Wednesday, April 20, 2011

"MedPAC on steroids" is toxic to many...

Hey, we're having a real debate about controlling healthcare costs.

Some "responsible" conservative commentators, a.k.a. New York Times op-ed writers, who expressed queasiness about Paul Ryan's plan to convert Medicare into vouchers of ever-shrinking value nonetheless praised Ryan for opening up discussion of how to control Medicare costs specifically and healthcare costs generally. The same is true of Obama's counter-proposal, a centerpiece of which is strengthening the mandate of the Independent Payment Advisory Board (IPAB) created by the ACA to limit the prices Medicare pays for various treatments.  A strong IPAB was one of Obama's chief priorities in the legislation. He would not fight for a public option, but he fought for IPAB.

Surprise surprise: the Wall Street Journal editorial board does not like IPAB:
Mr. Obama, by contrast, is relying on the so far unidentified technocratic reforms of 15 so far unidentified geniuses who are supposed to give up medical practice or academic research for the privilege of a government salary. Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.
 "Exactly--precisely [cried Mr. Rochester]: with your usual acuteness, you have hit the nail straight on the head."  Fiat pricing. That's what American healthcare needs.  That's the power with which France, Germany, Japan, Canada and other wealthy countries that provide effective universal health insurance at reasonable cost invest their governments. A Canadian writing to James Fallows describes how the provincial governments of our neighbor to the north exercises a moderated version of such power:
Here is how health care is financed in Canada.

1- The state determines how much money is available for heath care from the budget of the year. Say $1.00 [billion] etc

2- The state then asks the various medical professionals for a price for say 50,000 broken legs to be repaired, 20,000 births, you name it. The statistics of the needs of the country are known from previous experience.

3- The medical professionals discuss between themselves how to divide the available money for the various procedures. They know that it takes 10 minutes to do this and two hours to do that.

4- They return to the state with a price list for each procedure.

5- The state then guarantees that every medical act will be paid according to the price list.

6- The medical professionals know that they will get paid immediately upon completion of services. The only paper to fill is a credit card slip of paper containing the identification number of the physician and the procedure with the agreed price.

7- That is it. No collection agency, no discussion with an insurance about the need to do an MRI etc.. Whatever is ordered by the doctor is executed. If a question arises, then it is the medical association that looks into the matter and decides. The association has the power to remove the license of the offending doctor.<<
In a follow up note, the same reader adds:
There is a social impact as well.   Since health care is free, when a doctor screw things up (yes it happens in Canada) fixing the problem is also free. Hence the patient does not develop the anger of paying his bills and losing his home for the mistake of somebody else.

Result: A Montreal friend orthopedic surgeon specializing in spine surgery told me that he pays $5,000 per year for malpractice insurance per year.

Compare that with the $250,000 for insurance of the average surgeon in Dallas, TX. The doctor must recover the insurance fee by charging more, and you end up in a vicious loop.

Fairness and justice makes life easier for everyone.

IPAB won't get our government into this enviable position, because private insurers will continue to pay more. But it's a step in the right direction. A "strong" public option in the ACA would be another step thither.

Some Democrats as well as Republicans, natch, are inveighing against anything that crimps doctors' sovereign right to charge whatever the distorted market will bear (an idiocy beyond what Kevin Drum can bear). The Times' Robert Pear reports:
WASHINGTON — Democrats and Republicans are joining to oppose one of the most important features of President Obama’s new deficit reduction plan, a powerful independent board that could make sweeping cuts in the growth of Medicare spending....
Representative Allyson Y. Schwartz, a Pennsylvania Democrat prominent on health care issues, said: “It’s our constitutional duty, as members of Congress, to take responsibility for Medicare and not turn decisions over to a board. Abdicating this responsibility, whether to insurance companies or to an unelected commission, undermines our ability to represent our constituents, including seniors and the disabled.”  
It is your constitutional responsibility, Ms. Schwartz, to offload via legislation a "responsibility" that Congress manifestly cannot handle. Which is precisely what the PPACA did.

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