States and the Health Care Crisis: The Limits and Lessons of Laboratory Federalism

Policy analysts often assume that program innovations tend to arise at the local and state levels, work their way across a significant number of states, and then move onto the federal government’s agenda, by which time the innovation has been tested, adjusted, evaluated, and pronounced fit for national use. This chapter considers more closely the laboratory image in the health care context. What is a policy laboratory? In what ways can and do states act as policy laboratories? What are the results of the health care laboratory testing done thus far? How might national legislation encourage states to become better models? The chapter argues that states are not particularly good laboratories: states learn relatively little from each other, what they learn is filtered to accommodate local needs, social scientists have produced relatively few cross-state studies, and the federal government only selectively builds on state initiatives. It suggests that one model (federal menus) for making states more effective laboratories.