By: MA
In this week’s lead précis, scholar Porter discusses political inaction on environmental protection policies in the U.S. as an example of path dependence. Porter notes that policy feedback theory can explain how and why we reached the point of inaction on climate policy. However, the theory does not adequately describe how to intervene to change the course of path dependent policies, once it is clear that a different path would yield a better outcome.
This essay will discuss path dependence with respect to health care financing in the U.S. Though the federal government is heavily involved in financing Medicare, Medicaid and private insurance, efforts to streamline the system have been unsuccessful. The lead précis concludes by asking about the role of silos across disciplines. I will argue that incorporating theories from other disciplines could contribute to a more efficient and more politically palatable health care financing system.
Pierson’s articulation of policy feedback theory proposes two ways in which enacted legislation can shape political behavior. (Mettler and SoRelle) First, policies can have interpretive effects and convey meaning, affecting political ideas and public attitudes. Second, policies can have resource effects and incentivize political activity such as lobbying in support of or against a public program. Both effects are evident in health care financing.
Medicare and Medicaid serve the same purpose; they provide coverage that allows beneficiaries to access health care. However, eligibility requirements convey meaning about enrollees in each program. Medicare is a universally available to Americans age 65 and above. Funded through federal payroll taxes, Medicare ensures that beneficiaries have access to roughly the same health care services regardless of where they live. The program is valued as an important social protection for seniors, and has a dedicated constituency. Medicaid is means tested and is financed through a combination of federal and state funds. The federal government requires all states to cover certain health care services, but states have flexibility around program design. As a result, Medicaid coverage varies by state, creating different perceptions about its quality and a fractured constituency. Those who see it a taxpayer-funded handout stigmatize Medicaid.
The federal government also plays a role in employer-sponsored private health insurance, but its role is submerged. (Mettler, 2011) The government subsidizes the cost of private health insurance for employers and employees through the tax code. In addition, referring to employer-sponsored plans as private insurance distances enrollees from public financing.
Multiple financing streams for health care is inefficient. This essay will not discuss the inefficiencies in depth; it will use as an example, administrative burdens imposed on providers which contribute to higher health care costs. In a multi-payer system, providers must have a relationship with multiple insurers. Each insurer may have different systems for submitting claims, and different policies related to coverage for specific services. Providers may receive different reimbursement rates for performing the same procedure, depending on the patient has.
Numerous efforts to reform the current system have been defeated or ignored because they are viewed as politically unpalatable. Most recently, Senator Bernie Sanders proposed a streamlined, universal health care system called “Medicare for All.” Sanders’ plan would result in health care savings through system efficiencies and by giving the government better negotiating power.[1] It would streamline healthcare financing by converting the mix of health insurance premiums, co-pays and tax incentives to a business and personal tax, and raise additional revenue by closing other tax loopholes.
It is hard to argue that the current system persists due to economic efficiency. I believe path dependency is encouraged by lobbying based on resource effects. As with any policy change, moving to a universal health care system would create winners and losers. Businesses that profit from the current system stand to lose and consumers stand to gain. Despite potential wins, many consumers oppose proposals to create a universal system citing lack of confidence in government or concerns about the quality of government-run programs. These arguments do not account for the government’s existing role in health care financing or for generally positive impressions of public health care programs by the majority of beneficiaries.[2]
Consumers who argue against change based on interpretive effects, can also be understood as protecting personal identity. A universal system would eliminate the distinction between age-related eligibility and means-tested eligibility. It would also de-link health insurance from work, an activity that conveys normative value.[3] Addressing health care financing as an economic issue does not address non-economic factors that contribute to public views of health care. Incorporating theories from other disciplines, such as sociology which offers explanations for group formation and identity, could contribute to more palatable policy solutions.
Additional Works Cited:
[1] Michael Hiltzik, “The Dream of Medicare for All: Here’s Why the Sanders Health Plan is More Hope Than Change” Los Angeles Times (January 19, 2016) http://www.latimes.com/business/hiltzik/la-fi-mh-bernie-sanders-healthcare-plan-20160119-column.html.
[2] Arnold Epstein, et al, “Low-Income Residents In Three States View Medicaid As Equal To Or Better Than Private Coverage, Support Expansion” Health Affairs (October 2014) http://content.healthaffairs.org/content/early/2014/10/02/hlthaff.2014.0747.
[3] Theda Skocpol, “Targeting Within Universalism: Politically Viable Policies to Combat Poverty in the United States” in The Urban Underclass edited by Christopher Jenks and Paul E. Peterson.
In this week’s lead précis, scholar Porter discusses political inaction on environmental protection policies in the U.S. as an example of path dependence. Porter notes that policy feedback theory can explain how and why we reached the point of inaction on climate policy. However, the theory does not adequately describe how to intervene to change the course of path dependent policies, once it is clear that a different path would yield a better outcome.
This essay will discuss path dependence with respect to health care financing in the U.S. Though the federal government is heavily involved in financing Medicare, Medicaid and private insurance, efforts to streamline the system have been unsuccessful. The lead précis concludes by asking about the role of silos across disciplines. I will argue that incorporating theories from other disciplines could contribute to a more efficient and more politically palatable health care financing system.
Pierson’s articulation of policy feedback theory proposes two ways in which enacted legislation can shape political behavior. (Mettler and SoRelle) First, policies can have interpretive effects and convey meaning, affecting political ideas and public attitudes. Second, policies can have resource effects and incentivize political activity such as lobbying in support of or against a public program. Both effects are evident in health care financing.
Medicare and Medicaid serve the same purpose; they provide coverage that allows beneficiaries to access health care. However, eligibility requirements convey meaning about enrollees in each program. Medicare is a universally available to Americans age 65 and above. Funded through federal payroll taxes, Medicare ensures that beneficiaries have access to roughly the same health care services regardless of where they live. The program is valued as an important social protection for seniors, and has a dedicated constituency. Medicaid is means tested and is financed through a combination of federal and state funds. The federal government requires all states to cover certain health care services, but states have flexibility around program design. As a result, Medicaid coverage varies by state, creating different perceptions about its quality and a fractured constituency. Those who see it a taxpayer-funded handout stigmatize Medicaid.
The federal government also plays a role in employer-sponsored private health insurance, but its role is submerged. (Mettler, 2011) The government subsidizes the cost of private health insurance for employers and employees through the tax code. In addition, referring to employer-sponsored plans as private insurance distances enrollees from public financing.
Multiple financing streams for health care is inefficient. This essay will not discuss the inefficiencies in depth; it will use as an example, administrative burdens imposed on providers which contribute to higher health care costs. In a multi-payer system, providers must have a relationship with multiple insurers. Each insurer may have different systems for submitting claims, and different policies related to coverage for specific services. Providers may receive different reimbursement rates for performing the same procedure, depending on the patient has.
Numerous efforts to reform the current system have been defeated or ignored because they are viewed as politically unpalatable. Most recently, Senator Bernie Sanders proposed a streamlined, universal health care system called “Medicare for All.” Sanders’ plan would result in health care savings through system efficiencies and by giving the government better negotiating power.[1] It would streamline healthcare financing by converting the mix of health insurance premiums, co-pays and tax incentives to a business and personal tax, and raise additional revenue by closing other tax loopholes.
It is hard to argue that the current system persists due to economic efficiency. I believe path dependency is encouraged by lobbying based on resource effects. As with any policy change, moving to a universal health care system would create winners and losers. Businesses that profit from the current system stand to lose and consumers stand to gain. Despite potential wins, many consumers oppose proposals to create a universal system citing lack of confidence in government or concerns about the quality of government-run programs. These arguments do not account for the government’s existing role in health care financing or for generally positive impressions of public health care programs by the majority of beneficiaries.[2]
Consumers who argue against change based on interpretive effects, can also be understood as protecting personal identity. A universal system would eliminate the distinction between age-related eligibility and means-tested eligibility. It would also de-link health insurance from work, an activity that conveys normative value.[3] Addressing health care financing as an economic issue does not address non-economic factors that contribute to public views of health care. Incorporating theories from other disciplines, such as sociology which offers explanations for group formation and identity, could contribute to more palatable policy solutions.
Additional Works Cited:
[1] Michael Hiltzik, “The Dream of Medicare for All: Here’s Why the Sanders Health Plan is More Hope Than Change” Los Angeles Times (January 19, 2016) http://www.latimes.com/business/hiltzik/la-fi-mh-bernie-sanders-healthcare-plan-20160119-column.html.
[2] Arnold Epstein, et al, “Low-Income Residents In Three States View Medicaid As Equal To Or Better Than Private Coverage, Support Expansion” Health Affairs (October 2014) http://content.healthaffairs.org/content/early/2014/10/02/hlthaff.2014.0747.
[3] Theda Skocpol, “Targeting Within Universalism: Politically Viable Policies to Combat Poverty in the United States” in The Urban Underclass edited by Christopher Jenks and Paul E. Peterson.