The slippery slope of health care finance: business interests and hospital reimbursement in Massachusetts

In 1988 Massachusetts enacted a bill, popularly known as Health Care for All, which promised that by 1992 every Massachusetts resident would have available affordable insurance for basic medical expenses. This legislation was one of a series of laws enacted over a period of six years which progressively improved access to care for the uninsured. The policy process which led to the enactment of these laws was strongly influenced by the interests of large employers. This article describes the series of access-expanding hospital reimbursement changes in Massachusetts in the 1980s and traces the connection between the involvement of business interests in the policy process and the outcomes that occurred; that is, it follows the slide of employers down the slippery slope of health care finance. The article also describes a potential implementation strategy for the Health Care for All legislation.     

Breaking gridlock: the determinants of health policy change in Congress

Prior to the 2010 health care reforms, scholars often commented that health policy making in Congress was mired in political gridlock, that reforms were far more likely to fail than to succeed, and that the path forward was unclear. In light of recent events, new narratives are being advanced. In formulating these assessments, scholars of health politics tend to analyze individual major reform proposals to determine why they succeeded or failed and what lessons could be drawn for the future. Taking a different approach, we examine all health policies proposed in the U.S. House of Representatives between 1973 and 2002. We analyze these bills' fates and the effectiveness of their sponsors in guiding these proposals through Congress. Setting these proposed policies against a baseline of policy advancements in other areas, we demonstrate that health policy making has indeed been far more gridlocked than policy making in most other areas. We then isolate some of the causes of this gridlock, as well as some of the conditions that have helped to bring about health policy change.     

The labor impacts of policy change in health care: how federal policy transformed home health organizations and their labor practices

Health care organizations are highly labor-intensive; policies designed to stimulate organizational change are likely to have labor impacts. This paper examines the labor effects of policy change in home health care. Major federal home care policy trends since 1980 have spurred the evolution of the typical home care provider toward greater organizational and market rationality. Greater managerial sophistication has introduced changes in management/labor relations. Survey data from the 1986 DRG Impact Study are used to show how the pressure of cost-containment policies has pushed agencies to cut labor costs by increasing workloads, managerial supervision, and control of the work process. Research on the effects of recent policy change in health care has to date focused primarily on potential client effects. Labor impacts are rarely examined and are poorly understood at the time that policy is made. Findings in this article suggest that these issues deserve greater, more systematic attention, because unanticipated labor impacts may prove to be significant impediments to the realization of intended policy goals.     

Courts and health policy: judicial policy making and publicly funded health care in Canada

The 1982 Canadian Charter of Rights and Freedoms provided political actors with the opportunity to make rights-based challenges to public policy decisions. Two challenges launched by providers and consumers of health care illuminate the impact of judicial review on health care policy and the institutional capacity of courts to formulate policy in this field. The significant impact of rights-based claims on cross-jurisdictional policy differences in a federal regime is noted.     

National health policy: Efficiency-equity synchretism

A new emphasis in national health policy to encourage efficiency has been born in an environment of slower economic growth and an aging population. The increased reliance on market incentives to reduce health care costs does not signal the abandonment of equity as a social objective. To the contrary, the new emphasis on efficiency is intended to provide more and better health care through the generation of savings from the use of management systems to improve productivity. Market incentives and new management systems to increase efficiency are not the antithesis of equity but tools to provide better health care to the poor and to the elderly in an environment of fiscal constraints.     

American health policy: cracks in the foundation

Much American health policy over the past thirty-five years has focused on reducing the additional health care that is consumed when a person becomes insured, that is, reducing moral hazard. According to conventional theory, all of moral hazard represents a welfare loss to society because its cost exceeds its value. Empirical support for this theory has been provided by the RAND Health Insurance Experiment, which found that moral hazard--even moral hazard in the form of effective and appropriate hospital procedures--could be reduced substantially using cost-sharing policies with little or no measurable effect on health. This article critically analyzes these two cornerstones of American health policy. It holds that a large portion of moral hazard actually represents health care that ill consumers would not otherwise have access to without the income that is transferred to them through insurance. This portion of moral hazard is efficient and generates a welfare gain. Further, it holds that the RAND experiment's finding (that health care could be reduced substantially with little or no effect on health) may actually be caused by the large number of participants who voluntarily dropped out of the cost-sharing arms of the experiment. Indeed, almost all of the reduction in hospital use in the cost-sharing plans could be attributed to this voluntary attrition. If so, the RAND finding that cost sharing could reduce health care utilization, especially utilization in the form of effective and appropriate hospital procedures, with no appreciable effect on health is spurious. The article concludes by observing that the preoccupation with moral hazard is misplaced and has worked to obscure policies that would better reduce health care expenditures. It has also led us away from policies that would extend insurance coverage to the uninsured.     

Why public opinion changes: the implications for health and health policy

Research on stasis or change in public opinion toward health, health policy, and medical care tends to focus on short-term dynamics and to emphasize the impact of discrete messages communicated by individual speakers in particular situations. This focus on what we term "situational framing," though valuable in some respects, is poorly equipped to assess changes that may occur over the longer term. We focus, instead, on "structural framing" to understand how institutionalized public health and health care policies impact public opinion and behavior over time. Understanding the dynamics of public opinion over time is especially helpful in tracking the political effects of the Patient Protection and Affordable Care Act of 2010 as it moves from the debate over its passage to its implementation and operation.     

The logic of policy change: structure and agency in political life

Policy universes are usually characterized by stability, even when stability represents a suboptimal state. Institutions and processes channel and cajole agents along a policy path, restricting the available solution set. Herein, structure is usually to the fore. But what of agency? Do no actors choose? In fact, they do, even in policy environments of incrementalism, even amid hostility. But where agency makes for momentous change is during the punctuations of long policy equilibriums, perfect storms enabling nonincremental movement onto a new policy trajectory, departing from the old path. On both levels, the interaction effects of both structure and agency make a difference--incrementally in the first case, nonincrementally in the second. It's not just one damn thing after another, nor does just anything go.     

Behavioral economics and health policy: understanding Medicaid's failure

This Article employs a behavioral economic analysis to understand why Medicaid has failed to improve the health outcomes of its beneficiaries. It begins with a formal economic model of health care consumption and then systematically incorporates a survey of psychosocial variables to formulate explanations for persistent health disparities. This methodology suggests that consulting the literature in health psychology and intertemporal decision theory--empirical sources generally excluded from orthodox economic analysis--provides valuable material to explain certain findings in health econometrics. More significantly, the lessons from this behavioral economic approach generate useful policy considerations for Medicaid policymakers, who largely have neglected psychosocial variables in implementing a health insurance program that rests chiefly on orthodox economic assumptions. The Article's chief contributions include an expansion of the behavioral economic approach to include a host of variables in health psychology, a behavioral refinement of empirical health economics, a behavioral critique of Medicaid policy, and a menu of suggested Medicaid reforms.     

Nondecision making and inertia in Portuguese health policy

Despite there having been a positive context for initiating health care reforms in Portugal in the past fifteen years (accompanied by political consensus on the nature of the structural problems within the health care system), there has been a lack of reform initiatives. We use a process-based framework to show how institutional arrangements have influenced Portuguese health care reform. Evidence is presented to demonstrate inertia and nondecision making in three critical areas of Portuguese health policy: clarifying the public-private mix in coverage and provision, creating financial incentives and motivation for human resources, and introducing changes in the pharmaceutical market. Several factors seem to explain these processes, namely, problems in the balance of power within the political system, which have contributed to a lack of proper policy discussion; a lack of pluralism in the formation of health care policies (with low participation from citizens and high mobilization among structural interest groups); and the low priority of health care in public sector reforms. Portuguese politicians should be aware of the pitfalls of the current political system that constrain participatory arrangements and pluralism in policy making. In order to pursue health care reform, future governments will need to counterbalance the strong influence of structural interest groups.     

Immigrant workers: health, law, and public policy

Immigrant workers are a large segment of the lower echelon of the U.S. labor force, and as many as 3.6 to 6 million of these workers and their families are living in the U.S. illegally. This paper examines who the recent immigrants are: explains why their current situation in the U.S. is an important public health matter; discusses the ethical and policy issues stemming from their health needs and from illegal status; and concludes with a brief look at some implications of the Simpson-Mazzoli Immigration and Reform Act, currently before Congress. The paper suggests that the illegal status of undocumented workers intensifies their health risks; that the immigrants' responsibility for budget short-falls in public services is not as clearcut as frequently assumed; and that legislation aimed at regulating the status of immigrant workers in the U.S. is unlikely to solve many of the central problems.     

Unfinished business: how litigation relates to health care regulation

"Regulation by litigation" is a recently recognized trend in American legal governance that develops differently in each economic sector it affects. In health care, widespread litigation can be viewed as the product of three partial transformations: incomplete industrialization, incomplete consumerism, and incomplete social solidarity. One can argue that the public turns to the courts because other actors who might exercise judgment and authority to resolve problems appear unreliable. Because litigation has several features at odds with sound health policy--including its cost, its hindsight bias, and its adversarial character--it may be necessary to develop new discretionary institutions to address specific questions that regulators cannot or will not answer.     

Empire and the business of health insurance.

I examine the development of privately provided insurance since World War II, giving special attention to Empire Blue Cross, and argue that the competition between employers and unions for the loyalty of workers after the passage of the Taft-Hartley Act helped diffuse private health insurance benefits already favored by federal policies. For-profit insurers did not challenge the privileged status of Blue Cross plans because they recognized the political benefits that the plans offered and because they did not wish to offend the plans' sponsors. A relatively easy and profitable business, health insurance has been greatly disturbed by the system inflation accompanying the introduction of Medicare and Medicaid programs. Now self-insurance and various managed-care schemes are major threats. The future may bring consolidation and the strengthening of pools, just the opposite of today's system fragmentation.     

The regulation of heroin: Drug policy and social change in early twentieth-century Britain

Heroin, a derivative of opium, was first created in 1874 and was marketed in 1898 as a cough medicine by a German pharmaceutical company. In Britain, the dispensing of heroin was initially restricted to pharmacists under the general pharmacy and poisons legislation. Just 22 years later, the Dangerous Drugs Act 1920 made it a criminal offence to manufacture, sell, distribute or possess heroin for non-medical purposes. This article attempts to explain this major shift in the regulation of heroin by drawing on David Garland's influential book Punishment and Welfare. Garland traces the fundamental transformation in social regulation that occurred at the turn of the twentieth century, arguing that a new penal-welfarism emerged which was to underpin the welfarist politics that held sway until the 1970s. It is argued that by locating the shift in heroin regulation in this wider context of social change, some new insights are revealed. In conclusion, some implications of this argument for contemporary approaches to heroin are discussed.