Federal Health Policy Making

Federal Health Policymaking
US Political System—Federal Level

US federal government
Legislative branch Executive branch Judicial branch

- Senate - President and cabinet - Supreme Court
- House of Representatives
Copyright 2013 Health Administration Press

Legislative Branch—US Congress
• Composed of the House of Representatives and
the Senate
• Three powers:
— Power to use any reasonable means not directly
prohibited by the Constitution to carry out the
will of the people

Legislative Branch—US Congress
— Power to tax
• Allows to regulate indirectly health behavior of
individuals, organizations, and states
– Cigarette taxes intended to reduce individual consumption;
tax exemptions for employer health benefits to promote
insurance coverage for working individuals
— Power to spend
• Allocates funding as deemed appropriate to support
the public’s health through federal programs (e.g.,
Medicare)

Legislative Branch – US Congress
—Power to spend (cont’d)
• May restrict the manner which states can use federal
funds
– Establishing minimum requirement for basic services offered
by the joint federal- and state-funded Medicaid program

Federal Legislative Branch
• Congress consists of Senate and House
– Senate: statewide; two senators from each
state
• Total 100 Senators
• 6-year term
Federal Legislative Branch
– House: by district; proportional to state’s
population, at least one representative per state
• Total – 435 Representatives
• 2-year terms
• Proportionality rule favors larger states to dominate the
House and often hold leadership positions
Federal Legislative Branch --
Leadership
• Determined by political party affiliation;
majority party having the advantage
• US VP is President of the Senate and presides
over Senate proceedings
– President pro tempore presides if US VP is not
available
– President of the Senate breaks a tie vote in Senate
Leadership
• Speaker of the House (“Speaker”) presides
over the House
– Authority to prioritize and schedule bills, refer
bills to committees, and name members to joint
and conference committees
• Leadership positions in Congress determined
by the members from the party who have been
elected to Congress
Leadership
• Other key Congressional leadership positions
include:
– Senate majority leader: speak on behalf of the
majority party; schedule floor actions and bills,
works on bills, directs strategy, and tries to keep
the party united
– House majority leader: works with the Speaker of
the House to direct party strategy and set the
legislative schedule
Leadership
• Congressional leadership positions (cont’d)
– House and Senate minority leaders: speaks on behalf
of the minority party, direct strategy, and try to
maintain party unity; don’t have legislative duties of
the majority leader/Speaker
– House and Senate majority and minority whips: track
important legislation, mobilize members to support
leadership positions, keep a count of how party
members are planning to vote, and generally assist
their leaders in managing their party’s legislative
priority
Legislative Branch: Committees
• Workhorse of Congress
– Key decisions are made and legislative drafting takes
place
• Drafting and amending legislation
• Educating members on key issues
• Guiding the committee’s legislation on the floor when it goes
before a vote
• Working with President and administration, as well as
lobbyists to gain full support of a bill
• Holding hearings
• Conduct oversight over executive branch departments,
agencies, commissions, and programs under their purview
Legislative Branch -- Committees
• Types of committees
– Standing committees: permanent committees with
specified duties and powers
• Authorization jurisdiction – to create programs and
agencies
• Appropriation authority – responsible for funding
various programs and agencies
• Oversight authority – monitor how programs are run
and funds are spent
Legislative Branch -- Constituents
• Members of Congress have wide array of
constituents to be concerned about when
making policy decisions
– Prioritize to home-state constituents
• Will court independents or voters from opposing party
in their home state to strengthen appeal
– High approval ratings deter challengers to incumbent’s seat
and allow members of Congress more leeway to pursue their
goals and policies
Legislative Branch -- Constituents
– Supporting their party’s position on issues; voters
may be influenced by party stance on issues
– Views of the president may be important to
consider, depending whether the member and the
president share the same party, the particular issue
involved, and the president’s popularity
Executive Branch
• The administration of:
— President of the United States
— Department heads (Cabinet members)
• Crafts legislation that reflects the administration’s
preferred policies
• Attempts to convince legislators to enact those policies
• Creates policy by establishing rules and regulations used
to implement statutes and laws

Federal Executive Branch
• White House
– President
– Executive offices assist and advise president
• 15 cabinet departments
– Interpret and implement laws passed by Congress
Federal Executive Branch
• Presidential powers/duties
– Chief of State—symbol of the country and its
citizens
– Chief Executive Officer—manages cabinet
and executive branch
– Commander in Chief of the Armed Forces
—top ranking military official in the country
– Other powers: sets the agenda, budget
proposals, persuasion, sign or veto bills,
executive orders
Federal Executive Branch -- Constituents
• President has several layers of constituents to
consider when making policy choices
– Represents all citizens and country as a whole
– Representative of a particular political party and
needs to consider the views of the party
– Need to consider the foreign policy implications
(e.g., United Nations, World Health Organization)
Judicial Branch
• Made up of the US court system
• Statutory authority
— Capacity to enforce legislation on behalf of the
government as granted by the Constitution
• Interprets a statute
• Established a judicial precedent
• Interprets the US Constitution

Judicial Branch
• Has the power to declare that federal and state
laws are unconstitutional
• Federal judges are appointed for life
—Not subjected to the types of conflicts of interest
that may result from reelection efforts of
legislators and the president

Policymaking Process at the Federal Level
Source: Longest
(2010).

Policymaking Process
• Policymaking process
—Agenda setting: selection of a health problem as a
policy target
—Development of legislation
• Policy implementation
—Making the rules and putting them into operation
• Policy modification
—Policies are adjusted as necessary to accommodate real-
world application
Policymaking Process
• Three stages are interactive
—Rules and regulations proposed in implementation
stage in general solidifies policy
—Policymaking usually undergoes modification;
new priorities and needs arise which affect the
formulation of new policiies

Policy Formulation
• Two main components
—Agenda setting
—Legislation Development

Policy Formation – Agenda Setting
• Selection of a health problem as a policy target
• Can come to attention to policymakers through
multiple pathways
—If several pathways converge on a health problem,
chances of appearing on the policy agenda
increases

Pathways to Agenda Setting
• Impact of the health problem – affects the
general population of have a concentrated
impact on a small but powerful subpopulation
• Public opinion – high public interest and
degree of conflict or dispute is low
—Individuals tend to be concern with healthcare bill
that is likely to impact on their personal lives and
well-being

Pathways to Agenda Setting (cont’d)
• Public opinion (cont’d)
—Policymakers must structure the issues they want
to address in terms of the concerns of the public to
achieve a high degree of relevance and support

• Presidential involvement
—Form policy positions from various sources
• personal interests
• recommendation of advisers
• cabinet members
• agency chiefs
• campaign information
• expert opinion and public opinion polls
—Must firmly believe in the merits of the issue to be
strong advocate for targeted policy
• Presidential involvement (cont’d)
—Has the power to set the agenda and recommend a
course of action
• Can appeal directly to the country’s citizens to focus on
a particular issue and to influence legislative debates
– By going public, president can use support of the American
people to gain Congress attention and sway votes on policy
decisions; use the public to force politicians to accept the
president’s preference

—Can promote policy “behind the scenes”
• If policy is controversial with the general public or if
members of the president’s political party disagree with
a proposal
– Can directly or through intermediaries let members of
Congress know which policies are favored; using a
combination of promises of favors and threats to members’
interests, president may be able to influence the outcome of
policy debates in Congress without going to the public

• Legislator interest
– Championing a health issue that they personally
embrace or their constituents demand
• Media coverage
– Heightens the awareness of issues through
investigative reporting and exposure of findings;
produce strong public reaction that leads to new
regulations and laws
Copyright 2013 Health Administration

Press
Federal Legislative Process
Federal Legislative Process
• Committee Process
—Chair forwards bill to the appropriate
subcommittee
• forwards to agencies potentially affected by the bill
• hold hearings and hear testimony
• amend the bill
—Subcommittee and full committee may
recommend the bill for consideration by the entire
Congress, not recommend it, or recommend
tabling the legislation
Terminologies
• Tabling legislation
— Action undertaken by Congress to postpone
consideration of legislation
• Amendment
— Change or addition to current law or piece of legislation
• Veto
— Unilaterally stopping an official action; as a noun, it
means the authority to do so

Legislative Committees
• 14 committees and subcommittees in the
House of Representatives
• 24 committees and subcommittees in the
Senate
• More than 60 legislative panels

Legislative Health Committees
• Examples of key health committees
—Senate Finance/Subcommittee on Health Care
• Jurisdiction over taxes and revenues, including matters
related to Social Security, Medicare, Medicaid, and
Maternal and Child Health (Title V of Social Security
Act)
—House Ways and Means/Subcommittee on Health
Care
• Jurisdiction over taxes and revenues; sole jurisdiction
over Medicare Part A, Social Security, unemployment
compensation, public welfare, and healthcare reform
—Senate Appropriations and House Appropriations
• Subcommittee on Labor, Health and Human Services,
Education, and Related Agencies
– Responsible for allocating and distributing federal funds for
individual health programs (except for Medicare and Social
Security which is funded through the Social Security Trust
Fund)
—Senate Committee on Health, Education, Labor,
and Pensions
• Focuses on health, education, and workplace issues by
proposing changes to the healthcare system, the
minimum wage, working conditions and compensation,
and welfare and labor laws

—House Energy and Commerce Committee
• Oversees legislation relating to telecommunications,
consumer protection, food and drug safety, public
health, air quality and environmental health, the supply
and delivery of energy, and interstate and foreign
commerce in general; also has jurisdiction over
Medicaid, Medicare Part B (shared with Ways and
Means), and matters of public health.

Legislative Budget and
Appropriation Process
• A key policy for Congress and the President;
they are able to show which programs and
issues have their support through their funding
decisions
• Federal budget process is fairly complex given
the amount of money involved in running the
country (over $3.5 trillion in 2013) and the
various Congressional committees involved
• “Budget Act” of 1974 and subsequent
amendments passed by Congress to create a
process that brings together the numerous
committees involving in preparing the overall
budget
• Budget process works in conjunction with the
appropriations process (congressional passage
from the various appropriation committees to
distribute the funds provided for in the overall
budget
• President is required to submit proposal to
Congress in the 1st Monday in February;
proposal is a “request” made by the President
but Congress doesn’t have to follow
• Each chamber of Congress passes a budget
resolution – informing how each chamber
would spend federal money by different
categories of spending (e.g., defense,
agriculture, transportation)
• Members from each chamber meet to develop
a single conference report (a consensus
agreement) on the overall budget; this is
binding on both the House and Senate as a
blueprint for revenue collection and spending
– This is not law and not binding on the President
• During 6 weeks after the passing the
concurrent budget resolution, House and
Senate budget committees hold hearings to
discuss the budget
– Other committees review the budget as it relate to
their areas of interest; they provide the budget
committees with their “views and estimates” of
appropriate spending and/or revenue levels for the
upcoming year
• Congressional Budget Office (CBO) provides
the budget committees with its budget and
economic outlook report and provides the
budget and appropriations committees with its
analysis of the president’s proposal
– CBO provides Congress with cost estimates of
bills and federal mandates to state and local
governments, as well as predict economic trends
and spending levels
Appropriations Process
• In March, the House and Senate budget
committees each develop a budget plan during
public meetings (“markups)
– When the markups are complete, each committee
sends a budget solution to its respective chamber
• Budget solution contains a budget total, spending
breakdown, reconciliation instructions, budget
enforcement mechanisms, and budget policy
statements; budget totals are provided as
aggregates and as committee allocations
Appropriations Process
• Federal budget includes two types of
spending: discretionary and mandatory
– Discretionary: money that is set aside for programs
that must be funded annually in order to continue;
if not funded by Congress, they will not receive
federal dollars to continue their operations (e.g.,
Head Start program)
Appriopriation Process
– Mandatory: money must be set aside as a matter of
law or entitlement
• Example: Medicaid is entitlement that provides health
insurance to the low-income; has authorizing legislation
(the law that created the program) which establishes
eligibility rules and benefits; Congress must provide
enough money so the Medicaid agency can meet the
obligations as established in the authorizing legislation
• Appropriation committees write bills to cover
discretionary spending
– Make decisions on available funding
– Can make reconciliatory instructions to make
changes in the law for mandatory spending so to fit
within the budget
• Appropriation bills and reconciliation
instructions must be signed by the president to
become law
• Members of the House and Senate have the
opportunity to make changes to the work of
the budget committees
– Once the House and the Senate pass their own
versions of the budget resolution, a conference
committee is established to resolve any
differences; once the differences are resolved, each
chamber votes on the compromised budget
• Congress often doesn’t meet the Budget Act
deadlines
– If appropriation bills are not passed by October 1st
(the start of federal fiscal year), Congress may pass
a continuing resolution that allows the government
to continue spending
• If Congress does not pass a continuing resolution or if
the President vetoes the resolution, all nonessential
activities of federal agencies must stop until additional
funds are provided
Presidential “Bypasses” to
Congress’ Legislative Power
• If Congress passes legislation that president
dislikes, has the power to veto it, rejecting the
bill
– Congress can overturn presidential veto by 2/3rd
of the House and 2/3 of the Senate
• The president can threaten to use the veto to
get Congress to change a piece of legislation,
especially if Congress is only going to be able
to pass the law with a slim majority
• President can issue executive order
– Legally binding orders that the president gives to
administrative agencies under the Executive Office
– Orders to direct federal agencies and their officials
in how they implement specific laws
– Controversial because Congress is responsible for
making laws, not the President
• Significant policy decisions can be accomplished by
using executive orders
– Systems of checks and balance allows Congress to
challenge presidential executive order; two
avenues of recourse
• Congress can revoke, modify, or supersede an executive
order through its own legislative action
– President can still issue a veto over the Congress’ legislative
action against the executive order
• Congress may challenge the executive order in court,
claiming the president’s actions exceed presidential
constitutional powers
Policy Implementation
• When legislation is signed into law, it is

forwarded to the appropriate agency for
implementation

Policy Implementation –
Administrative Agencies
• Administrative agencies are part of the
executive branch; under the power and control
of the president
– Work out of the public’s eye to implement laws
passed by Congress and executive orders signed by
the president
• Federal agencies fall into two categories
– Executive Department Agencies
• Under the control of the president; department heads
serve at the pleasure of the president
Administrative Agencies (cont’d)
• Includes the 15 cabinet-level departments and their
subunits; some more well-known – Department of State,
Treasury Department, Department of Health and Human
Services
– Independent Agencies
• Not under direct control of the president but agency
heads are appointed by the president and confirmed by
the Senate; e.g., Securities and Exchange Commission,
US Postal Service
• Administrative agencies can be created by
statute, internal department reorganization, or
presidential directive
– Regardless how they are created, agencies must
have statutory authority in order to receive
appropriations from Congress and act with the
force of law
• Statutory authority or enabling statute defines the
agency’s responsibilities and powers
• Since laws are usually written broadly, it is up
to the agencies to fill in the details on how the
law should work
– Issue policy statements
– Develop rules
– Promulgate regulations
• US government’s principal agency for implementing
many of the health laws is Department of Health and
Human Services (HHS)
—HHS’ mission is to protect the health of all Americans and
provide essential human services, especially for those who are
least able to help themselves (HHS, 2011)

• Key operating divisions with specific areas of health
concern:
— Administration for Children and Families
— Administration on Aging
— Agency for Healthcare Research and Quality
— Agency for Toxic Substances and Disease Registry
— Centers for Disease Control and Prevention
— Centers for Medicare & Medicaid Services
— Food and Drug Administration

Administrative Agencies(cont’d)
• US Department of Health and Human Services (HHS)
operating divisions (cont’d):
— Health Resources and Services Administration
— Indian Health Service
— National Institutes of Health
— Office of Inspector General
— Substance Abuse and Mental Health Services Administration

Rule Making
• Process by which implementation agencies set
detailed rules and regulations for the application of
laws
— Experts agree on rules by which the new law will be
enforced
— Public may also have an opportunity to provide input
— Once rules or regulations are finalized, they become
guidelines for operationalizing the law

Operation
• Legislation is operationalized by the HHS
agency assigned to develop the regulations to
implement or enforce it
—Carrying out the rules or regulations in an efficient
and effective manner:
• The program must meet economic constraints while
delivering concrete services to the target population

Operation (cont’d)
• Ability to attain the policy objective depends on the presence of a
host of requirements:
— The logic of the potential solution is sound.
— The structure is in place.
— Program activities are designed to reflect the policy intent and logic
model.
— Program activities are carried out effectively and efficiently.
— Unintended outcomes will not jeopardize continuation of the program.
— External factors will not jeopardize the impact of the program.
• Unexpected events or influence from additional determinants

Policy Modification
• Revisions to the rules or regulations pertaining to a
piece of original legislation
—Enhance benefits to the targeted population
—Reduce negative consequences
—Refine policy objectives
—Address other issues related to the policy

Policy Modification (cont’d)
• Policy modification takes place:
— Typically after policy implementation: incorporates
lessons learned from implementation
— During agenda setting: existing similar policies inform
the formulation of the new policy
— During legislation development: new development, any
budgetary changes, or beneficiary demands require
adjustment in policy

— In rule making: nature of bureaucracy prompts the
operationalizing of policy into regulations; interest groups
use their resources to maximize the benefits or minimize
the negative consequences
— In operation: administrative structure and budgetary
constraints often determine the scope of the enacted
program

Why Policy Modification?
• Change in logic model – new evidence or new theory
becomes available that suggests the logic behind the
policy may not be strong
—if the logic is flawed, must be adjusted or corrected by
modifying the logic model;
—revising the logic model often necessitates policy revision
• Consequences of implementation – not all consequences
can be foreseen
—new events take place in the course of policy implementation
—consequences determined to be negative for the policy
beneficiaries or other stakeholders
• Policy analysis and evaluation – provides
important input into the modification of an
existing policy
—Congressional Research Service provides
Congress with information and analyses on
implemented policy

• Resource constraints – economic climate may
decline following a policy’s implementation;
particular issue not longer priority in the
situation of economic downturn and budget
cuts

• Changing goals – policy goals of one
administration may differ from next
administration
— since US government changes every 4 (or 8
years), plus changes in Congress, policy priorities
change accordingly

• Interest group involvement – Interest group
influence policies at the modification stage as
well as at the formulation and implementation
stages
—If adversely affected by the policy, likely to
expend extra effort to overturn or modify the
enacted policy

• Oversight by the three branches – each branch
of government has oversight responsibility for
enacted legislation
—Executive: administrative agencies has oversight;
Office of Management and Budget (OMB) plays a
critical role in supervising, assessing, and ensuring
the successful implementation of a policy
• OMB is the largest component of the Executive Office;
implements and enforces the commitments and
priorities of the president and assist executive
departments and agencies across the federal government
• Oversight by the three branches (cont’d)
—Legislative: any congressional committee
jurisdiction over a particular policy can hold
oversight hearings to review progress and assess
modification needs
—Judicial: the courts may become involved in
policy modifications by ruling on how laws are
interpreted and enforced, especially in the cases of
disputes over the interpretation, application, and
constitutionality of laws
• Incremental nature of policy change – radical
policy is rarely enacted in the American
political landscape
—Most policies are incremental and evolve over
time
• Basic nature of policy development dictates
modifications of existing policies (e.g., revising the
1935 Social Security Act over the decades)

Attributes of Health Policymaking in the
United States
• Government in subordinate role to the private
sector in providing healthcare services

Attributes of Health Policymaking in
the United States
• Policymaking by government is limited to
addressing market failures and deficiencies
(e.g., the creation of Medicare for the elderly
and Medicaid for the poor)
—Policies tend to be implemented piecemeal,
addressing one market deficiency at a time rather
than in a comprehensive and coordinated manner

Attributes of Health Policymaking in
the United States
• Fragmented American political institutions
reflected in the development of health policy
legislation
—Healthcare programs similarly fragmented among
federal, state, and local governments which pursue
their own policies with limited coordination

Attributes of Health Policymaking in the United States (cont’d)
• Fragmented government and programs (cont’d):
Example of Fragmented Health Care Programs: Funding of Health Insurance
The Employed Predominantly covered by voluntary private insurance to which they and
their employers make contributions.
The Elderly Funded by Social Security tax revenues (Medicare Part
A) and government-subsidized voluntary insurance for
physician, supplementary, and prescription drug
coverage (Medicare Parts B and D).
The Poor Covered by Medicaid, which is financed with federal, state, and local
revenues.
Special population Covered by the federal government directly.
groups

Attributes of Health Policymaking in the United
States (cont’d)
• Incremental approach to reform: fragmentation leads to
incremental approach rather systemic reform
— Example, expanding the Medicaid program involved various
disjointed measures rather than a single comprehensive initiative
• Importance of congressional support
— Most of the important US health legislation has been passed
when both congressional chambers are controlled by the same
party
— When the president is of the same party affiliation, chances of
success are even greater
Interest Groups in US Health Policymaking
• General term used for wide variety of
organizations that are created around a
particular issue or population
– Do not power to make policy; can influence policy
and educate others about their views and concerns
• Influence decisions of policy makers
• Different types of interest groups – trade
associations, think tanks, advocacy groups,
lobbying firms
• Well-organized interest groups

— Combine and concentrate their members’
resources
— Pursue an active agenda to influence all phases of
policymaking, from formulation to
implementation to modification

• Steps taken by interest groups
—Commission research to support their position
• Important in early stages of policy development; policy
makers might have an open mind about various
proposals
– Need to gain access to decision makers
– Need to develop a persuasive argument to convince policy
makers to agree with their view of a policy matter

• Steps taken by interest groups (cont’d)
—Initiate grassroots campaign
• Ask members to contact their government
representatives with a particular message; can be
effective since group members have the power to
elect/re-elect public officials, strong grassroots
campaigns can be quite effective

• Steps taken by interest groups (cont’d)
—Initiate grassroots strategy
• Harness the influence of community leaders and other
prominent individuals or join with other interest groups
to create coalitions and strengthen their influence
through numbers
—Start a media campaign to gain public support on
their position
—Provide political candidates with financial support
for their campaigns
• Physicians’ groups
— As a group have difficulty lobbying for their interests
because they represent many specialties
• American Medical Association represents only 17 percent of
US physicians,
• Other physician groups -- American Academy of Pediatrics,
Physicians for a National Health Program, American Society
of Anesthesiologists, etc.

• Physicians’ groups (cont’d)
— Come together on issues that pose a potential
threat to the interests of physicians as a whole
– Reimbursement system
– Income maintenance
– Professional autonomy
– Malpractice reform

• Senior citizens—American Association of Retired Persons
(AARP)
— Assists people aged 50 or older by providing them with
information, advocating for fulfillment of their needs, and
offering certain services
— Advocates expansion of financing public benefits for the
elderly covering housing, food, income, and health
— Supported Medicare Prescription Drug Improvement and
Modernization Act of 2003
— Did not oppose proposed Medicare cuts in Affordable Care Act
(benefits of having national healthcare system outweighs cuts
to Medicare program)
• American Hospital Association (AHA)
— Represents approximately 5,000 hospitals, health systems,
health networks, and other providers of care in issues of
national health policy development, legislation,
regulation, and legal concerns
— Current topics of interest include:
– Administrative simplification: as part of ACA that aims to reduce
administrative costs through adoption of electronic transactions and
standardization of operating rules
– Reduction of bad debt write-offs
– Profitability

• America’s Health Insurance Plans (AHIP)
— Represents nearly 1,300 health insurance companies
— Supports health insurers in their efforts to ensure that
affordable healthcare coverage is expanded to include all
Americans
— Issues of interest include:
– Elimination of cost shifting
– Implications of administrative simplification

• Pharmaceutical Research Manufacturers of America
(PhRMA)
— Represents US pharmaceutical research and
biotechnology companies
— Supports their efforts to discover new medicines
— Alerts its members to changes in health policy
— Attempts to influence policy formulation related to the
approval and monitoring of drugs and pharmaceutical
devices

Federal Health Policy Making

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Federal Health Policy Making

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Federal Health Policymaking

US Political System—Federal Level

Legislative branch Executive branch Judicial branch

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• When legislation is signed into law, it is

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• Well-organized interest groups

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