Letter: Bureaucratic Rationing of Health Care?
“It seems that about 90 percent of England’s government hospitals are now rationing care… Could it happen here? You bet it could,” says Woodbury resident Thomas St. Martin.
That, it seems, is emerging as a question du jour, a question pushed to the forefront of the debate sparked by the impending implementation of various provisions of the Patient Protection and Affordable Care Act (PPACA/aka ObamaCare), chiefly those provisions that create a fifteen member unelected board called the Independent Payment Advisory Board (IPAB).
The avowed purpose of the IPAB (created by secs. 3403 and 10320 of the PPACA) is to achieve specified savings in the Medicare program and to depoliticize Medicare policy-making.
Although it ostensibly prohibits IPAB from “rationing” health care, the language and overall flavor of the PPACA suggests otherwise. Consequently, many medical professionals, politicians, bioethicists and members of the general public have concluded that IPAB is a Trojan Horse filled with folks who think that bureaucratic allocation of medical resources (Medicare specifically) is essential to restraining the cost of American health care.
But before discussing the specifics of the controversy swirling around ObamaCare and the IPAB, one must first probe the meaning of the term “rationing,” especially as it is appears in the context of the current health care debate. For most people, me included, rationing by definition involves a resource allocation/distribution system imposed by a central authority, typically a governmental agency. By this definition, then, health care rationing would be analogous to the World War II rationing of gasoline, rubber, sugar and the like.
Accordingly, rationing differs from the way in which economic resources are allocated in free market regime, that is in a “system” in which individuals or groups of individuals voluntarily make self-interested decisions to buy or sell, to produce or consume. And an arrangement which operates with minimal involvement on the part of a central or top down authority.
Many, of course, will quarrel with this take on the matter, claiming, among other things, that health insurance companies, HMO’s and the like now “ration” health care, thus erasing any meaningful distinction between the current private health care market system (so-called) and a government run system of the type imposed by ObamaCare (or, eventually, probably by a government run single payer system).
To elaborate, there are those (leftists mostly) who claim that health care is already “rationed.” Therefore, no big deal if the government decides to do something that is already being done. This view, arguably, does have some merit. Health care decisions are currently “managed” to some extent by an outside entity. Consider “managed care,” a polity which has been and still is touted as a way of containing the cost of health care, mainly for the purpose of making health care accessible to persons who might otherwise be “priced” out of the health care market.
But even if one concedes that health care is now rationed (or “managed”) to some extent, it does not follow that the controversy surrounding PPACA and IPAB is moot. There is, I think, a significant difference between the “rationing” imposed on an essentially private, conditionally free market and rationing—whether directly or indirectly imposed—by a powerful, coercive governmental entity.
With that said, we must, then, return to a discussion of IPAB, focusing on the extent to which it may eventually control/allocate the nation’s health care resources. Predictably, views as to the purported dangers of health care rationing and the IPAB’s role in the matter are discounted, even summarily dismissed by many, usually by leftist ideologues. As one of the Patch “regulars,” a hyper-leftist put it, the threat of rationing is “…a scurrilous lie fomented by the [political] right…” Or the PolitiFact “finding” that, during the late presidential campaign, Romney exaggerated (lied?) when he said that the IPAB “….can ultimately tell people what treatments they are going to receive…”
And, in a more neutral vein, there is a recent Congressional Budget Office (CBO) claim that IPAB might have little to do in any case, a reference to the fact that its recommendations will kick in only if Medicare spending growth exceeds pre-determined targets (an eventually which the CBO does not expect to come about during the next five years and perhaps beyond). Moreover, Uwe Reinhardt, a renowned health policy expert, has said that IPAB’s German (“we have our ways”) counterpart has worked successfully and in a “civilized” manner.
Scurrilous lies, PolitiFacts, health policy experts and the CBO notwithstanding, I think that the IPAB is a loaded cannon waiting to be fired. Why?
First, because as a prominent Stanford University physician (Scott Atlas MD) put it “…the reality is that IPAB represents an unprecedented shift of power from individual [patients] to a centralized authority, a controlling board of political appointees that is virtually unaccountable…” In this regard, it is important to remember that any recommendations made by IPAB become mandatory unless overruled by a Congressional super-majority.
Second, because IPAB itself—ObamaCare language notwithstanding—will be able to define rationing, a notably malleable term, to justify policies that may well go beyond the original intent of the PPACA. In addition, IPAB, like any “good” bureaucracy will probably attempt to expand its powers. In fact, former Senator and former HHS secretary Tom Daschle has already suggested that the Board’s authority should be extended to cover all forms of health insurance, not just Medicare. Interestingly also, the PPACA stipulates that Congress cannot consider “abolishing” IPAB at any point prior to 2017.
By that time IPAB and its attendant bevy of bureaucrats will be solidly entrenched, its powers secure. How often has Congress or any legislative body abolished or significantly reined in an established bureaucracy? The answer? Almost never.
Third, IPAB was established for the express purpose of reducing the cost of Medicare, whether by the imposition of price controls, reduction of “waste,” etc. Although reduction of waste is, for example, a worthy goal, we must recognize that waste is a highly elastic term, a term which can be stretched to mean anything from improvements in routine medical procedures to the rationing/withholding of medical treatments. Is it “wasteful” to replace the hips or knees of an 80-year-old patient?
Depending on the patient’s ability to tolerate surgical procedures it might be medically imprudent to do so. But it is an easy step from medical prudence to an expansive utilitarian policy, a policy that involves the routine withholding of “wasteful” medical treatments based primarily (or even solely) on economic cost benefit criteria.
As for price controls, it is difficult to impose top down limits on health care expenditures without sacrificing the QUALITY of the services provided.
Supporters of the IPAB concept will, of course, argue that we can control prices without diminishing quality, a view which I think to be either naïve or duplicitous. Congressman Pete Stark was correct, I think, when he recently said that “…the IPAB sets Medicare up for unsustainable cuts that will endanger the health of patients…”
Fourth, IPAB could well become a plaything for powerful special interest groups which, among other things, might well favor rationing of Medicare services. More generally, powerful (or potentially powerful) regulators often develop symbiotic relationships with whomever they are purported to regulate (sort of like bees and flowers).
Thus, it often becomes unclear as to who is “regulating” whom. Worse, however, the IPAB will be permitted to “…accept, use and dispose of gifts or donations of services and property…” What better invitation to any group that seeks to co-opt the Board and its policies?
Fifth, IPAB, as previously noted, will—acting through the Federal HHS——have power to effectively cut Medicare reimbursements, first to physicians and others beginning in 2015 and to hospitals beginning in 2020. Specifically, federal government actuaries will compare Medicare spending growth against pre-determined five-year targets, thereby triggering cuts in Medicare reimbursements to health care providers.
Whether anything of this sort will actually happen during the next five years and beyond is an open question. As I have indicated, the CBO does not think that any such restraining action will be required for quite a few years to come. (However, apart from IPAB and PPACA, there is the possibility of a 31 percent cut in 2013. So far as I know, a series of “doc fixes,” has allowed Congress to dodge cuts which by law should have been made each year for several years past. The result? An ever mounting problem: an increasingly uncomfortable situation, the result of a not unsurprising lack of political will to face up to the rising costs of Medicare.)
Yet, IPAB and other cost containment schemes notwithstanding, is it realistic to expect any substantial reductions in Medicare spending during the next twenty years or so? There is, of course, the usual political palaver about bending the Medicare cost curve downward by eliminating “waste” and fraud, by changing economic incentives, and/or by standardizing and digitizing medical records (the latter effort to be inaugurated via a generous appropriation in the 2009 Stimulus bill).
All such brave talk aside, it seems that Medicare costs (and the costs of other health care programs as well) are about to collide with an irresistible force, namely the impending wave of aging Baby Boomers. This fact, unfortunately is one that many people (including most of those who routinely post their opinions on various Patch threads) are reluctant to talk about. But the demographic reality won’t go away, can’t be ignored. So, then, what are we to do?
Tax the Baby Boomers themselves and/or tax those in the younger but smaller demographic cohorts? In that regard, the PPACA has already done something of the sort: doesn’t its wide-ranging health insurance mandate effectively shift some part of the health care burden from the old to the young?
Assume that the nation’s economic base will be robust enough to adequately support the health care needs of an aging population, thus defusing the rationing issue? Recent experience, unfortunately, suggests that this may be a vain hope.
Ration health care? Quite likely. Which brings me back to the point at which I started. In closing, I ask you to consider this. Donald Berwick, the former U.S. Medicare/Medicaid administrator has said that “….the decision is not whether or not we will ration care. The decision is whether we will ration care with our eyes open…” (N.B. Full disclosure. This quote may or may not be indicative of Berwick’s considered views regarding health care rationing. In fairness, it must be noted that he has said on other occasions that he does not favor “rationing” of health care. Yet, he has, nonetheless, praised England’s socialized health care system, presumably including a favorable view of that country’s National Institute of Health and Clinical Excellence, acronym N.I.C.E.)
In any event, it is reasonable to think that the collision between the rising and demographically driven costs of health care and the need to control spending will lead many—especially those of a utilitarian bent—to see rationing as the “solution” to an intractable problem.
And since it was crafted with the N.I.C.E model in the back of some minds, IPAB could easily become the focus of a nationwide health care rationing regime. Which is to say that it could morph into something similar to N.I.C.E. So far as I have been able to determine, N.I.C.E has become a full throated rationing entity, restraining England’s health care costs by limiting available treatments, treatments for the elderly especially.
It seems that about 90 percent of England’s government hospitals are now rationing care, adopting N.I.C.E’s long list of cost control recommendations, recommendations which include denying access to certain life prolonging drugs, cancer drugs, cataract surgery, orthopedic procedures such as hip replacements, etc.
Could it happen here? You bet it could!
—Thomas St Martin, Woodbury