All Commentary
Friday, July 28, 2017

Let the States Be Laboratories for Health Care

Only allowing one laboratory to experiment creates limited and lethargic results.

Last year, I was driving on Highway 76 through Nebraska into Colorado to go to my cousin’s wedding in Denver. Imagine my amusement when the first thing I see crossing over the border is the sign for a cannabis shop with a giant green cross. As I drove past, I noticed it was neatly tucked between a gas station, a hotel, and a Subway; one of the most nonchalant environments to sell weed.

As I continued driving, I thought about how cool it was to see Colorado take the initiative to legalize it and make it successful. I thought of something else too: why aren’t other industries like this?

Low-Risk Experiments

When Supreme Court Justice Louis Brandeis wrote the dissent in the case of New State Ice Co. v. Liebmann (1934), he drafted what would become a classic metaphor in American politics:

It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

While this case dealt with a dispute over requiring a license to sell ice, the belief that states are laboratories is an idea that has been applicable to many different policies; one being recreational marijuana. It garnered great success when Colorado and Washington were the first states to legalize it, and many others soon followed.

What if this were to happen with health care?

Give health care to the states, and let them be our laboratories.

The national debate surrounding health care is highly contentious and divided between people who call for increased regulation or deregulation. The commonalty between the arguments is that both focus on how much the national government should be responsible for health care.

The immediate question that should be asked is, why? Why should it fall to the national government to legislate health care?

Give health care to the states, and let them be our laboratories.

Fortress vs. Frontier

Robert Graboyes, a researcher at the Mercatus Center, brilliantly puts the debate on health care into perspective with the “Fortress vs. Frontier” model. This is a dual approach where the “fortress” model increases centralization and regulation on healthcare which makes it less efficient and more expensive. The “frontier” is a method of making health care cheaper and innovative by opening it up to a free-market system.

Imagine the United States as a laboratory. The purpose of a laboratory is to provide a workspace where a scientist can do an experiment, and this American laboratory has 320 million citizens to experiment on.

Only allowing one laboratory to experiment creates limited and lethargic results.

The scientists are our political parties, and they have very different views on how to experiment. Historically, this American laboratory has been run with a “fortress” mentality, experimenting with new regulations on health care while continually enforcing antiquated laws. Americans are experimented on like mice, with patients forced to enter into the maze of government regulation.

This creates a lack of choice and innovation. Americans have no choice in deciding how they want their health care, and all Americans need to follow the same guidelines. The “fortress” mentality also stifles innovation because only allowing one laboratory to experiment creates limited and lethargic results.

This isn’t how science works.

Science works by having a pool of laboratories that work to solve the same issues but take on a multitude of approaches. They then compare results and debate each other to intellectually test how robust their findings are. This is more easily achievable when there are fifty laboratories instead of one.

These fifty laboratories are our fifty states, and they are already operational and producing results. This is seen in initiatives like the Healthcare Openness and Accessibility Project (HOAP) from the Mercatus Center. Their research shows that states are already creating incentives and experiments in health care, and ideas are spreading between them.

Looking at the map above, there is obviously a large diversity of results we can use to compare health care systems and accessibility laws. Blue states are less regulated and more accessible while orange are the opposite. What is most striking about this study is best captured in the researchers’ comment:

States have (and should have) substantial control over the delivery of health care – and not solely or principally in the area of insurance reform. To make maximum use of state powers in improving care, it is vital to have a basis for comparison – to see what works in other states.”

Opening the Frontier

Opening up health care to a “frontier” approach became popular due to the “fortress” partisanship in Washington, and the merits of the frontier are already showing.

Certificate of Need (CON) laws are a classic example of state experimentation that are being fixed by the frontier approach. CON laws require medical facilities to ask government permission before building an expansion, offering a new service, or purchasing new equipment. Their purpose is to ensure that communities have cheaper, higher quality, and adequate supply of care. However, these laws are detrimental to patients, and even cost lives.

Thanks to the frontier, states are quickly realizing the CON laws are impractical and wrong.

Legislation that gives more power back to the states may produce unexpected bi-partisan alliances.

Another example comes from California. With the fate of the Affordable Care Act in question, states have already responded with alternatives. California took the biggest leap by proposing to create its own single-payer health system. While their proposal drew scorn from many and represents a “fortress” mentality, it presents a great opportunity to see if this system can work.

What is even better is that none of the other states will be affected. A single-payer system is supported by 70 percent of Californians, and would most likely win if put on a ballot. So, why not let them try it? While I do not personally support a single-payer system, I welcome the opportunity to study it, though we will not see it come to fruition anytime soon.

State experimentation is also supported by both Republicans and Democrats, and levels of regulation typically do not follow party lines. HOAP cites that Blue Oregon has less regulation than Red Georgia, and Red Mississippi has less regulation than Blue New York. So when approaching health care reform, legislation that gives more power back to the states may produce unexpected bipartisan alliances.

Should the National Government Legislate Health Care?

Should the national government be responsible for health care over the states? I say no for two reasons.

We need to move away from the current system because it isn’t working, and move to the state system that is already successful.

The first reason is a “state’s rights” argument. Powers delegated to the states provide a more direct link for citizens to influence policy in their state. If citizens want a new system of healthcare, they should be able to implement it in their state. This approach is more reflective of citizens’ needs than a national plan.

The second reason is practicality. The national debate on health care is fraught with landmines and disagreements. Inter- and intra-party fighting has resulted in half-hearted attempts for reform, and nothing seems to be coming to fruition.

This leaves the country in limbo, with Americans circling a regulatory maze that is too difficult to escape. We need to move away from the current national system because it isn’t working, and move to the state system that is already successful.

The future of health care is through the states because they give citizens more power over their health care and incentivize innovation. We should allow our states to become the health care laboratories they were designed to be, and glean the best results from them.

  • Luke Ashton is a recent political science graduate from Alma College in Michigan and a Policy Fellow with the Platte Institute in Omaha, Nebraska.