Politics & Policy

Republicans Need to Repeal This Successor to Obamacare

(Dreamstime image: Juan Camilo Bernal)

The election of Donald Trump brings conservatives an opportunity to repeal a misguided piece of health care legislation that cost hundreds of billions of dollars, will blow a major hole in our deficit, has led to thousands of pages of regulations, and will further undermine the integrity of the doctor-patient relationship.

Think I’m talking about Obamacare?

I am — but I’m not just talking about Obamacare.

I’m also talking about the Medicare and CHIP Reauthorization Act (MACRA), which passed last year (with a surprising level of Republican support) and contains many of the same flaws as Obamacare itself.

Just as Republicans are preparing legislation to repeal and replace Obamacare, they also need to figure out how to undo MACRA.

Last month, the Obama administration released a 2,398-page final regulation — let me say that again: a 2,398-page regulation — implementing MACRA’s physician reimbursement regime.

In the new Congress, Republicans can and should use the Congressional Review Act to pass a resolution of disapproval revoking this massive new regulation. They can then set about making the changes to Medicare that both Paul Ryan and Donald Trump have discussed: getting government out of the business of 1) fixing prices and 2) micro-managing the practice of medicine.

MACRA’s Fundamentally Flawed, Statist Approach

Since the administration released its physician-payment regulations — nearly as long as Obamacare itself – some commentary has emphasized (rightly) the burdensome nature of the new federal regulations and mandates.

But the more fundamental point, rarely made, is that we need more than mere tweaks to free doctors from an ever-tightening grip exercised by federal overseers. After more than a half century of failed attempts at government price-setting and micro-management of medical practice, it’s time to get Washington out of the business of playing “Dr. Sam” once and for all.

In fact, even liberals tend to acknowledge this occasionally. In a May 2011 C-SPAN interview, Noam Levey of the Los Angeles Times asked then-administrator of the Centers for Medicare and Medicaid Services Donald Berwick why he thought the federal government could use Medicare as it exists to reform the health-care system:

In nearly half a century of federal-government oversight, the federal government hasn’t succeeded in two really important things: Number one, Medicare costs are still growing substantially more quickly than the economy; and number two, that fragmented [health care] system . . . has persisted in Medicare for 46 years now. . . . Why should the public, when it hears you, when it hears the President say, “Don’t worry, this time we’re going to make it better, we’re going to give you a more efficient, higher-quality health care system,” why should they believe that the federal government can do now what it essentially hasn’t really been able to do for close to half a century? [Emphasis added]

Dr. Berwick didn’t really answer the question: He claimed that fragmented care issues “are not Medicare problems — they’re health system problems.” But in reality, liberal organizations like the Commonwealth Fund often argue Medicare can be leveraged as a model to reform the entire health care system — and that is exactly what MACRA, in defiance of historical precedent, tries to do.

When a 2012 Congressional Budget Office report examined the history of various Medicare payment demonstrations, it concluded that most had not saved money. A seminal study undertaken by MIT’s Amy Finkelstein concluded that the introduction of Medicare, and specifically its method of third-party payment, was one of the primary drivers of the growth in health-care spending during the second half of the 20th century.

After five decades of failed government control and rising costs driven by the existing Medicare program, the solution lies not in more tweaks and changes to the same program.

The answer lies in replacing that program with a system of premium support that gets the federal government out of the price-fixing business entirely.

The notion that the federal government can know the right price for inhalation therapy in Birmingham or the appropriate reimbursement for a wart removal in Boise is a fundamentally flawed and arrogant premise — one that conservatives should whole-heartedly reject.

Unfortunately, most critics of MACRA have not fully grasped this. A law that prompts the federal bureaucracy to issue a sprawling regulation of nearly 2,400 pages cannot on any level be considered conceptually sound.

Believing otherwise echoes Margaret Thatcher’s famous maxim about consensus politicians and conviction politicians: Some analysts, seeking a consensus among their fellow technocrats, push for changes to make the 2,400-page rule more palatable. But our convictions should have us automatically reject any regulation with this level of micro-management and government-enforced minutiae.

The Need For Comprehensive Reform

It bears worth repeating that, in addition to perpetuating the statist nature of Medicare, MACRA raised the deficit by over $100 billion in its first ten years — and more thereafter — while not fundamentally solving the long-term problem of Medicare physician-payment levels.

More than a decade ago, after President Bush and a Republican Congress passed the costly Medicare Modernization Act (MMA), creating the Part D prescription-drug entitlement, conservatives argued even after the law’s passage that the new entitlement should not take effect. If the MMA was “no Medicare reform” for including only a premium-support demonstration project, conservatives should likewise reject MACRA, which includes nothing – not even a demonstration project — to advance the premium-support reform Medicare truly needs.

A Time for Choosing

Any efforts focused on building a slightly better government health-care mousetrap distract from the ultimate goal: removing the mousetrap entirely. In his 1964 “Time for Choosing” speech, Reagan rejected the idea “that a little intellectual elite in a far distant capital can plan our lives for us better than we can plan them ourselves” — and Republicans should do the same today.

In the context of health care, this means not debating the details of MACRA but replacing it, sending power back to where it belongs — with the people themselves.

Last week’s election results give the new Congress an opportunity to do just that, by disapproving the MACRA rule and moving to enact comprehensive Medicare reform in its place. After more than five decades of the same statist health-care policies, it’s finally time for a new approach. Here’s hoping Congress agrees.

— Chris Jacobs is founder and CEO of Juniper Research Group, a policy consulting firm based in Washington. He is on Twitter: @chrisjacobshc.

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