Health Policy

Chapter 13

Learning Objectives

Understand the definition, scope, and role of health policy in the United States.

Recognize the principal features of U.S. health policy

Comprehend the process of legislative health policy

Be familiar with some of the critical health policy issues in the United States

Health Policy

Public Policies

are authoritative decisions made in the legislative, executive, or judicial branches of government

intended to direct or influence the actions, behaviors, or decisions of others

Health Policy

the aggregate principles, stated or unstated

that characterize the distribution of resources, services, and political influences

• that impact on the health of the population

Different Forms of Health Policy

Health policies a by-product of public social policies enacted by pertains to health care at all levels,

including policies affecting the production, provision, and financing of health care services.

Health policies can be made through the private sector or the public policymaking process

Different Forms of Health Policy

Public Health policies include:

1. Reforms in medical education

2. 1965 enactment of Medicare and Medicaid

3. Federal funding for family planning clinics

4. A merger of two hospitals violates antitrust laws

5. Procedures for licensing physicians

6. Monitoring sanitation standards in restaurants

7. Banning smoking in public places

Regulatory Tools

Health policies may be used as regulatory tools

they call on government to prescribe and control the behavior of a particular target group by

monitoring the group and imposing sanctions if it fails to comply

Allocative ToolsHealth policies may be used as allocative tools

they involve the direct provision of income, services, or goods to certain groups of individuals or institutions

Distributive policies include:funding of medical research through the National Institute of Healththe development of medical personnelthe construction of facilitiesinitiation of new institutions

Redistributive policiescreates visible beneficiaries and payerstakes money or power from one group and gives it to another

The Principal Features of U.S. Health Policy

Features that characterize U.S. health policy:FragmentedIncrementalPiecemeal reformPluralistic (interest group)The decentralized role of the statesThe impact of presidential leadership

Policy intervention begins with identifying what markets fail or do not function well

The Principal Features of U.S. Health Policy

Government spending on health care fills the private sector gaps

Intervention includes: Environmental protection Preventative services Communicable disease control Care of special groups Institutional care of mentally and chronically ill Medical care to the indigent Support for research and training

Government as Subsidiary to the Private SectorMost cited problems associated with government involvement in

health care:Bureaucratic inflexibilityExcessive regulationRed tapeIrrational paperworkArbitrary and sometimes conflicting public directivesInconsistent enforcement of rules and regulationsEscalating costsFraud and abuseInadequate reimbursement schedulesArbitrary denial of claimsInsensitivity to local needsConsumer and provider dissatisfaction Government programs tend to promote welfare dependence rather than a desire to seek employment

Fragmented, Incremental, and Piecemeal Reform

The subsidiary role of government with both private and public approaches to healthcare result in a complex and fragmented financing structure, therefore:

The employed are predominantly covered by voluntary insurance that they and their employers make

The aged are insured through a combination of coverage financed out of Medicare Part A and Medicare Part B

The poor are covered through Medicaid via federal, state, and local revenues

Special population groups have coverage that the federal government provides directly

Pluralistic and Interest Group Politics

U.S. health policy outcomes result from compromises to satisfy demands

The policy community has included:Legislative committees Executive branchPrivate interest groups

The first two communities supply policies demanded by the third.

Pluralistic and Interest Group Politics

Well-organized interest groups are the most effective “demanders” of policies

Examples include: American Medical Association American Association of Retired Persons American Hospital Association American Health Care Association Pharmaceutical Research and Manufacturers of America

Businesses are a newcomer to interest groups• Look at Exhibit 13-1, page 542

To overcome pluralistic interests and maximize policy outcomes: Diverse interest groups form alliances with legislators

Decentralized Role of the StatesThe role of the individual states has taken several forms:

1.) financial support for the care and treatment of the poor and chronically disabled

2.) quality assurance and oversight of health care practitioners and facilities

3.) regulation of health care costs and insurance carriers

4.) health personnel training

5.) authorization of local government health services

• 24 state governments created an:• “Insurance risk pool”

• a program that helps people acquire private insurance

• Look at Exhibit 12-2, page 543

Impact of Presidential Leadership

Lyndon B. Johnson passed Medicare and Medicaid

Harry Truman passed the Hill-Burton Hospital Construction Act

Richard Nixon passed:1.) federal support of health maintenance organizations in 1973.2.) the enactment of the National Health Planning and Resources

Development Act of 1974 (CON legislation)

The Development of Legislative Health Policy

The making of U.S. health policy is a complex process that involves private and public sectors, and reflects:

1.) the relationship of the government to the private sector

2.) the distribution of authority and responsibility within a federal system of government

3.) the relationship between policy formulation and implementation

4.) a pluralistic ideology as the basis of politics

5.) incrementalism as the strategy for reform

The Policy Cycle

The formation and implementation of health policy occurs in a policy cycle comprising five components:

1.) issue raising

2.) policy design

3.) public support building

4.) legislative decision making and policy support building

5) legislative decision making and policy implementation

Legislative Committees and SubcommitteesCongress has three important powers that make it

extremely influential in the health policy process:

1.) the power to “make all laws which shall be necessary and proper for carrying into execution”

2.) the power to tax

3.) the power to spend

House Committees

Ways and Means Committee has sole jurisdiction over

Medicare Part A, Social Security, unemployment compensation, public welfare, and health care reform.

Energy and Commerce has jurisdiction over

Medicaid, Medicare Part B, matters of public health, mental health, health personnel, HMO’s, foods and drugs, air pollution, consumer products safety, health planning, biomedical research, and heath protection.

Committee on Appropriationsresponsible for funding substantive legislature provisions.

Senate Committees

Committee on Labor and Human Resourceshas jurisdiction over most health bills

Committee on Finance has jurisdiction over

taxes and revenues, matters related to Social Security, Medicare, Medicaid, and Maternal and Child Health

Access to Care

Two arguments for all American citizens have a right to be guaranteed access to health care

1.) All citizens have a right to the same level of care

2.) All citizens have a right to the some minimum level of care

Public FinancingPolicies have been enacted to:

provide access to health care for specific groups otherwise unable to pay for and receive care.

These groups : elderly (Medicare), poor children (Medicaid and SCHIP), poor adults (Medicaid and local or state general assistance), the disabled, veterans (Department of Veterans Affairs), Native Americans (Indian Health Service), and patients with end-stage renal disease (Social Security)

• benefits for kidney dialysis and transplants

Access and the Elderly

Two main concerns dominate the debate about Medicare policy:

1.) spending should be restrained to keep the program viable

2.) The program needs to be truly comprehensive by adding services not currently covered.

Access and Minorities

In some instances, the combination of low income and minority status creates difficulties;

in others, the interaction of special cultural habits and minority status causes problems.

With the exception of Native Americans no other minority population has programs specifically designed to serve its needs.

Access in Rural Areas

In the Omnibus Budget Reconciliation Act of 1986, Congress provided rural hospitals three important provisions:

1.) Separated urban and rural pools of funds • used to pay for outliers,

– cases in which excessive expenditures above the prospective payment system allotment are incurred

2.) Provided early payments to those with less than 100 beds

3.) Changed criteria for rural referral centers to allow more hospitals to qualify for funds.

Access in Rural AreasThe OBRA of 1987 included provisions that :

1. Provided greater increase in reimbursement to rural hospitals than to urban hospitals

2. Allowed rural hospitals located adjacent to metropolitan statistical areas to be defined as urban hospitals

3. Authorized a rural health care transition program to provide assistance to hospitals and others wishing to adopt new service delivery strategies

4. Required a report in the appropriateness of separate urban and rural rates

5. Authorized small rural hospitals to serve as residency training cites for physicians

Cost of Care

The National Health Planning and Resources Development Act of 1974:

became law in 1975.

the transition from improvement of access to cost containment

the principal theme in federal health policy.

Quality of CareOBRA of 1989,

Congress created a new agency, now known as the Agency for Healthcare Research and Quality (AHRQ) Mandated to conduct and support research concerning:

outcomes, effectiveness, and appropriateness of health care services and procedures.

The AHRQ established funding for patient outcomes research teams (PORTs)

focuses on particular medical conditions It’s the medical treatment effectiveness program

• Consists of four elements: – medical treatment effectiveness research, – development of databases for such research, – development of clinical guidelines and – the dissemination of research findings and clinical guidelines

Quality of Care

In March 2001, the Institute of Medicine (IOM) issued:

Crossing the Quality Chasm

identified six areas of quality improvement:

1. Safety

2. Effectiveness

3. Patient-Centeredness

4. Timelines

5. Efficiency

6. Equity

Research and Policy Development

The research community influences policymaking through:

Documentation Gathering, cataloging, correlating

Analysis Feasibility, efficacy, practicality of an intervention

Prescription Research that shows a course of action

Health Insurance Reform

One common criticism of the U.S. health care system:

the U.S. is the only industrialized nation that fails to assure universal access to basic health care.

States as Leaders

During the 1980’s, President Reagan ushered a:return of greater control and discretion

over the financing, delivery, and regulation of health care • to the states.

Block grants consolidates funds from different categorical programs into one lump sum

distributed to the states on a formula basis, became a key vehicle to achieve all three goals.

States as Leaders

One of the oldest and most fundamental state role:

Protecting the public’s health

Includes:

• Protecting the environment, workplace, housing, food and water• Preventing injuries and promoting health behaviors• Responding to disasters and assisting in recovery• Ensuring quality, accessibility and accountability of medical care• Providing basic health services when otherwise unavailable• Monitoring the population’s health status • Developing policies and plans that support health improvement

States as Leaders

The Institute of Medicine (1988),

condensed these activities into three basic functions:

1. Assessment of health status and systems

2. Policy development

3. Assurance of personal, educational, and environmental health services

Medical Malpractice

According to DHHS,

the malpractice litigation “crisis”

threatens access to health care

Malpractice insurance premiums increasing by double digits

A possible $250,000 cap for damages?

Mental Health Benefits

30 million Americans suffer fromSchizophrenia, depression…

Employers offer lower treatment benefits

Possible federal law requiring equal treatment

Steps to a Healthy U.S.

The DHHS launched

The Steps to a Healthy U.S. initiative:

The initiative unites all relevant programs of the Health and Human Services agencies such as:

• Centers for Disease Control• Centers of Medicare and Medicaid Services• Food and Drug Administration• National Institute of Health