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1 The Market for Information in Health Policy: Using the "Just-in-Time" Strategy Wendy B. Young Information is the raw ingredient supplying the public policy process. Throughout the process of policymaking, information is traded and transformed by participants seeking to influence the process and emerging policy. In the past two decades, the supply of information available to inform public policy has expanded and diversified in response to an increase in competition and partisanship in the policymaking process. A dramatic new development, fueled by congressional committee restructuring in the 1970s and 1980s, that emulates trends in the manufacturing industries, is occurring in information trading. The increasingly competitive and partisan environment and the subsequent desire for an ever-shortening response time prompts participants in the policymaking process to seek strategies that quickly sort the excess information that they receive and customize the information into a product that they can use immediately to advance their targeted message of the moment. Participants in the public policymaking process are making the same discovery as Japanese manufacturers: just-in-time (JIT) management strategies can shorten production time and enhance market competition. Policymakers are using think tanks, interest groups, and lobbyists to supply ready-to-
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use information, outsourcing background work traditionally supplied by congressional and executive branch agencies. In turn, the growing distance between policymakers and these executive branch agencies whose programs generate the data used by external information suppliers to create customized information products, is putting these agencies' budgets at risk and reducing the capacity for intramural and extramural evaluation of federal health care programs. THE JIT MANUFACTURING STRATEGY AT TOYOTA With the advent of JIT strategies, the process of supplying information to health policymakers is taking on characteristics of the Japanese manufacturing process. U.S. policymakers and Japanese automakers are using JIT strategies to manage excess supply, shorten production time, increase flexibility, spread their risk to suppliers, and reduce cost. Just as the JIT manufacturing strategy has helped Japanese manufacturers expand their market share, policymakers using the JIT strategy are seeking a competitive edge for influencing policy proposals and political agendas. A look at how JIT manufacturing works at Toyota, the most cited example of the widespread use of the JIT strategy in manufacturing, highlights the attractive features of these strategies: reducing excess supply, timeliness, more flexibility, shared risk, and reduced cost (Schonberger, 1982). A Response to Excess Supply Japanese manufacturers adopted the JIT strategy when they realized that their suppliers had overproduced the required products and created an excess capacity (Schonberger, 1982). When steel-makers overproduced steel, Japanese manufacturers decided that they no longer needed to stock steel or make their own components to keep their production times from being slowed by gaps in the supply of steel parts. Although eliminating their stock increased manufacturers' dependence on their suppliers, they compensated
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for this by eliminating the waste that resulted from transporting, storing, and cataloging materials. Timeliness The JIT strategy drastically reduces the timeline from product design to customer delivery by outsourcing the components (Bowman and Kogut, 1995). Toyota is as much as 1.5 years faster than any U.S. or German carmaker at bringing a car with a new design to market (Smith, 1995). Simultaneous engineering gives suppliers the same time to change the components as the assembly plant has to change the production process. The car design as well as its parts can be modified throughout development, because suppliers participate in the creation of the idea and the design of the car that results from that idea (Dale, 1994). The new product emerges into the market in time to match changing customer tastes and gives Toyota a market advantage before other carmakers have comparable products. Flexibility The JIT strategy increases flexibility by closing the supply market. Each essential component has one exclusive supplier. There is no competitive bidding process. Toyota supplies are customized components, tailor-made for each car design. Suppliers continuously refine their components by roaming the assembly plant and talking with workers about potential improvements in the assembly process or the performance of their components. Either a component is ready to use (arrives at the moment and location in the assembly line process where it is to be installed and works properly) or the assembly worker and supplier change the component or the assembly process. Shared Risk Extensive outsourcing to sole contractors puts suppliers at the same risk as manufacturers for product failure, a benefit for manu-
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facturers who grant exclusive contracts. More than 70 percent of Toyota's components are outsourced (Smith, 1995). Suppliers share the responsibility for meeting the production quotas set by the manufacturer. In turn, suppliers are given complete access to the assembly process and workers and a preferred operation site in close proximity to the assembly plant that they supply. These exclusive suppliers also have exclusive contracting rights to supply all subcomponents and other less frequently used parts obtained from subsuppliers. The manufacturer shares with these exclusive suppliers its savings from reducing production time, improving quality, and increasing market share (Smith, 1995). The car assembly plant in Toyota City is the hub of consecutive rings of suppliers located according to Toyota's dependence on them (Smith, 1995). The innermost ring contains the sole engine supplier, whose close proximity makes it possible to deliver a load of engines every 20 minutes at the dock adjacent to the engine assembly station. Located in the next ring are suppliers of essential parts to the major suppliers, such as those making engine parts. The outer ring provides space for marginal subsuppliers who operate on their own timetable to sell to any customer a set of standard components. Reduced Cost The cost of production of goods of very high quality is less when the JIT strategy is used (Schonberger, 1982). By relying on suppliers to deliver goods for assembly on a JIT basis, the costs of bidding for, packaging, storing, and wasting defective or excess supplies are eliminated rather than just being passed along the supply chain. Also, a faster product assembly time lowers labor costs. Streamlining customer delivery also lowers labor costs. For example, in the United States WalMart is using JIT strategies to save one third of its costs by moving goods directly from the manufacturer to the store shelf (McInerney and White, 1995).
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THE JIT STRATEGY IN THE U.S. CONGRESS Over the past two decades, the restructuring of congressional committees and increasing ease of travel between home districts and the Capitol have erased any earlier clear distinction between campaigning and policymaking activities. Members of Congress are readily accessible to constituents and can engage in the policymaking agenda of most committees, so they must have information that is current and framed to be consistent with their platform. An information industry has emerged to supply such tailored information on a just-in-time basis. However, this industry is overproducing, so that the supply of information has exceeded the need at any given moment, and created even more reliance on JIT strategies to sort and retrieve only the information needed at the moment. Growing Demand for Information Creates Excess Supply The restructuring of Congressional committees in the 1970s and 1980s set off a dramatic transformation of the public policymaking process (Ricci, 1993; Smith, 1988). Prior to 1970 seniority and specialization determined committee appointments, giving policymaking order and consistency. Over several terms on the same committee, members and their staffs became experts in a policy specialty and trained new committee appointees. Adequate information was available from congressional and executive branch resource offices, and this information generally fit the information needs of each committee. Without the ease of jet travel, representatives and senators stayed in Washington during the session, so that their information and support network were their political party, committee member and staffs, and colleagues (Smith, 1988). The growth of jet travel in the 1970s put constituents in immediate contact with their representatives and senators, and members of Congress spent more time in their districts. Greater constituent contact led to more focus on one's own agenda, and as television coverage of congressional activities grew in the 1970s, individual members could readily promote their own agendas (Smith, 1988).
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The restructuring of congressional committees, which dismantled traditional committees and created new subcommittees, opened the committee appointments so that even new members could realistically campaign for committee seats to promote their agendas (Ricci, 1993). Committee appointments and agendas were no longer controlled by party, tenure, specialization, and loyalty (Ricci, 1993; Smith, 1988). Opening the committee appointments dispersed power and expanded the agenda as the policymaking process engaged more participants and a wider range of perspectives (Ricci, 1993; Smith, 1988). All committee and subcommittee members acquired staff, and the staff expanded the agenda to showcase the member and the member's special issues (Smith, 1988). Members of special interest groups could now promote their goals by supporting a certain member of Congress for key committee appointments. The market for policy information grew from the relatively permanent and exclusive group of staff serving a few senior members of Congress to a large and diverse range of staff serving each member of Congress who expressed interest in a particular policy issue. Individual members constructed their own fleet of consultants to advise them on, for example, media, strategy, polling, and direct mail replacing the political party organization's traditional role (Smith, 1988). Washington, D.C., thus began to see a proliferation of advocacy, lobbying, consulting, and think tank organizations seeking to supply information to those involved in an expanded and more diverse policymaking process (Knoke, 1990; Smith, 1988). For example, conservatives created their own think tanks (e.g., the Heritage Foundation and the Cato Institute) to compete with well-established liberal and moderate operations (Ricci, 1993). As more outside groups participated in the policymaking process, the staffs of members of Congress and committee staffs became flooded with the explosion of materials supplied by this growing information industry. Congressional offices expanded their staffs to keep up with the growing agenda and information, and their growth expanded the agenda further, stimulating a new supply of information products (Smith, 1988). The information supply grew to become excessive, disorderly, and dissonant; it was no longer
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orderly and consonant with the needs of members. The nature and work of congressional staff leaves them ill equipped to sort and store the voluminous and conflicting information that they received on any policy subject. With an endless new supply arriving daily, information products became something used at the moment for the current political agenda or discarded. I became aware of the information explosion as it related to health care policy almost instantly when I began work for Senate Minority Leader Tom Daschle as a 1995-1996 Robert Wood Johnson (RWJ) Health Policy Fellow. The amount of mail and other correspondence related to health care issues was a pile of material at least a foot high that arrived daily and was distributed somewhat randomly by the office interns into the mailboxes of the two health legislative assistants and me. Each piece was passed along to the other two members of the team involved with health-related issues, who could keep material of special relevance or interest and toss the rest. I quickly learned to save material relevant to the stage of an issue at the moment and toss anything else. The amount of mail was too large to catalog for later retrieval. Anything that became relevant at a later date could be retrieved from the source or, more readily, from a group advocating the issue. For example, I filed all the mail that we received on medical savings accounts during the health insurance reform debate. I did not, however, attempt to save all the mail that we received on various provisions of Medicare and Medicaid reform. I relied instead on the Center for Budget and Policy Priorities, some key foundations, Families USA, and a few other groups for up-to-date summaries that supported our office's agenda. Rising Value of Timeliness The value of timeliness is increasing as the debate on a specific topic expands and becomes more competitive. Differences between campaigning and policymaking are becoming blurred. The continuous contact with constituents and the all-important and frequent media coverage, especially via C-SPAN, has members of Congress constantly campaigning (Smith, 1988). All stakeholders, public of-
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ficials, and private interests are in a constant race to create from events the opportunity to advance their political agenda (Kingdon, 1995). Congressional staff have discovered that outsourcing can shorten the time that they take to produce policy and political materials to advance the message of the moment. Beyond the thorough, objective problem and policy analyses that they obtain from congressional and executive branch offices (Congressional Research Service, General Accounting Office, Physician Payment Review Commission, Prospective Payment Assessment Commission, and legislative staff of the U.S. Department of Health and Human Services [DHHS]), and the budgetary analyses that they receive from the Congressional Budget Office and the Office of Management and Budget, congressional office staff who work on health issues rely on a selected group of think tanks and interest groups for information (Knoke, 1990). These outside information traders supply within a day or two targeted information products that are ready to use for a legislative provision, floor debate on alternative proposals, or talking points for a press conference to propose new legislation. As an RWJ fellow working on the many versions of Medicaid reform proposals, I developed a short list of interest groups and think tanks to supply me with a quick answer, rebuttal, or response to fit into a memo, talking point, chart, or brief remarks that I needed to draft within a few hours or a day. One strategy crafted to oppose the May 1996 Republican Medicaid reform provisions as part of the welfare reform movement highlighted how the proposed changes in Medicaid would make Medicare benefits inaccessible for many vulnerable dually eligible senior citizens. Although the data were checked with DHHS legislative staff, the Kaiser Family Foundation and Center for Budget and Policy Priorities were called on for the information required to craft the message. Reliance was also placed on the Center for Budget and Policy Priorities for an analysis of the total combined federal and state funding cuts in the Republican Medicaid block grant proposal.
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Interdependence: Trading Political Cover for Inside Tips Capitol Hill is surrounded by a series of consecutive rings of information suppliers whose proximity to the Hill is relative to the interdependence (Knoke, 1990) similar to the rings of suppliers surrounding the Toyota manufacturing plant. Those highly interdependent with congressional offices share the most risks with these offices. Think tanks and interest groups that are among a congressional office's preferred sources for timely and tailored information products gain advance notice of intended tactical and legislative changes. They also stand ready to deliver tailored information products on an on-call basis. Think tanks that produce information that leans toward one ideological side of an issue and is tailored for the needs of a select group of congressional offices are vulnerable to charges of using methodologies to support the think tank's and congressional members' preconceived views of the issue. Think tanks sometimes bolster their own recommendations by criticizing conflicting information dispensed by other think tanks as based on flawed methodology produced by a group whose beliefs are too strong to see the truth. These think tanks also face the risk to their continuing existence that depends on an ideological balance within Congress to stimulate a bipartisan debate in need of further information. The think tanks and interest groups offer congressional offices political cover by taking credit for controversial tactics in order to protect the image of a member of Congress (Smith, 1988). They can create a safe moderate position for an elected official by strongly advocating or opposing a more radical position and then agreeing publicly to graciously support the representative's or senator's ''astute and prudent" compromise. During the 1996 health insurance reform debate, mental health advocacy groups pushed very strongly for prohibiting any distinction of insurance benefits for mental health coverage from other benefits. When the bill moved to conference committee to resolve differences between the House and Senate versions, these groups formed a coalition to publicly support members who advocated the compromise: no differentiation in annual and lifetime caps. These mental health advocacy groups were
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in constant communication with the Daschle and other Senate offices during conference committee negotiations. As part of the many conversations with these groups' representatives, they were kept up to date on the trade-offs under consideration on all provisions of the health insurance reform bill, not just the mental health provision. The think tanks and interest groups that work closely with congressional office staff condense information from research reports, government reports, polls, and the news media and tailor it to fit into the congressional office's political message. These customized information packages relieve congressional staff from trying to quickly read and interpret comprehensive information from objective sources and reshape it to fit the message of the moment. These products, which are delivered quickly, speed up the response time for congressional offices and make it possible to issue new messages that day before the key television or print deadline. Representative John Kasich, an Ohio Republican and chairman of the House Budget Committee, recently told a Chicago Tribune reporter that he relied on the Heritage Foundation and a few other right-wing groups to prepare his arguments for defunding the Overseas Private Investment Corporation (Warren, 1996). Located four blocks from the U.S. Capitol, the Heritage Foundation is a think tank that emerged in the 1970s when congressional restructuring broadened the debate to include more conservative policy alternatives (Ricci, 1993). The Heritage Foundation is a prototype for using the JIT strategy to supply information to individuals involved in the policymaking process. The typical Heritage Foundation information product is a "brief," which is a one-page statement promoting a policy proposal or a preferred explanation of a social problem. Heritage Foundation staff produce briefs by taking background information from reports by university researchers, federal agencies, news media, and polls and condensing and casting the information to fit the preferred political message. These briefs are marketed to conservative congressional offices, whose staff can copy or extract the material to fit the proposal or message that the member wants to support. The Heritage Foundation also supplies information products to Republican Party organizations for public issue and election campaigns (Ricci, 1993; Toner, 1996).
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Outer-Ring Information Production Most university and independent research and policy centers with expertise in social and health problems are outside the beltway (the highway around Washington, D.C., delineating what is perceived to be an insular political and social world), making their role in the policy information market resemble that of the universal parts subsuppliers located farther from the hub of the Toyota assembly plant. They neither seek nor desire the interdependencies that innerring think tanks have built with congressional offices. Their products are objective, comprehensive analyses that demonstrate the current status and trends of a social problem or that evaluate the effectiveness of public programs. Their information products stimulate awareness within the congressional and executive branches of social problems that may benefit from program and policy changes. Articles in the Journal of Pediatrics or the Journal of Health and Social Behavior, just to give two examples, are more likely to be used by think tanks and lobbying groups to support their positions than to be read by congressional staff looking for ideas on new legislation. The products of most university researchers provide the raw material that is modified and extracted by think tanks and interest groups in closer proximity to the Congress that feed the daily information market on a JIT basis. The distance between most researchers and Capitol Hill and researchers' focus on objectivity and thoroughness carve out for them a more peripheral contribution to the moment-by-moment policy and political efforts on the Hill. Federal Deficit Reduction: Downsizing, Privatizing, and JIT Strategies Public interest in reducing the deficit and the proclivity to look toward the private market rather than government for solutions have resulted in numerous changes in the information that is produced by the federal government (Donahue, 1989). Along with White House initiatives to downsize government (Gore, 1993), the 104th Republican Congress's downsizing initiatives ranged from privatizing the
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House beauty and barber shops and food services to eliminating the Office of Technology Assessment (OTA) and significantly reducing the budget for the Agency for Health Care Policy Research (AHCPR). In addition, the growing privatization of Medicare and Medicaid through managed care capitation contracting reflects the current thinking that private enterprises are more cost-effective than public operations. Beyond the general interest in reducing federal spending, policymakers' growing reliance on JIT information products places federal agencies like OTA and AHCPR at special risk and eased the closure of OTA. In the heat of the moment, when the pace of policy action is extremely rapid and the stakes are the highest, congressional offices may be more dependent on outside think tanks and interest groups for the quick, tailored information needed to supply the political message of the moment. The essential value of OTA's comprehensive study reports delivered to Congress within a year or two of a committee's request may be overlooked when attention is directed toward deficit reduction and downsizing (Coates, 1996). Congressional offices receive OTA and AHCPR products frequently through their secondary use, since these federal agencies' products are often recycled because their information is used by such well-respected entities as the Institute of Medicine and universities to inform and strengthen their work (Coates, 1996). OTA data, conclusions, and policy recommendations are also frequently cited in targeted message-oriented paragraphs prepared on request by inside-the-beltway think tanks and interest groups for a congressional member's statement or proposal planned for later that day. On top of the inherent difficulties in producing for congressional members comprehensive research or analysis within the typical 60-day to 6-month window of attention for a specific issue, reports by OTA and AHCPR can yield findings and recommendations that are more favorable to one special interest than another. Regardless of how sound the methodology and how balanced the range of stakeholders are on a study commission, federal agencies that produce partisan recommendations or find one rationale as a better explanation than another are at risk of incurring the displeasure or even the active opposition of politicians and powerful stake-
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holders who stand to lose if the study's findings are implemented. AHCPR's back pain study that documented the lack of better outcomes from more expensive surgical rather than less expensive medical treatment spurred an intensive lobbying campaign that resulted in congressional proposals for radical funding reduction and even the elimination of this agency by the 104th Congress. The next year, AHCPR moved away from promulgating clinical practice guidelines, and encouraged external think tanks and private-sector research centers to continue this work. CONSEQUENCES OF JIT STRATEGIES FOR HEALTH POLICY The current partisan policy environment of continuous campaigning fueled by the JIT supply of customized information products is reducing the public's role from that of a stimulus for Congress to make policy to that of a consumer of policy made by Congress (Ricci, 1993). The public has been relegated to the role of customer and policymaking is acquiring more marketing characteristics. Although JIT sources provide congressional offices with timely and ready-to-use information for their partisan policymaking activities, the feedback loop between Congress and the inside-the-beltway operators emphasizes political receptivity more than policy effectiveness. The focus often leans more toward what sells, not what lasts. The capacity to evaluate policy effectiveness is at risk from the growing disinterest in maintaining the federal infrastructure that monitors federal health policy. Competing interest in balancing the budget and downsizing the government seeks to eliminate, downsize, or privatize the federal agencies and programs that produce and analyze the data needed to evaluate the consequences of changes in federal health programs and the transformation of the health care delivery system (Gaus and Fraser, 1996). Medicare claims data, for example, will diminish in size and representation as the Health Care Financing Administration (HCFA) approves more managed care contracts for capitation rather than fee-for-service payment. The General Accounting Office (1996) recently emphasized the need for HCFA to collect individual pa-
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tient encounter and satisfaction data from health maintenance organizations as the Medicare claims database erodes. Although the claims database has many limitations, especially for determining differences in client satisfaction and outcomes, it has been the primary data set for identifying unnecessary regional variations in cost, utilization and treatment patterns (U.S. Congress, Office of Technology Assessment, 1994). The Medicare claims database provided the data for AHCPR's first round of medical effectiveness studies, the Patient Outcome Research Teams. As HCFA director in the late 1980s, William Roper looked to AHCPR to be part of the expanded federal infrastructure necessary to evaluate health outcomes in the future as services moved out of the hospital setting and health plans shifted from the fee-for-service system to one of managed care (Roper, 1996). Since then, AHCPR has had diminished capacity as Congress has leaned toward expecting the private-sector market to regulate itself. Although the private sector is generating quality and outcomes data, these self-reported data are not uniformly available and lack external validity, comparability, and standardization across demographic differences (Roper, 1996; Physician Payment Review Commission, 1995). Just after the Physician Payment Review Commission called for a strong research infrastructure to support and improve the development and use of practice guidelines (Physician Payment Review Commission, 1995), Congress deleted from the Conference Committee Report on Medicare Reform the Medicare reform provisions of the Balanced Budget Act of 1995 (H.R. 2491) requiring Medicare choice plans to report aggregate encounter data on physician visits, nursing home days, home health days, inpatient days, and rehabilitation services. Congressional sentiment continues toward privatization and self-regulation and away from a major federal role in quality monitoring. Private funding for large-scale, objective, comparable research will be increasingly critical to evaluating the impact of the changes occurring in public-and private-sector health programs and services (Gaus and Fraser, 1996).
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CONCLUSION Beginning with the restructuring of the U.S. Congress in the 1970s, the environment for policymaking has become increasingly diverse and more partisan. With more committee appointments, members have more podiums to advance their own agendas. They use these to advance two goals: campaigning and policymaking. The shorter policymaking work week, due to the ease of jet travel back to the member's district, and expanded television exposure have increased the value of each moment in the week. JIT information supply helps congressional staff to shorten preparation time to increase the number of opportunities for member's public exposure. A preferred small network of think tanks and interest groups loyal to a member of Congress's agenda serves as an extension of the office staff in their daily work. Congressional and executive branch resource offices provide the extensive, objective, bipartisan background and analyses that congressional committee and personal staff use to develop legislative proposals. JIT sources, however, are becoming the more common supplier of the customized, ready-to-use information that congressional office staff need to prepare the daily partisan and strategy work. The popularity of JIT sources may be reinforcing the shift toward privatization and downsizing and eroding the federal capacity for conducting thorough evaluations of its policies. The evaluation of federal health policy and concurrent changes in the private health care sector may fall increasingly to the private sector to fund and conduct, with fewer public data being available to support this work. REFERENCES Bowman, E.H., and B.M. Kogut. 1995. Redesigning the Firm. New York: Oxford University Press. Coates, V.T., 1996. Rebuilding the Office of Technology Assessment. The Chronicle of Higher Education, Section B, p. 4, November 1. Dale, B.G., ed. 1994. Managing Quality, 2nd ed. New York: Prentice-Hall.
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Donahue, J.D. 1989. The Privatization Decision: Public Ends, Private Means. New York: Basic Books. Gaus, C.R., and I. Fraser. 1996. Shifting paradigms and the role of research. Health Affairs 15(2):235-241. General Accounting Office. 1996. Medicare: Federal Efforts to Enhance Patient Quality of Care. Report to the Chairman, Subcommittee on Health, Committee on Ways and Means, House of Representatives (Pub. No. GAOHEHS-96-20). Washington, D.C.: General Accounting Office. Gore, A. 1993. From Red Tape to Results: Creating a Government That Works Better and Costs Less. New York: Times Books, Random House. (Reproduced in entirety from the U.S. Government Printing Office document.) Kingdon, J.W. 1995. Agendas, Alternatives, and Public Policies, 2nd Ed. New York: Harper Collins. Knoke, D. 1990. Political Networks: The Structural Perspective. New York: Cambridge University Press. McInerney, F., and S. White. 1995. The Total Quality Corporation. New York: Truman Talley Books. Physician Payment Review Commission. 1995. Annual Report to Congress. Washington, D.C.: Physician Payment Review Commission. Ricci, D.M. 1993. The Transformation of American Politics: The New Washington and the Rise of Think Tanks. New Haven, Conn.: Yale University Press. Roper, W. L. 1996. "Can the Marketplace Assure Quality of Care?" Pp. 39-47inThe Richard and Hinda Rosenthal Lectures, 1994-1995: Looking Back, Looking Forward: "Staying Power" Issues in Health Care Reform. Washington, D.C.: National Academy Press. Schonberger, R.J. 1982. Japanese Manufacturing Techniques: Nine Hidden Lessons in Simplicity. New York: Free Press. Smith, H. 1988. The Power Game: How Washington Works. New York: Ballantine. Smith, H. 1995. Rethinking America. New York: Random House. Toner, R., 1996. Interest groups take new route to Congressional election arena. New York Times, pp. Al, A10, August 20. U.S. Congress, Office of Technology Assessment. 1994. Identifying Health Technologies That Work: Searching for Evidence (Pub. No. OTA-H-608). Washington, D.C.: U.S. Government Printing Office. Warren, J. September 29, 1996. GOP's budget guy is mostly right, sometimes right on. Chicago Tribune, Section 2, p. 2.
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