Policy Analysis

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Policy Analysis
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What is Policy Analysis?

• Multi-element process of assess and analyzing
  components of a plan of action
• Not an exact science, more of an art
• Reviews the component parts of an issue or
  problems
• Considers new options.

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What is Policy Analysis?

• Multi-element process of assess and analyzing
  components of a plan of action
• Not an exact science, more of an art
• Reviews the component parts of an issue or
  problems
• Considers new options.

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Policy Analysis

• New discipline
• Dates to early 1960s
• Policy analysis should
• Improve decision making
• Consideration of broad sets of alternatives
• Use of more systematic tools

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Policy Analysis

• Neutral analysts
• Consider all options
• Advocates for best options serving national
  interest

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1970s Amendments to the Legislative
Reorganization Act

• Congressional declaration of analytic
  independence from the administrative branch
• Created CBO, CRS, and OTA

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Think Tanks

• Originally, U.S.
• Now world-wide
• Have blended policy outside of political
  environment
• Established by interest groups
• Interest groups can adapt models developed by
  official sources

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Evolution of Policy Analysis

• Clients not only decision makers
• Individuals stewarding institutional governance
• Planning
• Budgeting
• Regulation

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Office of Assistant Secretary for Planning and
Evaluation (ASPE)

• ASPE
• Principal policy advisor to the secretary
• Policy coordination, legislation development,
  strategic planning, policy research and
  evaluation and economic analysis

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Office of Assistant Secretary for Planning and
Evaluation (ASPE)

• Use of office has varied with Administrations
• Staff vary, initially Ph.D. economistsmany from
  DoD
• Over time staff has varied
• Staff now serves entire department
• Also, other units have policy analysts, so ASPE
  is only one voice to Secretary

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Office of Assistant Secretary for Planning and
Evaluation (ASPE)

• Early methodology and analytic techniques relied
  on economic models
• Evolution to reliance upon policy expertise of
  office vs. policy analysis

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Needed skills for ASPE

• Program knowledge
• Statistics
• Microeconomics
• Cost-benefit analysis

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Congressional Research ServiceCRS

• Part of the Library of Congress
• Most recent incarnation dates to 1970 Legislative
  Reorganization Act
• Act allowed CRS to triple staff
• Now _at_ 700 individuals
• New staff teamed with experienced individuals

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CRS

• What is the legislative hook?
• High volume, quick turnaround
• a reference factory
• Emphasis on legislative consultation,
  interdisciplinary work, anticipatory work

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CRS

• Provision of background papers to the committee
• Assistance in design of congressional hearings
• Suggestions of witnesses for hearings
• Possible questions for Members to ask witnesses
• Attend hearings to supplement questions

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CRS

• Consultation at mark-ups
• Hearing testimony
• Consultation on the floor as requested
• Prepare conference agendas
• Consultation at conferences

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CRS

• Most important role may be participation in
  creation of new legislation
• Work not available to the public
• Unless released by a Member

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CRS

• Varied products
• Electronic briefing books
• Background reports on topics
• CRS staff also interacts with Members and staff

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CRS

• In-house capacity
• Modeling
• Create microsimulation models
• Fiscal analyses
• Culture emphasizes qualitative approaches and
  oral tradition

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Heritage Foundation

• Founded in 1973
• Formulate and promote conservative policies based
  on principles of free enterprise, limited
  government, individual freedom, traditional
  Americans values and strong national defense
• Seeks to differentiate itself from other
  conservative think tanks by focusing on
  influencing decisions very early in the process

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Heritage Foundation

• Established in 1973 with 9 staff
• 1997 staff of 180
• Added research staff in 1980
• Funding from individual sponsors

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Heritage Foundation

• Has pushed boundary of tax exempt organizations
• Replaced the Kennedy School orienting new
  conservative congressman
• Focus on Congress --- members and staff

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Health Policy

• Peters (1999)
• Pubic policy
• sum of government activities, whether acting
  directly or through agents as it has influence on
  the life of citizens
• Birkland (2001)
• a statement by government of what it intends to
  do or not do, such as laws regulation, ruling,
  decision, or order as a combination of these

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So, What is Health Policy?
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Health Policy

• Cochran and Malone (1995)
• policitical decisions for implementing programs
  to achieve societal goals
• Longest 2002
• authoritative decisions made in the legislative,
  executive, or judicial branches of government
  that are intended to direct or influence the
  actions, behaviors, or decisions of others.

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Policy and Health

• When public policies or authoritative decisions
  refer to health it is health policy
• Includes federal, state, and local government
• Health policy affects classes of citizens
• physicians, providers, consumers, the poor, the
  elderly

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Health Policy

• Authoritative
• refers to decisions made in any part of
  government
• all three branches

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Health Policy

• In the US Consists of many decisions, rather
  than one large decision
• Other countries have integrated, coordinated
  health systems (Great Britain, Canada)

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Health Policy

• Laws
• Rules
• Regulations
• Judicial Decisions

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Health Policy by levels

• Law
• PL 89-97 1965 law establishing Medicare
• Rule
• Executive order establishing federally funded
  health centers

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Health Policy by Levels

• Judicial Decision
• Court ruling that an integrated delivery systems
  acquisition of another hospital violates federal
  anti-trust
• Regulation
• County health departments procedure for
  inspecting restaurants
• City governments ordinance banning smoking in
  public places

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Laws

• Laws enacted at any level of government
• create policies
• Laws passed at federal or state levels
• federal laws 1983 Amendments to the Social
  Security Act (P.L. 98-21)
• state laws govern professional practice

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Health Policy and Markets

• Capitalist countries such as the USA assume
• markets are critical to production
• consumption of health services

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Health Policy Interventions

• intervention needed when markets fail
• party models have differing tolerance for market
  imperfection

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Conditions for the Market

• True markets require
• buyers and sellers have adequate information to
  make informed decisions
• large numbers of buyers and sellers
• easy entry to the market
• competitive products that can replace each other
• adequate quantity of products

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Health Policy Categories

• Allocative Policies
• provide net benefits to some at the expense of
  others
• subsidies for medical education
• rural hospital support
• Medicare and Medicaid

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Health Policy Categories

• Regulatory Policies
• policies designed to influence actions,
  behaviors, and decisions of others
• market-entry restrictions
• rate or price setting controls
• quality controls
• market preserving controls
• social controls

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Health Policy Categories

• Regulatory Policies
• market entry, rate controls, quality controls,
  market preserving controls are all economic
  regulation
• social controls seek socially desired outcomes
  smoke free workplace, nondiscriminatory hiring
  practices

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RegulatoryMarket-Entry Restrictions

• State licensing laws
• Planning programs
• CON

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Regulatory Price Setting

• Out of vogue
• Electric and gas utility control
• PPS

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Regulatory Quality

• Food safety and quality standards
• Medical Devices Amendments (P.L. 94-295) to the
  Food, Drug and Cosmetic Act (P.L. 75-717)
• placed medical devices under FDA

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Regulatory Market Preserving

• Health markets are not true markets this class
  of regulatory action addresses market
  imperfections
• Sherman Anti-trust laws

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State Health Policy

• Dynamic balance between state and federal policy
• Recent ascendance of state policy
• failed national reform in 1994-1995
• Medicaid growth

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State Health Policy Roles

• Lipson (1997)
• financing or paying for several categories of
  people
• public health
• regulating health professions licensing and
  practice.

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State Health Policy Roles

• Financing
• Medicaid
• about 15 of most state budgets
• State employee health benefits (large group when
  you consider teachers, employees, etc)
• uninsured

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State Health Policy Roles

• Public Health
• oldest most fundamental state health
  responsibility
• States granted constitutional authority to
  establish laws to protect publics health and
  welfare
• engages states in environmental protection
• Federal government delegates to states
  responsibility for monitoring the environment
• monitoring workplace and food safety

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State Health Policy Roles

• Professional Regulation
• license various professionals
• write practice acts
• license and monitor compliance

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State Health Policy Roles

• States regulate the content, pricing and
  marketing of insurance plans
• Under the McCarran-Ferguson Act (P.L. 79-15)

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ERISA 1974

• Enacted in 1974 to remedy fraud and mismanagement
  in private-sector pension plans.
• ERISA preempts states regulation of pensions and
  self-insured plans
• ERISA preemption broad language that supercedes
  all state laws relating to employee benefit plans
  sponsored by private sector employers or unions

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ERISA

• ERISA preempts states regulation of insurance
• ERISA creates
• self-insured plans which states cannot regulate
• Insured health plans that states can affect
  indirectly through insurance regulation
• Both are ERISA plans that states cannot directly
  regulate

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ERISA

• For 1st 20 years after passage, courts expansive
  view of ERISA
• Court noted the reemption clause was expansive
  in its breadth
• Overturned state laws that had any impact or
  referred to private sector employee plans

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ERISA

• 1995 Travelers Insurance decision
• Narrowed ERISA preemption provision
• Limiting types of state law that impacts the
  relate to private sector employer sponsored
  plans
• Court held NYs hospital rate-setting law imposed
  surcharges on bills paid by insurers other than
  BCBS even though it increased costs for ERISA
  plans buying coverage from these insurers.

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1995 Travelers Insurance decision

• ERISA preemption
• Designed to minimize employer-sponsored plans
  administrative and financial burdens of complying
  with conflicting local and state law
• Court said the NY surcharges as having indirect,
  at best, economic effect on employer sponsored
  plans.

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1995 Travelers Insurance decision

• This case and several that followed
• Show ERISA preemption does not condemn all types
  of state health legislation
• As long as the state legislation is not directed
  at ERISA plans
• Even if the law has an effect on an ERISA plan
• Still prohibits states from mandating employers
  offer coverage

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ERISA Allowable State Legislation

• 1998 Massachusetts enacted pay or play
• gt5 employees must pay a payroll finance tax
• Credit for costs the employer actually funded
• No effect on plans, but on the employer
• Challenged by state restaurant association
• Law was repealed

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ERISA Pay or Play

• Do not require employers to offer health coverage
  to their workers
• Establish universal coverage funded in part by
  employers taxes
• Do not refer to ERISA plans
• Remain neutral on payroll tax or tax credit
• Impose no conditions on employer coverage
• Minimize administrative impacts on ERISA plans.

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• COBRA 1985 allows employees to purchase health
  coverage for 18 months post employment
• 1996 HIPPA (P.L. 104-191)
• allows employees guaranteed access to health
  coverage
• company must provide benefits
• premiums can be renewed assuming payment

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State Laboratories

• State viewed as health coverage laboratories
• ability to implement local solutions to coverage
• little evidence the laboratories actually design
  experiments with national implications
• 50 individual markets
• all politics are too local

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State roles increasing

• States may be too idiosyncratic
• States still face large problems and increasing
  problems

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Health Policy Policy vs Policy Objectives

• Policies developed to achieve someones policy
  directives
• The objectives shape health policy

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Current US Health Policy Objectives

• Adding years and quality to life
• Eliminating disparities in health and access to
  health services
• Improving quality of health services
• Reducing cost of health services

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Current US Health Policy Objectives

• Eliminating environmental threats to health
• Improving housing and living conditions
• Improving economic conditions
• Improving nutrition
• Moderating consumption of food, drink and
  chemicals
• Modifying unsafe sexual practices

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Domain of Health Policy

• Remarkably broad
• physical Environment
• biology
• social
• tax issues

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Domain of Health Policy

• Personal Responsibility and Work Opportunity
  Reconciliation Act (P.L. 104-193)
• AKA Welfare Reform Act
• modified welfare eligibility
• also modified Medicaid eligibility for key
  welfare benefit
• AFDC

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Personal Responsibility and Work Opportunity
Reconciliation Act (P.L. 104-193)

• Replaced AFCD with Temporary Assistance to Needy
  Families (TANF)
• TANF provided in state block grants
• states provided broad flexibility to design
  support and work programs
• states must impose time limits on support

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Personal Responsibility and Work Opportunity
Reconciliation Act (P.L. 104-193)

• Allows AFDIC eligible families to enroll in
  Medicaid, but new identification methods are
  needed

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Political Negotiation

• Involves two or more parties bargaining
• win/win
• competitive -- win/lose

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Political Negotiation

• Cooperative Negotiating Strategies Work best
  when
• goal of both negotiators is to attain fair,
  specific outcome
• sufficient resources are available
• both negotiators believe they can achieve fair
  outcome

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Political Negotiation

• Competitive Negotiation works best when
• each negotiator want to achieve the most
  possible.
• resources are not sufficient for both negotiators
  to achieve their goals.
• both negotiators think it is impossible for both
  to succeed.
• the intangible goal of both negotiators is to
  beat the other.

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Economic Markets vs. Political Markets

• Health policies all policy is made within
  political markets
• operate much like traditional markets
• Differ from traditional markets
• no money exchanged
• less direct relationship than traditional markets

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Sellers Economic Exchanges in Market
Transactions Buyers
(Demanders)
(Suppliers)
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Economic Markets vs. Political Markets

• Demand for health policy markets
• knowledgeable individuals
• organizations
• organized interest groups
• AMA
• AARP
• AAHP
• PhRMA

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Benefits of Interest Groups Ambiguous

• James Madison The Federalist Papers in 1788
• described groups he labeled factions
• Madison felt factions were inherently bad
• mischiefs of the factions must be contained by
  setting it against other groups ambitions

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Pluralist Perspective

• Everyones interests represented in one or more
  interest groups
• View interests groups as positive
• Interest groups provide linkages among people and
  government
• Interest groups compete for outcomes creates
  counterbalanced vectors
• No group will become too dominant

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Pluralist Perspective

• Groups must rely on political power bases
• Groups representing concentrated economic
  interests must have money
• Groups representing consumer groups must have
  members

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Interest Groups

• More than 22,000 in US
• concern with pluralist perspective
• all 22,000 groups given legitimacy

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Interest Groups Have Power

• Lowi labeled interest group liberalism
• to address excessive deference to interest groups
• Edwards, Wattenberg Lineberry, 2001
• Hyperplualism

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Interest Groups have Power

• Critics
• Interest groups too influential
• responding to interest groups creates conflicting
  policy
• Government tries to satisfy conflicting groups
  with policy satisfying all groups

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Elitist

• Models argues those who control key institutions
  have power
• act as gatekeepers for public policy process
• take powerful roles in nations economic and
  social systems thereby overly controlling policy

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Elitist Model

• Real power lies within only a few groups
• Members of the power elite share a consensus or
  near consensus on basic values
• private property rights
• preeminence of markets
• best way to organize
• limited government
• role of individual liberty

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Elitist

• Protect power base

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What Must Health Care Reform Accomplish?

• Restrain cost
• Create access and equity
• Improve quality
• Promote health