Margaret Levi and the Problem of Institutional Legitimacy
Margaret Levi’s work sits at the intersection of political economy, institutional analysis, and moral psychology. Across several decades, she has returned to a deceptively simple question: why do people comply with rules and authority when they could defect, evade, or withdraw? Her answer is neither naïve nor cynical. People comply, she argues, not merely because of coercion or incentives, but because they perceive institutions as legitimate—that is, as rule-bound, fair, purposeful, and competent.
In Levi’s formulation, compliance is often quasi-voluntary. Citizens and organizations obey not because enforcement is omnipresent, but because they believe that authorities are acting in good faith and that rules are applied in a way that serves a collective project. Once that belief erodes, compliance becomes grudging, strategic, or purely formal—and institutional performance degrades accordingly.
Two strands of Levi’s work are especially relevant to modern health-care governance. First, in Analytic Narratives, she and her coauthors show how institutions stabilize or destabilize cooperation through the interaction of rules, incentives, and historically grounded practices. Institutions succeed not by abstract perfection, but by aligning formal rules with real-world contexts and foreseeable consequences. Second, in In the Interest of Others, Levi demonstrates that organizations function best when actors can plausibly understand themselves as serving a broader moral purpose, rather than merely minimizing risk or avoiding blame.
These ideas are not abstract. They are directly applicable to one of the most consequential institutions in American life: the Medicare program.
Medicare as a Legitimacy-Dependent Institution
Medicare is often described as a payer, a claims processor, or a coverage authority. In practice, it is something far more powerful: a national coordination engine for medical innovation. Its coverage decisions shape venture investment, determine which evidence standards are worth pursuing, influence clinical adoption, and ultimately decide which technologies survive long enough to prove their value.
From a Levi perspective, Medicare’s effectiveness depends not just on the correctness of its rules, but on whether those rules are perceived—by regulated actors—as legitimate and purposive. Several recurring problems threaten that legitimacy.
Rule Application Detached from Purpose
Many frustrations with Medicare policy do not stem from the existence of rules, but from their mechanical or abstruse application. Rules originally designed to prevent overutilization, fraud, or low-value care are often applied without regard to context, scientific trajectory, or downstream consequences. When rules appear detached from their original purpose, regulated actors stop seeing them as instruments of stewardship and start seeing them as obstacles to be navigated.
Levi’s work predicts this outcome. Institutions lose legitimacy when rules are treated as ends in themselves rather than as means toward clearly articulated goals.
Failure to Acknowledge System-Level Consequences
A second problem is the persistent fiction that Medicare is a neutral adjudicator rather than an active shaper of markets. Coverage decisions—or prolonged non-decisions—have enormous effects on innovation pathways. When the institution refuses to acknowledge this role, it cannot take responsibility for the foreseeable consequences of its actions.
Levi is explicit on this point: authority is undermined when institutions deny the moral weight of their own power. Pretending neutrality while exercising structural influence erodes trust, even among highly compliant and policy-literate actors.
Time as an Unacknowledged Harm
Perhaps the most corrosive issue is delay. In molecular diagnostics and genomics, it is increasingly common for companies with substantial peer-reviewed evidence and formal dossiers to wait years for local coverage determinations. For early- and mid-stage companies, these delays are not merely inconvenient; they are existential.
From Levi’s standpoint, time is not neutral. Delay functions as a form of de facto denial while preserving procedural deniability. When an institution’s time horizon is effectively infinite and regulated actors’ time horizons are finite, legitimacy collapses unless that asymmetry is explicitly addressed.
From Diagnosis to Repair: What External Actors Can Do
Levi’s work is often read as diagnostic, but it is also implicitly prescriptive. She is not a theorist of revolt or deregulation. She is a theorist of institutional repair, especially by actors who operate near the boundary between insiders and outsiders.
For companies, consultants, and scientific advocates engaging Medicare, several Levi-informed strategies follow.
Shift from Outcome Advocacy to Legitimacy Engineering
Institutions rarely change because they are told they are wrong. They change when new behaviors can be justified as consistent with their own identity. External actors are most effective when they help Medicare explain—to itself—how adapting procedures can better fulfill its stated mission of stewardship, fairness, and patient protection.
This means focusing less on demanding approvals and more on clarifying how existing goals are undermined by current processes.
Target Interpretive Layers, Not Just Final Decision-Makers
Change rarely originates with top leadership or frontline reviewers. It emerges in the middle layers of institutions: policy analysts, framework authors, medical directors drafting rationales. Supplying these actors with neutral, reusable language and analytic constructs lowers the cognitive and reputational cost of change.
Levi’s insight here is subtle but powerful: institutions adopt ideas when those ideas become easy to repeat internally.
Reframe Delay as a Procedural Fairness Problem
Medicare is deeply invested in procedural legitimacy. Arguments about innovation or competitiveness often fail, but arguments about arbitrariness and unequal treatment resonate. Highlighting the absence of defined timelines or predictable review horizons reframes delay as an internal governance issue rather than an external demand for speed.
Make Time and Absence Visible
Institutions manage what they measure. External actors can introduce descriptive constructs—such as coverage latency or evidence-to-decision intervals—without accusation. By documenting patterns rather than assigning blame, they force institutions to confront blind spots in their own self-understanding.
Expand the Moral Frame Without Sentimentality
Levi’s work emphasizes that cooperation improves when actors can see who they are acting for. Medicare staff are acutely aware of fraud risk and fiscal responsibility, but often less attuned to future patients who never appear in datasets because coverage was delayed or denied. Framing innovation as system learning rather than product approval helps expand this moral field without emotional pleading.
Accept Distributed, Delayed Impact
Perhaps the hardest lesson is that institutional influence is rarely immediate or traceable. Ideas seed frameworks; language migrates; norms shift slowly. Levi reminds us that legitimacy is rebuilt incrementally, often invisibly. Judging impact solely by near-term outcomes underestimates how institutions actually change.
Conclusion: Regulation as an Institutional Achievement
Margaret Levi’s work offers a way to think about Medicare that avoids both cynicism and naïveté. The problem is not that Medicare regulates, but that its regulatory practices too often drift away from legitimacy-sustaining conditions: purpose, fairness, temporal accountability, and moral clarity.
For those working in advanced medical technologies, the task is not merely to push harder, but to engage differently—to act as translators between scientific reality and institutional self-justification. Good government function is not ancillary to scientific progress; it is one of its preconditions. Institutions that learn how to encourage the right technologies, rather than strangling them through inertia or abstraction, are not abandoning rigor. They are achieving it.
That, in the end, is Levi’s deepest claim: durable authority and effective governance are not automatic. They are institutional accomplishments—and they can be repaired.
Absolutely. Here is a tight, reader-friendly précis of the recommendations section — stripped to essentials, but still faithful to the Levi framework. Think of this as the executive summary you could put in a sidebar or at the end of the essay.
Cliff Notes: How External Actors Can Help Improve Medicare Function
From a Margaret Levi perspective, improving Medicare’s performance does not require weakening regulation or pressuring individual decisions. It requires strengthening institutional legitimacy so the system can act competently, predictably, and with appropriate speed.
Key recommendations follow.
1. Shift from advocacy to legitimacy support
External actors are most effective when they stop arguing that Medicare is “wrong” and instead help it justify doing things better in its own terms. The goal is not to demand outcomes, but to help the institution explain how adapting procedures better fulfills its mission of stewardship and fairness.
2. Engage the interpretive middle, not just decision-makers
Institutional change rarely comes from leadership or frontline reviewers. It emerges from mid-level policy actors who draft frameworks, rationales, and internal justifications. Supplying these actors with neutral, reusable language and analytic concepts lowers the cost of change.
3. Reframe delay as a procedural fairness problem
Arguments about innovation often fail; arguments about arbitrariness and unequal treatment resonate. Undefined timelines and multi-year backlogs should be framed not as anti-innovation, but as failures of procedural fairness that undermine legitimacy.
4. Make time visible as a governance variable
Medicare measures utilization and fraud risk but not time-to-decision. External actors can introduce descriptive concepts—coverage latency, evidence-to-decision intervals—without accusation. Institutions are more likely to change what they can see.
5. Expand the moral frame without sentimentality
Medicare actors clearly see current beneficiaries and fiscal risk, but often not future patients excluded by delay or non-coverage. Framing innovation as system learning, rather than product approval, helps expand institutional responsibility without emotional appeals.
6. Create safe narratives the institution can reuse
Institutions run on stories. External actors should supply non-blaming narratives that balance caution with adaptability—stories Medicare can repeat internally without fear of precedent, capture, or scandal.
7. Accept that influence is distributed and delayed
Institutional change is rarely immediate or traceable. Success should be measured by concept adoption and language uptake, not just near-term decisions. Legitimacy is rebuilt incrementally.
Bottom line
From a Levi perspective, the most effective external actors do not push Medicare to move faster; they help Medicare see itself more clearly. When institutions can justify change as consistent with who they already are, better governance follows—often quietly, but durably.
If you want, I can also:
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Condense this further into a one-paragraph “policy takeaway,” or
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Rewrite it in CMS-style bureaucratic prose that would feel familiar rather than challenging.
Certainly. Below is the same set of recommendations, but rewritten in CMS-style bureaucratic prose—procedural, neutral, internally legible, and intentionally non-confrontational. This is the register that would not set off alarms inside Baltimore or a MAC.
Considerations for Enhancing Program Function Through External Engagement
The following considerations are intended to describe constructive roles that external stakeholders may play in supporting effective, consistent, and timely program administration, while remaining aligned with CMS’s statutory mission of stewardship, beneficiary protection, and evidence-based decision-making.
Support Institutional Clarity and Program Alignment
External stakeholders may contribute most effectively when communications are framed in ways that reinforce CMS’s existing objectives, including program integrity, evidentiary rigor, and equitable treatment of similarly situated technologies. Submissions that emphasize how proposed approaches align with current program goals may facilitate internal consideration and consistency.
Engage Policy Development and Interpretive Functions
Program evolution often occurs through ongoing policy analysis and interpretive work conducted by mid-level staff involved in framework development, evidence evaluation, and coverage rationale drafting. Materials designed for reuse in internal deliberations—such as neutral analytic summaries or conceptual frameworks—may support these functions.
Emphasize Procedural Consistency and Predictability
Concerns related to extended review timelines may be productively framed in terms of procedural consistency and transparency, particularly where similarly situated technologies experience differing review trajectories. Clarifying expectations around review processes may enhance perceptions of fairness and program credibility.
Improve Visibility of Review Timelines as an Operational Metric
While CMS routinely evaluates utilization, clinical appropriateness, and fiscal impact, additional descriptive attention to review intervals and decision timelines may support operational planning and program assessment. External analyses that characterize time-to-decision patterns in a non-comparative manner may be informative.
Frame Innovation in Terms of Program Learning and Evidence Development
Submissions that position emerging technologies within a broader framework of evidence generation and system learning may support CMS’s interest in responsible adoption while maintaining safeguards. Emphasizing data development pathways rather than immediate coverage outcomes may facilitate constructive engagement.
Provide Reusable Program Narratives
Institutions benefit from internally coherent narratives that reconcile caution with adaptability. External stakeholders may assist by articulating balanced descriptions of past program experience that acknowledge risk mitigation while highlighting opportunities for structured evaluation and learning.
Recognize the Incremental Nature of Program Change
Programmatic refinement often occurs gradually through accumulated experience, precedent, and shared understanding. External stakeholders should anticipate that influence may be distributed across multiple processes and timeframes rather than reflected in discrete or immediate outcomes.
Summary
From an institutional perspective, external engagement is most productive when it supports CMS’s ongoing efforts to administer coverage determinations in a manner that is consistent, transparent, and aligned with statutory responsibilities. Contributions that enhance internal clarity, procedural predictability, and evidence integration may strengthen program function over time.
If you would like, I can also:
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Tighten this further into a one-page CMS “discussion section” format, or
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Translate it into MAC or MolDX-specific language (slightly different tone, same substance).
