Designing Administrative Organizations for Health Reform

Abstract

Many proposals for expanding health coverage involve the creation of organizations to produce information on comparative effectiveness, make coverage decisions, manage the marketplace for health insurance, or offer a public health insurance plan. These new organizations might take the form of a federal executive branch agency, an independent commission, government corporation, legislative branch agency, or public-private entity. Some proposals would create entities with substantial independence from the usual political processes, such as the Federal Reserve enjoys.The choice of an appropriate organizational structure to carry out a public function raises several issues: the source and predictability of the entity's funding, its operational flexibilities, its degree of political independence and accountability, and the structure of its management. These matters are not fully determined by an agency's organizational form, however, and targeted solutions are often available and usually preferable. For example, the Congress may provide an agency with a permanent appropriation or exemption from certain legal or regulatory constraints without removing it from an executive department.Organizations that use governmental powers and funds and make public policy need to be accountable as well as effective. A quasi-governmental or Federal Reserve-like entity might be suitable for producing advisory information on the comparative effectiveness of medical treatments but not for making decisions that directly affect the health coverage of individual Americans.