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Perspectives

PERSPECTIVE

Technologies Of Health Policy

Abstract

 
Major factors in adoption of new national health policies include (1) a crisis or perceived opportunity; (2) a persuasive diagnosis of what is needed; (3) a prescription for new policies; and (4) new technologies that are ready to go. The past twenty-five years illustrate that the development of new policy ideas to where they can be implemented as major nationwide reforms can take a decade or more. Many national policy ideas for evidence-based medicine—such as electronic health records, rapid-learning networks, predictive modeling, Medicare/Medicaid disease management, widespread pay-for-performance, and large consumer-information databases—are in a development phase.

The public dramas about national health policy decisions often are cast in terms of clashing political ideologies. But partisan ideologies do not explain the adoption of major health policy changes over the past twenty-five years. The conservative Reagan administration, for example, proposed the Medicare price-setting reforms, one of the nation’s largest government regulatory initiatives ever. An activist Democrat, President Bill Clinton, led the market-based managed care revolution. Would anyone have picked President George W. Bush to be presiding over the advance of evidence-based health policy?

Four factors came together to bring about these national policy changes. First, previous policies were no longer satisfactory; there was an urgent feeling of a need for change. Second, there were persuasive diagnoses for these failures. Third, new policy prescriptions were proposed, analyzed, and discussed to target these diagnoses. Fourth—a final hurdle—pragmatic judgments were made about whether promising policy ideas had been developed into technologies that could be implemented on a national scale.

Crisis and diagnosis. By the early 1980s, for example, it was clear that Medicare’s unacceptable cost growth was due in large measure to inflationary payment policies. Diagnosis-related groups (DRGs) and the resource-based relative value scale (RBRVS) offered more-rational payment technologies, with government-set rates. When the New York Times editorialized in October 1992, before Bill Clinton’s election, that "the debate over health care reform is over. Managed competition has won," it reflected a broadly held view that health costs trends were unacceptable, that traditional health insurance was a root cause, and that managed care plans offered a better answer. In an open letter in Health Affairs, titled "Paying for Performance: Medicare Should Lead" (Nov/Dec 2003), fifteen health policy leaders wrote, "We the undersigned are united in our belief that a unique opportunity now exists to address the crisis of quality facing the nation’s health system." The administration and Congress soon enacted a national pay-for-performance provision for Medicare hospital payment.

Readiness is decisive. For their adoption, new national health policies must be developed into implementable measures by the time decisionmakers want new approaches. Without the large, sustained investments in DRG and RBRVS development, Medicare payment reforms would have been far different. Without a national health maintenance organization (HMO) industry, managed care could not have replaced traditional health insurance. The Reagan administration did not have a realistic option for an HMO-based Medicare strategy; there were not enough HMOs and very few Medicare enrollees. The Clinton administration envisioned sweeping reforms managed through a new national system of health alliances; the fact that these entities did not yet exist was one of the serious strikes against the proposal’s enactability. The Bush administration found a national capability in pharmacy benefit manager firms, so its Medicare drug proposals could be administered with consumer choice among private-sector plans. However, other Bush administration ideas have been frustrated because they were not ready for national implementation. For example, electronic health records (EHRs) have required many technical standards; high-deductible plans paired with health savings accounts do not have enough market share to replace managed care; and large consumer databases about costs and quality have to be built.

As this review suggests, health policy ideas often need a lot of sustained development work, including support across several electoral cycles. The Medicare DRG and RBRVS reforms of the early 1980s had early support from the research and development provisions of the 1972 Social Security amendments. The first major attempts to build a national HMO sector started in the 1970s; not until two decades later did managed care replace traditional health insurance. The development of evidence-based medical care as health systemwide reform has been a work in progress for more than fifteen years.¹

A TECHNOLOGY- FOCUSED approach is useful for thinking about future national health policies. What new health policy technologies can be available a year or so hence? On many lists, for example, would be the Federal Employees Health Benefits (FEHB) program model for insurance market reform. A number of approaches to universal coverage could have been adopted long ago. Medicaid home and community-based care options have been widely tested. Many ideas for evidence-based care are now in a technology development phase. These include setting of standards for EHRs, rapid-learning networks for evidence-based medicine, state-of-the-art predictive models (such as Archimedes), comparative effectiveness studies, Medicare/Medicaid disease management, broader use of pay-for-performance and quality reporting, and consumer information databases. Many of these health policy technologies could be "ready to go" when decisionmakers reach a point for choosing new health policies.

Editor's Notes

 
Lynn Etheredge (lyneth1{at}aol.com) is a consultant with the Rapid Learning Project at the George Washington University in Washington, D.C.

NOTES

Top NOTES

 

1. Historical reviews include D.G. Smith, Paying for Medicare: The Politics of Reform (New York: Aldine de Gruyter, 1992); L.M. Etheredge, "On the Archeology of Health Care Policy: Periods and Paradigms, 1975–2000," Special Report (Washington: Institute of Medicine, 1 January 2001); and D.M. Eddy, "Evidence-Based Medicine: A Unified Approach," Health Affairs 24, no. 1 (2005): 9–17.[Abstract/Free Full Text]

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