Health care reform battleground moves to Medicare

Rick Moran
To be honest, neither side is even remotely addressing the crisis. The "savings" being proposed by Democrats are a drop in the bucket for what is necessary to stave off disaster in a few years when Part A goes broke. And Republicans are pandering to seniors by opposing even the modest cuts the Democrats are offering.

Regardless, looking specifically at Medicare as it will be "reformed" by Obama is like listening to crazy people babble incoherently; the "savings they are proposing - overstated, and wildly off target - would come from simply paying doctors and hospitals less for procedures and treatments under Medicare.

I've used the analogy in the past of old King Canute standing on the sea shore and ordering the tides not to come in. The government simply ordering health care costs to come down is pathetic. This is why the Democrats will fail to get costs under control and why their oft stated claim that seniors won't have their benefits cut rings hollow.

Jennifer Rubin links to an AP article that highlights the latest CBO report where Director Elmendorf (who Ed Lasky thinks his days are numbered at CBO) shows that the draconian $100 billion cut in the Medicare Advantage program - the hugely popular supplemental insurance program - will reduce benefits for seniors substantially.

And Rubin also points to this James Capretta piece at NRO about the return of the Independent Medicare Advisory Commission - IMAC - that liberals are so fond of and that will develop new pay scales for Medicare treatments:

At the heart of the rise in entitlement costs is the Medicare program. For months, the president and his aides suggested that they could neutralize Medicare's rapid cost growth with targeted interventions in the health sector that would make care delivery more efficient. The cost curve could be bent, we were told, with painless investments in information technology, comparative effectiveness research, and prevention and wellness efforts.

This line of argument was quickly discredited by CBO. The core problem, CBO noted, is financial incentives. Providers of medical care increase their income when they deliver more services, and beneficiaries are largely insulated from the additional costs of higher use, since those costs are paid by a third party. No amount of federal spending on health IT is going to change that.

And so the Obama administration went back to the drawing board and returned in July with another idea: the IMAC. That's the proposed independent commission that would have the power to make sweeping changes in the Medicare program. In the original White House version, the IMAC's recommendations would have gone into effect automatically unless Congress could muster a two-thirds majority to stop them. The commission was to have broad authority to rewrite the Medicare program from top to bottom.

I noted at the time that this was an especially audacious proposal, representing as it did a massive, unprecedented power grab by the White House. Under the Obama IMAC, the president would pick all the commissioners, and the process gave him the power to reject the commission's annual recommendations if he wanted to - but if he accepted them, they would be nearly impossible to block in Congress.

The IMAC plan was dropped at the insistence of Blue Dogs. Now that the Democratic leadership appears to be throwing the moderates under the bus, IMAC is back in the Baucus bill. The whole set up screams "rationing" and that's why Obama and the liberals want to give IMAC such unprecedented power; resistance will be futile as IMAC's rules will carry the force of law.

Rather than "reform" Medicare, IMAC will assure its destruction. Capretta explains:

What does that leave? Price controls, of course. Inevitably, the Baucus commission would feel the same political pressures Congress does today, which means it would resort to the same kinds of arbitrary, across-the-board price cuts that are routinely adopted whenever budgetary targets must be hit. Just look at the health-care bill Sen. Baucus is pushing through his committee this week. It is filled with cuts in payment rates for hospitals, insurers, and others, as well as new industry-specific taxes. These kinds of cuts and fees make no distinctions based on quality or value; all providers are treated exactly the same, no matter how well or badly they treat their patients.

If the Baucus commission is adopted, we can expect more of the same in perpetuity as the commission is charged with hitting future budgetary targets. Worst of all, with the commission making annual provider-payment recommendations, Congress will have a ready excuse for never taking up what's really needed to fix the entitlement problem: a fundamental reform that brings the same kind of competitive structure used in the drug benefit to the rest of the program. And that's a disaster that would last for generations.

Many Congress watchers are now saying that the Baucus bill will pass the senate if reconciliation is used by the Democrats and will form the basis for a Grand Bargain with the House that will give us health care reform - whether we like it or not - by mid-November. There's a long way to go yet, but the outline of a final bill that Democrats could support is slowly taking shape in the Senate Finance Committee.

Hat Tip: Ed Lasky





To be honest, neither side is even remotely addressing the crisis. The "savings" being proposed by Democrats are a drop in the bucket for what is necessary to stave off disaster in a few years when Part A goes broke. And Republicans are pandering to seniors by opposing even the modest cuts the Democrats are offering.

Regardless, looking specifically at Medicare as it will be "reformed" by Obama is like listening to crazy people babble incoherently; the "savings they are proposing - overstated, and wildly off target - would come from simply paying doctors and hospitals less for procedures and treatments under Medicare.

I've used the analogy in the past of old King Canute standing on the sea shore and ordering the tides not to come in. The government simply ordering health care costs to come down is pathetic. This is why the Democrats will fail to get costs under control and why their oft stated claim that seniors won't have their benefits cut rings hollow.

Jennifer Rubin links to an AP article that highlights the latest CBO report where Director Elmendorf (who Ed Lasky thinks his days are numbered at CBO) shows that the draconian $100 billion cut in the Medicare Advantage program - the hugely popular supplemental insurance program - will reduce benefits for seniors substantially.

And Rubin also points to this James Capretta piece at NRO about the return of the Independent Medicare Advisory Commission - IMAC - that liberals are so fond of and that will develop new pay scales for Medicare treatments:

At the heart of the rise in entitlement costs is the Medicare program. For months, the president and his aides suggested that they could neutralize Medicare's rapid cost growth with targeted interventions in the health sector that would make care delivery more efficient. The cost curve could be bent, we were told, with painless investments in information technology, comparative effectiveness research, and prevention and wellness efforts.

This line of argument was quickly discredited by CBO. The core problem, CBO noted, is financial incentives. Providers of medical care increase their income when they deliver more services, and beneficiaries are largely insulated from the additional costs of higher use, since those costs are paid by a third party. No amount of federal spending on health IT is going to change that.

And so the Obama administration went back to the drawing board and returned in July with another idea: the IMAC. That's the proposed independent commission that would have the power to make sweeping changes in the Medicare program. In the original White House version, the IMAC's recommendations would have gone into effect automatically unless Congress could muster a two-thirds majority to stop them. The commission was to have broad authority to rewrite the Medicare program from top to bottom.

I noted at the time that this was an especially audacious proposal, representing as it did a massive, unprecedented power grab by the White House. Under the Obama IMAC, the president would pick all the commissioners, and the process gave him the power to reject the commission's annual recommendations if he wanted to - but if he accepted them, they would be nearly impossible to block in Congress.

The IMAC plan was dropped at the insistence of Blue Dogs. Now that the Democratic leadership appears to be throwing the moderates under the bus, IMAC is back in the Baucus bill. The whole set up screams "rationing" and that's why Obama and the liberals want to give IMAC such unprecedented power; resistance will be futile as IMAC's rules will carry the force of law.

Rather than "reform" Medicare, IMAC will assure its destruction. Capretta explains:

What does that leave? Price controls, of course. Inevitably, the Baucus commission would feel the same political pressures Congress does today, which means it would resort to the same kinds of arbitrary, across-the-board price cuts that are routinely adopted whenever budgetary targets must be hit. Just look at the health-care bill Sen. Baucus is pushing through his committee this week. It is filled with cuts in payment rates for hospitals, insurers, and others, as well as new industry-specific taxes. These kinds of cuts and fees make no distinctions based on quality or value; all providers are treated exactly the same, no matter how well or badly they treat their patients.

If the Baucus commission is adopted, we can expect more of the same in perpetuity as the commission is charged with hitting future budgetary targets. Worst of all, with the commission making annual provider-payment recommendations, Congress will have a ready excuse for never taking up what's really needed to fix the entitlement problem: a fundamental reform that brings the same kind of competitive structure used in the drug benefit to the rest of the program. And that's a disaster that would last for generations.

Many Congress watchers are now saying that the Baucus bill will pass the senate if reconciliation is used by the Democrats and will form the basis for a Grand Bargain with the House that will give us health care reform - whether we like it or not - by mid-November. There's a long way to go yet, but the outline of a final bill that Democrats could support is slowly taking shape in the Senate Finance Committee.

Hat Tip: Ed Lasky