Monday, November 16, 2009

When a government committee runs health care

Under the Democrats' plans, there will be a special unelected committee that will be tasked with cutting costs in government health-care spending. This commission will have vast powers to decide what spending should and should not be approved based on its cost effectiveness. They would have the ultimate authority and can only be overruled if Congress approves some other change that will cut just as much money. As the WSJ details, politics will now infuse every decision as powerful poiticians try to influence this supposedly neutral commission.
Yet if the goal really is political insulation, then the Medicare Commission is off to a bad start. To avoid a senior revolt, Finance Chairman Max Baucus decided to bar his creation from reducing benefits or raising the eligibility age, which meant that it could only cut costs by tightening Medicare price controls on doctors and hospitals. Doctors and hospitals, naturally, were furious.

So the Montana Democrat bowed and carved out exemptions for such providers, along with hospices and suppliers of medical equipment. Until 2019 the commission will thus only be allowed to attack Medicare Advantage, the program that gives 10 million seniors private insurance choices, and to raise premiums for Medicare prescription drug coverage, which is run by private contractors. Notice a political pattern?

But a decade from now, such limits are off—which also happens to be roughly the time when ObamaCare's spending explodes. The hard budget cap means there is only so much money to be divvied up for care, with no account for demographic changes, such as longer life spans, or for the increasing incidence of diabetes, heart disease and other chronic conditions.
Who can predict what medical innovations will be available a decade from now? And like most innovations, such treatments can be very expensive when they first appear.
Worse, it makes little room for medical innovations. The commission is mandated to go after "sources of excess cost growth," meaning treatments that are too expensive or whose coverage will boost spending. If researchers find a pricey treatment for Alzheimer's in 2020, that might be banned because it would add new costs and bust the global budget. Or it might decide that "Maybe you're better off not having the surgery, but taking the painkiller," as President Obama put it in June.
When most of health care spending will be provided by government plans, once a treatment is turned down by the Medicare Commission, will medical companies bother introducing it anyway? Will we ever get an opportunity to see how the new treatment works and for the cost to come down?

Created in 2003, we already have a similarly functioning committee now and so can get an idea of how this will work.
The Washington commission, called the Health Technology Assessment, is manned by 11 bureaucrats, including a chiropractor and a "naturopath" who focuses on alternative, er, remedies like herbs and massage therapy. They consider the clinical effectiveness but above all the cost of medical procedures and technologies. If they decide something isn't worth the money, then Olympia won't cover it for some 750,000 Medicaid patients, public employees and prisoners.

So far, the commission has banned knee arthroscopy for osteoarthritis, discography for chronic back pain, and implantable infusion pumps for pain not related to cancer. This year, it is targeting such frivolous luxuries as knee replacements, spinal cord stimulation, a specialized autism therapy and MRIs of the abdomen, pelvis or breasts for cancer. It will also rule on routine ultrasounds for pregnancy, which have a "high" efficacy but also a "high" cost.

Currently, the commission is pushing through the most restrictive payment policy in the nation for drug-eluting cardiac stents—simply because bare metal stents are cheaper, even as they result in worse outcomes. If a patient is wheeled into the operating room with chest pains in an emergency, doctors will first have to determine if he's covered by a state plan, then the diameter of his blood vessels and his diabetic condition to decide on the appropriate stent. If they don't, Washington will not reimburse them for "inappropriate care."
Such a committee will have a freezing effect on medical innovation. This should worry not only seniors, but everyone who expects to be a senior citizen one day. Once again, it is the unseen effects that will be so harmful. We'll never know about those new medical innovations that will never be made because so much of the choice is being taken out of the hands of individuals and turned over to a government committee.
It's possible this global budget could become an accounting fiction, like the automatic Medicare cuts Congress currently pretends it will impose on doctors. But health care's fiscal pressures will be even stronger than they are today if ObamaCare passes in anything like its current form. And that is when politicians will want this remote, impersonal and unaccountable central committee to do the inevitable dirty work of denying care.

The only way to take the politics out of health care is to give individuals more power to control medical dollars. And the first step should be not to create even more government spending commitments. The core problem with government-run health care is that it doesn't make decisions in the best interests of patients, but in the best interests of government.
But of course, the plan closest to that ideal, Medicare Advantage, is just the one with a big bulls-eye painted on it by the Democrats.