Congress Agrees to Lash Itself to the Mast; Making It Possible For Medicare To Move Forward With Reform—Update

A surprising number of Congressmen would acknowledge, privately, that in the past, legislators have meddled with Medicare reform, blocking Medicare’s best efforts to squeeze waste out of the system. When it comes to listening to appeals from powerful lobbyists, legislators just can’t help themselves. Lobbyists generally don’t like change– certainly not when the status quo is generating billions in profits.

At the same time, virtually everyone in Congress recognizes that we cannot afford the status quo. And most legislators do care about the public good. At the very least, they don’t want to see Medicare go under.  So they have chosen to tie their own hands. (This is the evidence that, in their heart of hearts, many Congressmen recognize that they themselves represent the major obstacle to reining in health care inflation.)


As I explained a few weeks ago, under the reform legislation the Secretary of Health and Human Services (HHS) will have the authority to expand pilot programs and put them into practice—without going through Congress.  In the past, the need for Congressional approval has derailed cost-saving initiatives. This will no longer be the case. http://www.healthbeatblog.com/2010/03/peggy-noonan-vs-the-new-england-journal-of-medicine.html   

Moreover, as I noted when the final legislation passed, an “Independent Payment Advisory Board,” (IPAB) made up of physicians and health care experts, will be able to change what Medicare pays for and how it pays for it. The board’s proposals will become law unless Congress enacts its own proposal to achieve the same level of cuts.”  http://www.healthbeatblog.com/2010/03/i-am-not-bound-to-win-but-i-am-bound-to-be-true.html My guess is that legislators will be reluctant to put their name on alternative cost-saving recommendations.  Most likely, they’ll so nothing, and let the Board take responsibility (and the inevitable blame) for achieving savings, As I  noted, “If Congress wants to overturn the board’s package of recommendations, it would have to muster a super-majority”— sixty votes.

Today, the Washington Post’s Ezra Klein fleshed out the story. (Many thanks to Klein for digging into the details of the bill.) He begins by noting that the Board is “substantially stronger . . . than I, for one, expected. . . . It is a sad commentary on Congress,” Klein adds, “that the most promising cost control in the Affordable Care Act is the one that takes much of the responsibility for controlling costs away from Congress and hands it off to an independent board of experts.” http://voices.washingtonpost.com/ezra-klein/

Here, I can't quite agree. I'm  not sure that it’s a “sad commentary” so much as a rather noble example of legislators doing the right thing. They are,  in effect, lashing themselves to the mast, just as Odysseus instructed his men to tie him to the mast, so that he would not be able to follow the song of the sirens —or in this case, the appeals of the  lobbyists.

    How the Board Works

The rest of Klein’s column is spot-on. He offers a deft summary of just how much power Congress has handed over to the Board: “If Congress approves the board's recommendations and the president signs them, they go into effect. If Congress does not vote on the board's recommendations, they still go into effect. If Congress votes against the board's recommendations but the president vetoes and Congress can't find the two-thirds necessary to overturn the veto, the recommendations go into effect. It's only if Congress votes them down and the president agrees that the recommendations die. ‘I believe this commission is the largest yielding of sovereignty from the Congress since the creation of the Federal Reserve,’ White House budget director Peter Orszag, “one of the idea's most enthusiastic supporters,” told Klein.

“The board will propose packages of reforms that bring Medicare in line with certain spending targets. Those reforms won't increase cost sharing or taxes and they won't change eligibility or benefits.”

This is critical. Anyone who tells you that Medicare will be cutting seniors’ benefits simply isn’t telling the truth. Women will still be able to get mammograms. The only time Medicare will eliminate a benefit is if it becomes clear that the product or treatment is doing more harm than good. For example, when it became apparent that Vioxx was causing strokes and heart attacks, Medicare no longer paid for the drug. In fact, the manufacturer was forced to remove it from the marketplace.

Meanwhile, under reform, Medicare will be expanding benefits by eliminating co-pays and deductibles for effective, preventive care.  But what if the effectiveness of certain tests, like mammograms, remains uncertain?  My guess is that while preventive care backed up by medical research will become free, seniors may have to continue to pay co-pays for mammograms, just as they do today. In other words, there will be no change in Medicare policy on mammograms.  Moreover, under reform, co-pays and deductibles would be capped, based on income. So low-income women will be in a better position to afford mammograms.

Klein confirms that, rather than withholding products or services that seniors need,  the IPAB will be recommending “changes in  what Medicare pays for and how it pays for it.”  The goal is to slow the growth of Medicare spending. By 2018, the target growth rate is the average five-year increase in GDP plus one percentage point. “So if GDP has been growing at 3 percent, the target is 4 percent,” he explains. “If Medicare's growth is faster than that, then the board is charged with saving the lesser of 1) the difference between the target growth rate and the real growth rate, or 2) 1.5 percentage points off the projected growth rate.”

Providers will have time to prepare for changes in fees. “The board can't seriously change payment rates until 2018,” Klein reports.  Nevertheless, he declares, “this is this is the most powerful cost-cutting agency we've seen. For all those folks saying Congress can't stick to cuts, this is the closest thing to a solution that anyone's come up with. It gives Congress a way to let someone else take on the hard decisions that it doesn't have the expertise or political will to make. If Congress so chooses, it could let the IPAB do its work without ever bringing the recommendations up for a vote: They'd still go into effect, and no one would be on the record in either direction.”

Yes, this is precisely what I think Congress will do. The many critics who have argued that the reform bill will not cut medical spending have ignored these provisions. Indeed, as Klein observes, a “strong version of IPAB slipped through [Congress] almost unnoticed.”

Much of the media was just too busy watching the politics of the process, a tennis match between liberals and conservatives. (Imagine a grandstand of spectators, heads pivoting from side to side, until they’re mesmerized by the game. Meanwhile, they are oblivious to the details that comprise the substance of the policy.)

I have argued that Medicare’s reforms will ripple out into the larger health care system as private insurers adopt Medicare reforms. Klein agrees: “You could see the reforms that get seeded into Medicare being adopted by everyone else (which is common even now)”

We disagree only on whether this is all “a little weird and a little sad.”

Here, I must argue that we don’t want politicians making decisions about Medicare projects and payments. Politicians are not physicians. They are not healthcare experts. And under our current system of campaign contributions, they are beholden to the sirens.

 Odysseus told his sailors to put wax in their ears, so that they, too, would be safe from the sirens. He, alone, would endure the agony of hearing their calls without being able to follow. (His men would watch him, lashed to the mast, and see when it was safe to unblock their ears.)

 I doubt that this legislation will silence the lobbyists. Yet the majority in Congress have agreed to put themselves in a position where they cannot respond to seduction. It’s not often that one has an opportunity to praise the nation’s legislators for showing the courage of a Homeric hero.

Okay, that may be an exaggeration. Put it down to euphoria following passage of this bill. Maybe some legislators didn’t exactly realize what they were voting for. But some very wise Senators—including Jay Rockefeller—have manage to craft a radical change in the relationship between Medicare and Congress.

 

19 thoughts on “Congress Agrees to Lash Itself to the Mast; Making It Possible For Medicare To Move Forward With Reform—Update

  1. Maggie,
    Just a couple of points, from an avid supporter of the President, but not quite sold on the Homeric aspect.
    (1) The Independent Medicare Advisory Board will indeed include physicians and healthcare experts, but not just them. It also calls for participation of employers and third-party payers, which looks a bit strange to me for a board of this type. Here is the exact text:
    “(i) IN GENERAL.—The appointed membership of the Board shall include individuals with national recognition for their expertise in health finance and economics, actuarial science, health facility management, health plans and integrated delivery systems, reimbursement of health facilities, allopathic and osteopathic physicians, and other providers of health services, and other related fields, who provide a mix of different professionals, broad geographic representation, and a balance between urban and rural representatives.
    (ii) INCLUSION.—The appointed membership of the Board shall include (but not be limited to) physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit programs, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research and expertise in outcomes and effectiveness research and technology assessment. Such membership shall also
    include representatives of consumers and the elderly.
    (iii) MAJORITY NONPROVIDERS.—Individuals who are directly involved in the provision or management of the delivery of items and services covered under this title shall not constitute a majority of the appointed membership of the Board.”
    BTW, there is also a consumer advisory council to advice the board, which is a nice addition.
    (2) I assume that the language from which you, and I guess Ezra too, inferred that Medicare beneficiaries will not be adversely impacted is as follows:
    “The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary costsharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria.”
    Since the Board is mandated to submit proposals to reduce costs every year, and if they fail to do so the Secretary has to submit a proposal, I think sooner or later we will need to revisit the exact legal meaning of every word in this paragraph.

  2. Maggie and Margalit —
    The one good thing about the IPAB is that it has a tremendous amount of cutting it can do without getting near the muscle and bone.
    Estimates based on the Dartmouth Atlas Data, individual pieces of research on procedures and treatments, and comparison with practices and results in other countries demonstrate that we are paying something between $500 billion and $750 billion A YEAR for medical care that is at best no more useful than much more conservative and much cheaper practices and at worst outright harmful. In addition, there are many very simple and inexpensive (as in virtually free) steps that could be implemented as requirements for doctors and hospitals that would greatly decrease the incidence of complications and deaths from avoidable medically induced injuries and illnesses and would save another $100 billion to $250 billion each year.
    Almost every week the major refereed journals publish a new study demonstrating that some widely practiced procedure or test is of questionable utility.
    Finally, there are a huge pile of innovations that have not been widely implemented that would save large sums of money while improving the quality of health care. These range from widespread use of electronic records that can be easily cross referenced between doctors and institutions to implementation of low tech high intensity management of the most common and expensive chronic illnesses (like the SMDC congestive heart failure project, the British National Health project on diabetes, and the Kaiser Bay Area project on coronary artery disease) to implementation of practice patterns like responsible care networks, medical homes, and discharge networks.
    It may be theoretically possible that we will run into trouble finding reasonable cuts that improve care, but that only will be after we remove nearly a trillion dollars a year from the US medical care budget and reduce costs to the level that other developed countries spend while achieving superior results.
    For now, the IPAB will be functioning it what can be only called an extremely target rich environment.

  3. Margait–
    IPAB is supposed to be very much like MedPac– the Medicare Payment ADvisory Commisson that has written hundreds of pages of brilliant reports about waste in Medicare, over-payment for unncessary procedures, hospital inefficiency, etc. (See Pat’s comments.)
    Pat, by the way, is an M.D., and like you, recognizes the waste in teh system. But many physicians don’t–or don’t want to.
    IPAB is sometimes referred to as “MedPac on steroids” because it will actually have the power to not only recommend, but implement changes unless Congress gers a supermajority to block it.
    MedPAC knows the Dartmouth research inside out. People like Gawande greatly respect MedPac’s work. The Bush administration ignored MedPac because lobbyists hated its recommendations..
    But now, many of MedPac’s recommendations will be implemented.
    Many people on MedPac were not doctors. Glen Hackbarth, the head of the board for quite a long time is an attorney. I’ve intervieed him. Excellent. No axe to grind.
    The reason that you don’t want more than 50% of the people on the board to be health care providers is because health care providers tend to favor over-paying themselves.
    This is the problem with the committee that revises Medicare fees on a regular basis–the majority are specialists.
    Ideally, any physicians on boards such as these would be docs on salary. But you also need others who are involved in paying for healthcare — employers, non-profit insuers (my guess is that insurers will be represented by people form Kaiser, Geisinger).
    The AMA and a long list of specialty organizaions (surgeons etc.) wrote to Congress protesting the very idea of IPAB. They lost that battle–which is all to the good.
    Just as we don’t want lobbyists representing Pharma blocking reform, we don’t want oncologists who make a fortune on treatments that give the average patient an extra 18 days of poor-quality life (without ever telling the patient that he or she is dying, while holding out false hopes of cure) blocking reform.
    As you know, I think patients shoudl be given full information in these end of life situations–and access to palliative care specialists (I’m quite certain that IPAB will raise fees for palliative care.)
    And ultimatley, teh Comparative Effectiveness panel (which is separate from IPAB) will be taking a close look at some of these cancer treatments that have been hyped without medical evidnece to support the hype.
    Dr. Zeke Emanuel (an oncologist and advisor to White House budget director Peter Orszag is a big fan of the IPAB idea and Zeke is likely to be involved in reocmmending people for IPAB.
    So I wouldn’t be worried about the quality of the people.
    Emmanuel, by the way, will be on the Comparative Effectiveness panel–it’s important to have an oncolgist there.
    The idea is to make IPAB a group like FASB–the indepndent panel that overeses US accoutnign rules and really stood up to the corporate interests on the issue of stock options for executives.
    That’s why the members of IPAB will have renewable 6 year terms– meaning that even a two-term presdient will not be able to pick all of the members of the board.

  4. Pat S.–
    Yes, there is so much low-hanging, over-ripe (to the point of rotting) fruit to be picked.
    And it is heartening to see so many medical jouranl articles exposing ineffective treatments.
    Those in the vanguard of patient-centered, evidence-based medicine movement are becoming a stronger voice in the profession.
    In the meantime, you are even beginning to see more skepticism in the mainstream media.
    A week or two ago, TIME magazine ran a piece about statins and women. We really have no evidence that statins save women’s savies–or prolong life.
    And we do have much evidnce that women are quite vulnerable to the side effects–memory loss plus deep muscle pain.
    Two years ago, Business Week did a cover story questioning the effectiveness of statins.
    This is progress. Gradully,
    the public will become better informed, and quicker to question over-treatment.
    In the meantime, though, we still face fierce resistance.
    Last week I found myself on television debating Betsy McCaughey (former NY Lt. Governor.)
    She insists that, under reform, old people won’t be able to have knee implants, the Sec of Health & Human Services will “take over a woman’s reproductive rights.” (I’m sure he’s eager to find himself at the center of that controversy. )
    She also called Pres. Obama a “liar and a demagogue” and said that Zeke Emanuel wants to kill old people.
    And this wasn’t Fox–it was channel 11, a local (NY N.J) independent station that re-broadcasts its shows around the country.
    This woman publishes op-eds all over the place and has been on every major (and minor) television show for the past 17 years. (She helped kill Clinton’s healthcare plan.)
    And no one stops her. Free speech is one thing, but she’s crying fire in a crowded theatre.
    I’m writing a post about my experience on the show– horrifying, but also pretty funny . . .

  5. Maggie,
    The name in the bill is Independent Medicare Advisory Board (IMAB).
    I do understand the problem with providers representing their interests, but in a board such as this, there should be no consideration for representation of special interests. Members are not allowed to hold any employment or conduct any business while serving on the board anyway. The selection should be solely based on quality of candidates.
    I would like to see maybe Tom Daschle as the first Chairman, but I doubt that it’s feasible.
    Pat, I do agree that there’s plenty to do before we hit muscle and bone. The question I have is what exactly are we waiting for?
    Does anybody see any particular reason why this board is not to be created until 2012 and why its first proposal is not due until January 2014?

  6. just to be clear, the analysis of stain use in women was based on review of multiple trials, not answered by a trial designed to address this question. the analysis suggested (but did not prove) that total mortality was not reduced in women taking statins for primary prevention purposes. there was, however, a reduction in cardiovascular events that was statistically significant.
    for secondary prevention there is much more data available. large studies, which admittedly were mainly in men, but designed to directly answer the question of secondary prevention did show mortality benefit and the consensus opinion is that the preponderance of data from multiple studies do show that there is a survival benefit in women in the setting of secondary prevention of cad.

  7. Margait, Anonymous
    Margait–
    The name of the board was changed from IMAB to IPAB –somewhere toward the end of the reconciliation process I believe. (When Ezra Klein posted about it in WaPO yesterday, he had the new name. I had read something about the change, can’t remember when it happened.)
    Why did they change it? I think they wanted to get “Medicare” out of the title. Opponents of reform have been telling seniors that their benefits will be cut to finance reform (not true).
    Reformers don’t want seniors– or senior advocates who oppose reform –to stumble onto this Board when they Google “Medicare.” So they took the word out of the name–even though the Board makes recomendations only for Medicare.
    Crazy, I know, but that’s what all of the fear-mongering leads to. (See my reponse to Pat)
    The Board isn’t created until 2012 and it’s first proposal not due until 2014 because there is so much hysteria out there now that reform has passed (among many docs as well as patients) that one doesn’t want to throw gasoline on the fire.
    Also, hospitals, in particular, need time to prepare for being held accountable for efficiency.
    Hospitals need to begin changing “systems”– paying much more attention to patient safety, training staff in using check-lists, etc. We’re talking about Huge cultural change involving many people. You can’t just flip a switch and make it happen.
    And reformers don’t want to give tea-baggers a reason to take to the streets . . . We’ve waited
    40 years for health care reform (actually longer– since the Truman administration) We need to wait another 3 years and make sure that we’re doing it right, and in a way that won’t be overturned by mass hysteria.
    I realize that for individuals who need reform Now, the three years is an impossible wait. But that’s why the legislation tries to address the neediest now: – children with pre-existing condtions, people close to maxing out on their insurers’ limit on lifetime reimbursements, adults with pre-existing conditions who need to be in high-risk pool . .–they all get help this this year.
    Also, picking the right people for IPAB will take time. (I have to disagree about Daschle– he just doesn’t know much about medicine-. I’ve read his stuff and written about him. Perfectly okay, but not a brilliant man and no indepth knowledge. If I were going to put a politician on the board, it woudl be Senator Jay Rockefeller. He has studied the subject in depth, and, like Ted Kennedy, make it his life’s work.
    We need people on the Board like Dr. Diane Meier (a pioneer in palliative care); Jon Skinner (an economist at Darmouth who has been working on Dartmouth research for years), George Halverson (Kaiser Permanente CEO–excellent book), Jim Sabin (Harvard Pilgrim–insurance–excellent) Bob Berenson (former Medicare executive, now at the Urban Institute) someone from an employer like Pitney Bowes (excellent healthcare benefits program, originally overseen by Pres. Ford’s former White House doctor), a patient advocate from Consumers’ Union (they’ve been doing great work on patient safety); maybe a health care economist like Uwe Reinhardt or Tom Rice or Victor Fuchs; also someone steeped in comparative effectiveness research . . . Perhaps two or three people now on MedPAC who have been working on this for 4 years or more.
    In other words, we need people like many of the best who write peer-reviewed articles for Health Affairs or NEJM about health policy.
    The people on the board must have in-depth knowledge, and the ability to udnerstand what the others on the board are explaining when sharing their in-depth knowledge.
    Anonymous– You’re entirely right; this was a review of multiple studies rather than a separate study focused on women.
    But I think these reviews of existing studies are very useful in making us stop and think. Then, of course, one would want to see a study focusing on women.
    But this review is a warning.
    It does seem that statins prevent undesirable events (i.e. heart attacks) for some people. But there is little clear evidence that they prevent Fatal heart attacks.
    I realize that having a heart attack is a horrible experence that one would like to avoid. Though it can serve as a head’s up that diet an exercise must change.
    Moreover,there’s no question but what statins lead to serious side effect for a fair number of (mainly older) patients.
    This is a question that needs more reserach
    But I’m convinced that the hype over statins has been . . well, hyperbolic.
    They’ve been over-sold to docs as well as patients.
    So we really need to take a step back. And pay attention to patients who complain about side effects.

  8. Yes, the system will take a while to adjust, and the results may not be predictable. There’s so much money floating around uncontrolled that some serious problems can occur when we finally get some handles on it. As one example: AT&T taking a ONE QUARTER charge of $1 BILLION just because it no longer can deduct from their taxes the subsidy it is GIVEN for 28% of retirees’ drug costs. And AT&T is threatening to cut retiree’s benefits as a result!

  9. Maggie
    It would also be helpful for readers to know about some of the IPAB’s limitations. Rather than MedPAC on steroids, it is more like Sudafed. By attacking only provider payments (docs are first up with significant delays to hospitals), the board cant touch benefits, eligibility, or treatment modalities. The CER initiative seems half-baked if the IPAB cant operationalize the findings. It is the latter, not the former that is the real meat in tilting the cost curve upwards.
    What a shame. Future changes in legislation as stand alone bills, or add ons to other measures will be harder to get through given congressional obstruction on initiatives such as this.
    Brad

  10. Brad–
    Good to hear from you.
    Actually Congress didn’t “obstruct” or limit anything about IPAB. As Ezra points out, what is remarkable is that the IPAB provision survived as originally written in the Senate bill– and quietly, made its way into the final legislation, untouched
    Legislators (and the media) were more focused on things that are easier to understand.
    Also, I’m not holding anything back about tiing: In the section I quote from Ezra he does make it clear that this does not kick in immediately.
    But I think you’re seriously undestimating what IPAD can do.
    Either that, or Peter Orszag is living in a fantasy world when he calls it a “game-changer”.
    Here’s the Financial Times, quoting Orszag:
    ” Under the bill, a new Medicare commission, known as the Independent Payments Advisory Board, would have the power to impose steep annual cuts in Medicare payments against forecast healthcare inflation.
    “The board’s initial chan­ges would look deceptively incremental. Over time, however, a fully empowered board could help transform chronic fiscal challenges. Government spending accounts for roughly half of annual $2,500bn (€1,835bn, £1,652bn) health spending, of which Medicare is by far the largest portion.
    “History suggests that if you phase something in, it works,” Peter Orszag, Mr Obama’s budget director, told the Financial Times. “The commission would have the power to propose changes to hit the growth targets for healthcare spending, which would take effect unless Congress enacts alternative proposals with equivalent savings. I don’t think people have appreciated just how big a game changer this could be”.
    “So important is this to Mr Obama,” FT continues, ” that it was the only specific healthcare proposal that came from the White House last year. It was only last month that Mr Obama proposed his own detailed healthcare bill – much along the lines of the Senate bill.
    “The powers of the proposed board would resemble the Base Closure and Realignment Commission, an independent body that recommends to Congress which military bases to close. Unlike normal bills, Congress can vote only Yes or No. That deprives lawmakers of their normal powers to insert special deals, but with the knowledge their opponents will also lose that scope.
    “IPAB’s powers would be similar. If Congress rejected a proposed spending cut, it would have to propose an equivalent cut or the original IPAB proposal would automatically go through. It is highly unusual for Congress to cede such powers. Other examples include the creation of the Federal Reserve in 1913, where Congress forfeited the right to set monetary policy.
    “Right now, Medicare is run by 536 chief executive officers [members of Congress plus the president],” says David Cutler, a healthcare economist at Harvard University. “This could transform the whole management of it. It is potentially very far reaching.”
    I think “decpetively incremental” is the key phrase here– as Orszag say it will have to be phased in, and to a large degree it will address docs first, then hospitals.
    Though already, Medicare has decided to stop pay for an excess number of preventable hospital admissions for certain conditoins.
    Moreover, Medicare is going to make hospitals report on hospital acquired infecttion. Ultimately, it will stop paying for treatment of these infections if there are too many. But first, after giving hospitals a year or two to clean up their act, Medicare will advertise which hospitals have the highest reate of infections.
    You’ll see the stories in local newspapers. And the idea of developing an ugly, difficult to treat infection in a hospital– one that can cause you to lose a body part–is an idea that the public can wrap its mind around.
    There are a great many things that IPAB can do before getting to the stage of financial penalties.
    Not long ago, I attended a conference where Mark McClellan said that for the first time, for a long time, people are talking seriously about brining “Certificate of Need” back.
    I suspect this will happen. Hospitals will be told that they can’t expand and will have to show need before investing in equipment costing over a certain amount.
    Finally, questions have been raised about the tax-exempt status of non-profits.
    Once 30 million people uninsured people are uninsured, there will be less charity care for hospitals to do. How many actually do enough in the community to justify the tax exemption? Should it be only a partial exemption?
    Many hospitals sit on extraordinarily valuable real estate. The lost propoerty taxes are costinng cities hunderds of billions–money that could be invested in public health.
    There is also talk of closing some hospitals and turning them into community clinics, long term care centers etc.
    We have more inpatient beds that we need in many places, and more very, very expensive medical equipment in hospitals that are less than a mile
    from each other.
    IPAB isn’t just about changing fees, it’s about saving Medicare dollars without cutting benefits for Medicare beneficiaries. That means making structural changes that change the way care is delivered–which includes looking at excess capacity.
    I suspect that 10 years from now, people will be astounded by how much IPAB had accomplished. The key is that it is so well insulated from Congress.
    Legilsators can’t “edit” the proposals– cutting one part of the package, or including a special exemption for Florida, LA or Manhattan . .

  11. I can see how a government committee can review the non-profit status of hospitals and make long overdue changes. I cannot see how such committee can decided to close hospitals, though. Aren’t they private “businesses”?
    Could IPAB or any other government branch reverse the consolidation of hospitals, and more recently ambulatory services, into mega-enterprises, a.k.a monopolies? That alone should save a bundle, albeit not so much to Medicare.

  12. Maggie
    I think you misunderstood. I believe the IPAB will work. It has certain limitations however.
    I cant find references, but when the original proposal was assembled (IPAB 1.0/IMAC), the envisioned commission had certain limitations–most likely related to congressional fears of blow back.
    While conceptually we all can grasp how things might work, I do believe we have to learn more in terms of what is eligible for trimming and how decisions will be made. Rightfully so, Congress does not want an angry mob of seniors pelting them with walking canes and oxygen tanks.
    Brad

  13. Brad,
    That is exactly what I meant in my first comment. This paragraph from the bill will be the focal point for debate…. eventually:
    “The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary costsharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria.”
    Is a decision to not pay for something that is not cost effective allowed by this paragraph?

  14. Margait–
    If Medicare stops paying for Medicare patients at a particularly hospital (because the hosptial has failed to approach benchmarks on infection control or preventable readmissions) after being given several years to improve –that effectively shuts down the hospital.
    (Medicare pays such a large share of hospital bills that virtually no hospital could stay open without Medicare patients.)
    If a state decides to rescind a private hospital’s tax-exempt status, that could shut down hospitals (particularly small hospitals located in affluent areas. Some of these hospitals are redundant and skim cariology and orthopedic and other lucrative business that could be going to larger community hospitals that actually do serve the community that
    money-losing burn units, trauma centers, drug rehab and outreach into community to meet genuine public health needs.
    Also today Berwick was saying that we really haven’t tried “transparency”– and that we need to move into the system, turn on the lights, and take a real look at hospitals. In particular he was talking about the requirement that hospitals begin reporting infection rates.
    He says publishing the lists will be powerful.
    And he indicates that some hospitals may “pretend” to report rates- it sounds as if he will crack down on that.

  15. Harry in MD, Brad, Margalit
    Harry in MD
    Interesting about AT&T– and yes, the consequences of HCR will be rippling through corporate America.
    So much $$$ at stake. This is why the Republicans have been so upset.
    Brad– I understand you’re in favor of IPAB. I just don’t think it was every in the cards that it would eliminate benefits . . . though there are way to reduce overtreatment by lowering doctors’ fees for very lucrative services.
    You would think docs would just crank up volume to make up the difference but a GAO report shows that when Medicare reduced fees for some diagnostic testing a few years ago, volume (which had been spiralling) leveled off. It didn’t fall, but they “broke the curve.” At some point, it just isn’t worth it to doctors to do extra tests. Their profit margin is too small.
    Also, Medicare can lower co-pays– which is a way of steering patient away from less effective services which lead to overtreatment and toward more effective services . . .
    For example, there will be no co-pays or deductibles for preventive care that the Preventive Servcies Task Forces rates A or B, but co-pays will continue tests and treatments the PSTF sees as less effective– for instance, mammograms for average risk women of certain ages. . . .
    My guess is that there will be no co-pay for an annual gynecological exam for women of a certain age that include Pap smear and breast examination by doctor. (Less likely to find tiny tumors that will never grow, and so less dangerous than mammograms.)
    This could encourage women to forget about the mammogram and just go for the gyn exam– where we know that Pap smears do save lives.
    They left the language of the legislation as vague as possible (for instance not mentioning lower co-pays) so as to give IPAB and Medicare some room to find ingenious ways to cut costs and discourage overtreatment.
    Now that we know that Berwick will be heading up Medicare, we know that he will be very proactive.
    He won’t shoud–but he’s passionate, and believes that we have to move quickly. Today, he called our healthcare system a “thief”– robbing money needed for education, etc.
    He believes that we shoudl reudce spending on health care as a percentage of GDP–or at the very least cap it, permanently, where it is as a percent of GDP.
    He talks about 30% of dollars wasted, etc. — and that we just can’t afford to let this go on much longer.
    On the other hand, he understands that the country is not psychologically prepared for revolution.
    Tricky. But I can’t think of anyone who would do a better job of enacting change without causing riots. . .(canes, oxygen tanks etc.)
    Margalit –If it becomes clear that a treatment is ineffective Medicare could stop paying for it on the grounds that an ineffective treatment exposes patients to risk without benefit and thus is hazardous.
    This, as I recall, falls under a “reasonable” clause in Medicare law.

  16. Maggie, I’m not sure I have to decide between your and Ezra’s views. It is sad that Congress has and continues to succumb to special interest lobbying to such a degree. We are a bit pathetic as a nation that we haven’t got a better handle on the lobbies and the influence of money i politics (European nations tend to do a better job). But, given that, it is noble of them to tie their hands in advance in order to save reform from themselves.
    Two questions:
    1. What do you think about the 10 year hospital exemption?
    2. What do you think about the section that forbids insurers from having more cost-sharing (copay, coinsurance) for people who go out of network than people who go in network?

  17. Maggie
    In reference to Betsy McCaughey. There’s always been a fringe element but it’s scary what some people accept as facts in light of compelling evidence to the contrary. Thanks for trying to help us out against this fringe!

  18. j.d
    j.d. Eza and I just have different personal (emotional) reactions to this– no choice needed.
    I think the difference may be the fact that I’m older, and perhaps less idealistic about what a representative democracy means. I’ve also read a great deal of history (and lived through quite a bit of U.S. history).
    As long as I can remember, Congress has been corrupted by campaign contributions.
    Could this change? Yes, with real campaign contribution reform.
    We outlawed slavery,we could do this.
    But it would be at least as hard as health care reform legislation.
    This Congress is more dysfunctional than most, but hardly unique.
    FDR and LBJ had to fight Cognress to do what they wanted to do to serve the public good. (FDR also had to fight the Supreme Court.)
    On the 12-year exemption re hospitals.
    IPAB probably won’t be able to cut hospital fees until (actually, I think it’s 2019, not 2022. But whatever.)
    Medicare, however can enforce changes without going through IPAB. For instance, Medicare has already decided to stop paying for an excessive number of preventable unnecessary hopsital readmissions.
    It is also going to begin requiring hosptials to report on rate of hospital infections. And Medicare plans to publicize results.
    This will cut into revenues at hospitals that don’t improve.
    Finally, Medicare’s pilot projects will experiment with how Medicare pays hospitals (bundling payments to docs hospitals and paying them more for better more efficient outcomes.)
    An individual hospital won’t have to accept this change in payment; it can stick with the old system. But a hospital won’t be eligible for bonsues, and probably won’t see any increases in fees, unless it does.
    There are many ways that Medicare can create finacial carrots and sticks that will help to re-shape hospital care so that we are getting better value for our dollars.
    For example, Medicare is likely to increase the number of residency slots for primary care docs–and decrease the number of slots for some specialists. (We really don’t need more specialsts in many areas) Today I read that Medicare had already done that for this year.
    Also, you’ll note that while the Board can’t lower fees or raise co-pays, it can raise fees (for services that actually help patients) and lower co-pays (for those same services) –thus steering patients and doctors away from over-priced and not very effective services and toward more effective care.
    Finally, as for cost-sharing and going out of network . . .
    Premiums will continue to be much higher for insurance plans that let you go out of network–significantly lower for plans that require that you stay in network.
    And the only Medicare Advantage plans that are likely to survive are those well established HMOs (which use networks) which are much more efficient–and less costly– than other Advantage plans.