Dark Days for Obama's Health Care "Game-Changer"


President Obama told the Washington Post last week that he considered a powerful independent board advising on Medicare a key component of the health care plan he expects to sign this fall. Elsewhere, the administration has called a strong independent Medicare council a "gamechanger" with the potential to significantly lower the long term costs of health care. But according to the Congressional Budget Office (CBO), the proposal would save little money over the next ten years. Politico called the report "a serious blow." Is that right?

Responding to the CBO, which he used to head, current White House Budget Director Peter Orszag points out that the council was not designed to save much in the next ten years, anyway:

"The point of the proposal, however, was never to generate savings over the next decade. ... Instead, the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term ... in the terminology of our belt-and-suspenders approach to a fiscally responsible health reform, the IMAC is a game changer not a scoreable offset."

That last point seems intuitive, and important. An empowered IMAC (or MedPAC), as envisioned by the administration, is an advisory board of unknown doctors and economists, with responsibilities that haven't been codified, whose job is to make recommendations we haven't thought of yet. Scoring the fiscal benefit of the council (which already exists, but in a weaker form than Obama would like) is an exercise in fantastical thinking. It is the opposite of a "scoreable offset."

But that sword cuts both ways: We shouldn't trust the CBO to accurately predict the council's cost-saving potential, but we also shouldn't eat up any promises that the panacea to our health care crisis is to de-politicize our health care policy. The reason is simple: There is no way to de-politicize our health care policy.

Obama told the Post: "There have to be a series of modifications over the course of a series of years, and we have to take that out of politics." But health care is a multi-trillion industry with an ocean of special interests that will never leave politics. If MedPAC recommends a policy change that dramatically rations care for seniors to save costs, you can bet Congress is going to hear from the AARP. If it recommends a policy that cuts pay for doctors, then ditto the AMA. An IMAC program of quasi-oracle status would still be vulnerable to elections and future laws, so that stepping on powerful toes could ultimately get the program booted in another Congress. You can try to take public policy out of Washington, but you'll never take the Washington out of public policy.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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