American Elephants

The Affordable Care Act’s Independent Payment Advisory Board has been so heavily criticized as an unaccountable body with the power to effectively ration Medicare services that even many congressional Democrats no longer support it. Ordinary people didn’t pay too much attention until Sarah Palin called it a “death panel.”

IPAB’s 15 supposed experts (yet to be nominated) are completely unaccountable and are there to preserve Medicare in its current form by making it cost less. Uh huh. This is traceable to Obama’s chosen health care advisors and their admiration for Britain’s NHS and that organization’s recognition that most of the expense driving up the cost of health care comes in seniors’ final years. Why should we waste all this money on old folks who are about to die anyway?

The unstated yet clear agenda is to impose stricter price controls within Medicare. The history of such price regulation in Medicare and around the world clearly reveals that such controls cut costs only by lowering quality and adding rationing (queues and long waits for service), as well as eliminating participants.

This is Democrats normal modus operandi. Lots of carrots to sell a policy or program, but the carrots always cost too much and one way or another the costs must be cut back. Medicare is not sustainable in its current configuration.

There are enormous amounts of fraud in Medicare. It is quite possible to find ways to reduce costs that do not assume that doctors are all too rich and charge too much. If you honestly look for ways to be more efficient, they are there to be found. That’s how American productivity keeps growing. Ideological assumptions about unearned wealth and an ever increasing need for more control by more bureaucrats prevents efficiency from being found. The assumption that unaccountable bureaucrats can run the medical profession better than those who have spent years in training to learn how to preserve life and heal the afflicted seems a little odd when looked at straight on.

The IPAB’s little-known cousin the Center for Medicare and Medicaid Innovation has managed to escape the political radar. Its seemingly innocuous mission is promoting new and more efficient “payment systems” and “models of care.” This agency is just as dangerous as the IPAB. It is an agency run by the president’s political appointees, but never has to go back to Congress to get an appropriation. Obama provided it with $10 billion up front, to cover its costs for 10 years. At the end of that time the agency will get another $10 billion appropriation.

The big infusion of funding has allowed the CMMI to grow from 60 employees in 2012 to a planned 440 full-time workers in 2015. Ten percent of the funding is devoted to personnel and administrative expenses. Congress usually requires agencies to return to Congress to request a new appropriation each year, which at least gives the illusion of competency being reported and checked.

The premise is that government bureaucrats are best positioned to lead an effort in innovation in medical delivery. (stop laughing!) The history of Medicare’s payment systems over four decades is one of politicized decision-making by regulators who know little about what they are regulating, protection of incumbent providers and roadblocks to new technologies or new ways of doing business. Inefficiency is rampant, and made far worse by government attempts to direct doctors’ time and practice. They will routinely try to cut costs by eliminating the highest and lowest-cost providers.

There has never been an industry, a profession or a product that has not been improved by competition. Politicians policy prescriptions are based on the implicit assumption that government is full of wise platonic guardians who automatically recognize market failures and instinctively recognize the remedies for such failures. Democrats don’t like competition anyway. It’s not fair.

Both agencies should be shut down at the earliest opportunity.