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Saturday, July 30, 2011

The Health Industry: Capturing the States or Congress?

According to the New York Times, Florida, like about a dozen other states, debated a proposed amendment to its state constitution that would block, at least symbolically, much of the federal health-care insurance overhaul on the grounds that it tramples individual liberty. Behind the amendments was an industry with a vested interest—an industry that made substantial campaign contributions to the supporters of the amendment. I contend that there is an ethical conflict of interest in the practice, even if it is constitutional (assuming wealth as free speech, which itself is a problematic assumption).

What united the proposal’s legislative backers in Florida was more than this ideology. Its 42 co-sponsors, all Republicans, were almost all recipients of outsized campaign contributions from major health care interests, a total of about $765,000 in 2008. Around the 2008 election, the groups that provide health care contributed about $102 million to state political campaigns across the country, surpassing the $89 million the same donors spent at the federal level. This opened the backers and their state government to attack by those "nationalists" who wanted the federal government to be involved in health-insurance. Indeed, they argued that the magnitude of the health care industry’s contributions demonstrated the dangers of leaving such a question up to individual states, where campaign finance and ethics rules vary from strict to negligible. The industry has enormous power at the state level, they contended, and very few states have state-level consumer groups that are able to lobby effectively against them. Yet the alternative of consolidation of the "extended republic" carries with it other dangers.

Indeed, the matter of the US Government’s enumerated powers was not lost on the state legislators opposed to a federal health-care law. “We are trying to prepare, and trying to send a message that there is no reason for those decisions to get made at the federal level,” said Representative Linda L. Upmeyer, a Republican who is leading the council’s efforts in Iowa. Without “opt-in” or “opt-out” provisions in the federal legislation, state constitutional amendments would be preempted, and thus merely symbolic. It seems like a lot of work just to make a statement.

In terms of health-care policy, states opting out could compromise the economies of scale being assumed by the federal cost-saving measures. However, such policy reflects ideological preferences, which can vary from state to state. The effect on our system of public governance (i.e., federalism) ought to be considered as well, lest we inadvertently run our ship of state into a wall.

Consolidation at the expense of federalism works against the inherent diversity in an empire-scale Union. However, if the health-care industry is able to dominate health-care policy at the state level—a consolidated industry against comparatively smaller republics—then federal action might be necessary to protect republican principles—yet at the expense of federalism. In other words, what if the cost of maintaining federalism is rule by industry?

Governmental consolidation may well be foisted on us by necessity, given the power of consolidated private capital in the US. Yet by this logic, why stop at the US Government? To be sure, the health-care and banking industries have demonstrated their influence on Congressional action (and inaction). Why not then argue that a federation, such as that of the U.S. or E.U., is necessary to create a governmental entity large and powerful enough to fend off the encroachments of big business?

Unfortunately, the distance between the federal heads and the citizens in an empire-scale federation is apt to be taken advantage of by industry lobbyists on “K Street.” In other words, concentrated vested interests (whether business or labor) are literally closer to the federal representatives. Furthermore, the sheer amount of money required to run a campaign in a federal district and republic gives the federal representatives more of an incentive to meet with the lobbyists. In fact, legislative staff in Congress prepare “position papers” that summarize the stances of the various interest groups. Missing in these papers are the constituents.

Therefore, even though the member states of an empire-level federal system are perhaps more easily dominated by big business, the federal head is also capable of being captured (though for different reasons). Perhaps the solution lies in the checking of ambition by ambition that is available when the state governments can check the federal head, and vice versa. In other words, the worst enemy of corporate corruption of public officials at either government may be balanced federalism.

Such a balance does not necessarily mean that both levels have health-insurance plans; balanced federalism would proffer stronger checks and balances if the levels have qualitatively different approaches to a given problem. In the case of health-care, the federal head could be oriented to determining and establishing a floor (rather than ceiling) commensurate with the right of every citizen in the empire to health-care—in other words, to what each American deserves by virtue of being an American. The state governments, on the other hand, could be oriented to determining and implementing the revenues and programs at or above the federal floor guidelines. Establishing guidelines is qualitatively different than formulating and implementing a program. The two vantage-points strengthen the check and balance feature of a balanced federal system of governance.

Source: David D. Kirkpatrick, “Health Lobby Takes Fight to the States,” New York Times, December 28, 2009. http://www.nytimes.com/2009/12/29/health/policy/29lobby.html?_r=1&ref=politics