Application of administrative law to health care reform: the real politik of crossing the quality chasm.

• Author: McLean, Thomas R.

1. INTRODUCTION

   In a well-written editorial in the British Medical Journal, (2) Kelley and Tucci provide insight into the deficiencies of the Institute of Medicine's book, Crossing the Quality Chasm: A New Heath Care System for the 21st Century. (3) The authors observed that Crossing the Quality Chasm has, "received only a subdued response," especially when compared with the public outcry after the Institute of Medicine's prior publication To Err is Human: Building a Safer Health Care System, that reported that up to 98,000 Americans die each year from errors in our health care system. (4) Kelly and Tucci offer two interrelated reasons for the divergent public responses between these two Institute of Medicine publications: (1) the ambitions goals of the Institute of Medicine outlined in Crossing the Quality Chasm are supported only by a general outline for an action plan, and (2) the underlying complex adaptive system theory is only in a nascent stage of development. (5) Thus, Kelly and Tucci are suggesting that the generalities associated with an esoteric economic theory do not capture the public's imagination like an excessive body count. (6) This is, without a doubt, true. Accordingly, the authors recommend that we need to, "explore the motivations and incentives of those who provide care" (7) before complex adaptive system theory is allowed to become an integral part of patient care. Unfortunately, while Kelley and Tucci's conclusion is logically sound, it is likely to go unheard by governmental health care reformers because it ignores the "Real Politik" of our health care delivery system.

   "Real Politik," a term in vogue at the height of the Cold War, contemplates that in practice, governmental bodies attempt to expand their spheres of influence and control by the application of economic leverage. (8) The federal government is clearly interested in expanding its influence into health care because of its cost. (9) Americans spend over one trillion dollars--forty-four percent of which is paid for by the federal government--on health care each year. (10) To control the cost of health care, governmental reformers proposed the Health Securities Act of 1993 (11) as a frontal assault on the American health care system. But, to the reformers' chagrin, the Health Securities Act was dead on arrival, as much from the message as the messenger. (12) Undeterred by having the front door of reform barred by a plurality of interests, the reformers shifted gears to use a side entrance to legislative reform--administrative agency law. Presently, health care reformers are using administrative law to institute many of the core concepts of the Health Securities Act.

   Thus, to understand the cool media response to the release of Crossing the Quality Chasm, which provides only a general blueprint for health care reform, the Real Politik of administrative agency law must be grasped; moreover, once the machination of agency law is grasped, it is possible to reasonably predict where health care reform is heading.

   Accordingly, Part H of this Article provides an overview of federal administrative agency procedure; Part III sets forth the argument that if Institute of Medicine had desired a media event associated with the release of the Crossing the Quality Chasm it would have been arranged; Part IV argues that the absence of orchestrated media response was intended to facilitate the health care reform though promulgation of agency regulations. Part V examines the potential for the National Technology Transfer and Advancement Act of 1995 (13) to facilitate the rule making of federal agencies concerned with health care, This Article concludes that Crossing the Quality Chasm is only the first of many public announcements of coming health care reform regulations. Thus, the "Real Politik" of Crossing the Quality Chasm is that all interested parties immediately need to provide comment in health care publications, before the publications form the foundation of a new federal regulation.

2. PRACTICAL ADMINISTRATIVE LAW

   Administrative agencies exist to transform general governmental policy into operational reality. (14) Congress has broad discretion to delegate its powers, including rulemaking, to administrative agencies. (15) Unless the delegation is associated with an unintelligible standard, courts will not second-guess congressional delegation of power. From a practical point of view, a standard such as, "to make regulations that are in the public's interest," is sufficient to be intelligible to the courts. (16) Once the agency receives the delegation "green light," it is free to begin the research that will lead to a proposed regulation. In short, Congress delegates with broad-brush strokes leaving the details to be filled in later as the agency acquire expertise. (17)

   Agencies are not unfettered. The Administrative Procedure Act (APA) requires that the administrative agency subject a proposed rule to, "notice, comment, and hearing," as the procedure for proper promulgation. (18) It is through proper promulgation that a proposed rule becomes a federal regulation. In general, this means that the agency must publish the proposed regulation in the Federal Register, provide interested parties with sufficient opportunity to comment, and then consider whether the rule needs to be revised in light of the comments received. (19) The purpose of the public's involvement is to allow interested parties the opportunity to object on the record to the substance of the proposed rule. (20) In addition, the agency must disclose any technical basis for the proposed regulation. (21) Because of the time and effort an agency must invest to promulgate a regulation under the APA, the agency acquires true expertise in the subject matter.

   During subsequent review of an agency's promulgation, such expertise is a benefit to the agency because the judicial system will defer to the expertise of agency, as it would any expert. (22) Unfortunately, promulgation of regulation also has a downside. Because promulgation of a regulation requires substantial sums of money, an administrative agency also acquires a vested interest in having that regulation become law to justify its existence.

   Because a properly promulgated regulation has the force of a law, in essence the administrative agencies are a non-elected "fourth branch" to our government. (23) To illustrate the power of an agency to make law through the promulgation of regulations, consider the evolution of the recent final Privacy Rule regulations for electronic medical records from its Congressional inception of its final form. (24)

   Congress passed the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (25) to provide in part for the regulation of electronic medical record. The Act authorized the Secretary of Health Human Services (HHS) to develop regulations in the event that Congress did not act within two years to develop specific legislation for electronic medical records. (26) But following the time honored principle of general, rather than specific delegation, all that the Secretary of HHS was charged with was adopting "standards for transactions, and data elements for such transactions, to enable health information to be exchanged electronically." (27) It was a pretty sure bet in August 1996, when HIPPA was passed, that Congress would not provide supplemental detail. First, because HHS already possessed expertise in health care delivery. Second, and just as...