Health Care Regulation in America: Complexity, Confrontation and Compromise

Preface

Virtually no aspect of American health care escapes regulatory oversight. Anyone who works anywhere in the health care system can attest to the overriding, and some might feel overbearing, influence of regulators. This is true for hospital administrators managing the delivery of health care services, physicians delivering those services, pharmaceutical executives planning the development of new drugs, pharmacists dispensing those drugs, medical directors making coverage decisions for health maintenance organizations, and even computer consultants planning a medical Web site. Outsiders, both in the government and in private accrediting and certifying organizations, have a major role in telling health care workers at all levels what to do.

The prominence of regulation in health care arises for a good reason. It would be difficult to identify another industry that is as directly involved in the health and well-being of its customers. While policy debates swirl around the proper role and extent of health care regulation, it is an area in which few would find no place for oversight of some sort. Despite the apparent need, however, health care regulation in America is neither uniform nor consistent. It encompasses a broad range of regulatory programs that apply in different ways to different aspects of the industry. Hospitals, physicians, insurance companies, pharmaceutical companies, and equipment manufacturers, to name just a few key players, each face distinct kinds of monitoring. Health care regulations are developed and implemented not only by all levels of government—federal, state, and local—but by private organizations as

American health care regulation has a diverse landscape. At the federal level there is the Department of Health and Human Services and its many components, including the Centers for Medicare Medicaid Services, the Centers for Disease Control and Prevention, and the Food and Drug Administration, in addition to the Environmental Protection Agency, the Occupational Safety and Health Administration, and numerous other agencies. In each state there are departments of health, welfare, and insurance. In cities and counties there are municipal health departments. Turning to the private side, there is the Joint Commission on Accreditation of Healthcare Organization, the National Committee on Quality Assurance, and numerous professional boards and societies. These agencies and organizations, and the programs they administer, have arisen at different times but primarily over the course of the past century. New ones are often added with little consideration for those already in place, sometimes resulting in redundancy and conflict.

To some observers, this landscape indicates that there is not really a “system” of health care regulation in America, but rather a disjointed set of programs that often work at cross-purposes. Many states, for example, encourage the development of clinical service monopolies through certificate-of-need programs, while federal antitrust enforcers promote free-market competition. The Food and Drug Administration approves drugs for use only under narrowly circumscribed conditions, but licensed physicians can prescribe them for any purpose they see fit. For those who make up the health care industry, however, professional life requires dealing with this morass, no matter how frustrating the conflicts may be.

The goal of this book is to present an overview of health care regulation in America in its breadth and scope and to help develop an understanding of its most significant components. Each regulatory program’s policy goals and conflicts are the focus, rather than the technical details, which tend to change frequently. Regulation is more than a set of laws and rules. It is a network of heterogeneous bureaucratic structures that fulfill distinct missions, sometimes complementary and sometimes conflicting, in response to public policy challenges that have emerged over many years and that continue to arise. The book is intended as a resource for students of the health care system, for professionals who work in America’s health care enterprise, and for readers outside the field who have an interest in understanding an important set of forces that shape the health care that Americans receive.

Because of the tremendous breadth of the subject, it is impossible to cover every regulatory program that relates to health care. However, an attempt has been made to be as comprehensive as possible and to describe every significant kind of regulation that is directly targeted to the provision or financing of health care. It is hoped that the reader will gain not only a perspective on the enormous variety of ways in which health care is regulated but also an appreciation of the complexity of the system and of the policy conflicts that drive it.

Chapters 2 through 8 are organized around substantive areas of regulation. Since the spheres of regulatory responsibility cannot be divided with complete precision, chapters cross-reference one another. Chapter 1 sets the stage with a brief historical overview and discussion of central policy challenges that regulation presents, and chapter 9 brings together overriding themes and considers emerging regulatory challenges.

Each chapter begins with a historical overview of the evolution of regulatory programs and of related government policy in its area of focus. This offers the clearest perspective on the reasons that programs and policies developed in the ways that they did. Since historical events are often key catalysts for regulatory responses, the progression of government actions brings to light the conflicts and compromises that shaped the web of laws, rules, and bureaucratic structures that have emerged. With the historical overview as a base, the current structure of key programs, agencies, and organizations is then presented. Finally, there is a discussion of overriding policy issues, including some that are specific to each sphere of regulatory attention and some that policy makers perennially face in all health care policy. The persistence of these conflicts provides the best explanation for the lack of a cohesive system and the best window on the forces that one can expect to operate in the future as health care evolves and new challenges for oversight emerge.