On economic values in policy analysis

Analyses of public policy are rooted in the economic theory of the private sector. How relevant is this approach to the public sector? Specifically, where the organization is generally viewed as a controlled variable it often exhibits the characteristics of an independent variable working to constrain the feasible solution space. An illustration of this phenomenon is discussed, using a state rehabilitation agency as the case in point. Conclusions of an analysis based mainly on maximizing the economic value of return on investment conflicted with the agency professional values of individualized client service. This external/internal value conflict led to the apparent inability of the agency to implement the study conclusions in the near term. The substance of this conflict is seen as the main problem facing many public administrators. Recognition of economic values as but one element of public agency analysis is suggested as an approach superior to sole concentration on maximization of the return on public investment. By taking a broader view, the analyst may be able to encourage more rapid implementation of his recommendations.     

Tension, compression, and shear: directions, stresses, and outcomes of health care cost control

"Control" of health care costs is often portrayed as a struggle between external, "natural" forces pushing costs up and individuals, groups, and societies trying to resist the inevitable. This picture is false. Control includes strenuous efforts by some to raise costs, and by others to resist those increases, and/or to transfer costs to someone else. But all such forces originate in the purposes and interests of individuals and groups. Health care cost control is a struggle among conflicting interests over the priorities of a society, and claims of "inevitability" are simply part of the political rhetoric of that struggle. International experience supports certain conclusions. First, there is no basis for the claim that limits on expenditure growth must threaten the health of (some members of) a society. Second, there is a substantial variety of experience with cost control. Failure in the United States is often presented as evidence of the impossibility of control, but most other countries have succeeded. Finally, control requires the direct confrontation of interests, with substantial build-up of stress. Advocates of expansion are more successful if they can transform compressive forces into efforts to shift the burden onto someone else. Pressures from providers in every country for "privatization" and/or payment by users reflect this recognition of economic interest.