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Prior chapters have discussed the role of the federal government in payment programs, such as Medicare and Medicaid (see Chapters 18 and 19). The following chapter describes the government’s role in promoting public health, including the Centers for Disease Control and Prevention (CDC), which have played a major role in the COVID-19 crisis. This chapter describes the responsibilities for healthcare that are widely distributed and exercised throughout the congressional and executive branches of the US government. It also sketches some of the major policy initiatives these branches have undertaken over the past few decades.


The federal government’s role in healthcare was never systematically designed; rather, it evolved and developed incrementally over time. In general, the serial involvement of the federal government has spanned (1) the direct delivery of care, (2) welfare payments and public assistance, (3) support for the capital and manpower infrastructure to deliver this healthcare, (4) financing biomedical innovation and payment for that healthcare, and finally (5) regulating the system to control the cost and improve the quality of the healthcare it had spawned.

Federal involvement began with sponsorship of Public Health Services hospitals for merchant seamen at the turn of the 20th century (see Chapter 26). The scale and variety of federal activity has grown since the 1930s, starting with the Social Security Act of 1935. Some of the stimuli for federal involvement have included the Depression of the 1930s, World War II and technological discoveries (1940s and 1950s), and dealing with price inflation (1970s).

This growing involvement has been described in 2, polar opposite ways. One view is that the federal government executed a “takeover” of the healthcare system and inserted itself into everything. The other view is that the federal government has been engaged in a long-term collaboration, partnership, and symbiotic relationship with the healthcare industry, which owes its current size and shape to federal efforts. According to this latter view, every core element of the healthcare ecosystem was fashioned in one way or another by the government, which guided the industry over the course of the 20th century.1

Regardless of which view you endorse, why did the federal role develop this way? Problems arose incrementally, and policies then developed incrementally to deal with them. To implement these policies, the federal bureaucracy expanded incrementally. The result is a dynamic, changing structure that is widely spread across the federal government and its divisions. The dispersion of health activities reflects the variety of stimuli that gave rise to federal program development, the diversity in constituencies served, the variety of issues addressed, and the diversity in emphasis by specific agencies.

The federal government plays at least 3 major roles: financing (payer of healthcare), delivery (provider of healthcare), and regulation (oversight of healthcare). With regard to financing, the federal government underwrites ...

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