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.