Network News

X My Profile
View More Activity

Will the Medicare Commission survive Congress?

The easy dismissal of the Medicare Commission is that Congress will simply reject its recommendations, no matter how streamlined the process or wise the wonks. The template here is the Medicare Sustainable Growth Rate, which sought a growth rate that was much lower than the reality of Medicare, and prescribed sharp cuts to doctor's payments only to see the cuts overturned by Congress.

There's certainly a possibility that history could repeat itself with the recommendations of the Medicare Commission. But it's being given every chance to take a different course.

The architects of the Medicare Commission idea learned a couple of lessons from SGR. First, the underlying mechanism was too blunt. The choice was between deep cuts to doctor payments or ... nothing. With the Medicare Commission, the spending targets will be more realistic, but just as importantly, the choice will be between a package of reforms to the Medicare program and the insolvency of the federal government. It relies on changes, not cuts.

Moreover, if the Finance Committee and the relevant House committees (not the Congress as a whole, just the committees) don't like the reforms proposed by the commission, they have the option of substituting their reforms that hit the same spending target. There are, in other words, options. At that point, the bill is brought to the floor for an up-or-down vote. Debate is limited, the filibuster is short-circuited and extraneous amendments are not allowed.

It's possible, of course, that Congress will still reject the ideas. At that point, however, it's pretty much time to give up and go home. If there are no circumstances under which Congress will reform Medicare, there are no circumstances under which the federal government will not go bankrupt. It would be interesting to watch the jump in interest rates on Treasury bills the first time Congress rejects a Medicare Commission report, which will also be one of the first times that it really becomes clear that the federal government will not be able to honor its debts.

But Congress has made tough decisions before. The House, for instance, just voted to cut $500 billion from Medicare to reform the health-care system. The Senate is expected to cut a similar amount, and also create a new institution to make future cuts easier. Hard votes often fail, but they occasionally succeed.

As do institutions. "Imagine if the Congressional Budget Office analyzed the Congressional Budget Office," Peter Orszag said to me. "They'd say there was no way this would work. That it was a totally feckless institution. The director is chosen by the Congress. The director can be fired by the Congress. The budget is controlled by the Congress. And yet, CBO is effective. That's because Alice Rivlin and other directors gave it a reputation for independence that nobody could mess with."

The Medicare Commission will require something similar. Like the CBO, it will need strong leadership. Like the CBO, it will need to gain Congress' respect, if not its affection. And like the CBO, the opportunity it has is that it's necessary, and members of Congress may well come to understand that.

By Ezra Klein  |  November 16, 2009; 5:53 PM ET
Categories:  Health Reform  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Why does Third Way oppose the Stupak amendment?
Next: Tab dump

Comments


I think it's instructive to look at the Federal Reserve. No matter what people say, Bernanke is being influenced by the administration to keep interest rates at a level that helps satisfy short-term political objectives.

Posted by: RandomWalk1 | November 16, 2009 6:19 PM | Report abuse

Exactly as RamdomWalk1 said. It is quite easy to discredit Fed, but fact of the matter is Bernanke saved us. Before that Paul Volcker did the tough job.

Who are the good founding choices for Medicare Commission if Congress really includes that in the law? We all know how the founding members of an institution matters. Atul Gawande? Or some other strong Economist?

Meanwhile, Ezra's litmus test is dot on - watch the bond rate when Congress fails to honor Medicare Commission recommendations to cut Medicare payouts.

Posted by: umesh409 | November 16, 2009 6:48 PM | Report abuse

Reasonable post. A couple of thoughts:

"At that point, however, it's pretty much time to give up and go home. If there are no circumstances under which Congress will reform Medicare, there are no circumstances under which the federal government will not go bankrupt."

As long as you mean this, and by "give up and go home" you really mean a more market-oriented solution, that's good.

"But Congress has made tough decisions before. The House, for instance, just voted to cut $500 billion from Medicare to reform the health-care system"

Cutting $500 billion of future money that doesn't impact anyone for at least 5 years doesn't qualify. Making a decision with tangible, near-term impact does. You'd be hard-pressed to find an example that is as important and personal as access to health care.

""Imagine if the Congressional Budget Office analyzed the Congressional Budget Office," Peter Orszag said to me. "They'd say there was no way this would work."

Comparing CBO to health care reform is silly. CBO is a bunch of bean counters that have a limited visible impact on people's lives. They set numbers that are argued about in the paper. The Federal Reserve is a significantly more pertinent example than CBO, and as I have argued in the past, that's still a far cry from a Fed Health in terms of political pressures. Again, this is uncharted territory from a political context. The examples in the post aren't great ones.

Posted by: wisewon | November 16, 2009 6:53 PM | Report abuse

"Like the CBO, it will need strong leadership. Like the CBO, it will need to gain Congress' respect, if not its affection. And like the CBO, the opportunity it has is that it's necessary, and members of Congress may well come to understand that."

One other thought-- CBO ONLY has to worry about Congress. For a MedPAC, Congress will be the least of its worries. Changing medical practice, hospital organizational structures, nurse vs. physician work scope changes, comparative effectiveness recommendations, etc.-- this is SIGNIFICANTLY more complex than budget projections. The actual science is never 100% straightforward, and the stakeholders are fully invested in the status quo. And they happen to be smart, well-funded and politically connected. Orszag would get chewed up and spit out-- as would all other academic types. A Dennis Cortese/George Halvorson may have a chance-- but there a very, very few of those that would want to put themselves in the middle of this.

This ain't something esoteric like monetary policy or budget projections. This is health care. Smart folks have been working on cost control a lot longer than people in Washington DC. We saw actual success in the 90's with HMOs. Its a lot more realistic to say we should try that again than assume all of the Orszag "ifs, ands or buts" that you need to believe for MedPac to be the solution of the future.

Posted by: wisewon | November 16, 2009 7:06 PM | Report abuse

The new recommendations on mammogram screenings should make for an interesting test. A big swatch of the public isn't going to like it. We've been conditioned that MORE prevention is always better.

40 years after Congress set up the Ponzi scheme known as Medicare, the chickens are coming home to roost.

Posted by: besnyder1 | November 16, 2009 8:36 PM | Report abuse

I don't see how this commission is going to get through Congress. Nancy Pelosi is against it. All the usual suspects in the health care industry are against it.

Even if the Super MedPac is established it's going to take decades to get buy-in from the public and providers. I'm not even convinced it's possible. Look at what's going on with NICE: It is literally proving harder to do than establishing NHS in the first place.

Posted by: bmull | November 16, 2009 10:20 PM | Report abuse

Ezra,

I'd like to refer you to Uwe E Reinhardt's argument, which is that because our GDP will be so much larger we will be able to afford Medicare decades into the future even if we cannot get spending under control:

http://economix.blogs.nytimes.com/2008/12/19/us-health-care-costs-part-v-can-americans-afford-medicare/

Of course, politicians would need to raise taxes for this, which is political suicide in today's political climate. But I have hope that this attitude will change over the next decade or so.

Posted by: AviN1 | November 16, 2009 11:40 PM | Report abuse

Once again- how is it possible for this congress to write a law that prevents future congresses from filibustering parts of the bill? If its this easy to filibuster protect legislation then why don't we see this more often?

Posted by: spotatl | November 17, 2009 9:15 AM | Report abuse

If there are no circumstances under which Congress will reform Medicare, there are no circumstances under which the federal government will not go bankrupt"

I think thats what lots of us fear. That in our political system there is no incentive for any individual member of congress to back cuts to healthcare of the voters and both parties will take the immediate political gain of attacking their opponents. When just 15% of our population is covered the issues is already politically untouchable but liberals want to ignore that and greatly expand coverage? I think this is a perfect example where you should show that our politicial system is capable of making meaningful adjustments to government run healthcare and THEN worry about expanding coverage.

Posted by: spotatl | November 17, 2009 9:18 AM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company