Tempers flared this week in Washington’s sweltering July heat over the looming government default and the hot debates over one of the scariest parts of ObamaCare — the powerful, unelected, 15-member Medicare payment board.
House Budget Committee Chairman Paul Ryan asked Health Secretary Kathleen Sebelius to testify on Tuesday about the Independent Payment Advisory Board, and he challenged her to explain how doctors and hospitals will be able to provide services if Medicare payments don’t even cover their costs. Under ObamaCare, Medicare is on track to pay doctors less than a third of what private health insurers pay. The IPAB could make even deeper cuts.
Sec. Sebelius did everything she could to downplay the dreaded IPAB and its powers, insisting it is only a “stopgap” and won’t be needed if Congress does its job in cutting Medicare payments.
(I offer, as Exhibit A, the current budget battles in Washington as a predictor of whether or not Congress could get that done…)
Sec. Sebelius was literally in the hot seat as she testified in the hearing room that easily reached 90 degrees. Even the air conditioning system couldn’t take it! She offered utopian promises about the incredible savings that will come from government-directed and regulated programs that will create efficiency and cost savings. And she worked hard to deflect attention from IPAB with inaccurate charges about the Ryan Medicare plan.
That’s not a good idea to do with Ryan sitting right there, defending and explaining better than anyone on the planet the need for competition, choice, and modernization of Medicare’s financing.
Second Budget Committee Hearing: On Wednesday, at another Budget Committee hearing, Rep. Tom Price (R-GA), a physician, asked chief Medicare actuary Rick Foster what the impact would be of deeper cuts in payments for Medicare services.
“We’d like not to find out,” Foster replied, stressing that “the potential access problems could be very serious.”
The health overhaul law calls for cuts in payments to Medicare providers that will mean they fall below current payment rates for Medicaid. “We see with the Medicaid program, of course, in some states the payment rates — particularly for physicians — are quite low and the access to care is quite low,” Foster said.
Under current law, Foster predicts many Medicare providers will go bankrupt. He says more than 40% of them eventually would end up “shifting to negative profit margins” — losing money — and will either go out of business or stop seeing Medicare patients altogether.
And the IPAB will be charged with cutting payments even further than ObamaCare does to reach ever-declining statutory targets. Unless Congress can muster super-majority votes to come up with its own cuts to reach the same targets, the dictates of these unelected technocrats will carry the force of law. The IPAB will be sitting at the controls in Washington making spending decisions that will directly impact doctors and patients.
Our testimony: I testified before the Budget committee the first day and warned that these unelected IPAB members will ultimately determine policies for spending hundreds of billions of dollars, impacting care for tens of millions of seniors, with no judicial, administrative, or, realistically, congressional intervention. This challenges the very principles of representative democracy and consent of the governed. Here is a link to my full testimony and five minute summary.
My testimony followed that of Doug Holtz-Eakin, former CBO director and current president of the American Action Forum, who said: “IPAB is fatally flawed, structured to punish innovative health care providers and threaten seniors’ access to care…It continues Washington’s obsession with price-fixing in Medicare’s separate silos rather than changing the incentives that have led to rampant overspending, fraud, and uneven care quality.”
Georgetown University Prof. Judith Feder was the third witness, cheering the health law and the IPAB and calling for Congress to expand its powers to direct ALL health care payments.
Feder stood alone in her enthusiastic defense of IPAB and later indicated she wants to serve on the board.
Second IPAB hearing: The Energy and Commerce Health Subcommittee, chaired by Rep. Joe Pitts (R-PA), held a hearing Wednesday, also inviting Sec. Sebelius to the witness chair.
She continued to downplay IPAB and insist that the health law will do what never has been done before: Regulate the health sector into efficiency. And she continued to deflect the focus on IPAB by mischaracterizing the Ryan plan.
It is astonishing that she has the gall to do that when she is presiding over ObamaCare, which takes $575 billion out of Medicare to create two shockingly expensive new entitlement programs and creates this despised, all-powerful IPAB that will quickly dry up access to care for seniors.
There is bi-partisan opposition to IPAB: Rep. Frank Pallone (D-NJ), the top Democrat on the Energy and Commerce Health Subcommittee, said on Wednesday he has no interest in defending the board. “I’ve never supported it, and I would certainly be in favor of abolishing it,” he said.
IPAB stands for everything that is wrong with ObamaCare — taking power away from doctors and patients and putting it in the hands of elite experts who have virtually no accountability to voters.
I believe that IPAB is ripe for repeal. “Many Democrats agree with Republicans that IPAB should be repealed,” Rep. Pitts said. “I hope that we can come together across the aisle and stop this unaccountable and possibly unconstitutional board from taking power away from the people’s representatives.”
Medicaid should be the target: After it does that, Congress could focus on fixing the worst health program in the country — Medicaid.
And that was the subject of another health hearing this week — by the Senate Finance Committee on Thursday in Salt Lake City, Utah.
Sen. Orrin Hatch (R-UT) wanted to hold the hearing in Salt Lake where the nation’s governors were meeting so they could testify. “The more that one looks at this program, the more clear it is that this program cries out for fundamental reform,” Sen. Hatch said.
“Medicaid is failing patients and is a target for waste, fraud, and abuse, not because the states are doing a bad job, but because Washington’s bureaucracy has tied states’ hands, preventing them from making meaningful changes and reforms that make sense at a local level.
“Solutions for sustainable Medicaid reform will come from the states — not just Washington. My goal is to empower the states to design and implement innovative Medicaid solutions that work for states,” Sen. Hatch said.
How right he is. I also prepared testimony for the Senate Finance Committee hearing.
Back in Las Vegas: And now I am in Las Vegas to speak at the FreedomFest conference here, overlooking the Eiffel Tower out my window and where I attended a Bastille Day party at the Paris Hotel last night. It’s a three-day conference in celebration of founding principles of liberty.
This is my second trip to Las Vegas in a week. I was here last weekend to attend a board meeting of the Association of Private Enterprise Education, a terrific organization of economists and academics who are leading educators about the genius of markets and competition. Even in 100º Las Vegas, these conversations with the APEE board and the FreedomFest patriots are a refreshing break from Washington!
CLIP OF THE WEEK
Grace-Marie Turner on IPAB
In this clip, Grace-Marie Turner testifies before the House Budget committee on “Medicare’s Future: An Examination of the Independent Payment Advisory Board.”
Watch now >>
GALEN IN THE NEWS
Medicare’s Future: An Examination of the Independent Payment Advisory Board
Testimony before the House Budget Committee
Galen Institute, 07/12/11
Turner provides an overview of how the IPAB will work, the controversy surrounding the board’s powers, and explores some of the ideas being discussed as alternative solutions, including widening the baseline for the spending cuts, requiring an evaluation of the overall impact of the payment reductions, and limiting and redirecting IPAB’s powers. Turner concludes that there is a better way: We have a working model in the Medicare Part D program, in which private companies offer prescription drug benefits to seniors and compete on benefit design and price, and which is coming in significantly below projected costs.
Read More »
U.S. Senate Finance Committee Field Hearing: “Perspectives on Medicaid from Select Governors”
Submission for the Record
Galen Institute, 07/14/11
In testimony submitted for the Committee record, Grace-Marie Turner argues that we need — in Medicare, in the private sector, and in Medicaid — more flexibility, more transparency, and better incentives to provide affordable, quality care. The states can be the power centers in charting a new path to redesign their Medicaid programs to provide better services at lower costs. Governors need greater flexibility in running their Medicaid programs through block grants, global waivers, and other programs to give them more control over spending. Change is not only inevitable but essential. The question is whether or not the political leaders closest to the people will be able to make finely tuned changes or whether the program will remain rigid and driven by ever more inflexible rules from Washington.
Read More »
How the Debt Tussle Can Help Move Toward a Flat Tax
Thomas Miller, The American, 07/12/11
Ballots, Not Judges, Will Decide This
Thomas P. Miller, The Wall Street Journal, 07/11/11
Living in a Fiscal Fantasy World
Joseph Antos, The American Square, 07/12/11
Who am I to decide how my own health care should be handled?
Chris Jacobs, The Daily Caller, 07/09/11
Private exchanges offer alternative
Sarah Kliff, Politico, 07/11/11
Fresh doubt cast on Obama’s health care story
Byron York, The Examiner, 07/11/11
Rising Health Care Curve Won’t Bend, Even for Obama
Merrill Goozner, The Fiscal Times, 07/13/11
Taxes Upon Taxes Upon . . .
The Wall Street Journal, 07/11/11
Small Group Health Insurance in 2010: A Comprehensive Survey of Premiums, Product Choices, and Benefits
America’s Health Insurance Plans, 07/11
MEDICARE AND MEDICAID
New Insurance Models and the Independent Payment Advisory Board
Thomas P. Miller, Aspen Institute’s Health Stewardship Project symposium on “Next Steps in Health Reform”, 07/11/11
Triggering a Policy Response to the Medicare Funding Warning
Joseph Antos, Testimony before the House Committee on Oversight and Government Reform, 07/12/11
Why Medicare Patients See the Doctor Too Much
Merrill Matthews and Mark Litow, The Wall Street Journal, 07/11/11
The Economics of Financing Medicare
Katherine Baicker, Ph.D., and Michael E. Chernew, Ph.D., The New England Journal of Medicine, 07/13/11
The Public’s Views about Medicare and the Budget Deficit
Robert J. Blendon, Sc.D., and John M. Benson, M.A., The New England Journal of Medicine, 07/13/11
IPAB: The Controversial Consequences for Medicare and Seniors
Scott Gottlieb, Testimony before the House Committee on Energy and Commerce, 07/13/11
Repeal and Replace IPAB
Paul Howard and Douglas Holtz-Eakin, Politico, 07/12/11
Follow the State’s Lead to Better Medicaid
Sally C. Pipes, Forbes.com, 07/13/11
Will Washington Find the Cure for Cancer?
Kenneth C. Frazier, The Wall Street Journal, 07/13/11
July 14-16, 2011
Las Vegas, NV
Grace-Marie Turner will participate in a panel discussion on “Who Cares About ObamaCare? Healthy Alternatives for You and Your Business,” at 4:00pm on Friday, July 15.
States Moving Away from Government-Run Health Care
The Heritage Foundation Event
Monday, July 18, 2011
2:00pm- 3:30 pm
Grace-Marie Turner on The Small Business Advocate
Nationally Syndicated Radio Broadcast
Wednesday, July 20, 2011
Mobile Health: Innovations in Care & the Spectrum Challenge
Institute for Policy Innovation Event
Tuesday, July 26, 2011
10:00am – 11:30am
State of Health: Seizing Opportunities, Achieving Results
Colorado Health Foundation Symposium
July 27-29, 2011
Grace-Marie Turner will participate in an interactive debate on repealing PPACA at 7:30pm on Wednesday, July 27.