Mediating Institutions Needed for the Nation's Toughest Public Management Challenges

As democratic societies grow older, entrenched groups become increasingly adroit at protecting and furthering their interests. The challenge for public management is how to make hard choices that moderate the power of such groups in ways that take cognizance of broader, less powerful interests. My subject for this article is "mediating institutions" that is, organizational approaches that can be adopted to insulate certain policy choices from the hottest of hot politics.

I begin with what is arguably the nation's greatest policy and implementation challenge -- how to control health care costs. The British recently invented an organizational approach that zeros in on this task. It is called NICE, standing for the National Institute for Health and Clinical Excellence. This body within the National Health Service (NHS) is independent of direct political control.¹The role of NICE is to study the cost-effectiveness of medical interventions, relying on the work of advisory bodies, whose members are drawn from clinicians, professional groups, researchers and individuals with experience in patient advocacy.²

NICE has a staff of approximately 200 people and a budget close to $35 million in U.S. dollars. It issues reports in terms of QALYs, quality-adjusted life-years gained. While it does not have fixed benchmarks on which of its recommendations are made to the National Health Service, NICE uses ranges of costs, which reportedly are encompassed in NHS policies about what treatments and services are covered. Follow-up efforts are made to assure the implementation of NICE's recommendations, which I am sure lots of interests consider not so nice!

This is an example of a mediating institution with assigned tasks and commensurate powers, and resources to deal with hard choices on a basis that involves a measure of political insulation and a political-accountability safety valve. In the United States, military base-closing commissions can be viewed in a similar way. Three commission members are directly nominated by the president; the other six are nominated by the president after consultation with the majority and minority leaders of the House and Senate. The commissions make recommendations for closing military bases that go into effect en bloc unless the president or the Congress turns them down. (There have been five such commissions since 1988.) Going back further in time, independent regulatory commissions and reorganization commissions can be seen as similar attempts to moderate our yeasty bargaining systems for making and carrying out public policies.

Such a technique is being used now in New York State to "right-size" hospitals and nursing homes. The state has been divided into six regions, each with a regional advisory committee, one of which I am chairing. At the state level, a Commission on Health Care Facilities in the 21st Century is responsible for developing guidelines on which basis each regional committee is to make specific recommendations that are due to the commission in mid-November for hospital and nursing home closures and restructuring. Then, on or before December 1, the commission is charged with transmitting to the governor and the legislature its report containing hospital and nursing home closure and restructuring recommendations, which go into effect en bloc unless (1) the governor decides to not transmit them to the legislature by December 5, or (2) both houses of the legislature by majority vote reject them by December 31. This is a tall order and a tight schedule for a new change agent in such a hot and heavy, big-stakes policy cauldron as that involving health-care cost containment.

Other state governments have experimented with similar devices; in the case of New Jersey, to bring the political parties together for legislative redistricting. States have also tried budget-control mechanisms with action-forcing powers.

Setting up and operating politically insulated mediating institutions like this is a huge challenge. The essential need is to devise, and then put together, a coalition to adopt governance instruments for making hard choices on a basis that fits with the policy contours of the challenge being addressed, and which at the same time provides a safety valve for broad-gauged political accountability.

1. Steven D. Pearson and Michael D. Rawlins, "Quality, Innovation, and Value of Money: NICE and the British Health Service," Journal of the American Medical Association, Vol. 294, No. 20 (Reprinted), Nov. 23-30, 2005, pp. 2620. I am grateful to Robert Reischauer for calling attention to this article.
2. Ibid., p. 2618.