HCFO Grantees at the Council of Economic Advisors

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Introduction
Major Policy Issues
HCFO & Other Health Services Research Informs CEA
Conclusion

The Council of Economic Advisors (CEA), established in 1946, functions within the Executive Office of the President and is comprised of a chair, two members, and a staff of economics experts.¹ The CEA is charged with using empirical evidence and the best available data to provide economic advice on domestic and international policy issues. Several HCFO grantees were selected to serve as staff members at the CEA under both the Bush and Obama administrations. They graciously shared some of their experiences and thoughts on how their HCFO-funded work and health services research generally helped inform their analysis at the CEA.
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Majors Policy Issues

Bradley Herring, Ph.D. of Johns Hopkins University Bloomberg School of Public Health, served under the Bush administration from July 2006 through July 2007. Jean Abraham, Ph.D., of the University of Minnesota School of Public Health, served during both the Bush and Obama administrations from July 2008 through July 2009. Mark Duggan, Ph.D., of the Wharton School of Business at the University of Pennsylvania, served during the Obama administration from April 2009 through July 2010. Helen Levy, Ph.D., of the University of Michigan, served most recently during the Obama administration from September 2010 through August 2011.²

During his tenure at the CEA under the Bush administration, Herring largely focused on the tax treatment of employer-sponsored insurance. He and others on the Council examined the advantages and disadvantages of creating a standard tax deduction for purchasers of private health insurance, either from their employer or through the individual insurance market.³ In an alternate analysis, the group examined the use of tax credits, which would have been more advantageous to low income workers. 

Abraham’s tenure spanned the last five months of the Bush administration, during which time she focused on the Economic Report of the President, which is an annual overview of the nation’s economic progress.⁴ During her time at the CEA within the Obama administration, Abraham was staffed on a working group responsible for developing policy positions related to health reform. Priority issues for the group included designing insurance exchanges, insurance market regulation, and delivery system reform. Additionally, they explored potential revenue streams (e.g. Medicare payment changes, “Cadillac tax” on employer-sponsored insurance, other taxes and fees) to support a health reform bill. Like Abraham, Duggan, and Levy recall the health care reform bill was the most important issue they addressed.

The start of Duggan’s term overlapped with Abraham’s. He recalls that during his time at the CEA he “had a hand in almost every issue related to health reform.” He worked on several reports and publications including making the economic case for health reform and examining how health reform would impact small businesses. At the time, Duggan and others conducted an analysis of 16 states to better understand the potential impact of health reform at the state and local level, including the effect of expanded federal matching funds relative to the level of uncompensated care. Duggan also examined the extent to which reform provisions could slow the rate of growth of public and private health care spending.

Levy joined the CEA following the passage of the Patient Protection and Affordable Care Act (ACA). Her work primarily focused on preparations for the implementation of reform, including developing guidance for exchanges and early delivery system reforms, such as accountable care organizations.
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HCFO & Other Health Services Research Informs CEA

While their individual studies had varying degrees of relevance to the policy analyses being conducted at the time, in general, the grantees felt that their HCFO work helped prepare them to take on the challenges of working at the CEA. In his HCFO-funded study, Duggan evaluated the effects of mandatory Medicaid managed care in California on spending and health outcomes. He noted that this work was directly applicable to the issues he addressed at the CEA, as many policymakers were concerned about the churn between Medicaid and exchanges. According to Duggan, this research gave him unique insights into the Medicaid program. 

Levy’s work on crowd-out in the CHIP program helped inform her understanding of the relationship between public sector programs and private sector behavior. While there was not a specific emphasis on CHIP during the ACA discussions, the relationship between the public and private sector coverage helped inform implementation rules being developed. Herring noted that although his HCFO work prior to joining the CEA focused mainly on Medicaid health maintenance organizations, the general HCFO process offered an excellent foundation. He explained that HCFO’s strong emphasis on the application of research for policy was an excellent guide for the translating and communicating evidence for policymakers. 

The researchers pointed out that health services research plays a critical role in helping to inform and shape recommendations made by CEA staff, as well as their counterparts at OMB, Treasury, and HHS. The experience of working at CEA also provided a unique opportunity for these four researchers to see the gaps in the research literature and identify areas to for future analyses. The idea for Abraham’s recently completed HCFO grant on the impact of the medical loss ratio (MLR) on the individual insurance market was formulated during her time at the CEA. According to Abraham, “…My HCFO-funded research came about because of the recognition that there was so little research on the topic of medical loss ratio regulation and its effect on individual insurance market functioning.” Similarly, Herring’s recent HCFO grants on the effect of rising health care costs on workforce compensation and the impact of insurer and hospital concentration on insurance premiums are also a direct result of following the policy debate and recognizing the need for information on these issues. 

Duggan noted that much of the research they considered at the CEA was highly influential in the decision-making process. And while not all of the questions facing the CEA could be answered directly from research, it was often invaluable in helping the staff consider trade-offs and potential unintended consequences of certain policies. Working on the Council is fast-paced, noted Herring. Finding better ways to access data and generate rigorous, empirical evidence in a timely way would be of enormous help to the CEA staff and other policymakers who need information quickly. 
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Conclusion

The CEA is responsible for identifying the best and most current empirical evidence available to inform critical economic policy issues. HCFO grantees have made valuable contributions at CEA, providing objective guidance to the administration on a range of health care issues. The relationship between HCFO-funded research and the CEA has really been a “two-way street.” HCFO grantees have shared their knowledge and expertise, and in exchange have achieved a better understanding of the information needs of policymakers. The link between research and policy is crucial, especially at the CEA. All four of these HCFO grantees agree that it is imperative for researchers to consider the policy implications of their research and to ensure that their findings are widely disseminated to policymakers who need it to support their decisionmaking. HCFO continues its efforts to identify new and innovative ways to close this loop. 
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1. Council of Economic Advisers. About CEA. Washington, DC: Whitehouse.gov. Available from http://www.whitehouse.gov/administration/eop/cea/about
2. Thomas Buchmueller, Ph.D., University of Michigan School of Public Health currently serves as a staff member at the CEA.
3. Sahadi, J. What Bush’s Health Plan Means to You. January 23, 2007. CNNMoney.com. Available from http://money.cnn.com/2007/01/23/pf/taxes/health_proposal_effect/index.htm
4. Executive Office of the President. Economic Report of the President: Main Page. Washington, DC: U.S. Government Printing Office; [Updated 2011 February 23; cited 2011 15 October]. Available from http://www.gpoaccess.gov/eop/index.html