Health Care

Orszag: This Looks Like a Job for MedPAC

by Tim Foley

categories: Medicare And Medicaid, Obama And Congress

Published July 18, 2009 @ 12:03AM PT

The kerfluffle over Congressional Budget Office Director Elmendorf’s comments about whether the health care bills in front of him would do enough to bend the curve of our overall trajectory of sky-rocketing costs may have been news to some, but it’s old hat to White House OMB Director Peter Orszag.  After all, it used to be him, as CBO Director, making the presentations and the charts showing how the alarming rise in overall health care costs was threatening our fiscal house.  As such, he took today to mention a proposal that would serve to dramatically cut costs both now and ongoing – changing the process to give the recommendations of the non-partisan Medicare Payment Advisory Committee real weight.

I’ve mentioned this White House proposal before.  MedPAC, a body that was created in a bipartisan fashion by the Gingrich House and the Clinton White House, issues two reports a year on ways to revise Medicare to make the system better and more cost-efficient.  As I wrote back when it was first proposed, “right now the reports are completely advisory. Meaning if they advise difficult choices to dramatically control costs and improve care – as they usually do – they can be easily ignored.”  Their most recent report was insightful, creative, and balanced with ideas that would both cut costs and improve quality.  But I also noted “none of them have, to date, survived resistance from the lobbyists of the various industries.”

Orszag, in a letter to Congressional leaders as well as a post on the OMB blog, takes the opportunity to point out, in essence, “Yo, I got your cost control right here”:

There are a number of steps that can be taken to bend the curve – health IT, investing in research into what works and what doesn’t, and changing incentives so that doctors and hospitals give you better care not just more care. But one of the most potent reforms is a change in the process of health care policymaking: empowering an independent, non-partisan body of doctors and other health experts to make recommendation about Medicare payment rates and other reforms.

In many ways, the current debate in Congress proves the point.  The strongest parts of the House bill’s cost-cutting measures are “safe” ideas, like cutting overpayment to Medicare Advantage, that MedPAC has been advocating years.  Much bolder ideas, like cutting reimbursement for physicians who self-refer on imaging scans, are in MedPAC’s recommendations, but didn’t make it into the batch of savings designed to pay for reform, despite being an easy if politically tenuous proposal.  So the White House would create a process whereby MedPAC’s ideas become more than just a report that sits on a shelf, gathering dust.  Like the base closing commissions, the President could choose to submit all of MedPAC’s recommendations as a package deal.  Congress would have 30 days to intervene, but they couldn’t pick and choose what proposals they’d like – they could only vote up or down on the whole package.  As Orszag diplomatically puts it, this “would free Congress from the burdens of dealing with highly technical issues such as Medicare reimbursement rates while rightly giving them, your representatives, a say in the matter. Moreover, this kind of body would enable the health care system to respond to a very dynamic market and technical landscape, making Medicare policy more responsive and effective in the future.”

As I’ve said before, it’s not that we don’t have great ideas to dramatically lower costs.  We just don’t have the political will to implement them.  If people really cared about Elmendorf’s statements and about bending the curve of health care costs, they would support the non-partisan MedPAC recommendations all the way.

But pardon me if I don’t hold my breath.

(Photo credit:  The National Academy of Sciences on Flickr.)