Doing Better, Still Feeling Worse

Tom Miller

Fall 2023

Working in American health-care policy imparts a keen sense of déjà vu. The conditions that plague our health-care system today not only have deep pre-existing roots, but have been accurately diagnosed before. But diagnosis does not ensure effective treatment. We continue to try the same failed prescriptions and leave alternative paths forsaken.

Consider four issues that have received sustained attention in past decades: developing and implementing guiding goals for health policy, reducing high costs, curtailing inequality in the provision of care, and maintaining the proper balance between public and private decision-making. All four persist as challenges today, but we have arguably not made much headway in resolving any of them. The Affordable Care Act (ACA) remains the law of the land and has expanded health-care coverage, primarily by increasing access to Medicaid. The ACA hasn't exactly reduced costs, however: U.S. health-care spending continues to escalate, reaching $4.3 trillion in 2021 and nearing 20% of GDP. And despite the increase in care, U.S. life expectancy actually declined in 2020 and 2021 to its lowest level in nearly three decades. Meanwhile, the Covid-19 pandemic had a disproportionate impact on minorities, revealing that inequalities of care persist as we create new ways to measure them.

Neither political party has offered a convincing case regarding how to address these challenges, what the goals of health policy should be, or how much of the response should involve private or public control or resources. One occasionally hears a call for Medicare for all or repealing the ACA, and not much else. Although reducing health-care costs remains a priority for voters, health policy consistently ranks below strengthening the economy.

These recurring problems suggest that we may not need innovative ideas or new reforms in health policy as much as we need to reconsider and implement some older ones that were never tried — changes that faced resistance from patients, providers, and politicians. Revisiting past policy disputes and recovering the best ideas requires a reliable guide.

Aaron Wildavsky (1930-1993) is such a guide. Wildavsky was a political scientist and frequent contributor to this journal's predecessor, The Public Interest, for which he wrote several analyses of U.S. political culture. He also wrote an illuminating essay for the Winter 1977 issue of the journal Daedalus titled, "Doing Better and Feeling Worse: The Political Pathology of Health Policy."

Wildavsky began his analysis of health policy by emphasizing that more available health-care services do not equal better health outcomes. Studies conducted decades ago found that the medical system's clinical care affects about 10% of the usual measures of health — mortality, morbidity, functionality, longevity. These findings still hold up today, because other decisive factors — lifestyle, genetics, social conditions, and physical environment — continue to remain outside the control of the medical profession's tools (if not its marketing claims and billing codes). Later estimates ranging from the seminal 1993 paper by Michael McGinnis and William Foege ("Actual Causes of Death in the United States") to an updated review by Steven Schroeder in 2007 reinforced those upper bounds on what health-care services can do to reduce avoidable mortality. A 2010 literature review by the University of Wisconsin's Population Health Institute first removed genetic factors for early deaths and then slightly bumped up the impact of medical care to 14%.

The takeaway from these studies is that medicine is not good for everything, and more money alone cannot cure old complaints. But the question arises: Why do we keep spending more for health-care services and expecting better outcomes, when much of that care is "flat of the curve" and of marginal value? Wildavsky devised a set of principles that can help us think through this disparity between care and outcomes and our political debates.


Wildavsky suggested that part of why we were doing better but feeling worse was the paradox of time. Time penalizes past treatment success with future failures as an older population contracts illnesses that are harder to cure and that require more expensive interventions. His principle of goal displacement also explained how health-system sponsors could shift their targets to more attainable "process" objectives they could control. Government-program advocates found that improving equal access to medicine served as a more pliable metric for claims of health-policy success. That goal involved the quantity, not the quality, of care, Wildavsky noted, and lent itself to interventions focused on reassurance for patients and better access to doctoring, rather than maintaining or restoring better health per se.

When a patient's needs are determined more by wants, however, it becomes even harder to decide just how much medical care is sufficient. Wildavsky's medical uncertainty principle posited that there is always one more thing that might be done, at least up to the level of existing insurance coverage. Thus, costs rise to equal the sum of all private insurance and government subsidies (which he called the law of medical money). Beyond that point, patients will tend to want more medical services to resolve uncertainties than any system — public or private — is willing to provide. Although government programs appear to be far better at equalizing access to medicine than at producing better health, the limits of politics and economics may also end up regenerating rather than resolving distributional disparities.

Wildavsky's axiom of inequality explained how every move to improve equality in one dimension of health care necessarily leads to inequality in another. Efforts to equalize the distribution of money are reshaped through differences in space (geography-based variation in income, custom, and expectations) and time (amounts devoted to medical care). For example, the acquisition of more money also involves devoting more time to pursue it. He noted that wealthy elderly populations will end up receiving more benefits than the aged poor under government programs like Medicare because the former are more able to navigate and negotiate the system. Even in national health-care programs, state-level variations in economic development will ensure conflict over differences in medical inputs and outcomes. A more modest goal involves government policymakers choosing the types of inequalities with which they are prepared to live. The inevitable rationing of unaffordable health-care services may be done by time, distance, space, or complexity (or combinations thereof).

All of these trade-offs inherent to seeking a goal like more equal care adjust the balance between public and private forces that shape the allocation of health-care resources. Wildavsky forecast three primary options for the future of health coverage: a government-administered national health service, income-graded catastrophic insurance, or a larger mixed public-private system. His prediction that a mixed system was the most likely result for the 21st century is not particularly remarkable by itself, but more notable for the implications of its reasoning.

Wildavsky observed that relying more consistently on either market or administrative forces would simplify administrative functions. One approach relates cost to quality by controlling resources at the level of the individual; the other does so at the level of the collective system. The rationing mechanisms may vary, but there are no free lunches at the health-benefits cafeteria. If medical care is not allocated from the bottom by individual income, it will be allocated at the top through national income.

Either type of coverage system would also pinpoint responsibility better than the ambiguities of a mixed system. Wildavsky criticized the top-down option for leaving patients (and voters) unable to navigate the health-care system, to figure out why their coverage may be inadequate, and to determine how health-care services can be overregulated yet inadequately controlled. The fatal defect of a mixed system, according to Wildavsky, is its failure to impose sufficient discipline at either the individual or the collective level. Individuals need not face the full costs of health-care services, and government (and ultimately, taxpayers) need not carry the full burden of covering and administering them. He overlooked this reality, however: These effects are political features, not bugs, when it comes to health policy, because they allow policymakers to intervene more while taking less responsibility for the results.

Wildavsky did outline the basic difference between government-administered and market-centered health care: The former asserts the political ideal of one man, one vote; the latter hews to the economic principle of one dollar, one preference. But he failed to add that people get to vote far more often in economic markets than in political ones, and that minority preferences in the former do not need to be approved by majorities.

Beyond these core insights in "Doing Better and Feeling Worse," Wildavsky offered several other pithy explanations for the pathologies of our health-care politics. On geographic disparities and shortages in the supply of physicians, he wrote that it is potential patients, not doctors, who are maldistributed. Yet those patients keep insisting that doctors should not live where their well-being and economic income would be the highest. Even if assigned to more remote areas, most well-trained doctors still manage to find escape routes. Perhaps we should focus more on facilitating access to care through better mobility and tools (real and virtual) for patients in rural or less-developed markets?

On the limited use of preventive care through outpatient visits, Wildavsky reminded readers that for doctors, "cure" remains intrinsically more interesting than prevention. A recent study in the Journal of General Internal Medicine found that there are not enough hours in a given day for primary-care physicians to provide the full 26.7 hours of daily guideline-based care for a typical panel of U.S. adult patients. The daily time estimate for preventive care alone is 14.1 hours, up significantly from 7.4 hours in 2003 and 8.6 hours in 2020.

Another perennial question concerns why our largest public health-care programs for the poor focus on payments in kind (i.e., enabling receipt of medical services without cost) rather than in cash. Wildavsky suggested that subsidies tied to covered medical services are aimed at preventing the poor from choosing alternative expenditures. They arguably reveal distrust of the "shortsighted" poor who must be protected against themselves. Several more recent policies embrace this logic of instructing patients about what care they need: the ACA's original individual mandate, premium tax credits assigned directly to insurers, and automatic-enrollment mechanisms.

To put it simply, re-reading Wildavsky's essay and its analysis of intractable health-care problems does not inspire much confidence that tomorrow will be different from yesterday in health policy. But it does improve our understanding of the pre-existing chronic conditions that still plague our health-care politics.


What have we learned since 1977 — the year Wildavsky's essay was published?

In nominal terms, health-care spending has soared by more than 25 times its 1977 level, while the rulebook governing health-care practices has thickened as well. We are wealthier and continue to make net gains economically, and we should be doing better as medical progress advances. But we still feel worse. Life expectancy (both at birth and at age 65) in the United States and in comparably large and wealthy countries was roughly equal in 1980, but a gap has appeared and widened between the two over time. Indeed, U.S. life expectancy fell by 2.7 years from 2019 to 2021 — a sharper drop during the Covid-19 pandemic than in those comparable countries. These relatively poor health outcomes are not solely attributable to the quality of U.S. medical care: U.S. health care does not suffer from a lack of resources, but from how ineffectively and inefficiently those resources are deployed.

One might question the returns on the increasingly large public investments in health-care subsidies and government regulation of health-care services since the late 1970s. Promoting their greater availability was not the same as ensuring their most productive delivery and use, as Wildavsky observed at the time. His law of medical money stipulated that health-care costs rise to the sum of all private insurance and government subsidies. He erred, however, in forecasting that our collective choices (through government) would be less than the total amount of our individual preferences. A different principle of U.S. health-care politics — the law of spending other people's money — has proven more powerful in recent decades. The underlying rationale for government mandates of health-care coverage and services, as well as related pricing and delivery rules, is to ensure that people spend more collectively than they would on their own.

Wildavsky was perhaps bound too tightly to his era of health care when he observed that doctors run hospitals and not the other way around. He concluded that the politics of medicine is just as much about the power of doctors as it is about the authority of politicians. More recent history points in a different direction: Private-sector interests have adjusted to their expanding opportunities, performing as government-program subcontractors and lobbying for regulatory favors.

To more profitably understand the dividing lines in health-care politics, we might turn to Wildavsky's other perceptive work during the 1980s on the cultural theory of political-preference formation. It outlined the four main filters through which people sort out risk-related issues: hierarchical collectivism, competitive individualism, equality egalitarianism, and apathy fatalism.

In older eras of health-care politics, the professional paradigm of the medical community was far more dominant (expressed as "doctors know best " — or at least we think they do). This dominance was a form of hierarchical collectivism. It reflected the scientific premises of medical training and the bias toward selecting the "best" answers discernable for health-care treatment and practices, rather than delegating them to other parties as more subjective trade-offs among competing values and preferences. Organized medicine is no longer viewed as infallible, however: Third-party insurers, government-program administrators, competing factions within the medical professions, and more assertive (if not more knowledgeable) patients have all leveled the playing field of medical decision-making. The Covid-19 pandemic further demonstrated how presumed deference to the politically mediated claims of medical science can quickly succumb to political polarization and cultural conflict.

A different type of hierarchical collectivism, however, may have replaced the older deference to the wisdom of the medical community when it comes to health-policy issues. Delegation to the rule of experts claiming special acumen has offered new opportunities for policy advocates to pose as objective, scientific finders of fact; they now fill in the blanks of campaign slogans and engage in post-legislative rulemaking. Of course, periods of increased political polarization may simply generate competing experts, but the health-policy field is not noted for its philosophical diversity, equity, and inclusion. So-called experts may not have a successful record when it comes to making measurable improvements in health outcomes, but they keep offering proposals anyway — mostly with repackaged prescriptions from similar sources.

Competitive individualism has had its moments in health care, too, but more in the pursuit of profits and prestige, as well as opportunistic arbitrage, than in voluntary assumption of risks. Younger and healthier patients are tempted to try to have it both ways through a health-care adaptation of "profit-side capitalism and loss-side socialism." They prefer paying lower premiums for less comprehensive coverage when it suits their needs, while holding a put option on broader back-up protection against what is less likely or foreseen. Insurers, providers, and policymakers adapt and oblige by shifting costs and gaining revenue through other means (safety-net coverage, insurance-rate compression, contractual overrides, and taxpayer subsidies) that further blur the lines between risk and reward. And even "competitive individualists" will one day become older and sicker claimants themselves, seeking then to shift risks to others after the fact. Such risk-taking without risk tries to bypass the competitive part of health-care individualism rather than struggle with uncertain trade-offs over time through more lasting arrangements. The modern version of the wartime adage that there are no atheists in foxholes is that there are few libertarians in intensive-care beds or long-term-care facilities.

Equality egalitarianism is more ascendant recently, although it is more visible in advocacy than operational policy. Its backers appear to care more about equalizing the distribution of care than improving health outcomes. More measurable inputs again trump elusive outputs. The Biden administration's embrace of health equity and gender-neutral vocabulary may be more about placating parts of its political coalition rhetorically than substantively redressing past injustices, but it diverts attention away from confronting more persistent policy problems.

Even in our more polarized political times, the complexities and exaggerated claims of health-policy debates make a strong case for apathy among patients and voters. Their personal preferences don't appear to shape much of what happens, at least at the level of public policy. The fundamental problem here remains motivating the apathetic and fatalistic to engage in more purposeful action beyond rational ignorance or disengagement.

As noted by Wildavsky, none of these four modes of organizing social life can overpower the others consistently. Adherents of each one need the others to define their own sense of purpose and opportunities for manipulation. The issues of the moment will vary; each will reinforce, modify, reject, or succumb to the others at times. The boundary lines for these categories of cultural preferences are far from fixed, but they offer workable approximations of the more persistent dividing lines in health policy and our broader political discourse.


With Wildavsky's analysis of health-care politics in mind, how might we evaluate the future of health policy and the next potential moves? Five points can be made about how his timeless insights remain applicable to the current era.

First, the pyrrhic pursuit of health-care equality can only aim at leveling access to medical services, because that is somewhat measurable and malleable. This leveling will continue to produce other types of unequal results, however, in both the effective use of those services and the outcomes they generate. Even the most diligent legions of diversity, equity, and inclusion administrators cannot overcome differences in individuals' time management, preferences, personal resources, habits, decision-making skills, genetic heritage, and geographic locations. These differences are far more influential in shaping how different patients choose medical care than other goods and services, as well as how effectively they then use it.

Second, geographic disparities can be reduced through financial-equalization policies but never eliminated. Distinct regions develop differently and may be limited not just in their command of resources, but in their effective demand for health-care services, ability to attract skilled professionals, and broader physical and social environments that shape residents' health. Regions also vary in how effectively residents help manage their own health. Migration and skill development are far more effective agents of upward social mobility than necessarily limited steps to level access to health care down or up.

Third, the most predictable and persistent policy goals of the American health-care system, as practiced rather than proclaimed, are the following: ensuring that most of its providers and payers remain financially well-nourished; that dominant incumbents are protected from disruptive competition; that the real amounts, distribution, and incidence of paying for health-system costs continue to be disguised; and that political management of private actors always stops well short of accountability for whatever might go wrong or prove too unpopular. Actually improving health outcomes — as opposed to financially facilitating efforts to "try" to respond to patients' concerns — is often more of a secondary byproduct than a primary goal. Political-survival skills involve either convincing more people that they might be winners rather than losers in the latest policy auctions, or feeding their grievances over recent losses. But the underlying motivation for most political engagement is to hope to alter through government action what unregulated competitive mechanisms and personal choices might otherwise produce.

Fourth, the evolving balance between what is considered public and what is considered private in health-care allocations and operations tends to resist sudden change and always circles back toward a mixed complexion, so that a purely market-based or government-administered system never emerges. Surface appearances can mask delegated and redirected decision-making. The U.S. health-care system is not a mixed one by accident: It reflects our decades-long ambivalence about whether to ration medical care solely by money or by politics. Wildavsky concluded nearly five decades ago that we learn to live with faults we do not want to live without.

A more recent examination of health-care spending by Mark Pauly in 2019 found that while the public share of expenditures continues to creep upward, so too does the portion of health care delivered and administered through more "market-like" private-sector mechanisms. The comparative advantages in this division of labor demonstrate the federal government's capabilities to raise and dispense money for insurance-coverage subsidies and private-sector intermediaries' ability to deliver medical goods somewhat more efficiently. We thus see more "marketization" of the Medicare and Medicaid programs, even as more public money flows through them.

Distribution of public funding also reflects more goals than fairness and predictability. Private-sector health management operates within a cozy cocoon of incumbent protection and competition-dampening regulation. The symbiotic private and public sectors need each other, and neither one can dominate the other for long in our mixed system. Political actors cannot afford to drive private providers out of business; they cannot deliver health care on their own. They do not even want the full responsibility for micromanaging it. The safest setting is maintaining just enough power to selectively blame others when something goes wrong.

Generous taxpayer subsidies tend to produce a relative equilibrium in our mixed system for care that at least appears to be managed privately, albeit under intermittent political supervision and rent-seeking. Pricing floors to accommodate a host of inefficiencies are balanced with unlimited ceilings on circular blame-shifting across all health-care sectors. Public budgets look smaller if highly regulated and amply subsidized private payers make up the difference.

Fifth, the more fruitful path to limiting health spending involves facilitating changes in future demand rather than imposing artificial curbs on current appetites. (Of course, overcoming the daunting political odds of reforming a few public policies that artificially stimulate and increase that demand would help.) Wildavsky sensibly observed that health-care costs will decrease when either individuals or governments reduce the amount they put into medicine. Thus, the future trajectory for health-care spending will be lowered whenever the government prefers to spend more on other things (public programs needing more financial support) or wants to keep its total tax and borrowing rates down.

Similarly, private health-care spending will stop rising to the degree that individuals become more willing to reduce purchases of medical services and buy something else that they want more. These shifts in demand-side signals can be muted by pricing distortions (subsidies, regulation, and information suppression), but they can be facilitated and enhanced by policies that bypass or eliminate funding silos and decentralize spending-allocation decisions. Perhaps presenting various social determinants of health investments as competing substitutes — and not social-reengineering complements — would provide a starting point for more efficient and effective modes of health spending.

Wildavsky summed up why U.S. health policy was (and remains) pathological: We are neurotic, and we insist on making our government psychotic. The neurosis stemmed from knowing what is required for good health but not being willing to do it. Government-level ambivalence produced payments both coming and going: once in telling people how to be healthy, and then in paying the bills when they disregard that advice. The psychosis complement arrived when government officials persisted in repeating this self-defeating playbook. (Of course, the quality and consistency of past government advice on how to be healthy is an issue for another essay.)

Our health-care system is inescapably imperfect because it features the interference of our human and political natures in matters of medical science and its execution. Nearly 50 years of experience since Wildavsky's original observations suggests that we should not expect any grandiose reforms or improvements by doing more of the same. We first need to reexamine our health-care politics and how we each can stop contributing to its persistently bad habits and insist on better accountability by all — including ourselves.

Let's not wait another four or five more decades to learn the same lessons again. The fault is not in our health-policy stars, but in ourselves.

Tom Miller is a senior fellow at the American Enterprise Institute.


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