POLITICAL EVOLUTION OF FEDERAL HEALTH-CARE REGULATION

Although federal regulation of health care faces cultural obstacles and skepticism among policymakers, it has grown markedly over the past two decades. Beginning in the 1970s with decentralized programs aimed at regulating provider behavior (Health Systems Agencies and certificate of need) and budgets (state rate setting), health care regulation grew more centralized in the 1980s as federal policymakers expanded their influence on behavior (peer review organizations and medical practice guidelines) and budgets (Medicare prospective payment and the resource-based relative value scale). Behavioral regulation has increased the heavy micromanagement that providers face in the United States, while budgetary regulation falls well short of the fiscal macromanagement (global budgets, for example) that other Western nations use. As cost increases intensify, the coalitions that supported limited regulation as a compromise designed to forestall more threatening intrusions may yield to political pressure for firmer central budget controls.