Mike Kueber's Blog

April 22, 2011

Krugman, IPAB, and doctors

Yesterday I blogged about health-care rationing, price-controls, and IPAB.  Today NY Times columnist Paul Krugman wrote about the same subject.    Not surprisingly, we have a different perspective.   What did surprise me was that instead of charging that opponents of IPAB are engaging in scare tactics by referring to rationing, Krugman seems to concede that IPAB is about rationing:

  • “Before you start yelling about ‘rationing’ and ‘death panels,’ bear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money. And the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness. And the point is that choices must be made; one way or another, government spending on health care must be limited.”

I agree with Krugman that the government is entitled deny treatment that is too costly, but that is rationing .  I am confused, however, by Krugman’s insistence that the “almost sacred” doctor-patient relationship is somehow greater than a vendor-consumer relationship, while at the same time Krugman acknowledges that we can’t afford “the blank-check approach”:

  • “We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.”

Later in his column, Krugman returns to characterizing doctors as having higher standards than the average professional and being heroic.  I think Krugman is guilty of depicting doctors according to whatever furthers his political arguments.  That’s like mixing metaphors when he does it in the same column.

April 21, 2011

Health-care rationing, price controls, and IPAB

This morning, I visited my orthopedic doctor to receive the first of five weekly injections of hyalgan that are intended to improve my arthritic knee.  I’ve tried glucosamine chondroitin, but the functioning of my knee continues to deteriorate. 

After receiving the injection, I stopped at HEB to buy some groceries and noticed an 80-year-old guy slowly walking to the store.  Although I feel slight discomfort in my arthritic knee when I walk, I can still move at a normal pace and thus walked by the old guy like he was standing still. 

The old guy reminded me of the limited functionality that will be afflicting me in a few years.  My conservative 62-year-old friend Kevin has an arthritic knee a little worse than mine, and he is considering a knee replacement.  His doctor has warned him, though, to make the decision in the next couple years while he still has USAA’s health insurance for retirees because his ability to have the surgery done under Medicare after he become 65-years old is not assured.

I thought Kevin’s doctor might be “crying wolf,” but an article in the NY Times yesterday reported that the Obama administration is attempting the expand the power of the 15-member Independent Payment Advisory Board (IPAB), which was created by ObamaCare to reduce the rate of growth in the cost of Medicare. 

IPAB replaces the current Medicare Payment Advisory Commission (MedPAC), which makes recommendations (often regarding reimbursement rates) that Congress is free to accept, but usually ignores.  By contrast, IPAB recommendations will automatically become effective unless Congress overrules the recommendations. 

Currently, IPAB is specifically prohibited from making any recommendation to ration health care, and although President Obama didn’t mention what additional powers he wanted for IPAB, Republicans and some Democrats have decided not only against expanding the powers of IPAB, but in favor of eliminating IPAB.  They claim that IPAB “would usurp Congressional spending power over one of the government’s most important and expensive social programs.”

GOP budget guru Paul Ryan led the way by demagoguing the issue, calling it “a rationing board” and declaring that the board would “impose more price controls and more limitations on providers, which will end up cutting services to seniors.”  Texas Senator John Cornyn more accurately said the president’s proposal “punts difficult decisions on health spending to an unelected, unaccountable board of bureaucrats.”

But the Republicans are not acting alone.  Three prominent Democrats have weighed-in:

  • Representative Allyson Y. Schwartz, a Pennsylvania Democrat prominent on health care issues, said: “It’s our constitutional duty, as members of Congress, to take responsibility for Medicare and not turn decisions over to a board. Abdicating this responsibility, whether to insurance companies or to an unelected commission, undermines our ability to represent our constituents, including seniors and the disabled.”
  • Representative Pete Stark, a California Democrat on the Way & Means Subcommittee on Health, said: “Why have legislators?” He suggested that expanding the power of the board could be as bad as giving vouchers to Medicare beneficiaries to buy private insurance. “In theory at least, you could set the vouchers at an adequate level.  But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care.”
  • Nevada Representative Shelley Berkley said she wanted to repeal the Medicare board. “I have great faith that this administration can put together a strong, independent and knowledgeable board,”  but she said she had less confidence in future administrations.

Despite Paul Ryan’s protestations about rationing, the main concern, as noted by Representative Stark,  is that the Board will reduce the reimbursement rates to medical providers to unacceptable levels.  Although that would not be rationing, it would be a typical liberal response that does nothing to solve the underlying problem of risings costs.  Price controls don’t work.

The other concern, as articulated by Senator Cornyn, is that IPAB implies that, because our elected officials are incapable of making tough decisions, Americans are better served by having those decisions made by an unelected bureaucracy appointed by the president.  That may be President Obama’s vision of a new and improved America, but it isn’t mine.  To paraphrase Wm. F. Buckley, I would would rather be governed by the first 500 names in the San Antonio phone book than by 500 wise men selected by Barack Obama.