THE ROLE OF FEDERAL WAIVERS IN THE HEALTH-POLICY PROCESS

Federal waiver programs enable states to bypass the requirements of federal programs such as Medicare and Medicaid to experiment with different ways of financing, organizing, and delivering health care. In tracking waiver activity from 1980 to 1990, the authors found that the federal involvement with waivers lost momentum during the latter part of the 1980s, while state involvement increased. Three key issues dominate the discussion of waivers: administrative control, the role of the states, and the ability to evaluate demonstration waivers. Examination of the chronology of waiver activity suggests the emergence of a new era, wherein federal control reemerges as a way to counter the increased fragmentation of health policies among states. If this is the case, four areas need to be addressed: (1) balance of political and research objectives; (2) administrative flexibility for states; (3) careful scrutiny of rules; and (4) increased accountability. These recommendations can guide the federal government, with the states as partners, in its attempt to regain momentum in the use of waivers to expand the knowledge base.