Association for Public Policy Analysis & Management

This paper seeks to illuminate a political puzzle: The United States has by far the highest medical care spending per person of any country; these costs have both raised the barriers against expanding insurance to the uninsured and threatened the insurance citizens already have. Yet the health care reform legislation of 2010 included virtually no credible methods to control costs for citizens who already had insurance. I seek to explain that puzzling result and its consequences. To be sure, many prominent health policy scholars, and certainly the leaders of the Obama Administration, believed quite differently. For example, a group of the most eminent health economists in the country asserted that the legislation as of November 2009 included virtually all credible cost control ideas (Rampel 2009)), and economist David Cutler (2010), a close adviser to the White House, asserted that the legislation “must bend the cost curve.” Nevertheless, there is overwhelming evidence that such cost controls as were put in the legislation at a minimum were not credible to neutral experts and the public. For example, the Congressional Budget Office (2008) had already reported that most of the measures praised so strongly by many economists could not be expected to yield significant savings within a decade. Its analysis of the enacted legislation claimed very little cost control outside of the Medicare program. The paper examines the reasons for this outcome and offers broader lessons into the role of analysis in the politics of health policymaking.