Message from the Editor

When Evidence Meets Action

For those who believe that research and analysis should inform public policy, early 2009 has offered auspicious signs. The feature story topics in this issue have been RAND research priorities for years but have recently become national priorities for the United States. In each case, the evidence gleaned can now shape the contours of the policies being formed.

Our cover story on controlling government costs is the result of years of investigative research into the causes of cost growth (the increase from cost estimates to actual cost) and price growth (the increase in actual cost from one period to the next). Our team of researchers focused primarily on the spiraling costs of weapon systems.

On the surface, the team found, cost growth often results from unrealistically low cost estimates, while price growth often results from an uncontrolled appetite for higher technological performance. Beneath the surface lay some less expected discoveries: The overuse of contractors appears to be costing taxpayers more money rather than saving it, and some of the reputed acquisition reforms of the 1990s gutted the government oversight systems that had helped keep the costs of contracting under control.

President Barack Obama has asked his budget office for guidance on curbing government costs. Bernard Rostker, Robert Leonard, Obaid Younossi, Mark Arena, and Jessie Riposo offer guidelines for dealing with contractors in particular and for improving the efficiency and effectiveness of government in general.

Some of our proposals for a health information technology network date back to 2005; others have been added since. The president’s economic stimulus package now allots $19 billion for such a network. That is a good start, but a sustained investment of $115 billion over 15 years could yield $628 billion in efficiency savings over that time, with benefits rising thereafter, according to Richard Hillestad and Federico Girosi. Our centerpiece shows how the savings could expand over time as more health providers join the network. The authors outline additional benefits for safety, quality of care, and privacy.

Our final feature story is about negotiating with Iran. President Obama has signaled a new day of engagement with the country, but diplomatic success will hinge on a clear understanding of the country’s political complexity, regional influence, and negotiating culture. Frederic Wehrey marks the hurdles that lie ahead and suggests how to surmount them.

—John Godges