January 31, 2022

Comment to the Healthy Future Task Force Security Subcommittee

  • Kofi Ampaabeng

    Senior Research Fellow
  • Bobbi Herzberg

    Distinguished Senior Fellow, F. A. Hayek Program in Advanced Study in Philosophy, Politics, and Economics
  • Jordan Lofthouse

    Associate Program Director, Academic and Student Programs
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Healthy Future Task Force Security Subcommittee

Dear Representatives Hudson, Banks, and Cole:

We are pleased to respond to the request for information (RFI) by the Healthy Future Task Force Security Subcommittee for policy recommendations focusing on pandemic preparedness, public health, supply chains, and medical independence from China. The Mercatus Center at George Mason University is dedicated to advancing knowledge relevant to current policy debates. Toward this end, its scholars conduct independent, nonpartisan analyses and propose policy solutions grounded in peer-reviewed literature. With that in mind, this comment does not represent the views of any affected party or special interest group.

The subcommittee is seeking feedback on several policy issues under three focus areas. We concentrate on two policy options under the public health focus area:

  • Bolstering Americans’ confidence in public health institutions (question 15 in the RFI)
  • Improving the quality of healthcare services to Native Americans (question 19 in the RFI)

Bolstering Americans’ Confidence in Public Health Institutions

The management of public health during the pandemic has been controversial at best, and lawmakers should review and draw lessons from the public health decision-making process that has operated during the public health emergency, especially regarding nonpharmaceutical interventions (NPIs) such as lockdowns, mask mandates, vaccine mandates, and eviction moratoria. Conducting a review and implementing the lessons of such review into future emergency response plans would help build trust between Americans and their public health officials.

In response to an RFI by the Republican Study Committee, Mercatus scholars made four recommendations to improve public health. This response is attached, and we summarize the recommendations here. Generally, Congress should review laws that permit public health agencies to impose certain restrictions. Specifically, Congress should do the following:

  • Conduct a full cost-benefit or cost-effectiveness analysis of NPIs recommended and implemented during the COVID-19 pandemic, taking into account individual autonomy and method sustainability in the analysis, as officials do in Sweden.
  • Use the laboratory of federalism to catalog pandemic policies according to their effectiveness and net benefit. Such a catalog could provide a starting point for future public health crises. A broad set of experts should contribute to the creation of the catalog, making special note of past policy failures so that future policymakers do not repeat those mistakes.
  • Examine how the federal response to the COVID-19 pandemic has altered the power balance between federal, state, and local public health policymakers. Doing so would allow Congress to consider how any such alteration affects the future development of effective, robust, and resilient public health policies.
  • Review section 361 of the Public Health Service Act of 1944, which grants broad powers to health agencies to take necessary actions during a public health emergency, with the aim of narrowing the scope of actions agencies can take.

Improving Quality of Healthcare Services to Native Americans

Native Americans have long experienced higher rates of health problems than the general American population and other racial and ethnic minority groups. In addition, Native Americans have been disproportionately affected by COVID-19 in part because of poorer underlying health conditions, which are risk factors for COVID-19 mortality. The contributors to Native American health outcomes are complex and multifaceted. Two of the leading contributors to Native American health problems are pervasive poverty and shortcomings within the Indian Health Service (IHS). In a series of recently released policy briefs (see attached), one of us (Lofthouse) discusses these problems and proposes solutions to address them. The main problems discussed in the briefs are (a) inadequate funding for the IHS, (b) managerial inefficiencies within the IHS, and (c) broader institutional inefficiencies that impede economic growth for Native Americans living on reservations.

Our recommendations range from small-scale policy changes to large-scale institutional changes that could rearrange governance structures in ways that improve the IHS and the broader institutions that affect Native American economic growth. We make three main recommendations for improving the health outcomes for Native Americans:

  • Increase funding to the IHS.
  • Increase accountability within the IHS.
  • Remove institutional barriers to economic growth on Native American reservations.

Increase funding to the IHS. The IHS, which is charged with improving the health of Native Americans, has been chronically underfunded since its creation in 1955. For example, the Government Accountability Office (GAO) reports that, in 2017, per capita spending for the 1.6 million Native Americans eligible for service from the IHS was $4,078, compared with $8,109 for Medicaid beneficiaries. Although the IHS is the payer of last resort, per capita expenditures that are half those of Medicaid and the Federal Bureau of Prisons are unlikely to yield good outcomes.

Unlike many other federal healthcare programs such as Medicare and Medicaid, the IHS is funded mainly through discretionary appropriations. In 2020, Congress appropriated $6 billion to the IHS. These funds were used for both clinical services to the eligible population and maintenance of IHS facilities. These appropriated funds have been insufficient. As a result, the IHS experiences significant staffing shortages, lack of equipment for on-site services, and long wait times, among other problems.

The amount appropriated to the IHS is determined by base funding (from prior years) with adjustments for inflation and population increase. Congress should reset the base funding to, at a minimum, ensure parity with Medicaid in per capita terms. In addition, as it has done for the US Department of Veterans Affairs, which provides healthcare to veterans through the Veterans Health Administration, Congress can grant the IHS advance appropriation authority, which would make funds available to the IHS at the beginning of the fiscal year to prevent funding lapses. As the Congressional Research Service notes, the IHS has received its regular appropriation at the start of the fiscal year only once in the past 25 years. This means that the IHS has very often been subjected to funding constraints caused by delay in appropriations via continuing resolutions. Funding via continuing resolutions imposes significant constraints on the activities of the IHS and its ability to adequately provide healthcare to Native Americans.

Increase accountability within the IHS. The GAO and the US Department of Health and Human Services Office of Inspector General have documented several managerial shortcomings at the IHS. As one of us (Lofthouse) notes, the IHS has long-standing issues with mismanagement that go beyond ordinary bureaucratic inefficiencies—the healthcare services have been substandard, and staff do not adequately follow administrative policies. An increase in funding without robust measures of accountability or improved organizational structures could lead to boondoggles, continued substandard healthcare quality, or other unintended consequences. Although the IHS has established a new strategic plan, the Quality Framework, the Accountability Dashboard for Quality, and a new credentialing system in recent years to improve access, quality, and management within the agency, Congress should institute measures that would improve the accountability within the IHS and ensure compliance with existing regulations.

One way to improve accountability in the IHS is to reform institutional structures so that they better align the incentives of the officials, doctors, and other employees with the desired outcomes. Incentives to improve accountability might include a system of rewards for good performance or rewards for discovery of innovations. What good performance means, what constitutes an innovation, or what a system of rewards involves depends on context. Because IHS employees have local and tacit knowledge about the institutional details and incentives of the agency, they have the best knowledge about how to align incentives for the desired outcomes. Therefore, any potential reforms should include consultation with IHS employees at every level so that reforms incorporate knowledge of the people they are meant to help.

Remove institutional barriers to economic growth. The third policy option is more complex and would require sustained effort. Chronic poverty among Native Americans can be attributed to lack of sustained economic growth within reservations. Economic development is heavily dependent on formal and informal institutions, such as legislation, regulations, social norms, and civic groups. When institutions, both formal and informal, facilitate entrepreneurship and innovation, a society can experience unimpeded economic growth. However, if a society’s institutions hamper exchange and entrepreneurship, that society will experience relatively slow economic growth and poverty. There is a well-established direct relationship between poverty and poor health outcomes. Long-term solutions to Native American health problems must include institutional reforms that ensure economic growth.

The federal government’s legal relationship with tribes means that many institutions are similar across most, if not all, tribes. Three important institutional channels impede entrepreneurship and economic development on many reservations: the federal land trust, a dual federal-tribal bureaucracy, and legal and political uncertainty. Those three channels make it more difficult for people to engage in mutually beneficial exchange, to become entrepreneurs, and to discover innovations. Such barriers hamper economic growth, thereby leaving people poorer than they would be otherwise.

Federal policymakers can improve governance institutions by streamlining the policies governing how trust land can be sold, leased, or developed. In addition, federal officials can remove unnecessary red tape that affects Native American economic life. Finally, federal officials can reform laws and regulations to mitigate the uncertainty and complexity regarding taxation schemes, judicial jurisdiction, incorporation codes, and access to capital markets.

Conclusion

In this comment, we propose actions Congress could take to ensure that public health is more effectively managed during pandemics and to improve health outcomes for Native Americans. Concerning public health, Congress should conduct a full review of the cost-effectiveness of NPI recommendations; consider how the federal response to the pandemic has altered the balance of power between federal, state, and local policymakers; and assess the comparative effectiveness of the various state policy responses to the pandemic. In addition, Congress should review laws that give broad powers to agencies to regulate public health.

Concerning Native American health outcomes, the funding for the IHS should be increased to match expenditure on other similar programs, and the IHS should also be granted advanced appropriation authority. In addition, Congress should improve accountability within the IHS management to ensure quality care for Native Americans. Finally, the long-term improvements to Native American health require economic growth, which reduces poverty. We recommend that Congress review and streamline policies that govern the federal land trust and reform regulations that contribute to complexity and uncertainty.