and Related Agencies; Indian Health Service, Subcommittee on Veteran's Affairs Appropriations Committee: Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Indian Health, Subcommittee on Veteran's Affairs Veteran's Affairs Veteran's Affairs

Committees hold hearings to obtain information about a bill by soliciting testimony of subject matter experts, persons who are most likely to be affected by the passage of the bill, and others. Bills are then 'marked up,' that is, there are additions, deletions or corrections made to the original bill. The bill is then reported out of committee and sent to the floor to be voted on by the full house or senate. Once passed by the chamber originating the bill, it is then sent to the other chamber where it is again sent to committee and then to the floor for a vote. After passage by both houses, the bill will be sent to a conference committee where any discrepancies in the bill as passed by each chamber are negotiated and final language is determined.

The final step in the formulation phase occurs when the bill is sent to the executive (president or governor) to be signed into law. If the executive disagrees with the bill, he or she will veto the bill and send it back to the legislative body. The legislative body can override the veto, in Congress and in most states, by a two-thirds majority vote. Once the bill is passed it is sent to the executive branch for implementation.

Implementation

The implementation phase occurs in the executive branch of government, also known as the bureaucracy. At the federal level, almost all bills pertaining to health are administered by the Department of Health and Human Services (DHHS). This department has numerous divisions and agencies reflecting special expertise or specific segments of the population. Examples of DHHS agencies include (but are not limited to), the Administration on Aging, the Administration on Children and Family, the Food and Drug Administration, the Centers for Medicare and Medicaid, and the Public Health Service which includes the National Institutes of Health, the research arm of federal health programs. Congress provides appropriations to each agency to carry out the laws that have been delegated to it. Congressional committees also monitor the implementation progress of each law.

One of the most important tasks an agency completes when it receives a new law is rule-making. When a piece of legislation is finally passed and enacted into law by signature, it usually is not very specific. In fact, the language may be deliberately vague as a result of negotiation and compromise during the formulation phase. During the rule-making process, agencies make explicit rules and regulations regarding how the law is to be implemented.

Policy Evaluation

As new policies are carried out by the executive branch during implementation there are generally procedures put in place to monitor and evaluate the effect of the program and its impact. Invariably there are things that go wrong, unforeseen events that occur, and occasionally negative outcomes associated with policy implementation. Sometimes these glitches can be fixed by modifying rules that were originally promulgated and sometimes amendments to the original legislation have to be made. Every major piece of legislation comes up for re-authorization at defined periods. For example, the Social Security Act has been amended over 20 times since it was originally passed in 1935. Among the changes and amendments were the addition of Medicare, the addition of rural health services, changes in reimbursement policy from fee for service to prospective payment, and the addition of prescription drug coverage, Medicare Part D. These examples are only those affecting health care sections of the Social Security Act. Others of the Act include Social Security pensions, disability, and social services.

The Political Environment of Health Care

The policy process is a useful model to help us understand the underlying logic of how a solution to a problem is transformed into public policy. Its simplicity, however, belies the political reality of the world within which health policy occurs. This world is dynamic, messy, generally chaotic, and impacts every step of the policy process. Political forces are greater and more complex than who holds office; which party dominates Congress or the state legislature; which interest group has the most influence; or which political action committee has the most money. In every policy issue there are dimensions of power and influence beyond the obvious interest groups, electoral and party politics. In health care, one of these dimensions is information and trust.

Health economists and scholars in medical economics debate the issue of information asymmetry and the degree to which it influences the healthcare market in the sense of a classically competitive market model (Haas-Wilson 2001, Robinson 2001, Arrow 2001). A classically competitive market assumes that buyers and sellers in a market have equal information, or have equal access to information, that will be used in making market transactions. Information asymmetry occurs when the information held by buyers and sellers is not equal. In the healthcare market, physicians (the sellers) have traditionally had exclusive access to the information needed to make treatment decisions for their patients (the buyers). Lacking information, patients had to trust their physician to diagnose and recommend the best treatment option. This trust formed the power base from which physicians, in the guise of the American Medical Association, were able to maintain their exclusive control of medical information and in turn control the healthcare market (Starr, 1982).

Mark Peterson in a 2001 article in the Journal of Health Politics, Policy and Law examined how the trust in an individual physician-patient relationship has been transformed into a collective trust that goes well beyond the scope of medical practice.

"What undergirds our faith in our individual physicians thus empowers them collectively in issues that are as removed from explicit medical practice as taxation allocative fairness, public administration and political accountability" (pg 1148).

Peterson observes that the collective base of physician power began to erode with the rise of issues such as access to care, insurance coverage, and increasing costs. In addition, new groups of health experts were forming. These experts included researchers in policy think tanks, academics, private foundations, non-profit organizations, and consumer driven groups such Families USA and AARP. Research findings and reports from the front lines of health care delivery challenged the information exclusivity of the AMA and others representing organized medicine.

Another dimension adding to the complexity of health care policy is the discrepancy in the public's perception of the health care system versus what they think of their own health care experience. In a 2006 public opinion survey on American health priorities, Blendon et.al. (2006) found that, overall, people want change in the healthcare system in the United States but they don't want any change to their own healthcare situation. The matter of public opinion and health care became a much bigger issue between 2010 and 2013, with the Patient Protection and Affordable Care Act (also known as the Affordable Care Act or Obamacare) that was passed under President Obama. The act faced considerable resistance in Congress and from conservative bodies, and was a highly contentious and controversial subject among politicians, the media, and the public. Indeed, public perceptions and misinformation resulted in mixed (and occasionally vitriolic) reactions to the health care reform, which will officially go into effect on January 1, 2014.

Patient Protection and Affordable Care Act

In 2010 President Obama signed the Affordable Care Act into law. The act will require that Americans be insured (they must have coverage or else face a penalty) and some citizens will get financial assistance if necessary, whether through a subsidy or Medicaid; the act also will change the qualifications for Medicare, affect premiums, and prevent insurers from denying coverage for preexisting conditions, among many other provisions. The goal of the Affordable Care Act is to lower the number of uninsured by reducing costs and expanding coverage -- it is expected to reduce healthcare inflation and lower government spending for Medicare and Medicaid. Notably, the act also includes insurance exchanges and a mandate. Opponents of the act challenged its constitutionality, but in 2012 the US Supreme Court ruled that the mandate was constitutional.

Conclusion

Health care policy and politics is a dynamic and complex field of study. It is also a comparatively young field of study. Up until the federal government assumed a prominent role in health care finance, the practice of medicine and health care delivery was mostly a private concern between doctors and patients, or was at the most a local or regional concern centering on hospitals and local clinics. Prior to Medicare, the federal government was mainly concerned with public health issues of populations and contagious disease. Today, no one is unaffected by changes in health care systems. The drive to control costs and provide equal and equitable access to health care is creating organizational changes from the local doctor's office to regional health systems, to state and federal governments. The impacts of these changes will be felt by individuals, health care providers of all types, health care institutions, corporations, and governments.

Terms & Concepts

Health Care Delivery: The activity of providing or supplying health care to individuals or groups of individuals.

Health Policy: The method decided upon and used to deliver health care to individuals or groups of individuals.

Information Asymmetry: When buyers and sellers in a market do not have equal access to the same information.

Policy: Recognition of a problem and the subsequent actions of the government to solve the problem.

Policy-Process: The sequence of activities that occur to move a proposed solution to an identified problem from the government agenda to formulation to implementation to modification.

Rule-Making: The actions of a government agency to make explicit rules and directions in order to implement a new piece of legislation.

Bibliography

Arrow, K.J. (2001). Uncertainty and the welfare economics of medical care. Journal of Health Politics, Policy and Law, 26(5), 851-884. Retrieved August 24, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=5689210&site=ehost-live

Blendon, R.J., Hunt, K, Benson, J.M., Fleischfresser, C., & Buhr,T. (2006). Understanding the American public's health priorities: A 2006 perspective. Health Affairs, 25, 508-515. Retrieved October 22, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=25072625&site=ehost-live

Clarke, S., & French, S. (2013). Healthcare reform in 2013: Enduring and universal challenges. Nursing Management, 44(3), 45-47. Retrieved December 3, 2013 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=86152623

Enthoven, A.C. (2004). Market forces and efficient health care systems. Health Affairs, 23(2), 25-27. Retrieved August 31, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=13679706&site=ehost-live

Francis, T. (2013). The Affordable Care Act: An annotated timeline. Physician Executive, 39(6), 64-67. Retrieved December 3, 2013 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=91985132

Green-Pederson, C. & Wilkerson, J. (2006). How agenda-setting attributes shape politics: Basic dilemmas, problem attention and health politics developments in Denmark and the US. Journal of European Public Policy, 13(7), 1039-1052. Retrieved October 18, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=22483139&site=ehost-live

Haas-Wilson, D. (2001). Arrow and the information market failure in health care: The changing content. Journal of Health Politics, Policy & Law, 26(5), 1031-1045. Retrieved August 22, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=5689222&site=ehost-live

Jacobs, L. & Illuzi, M. (2004). In the shadow of 9/11: Health care reform in the 2004 presidential election. The Journal of Law, Medicine, and Ethics, 32(3), 454-460. Retreived October 15, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=14841798&site=ehost-live

Kingdon, J.W. (1984). Agenda, alternatives, and public policies. Boston: Little, Brown and Company.

Longest, B.B. Jr. (1994). Health policymaking in the United States. Ann Arbor, MI: AUPHA Press/Health Administration Press.

Porter, M. E., & Lee, T. H. (2013). The strategy that will fix health care. Harvard Business Review, 91(10), 50-70. Retrieved December 3, 2013 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=90325428

Robinson, J.C. (2001). The end of asymmetric information. Journal of Health Politics, Policy & Law, 26(5), 1045-1054 Retrieved September 27, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=5689223&site=ehost-live

Starr, Paul. (1982). The social transformation of American medicine. New York, NY: Basic Books, Inc.

Suggested Reading

Chernew, M.E., Rosen, A.B. & Fendrick, A.M. (2006-2007). Value-based insurance design. Health Affairs, 26, 195-203. Retrieved October 23, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=26658277&site=ehost-live

Cook, N.L., Hicks, L.S., O'Malley, A.J., Keegan, T., Guadagnoli, E. & Landon, B.E. (2007). Access to specialty care and medical services in community health centers. Health Affairs, 26(5), 1459-1468. Retrieved October 23, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=26658247&site=ehost-live

Ghosh, C. (2013). Affordable Care Act: Strategies to tame the future. Physician Executive, 39(6), 68-70. Retrieved December 3, 2013 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=91985133

Longest, B.B. Jr. (1994). Health policymaking in the United States. Ann Arbor, MI: AUPHA Press/Health Administration Press.

Tacchino, A. (2012). Health care reform's effect on the working middle class. Journal Of Financial Service Professionals, 66(3), 43-50. Retrieved December 3, 2013 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=75058637

Robinson, J.C. (2001). The end of asymmetric information. Weissert C.S. & Weissert, W.G. 1996. Governing health: The politics of health policy. Baltimore: Johns Hopkins University Press.