Research assignment

CHAPTER

135

POLICY FORMULATION: AGENDA SETTING

Learning Objectives

After reading this chapter, you should be able to

• define agenda setting; • understand Kingdon’s conceptualization of the confluence of problems,

possible solutions, and political circumstances in opening a window of opportunity in agenda setting;

• describe how problems emerge for consideration in policymaking; • appreciate the role of research in selecting among possible solutions to

problems; • describe the role of political circumstances in agenda setting; • understand the role of interest groups in agenda setting; • describe the tactics used by interest groups in influencing the policy

agenda; • understand the role of chief executives in agenda setting; and • describe and explain the nature of the health policy agenda.

T his chapter and the four that follow examine in greater detail the three distinct phases of the health policymaking process described and mod- eled in Chapter 3. This chapter focuses on the agenda setting that

occurs in the policy formulation phase. Chapter 6 focuses on the develop- ment of legislation that also occurs in that phase. Chapter 7 describes policy implementation and implementing organizations, whereas Chapter 8 describes the policy implementation activities of designing, rulemaking, operating, and evaluating. Chapter 9 discusses the policy modification phase. These chapters apply the model to health policymaking almost exclusively at the national level of government. However, as is true of previous chapters, much of what is said here about the process of public policymaking also applies at the state and local levels. The contexts, participants, and specific mechanisms and pro- cedures obviously differ among the three levels, but the core process is similar.

5

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Remember from the discussion in Chapter 3 that the formulation phase of health policymaking is made up of two distinct and sequential parts: agenda setting and legislation development (see the darkly shaded portion of Exhibit 5.1). Each part involves a complex set of activities in which policy- makers and those who would influence their decisions and actions engage, but policy formulation begins with agenda setting.

Agenda Setting

As noted in Chapter 3, agenda setting is deciding what to make decisions about in the policy formulation phase of policymaking. It is the crucial ini- tial step in the process. Kingdon (2010) describes agenda setting in public policymaking as a function of the confluence of three streams of activity: problems, possible solutions to the problems, and political circumstances. According to Kingdon’s conceptualization, when problems, possible solu- tions, and political circumstances flow together in a favorable alignment, a “policy window” or “window of opportunity” opens. When a policy window opens, a problem–potential solution combination that might lead to a new public law or an amendment to an existing one emerges from the set of competing problem–possible solution combinations and moves forward in the policymaking process (see Exhibit 5.2).

Current health policies in the form of public laws—such as those per- taining to environmental protection, licensure of health-related practitioners and organizations, expansion of the Medicaid program, cost containment of the Medicare program, funding for acquired immunodeficiency syndrome (AIDS) research or women’s health, and regulation of pharmaceuticals— exist because problems or issues emerged from agenda setting and triggered changes in policy. However, the existence of these problems alone was not sufficient to trigger the development of legislation intended to address them.

The existence of health-related problems, even serious ones such as inadequate health insurance coverage for millions of people or the continuing widespread use of tobacco products, does not always lead to policies intended to solve or ameliorate them. There also must be potential solutions to the problems and the political will to enact specific legislation to implement those solutions. Agenda setting is best understood in the context of its three key variables: problems, possible solutions, and political circumstances.

Problems The breadth of problems that can initiate agenda setting is reflected in the broad range of health policies. Chapter 1 discussed how health is affected by several determinants: the physical environments in which people live and

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work; their behaviors and biology; social factors; and the type, quality, and timing of health services they receive.

Beyond these determinants, as shown in the external environment component of Exhibit 5.1, the situations and preferences of individuals, orga- nizations, and groups as well as biological, biomedical, cultural, demographic, ecological, economic, ethical, legal, psychological, science, social, and techno- logical variables affect policymaking throughout the process. These inputs join with the results and consequences of the policies produced through the ongo- ing policymaking process to continuously supply agenda setters with a massive pool of contenders for a place on that agenda. From among the contenders, certain problems find a place on the agenda while others do not.

Problems That Drive Policy Formulation The problems that eventually lead to the development of legislation are generally those that policymakers broadly identify as important and urgent. Problems that do not meet these criteria languish at the bottom of the list or never find a place on the agenda. Price (1978), in a classic article, argues that whether a problem receives aggressive congressional intervention in the form of policymaking depends on its public salience and the degree of group conflict surrounding it. He defines a publicly salient problem or issue as one with a high actual or potential level of public interest. Conflictive problems or issues are those that stimulate intense disagreements among interest groups or those that pit the interests of groups against the larger public interest. Price contends that the incentives for legislators to intervene in problems or issues are greatest when salience is high and conflict is low. Conversely, incentives are least when salience is low and conflict is high. Appendix 12, which pertains to the legalization of recreational marijuana, illustrates the difficulty of legislative intervention when the conflict sur- rounding a problem is high.

Problems that lead to attempts at policy solutions find their place on the agenda along one of several paths. Some problems emerge because trends

EXHIBIT 5.2 Agenda

Setting as the Confluence

of Problems, Possible

Solutions, and Political

Circumstances

A Place on the Policy Agenda

Problems

Possible Solutions

Political Circumstances

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in certain variables eventually reach unacceptable levels—at least, levels unac- ceptable to some policymakers. Growth in the number of uninsured and cost escalation in the Medicare program are examples of trends that eventually reached levels at which policymakers felt compelled to address the underlying problems through legislation. Both problems are addressed in the Affordable Care Act (ACA).

Problems also can be spotlighted by their widespread applicability (e.g., the high cost of prescription medications to millions of Americans) or by their sharply focused impact on a small but powerful group whose members are directly affected (e.g., the high cost of medical education). Another example of a widespread problem that led to specific legislation was that a large number of people felt locked into their jobs because they feared that preexisting health conditions might prevent them from obtain- ing health insurance if they changed jobs. In response to this problem, the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) significantly enhanced the portability of health insurance coverage when people change jobs. Other provisions in this law guarantee availability and renewability of health insurance coverage for certain employees and individu- als and an increase in the tax deduction for health insurance purchased by the self-employed.

Some problems gain their place on the agenda or strengthen their hold on a place because they are closely linked to other problems that already occupy secure places. Efforts by the legislative and executive branches of the federal government to address the nation’s budget deficit problem, at least in part through reduced expenditures on the Medicare program, are a recur- ring example of the link between one problem (cost increases in the Medicare program) and another (growth of the federal deficit). Linking these two problems significantly strengthens prospects for the development of legisla- tion intended to curtail Medicare program expenditures.

Some problems emerge more or less simultaneously along several paths. Typically, problems that emerge this way become prominent on the policy agenda. For example, the problem of the high cost of health services for the private and public sectors has long received attention from policymak- ers. Even though the rate of growth in health costs has slowed in the past few years, these costs remain high and problematic (Martin et al. 2014). This problem emerged along a number of mutually reinforcing paths. In part, the cost problem has been prominent because the cost trend data disturb many people. The data contribute to and reinforce a widespread acknowledg- ment of the problem of health costs in public poll after public poll and have attracted the attention of some of those who pay directly for health services through the provision of health insurance benefits, especially the politically powerful business community. Finally, the health cost problem, as it relates to

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public expenditures—for the Medicare and Medicaid programs especially— has also been linked at times to the need to control the federal budget.

The importance of these variables has been magnified greatly in the context of the global financial crisis engulfing the world beginning in 2008 (Shah 2013). The variables of healthcare costs and the escalating federal budget form a combination of interacting circumstances, which is largely why this problem remains perennially prominent in the minds of many policymak- ers. The persistence of this problem, and many others, is also related to the difficulty of finding and pursuing potential solutions.

Possible Solutions The second variable in agenda setting (see Exhibit 5.2) is the existence of possible solutions to problems. Problems themselves—even serious, fully acknowledged ones with widespread implications such as high costs, poor quality, and uneven access to needed health services—do not invariably lead to policies. Potential solutions must accompany them. The availability of pos- sible solutions depends on the generation of ideas and, usually, a period of idea testing and refinement. As Appendix 13, which pertains to the Centers for Medicare & Medicaid Services (CMS) Innovation Center’s search for new and better payment and health services delivery models, illustrates, numerous ideas might serve as solutions to problems, either in single application or in various combinations.

While the menus of alternative solutions vary in size and quality, alter- native solutions almost always exist. An excessive number of alternatives can slow the problem’s advancement through the policymaking process as the relative merits of the competing alternatives are considered. Without at least one solution believed to have the potential to solve it, however, a problem does not advance, except perhaps in some spurious effort to create the illu- sion that it is being addressed.

When alternative solutions do exist, policymakers must decide whether the potential solutions are worth developing into legislative proposals. Frequently, multiple solutions to a particular problem will be considered worthy of such action, resulting in the simultaneous development of several competing legislative proposals. Competing proposals tend to make agenda setting rather chaotic, although rigorous research and analysis can sometimes provide more clarity.

The Role of Research and Analysis in Defining Problems and Assessing Alternatives Health services research is “the multidisciplinary field of scientific investiga- tion that studies how social factors, financing systems, organizational struc- tures and processes, health technologies, and personal behaviors affect access

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to healthcare, the quality and cost of healthcare, and ultimately our health and well-being. Its research domains are individuals, families, organizations, institutions, communities, and populations” (AcademyHealth 2014). It has been defined more succinctly as “scientific inquiry into the ways in which health services are delivered to various constituents” (Forrest et al. 2008). Health services researchers seek to understand how people obtain access to healthcare services, the costs of the services, and the results for patients of using this care. The main goals of this type of research include identifying the most effective ways to organize, manage, finance, and deliver high- quality care and services and, more recently, how to reduce medical errors and improve patient safety. Health services research, along with much bio- medical research, contributes to problem identification and specification and the development of possible solutions. Thus, research can help establish the health policy agenda by clarifying problems and potential solutions. Well- conducted health services research provides policymakers with facts that might affect their decisions.

Policymakers value the input of the research community sufficiently to fund much of its work through the National Institutes of Health (NIH), the Agency for Healthcare Research and Quality (AHRQ), and other agencies. AHRQ, the health services research arm of the US Department of Health and Human Services (HHS), complements the biomedical research mission of its sister agency, NIH. AHRQ is the federal government’s focal point for research to enhance the quality, appropriateness, and effectiveness of health services and access to those services.

In addition to these traditional research and analysis agencies, the ACA significantly improved the government’s ability to use analysis and research in guiding agenda setting. For example, the ACA created the Center for Medicare and Medicaid Innovation (CMI) within CMS, and appropriated $10 billion for the FY2011 to FY2019 period—along with $10 billion for each subsequent ten-year period. The purpose of CMI is to test and imple- ment innovative payment and service delivery models. These models are intended to reduce program expenditures under Medicare, Medicaid, and the Children’s Health Insurance Program while preserving or enhancing the quality of care furnished under these programs (Redhead 2014).

The ACA also established and funded an Independent Payment Advi- sory Board (IPAB) to make recommendations to Congress for achieving specific Medicare spending reductions if costs exceed a target growth rate. IPAB’s recommendations are to take effect unless Congress overrides them, in which case Congress would be responsible for achieving the same level of savings.

Further supporting the research and analysis basis for policymaking, the ACA established a trust fund to finance the Patient-Centered Outcomes

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Research Institute (PCORI). The main purpose of PCORI (2014) is to support the conduct of comparative clinical effectiveness research. Appro- priations to this trust fund were $10 million for FY2010, $50 million for FY2011, and $150 million for each of FY2012 through FY2019, for a total of $1.26 billion over that ten-year period. For each year of FY2013 through FY2019, the trust fund is to receive additional appropriations equal to the net revenues from a new health insurance policy or plan fee, as well as Medicare trust fund transfers. Each fiscal year, 20 percent of the funds in the trust are to be transferred to the secretary of HHS, with 80 percent of the transferred funds provided to AHRQ.

Research and analysis play two especially important roles in agenda setting. First, an important documentation role is played through the gather- ing, cataloging, and correlating of facts related to health problems and issues. For example, researchers documented the dangers of tobacco smoke; the presence of human immunodeficiency virus (HIV); the numbers of people living with AIDS, a variety of cancers, heart disease, and other diseases; the effect of poverty on health; the number of people who lack health insurance coverage; the existence of health disparities among population segments; and the dangers imposed by exposure to various toxins in people’s physical environments. Quantification and documentation of health-related problems give the problems a better chance of finding a place on the policy agenda.

The second way research informs, and thus influences, the health policy agenda is through analyses to determine which policy solutions may work or to compare alternative solutions. Health services research provides valuable information to policymakers as they propose, consider, and prioritize alternative solutions to problems. Often taking the form of demonstration projects intended to provide a basis for determining the feasibility, efficacy, or basic workability of a possible policy intervention, research-based recommen- dations to policymakers can play an important role in policy agenda setting. Potential solutions that might lead to public policies—even if the policies themselves are formulated mainly on political grounds—must stand the test of plausibility. Research that supports a particular course of action or attests to its likelihood of success—or at least to the probability that the course of action will not embarrass proponents—can make a significant contribution to policymaking by helping shape the policy agenda.

What research cannot do for policymakers, however, is make decisions for them. Every difficult decision regarding the health policy agenda ulti- mately rests with policymakers.

Making Decisions About Alternative Possible Solutions Problems that require decisions and alternative possible solutions to them are two prerequisites for using the classical, rational model of decision making

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outlined in Exhibit 5.3. This model shares the basic pattern of the organi- zational decision-making process typically followed in the private and public sectors. However, differences between the two sectors in the use of this model typically arise with the introduction of the criteria used to evaluate alternative solutions.

Some of the criteria used to evaluate and compare alternative solutions in the private and public sectors are the same or similar. For example, the cri- teria set in both sectors usually include consideration of whether a particular solution will actually solve the problem, whether it can be implemented using available resources and technologies, its costs and benefits relative to other possible solutions, and the results of an advantage-to-disadvantage analysis of the alternatives.

In both sectors, high-level decisions have scientific or technical, politi- cal, and economic dimensions. The scientific or technical aspects can be more difficult to factor into decisions when the evidence is in dispute, as it often is (Atkins, Siegel, and Slutsky 2005; Steinberg and Luce 2005). The most pervasive difference between the criteria sets used in the two sectors, how- ever, is in the roles political concerns and considerations play. Decisions made by public-sector policymakers must reflect greater political sensitivity to the public at large and to the preferences of relevant individuals, organizations, and interest groups. The greater political sensitivity required helps explain the importance of the third variable in agenda setting in the health policymaking process, political circumstances.

Define the problem.

Develop relevant alternative solutions.

Evaluate alternatives.

Select a solution.

Criteria based

EXHIBIT 5.3 The Rational Model of Decision Making

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Political Circumstances A problem that might be solved or lessened through policy, even in com- bination with a possible solution to that problem, is not sufficient to move the problem–solution combination forward in the policymaking process. A political force, or what is sometimes called political will, is also necessary.

Thus, the political circumstances surrounding each problem–potential solution form the crucial third variable in creating a window of opportunity through which problems and potential solutions move toward development of legislation. This variable is generally as important as the other two variables in this complex equation (see Exhibit 5.2), and in times of crisis such as the global financial crisis that emerged in 2008, political circumstances can be by far the most significant factor in stimulating policy changes. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) is an example of this phenomenon.

The establishment of a political thrust forceful enough to move poli- cymakers to act on a health-related problem is often the most challenging variable in the problem’s emergence on the policy agenda and progression to legislation development. This variable can be seen clearly in the passage of the ACA in 2010. Following decades of failed attempts to fundamentally reform healthcare in the United States, why did major health reform occur in 2010? The answer to this question is complex, but it certainly involves the political circumstances surrounding the issue. As Hacker suggests (2010, 863), “The obvious answer is the election of a Democratic president, the Democratic capture of Congress in 2006, and the strengthening of the majority in 2008.” Hacker goes further to point out that the political circumstances in which the ACA occurred included not only a Democratic majority in Congress, but a more homogeneously liberal composition of members of Congress.

Whether the political circumstances attendant on any problem–poten- tial solution combination are sufficient to actually open a window of oppor- tunity depends on the competing entries on the policy agenda. The array of problems is an important variable in agenda setting. When the nation is involved in serious threats to its national security or its civil order, for exam- ple, or when a state is in the midst of a sustained recession, health policy will be treated differently. In fact, health policy, which is often a high priority for the American people, can be pushed to a secondary position at times.

The political circumstances surrounding any problem–potential solu- tion combination include such factors as the relevant public attitudes, concerns, and opinions; the preferences and relative ability to influence political decisions of various groups interested in the problem or the way it is addressed; and the positions of involved key policymakers in the executive and legislative branches of government. Each of these factors can influence whether a problem is addressed through policy and the shape and scope of

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any policy developed to address the problem. Two factors in particular exert great influence in establishing the policy agenda. These are interest groups and the chief executive (president, governor, or mayor). The role of each in agenda setting is discussed in the next two sections.

Interest Group Involvement in Agenda Setting

As we discussed in Chapter 2, interest groups are ubiquitous in the policy marketplace. Perhaps nowhere in the policymaking process is the influence of interest groups more prevalent than in the agenda-setting activities of the formulation phase (see Exhibit 5.1).

To fully appreciate the role of interest groups in setting the policy agenda, consider the role of individual Americans. In a representative form of government, such as that of the United States, individual members of society, unless they are among the elected representatives, usually do not vote directly on policies. They can, however, vote on policymakers. Thus, policymakers are interested in what individuals, especially voters, want, even when that is not easy to discern.

However, one of the great myths about democratic societies is that their members, when confronted with tough problems such as the high cost of healthcare for everyone, the lack of health insurance for many, or the existence of widespread disparities in health among segments of the society, ponder the problems carefully and express their preferences to their elected officials, who then factor these opinions into their decisions about how to address the problems through policy. Sometimes these steps take place, but even when the public expresses its opinions about an issue, the result is clouded by the fact that the American people are heterogeneous in their views. Opinions are mixed on health-related problems and their solutions. Public opinion polls can help sort out conflicting opinions, but polls are not always straightforward undertakings. In addition, individuals’ opinions on many issues are subject to change.

The public’s thinking on difficult problems that might be addressed through public policies evolves through predictable stages, beginning with awareness of the problem and ending with judgments about its solution (Yankelovich and Friedman 2010). In between, people explore the problem and alternative solutions with varying degrees of success. The progress of individuals through these stages is related to their views on the problems and solutions.

The diversity among members of society and the fact that individual views on problems and potential solutions evolve over time explain in large part the greater influence of organizations and interest groups in shaping the

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policy agenda. Interest groups in particular can exert extraordinary influence in policy markets, as we discussed in Chapter 2.

Whether made up of individuals or organizations, interest groups are often able to present a unified position to policymakers on their preferences regarding a particular problem or its solution. A unified position is far easier for policymakers to assess and respond to than the diverse opinions and pref- erences of many individuals acting alone. Although individuals tend to be keenly interested in their own health and the health of those they care about, their interests in specific health policies tend to be diffuse. These diffused interests stand in contrast to the highly concentrated interests of those who earn their livelihood in the health domain or who stand to gain other benefits there. This phenomenon is not unique to health. In general, the interests of those who earn their livelihood in any industry or economic sector are more concentrated than the interests of those who merely use its outputs.

One result of the concentration of interests is the formation of orga- nized interest groups that seek to influence the formulation, implementation, and modification of policies to some advantage for the group’s members. Because all interest groups seek policies that favor their members, their own agendas, behaviors, and preferences regarding the larger public policy agenda are often predictable.

Feldstein (2006) argues, for example, that all interest groups represent- ing health services providers seek through legislation to increase the demand for members’ services, limit competitors, permit members to charge the high- est possible prices for their services, and lower their members’ operating costs as much as possible. Likewise, an interest group representing health services consumers logically seeks policies that minimize the costs of the services to its members, ease their access to the services, increase the availability of the services, and so on. Essentially, interest groups are human nature at work.

As we noted earlier, interest groups frequently play influential roles in setting the nation’s health policy agenda, as they subsequently do in the development of legislation and the implementation and modification of health policies. These groups sometimes proactively seek to stimulate new policies that serve the interests of their members. Alternatively, they some- times reactively seek to block policy changes that they believe do not serve their members’ best interests.

Interest Groups Are Ubiquitous in Health Policymaking A significant feature of the policymaking process in the United States is the presence of interest groups that exist to serve the collective interests of their members. These groups analyze the policymaking process to discern policy changes that might affect their members and inform them about such

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changes. They also seek to influence the process to provide the group’s mem- bers with some advantage. The interests of their constituent members define the health policy interests of these groups.

Health services providers rely heavily on interest groups to influence policymaking to their advantage, as do other types of health-related organiza- tions. Some interest groups are consumer based. Without being exhaustive, some of the important health-related interest groups are noted next.

Hospitals can join the American Hospital Association (www.aha.org), long-term care organizations can join the American Health Care Association (www.ahca.org) or the American Association of Homes and Services for the Aging, now known as LeadingAge (www.leadingage.org), and health insurers and health plans can join America’s Health Insurance Plans (www.ahip.org).

Other interest groups represent individual health practitioners. Physi- cians can join the American Medical Association (AMA; www.ama-assn.org). African American physicians may choose to join the National Medical Asso- ciation (www.nmanet.org), and female physicians may choose to join the American Medical Women’s Association (www.amwa-doc.org). In addition, physicians have the opportunity to affiliate with groups, usually termed col- leges or academies, where membership is based on medical specialty. Promi- nent examples are the American College of Surgeons (www.facs.org) and the American Academy of Pediatrics (www.aap.org). Other personal membership groups include the American College of Healthcare Executives (www.ache .org), the American Nurses Association (www.ana.org), and the American Dental Association (www.ada.org), to name a few.

Often, in addition to national interest groups, health services pro- vider organizations and individual practitioners can join state and local groups—usually affiliates or chapters of national groups—that also represent their interests. For example, states have state hospital associations and state medical societies. Many urban centers and densely populated areas even have groups at the regional, county, or city level.

There are numerous other health-related interest groups in addition to those whose members provide health services directly. Examples include the following:

• America’s Health Insurance Plans (www.ahip.org) • Association of American Medical Colleges (www.aamc.org) • Association of University Programs in Health Administration

(www.aupha.org) • Biotechnology Industry Organization (www.bio.org) • Blue Cross and Blue Shield Association (www.bcbs.com) • Pharmaceutical Research and Manufacturers of America (www.phrma.org)

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Like groups whose members are health services providers, these groups focus particularly on policies that affect their members directly.

There are also a number of interest groups that serve consumers. Reflecting the populations from which their members are drawn, groups with individual member constituencies are diverse. Some are based in part on a shared characteristic such as race, gender, age, or connection to a specific disease or condition. Examples include the following:

• Alliance for Retired Americans (www.retiredamericans.org) • American Association of Retired Persons (AARP; www.aarp.org) • American Heart Association (www.heart.org) • Consortium for Citizens with Disabilities (www.c-c-d.org) • Families USA (www.familiesusa.org) • National Association for the Advancement of Colored People

(NAACP; www.naacp.org) • National Organization for Women (NOW; www.now.org)

Interest groups such as NAACP and NOW serve the health interests of their members as part of agendas focused broadly on racial and gender equality. Although the Fourteenth Amendment to the US Constitution guar- antees equal protection under the law, American history clearly shows how difficult this equality has been to achieve. Interest groups such as NAACP and NOW have made equality their central public policy goal at the polls; in the workplace; and in education, housing, health services, and other facets of life in the United States. Income inequality in the United States is the newest of these variables.

The specific health policy interests of groups representing African Americans include adequately addressing this population segment’s unique health problems: widespread disparities in health status and access to health services, higher infant mortality, higher exposure to violence among ado- lescents, higher levels of substance abuse among adults, and, compared to other segments of the population, earlier deaths from cardiovascular disease and other causes. Similarly, groups representing the interests of women seek to address their unique health problems. In particular, they focus on such interests as breast cancer, childbearing, osteoporosis, domestic violence, family health, and funding for biomedical research on women’s health problems.

A growing proportion of the American population is older than 65. Older adults have specific health interests related to their stage of life; as peo- ple age, they consume relatively more healthcare services, and their health- care needs differ from those of younger people. They also become more likely

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to consume long-term care services and community-based services intended to help them cope with limitations in the activities of daily living.

In addition to their health needs, older citizens have a unique health policy history and, therefore, a unique set of expectations and preferences regarding the nation’s health policy. The Medicare program, a key feature of this history, includes extensive provisions for health benefits for older citizens. Building on the specific interests of older people and their pref- erences to preserve and extend their healthcare benefits through public policies, organizations such as AARP and the Alliance for Retired Americans (www.retiredamericans.org) play an important role in addressing the health policy interests of their members.

Other interest groups with individual constituencies reflect member interests based primarily on specific diseases or conditions, such as the Ameri- can Cancer Society (www.cancer.org) or the Consortium for Citizens with Disabilities (www.c-c-d.org). The American Heart Association (AHA; www .heart.org), for example, has 22.5 million volunteers and supporters pursuing the organization’s mission of building healthier lives, free of cardiovascular diseases and stroke. The association pursues its mission through such avenues as direct funding of research, public and professional education programs, and community programs designed to prevent heart disease. It also seeks to serve its members’ interests through influencing public policy related to heart disease. As AHA (2014) notes on its web page, its federal policy agenda is organized into the following categories:

• Research, with a focus on stable and predictable funding streams for NIH, AHRQ, and the National Center for Health Statistics

• Prevention, with a focus on measures for improving cardiovascular health such as obesity prevention, tobacco control, and public funding for prevention and air pollution control

• Quality care, including health equity for minorities and women, evidence-based cardiovascular care, stroke prevention and treatment programs, rehabilitation services, and telemedicine

• Access to care, including adequate and affordable healthcare coverage; appropriate systems of emergency care for stroke, ST segment elevation myocardial infarction, and sudden cardiac arrest; cardiopulmonary resuscitation training; and access to automated external defibrillators and cardiovascular surveillance systems

• Stroke, including the creation and enhancement of high-quality stroke systems of care incorporating prevention, community education, notification and response of emergency medical services, acute treatment, and rehabilitation

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Tactics of Interest Groups in Agenda Setting As influential participants in public policymaking, interest groups are integral to the process. They are especially ubiquitous in the health domain. But how do they exert their influence? Interest groups rely heavily on four tactics: lobbying, electioneering, litigation, and, especially recently, shaping public opinion so that it might in turn influence the policymaking process to the groups’ advantage (Edwards, Wattenberg, and Lineberry 2012). Each of these tactics is described in the following sections.

Lobbying This widely used influencing tactic has deep roots in public policymaking in the United States, and it involves large sums of money. Lobbying expendi- tures on health issues at the federal level were about $480 million in 2013 (Center for Responsive Politics 2014c). In the minds of many people, lobby- ing conjures a negative image of money exchanging hands for political favors and backroom deals. But ideally it is nothing more than communicating with public policymakers to influence their decisions to be more favorable to, or at least consistent with, the preferences of the lobbyist (Andres 2009; Her- rnson, Shaiko, and Wilcox 2005).

Lobbying, the word for these influencing activities, and lobbyists, the word for people who do this work, arose in reference to the place where such activities first took place. Before members of Congress had offices or telephones, people who sought to influence their thinking waited for the legislators and talked to them in the lobbies of the buildings they frequented. The original practitioners of this influencing tactic spent so much time in lobbies that they came, naturally enough, to be called lobbyists, and their work, lobbying.

The vast majority of lobbyists operate in an ethical and professional manner, effectively representing the legitimate interests of the groups they serve. However, the few who behave in a heavy-handed, even illegal manner have to some extent tarnished the reputations of all who do this work. Their image is further affected by the fact that their work, properly done, is essen- tially selfish in nature. Lobbyists seek to persuade others that the position of the interests they represent is the correct one. Lobbyists’ whole professional purpose is to persuade others to make decisions that are in the best interests of those who employ or retain them.

Opinions and results of studies on the effectiveness of lobbying are mixed at best (Bergan 2009). Some ambivalence over the role of lobby- ing derives from the inherent difficulty in isolating its effect from the other influencing tactics discussed later. There is no doubt that lobbying affects the policymaking process, but it seems to work best when applied to policymakers who are already committed, or at least sympathetic, to the lobbyist’s position

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on a public policy issue (Edwards, Wattenberg, and Lineberry 2012). Lob- byists certainly played a prominent role in the enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108- 173), the ACA, and other health policies (Kersh 2014; Weissert and Weissert 2012). Appendix 14 provides an example of highly focused and cooperative lobbying to improve the Meaningful Use program standards and increase health information technology interoperability. The influence lobbyists exert on policymaking is facilitated by several well-recognized sources (Godwin, Ainsworth, and Godwin 2013; Herrnson, Shaiko, and Wilcox 2005):

• Lobbyists are an important source of information for policymakers. Although most policymakers must be concerned with many policy issues simultaneously, most lobbyists can focus and specialize. They can become expert and can draw on the insight of other experts in the areas they represent.

• Lobbyists can assist policymakers with the development and execution of political strategy. Lobbyists typically are politically savvy and can provide what amounts to free consulting to the policymakers they choose to assist.

• Lobbyists can assist elected policymakers in their reelection efforts. (More is said about this role in the next section on electioneering.) This assistance can take several forms, including campaign contributions, votes, and workers for campaigns.

• Lobbyists can be important sources of innovative ideas for policymakers. Policymakers are judged on the quality of their ideas as well as their abilities to have those ideas translated into effective policies. For most policymakers, few gifts are as valued as a really good idea, especially when they can turn that idea into a bill that bears their name.

• Finally, lobbyists can be friends with policymakers. Lobbyists are often gregarious and interesting people in their own right. They entertain, sometimes lavishly, and they are socially engaging. Many of them have social and educational backgrounds similar to those of policymakers. In fact, many lobbyists have been policymakers earlier in their careers. Friendships between lobbyists and policymakers are neither unusual nor surprising.

Electioneering Electioneering, or using the resources at their disposal to aid candidates for political office, is a common means through which interest groups seek to influence the policymaking process. Many groups have considerable resources to devote to this tactic. The effectiveness of electioneering in influencing the

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policymaking process is based on the simple fact that policymakers who are sympathetic to a group’s interests are far more likely to be influenced than are policymakers who are not sympathetic. Thus, interest groups seek to elect and keep in office policymakers whom they view as sympathetic to the interests of the group’s members.

Interest groups have, to varying degrees, a set of resources that involve electoral advantages or disadvantages for political candidates. For example, some groups whose members are widely dispersed across congressional dis- tricts throughout the country, that can mobilize their members, and whose members have status or wealth can affect election outcomes (Kingdon 2010).

One of the most visible aspects of electioneering is the channeling of money into campaign finances. Exhibit 5.4 shows the extent of this activity in the House and Senate midterm elections in 2012. Health-related inter- est groups participate heavily in this form of electioneering. Appendix 15 describes the types of groups permitted to be involved in financing political campaigns.

In 1975, Congress created the Federal Election Commission (FEC; www.fec.gov) to administer and enforce the Federal Election Campaign Act—the law that governs the financing of federal elections. The duties of the FEC, which is an independent regulatory agency, are to disclose campaign finance information; enforce the provisions of the law, such as the limits and prohibitions on contributions; and oversee the public funding of presidential elections.

The Center for Responsive Politics, a nonpartisan, not-for-profit research group based in Washington, DC, is a rich source of information on the use of money in politics and its effect on elections and public policymak- ing. The center’s website (www.opensecrets.org) provides extensive, detailed information on the flow of money in the political process.

Although participation in campaign financing is an important source of influence for interest groups, the most influential groups are those who exert their influence through lobbying and electioneering activities. The hospital industry is a notable example. The AHA is a leading campaign contributor through its political action committee. Furthermore, it has many additional resources at its disposal. As Kingdon (2010) points out, every congressional district has hospitals whose trustees are community leaders and whose man- agers and physicians are typically articulate and respected in their community. These spokespersons can be mobilized to support sympathetic candidates or to contact their representatives directly regarding any policy decision.

As Ornstein and Elder (1978, 74) observed decades ago, “The ability of a group to mobilize its membership strength for political action is a highly valuable resource; a small group that is politically active and cohesive can have more political impact than a large, politically apathetic, and unorganized

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group.” The ability to mobilize people and other resources at the grass- roots level helps explain the capabilities of various groups to influence the policymaking process. The most influential health interest groups, including those representing hospitals, physicians, and nurses, have particularly strong grassroots organizations to call into play in their lobbying and electioneering tactics.

Litigation A third tactic interest groups can use to influence the policymaking process is litigation. Interest groups, acting on behalf of their members, seek to influ- ence the policy agenda and the larger policymaking process through litigation in which they challenge existing policies, seek to stimulate new policies, or try to alter certain aspects of policy implementation. Use of the litigation tactic in state and federal courts is widespread, and interest groups increasingly employ it in their efforts to influence policymaking in the health domain.

Although interest groups are more likely to seek to influence legisla- tive and executive branch decisions, they can and do pursue their policy goals in the courts. This tactic is especially attractive when interest groups do not have the economic resources to mount a large lobbying effort or do not have large and influential memberships. In these circumstances, groups may find the judicial branch a more fertile ground for their efforts. When interest groups turn to the courts, they are likely to use one of two strategies: test cases and amicus curiae (“friend of the court”) briefs.

Because the judiciary engages in policymaking primarily by rendering decisions in specific cases, interest groups may attempt to ensure that cases that pertain to their interests are brought before the courts, which is known as using the test-case strategy. A particular interest group can initiate and sponsor a case, or it can participate in a case initiated by another group that is pertinent to its interests. The latter strategy involves filing amicus curiae briefs and is the easiest way for interest groups to become involved in cases. This strategy, which is used in federal and state appellate courts rather than trial courts, permits groups to get their interests before the courts even when they do not control the cases in which they participate by filing the briefs. To file a brief, a private group must obtain permission from the parties to the case or from the court. This requirement does not apply to government interests. In fact, the solicitor general of the United States is especially impor- tant in this regard, and in some situations the US Supreme Court invites the solicitor general to present an amicus brief.

Friend-of-the-court briefs are often intended not to strengthen the arguments of one of the parties but to assert to the court the filing group’s preferences as to how a case should be resolved. Amicus curiae briefs are often filed to persuade an appellate court to either grant or deny review of a

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lower-court decision (US Department of State 2004). For example, in one case a group of commercial insurers and health maintenance organizations in New York City challenged the state of New York’s practice of adding a surcharge to certain hospital bills to raise money to help fund health services for indigent people (Green 1995). The US Supreme Court heard this case. Because the outcome was important to their members, a number of health interest groups filed amicus briefs in an effort to influence the court’s deci- sion. Through such written depositions, groups state their collective posi- tion on issues and describe how the decision will affect their members. This practice is widely used by interest groups in health and other domains. It has made the Supreme Court accessible to these groups, who, in express- ing their views, have helped determine which cases the Court will hear and how it will rule on them (Collins 2008). This practice is also frequently and effectively used by interest groups in lower courts to help shape the health policy agenda.

The use of litigation is not limited to attempts to shape the policy agenda, however. One particularly effective use of this tactic is seeking clari- fication from the courts on vague pieces of legislation. This practice provides opportunities for interest groups to exert enormous influence on policymak- ing overall by influencing the rules, regulations, and administrative practices that guide the implementation of public statutes or laws. We will say more about the role of interest groups in rulemaking in Chapter 8 in the discussion about rulemaking in the overall public policymaking process. For now, recall from Chapter 1 that the rules and regulations established to implement laws and programs are themselves authoritative decisions that fit the definition of public policies.

Shaping Public Opinion Because policymakers are influenced by the electorate’s opinions, many interest groups seek to influence the policymaking process by shaping public opinion (Blendon et al. 2010; Schlesinger 2014). A good example of this influence is seen in some of the activities of the Coalition to Protect Ameri- ca’s Health Care. On its Facebook page, the coalition describes itself as “an organization of hospitals, national, state, regional and metropolitan hospital associations .  .  . united to achieve one goal: to protect high quality patient care by preserving the financial viability of America’s hospitals” (Coalition to Protect America’s Health Care 2014). It pursues this goal in part by shaping public opinion through ads supporting hospitals.

This tactic, of course, is not new. It was used extensively in the congressional debate over national health reform in the 1990s. Interest groups spent more than $50 million seeking to shape public opinion on the issues involved. For example, many thought the health insurance industry’s

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ubiquitous “Harry and Louise” ads were effective during the debate (Hacker 1997). These ads were not the first use of this public opinion tactic by health- care interest groups, however.

Intense opposition in some quarters to the legislation, especially by the AMA, fueled the congressional debate over the Medicare legislation in the 1960s. The American public had rarely, if ever, been exposed to so feverish a campaign to shape opinions as it experienced in the period leading up to its enactment in 1965.

Among the many activities undertaken in that campaign to influence public opinion (and through it, policymakers), perhaps none is more enter- taining in hindsight—and certainly few better represent the campaign’s tone and intensity—than one action taken by the AMA. As part of its campaign to influence public opinion on Medicare, the AMA sent every physician’s spouse a recording and advised her (most physicians were men in those days) to host friends and neighbors and play the recording for them. The idea was to encourage these people to write letters to their representatives in Congress in opposition to the legislation. Near the end of the recording, narrated by Ronald Reagan, the following words can be heard (as quoted in Skidmore 1970, 138):

Write those letters now; call your friends and tell them to write them. If you don’t,

this program, I promise you, will pass just as surely as the sun will come up tomor-

row. And behind it will come other federal programs that will invade every area of

freedom as we have known it in this country. Until one day . . . [we] will awake to

find that we have socialism. And if you don’t do this, and I don’t do it, one of these

days you and I are going to spend our sunset years telling our children and our

children’s children what it was like in America when men were free.

Attempts to shape public opinion about government’s role in health reached their high point in the debate leading up to the 2010 enactment of the ACA. The health sector spent a record $552 million in 2009 seeking to influence the legislation (Center for Responsive Politics 2014a). Some of this money was spent on ads intended to shape public opinion.

Although the effect of the appeals to public opinion made by inter- est groups on policymaking is debatable, the extent and persistence of the practice suggests that interest groups believe that it does make a difference. One factor clearly mitigates the usefulness of this tactic and makes difficult its use by interest groups: the heterogeneity of the American population’s perceptions of problems and preferred solutions to them. For example, in the congressional debate over major health reform in the 1990s, the majority viewpoint at the beginning of the debate was that health reform was needed. However, at no time during the debate was a public consensus achieved on

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the nature of that reform. No feasible alternative for reform ever received majority support in any public opinion poll. During most of the debate, in fact, public opinion was about evenly divided among the possible reform options (Brodie and Blendon 1995). Similarly, public opinion was split during development of the ACA legislation and has continued to be split throughout its implementation (Kaiser Family Foundation 2013). The split was largely partisan in the early debate about reform in 2009, with Demo- crats (70 percent) supporting reform and Republicans (60 percent) opposing it (Kaiser Family Foundation 2009).

Interest Group Resources and Success in Influencing the Policy Agenda Using lobbying, electioneering, litigation, and efforts to shape public opin- ion, interest groups seek to influence the policy agenda and the larger pub- lic policymaking process to the strategic advantage of their members. The degree of success they achieve depends on the resources at their disposal. In a classic book on the subject, Ornstein and Elder (1978) categorize the resources of interest groups as follows:

• Physical resources, especially money and the number of members • Organizational resources, such as the quality of a group’s leadership,

the degree of unity or cohesion among its members, and the group’s ability to mobilize its membership for political purposes

• Political resources, such as expertise in the intricacies of the public policymaking process and a reputation for influencing the process ethically and effectively

• Motivational resources, such as the strength of ideological conviction among the membership

• Intangible resources, such as the overall status or prestige of a group

An especially important physical resource is the size of a group’s mem- bership. Large groups, especially when a group can convince policymakers that the group speaks with one united voice representing the preferences of its members, can influence all phases of the policymaking process from agenda setting through modification (Kingdon 2010). Larger groups can obviously have more financial resources, but perhaps even more important, size might provide an advantage simply because the group’s membership is spread through every legislative district. However, the costs of organizing a large group can be high, especially if their interests are not extremely con- cordant and focused.

The mix of physical, organizational, political, motivational, and intan- gible resources available to an interest group, and how effectively the group

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uses them, helps determine the group’s influence on the policy agenda and other aspects of the policymaking process. A particular group’s performance is also affected by its access to resources compared with groups that may be pursuing competing or conflicting policy outcomes (Edwards, Wattenberg, and Lineberry 2012; Feldstein 2006; Kingdon 2010). The policy market- place, as we discussed in Chapter 2, is a place where many people and groups promote their policy preferences.

The Influential Role of Chief Executives in Agenda Setting

Chief executives—presidents, governors, or mayors—also influence the policy agenda, including the agenda for policy in the health domain. Popu- lar chief executives can influence the policy agenda easily (Aberbach and Peterson 2006). Kingdon (2010) attributes the influence of presidents (his point also applies to other chief executives) to certain institutional resources inherent in the executive office. Morone (2014) notes that presidents can energize healthcare policy by setting the agenda and proposing solutions to problems. He also observes that bold federal health policies invariably require presidential leadership.

Political advantages available to chief executives include the ability to present a unified administration position on issues—which contrasts with the legislative branch, where opinions and views tend to be heterogeneous—and the ability to command public attention. Properly managed, the latter ability can stimulate substantial public pressure on legislators. Chief executives can even rival powerful interest groups in their ability to shape public opinion around the public policy agenda.

Chief executives can emphasize problems and preferred solutions in a number of ways, including press conferences, speeches, and addresses. To emphasize problems and preferred solutions may be an especially potent tac- tic in such highly visible contexts as a president’s state of the union address or a governor’s state of the state address.

Candidates for the presidency are often specific in their campaigns on various health policy issues, sometimes even to the point of endorsing specific legislative proposals. Examples include the emphasis President Kennedy and President Johnson gave to enactment of the Medicare program in their cam- paigns and President Clinton’s highly visible commitment to fundamental health reform as a central theme of his 1992 campaign. President Bush made enactment of the Medicare Prescription Drug, Improvement, and Modern- ization Act of 2003 a priority as he entered the campaign for his second term in 2004. In his 2008 campaign, and again in his 2012 reelection campaign,

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President Obama made health reform one of the highest priorities for his administration. Implementation of the ACA is one of the highest priorities of his second term.

Another issue-raising mechanism some chief executives favor is the appointment of special commissions or task forces. President Clinton used this tactic in the 1993 appointment of the President’s Task Force on Health Care Reform (Johnson and Broder 1996), as did President Obama in the creation of the National Commission on Fiscal Responsibility and Reform in 2010.

Governors can also use commissions and task forces to elevate issues on the policy agenda. For example, Massachusetts made history when that state’s Gay and Lesbian Student Rights Law was signed by Governor Weld in 1993. He established the nation’s first Governor’s Commission on Gay and Lesbian Youth, which helped lead the state legislature to enact the law. This law prohibits discrimination in public schools on the basis of sexual orientation. Gay students are guaranteed redress if they suffer name-calling, threats of violence, and unfair treatment in school. In another example, Governor McAuliffe of Virginia established the Governor’s Task Force on Mental Health Services and Crisis Response in 2013 and charged it to seek and recommend solutions to improve the state’s mental health crisis services.

Chief executives occupy a position that permits them to influence each phase of the policymaking process. In addition to their issue-raising role in agenda setting, they are well positioned to focus the legislative branch on the development of legislation and to prod legislators to continue their work on favored issues even when other demands compete for their time and atten- tion. In addition, chief executives are central to the implementation of poli- cies by virtue of their position atop the executive (or implementing) branch of government, as we discuss in Chapters 7 and 8, and they play a crucial role in modifying previously established policies, as we discuss in Chapter 9.

The Nature of the Health Policy Agenda

The confluence of problems and potential solutions and the political circum- stances that surround them invariably shapes the health policy agenda. This agenda, however, is extraordinarily dynamic, literally changing from day to day. In addition, the nation’s health policy agenda coexists with policy agen- das in other domains, such as defense, welfare, education, and homeland security. The situation is further complicated by the fact that in a pluralistic society where difficult problems exist and clear-cut solutions are rare, every problem and potential solution has different “sides,” each with its support- ers and detractors. The number, ratio, and intensity of these supporters and

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detractors are determined by the effect on them of a problem and its possible solution. One consequence of this phenomenon is severe crowding and con- founding of the health policy agenda. This agenda is impossible to describe in its full form at any point in time; it is enormous and in constant flux.

As policymakers seek to accommodate the needs and preferences of different interests in particular problem–potential solution combinations, the inevitable result is a large and diverse set of policies that are riddled with incompatibilities and inconsistencies. The subset of US policies on the pro- duction and consumption of tobacco products—a mix that simultaneously facilitates and discourages tobacco use—provides a good example of the coexistence of public policies at cross-purposes.

Another example can be seen in the health policy agenda, and in the eventual pattern of public policies, related to medical technology. Policymak- ers have sought to spread the benefits of new medical technology and at the same time to protect the public from unsafe technologies and slow the growth in overall health costs through controlling the explosive growth of new technologies. The result is a large group of technology-related policies that seek to foster (e.g., NIH, National Science Foundation, other bio- medical funding, tax credits for biomedical research in the private sector), to inhibit (e.g., state-run certificate-of-need programs that restrain the diffusion of technology), and to control (e.g., Food and Drug Administration regula- tion and product liability laws) the development and use of medical technol- ogy in the United States.

Its complexity and inconsistency aside, the most important aspect of the health policy agenda is that when a problem is widely acknowledged, when possible solutions have been identified and refined, and when political circumstances are favorable, a window of opportunity opens, albeit some- times only briefly. Through this window, problem–potential solution combi- nations move forward to a new stage: development of legislation (see Exhibit 5.1). As we describe in Chapter 6, through the development of legislation, policymakers seek to convert some of their ideas, hopes, and hypotheses about addressing problems into concrete policies in the form of new public laws or amendments to existing ones.

Summary

The policy formulation phase involves agenda setting and the development of legislation, as Exhibit 5.1 shows. Agenda setting is the central topic of this chapter. We discuss the development of legislation in Chapter 6.

Following Kingdon’s (2010) conceptualization, agenda setting in pub- lic policymaking is a function of the confluence of three streams of activity:

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problems, possible solutions to those problems, and political circumstances. When all three streams flow together in a favorable alignment, a window of opportunity opens (see Exhibit 5.1), allowing a problem–potential solution combination, which might be developed into a new public law or an amend- ment to an existing one, to advance to the next point in the policymaking process: development of legislation.

Review Questions

1. Discuss the formulation phase of policymaking in general terms. 2. Discuss agenda setting as the confluence of three streams of activities.

Include the concept of a window of opportunity for legislation development in your answer.

3. Describe the nature of problems that drive policy formulation. 4. Discuss the role of research and analysis in defining problems and

assessing alternatives. 5. Contrast decision making in the public and private sectors as it relates

to selecting from among alternative solutions to problems. 6. Discuss the involvement of interest groups in the political

circumstances that affect agenda setting. Incorporate the specific ways they influence agenda setting in your response.

7. Discuss the role of chief executives in agenda setting at the federal level. 8. Discuss the nature of the health policy agenda that results from agenda

setting at the federal level.

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CHAPTER

165

POLICY FORMULATION: DEVELOPMENT OF LEGISLATION

Learning Objectives

After reading this chapter, you should be able to

• understand the policy formulation phase of policymaking more thoroughly;

• list and describe the steps in the choreography of legislation development;

• discuss the legislative process in state governments; • discuss the drafting of legislative proposals, including the forms they

can take; • discuss the legislative committee and subcommittee structure of

Congress; • identify and describe the roles of the key congressional committees and

subcommittees with health policy jurisdiction; and • describe the federal and state budget legislative development processes.

A s we noted in Chapters 3 and 5, the formulation phase of health poli- cymaking is made up of two distinct and sequential parts: agenda set- ting and legislation development. Chapter 5 focused on agenda

setting; in this chapter we turn our attention to the development of legisla- tion. Policy formulation can be fully appreciated only through an understand- ing of the combination of activities associated with agenda setting and legislation development.

As with the discussion of agenda setting in Chapter 5, this discussion of legislation development is confined almost exclusively to its occurrence at the federal level of government. However, state and local governments develop their own legislation, and this is generally done using a similar approach. The problems legislation is developed to address differ at each level, as do many of the participants and the specific mechanisms and procedures used in developing legislation.

The result of the entire formulation phase of policymaking is pub- lic policy in the form of new public laws or amendments to existing laws.

6

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H e a l t h P o l i c y m a k i n g i n t h e U n i t e d S t a t e s166

New health-related laws or amendments originate from the policy agenda. Recall that the health policy agenda is established through the interactions of a diverse array of problems, possible solutions to those problems, and the dynamic political circumstances that relate to the problems and to their poten- tial solutions. Combinations of problems, potential solutions, and political circumstances that achieve priority on the policy agenda move on to the next component of the policy formulation phase: legislation development (see the darkly shaded portion of Exhibit 6.1).

The laws and amendments to existing laws that result from the formu- lation phase of policymaking are tangible, and purposely so. They can be seen and read in a number of places (see Appendix 5 for example). The US Con- stitution prohibits the enactment of laws that are not specifically and directly made known to the people who are to be bound by them. In practice, federal laws are published for the citizenry immediately upon enactment. Of course, it is incumbent on persons who might be affected by laws to know of them and to be certain that they understand the effects of those laws. Health pro- fessionals should devote time and attention to the potential and real impact of relevant laws and amendments.

At the federal level, enacted laws are first printed in pamphlet form called slip law. Later, laws are published in the US Statutes at Large and eventually incorporated into the US Code. The Statutes at Large, published annually, contains the laws enacted during each session of Congress. In effect, it is a compilation of all laws enacted in a particular year. The US Code is a complete compilation of all the nation’s laws. A new edition of the code is published every six years, with cumulative supplements published annually. Federal public laws can be read at www.congress.gov.

The Choreography of Legislation Development

Development of legislation is the point in policy formulation at which specific legislative proposals, which are characterized in Chapter 5 as hypothetical or unproved potential solutions to the problems they are intended to address, advance through a series of steps that can end in new or amended public laws. These steps, not unlike those of a complicated dance, are specified or choreographed. The steps followed at the federal level are shown schemati- cally in Exhibit 6.2. A variation of these steps was shown earlier in Exhibit 3.2 and briefly introduced and described in Chapter 3. Only when all of the steps are completed does a new public law or, far more typically, an amendment to a previously enacted law result. The steps that make up the development of legislation activity provide the framework for most of the discussion in this chapter.

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C h a p t e r 6 : P o l i c y F o r m u l a t i o n : D e v e l o p m e n t o f L e g i s l a t i o n 167

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H e a l t h P o l i c y m a k i n g i n t h e U n i t e d S t a t e s168

A conference committee is created to resolve differences if both chambers do not pass an identical bill.

Bill is originated and drafted.

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Bill is originated and drafted.

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Bill is sent to Senate. Bill is sent to House.

Representative introduces bill in the House.

Senator introduces bill in the Senate.

Bill is read in the House and assigned to a committee by the speaker.

Bill is presented to the president, who has four options.

Bill is read in the Senate and assigned to a committee by the majority leader.

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and may be amended.

Bill leaves committee, is scheduled for floor consideration and debate,

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Option 2:

During congressional session, bill

becomes law after 10 days without

presidential signature.

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When Congress is not in session, bill does not become

law without presidential signature.

Option 4:

President vetoes bill. Two-thirds

vote in House and Senate can

override veto.

EXHIBIT 6.2 The Steps in Legislation Development

Source: Adapted from Teitelbaum, J. B., and S. E. Wilensky. 2013. Essentials of Health Policy and Law, second edition. Burling, MA: Jones and Bartlett Learning. www.jblearning.com. Reprinted with permission.

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C h a p t e r 6 : P o l i c y F o r m u l a t i o n : D e v e l o p m e n t o f L e g i s l a t i o n 169

Legislation development begins with the origination of ideas for leg- islation and extends through the enactment of some of those ideas into law or the amendment of existing laws. The steps of this process apply equally whether the resulting legislation is a new law or an amendment. Sullivan (2007) provides an extensive description of the steps through which federal legislation is developed. Similarly, most states include descriptions of their legislative processes on their websites. For example, Massachusetts publishes Lawmaking in Massachusetts (Galvin 2014). Exhibit 6.3 illustrates the steps in the state of Washington’s legislative process, a process typical of the states.

At the federal level, the path through which legislation is developed begins with ideas for proposed legislation or bills in the agenda-setting stage, extends through formal drafting of legislative proposals and then several other steps, and culminates in the enactment of laws derived from some of the pro- posals. In practice, only a fraction of the legislative proposals that are formally introduced in a Congress—the two annual sessions spanning the terms of office of members of the House of Representatives—are enacted into law. For example, the One Hundred Fourteenth Congress spans the period from January 3, 2015, to January 3, 2017. Proposals that are not enacted by the end of the congressional session in which they were introduced die and must be reintroduced in the next Congress to be considered further.

As the bridge between policy formulation and implementation (shown in Exhibit 6.1), formal enactment of proposed legislation into new or

1. A bill (a proposed law presented to the Legislature for consideration) may be introduced in either the Senate or House of Representatives by a member.

2. It is referred to a committee for a hearing. The committee studies the bill and may hold public hearings on it. It can then pass, reject, or take no action on the bill.

3. The committee report on the passed bill is read in open session of the House or Senate, and the bill is then referred to the Rules Committee.

4. The Rules Committee can either place the bill on the second reading of the calendar for debate before the entire body or take no action.

5. At the second reading, a bill is subject to debate and amendment before being placed on the third reading calendar for final passage.

6. After passing one house, the bill goes through the same procedure in the other house.

7. If amendments are made, the other house must approve the changes. 8. When the bill is accepted in both houses, it is signed by the respective lead-

ers and sent to the governor. 9. The governor signs the bill into law or may veto all or part of it. If the gover-

nor fails to act on the bill, it may become law without a signature.

EXHIBIT 6.3 Steps in the Legislative Process in the State of Washington

Source: Washington State Legislature (2014).

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H e a l t h P o l i c y m a k i n g i n t h e U n i t e d S t a t e s170

amended law represents a significant transition between these two phases of the overall public policymaking process. The focus in this chapter is on ways in which public laws are developed and enacted in the policymaking process; their implementation is discussed in Chapters 7 and 8.

As we described in Chapter 5, individuals, health-related organiza- tions, and especially the interest groups to which they belong are instrumen- tal in the agenda setting that precedes legislation development. They also actively participate in the development itself: Once a health policy problem or issue achieves an actionable place on the policy agenda and moves to the next stage of policy formulation—development of legislation—those with concerns and preferences often continue to seek to exert influence.

Individuals and health-related organizations and interest groups can participate directly in originating ideas for legislation, helping with the actual drafting of legislative proposals, and attending the hearings sponsored by legisla- tive committees. When competing bills seek to address a problem, those with interests in the problems align themselves with favored legislative solutions and oppose those they do not favor. The following sections present a detailed discus- sion of the steps in legislation development at the federal level, although much of this information also applies to legislative processes in the states.

Originating and Drafting Legislative Proposals

The development of legislation begins with the conversion of ideas, hopes, and hypotheses about how problems might be addressed through changes in policy—ideas that emerge from agenda setting—into concrete legislative proposals or bills (see Exhibit 6.2). Actually, proposed legislation can be introduced in one of four forms. Two of the forms, bills and joint resolu- tions, are used for making laws. The other two forms of proposed legislation, simple resolutions and concurrent resolutions, are used to handle matters of congressional administration or for expressing nonbinding policy views.

Forms of Legislative Proposals The discussion of originating and drafting legislative proposals presented here focuses on bills because they are the most common way for legislation to emerge. Congress selects between using bills or joint resolutions to intro- duce legislative proposals using conventions that have developed over time for the subject matter involved. Although bills are much more common than joint resolutions, a good example of a routinely used joint resolution is one to make continuing appropriations beyond the end of a fiscal year when the regular appropriations bills for the next year have not been completed. This

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C h a p t e r 6 : P o l i c y F o r m u l a t i o n : D e v e l o p m e n t o f L e g i s l a t i o n 171

joint resolution is called a continuing resolution (CR) (Office of the Legisla- tive Counsel, US House of Representatives 2014).

For a bill or a joint resolution to become law, it must pass both the House of Representatives and the Senate and be signed by the president. Even if a bill or joint resolution is passed and presented to the president, it can be vetoed. Such vetoed legislation can become law if Congress overrides the veto by a two-thirds vote. The legislation can also become law if the president takes no action for a period of ten days while Congress is in session. There is no legal difference and little practical difference between a bill and a resolution, and they are not differentiated operationally here.

Simple resolutions (passed in either the House of Representatives or the Senate) and concurrent resolutions (passed in both the House of Rep- resentatives and the Senate) are not presented to the president because they do not become law. Exhibit 6.4 summarizes the four forms that legislative proposals can take.

Origins of Ideas for Public Policies Ideas for public policies originate in many places. They obviously come from members of the House of Representatives and the Senate. In fact, many Con- gress members are elected, at least in part, on the basis of the legislative ideas they expressed in their campaigns. Promises to introduce certain proposals, made specifically to the constituents candidates seek to represent, are core aspects of the American form of government and frequent sources of eventual legislative proposals. Once in office, legislators may become more aware of and knowledgeable about the need to amend or repeal existing laws or enact new laws as their understanding of the problems and potential solutions that face their constituents or the larger society evolves.

But legislators are not the only source of ideas for laws or amend- ments. Individual citizens, health-related organizations, and interest groups representing many individuals or organizations may petition the govern- ment—a right guaranteed by the First Amendment—and propose ideas for the development of policy in the form of laws or amendments. In effect, such petitions result directly from the participation of individuals, organizations, and groups in agenda setting as described in Chapter 5. Much of the nation’s policy originates in this way because certain individuals, organizations, and interest groups have considerable knowledge of the problem–potential solu- tion combinations that affect them or their members.

Individuals, organizations, and groups also participate in the develop- ment of legislation. Interest groups tend to be especially influential in leg- islation development, as they are in agenda setting, because of their pooled resources. Well-staffed interest groups, for example, can draw on the services

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H e a l t h P o l i c y m a k i n g i n t h e U n i t e d S t a t e s172

of legislative draftspersons to transform ideas and concepts into suitable leg- islative language.

An increasingly important source of ideas for legislative proposals is “executive communication” from members of the executive branch to members of the legislative branch. Such communications, which also play a role in agenda setting, usually take the form of a letter from a senior member of the executive branch such as a member of the president’s cabinet, the head of an independent agency, or even the president. These communications typically include compre- hensive drafts of proposed bills. They are sent simultaneously to the speaker of the House of Representatives and the president of the Senate, who can insert them into the legislation development procedures at appropriate places.

Forms of Legislative Proposals

Passage Required

by Presentment to President Result Example

Bill Both House of Represen- tatives and Senate

Yes Law H.R. 2568 (111th Congress)

Joint resolution

Both House of Represen- tatives and Senate

Yes Law H.J. Res. 52 (a CR from the 110th Congress)

Concurrent resolution

Both House of Represen- tatives and Senate

No Not law (bind- ing only as to certain matters of congressional administra- tion)

S. Con. Res. 70 (the concurrent resolution on the budget for fiscal year 2009; 110th Congress)

Simple resolution

Either House of Represen- tatives or Senate

No Not law (bind- ing only as to certain mat- ters of admin- istration of the house that passed it)

H. Res. 88 (a “special rule” governing House debate on a bill; 111th Congress)

EXHIBIT 6.4 Comparison of Forms of Legislative Proposals

Source: Adapted from Office of the Legislative Counsel, US House of Representatives (2014).

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The executive branch’s role as a source of policy ideas is based in the US Constitution. Although the Constitution establishes a government characterized by the separation of powers, Article II, Section 3, imposes an obligation on the president to report to Congress from time to time on the state of the union and to recommend such policies in the form of laws or amendments as the president considers necessary, useful, or expedient. Many of the executive communications to Congress follow up on ideas first aired in annual presidential State of the Union addresses to Congress.

Executive communications that pertain to proposed legislation are referred by the legislative leaders who receive them to the appropriate legis- lative committee or committees that have jurisdiction in the relevant areas. The chairperson of an affected committee may introduce the bill either in the form in which it was received or with whatever changes the chairperson considers necessary or desirable. Only members of Congress can actually introduce proposed legislation, no matter who originates the idea or drafts the proposal.

The practice of having committee chairpersons introduce legislative proposals that arise through executive communication is followed even when the majority of the House or Senate and the president are not of the same political party, although there is no constitutional or statutory requirement that a bill be introduced to put the executive branch’s recommendations into effect. When the chairperson of the committee with jurisdiction does not introduce a bill that is based on executive communication, the committee or one of its subcommittees considers the proposed legislation to determine whether the bill should be introduced.

The most important regular executive communication is the proposed federal budget the president transmits annually to Congress (Oleszek 2014). Recently prepared budgets and related supporting documents are available from the Office of Management and Budget (OMB; www.whitehouse.gov /omb/budget). More is said about the budget process later in this chapter; here, suffice it to say that the president’s budget proposal, together with sup- portive testimony by officials of the various executive branch departments and agencies, individuals, organizations, and interest groups concerned about the budget—before one of the 12 subcommittees of the appropriations commit- tees of the House and Senate—is the basis of the appropriation bills that these committees eventually draft.

Drafting Legislative Proposals Drafting legislative proposals is an art in itself, one requiring considerable skill, knowledge, and experience. Any member of the Senate or House of Representatives can draft bills, and these legislators’ staffs are usually instru- mental in drafting them, often with assistance from the Office of Legislative Counsel in the Senate or House of Representatives.

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Sandra Strokoff (2014), senior counsel in the Office of the Legislative Counsel, US House of Representatives, describes the work of the attorneys who work in the counsel’s office as follows:

Frequently, on the floor of the House of Representatives, one will hear a Member

refer to another as the “author” of a bill who has “carefully crafted” the language

of the proposed legislation. Statements like these make me smile, because if the

Members are the authors, then I and my colleagues in the Office of the Legislative

Counsel of the House of Representatives are the ghost writers.

The Office of the Legislative Counsel, created by statute originally in 1918,

is currently composed of 30-plus attorneys who generally toil in anonymity, at

least as far as those outside the legislative process are concerned. Attorneys are

charged with taking the idea of any Member or committee of the House of Repre-

sentatives requesting the services of the Office and transforming it into legislative

language or, as one of my clients used to say, “the magic words.” We participate in

all stages of the legislative process, be it preparing a bill for introduction, drafting

amendments, participating in any conference of the two Houses of Congress to

resolve differences between the two versions of the bill, or incorporating changes

in the bill at each stage for publication and ultimately for presentation to the

president. Frequently, we draft while debate is going on—both during committee

consideration and on the House Floor, and may be asked to explain the meaning

or effect of legislative language.

When bills are drafted in the executive branch, trained legislative coun- sels are typically involved. These counsels work in several executive branch departments, and their work includes drafting bills to be forwarded to Con- gress. Similarly, proposed legislation that arises in the private sector, typically from interest groups, is drafted by people with expertise in this intricate task.

On occasion, legislation drafting is undertaken as a public–private partnership (Hacker 1997, 2010). Such legislation drafting has occurred twice in recent decades in the health policy arena, first in the case of the Clin- ton administration’s attempt at substantial health reform, and again in the more successful Obama administration proposal that eventually was enacted in 2010 as the Affordable Care Act (ACA).

Information on how the Office of the Legislative Counsel in the House of Rep- resentatives supports legislation development is available at www.house .gov/legcoun. Information on how the Senate’s Office of the Legislative Coun- sel supports legislation development is available at www.slc.senate.gov.

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In the first example, in late 1993, after many months of feverish drafting by a team including some of the nation’s foremost health policy experts, President Clinton presented his proposal for legislation that would fundamentally reform the American healthcare system. The document, 1,431 pages in length, outlined the drafters’ vision of the way health services should be provided and financed in the United States. The proposal was in the form of a comprehensive draft of a bill (to be called the Health Security Act) that could potentially be enacted into law.

However, the proposal faced a long and difficult path from legislation development to possible enactment. Hacker and Skocpol (1997, 315–16) note that “President Clinton sought to enact comprehensive federal rules that would, in theory, simultaneously control medical costs and ensure uni- versal insurance coverage. The bold Health Security initiative was meant to give everyone what they wanted, delicately balancing competing ideas and claimants, deftly maneuvering between major factions in Congress, and help- ing to revive the political prospects of the Democratic Party in the process.”

In the end, the Clinton health reform proposal failed to make it suc- cessfully through the remaining steps in legislation development to enact- ment into law (Johnson and Broder 1996; Skocpol 1996). Peterson (1997, 291) characterized the failure of this proposal as a situation in which “the bold gambit of comprehensive reform had once again succumbed to the power of antagonistic stakeholders, a public paralyzed by the fears of disrupt- ing what it already had, and the challenge of coalition building engendered by the highly decentralized character of American government.”

The second example of developing legislation through a public–pri- vate partnership led to a more successful outcome. The ACA was enacted into law in 2010. (You may want to review Appendix 1, an overview of the ACA.) There have been difficulties in implementing this law and extraordi- nary attempts have been made to repeal it (Jost 2014), but this legislation was successfully developed into public law, and a complex law at that.

Technically, in March 2010, the One Hundred Eleventh Congress enacted the ACA (P.L. 111-148). The law was substantially amended by the health provisions in the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). Several other laws that were subsequently enacted made more targeted changes to specific ACA provisions. The ACA emerged from bills in the House of Representatives and the Senate. In the Senate, two committees—the Committee on Health, Education, Labor and Pen- sions (HELP) and the Committee on Finance—participated in the draft- ing. The law was formed in an amazingly convoluted series of negotiations involving numerous members of Congress working through various com- mittees, the administration, congressional and administration staff, external stakeholders such as the pharmaceutical and insurance industries, and the

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professionals who wrote the actual language of the law. Cannan (2013) wrote an excellent history of the ACA’s dynamic path through the legisla- tion development step.

The ACA has multiple goals. Among the most important are to increase access to affordable health insurance for the millions of Americans without coverage and make health insurance more affordable for those already covered. The act makes numerous changes in the way healthcare is financed, organized, and delivered. Among its many provisions, the ACA restructures the private health insurance market, sets minimum standards for health coverage, creates a mandate for most US residents to obtain health insurance coverage, and provides for the establishment of state-based insur- ance exchanges for the purchase of private health insurance. Certain indi- viduals and families receive federal subsidies to reduce the cost of purchasing coverage through the exchanges. The ACA also expands eligibility for Med- icaid; amends the Medicare program in ways that are intended to reduce the growth in Medicare spending; imposes an excise tax on insurance plans found to have high premiums; and makes numerous other changes to the tax code, Medicare, Medicaid, the Children’s Health Insurance Program, and many other federal programs. Full implementation of the law involves all the major healthcare stakeholders, including the federal and state govern- ments, as well as employers, insurers, and healthcare providers (Redhead et al. 2012).

Packed into 1,024 pages, the ACA is a product of input from many sources. For example, the individual mandate provision requiring most residents to obtain health insurance, coupled with public subsidies for many, has deep historical roots in previous health reform attempts. The conservative Heritage Foundation proposed an individual mandate as an alternative to single-payer healthcare as far back as 1989 (Avik 2012). In 2006, Massachusetts enacted health reform at the state level that included an individual mandate and an insurance exchange (Wees, Zaslavsky, and Ayanian 2013).

No matter who drafts legislation, however, only members of Congress can officially sponsor a proposal, and the legislative sponsors are ultimately responsible for the language in their bills. Bills commonly have multiple sponsors and many cosponsors. Once ideas for solving problems through policy are drafted in legislative language, they are ready for the next step: introduction for formal consideration by Congress. Although the Health Security proposal the Clinton administration drafted was formally introduced in Congress, it was not enacted into law. The ACA, on the other hand, was formally introduced and moved through the other steps in legislation devel- opment to ultimate enactment into law.

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Introducing and Referring Proposed Legislation to Committees

Members of the Senate and the House of Representatives who have chosen to sponsor or cosponsor legislation introduce their proposals in the form of bills (see Exhibit 6.2). On occasion, identical bills are introduced in the Senate and House for simultaneous consideration. When bills are introduced in either chamber of Congress, they are assigned a sequential number (e.g., H.R. 1, H.R. 2, H.R. 3, etc.; S. 1, S. 2, S. 3, etc.) based on the order of introduction by the presiding officer, and are referred to the appropriate standing committee or committees for further study and consideration. Exhibit 6.5 illustrates the path of a bill introduced in the House of Representatives through its enactment into public law. (Follow the path from the bottom of the exhibit up.)

Date Chamber Actions

01/24/2014 Became P.L. 113-77, Poison Center Network Act of 2014

01/24/2014 Signed by president.

01/15/2014 House Presented to president.

01/15/2014 Senate Message on Senate action sent to the House.

01/14/2014 Senate Passed Senate without amend- ment by unanimous consent.

01/09/2014 Senate Received in the Senate.

01/08/2014 – 3:47pm House On motion to suspend the rules and pass the bill as amended, agreed to by the Yeas and Nays: (2/3 required): 388–18.

01/08/2014 – 3:39pm House Considered as unfinished business.

01/08/2014 – 1:12pm House At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the chair announced that further proceedings on the motion would be postponed.

EXHIBIT 6.5 Path of a Bill to Public Law: H.R. 3527 to P.L. 113-77, Poison Center Network Act of 2014

(continued)

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Legislative Committees and Subcommittees The Senate and the House of Representatives are organized into legisla- tive committees and subcommittees. The committee structure of Congress is crucial to the development of legislation. Committee and subcommittee deliberations provide the settings for intensive and thorough consideration of legislative proposals and issues. Exhibit 6.6 shows the current legislative committee structure of the US Congress.

Each standing committee has jurisdiction over a certain area of legisla- tion, and all bills that pertain to a particular area are referred to its committee. Information about the committees is available on their websites, which can be accessed through www.congress.gov. Committees are divided into subcom- mittees to facilitate work. For example, the Ways and Means Committee of the House of Representatives has six subcommittees: Health, Human Resources, Oversight, Select Revenue Measures, Social Security, and Trade.

Date Chamber Actions

01/08/2014 – 12:57pm House Debate—The House proceeded with forty minutes of debate.

01/08/2014 – 12:57pm House Considered under suspension of the rules.

01/08/2014 – 12:57pm House Mr. Pitts moved to suspend the rules and pass the bill, as amended.

01/07/2014 House Reported by the Committee on Energy and Commerce.

12/10/2013 House Committee Consideration and Mark-Up Session Held.

12/10/2013 House Forwarded by Subcommittee to Full Committee.

12/10/2013 House Subcommittee Consideration and Mark-Up Session Held.

11/22/2013 House Referred to the Subcommittee on Health.

11/18/2013 House Referred to the House Committee on Energy and Commerce.

11/18/2013 House Introduced in House.

Source: Poison Center Network Act of 2014, H.R. 3527, 113th Cong. (2014).

EXHIBIT 6.5 Path of a Bill

to Public Law: H.R. 3527 to P.L.

113-77, Poison Center Network

Act of 2014 (continued)

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House Senate

Standing Committees

• Agriculture • Appropriations • Armed Services • Budget • Education and the Workforce • Energy and Commerce • Ethics • Financial Services • Foreign Affairs • Homeland Security • House Administration • Judiciary • Natural Resources • Oversight and Government Reform • Rules • Science, Space, and Technology • Small Business • Transportation and Infrastructure • Veterans’ Affairs • Ways and Means

• Agriculture, Nutrition, and Forestry • Appropriations • Armed Services • Banking, Housing, and Urban

Affairs • Budget • Commerce, Science, and

Transportation • Energy and Natural Resources • Environment and Public Works • Finance • Foreign Relations • Health, Education, Labor, and

Pensions • Homeland Security and Govern-

mental Affairs • Judiciary • Rules and Administration • Small Business and

Entrepreneurship • Veterans’ Affairs

Special and Select Committees

• Intelligence (Permanent) (Select Committee)

• Aging (Special Committee) • Ethics (Select Committee) • Indian Affairs (Other Committee) • Intelligence (Select Committee)

Joint Committees

• Joint Economic • Joint Library • Joint Printing • Joint Taxation

EXHIBIT 6.6 Current Committees of the US Congress

Source: Congress.gov (2014).

Sometimes the content of a bill calls for assignment to more than one committee. In this case, the bill is assigned to multiple committees either jointly or, more commonly, sequentially. For example, the Clinton adminis- tration’s Health Security plan was introduced simultaneously in the House and the Senate as H.R. 3600 and S. 1757. Because of its scope and complex- ity, the bill was then referred jointly to ten House committees and two Senate committees for consideration and debate.

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Membership on the various congressional committees is divided between the two major political parties. The proportion of members from each party is determined by the majority party. Legislators typically seek membership on committees that have jurisdiction in their particular areas of interest and expertise. The interests of their constituencies typically influence the interests of policymakers. For example, members of the House of Rep- resentatives from agricultural districts or financial centers often prefer to join committees that deal with these areas. The same is true of senators in terms of whether they hail from primarily rural or highly urbanized states, from the industrialized Northeast, or from the more agrarian West. The seniority of committee members follows the order of their appointment to the committee.

The majority party in each chamber also controls the appointment of committee and subcommittee chairpersons. These chairpersons exert great power in the development of legislation, because they determine the order and the pace in which the committees or subcommittees they lead consider legislative proposals.

Each committee has a professional staff to assist with administrative details involved in its consideration of bills. Under certain conditions, a stand- ing committee may also appoint consultants on a temporary or intermittent basis to assist the committee in its work. By virtue of expert knowledge, the professional staff members who serve committees and subcommittees are key participants in legislation development.

Committees with Health Policy Jurisdiction Although no congressional committee is devoted exclusively to the health policy domain, several committees and subcommittees have jurisdiction in health-related legislation development. In recent decades, health has been an especially important and prevalent domain in the federal and state policy agendas. The committees and subcommittees with jurisdiction for health matters have been busy.

At the federal level, there is some overlap in the jurisdictions of com- mittees with health-related legislative responsibilities. Most general health bills are referred to the House Committee on Energy and Commerce and the Senate HELP Committee. However, any bills involving taxes and rev- enues must be referred to the House Committee on Ways and Means and the Senate Committee on Finance. These two committees have substantial health policy jurisdiction because so much health policy involves taxes as a source of funding. The main health policy interests of these committees are outlined here.

• Committee on Finance (www.finance.senate.gov), with its Subcommittee on Health Care. This Senate committee has jurisdiction over health

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programs under the Social Security Act and health programs financed by a specific tax or trust fund. This role gives the committee jurisdiction over matters related to the ACA, Medicare, and Medicaid.

• Committee on Health, Education, Labor, and Pensions (www.help .senate.gov), with its Subcommittees on Children and Families, Employment and Workplace Safety, and Primary Care and Aging. This Senate committee’s jurisdiction encompasses most of the agencies, institutes, and programs of the Department of Health and Human Services (HHS), including the Food and Drug Administration, the Centers for Disease Control and Prevention, the National Institutes of Health, the Administration on Aging, the Substance Abuse and Mental Health Services Administration, and the Agency for Healthcare Research and Quality. The committee also oversees public health and health insurance policy.

• Committee on Ways and Means (http://waysandmeans.house.gov) with its Subcommittee on Health. This House committee has jurisdiction over bills and matters that pertain to providing payments from any source for healthcare, health delivery systems, or health research. The jurisdiction of the Subcommittee on Health includes bills and matters related to the healthcare programs of the Social Security Act (including Titles XVIII and XIX, which are the Medicare and Medicaid programs) and tax credit and deduction provisions of the Internal Revenue Code dealing with health insurance premiums and healthcare costs.

• Committee on Energy and Commerce (http://energycommerce .house.gov) with its Subcommittees, including those on Health and on Environment and the Economy. This House committee has jurisdiction over all bills and matters related to public health and quarantine; hospital construction; mental health; biomedical research and development; health information technology, privacy, and cybersecurity; public health insurance (Medicare, Medicaid) and private health insurance; medical malpractice insurance; the regulation of food and drugs; drug abuse; HHS; the Clean Air Act; and environmental protection in general, including the Safe Drinking Water Act.

Legislative Committee and Subcommittee Operations Depending on whether the chairperson of a committee has assigned a bill to a subcommittee, either the full committee or the subcommittee can, if it chooses, hold hearings on the bill. At these public hearings, members of the executive branch, representatives of health-related organizations and interest groups, and other individuals can present their views and recommendations on the legislation under consideration. For example, from the One Hundred

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Tenth Congress, H.R. 1014, a bill to amend the federal Food, Drug, and Cosmetic Act and the Public Health Service Act to improve the prevention, diagnosis, and treatment of heart disease, stroke, and cardiovascular diseases in women, was introduced in the House of Representatives on February 13, 2007. An identical bill, S. 573, was simultaneously introduced in the Senate. The bills followed different courses.

In the House, H.R. 1014 was referred to the House Committee on Energy and Commerce on the day it was introduced, and it was sent to the Subcommittee on Health the following day. Hearings on the bill were held on May 1, 2007. Following further discussion and consideration, the bill, with some modification, passed the House on September 23, 2008. In the Senate, S. 573 was introduced on September 13, 2007. The bill was imme- diately referred to the Senate HELP Committee, where it received no further action. Appendix 16 provides an example of testimony at a hearing related to H.R. 1014 before the House Subcommittee on Health of the Committee on Energy and Commerce.

Following such hearings, and there may be a number of them for a bill, members of committees or subcommittees “mark up” the bills they are considering. This term refers to going through the original bill line by line and making changes. Sometimes, when similar bills or bills addressing the same issue have been introduced, they are combined in the markup process. In cases of subcommittee involvement, when the subcommittee has com- pleted its markup and voted to approve the bill, it reports out the bill to the full committee with jurisdiction.

When no subcommittee is involved, or when a full committee has reviewed the work of a subcommittee and voted to approve the bill, the full committee reports out the bill for a vote, this time to the floor of the Senate or House. At this point, the administration can formally weigh in with sup- port for or opposition to a bill. This input is issued through a Statement of Administration Policy, examples of which are available at the White House website (www.whitehouse.gov/omb/legislative_sap_default).

If a committee votes to report a bill favorably, a member of the com- mittee staff writes a report in the name of a committee member. This report is an extremely important document. The committee report describes the purposes and scope of the bill and the reasons the committee recommends its approval by the entire Senate or House. As an example, the report for H.R. 1014 can be read at the Congress website (www.congress.gov /bill/110th-congress/house-bill/1014).

Committee reports are useful and informative documents in the leg- islative history of a public law or amendments to it. These reports are used by courts in considering matters related to particular laws that have been

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enacted and by executive branch departments and agencies as guidance for implementing enacted laws and amendments. They provide information regarding legislative proposals for those who are interested in the history, purpose, and meaning of enacted legislation.

Generally, a committee report contains an analysis in which the pur- pose of each section of a bill is described. All changes or amendments to existing law that the bill would require are indicated in the report, and the text of laws the bill would repeal are set out. The report begins by describing and explaining committee amendments to the bill as it was originally referred to the committee. Executive communications pertaining to the bill are usu- ally quoted in full in the report.

House or Senate Floor Action on Proposed Legislation

Following approval of a bill by the full committee with jurisdiction, the bill and its report are discharged from the committee. The House or Senate receives it from the committee and places it on the legislative calendar for floor action (see Exhibit 6.2).

Bills can be further amended in debate on the House or Senate floor. However, because great reliance is placed on the committee process in both chambers of Congress, amendments to bills proposed from the floor require considerable support.

Once a bill passes in either the House or the Senate, it is sent to the other chamber. The step of referral to a committee with jurisdiction, and perhaps then to a subcommittee, is repeated, and another round of hearings, markup, and eventual action may or may not take place. If the bill is again reported out of committee, it goes to the involved chamber’s floor for a final vote. If it is passed in the second chamber, any differences in the House and Senate versions of a bill must be resolved before the bill is sent to the White House for action by the president.

Conference Committee Actions on Proposed Legislation

To resolve differences in a bill that both chambers of Congress have passed, a conference committee (see Exhibit 6.2) may be established (US Senate 2014). Conferees are usually the ranking members of the committees that reported out the bill in each chamber. If they can resolve the differences, a conference report is written and both chambers of Congress vote on it. If the conferees cannot reach agreement, or if either chamber does not accept the

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report, the bill dies. However, if both chambers accept the conference report, the bill is sent to the president for action. The conference committee process is described more fully in Appendix 17.

Presidential Action on Proposed Legislation

The president has several options regarding proposed legislation that has been approved by both the House and the Senate (see Exhibit 6.2). The president can sign the bill, in which case it immediately becomes law. The president can veto the bill, in which case it must be returned to Congress along with an explanation for the rejection. A two-thirds vote in both chambers of Con- gress can override a presidential veto. The president’s third option is neither to veto the bill nor to sign it. In this case, the bill becomes law in ten days, but the president has made a political statement of disfavor regarding the legislation. A fourth option may apply when the president receives proposed legislation near the close of a congressional session; the bill can be pocket vetoed if the president does nothing about it until the Congress is adjourned. In this case, the bill dies.

Legislation Development for the Federal Budget

Because enactment of legislation related to the federal government’s annual budget is so crucial to the government’s performance and the well-being of the American people, special procedures have been developed to guide this process. The Congressional Budget and Impoundment Control Act of 1974 and the Balanced Budget and Emergency Deficit Control Act of 1985 and their subsequent amendments provide Congress with the process through which it establishes target levels for revenues, expenditures, and the overall deficit for the coming fiscal year. The budget process is designed to coordi- nate decisions on sources and levels of federal revenues and on the objectives and levels of federal expenditures. Such decisions affect other policy deci- sions, including those that pertain to health.

A distinctive feature of legislation development for the budget is the president’s role. The president is required to submit a budget request to Con- gress each year to initiate the process. By doing so, the president establishes the starting point and the framework for the annual process of legislation develop- ment for the federal budget. Once the president submits a budget request, the legislative process for federal budget making unfolds in distinct stages. First, Congress drafts and approves a budget resolution that provides the framework for overall federal government taxation and spending for various agencies and

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programs for the upcoming year. Next, the agencies and programs are autho- rized by way of establishment, extension, or modification. This authorization must take place before any money can be appropriated for a particular agency or program, which is the final stage of federal budget making.

The federal budgeting process is enormously complex. It “entails dozens of subprocesses, countless rules and procedures, the efforts of tens of thousands of staff persons in the executive and legislative branches, millions of work hours each year, and the active participation of the president and congressional leaders, as well as other members of Congress and executive officials” (Heniff, Lynch, and Tollestrup 2012, ii). Several federal agen- cies play especially important research and oversight roles in the budgeting process. These include the OMB, the Government Accountability Office (GAO), and the Congressional Budget Office (CBO).

Exhibit 6.7 shows the actions and timeline through which the annual federal budget is supposed to be developed. As noted earlier, the schedule begins when the president submits a budget request to Congress. Appendix 18 describes these steps in greater detail.

President’s Budget Request The president’s budget, officially referred to as the Budget of the United States Government (www.whitehouse.gov/omb/budget), is required by law to be submitted to Congress no later than the first Monday in February (see Step 1 in Exhibit 6.7). The budget request by the president includes

Action Steps Timeline

1. President submits budget request to Congress. First Monday in February

2. House and Senate Budget Committees pass budget resolutions.

April 15

3. House and Senate Appropriations Subcommittees mark up appropriations bills.

June 10

4. House and Senate vote on appropriations bills and reconcile differences.

June 30

5. President signs each appropriations bill and the budget becomes law.

October 1

6. Congress passes continuing resolutions until budget is in place

As needed

7. Audit and review of expenditures Ongoing

EXHIBIT 6.7 Steps in the Federal Budget Process

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estimates of spending, revenues, borrowing, and debt. In addition, it includes policy and legislative recommendations and detailed estimates of the financial operations of federal agencies and programs. The president’s budget request plays three important roles. First, the budget request tells Congress what the president recommends for overall federal fiscal policy. Second, it lays out the president’s priorities for spending on health, defense, education, and so on. Finally, the budget request signals to Congress the spending and tax policy changes the president prefers (Center on Budget and Policy Priorities 2011).

The president’s budget is only a request to Congress, which can do with it as it pleases. Even so, the formulation and submission of the budget request is an important tool in the president’s direction of the executive branch and of national policy. The president’s proposals often influence congressional rev- enue and spending decisions, though the extent of the influence varies from year to year and depends on such variables as political circumstances and the condition of the economy (Heniff, Lynch, and Tollestrup 2012).

Preparation of the president’s budget typically begins at least 9 months before it is submitted to Congress. Therefore, preparation begins about 17 months before the start of the fiscal year to which a budget per- tains. The early stages of budget preparation occur in federal agencies, pri- marily in the OMB.

Congressional Budget Resolution Upon receiving the president’s budget request, Congress begins the months- long process of reviewing the request (Step 2 in Exhibit 6.7). Based on the review process, which may include hearings to question administration offi- cials about the budget request, the House and Senate Budget Committees draft their budget resolutions. These resolutions go to the House and Senate floors, where they can be amended (by a majority vote). A House–Senate conference then resolves any differences, and a reconciled version is voted on in each chamber.

Because the budget resolution is a “concurrent” congressional resolu- tion, it is not signed by the president and is not a law. Budget resolutions are supposed to be passed by April 15, but often are not. Resolutions may not be passed because of disagreements about spending levels and priorities. On occasion, no budget resolution is passed, in which case the previous year’s resolution remains in effect. Congress has failed to pass a budget resolution by the April 15 deadline on many occasions. When Congress fails to do so, the House can begin to work on most of the appropriations bills without a budget resolution after one month. The Senate can also do so if a majority vote among members favors proceeding.

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Congressional Appropriations Process Before appropriations can be made to any agency or program, they first must be authorized. Authorization can occur through a law that establishes a program or agency and sets the terms and conditions under which it oper- ates, or by a law that specifically authorizes appropriations for that program or agency. Assuming that authorization has occurred, federal spending for agencies and programs occurs in two main forms: mandatory and discretion- ary. Primarily, mandatory spending, also known as direct spending, is for entitlement programs such as Medicare, Medicaid, and Social Security. The ACA contains some mandatory programs such as the Prevention and Public Health Fund, for example. Mandatory spending is under the jurisdiction of the legislative committees of the House and Senate. The House Ways and Means Committee and the Senate Finance Committee are most responsible for mandatory spending decisions. Discretionary spending decisions occur in the context of annual appropriations acts. All discretionary spending is under the jurisdiction of the appropriations committees in the House and the Sen- ate (Tollestrup 2012).

The appropriations acts passed by Congress provide federal agencies and programs legal authority to incur obligations. These acts also grant the Treasury Department the authority to make payments for designated pur- poses (Heniff, Lynch, and Tollestrup 2012). Steps 3 and 4 in Exhibit 6.7 constitute the federal appropriations process. Based on the guidance provided by the budget resolution, the House and Senate Appropriations Committees allocate spending levels to their 12 subcommittees, which then determine funding levels for the agencies and programs under their jurisdiction. The subcommittees include those for Labor, Health and Human Services, Educa- tion, and Related Agencies as well as 11 others in each chamber of Congress.

As with delays in Congress failing to pass a budget resolution by the deadline, disagreements over spending levels and priorities also delay the work of the appropriations committees’ subcommittees. When some or all of the appropriations subcommittees fail to pass their spending bills, the bills can be grouped into a single appropriations bill, called an omnibus bill, and sent to the floor of the House or Senate for a vote.

President Signs Appropriations Bills For the federal budget to become law, the president must sign each appro- priations bill passed by Congress (Step 5 in Exhibit 6.7). Only then is the budget process complete for the year. Rarely, however, is this work completed by the September 30 deadline so that the budget can become law on October 1. When the budget is not completed on time, Congress may pass a CR so that agencies and programs can receive funds and continue to operate on a

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temporary basis until the appropriations bills become law (Step 6 in Exhibit 6.7). The alternative to a CR is to shut down the nonessential activities of the federal government. Both CRs and shutdowns are problematic for the agencies and programs operating under the federal budget.

Audit and Review of Expenditures Even when the federal budget for a given fiscal year is completed and operat- ing, however, the budgeting cycle continues in the form of ongoing oversight by legislative committees, auditing, and review of expenditures. Specifically, GAO serves as an independent, nonpartisan agency that works for Congress. Among its duties are “auditing agency operations to determine whether federal funds are being spent efficiently and effectively; investigating allega- tions of illegal or improper activities; and reporting on how well government programs and policies are meeting their objectives” (GAO 2014). CBO produces “independent analyses of budgetary and economic issues to sup- port the Congressional Budget process” (CBO 2014). Among its products is a monthly analysis of federal spending and revenue totals for the previous month, current month, and fiscal year to date. OMB works directly for the president and has major responsibility for budget development and execution and oversight of agency and program performance (OMB 2014).

Legislation Development for State Budgets

The states also develop budget legislation, although the process varies con- siderably from state to state. In all states, however, the budget is among the most—if not the most—important mechanisms for establishing policy priori- ties. Pennsylvania, for example, uses a process that includes the following four key stages (Office of the Budget 2014):

1. Budget preparation. The budget is developed and submitted to the General Assembly.

2. Legislative review and approval. The budget is reviewed by appropriations committees of the House and the Senate. The General Assembly enacts its decisions about the budget in the form of the General Appropriation Bill and several individual appropriation bills.

3. Budget execution. The governor assumes responsibility for implementing the budget, although the various state agencies share this responsibility and the Office of the Budget is heavily involved.

4. Audit. There is an ongoing audit of financial performance and monitoring and evaluating performance of the state’s various programs.

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The activities in each of the four stages in this example of legislation devel- opment for state budgets are described more fully in the following section.

Stage 1: Budget Preparation The preparation stage of the budget process for a fiscal year that begins July 1 in Pennsylvania is initiated nearly 12 months prior to that date. The gover- nor controls the first phase of building the budget. The governor establishes initial direction for the budget in August, and state agencies are guided by these priorities as they develop funding requests. The agency heads seek to balance the wants and needs of their constituencies with the administration’s priorities and guidelines on total spending.

The Office of the Budget, whose director reports directly to the gover- nor, exerts considerable influence as the office evaluates the agencies’ requests and begins to help them formulate preliminary spending and revenue recom- mendations. Agency heads meet with the governor to express their views on desired changes to those recommendations. This input influences the gover- nor’s final recommendations. The governor’s Executive Budget, the result of the preparation stage, is finalized in January and submitted to a joint session of the General Assembly through the governor’s budget address in early February.

Stage 2: Legislative Review and Approval Upon receiving the Executive Budget, the House and Senate Appropriations Committees hold hearings to review agency requests for funds. Cabinet secretaries and others participate in these hearings, which provide legislators with an opportunity to review the specific programmatic, financial, and policy aspects of each agency’s programs and requests. At the same time, legislative staff members analyze the details of the proposals. These review activities provide interest groups with their greatest opportunities to influence the outcome in specific areas by interacting with the legislature. The General Assembly makes its decisions on the budget in the form of the General Appropriation Bill and individual appropriation bills.

Pennsylvania’s governor has the power of “line-item veto,” which means the governor can reduce or eliminate, but not increase, specific items in the budget legislation. Line-item veto power allows the governor to insist on certain items in the budget and exert additional influence over the leg- islative process before the budget legislation reaches the governor’s desk. Pennsylvania’s constitution requires a balanced budget, which means the governor must veto spending that exceeds the estimated available revenues.

Stage 3: Budget Execution The governor’s signing of the General Appropriation Bill signals the begin- ning of the execution stage of the budget cycle. With the signing, the Office

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of the Budget issues detailed “rebudget,” or spending plan, instructions. The agencies rebudget the funds appropriated in the legislation. The governor assumes responsibility for implementing the budget, although the various state agencies share this responsibility and the Office of the Budget is highly involved in these activities. The Office of the Budget has the authority to establish the authorized salaried complement for agencies and to request and approve agency spending plans or rebudgets. The executive branch must periodically report the progress of spending to the General Assembly.

Stage 4: Audit The final stage of the budget cycle for a particular year encompasses an audit and a review of financial and program performance. The Office of the Budget monitors and reviews performance and may conduct program audits or evaluations of selected programs. In addition, the state’s auditor general performs a financial post audit. Audits may be administrative reviews or more official performance audits with published results available to other govern- ment officials and the public. Agency officials or the Pennsylvania General Assembly acts on significant audit findings and recommendations.

Pennsylvania’s budget process authorizes the Office of the Budget to evaluate the effectiveness and management efficiency of programs supported by any agency under the governor’s jurisdiction. The process also requires the secretary of the budget to prepare reports detailing the results of program evaluations for distribution to the governor, the General Assembly, interested agencies, stakeholders and interest groups, and the public. A more complete description of another state’s budget process, Michigan in this case, is pre- sented in Appendix 19.

From Formulation to Implementation

When a legislature, whether the US Congress or a state legislature, approves proposed legislation, and the chief executive, whether the president or a

Most states include descriptions of their budget process on state web- sites. For example, California’s process can be seen at www.dof.ca.gov/ fisa/bag/process.htm; New York’s at www.budget.ny.gov/citizen/pro- cess/process.html; North Carolina’s at www.osbm.state.nc.us/files/ pdf_files/2003_budget_manual.pdf; and Texas’s at www.senate.state. tx.us/SRC/pdf/Budget_101-2011.pdf.

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governor, signs it, the policymaking process crosses an important threshold. The point at which proposed legislation is formally enacted into law is the point of transition from policy formulation to policy implementation. As shown in Exhibit 6.1, the formal enactment of legislation bridges the for- mulation and implementation phases of policymaking and triggers the imple- mentation phase. Policy implementation is considered in the next chapter.

Summary

The policy formulation phase of policymaking involves agenda setting and the development of legislation. Agenda setting, which we discussed in Chapter 5, entails the confluence of problems, possible solutions to those problems, and political circumstances that permit certain problem–possible solution combinations to progress to the development of legislation.

Legislation development, the other component of policy formulation and the central topic of this chapter, follows carefully choreographed steps that include the drafting and introduction of legislative proposals, their refer- ral to appropriate committees and subcommittees, House and Senate floor action on proposed legislation, conference committee action when necessary, and presidential action on legislation voted on favorably by the legislature. These steps apply whether the legislation is new or, as is often the case, an amendment of prior legislation.

The tangible final products of legislation development are new public laws, amendments to existing ones, or budgets, in the case of legislation development in the budget process. At the federal level, laws are first printed in pamphlet form called slip law. Subsequently, laws are published in the Statutes at Large and then incorporated into the US Code.

Review Questions

1. Discuss the link between agenda setting and the development of legislation.

2. Describe the steps in legislation development. 3. Discuss the various sources of ideas for legislative proposals. 4. What congressional legislative committees are most important to health

policy? Briefly describe their roles. 5. Describe the federal budget process. Include the relationship between

the federal budget and health policy in your response.

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