In conjunction with the Peterson Foundation’s Fiscal Summit today, various think tanks have released their deficit reduction proposals. The Center for American Progress plan includes an interesting sentence buried within it:
“Our plan also includes a failsafe mechanism that would ensure significant savings throughout the system. Our failsafe would be triggered if, starting in 2020, total health care expenditures—not just those in the public sector—grow at a rate faster than that of the economy itself. Should that happen, we would empower the Independent Payment Advisory Board—subject to the same congressional review process as exists currently in the health care law—to extend successful reforms in the public sector to all insurance plans offered in the health care exchanges, and then potentially to all health care plans, such that the target is met.”
As background, the health care law created the Independent Payment Advisory Board (IPAB) – an unelected, unaccountable board of 15 appointed bureaucrats – to make binding rulings on Medicare policy. But the IPAB was created to enforce a hard cap on total Medicare expenditures. While the CAP paper (by accident or design) doesn’t include details on this proposed failsafe, extending IPAB “targets” to the private sector sounds strikingly similar to a global cap on total health care spending – which could mean that individuals would be PROHIBITED from using THEIR OWN MONEY to purchase health care. This issue of global caps was one of the downfalls of the Clinton health care plan – yet CAP apparently wants to revive this mechanism to “reform” health care.
Many people would find this type of proposal – extending unelected bureaucrats’ reach well into the private sector – strikingly radical. But one person who doesn’t is CMS Administrator Donald Berwick. He’s written frequently – and admiringly – about imposing global caps on health care spending, which again could well prohibit individuals from spending their own money on health care:
“If I could wave a wand…Health care can and should find a route to both higher quality and lower cost—‘The budget is now capped.’” [i]
“We must have absolute caps on healthcare expenditures at some level in this country. So long as we continue to believe that the survival of our organizations depends on finding additional revenues, we will not reorient ourselves to the internal restructuring that is so crucial.”[ii]
“The third principle is that we need to control costs and the way to do that is probably not through price controls at the level of individual deeds or actions or resources, but rather thinking about population-based payment, the idea of controlling costs per capita, for a population. It’s sort of the same idea as establishing a budget for the population that can then be rationally spent, optimizing the use of resources. That will require an integrator, somebody that can be [a] steward of a population-based budget.”[iii]
“The integrator would be responsible for deploying resources to the population, or for specifying to others how resources should be deployed. Segmentation of the population, perhaps according to health status, level of support from family or others, and socioeconomic status, will facilitate efficient and equitable resource allocation.”[iv]
“If we could ever find the political nerve, we strongly suspect that financing and competitive dynamics such as the following, purveyed by governments and payers, would accelerate interest in the Triple Aim and progress toward it: global budget caps on health care spending for designated populations”[v]
In recent months, liberals have dismissed arguments about the IPAB rationing care; Paul Krugman argued last month that “we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money.” Some may find it bad enough that under Obamacare, a board of appointed officials will be charged with making arbitrary determinations about what types of care seniors will be able to obtain. But the unfortunate problem for Dr. Krugman – and for Democrats – is that they’re NOT just talking about what will be paid for with taxpayers’ money – now that CAP has proposed giving unaccountable bureaucrats free rein over ALL of the health care sector.
[i] “Take Two Policies and Call Me in the Morning” by Donald Berwick, presentation slides from speech to Healthcare Management Association and Massachusetts Hospital Association, October 22, 2008
[ii] “Seeking Systemness” by Donald Berwick, Healthcare Forum Journal March/April 1992, p. 28
[iv] “The Triple Aim: Care, Health, and Cost” by Donald Berwick, Thomas Nolan, and John Whittington, Health Affairs May/June 2008, p. 764
[v] “The Triple Aim: Care, Health, and Cost” by Donald Berwick, Thomas Nolan, and John Whittington, Health Affairs May/June 2008, pp. 767-78