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Healthcare Reform: Republicans Aim to Kill... Medicare Cost Controls!

Kudos to the Washington Post editorial board and to Post columnist Ezra Klein for forthrightly opposing a Republican effort to rub out a central cost-cutting provision of the Affordable Care Act. The Republican bill, called the Health Care Bureaucrats Elimination Act -- no, I'm not making this up -- would kill the Independent Payment Advisory Board (IPAB), which has the goal of reining in Medicare spending.

The bill proponents' main point is that unelected "bureaucrats" -- actually, 15 healthcare experts to be nominated by the President and confirmed by the Senate -- will decide how much we're going to spend on Medicare. In fact, Congress will still have the power to block IPAB proposals by an up and down vote if the President doesn't veto it. If Congress wants to change IPAB recommendations in a way that saves less money, it has the ability to do so with a 60 percent majority vote.

The 12 Republican senators who are cosponsoring this bill, led by John Cornyn (R-Tex.), might be able to find some Democrats to support their position. A year ago, when President Obama first suggested turning the Medicare Payment Advisory Commission (MedPAC) into the IPAB, a bipartisan group of 75 Congressmen sent House Speaker Nancy Pelosi a letter denouncing the proposal because it might prevent seniors from getting needed care.

Of course, that's nonsense. Congress has adopted some of MedPAC's proposals, such as one that reduced excessive imaging costs. Aside from the affected healthcare providers, nobody argued that these policies would hurt Medicare beneficiaries.

Moreover, as the Washington Post notes in an editorial, Congress has an abysmal track record on Medicare cost control. The Medicare Modernization Act of 2003, for example, overpaid insurance companies in the Medicare Advantage program and prohibited the government from negotiating drug prices. Congress has also failed to control rising physician costs, dithering year to year on whether to cut Medicare fees or come up with a new method for reimbursing doctors. The IPAB offers one way to overcome this annual gridlock.

Interestingly, Cornyn and his colleagues agree with some Democratic observers who say that the IPAB's powers are too circumscribed to have much impact on reducing costs, at least in the early years. Until 2018, for example, hospitals are exempt from IPAB's budget axe, Cornyn points out. But the Republicans can't have it both ways: If they're opposed to government appointees cutting costs, they can't complain in the same breath that they don't have enough authority to do so. Also, as Klein observes, they can't say they're opposed to ACA provisions that reduce government expenditures while promoting a balanced budget act and decrying every new dollop of Washington spending.

The efforts of Republicans to kill pieces of the reform law -- which parallel Democratic efforts to preserve other pieces of it in court and in regulation writing -- represent both an admission that they can't repeal the law and an effort to score political points in advance of the November elections. No matter how ridiculous it may sound, the Health Care Bureaucrats Elimination Act is calculated to appeal to the many voters who detest the government. It should also play well with people who want the government to keep its hands off of "their" Medicare.

And, of course, let's not forget that healthcare providers hate the idea of the IPAB. Physicians and hospitals tried to block Obama's proposal last January, and the AMA and the AHA remain strongly opposed to it. After all, what's the good of having lobbyists if their influence over Congress won't stop payment cuts? On the other hand, even if the proposed bill passed, it would have to survive a likely veto threat from President Obama, and that's not particularly likely.

Still, IPAB will remain vulnerable, and the outcry against it will increase as it gains more power later in this decade. But in the long run, elected officials cannot micromanage healthcare every year and decide how much to pay healthcare providers. That's a recipe for inaction and the road to fiscal ruin.

Image supplied courtesy of Wikimedia Commons