THEORETICAL REFLECTIONS
4. THE ROLE OF GOVERNMENT
auditing and monitoring functions in place does not negate the need for an external, independent oversight body, commonly referred to as a regulatory agency.
Although a regulatory agency can be a private enterprise, as it is in the managed care industry, the federal government in the United States has instituted most regulatory agencies. Not everyone, however, appreciates the involvement of the federal government. The implementation of yet another regulatory agency, yet another oversight function of government, is considered by many to be inconsistent with the belief that the role of government must be limited to the greatest extent possible. The recent history of managed care illustrates this point. The managed care industry fought to minimize or even avoid the implementation of any kind of regulatory oversight body. Eventually, the industry itself created the National Committee on Quality Assurance (NCQA) and urged its members to voluntarily participate in the program and to comply with NCQA recommendations.
Nonetheless, the question remains of whether regulatory oversight would not be better served by a government-instituted oversight body, which would give more credence to the necessary independence of such a committee or agency.
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maintenance of an environment conductive to health be apportioned among various agencies? But above all, just what is public health? What does it include and what does it exclude? Based on an appropriate definition, what kinds of programs and agencies should be constructed to meet the needs and demands of the public, which is often resistant to an increasing role, or at least an increasing cost, of government? (pp. v-vi)
Although these questions were posed almost two decades ago, they are all still relevant and timely. Most of these fundamental questions remain subject to intense debate. Society is still undecided about how to define the role of government in health care, including the issue of oversight and, probably even more important, the issue of public health.
4.1 Covering the Basics
The main rationale for advocating regulatory government oversight in health care rather than voluntary, industry-initiated health planning stems from the observation that the objectives of industry and government are not necessarily consistent with each other. From an industry perspective, the purpose of voluntary health planning is not so much to promote collective social objectives. Instead, its main purpose is to reduce competition, gain an edge in the marketplace, and protect existing market positions. Whereas government-mandated regulations intend to promote access to quality health care, industry-initiated health planning is more focused on improving the organization’s strategic position.
With increased fiscal pressures in the health care environment, the mechanisms of monitoring, evaluating, controlling, and influencing the functioning of the system are widely considered crucially important to maintaining adequate levels of accessibility to high-quality health care. Whether it is information on pricing, utilization, costs, quality, efficacy, or effectiveness of health care services and products, appropriate management of each component alone and of all of the components together are both essential to ensuring accessibility. If voluntary, industry-initiated planning in a competitive environment is dictated largely by market influences, it is unlikely to result in a rational allocation of resources that focuses on meeting the collective social objective of maintaining adequate levels of accessibility to health care for all members of society. Thus, implementing a system of mandatory regulation in health care is not only a matter of political preference or economic necessity but also a matter of social justice in light of any government’s responsibility to create and maintain a health care system that is universally accessible.
However, the political attitude of the 1980s and 1990s favoring deregulation to promote competition actually reduced community-wide planning of services, facilities, and marketplaces. Exceptions were made for the areas of occupational health and workplace safety, for which the federal government maintained regulatory authority. Later, in response to deep concerns about the practice of for- profit health maintenance organizations (HMOs), the government again became more involved in identifying avenues to modify the health care system’s operations through the mechanism of regulation.
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4.2 Government Involvement
Traditionally, government has intervened in the health care marketplace through subsidy interventions. Such interventions are aimed at providing financial assistance to those unable to purchase health care by subsidizing Medicare and Medicaid and by subsidizing health care services in underserved communities (e.g., by offering grants to providers of facilities). The government also controls entry into the marketplace through its licensing mechanism. Thus, institutions and professional caregivers must receive licensure to function in the marketplace.
Furthermore, federal price and quality controls are commonplace, which is de facto confirmation of the government track record of marketplace interventions.
Thus, the government does indeed play an important and prominent role in health care. Despite a politically motivated effort by conservatives and business in general to minimize the role of the federal government in domestic social policy, the federally mandated regulation of health care rather than industry-initiated voluntary planning appears to be a better suited and more effective mechanism for promoting (and protecting) community interests.
The well-proportioned involvement of government in health care also enhances opportunities for the development of comprehensive health policies and programs rather than having to rather than relying on the piecemeal approach that has historically characterized governmental contributions. U.S. health care policies and programs have typically resulted from efforts to respond to consumer needs that were not met by the private sector or by state and local governments. As a result, the functions of the public and private sectors have become increasingly interrelated although their roles have been poorly delineated. These and other issues are what Remington (1988) referred to when he raised the questions of how the government’s role should relate to that of the private sector and whether the role of government should be limited to that of a last resort provider or else that it be acknowledged as wielding greater responsibility.
Jonas (2003) later argued that questions about the proper role of government cannot be resolved until the place and power of private health service providers in the health care delivery system as a whole have been redefined. Within the context of genuine responsibility, government and proprietary business have an opportunity to partner in the area of health care and to do so on the basis of shared values and responsibilities. Operating on the premise of a social market concept, both entities share the objective of promoting broader individual, community, and social values.
The health care industry and government alike focus on the provision of equitable, effective, and efficient use of the scarce financial resources that are being allocated to pay for goods and services. The question of how the government’s role should relate to that of the private sector can be answered only by means of a moral public debate. The outcome of the debate, in which all parties share a mutual understanding of the basic connotation of the notion of responsibility, provides the moral authority necessary to implement the delineation of the roles of government and the private sector in health care as agreed.
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4.3 The Domain of Government Responsibility
Also related to the issue of establishing clear roles for government and the private sector is the extent of the government’s domain of responsibility. If, for instance, the primary role of government is understood to be the ensuring of access to health care services for all members of society, and if the model of employer- sponsored health care insurance continues to be the preferred insurance strategy, then the role of government is indeed destined to be limited to that of a health care provider of last resort. On the basis of this premise then, its main purpose is to supply a safety net not only as in the case for children, disabled or indigent persons, or those older than age 65 but also for those persons who are unable to purchase health insurance through an employer-sponsored benefits program, either because they are unemployed or because their employer does not provide health care benefits.
Opponents argue that the responsibility of the government should go much further. They prefer for the federal government to accept the primary responsibility for health care because health care is both a critically important social good and a universally needed good that is unsuitable to leave to the workings of the marketplace. But even the minimalist approach leaves open the question of what a basic health care benefits package should encompass, in light of the fact that these decisions must be made in the context of a scarcity of resources. This important question goes back to the problems of defining access to a sensible package of health care benefits and deciding which services should be covered by basic health care insurance under reasonable resource constraints. This issue will be addressed in more detail later.
Nothing has been said about the content of these so-called safety nets themselves or the mechanisms by which they actually could be provided. Although it appears reasonable to postulate that governments should be the primary responsible entities for ensuring universal access, that premise does not imply that governments cannot outsource these responsibilities to the private sector. However, prior to involving the private sector in fulfilling the governmental responsibility to ensure access to health care, social agreement must be reached on the conditions under which corporate health care is mandated to operate.
If the federal government and the private sector cooperate on the basis of the premise that both will share in the responsibility for providing equitable, effective, and efficient use of scarce resources to be allocated to pay for goods and services, then it should be possible, for instance, to include in the delivery system those persons who are currently uninsured and to have their access subsidized by the government. The underlying assumption, or necessary condition, is that both parties will agree to this premise, which seems likely only within a social community concept of the marketplace. The mechanism of a supply-side subsidy is a common format for cooperation between the government and private sector. For example, supply-side subsidies already provide financial assistance to persons who are older than 65 years of age or who are uninsured and qualify for Medicaid.
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4.4 Obstacles to a Subsidy Model
A practical difficulty in implementing a subsidy model lies in the diversity of the health insurance products. Except for Medicare, there is no universal comprehensive health care benefits package. In response to the public demand for more choice, the continuation of double-digit rate increases for group health plans, and the employer- initiated search for more affordable premiums, health care insurers have started offering a variety of products. Premiums may depend on the choice of options, deductibles, and copayment levels, and on the composition of benefits. These products come under many different names: health savings accounts, health reimbursement arrangements, consumer-driven health plans, and high-deductible health plans. They are marketed with various creative names, such as employee empowerment, cost sharing, consumer choice, and consumer-driven care.
These plans share the common objective of making employees more knowledgeable and thus more responsible consumers of health care, with the goal of curbing their wants satisfaction. The sheer presence of these variances raises challenging ethical questions. The composition of benefits, for instance, translates into higher or lower premiums. Better coverage means that plan enrollees will have to pay more. Selecting an appropriate benefits package is highly correlated with what they can afford or, more likely, with what they cannot afford. Choosing higher deductibles and copayments is a viable option only for persons who are financially able to accept such monetary risks in lieu of paying lower monthly premiums. In general, people are going to get whatever they are able to afford.
This is not to say that health care consumers have not been sheltered for too long from the fiscal reality of health care costs. But variation in individualized financial risk with higher utilization of health services because their health status is less than optimal. Critics of this trend have pointed out that the satisfaction of medical needs has become a secondary issue and that the idea of health insurance as a form of social insurance appears to have become obsolete.
In addition, in the absence of a well-defined minimal health care benefits package, people make choices without knowing what should be included in an acceptable package. No social agreement exists on what should go into a basic health care benefits package. For both the government and the private sector to be dedicated to ensuring universal access to a minimal reasonable level of health care services, they must both reach agreement first on what should be included in this package of benefits.
This discussion can be meaningful and relevant on a practical level only when it is conducted within the context of the scarcity of resources. Thus, government must take a leading role in the debate to define the scope of health care entitlement, that is, to establish the appropriate criteria for the rationing of health care services. To do so, government must reestablish itself as the key player in planning health care reform, a task that it relinquished as managed care gained prominence. Any reluctance to engage in the formulation of such plans would certainly be one of the obstacles that must be overcome in order to resolve the problems inherent in access to affordable health care.
schemes also implies that the burden of health care is being shifted to those persons
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