Speaking Notes

PADM 5791

January 20, 2009

Dr. Neubauer

WHERE WE ARE

· Second class meeting

· We are still in Chapter 1

· I don't have a discussion forum in a Blackboard shell ready yet. We will delay the first online discussion assignment.

· Please read Chapter 2

· Please read the book review of, "The Health Care Crisis and What to Do About It" available at this URL.

· http://www.nybooks.com/articles/18802

REVIEW

· Last week we considered the complexity of our US political system and the implications of that complexity/fragmentation on public policies and on the practice of public administration.

· I suggested that the price of the continuance of our nation is policy that is less than logical and challenges for public administrators to work around what they are strictly charged to do.

· I suggested that evolutionary processes have shaped our nation's political system and that it is similar in structure to the human brain/mind.

REVIEW QUESTIONS FROM LAST WEEK

1) What is the difference between a unitary and a federated system of government? What are the implications for policy of the government being federal and otherwise fragmented by regionalism?

2) What is pluralism and how is pluralism related to the formulation of public policy?

See . . . http://en.wikipedia.org/wiki/Pluralism_%28political_philosophy%29

3) Does the presence of politically powerful interest groups tend to promote or prevent the initiation of major changes in public policy? Why?

4) Is it always acceptable that policy evolve incrementally? In responding, think specifically about health care policy in the United States.

5) Generally speaking, what are the core themes or values that tend to give form to politically liberal and conservative minds, respectively?

CHAPTER 1 -- HEALTH CARE POLITICS (continued)

The authors of our textbook conclude chapter 1 with an overview of stakeholders regarding health care policy. In a less democratic society the interests of the stakeholders would be lesser constraints on change.

Almost every possible change produces potential winners and losers. In a representative democracy the potential losers have interest groups have the power to block change. It is often more difficult to ORGANIZE the potential winners allowing them the power to force change upon the existing system.

Why is medical care different than, say, the automotive industry? (In other words, why not just let markets serve to provide and allocate medical care resources?)

1) People suffer and die for lack of medical care. If you don't have a car you can probably at least walk or take the bus.

2) Medical care can be VERY costly. If necessary, a cheap "clunker" can be adequate transportation, at least locally. It is quite a different thing for people to suffer or die because they cannot afford medical care that would otherwise be available to them.

3) It pains people to see others suffer and die. We generally don't get too upset if our neighbor does not have a nice vehicle.

4) If others around us are sick we are likely to become sick. There is a POSITIVE EXTERNALITY to medical care. It is in each person's self interest that others are well.

5) Poverty and poor health often go together. Many people value social justice. (Social justice is not the same thing as social equity.) Social justice is a core value of Public Administration. To me, it means impartiality and essential fairness.

6) Individuals who become ill are usually either only partly to blame or not to blame at all for their illness. We live in a society made possible by some people having stressful and/or dangerous jobs. Coal miners have black lung disease so our homes can be cooled and heated, for example. Many instances of personal illness can be attributed to environmental pollution that we collectively continue to produce.

7) Many people believe that adequate medical care is a political right. We do not, by contrast, have a political right to possession of an automobile.

8) With the possible exception of young adults, we can all imagine becoming so severely ill that we lose our home and everything else as a result of the high costs of medical care.

CONSERVATIVES generally favor MARKET SOLUTIONS rather than GOVERNMENT PROGRAMS. Realizing that markets are not entirely adequate/appropriate, conservatives are likely to support relatively minor government efforts to tweak the market for medical care.

LIBERALS are more likely than conservatives to argue for government agencies managing/regulating (or even providing) medical care. Realizing that "bureaucracies" are not wildly popular and are sometimes known to be costly and slow, liberals are likely to support THE IDEA THAT BUREAUCRATIC PROCESSES CAN BE IMPROVED.

The "JUST RIGHT" spot somewhere between involves creating a delivery system in which the INCENTIVES for the various kinds of stakeholders make sense. This has proven difficult or impossible.

The effort to achieve comprehensive health care reform in the United States is a very HIGH STAKES endeavor involving multiple POWERFUL STAKE HOLDERS. Giving the system of government that the Founder's created, it is very difficult to initiate substantial changes.

When change does happen, individual stakeholders find ways to WORK THE NEW SET OF INCENTIVES to their own advantage, often in UNINTENDED AND PERVERSE WAYS.

SELF INTEREST DOES NOT AGGREGATE UP INTO THE COMMON GOOD (despite Adam Smith's notion of an invisible hand). In this area, what markets will produce is not what most people think should be the reality by which we live and die. For one thing, insurers will CHERRY-PICK applicants or another possibility is that employers will DISCRIMINATE AGAINST OLD AND "UNHEALTHLY" applicants to help constrain insurance costs for their existing employees.

A COMMAND ECONOMY is essentially impossible if for no other reason than COMMUNICATIONS AND COGNITIVE OVERLOAD.

I my opinion, the pervasive idea that everyone acting in his/her own perceived best interest produces the best possible outcome for all is a core fallacy in how we perceive the virtues of democracy.

The idea that it is in the interests of the poor for the rich to become richer, to me, is less credible than the common observation that the rich get richer while the poor get poorer over time.

BACK TO INCENTIVE SYSTEMS. Whatever set of incentives policy makers attempt to create will be exploited by someone in the system for their own benefit at the expense of others.

COMPLEX SYSTEMS are just plain hard to design in such a way that no entity within the system gets exploited.

SPECIFIC LEGISLATION has specific intended goals. Those who write the legislation frequently overlook the probable negative consequences.

· The Hill-Burton Act of 1946 was intended to provide federal money to build hospitals in rural places. To get it passed it was expanded to provide money to build hospitals everywhere. Over time more and more patients required hospitalization and medical costs rose dramatically. Should this have been a surprise?

· The National Health Planning and Resources Development Act of 1974 (PL 93-641) required hospitals to write Certificate-of-Need applications and get approval before making major expenditures for new equipment and new services. This was intended to constrain the growth of health care spending. Given competition among local hospitals, what was the actual consequence? Should this have been a surprise?

SYSTEMS are complex sets of "moving parts" that interact with each other. A system usually settles into a pattern of motion called an ATTRACTOR. When something modifies part of a system the change has SIDE EFFECTS that may or may not be desired. After the INJECTION of the change the system will eventually settle again into a new ATTRACTOR. The outcome may be worse than the original ATTRACTOR. Basically, it is, "don't chase skunks unless you know what you are doing."

Dr. Phil Rutsohn's "Texas star" model.

· TECNHOLOGY

· FACILITIES

· LAWS/POLICIES

· FINANCES

· PERSONNEL

There are benefits to INCREMENTAL CHANGE. By making multiple small changes over time you avoid really messing things up accidentally. The problems are:

· It takes "forever" to get from the system to have to new and better system.

· Sometimes you simply can't get from here to there incrementally. (Memphis example metaphor).

The other approach to change is called RATIONAL COMPREHENSIVE CHANGE. The idea is to get from here to there by making major changes immediately. The problems are:

· All the political interest groups take notice.

· The fight becomes partisan.

· Individual politicians extract their own price for getting on board.

· Alternative plans (either of which could work) become subject to "reconciliation" and the legislation produced is not likely to work well.

· The code becomes thicker and all the more difficult to make sense of as a whole.

· Public administrators and others are left to try to make sense of it all and to try to implement it.

· People find new ways to work the new system to their own advantage.

· New problems become apparent and a new generation of candidates run on the theme of "change."

Most "solutions" involve structural changes. Structure is not usually the problem.

But changing structure at least gives the appearance of responding to the problem.

But we tend to get caught in cycles -- for example, centralization followed by decentralization, followed by centralization.

STORY OF THE CITY ADMINISTRATOR . . .

First message in the envelop -- BLAME YOUR PREDECESSOR

Second message -- REORGANIZE

Third message -- PREPARE AN ENVELOP WITH THREE MESSAGES IN IT

The hope of "a better world" is DOUBLE LOOP LEARNING. In other words, the key is to see the systems in which we live and get beyond cycles that don't really break out of the problems we confront. But that is easier said than done. Election cycles are more important than METACOGNITION. Meta cognition does not win reelection. The failure to stay in the game defeats the purpose of seeing the larger picture.

Democracy is not at the place that sophisticated reasoning wins elections. The problem is a lack of bumper sticker problems.