Private Certifiers and Deputies in American Health Care

Abstract

So-called “public programs” in U.S. health care pervasively contract with private entities. The contracting does not merely involve the purchase of drugs, devices, information technology, insurance, and medical care. Rather, government agencies are increasingly outsourcing decisions about the nature and standards for such goods and services to private entities. This Article will examine two models of outsourcing such decisions. In private licensure, firms offer a stamp of approval to certify that a given technology or service is up to statutory or regulatory standards. Via deputization, firms can pursue a regulatory or law enforcement role to correct (and even punish) providers who have failed to meet standards or acted fraudulently. Both private licensure and deputization provide new models for administrative governance in rapidly changing, technically complex fields. But they can also be abused if private licensors or deputies are not adequately supervised, or if they are faced with too crude an incentive framework. This Article suggests some best practices for the outsourcing of responsibility to these health care decision makers.

Keywords: outsourcing, private licensure, deputization, governance