The Structure of Bureaucratic Decisions in the American States

Bureaucrats have a significant impact on the ways that governmental policies impinge on American citizens. This is particularly true at the state level. Administrators in state agencies have wide latitude to make vital decisions in important public programs. And yet, surprisingly little is known about this process. The present analysis will address this topic by focusing on the structure of bureaucratic initiatives in state Medicaid policies. We believe that doing so has several important advantages. Substantively, our focus on the structure inherent in bureaucratic decisions reveals a great deal about the nature of administrative policy making in social program developments at the state level. Methodologically our analysis produces an empirical measure of bureaucratic policy outputs, which can be used as an analytic variable in other research efforts. Altogether the information obtained in this analysis provides new insights about the role of administrators in the American policy process. Background In this study, we will examine state adoptions of Medicaid optional health care services. The federal government and state legislators establish the general parameters for the Medicaid program (Coughlin, Ku, and Holahan, 1994). But, state-level bureaucrats make important decisions that determine the exact configuration of services to be offered within each state (Bovbjerg and Holahan, 1982; Congressional Research Service, 1993; Schneider and Jacoby, 1996). Hence, many of the differences that exist across state Medicaid programs are due to administrative initiatives rather than to state legislative statutes or federal regulations (Davison, 1980). The objective of this article is to determine whether there is an underlying structure among these interstate differences. If such a structure does exist, then it should be useful for discerning the criteria that Medicaid bureaucrats have in mind when they make administrative decisions. Given the importance of state bureaucracies in the Medicaid policy making process, it is somewhat surprising that so little is known about how they operate. There has been virtually no research conducted on this topic so we do not know whether there is any pattern or structure to bureaucratic decisions. Previous empirical analyses have focused on other aspects of the Medicaid program, such as state expenditures and assessments of program intention, content, and/or scope (Hanson, 1984; Holahan and Cohen, 1986; Barrilleaux and Miller, 1988; Schneider, 1988; Buchanan, Cappelleri, and Ohsfeldt, 1991). Those few studies that have focused directly on administrative initiatives in the Medicaid program have tended to be speculative and interpretive (Lemov, 1991; Hovrath, 1992). They generally conclude that there is no discernible pattern among state bureaucratic policy adoptions. Instead, they argue that the range of available services is too wide to be analyzed or summarized in any comprehensible form (Davison, 1980; McDonough, 1992). We emphatically disagree with the preceding conclusion and believe that there is an underlying structure to bureaucratic decisions in state Medicaid programs. We hypothesize a pattern of bureaucratic activity based upon the degree of difficulty involved in providing various health care services. State administrators would begin by adopting easy options; only after doing so would they move on to implement more difficult services. The exact nature of the difficulty is an empirical matter, to be determined as pa-rt of the analysis. It could be based upon the costs of the services, the size of the clientele groups for the various services, or the level of political controversy surrounding different health care options. In a-nv case, a cumulative pattern should arise because states adopt easier services before proceeding to more difficult options. Most states are willing to provide a set of minimal health care services while others are willing to bear greater burdens. …