GUEST EDITORIAL
By Benjamin Domenech, The Heartland Institute
A rather surprising amount of time was spent in the first presidential debate discussing the Independent Payment Advisory Board and its role in cutting the costs of Medicare. It’s worth drilling down into the defense President Barack Obama offered of IPAB’s approach. President Obama, from the transcript:
Let’s get all the doctors together at once into one test instead of having the patient run around with 10 tests. Let’s make sure we are providing preventive care so we are catching the onset of something like diabetes. Let’s pay providers on the basis of performance as opposed to on the basis of how many procedures they engage in. What this board does is basically identify best practices. Let’s use the purchasing power of Medicare and Medicaid to help institutionalize all of the good things that we do. The fact of the matter is that when Obamacare is fully implemented, we are going to be in a position to show that costs are going down … This board we are talking about cannot make decisions about what treatments are given here – that is explicitly prohibited.
This is a flawed depiction of what IPAB will do. But even if he were more accurate, the president would have an additional problem with what he’s saying. Last week David Hogberg reported on a little noticed quote from January 2009, with then president-elect Obama discussing his approach to Medicare reform, which provides a notable contrast with his remarks in the debate:
ObamaCare caps annual Medicare growth at GDP + 1%. In his 2013 budget, President Obama proposed an even stricter cap of GDP + 0.5%. But it seems that Obama was against capping Medicare before he was in favor of it.
In a 2009 interview with the Washington Post, Obama said, “What I think is probably the wrong approach is to think, well, the way to solve this is Medicare is spending X, and we’re just going to cap it at Y, and whatever that means in terms of people being thrown off the rolls or cutting benefits, you know, then so be it. Because that doesn’t solve the underlying problem which is health care costs themselves are still escalating at a 6 or 7 or 8 percent rate. All we’re doing is we’re just saying to people, you know what, you’re going to get less health care.
Audio here. So yes, it turns out Obama was against a Medicare cap before he was for it.
The real problem here is that Obama is trying to have his cake and eat it too. He says he wants to have one test instead of ten, but then says the board can’t make decisions about which treatments are given (only which ones that are paid for, which is the same thing). Obama has slowplayed IPAB since it became a political lightning rod – he was required by law to submit nominees for the board by the end of last month, but failed to do so, kicking the can until after the election. What’s more, there remain serious questions about whether IPAB can work at all even from the most generous interpretations:
Health policy experts say the IPAB won’t turn out to be as sinister as Romney described it, but it also might not be as effective as Obama envisions. In fact, it could be a struggle to even get the board up and running.
The Affordable Care Act sets up the IPAB as a 15-member board including doctors, academics and other “individuals with national recognition for their expertise in” health economics and other parts of the healthcare system. The board members will be appointed by the president and confirmed by the Senate. And that’s the hitch – only about 57 percent of Obama’s civilian nominees have been confirmed in the 112th Congress, and finding consensus could get even harder if Republicans pick up seats, if not the majority, in November.
And the White House has had an especially hard time with nominees to controversial positions, including the Consumer Financial Protection Bureau and the National Labor Relations Board. Obama resorted to recess appointments for those positions, and Republicans challenged the legality of that move.
The IPAB is just as controversial. If Romney wins the presidency, one healthcare lobbyist said, he might not appoint anyone to the IPAB, assuming Republicans can’t repeal the healthcare law. Democrats would likely have to offer enormous concessions just to get a vote on IPAB nominees, the lobbyist suggested. The White House did not respond to questions about what would happen if the IPAB board cannot be confirmed.
Both Obama and Romney ultimately want people to get less health care; the difference is that Obama wants that determined from the top down, from Washington, and from bureaucrats insulated from the political realities that would prevent them from capping effectively. Romney’s approach instead believes people will demand less health care if they approach it from the ground up and are not thoroughly insulated from the costs of their choices – something more true of health care than any other marketplace in the country.
