This book makes a major contribution to an understanding of what influences state and national health policy. While the focus is on the role of interest groups, the models add insight into the range of influences on policy development, including political party control, competition between parties, issue saliency, ideology, and political action committees. Although Interest Groups and Health Care Reform across the United States adds value to the health policy field, in several places it is better at identifying effects than explaining the magnitude of the effect or impact on policy.
After providing background on interest-group theory, the structure of health care in the United States, and organized interest-group literature, Virginia Gray, David Lowery, and Jennifer K. Benz analyze three health-care policy areas: state pharmacy programs, regulation of managed care, and universal health-care efforts in the states. Variation within state policies is used to assess the influence of interest groups and other factors that impact policy adoption and revision. The driving theory is derived from the Energy Stability Area (ESA) model, which focuses on the density and diversity of organized interest.
State pharmacy programs assist low-income seniors not eligible for coverage through Medicaid. Prior to the passage of the Medicare Part D prescription-drug benefit in 2003, 34 states had drug assistance programs. Findings are based on variations among state programs. The authors question why these assistance programs were able to happen at the state level but were blocked nationally for so long. A key finding was that organized interests had little impact on program adoption but significant impact on subsequent modifications. This finding reinforces the supposition in ESAs that interest groups react more to the policy agenda than create it. Citizens’ belief in a broader role for government had a positive impact on adoption, but Democratic Party control did not. However, Democratic control was essential for program expansion. Interparty competition, state wealth, and a higher percentage of seniors all increased chances of adoption. Higher health maintenance organization (HMO) penetration had a mitigating effect on adoption. Additionally, the authors found that the “greater number of health interests in a state, the lower the generosity of the program” (p. 87).
Politics of healthcare in the states differed from Medicare Part D. The authors conclude “that the politics of state health care is far more complex, far more interesting, and potentially far more optimistic than the national story” (p. 89). They accurately characterize the politics of Medicare Part D as “the purchase of a benefit at the expense of a wide array of pork barrel expenditures for providers, insurance companies, and pharmaceutical manufacturers” (p. 89). However, the political variations are more likely due to the differences in the nature of state programs compared to Medicare Part D. States with programs in 2002 covered just 16% of the people eligible and included waiting lists and benefit restrictions. The best state, New Jersey, covered just 40% of those eligible. In 2000, the largest such program, again in New Jersey, spent $324 million and covered 187,000 people (Kimberley Fox et al., “Managing Program Costs in State Pharmacy Assistance Programs,” The Commonwealth Fund, February 2004). In comparison, more than 1.5 million beneficiaries in New Jersey are eligible for Medicare Part D and expenditures are in the billions; nationally in 2014, Medicare Part D spent $97 billion, $2,203 per beneficiary (“10 Essential Facts About Medicare and Prescription Drug Spending,” The Kaiser Family Foundation, July 2016). While Medicare Part D is complex for consumers and a boon to industry and insurers, it provides comprehensive benefits to nearly all eligible Medicare beneficiaries. A program the magnitude of Part D could make or break the pharmaceutical industry or health insurance companies. State programs are not comparable.
The second major focus is on the politics of managed-care regulation. The 1990s backlash against managed care was driven by physician loss of autonomy and patient frustration. States filled a federal void by enacting significant and widespread managed-care regulation. Here, the authors provide more information on the magnitude of effect, and the federal-to-state comparisons are solid. Unlike prescription drug programs’ organized interests, physician and consumer groups had an effect on the number and strengths of regulations. But surprisingly, HMO strength was associated with more and stronger regulations.
The research finds that “[t]he higher the proportion of health-lobbying organizations, the fewer HMO regulations adopted, and the weaker the stringency of those regulations” (p. 113). This is attributed to “policy gridlock.” States with a minimum proportion of health-lobbying organizations enacted an average of 12 regulations, compared to an average of five for states with a maximum number. They did not find any influence of state ideology. This makes sense as the Left and the Right shared discontentment with HMOs. At the same time, political-action committee (PAC) contributions were associated with weaker regulations. Once again, there was more legislative activity in states with greater party competition. Democratic legislatures were associated with more and stronger regulations (p. 115). However, the party of the governor did not matter, suggesting that regulations are more important to the legislative branch. State administrative capacity was positively associated with reforms. The role of interest groups and other influences over HMO regulations was significantly different for federal programs than for state drug programs, and this variation and complexity was part of the story.
The third case is called “universal coverage,” but is more like state health-policy reforms. Gray, Lowery, and Benz define universal coverage as “any effort to provide universal coverage to all its citizens” (p. 16) including mandates for employer coverage, controlling costs of health insurance, and expanding coverage for needy families or individuals with state-only money. While the authors include appropriate caveats, in many places it reads as though the states actually proposed or enacted plans that would or could achieve universal coverage. By 1996, 17 states had passed and 42 states had considered universal coverage laws (p. 17). And later the authors say: “Five states enacted universal coverage legislation in 2007, six in 2008, and five from 2003 through 2009, for a total of twenty-two universal care enactments of some type from 2003 to 2009” (p. 154). But 17 states did not pass laws that would remotely achieve universal coverage, and nothing close to universal coverage in their sample was “enacted.” This terminology is comparable to suggesting that states enacted laws to end hunger, if they improved their school lunch program.
Massachusetts’s reform and Vermont’s single-payer efforts were attempts to provide near-universal coverage. These plans are discussed but came too late to be considered in the analysis. And these programs relied heavily on federal funding, which would have excluded them from the analysis. Massachusetts’s reform was driven by the state’s need to renew its federal 1115 waiver, and most subsides were matched with federal dollars. The Vermont plan would also require waivers and sought to maximize federal revenue. According to the book: “So states have achieved reform in spite of less diversity and higher concentration of for-profit interest groups than the national level” (p. 23). Similar to state prescription-drug programs, this overimplies what the states achieved, in my opinion. But this does not invalidate their findings on interest-group influence on state health-care reform efforts.
Interest groups had the most important influence on state action (p. 146). As expected, the greater proportion of liberal advocacy interest, the greater likelihood of reform. Reform was more likely when there were a lower proportion of advocates for low taxes, small business groups, and/or insurance industry interests. Higher HMO penetration was also associated with reforms. The authors found strong evidence of diffusion between neighboring states. Overall, moving toward health-care reform was “more a partisan issue than an ideological one” (p. 147). Estimates for liberalism in a state were not associated with increased reforms, but Democratic control over the governor’s office was, and control of the legislature more so. And once again, party competition mattered and led to more reform.
The authors concluded that organized interests mattered more in national reform than in the states. But like the state prescription-drug policies, this could be because of scope and scale. The Clinton health-care reform plan and Barack Obama’s Affordable Care Act were comprehensive health-care reform measures with billions of dollars attached. The state-only resources were crumbs by comparison.
Findings across all three cases show that interest groups have varying influential power on different policies and come together, or oppose each other, depending on the policy specifics. The analysis leads to the conclusion that “the nature of state policymaking is highly contingent on the specifics at hand” (p. 161). Outcomes are not always determined by dominant interests. The suggestion is that there are more opportunities for change and a broader range of issues that impact this change at the state level. This is a validation of federalism or the opportunity to be different, and of the notion that states can serve as “laboratories of democracy.” The conclusion might also be that states are more willing to regulate in a federal void, but less willing or able to spend significant state-only dollars compared to the federal government. The real value of Interest Groups and Health Care Reform lies in its examination of state variation on interest-group action and other influences on state action. This adds insight and breaks new ground in a critical branch of political science.
