What Pres. Barack Obama’s budget speech last week lacked in details, it made up for in an obnoxious faith in the surpassing wisdom of unelected experts.
Why does Obama need specifics when he has the Independent Payment Advisory Board, or IPAB? If spending on health care is the biggest driver of government spending, then IPAB is Obama’s most important deficit-reduction initiative. It is a panel of 15 presidentially appointed experts. They will have more power over Medicare than the average member of Congress, whose only credential — embarrassingly enough — is being a duly elected representative of the people under the Constitution of the United States.
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Obama has elevated Medicare, along with other New Deal and Great Society programs, to part of America’s holy writ. Yet he implicitly acknowledges that it is broken and bankrupting us. Otherwise, he wouldn’t be proposing a cap on Medicare’s growth that is at least as stringent as anything New Gingrich proposed in the 1990s, when he was by general acclamation declared an enemy of the sick and elderly.
We already have an arbitrary check on Medicare’s spending, and we already have a panel of experts to recommend changes to the program. The arbitrary check is the “sustainable growth rate,” and the panel is the Medicare Payment Advisory Commission. Congress has repeatedly deferred cuts under the former and ignored the recommendations of the latter. To this, Obama has an elegant solution: Bypass Congress.
Under Obamacare, IPAB is to hit a target for Medicare’s growth that significantly squeezes the program beginning in 2014 (in his budget speech, Obama said he wants to ratchet down the cap even further). Congress has limited options: It can pass the IPAB recommendations, substitute its own version of them, or by a three-fifths majority in the Senate vote to waive these requirements. If it does none of these things, the secretary of Health and Human Services automatically implements the IPAB plan.
If this makes IPAB sound like a powerful body, it’s still too weak for the president. In the fact sheet released in conjunction with his budget speech, the White House says he wants to give IPAB “additional tools” and “additional enforcement mechanisms such as an automatic sequester.” All that’s missing is the power to launch kinetic military operations.
No one doubts that Congress is frustratingly fractious and fiscally incontinent. Surely, our public affairs would be conducted more efficiently if every key function of Congress were handed off to a board of experts. But at the cost of an incalculable diminution in democratic accountability.
Friedrich Hayek warned of this temptation in his classic book The Road to Serfdom: “Parliaments come to be regarded as ineffective ‘talking shops,’ unable or incompetent to carry out the tasks for which they have been chosen. The conviction grows that if efficient planning is to be done, the direction must be taken ‘out of politics’ and placed in the hands of experts — permanent officials or independent autonomous bodies.”
Only Obama could give a speech touting such a body and think he’s made a ringing defense of what’s great about America. He is an IPAB kind of guy. William F. Buckley Jr. famously said he’d rather be governed by the first 2,000 names in the Boston phone book than the faculty of Harvard. Obama would take the Harvard faculty in a heartbeat. He’d dress it up with a clunky acronym, grant it vast bureaucratic power, and set it loose on the problems of the world.
The fact of the matter is that IPAB won’t make the notoriously inefficient Medicare program any more efficient. Through arbitrary reductions on payments to providers, it will simply reduce the supply of care. Even before the advent of a new, more powerful IPAB and a new, tougher limit on spending, Medicare’s chief actuary warned that Obamacare will drive providers out of the program. If you love Medicaid, you’ll adore the new IPAB version of Medicare.
It will be the experts’ gift to America’s seniors.
"Surely, our public affairs would be conducted more efficiently if every key function of Congress were handed off to a board of experts."
Disagree. If Congress actually had to sweat these details, they'd have no time for their incessant campaigning and ideological posturing. They'd have to practically which, happily, more or less means conservatively.
Good article. The IPAB will make the decisions so Obama can throw them under the bus if the decisions are unpopular. But they will be able to cut costs, by throwing out care for "old" people. It may start with people over 90, but the age will move down as needed to make financial targets. Just like the definition of "rich" starts high and can move down, or a VAT would start low and move up. The initial position always seems reasonable, but then the number is quietly changed so it becomes all-encompassing. The IPAB is just getting the framework's foot in the door so the endgame can begin.
Here's my fundamental dictum: Authority must be paired with responsibility, or things are bound to get screwed up.
So we put a council of 15 in charge of the largest component of our economy, and insulate them from even indirectly answering to us through congress. I hope we have the honesty to call them commissars.
If you want to see the future of medicine under this scheme, come to California, where Medi-Cal (our Medicaid) pays about $20 for a physician office visit (if you can find one who will accept Medi-Cal) and where it's difficult, if not impossible, to find a specialist to follow you.
How is this different than the faceless insurance company deciding which treatments they cover and which they don't? And while you can pick a plan based on what they provide, if you are suddently struck with an illness you're out of luck. Someone is always making decisions and rationing your healthcare. Only the rich are immune to these considerations.
"William F. Buckley Jr. famously said he’d rather be governed by the first 2,000 names in the Boston phone book than the faculty of Harvard."
I agree with the sainted Mr. Buckley Jr.'s sentiment, with the provision the 2,000 names come from a planet a little closer to earth than Boston. Cleveland maybe.
And back here on earth we are still in the process of insuring our financial failure(see above article as exhibit 9,987,865,436), but hey,the band's still playing, and I love the new arrangement of these deck chairs. Pay no attention to the icy water lapping at your ankles, chief steward Reid assures me the problem is a minor one and will be corrected forthwith.
@smithers
In the spirit of class warfare, who exactly are the rich?
I'd like to know who to hate.
Thank you in advance for sharing your priceless wisdom.
The rich are anyone who makes more money than you do, duh! Rich is right on about the IPAB, which is little more than a euphemism for a rationing board. I remember during the Obamacare debates I had a discussion with a liberal friend of mine who was outraged about Ms. Plain’s “Death Panel” comments. I explained to him that the reason why I thought liberals loved focusing on her comments was that it allowed them to ignore the very real rationing mechanisms contained in ObamaCare, such as the Comparative Effectiveness Research, that Medicare would ultimately use to set reimbursement rates and thus service availability. The IPAB is part and parcel of this rationing framework.
To answer Mr. Jones, if the Government is the only insurer, then the people have no other options and have their health literally at the whim of Government regulators making cost benefit decisions. Insurance companies are imperfect, and unpleasant to deal with, but there is recourse, such as selecting a different plan each year, or ultimately the judicial process. Mechanisms such as the IPAB give the Government control over our lives, and that measure of control is inconsistent with the principles of life and liberty embodied in the Declaration of Independence.
"Only the rich are immune to these considerations."
Because self-financing medical care surely helped the likes of Farrah Fawcett, Michael Jackson, Jerry Steinbrenner, and Steve Jobs (who isn't dead, but surely ain't the most well of human beings).
The "stimulus" bill 2yrs ago included $1.1 billion for a CERB (Comparative Effectiveness Research Board). Its purpose was to limit options for patients based on quality of life and/or cost considerations. Last year 19 people were appointed as board members with a glowing public announcement. Now we have the IPAB(Ind. Payment Advisory Board) 15 members to be appointed. Its purpose is also to limit options for patients based on quality of life and/or cost considerations. Doctors have told me that medical treatment decisions are a very personal thing between a Doctor and patient. Some options are better for some patients etc.. They have also told me medical treatment decisions made by a centrally controlled Federal board/panel will be disastrous on all kinds of levels for the delivery of medical service in this country. By the way Sarah Palin was right early on and continues to be right.
the alernative to the board is Ryan's plan which is socialism because it subsidizes private corporations to do that which they would not do by dictate of the free market, namely, insure the elderly. That is why we instituted medicare to begin with.
If the government medicare payment board follows "the rule" of paying the rates paid by private insurance for services they cover in the normal (unsubsidized) course of business, less some percentage discount, then they will have delivered a public good in the optimally efficient manner. All that's missing is that people pay for the good they demand. And that is what needs to be addressed, not how much taxpayer money Mr. Ryan will dump on K Street fat cats.
I see alot of ad hominem but no real answers to my point. Rationing of health care already exists. If it makes you more angry that government might deny you a treamtent versus Blue Cross or Human, hey, more power to you. I'm also not attacking the rich in this point. My point is that the only antidote to rationing is having deep pockets. Enjoy!
"I see alot of ad hominem but no real answers to my point. Rationing of health care already exists."
1) You made no point that wasn't already addressed a thousand times before.
2) You miss the point about people whose healthcare is "rationed" now have recourse. Exactly what recourse is there when the government says no? Wait two years, four years and six years respectively to elect new representatives and until a judge decides to retire or dies?
By the way, why exactly would you want to have your healthcare decided by the political whims of others?
No ad hominems, but attempts to point you in the right direction. I don't think I've succeeded.
Healthcare is a scarce resource, so rationing is a given. There is a limited number of ICU beds, vaccine, doctors, etc. The question is: Who is going to do the rationing? The IPAB or the patient in the context of having their own health insurance/ self-pay.
I prefer the insurance route, leaving the discussions about care and reimbursement to the patient/doctor/insurance company. I agree with Ryan's plan. The wealthy should not expect to get discounted healthcare (medicare) as they can afford to pay full price.
Medicare is already underfunded compared to other private insurance carriers. Internists like myself have already ditched Medicaid, and more docs are choosing to ditch Medicare every year.
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