Dec 5, 2013
Take Politics Out of Health Care Reform
Posted on Jul 21, 2009
By Ruth Marcus
If you’re interested in how to get health care costs under control, the case of the F-22 offers an instructive example.
Huh, you say? What does a fighter jet have to do with health care? Nothing, of course, but it has everything to do with politics, which has, in our current system, a good deal to do with health care costs.
As I was writing this article on Tuesday, the Senate was debating a defense authorization bill amendment that would end production of the stealth fighter. President Obama wants to end the program. So does his opponent in the last presidential election, Arizona Republican Sen. John McCain. So did President Bush. So do the defense secretary and the chairman of the Joint Chiefs of Staff.
In 2004, the Pentagon concluded that 183 of the aircraft would be sufficient to meet defense needs. If the program is ended, there will be 187, costing $65 billion.
And yet, in the face of Obama’s first veto threat, the Senate Armed Services Committee voted to authorize $1.75 billion to purchase seven more planes. The House, in its version of the measure, inserted a $367 million down payment for a dozen more.
Good question. The answer is that the F-22 just happens to be built in 44 states. Connecticut Democrat Chris Dodd has argued against the amendment; Connecticut-based Pratt & Whitney makes F-22 engines. So has Georgia Republican Saxby Chambliss; Lockheed-Martin, the F-22 manufacturer, does the plane’s final assembly in Marietta.
Which brings me to health care, and one of the most promising ideas for constraining rising costs: Get politics out of the decision-making about how much to pay and what to pay for.
The Obama administration, which has been ostentatiously hands-off in the drafting of health care reform, has produced a detailed proposal to create an “Independent Medicare Advisory Council” to determine payment rates and other policy changes in the health care program for seniors. The president would have to approve or reject its recommendations as a package, after which Congress would have 30 days to reject them.
Democratic Sen. Jay Rockefeller of West Virginia and Democratic Rep. Jim Cooper of Tennessee have a similar—and, in important ways, stronger—proposal that the administration also supports. The biggest difference between the two proposals is the number of votes it would take for Congress to block the recommendations: a simple majority in the administration’s proposal; three-fifths in the Rockefeller-Cooper plan.
The smart idea behind both is to create a kind of MedPAC on steroids. MedPAC is the Medicare Payment Advisory Commission, and the reason it needs boosting lies in its name: advisory. MedPAC routinely offers good recommendations about how to rein in costs; these are just as routinely ignored.
In the world according to MedPAC, Medicare would change policies that encourage the purchase of expensive imaging machines. It would increase reimbursements to primary care physicians and reduce payments to specialists. It would cut overpayments to private Medicare plans that cost, on average, 14 percent more than regular fee-for-service Medicare—not that regular fee-for-service Medicare is a model of cost-effectiveness.
Medicare costs matter not just because Medicare consumes such a large and rapidly growing share of government spending. Because Medicare is the 800-pound gorilla of health care, its reimbursement policies also drive payment arrangements between private insurers and providers.
Health care is like the F-22, except more so: It affects constituents, influential employers and jobs in every congressional district. Draining the politics out of health care decision-making is a first step toward getting costs down.
It’s Congress’ job to make tough policy choices. Resorting to commissions is generally an admission of a broken political process. But MedPAC on steroids would be different: Its recommendations mostly involve technical questions outside congressional expertise.
Now back to the F-22. At midday Tuesday the Senate voted—by a surprisingly robust margin of 58 to 40—to eliminate the F-22 funding. That action will now be taken up by a Senate-House conference committee.
The vote is good news—and not just for more rational defense spending. Health care politics make the F-22 fight look simple. It won’t be easy to expand coverage in a way that controls costs.
But maybe, just maybe, the naysayers are premature.
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