Robert F. Rich - Health Policy, Federalism and the American States

We would like to express our thanks to a number of organizations and individuals who helped with the conference upon which this volume is based or provided helpful insights into the structure and content of the volume. The conference was organized by the Institute of Government and Public Affairs at the University of Illinois. Special thanks are due to those at the Institute who provided direct and indirect support to the conference and to the ongoing work of the co-editors. Thanks are equally due to the Cooperative Extension Service at the University of Illinois, the Office of the Vice Chancellor for Health Services at the University of Illinois at Chicago, Advocate Health Care, the Alpha Center in Washington, D.C., and the Program in Health Economics, Management, and Policy of the University of Illinois at Urbana-Champaign whose support allowed us to attract a number of top experts in health policy. In addition to the contributors to this volume, we want to thank the following individuals for their important and helpful insights: Richard Arnould, Ray Austin, Paul Brace, Charles Barrilleaux, David Dranove, Thomas Downes, Congressman Dennis Hastert, Dieter Haussmann, David Helms, Edward Howard, Al Lewis, Stephen Long, Therese McGuire, Marilyn Moon, Wallace Oates, Mark Pauly, James Pfander, Andrew Reschovsky, Frank Thompson, and Carl Van Horn. Richard Nathan was particularly helpful in providing input into the structure of this volume and also provided us with insights in our thinking about federalism.

We are grateful to Felicity Skidmore of the Urban Institute Press for the care she and her staff gave to the preparation of this book. She also arranged for very helpful referees reports. As co-editors, we found these reports instrumental in the preparation of our two chapters.

We are also grateful to Anna Merritt, Melissa Morgan, and Linda Schaumann for their valuable assistance in planning the conference, and in putting together this volume, and to Brian Keefe, who provided valuable research assistance in the preparation of the co-editors chapters.

In the debate on the federal-state division of responsibility that has been ongoing in the United States since the days of the Founding Fathers, health care is a relatively recent addition. Historically, the predominant debate in the health care arena has been over the desirability of government involvement at any level. Federal government involvement in the health care market began with protection for selected groups: the merchant marine, native Americans, veterans, and (since 1965) the elderly and certain categories of the poor. State involvement was restricted largely to regulation designed to mitigate some of the worst inequities in the private health insurance market. Local government acted as the provider of last resort. Since these three spheres of activity were clearly separable, the intergovernmental allocation of responsibility in health policy received little attention.

As we approach the 21st century, however, health care has become a central part of the federalism debate. One reason for this is simply the enormous and rapidly rising public cost of health care, in an environment in which some observers equate the devolution of responsibility to the states with saving money. Another reason is growing recognition of the many millions of Americans who lack health insurance, in an environment in which some observers equate increased state responsibility with increased responsiveness to need. A third is the extensive record of experimentation on the part of state Medicaid programs in the 1980s with new ways of financing and delivering care, leading some observers to claim that the secret to cost-effective health care delivery will come from state-level innovations. All these factors give new urgency to the issue of how best to divide public responsibilities between the federal government and the state.