Commentary

Private Sector Can Do the Job

This article originally appeared in USA Today on July 24th, 2002.

In the current federal budget, the Bush administration notes that “in few federal agencies is the need for organizational reform more acute than at Health and Human Services (HHS), where a long history of decentralized decision-making has produced … a complex web of ever-proliferating offices … and a patchwork of uncoordinated and duplicative management practices.”

With the Agency for Health Care Research and Quality (AHRQ), a part of HHS, the administration has proposed steps to solve the problem. A key function is to hand out university research grants. President Bush’s proposal would cut funding where the agency is not a recognized leader. For example, funding for health care cost research would be cut because another agency is the leader in that area. But AHRQ is the leader on patient safety research, which is not being cut.

Overall federal health research is not being cut. Indeed, the $27 billion National Institutes of Health budget has doubled since 1998. Bush’s proposed $49 million cut to AHRQ came after a $129 million increase since 1999. With the overall federal budget in the red and research dollars being reallocated to bioterrorism, the cut is reasonable.

The initiative to rationalize research programs is part of Bush’s broader agenda of federal management reform. Other initiatives, such as privatization, could also be applied. For example, AHRQ’s evidence-based practice synthesizes already-published research for doctor organizations, health plans and health providers. These groups could collaborate and fund this through fees. Similarly, AHRQ’s promotion of medical-practice guidelines should be left to the private sector. Some suggest that recent findings casting doubt on common therapies show that government standards are needed. But leading-edge medicine is extremely uncertain, making therapies subject to routine reassessment. The new study linking estrogen to higher cancer risks notes that “despite decades of accumulated observational evidence, the balance of risks and benefits for hormone use in healthy post-menopausal women remains uncertain.”

Where uncertainty reigns, a diversity of approaches is the best way to move science forward. While professional doctor groups can usefully develop voluntary guidelines in a healthy tension with cost-sensitive insurance companies, it is ultimately up to individual doctors and patients to choose among treatments themselves. The estrogen study is available free so women and their doctors have the full information.

Let’s keep the setting of medical standards out of the HHS bureaucracy. Who can doubt that streamlining is needed given that it has 50 separate public affairs offices?

Chris Edwards is director of fiscal policy at the Cato Institute.