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April 27, 2017
View from Here
Christopher F. Koller
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We should expect competence as public policies are planned and implemented. Frequently, with state health policies, we get it: heroic responses by public workers reacting to environmental emergencies or outbreaks of infectious diseases; well-executed outreach and enrollment of large populations newly eligible for public programs; well-coordinated and persistently implemented efforts to tackle poor performance in particular public health areas like maternal and child health.
But sometimes we receive services that aren’t even, as the disparaging phrase goes, “close enough for government work.” Botched information technology system implementations lead to poorly served citizens; bad information and analysis result in budget overruns; and inadequately trained and supervised staff produce ineffective and unresponsive programs. For a public already inclined to distrust government because of legislative gridlock, such administrative mediocrity is more fuel for the fire.
With health care consuming a greater portion of state budgets and the Trump administration and Congress promising more health policy flexibility to states, the spotlight is on state legislators and the executive branch. Can they deliver on the policies they promise? Past performance can be instructive for future efforts.
For health policy planning and implementation, there was no greater recent test of state capacity than the response of state health leaders to the Affordable Care Act (ACA). In short order, state leaders had to plan and implement major changes to Medicaid and individual and small group insurance markets. Regardless of the policy decisions made, there were changes in how states communicated with health care players, conducted regulatory activities, and interacted with the federal government.
In a report for the Milbank Memorial Fund, State Policy Capacity and Leadership for Health Reform, Pierre-Gerlier Forest and W. David Helms interviewed 24 officials from 10 states to glean lessons about ACA implementation. Whether or not their state expanded Medicaid or started a state-based exchange, what did leaders think went well? Where do they wish they had a do-over?
Three capacities emerged in Forest and Helms’ study as essential to sound policy development and implementation. First are the roles, mechanisms, and leadership needed in state government. For successful policymaking, legislators, governors, and key executive branch officials have to establish roles clearly and firmly. Perhaps the most important role cited was that of the governor, as leader of the executive branch. Health policy covers such a broad expanse of topics that responsibility for detailed policy development has steadily shifted from the legislature to the executive branch—among insurance regulators, Medicaid officials, and public health officers. In most instances, they all report to the governor, who also has the bully pulpit to set the tone and the direction. If s/he, does not embrace this responsibility, health policy in the state will flounder.
Legislators, however, who retain the purse strings and the constitutional authority, must hold the executive branch accountable for the direction their work takes and for the outcomes. Those who were interviewed for the report also noted extensive use of study committees, task forces, and public hearings as mechanisms employed by both branches to vet and refine policy and implementation plans.
The second capacity identified is equally fundamental: staff to plan and implement the policy decisions made. Most states indicated that staff capacity was less of a concern for planning than it was for implementation. Salary limitations and administrative hiring policies make it challenging to identify, recruit, and retain competent staff to run complex projects serving hundreds of thousands of people. New skills in information systems, project management, procurement, and contracting oversight are required. A job role with clear sense of purpose that provides public benefit and significant responsibility quickly can be a great recruiting tool, interviewees reported, but bureaucratic work environments focused on predictability and risk reduction do not encourage the flexibility and skills acquisition that new policy implementation often requires.
As a result, many reported, states have resorted to outsourcing key management roles and functions. In the short run, this allows government programs to acquire needed technical skills, but at a high price. In the long run, when the consultants leave, so does their knowledge and expertise—with little benefit to the staff and agencies left behind.
People make a difference. There is a market for leadership, as well as for technical and management skills. State governments do not need to offer salaries equivalent to those of insurers, health system personnel, or consultants who all vie for employees with these skills, but those that do not reform their personnel systems, making it easier to hire and retain skilled employees, will continue to suffer the consequences of poor performance and poor public opinion.
The final capacity identified by Forest and Helms is even more basic: money and time. Federal resources for planning and implementation—in the form of appropriations and federal grants to help states build new capacities in Medicaid, health insurance regulation, and health systems planning—were crucial for interviewees. The strings and oversight attached to them could have been improved, the authors report, but when policymakers pass new obligations onto government, the failure to appropriate financial resources to fulfill them bodes ill for the prospects of the legislation.
The interviewees also noted that the challenges of policy implementation are in part addressed by opportunities for collegiality—simply comparing notes with peers in other states and learning from successes and failures. Sometime the occasions are meeting with people in the same role—for instance legislators, Medicaid directors, or insurance commissioners. In other instances, the mix of roles in attendance makes the learning more comprehensive.
These three capacities have the ring of truth, based on my own experience as health insurance commissioner in Rhode Island. The governor at the time, Lincoln Chaffee, set a clear policy direction for the state’s response to the ACA and asked the independently-elected lieutenant governor from a different political party to lead the planning and implementation for a state-based exchange, expanded Medicaid eligibility, and an upgraded health and human services eligibility system.
Where the state had depth and experience—in Medicaid operations and commercial health insurance regulation—implementation went smoothly and deadlines were met. In the new work of setting up a state-based insurance exchange, Rhode Island learned along with others. In spite of operational and budgetary bumps, the state enjoys a competitive individual health insurance market with an array of choices.
The enrollment and eligibility system implementation, however, has been marked by mismanagement. Those responsible did not adequately account for the system’s reach into many operations, the complexity of managing multiple projects, and the challenge of vendor management. Even now, information remains inaccurate and citizens face long waits for service and uncertain enrollment status. As providers and contracted health plans struggle to reconcile conflicting information, budgetary projections and trust in government are compromised and legislators look for accountability from state employees and vendors. The state government’s reach clearly exceeded its grasp in this area—in Forest and Helms’ framework, key staff capacities and resources were lacking to plan and implement this work.
The ACA will not be the last major health policy planning and implementation challenge states face. Any amendments to the ACA would require new and possibly comprehensive responses from the states. Meanwhile, demands on Medicaid are growing. Health care costs threaten state budgets. Insurance markets are fragile. As states plan and implement their responses, using Medicaid waivers and statutory, regulatory, and administrative tools, will they learn from the past? Will they develop and exercise the leadership, roles, mechanisms, staff capacities, and monetary resources necessary to deliver the competence citizens expect and deserve?
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An endowed operating foundation that engages in nonpartisan analysis, collaboration, and communication, with an emphasis on state health policy.