Health Commission Plan Wins Some, Angers Others

The problem with putting together a big proposal – like overhauling the nation’s entire health care system – with lots of moving parts and many different interests to please, is that every time you satisfy one important constituency, you upset another.

A case in point: President Obama’s plan to create an independent commission to force Congress to vote on pay increases or cuts to doctors, hospitals and other providers in the Medicare program.

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Administration officials say such a commission would be a strong start toward starting to control health care costs, despite a less-then-enthusiastic review from the Congressional Budget Office over the weekend. It would, wrote White House Budget Director Peter Orszag, “represent a critical step forward in creating a health care system that rewards quality, restrains unnecessary costs, and provides better care to more Americans.”

In fact, such a commission already exists. It’s called the Medicare Payment Advisory Commission, or MedPAC. Every year it sends Congress two reports; one recommending ways to improve the functioning of the vast program for the 45 million elderly and disabled Americans it serves, and a second recommending payment rates for hospitals, doctors, nursing homes and other health care providers.

Annual inflation increases are written into Medicare laws. But, says former MedPAC member Robert Reischauer, “sometimes given what inflation is doing, what market conditions are like, and what the demands on the federal budget are, those may be inappropriate, and what MedPAC does is present an alternative set of recommendations, which Congress can review and act on.”

Emphasis on the “can.” Congress routinely ignores MedPAC’s recommendations, particularly when they call for cuts in payments to doctors, hospitals and other providers.

Sen. Jay Rockefeller, a Democrat from West Virginia, was one of the first to propose giving the commission more power, if only to protect lawmakers from their worst instincts.

“This is much too complicated for congressmen, being lobbied by lobbyists, who make a fortune to get more of a certain product out of a congressman, (and) often succeed. And that is not public policy in health care in a smart way,” says Rockefeller, who has been watching the process as a member of the Senate Finance Committee for more than two decades.

So far, the fiscally conservative Democrats in the House known as the “blue dogs” have been warm to the idea of a commission with the power to put together a package of Medicare payment changes, then require Congress to vote up or down, with no amendments.

But what warms the blue dogs’ hearts is sending chills through some groups that have already endorsed the House bill, particularly health care provider groups like the American Hospital Association.

Adding such a commission to the pending House health overhaul bill “would have real problems for us,” said Rick Pollack of the AHA. Hospital groups have already pledged to give up more than $150 billion in Medicare payments over the next decade to help pay for the bill.

Pollack is afraid the commission – which he says is considered in the House as a way to “bring the blue dogs on board,” would actually “jeopardize” the total that has been pledged, presumably by recommending even deeper cuts in payments.

There’s a separate problem as well, says former MedPAC member Reischauer. Currently the panel works well precisely because it does not have much real power. If it did, he says, things would likely change.

“If it were given real bullets, the individuals who would make it onto MedPAC would be a very different class of people, and they would take their jobs much more as representing the hospitals; representing the physicians; representing the home health agencies,” he said. “And they would fight tooth and nail against cuts they perceive to be too deep.”

Adding to the confusion is the fact that over the weekend, the Congressional Budget Office cited Reischauer’s point as one reason why the administration’s proposal might not save very much money. That’s likely to disappoint the blue dogs, but relieve health care provider groups. But the CBO also said that with some minor changes, an independent commission could well produce significant savings over the long term by forcing reductions in Medicare spending. That could reverse the emotions of the various interested parties.