Wednesday, May 30, 2012

Peter Orszag Wants Bureaucrats, NOT Patients, in Charge

Writing in his weekly Bloomberg column this morning, former Obama Administration Budget Director Peter Orszag criticizes Republican efforts to cap spending as a way to reverse skyrocketing federal budget deficits.  In so doing, he cites one element of the 1997 Balanced Budget Act, signed by President Clinton, that has vexed the health sector for years:

A good illustration of how to do future deficit reduction the wrong way is the Sustainable Growth Rate formula for Medicare, which was enacted in 1997 to constrain payments to doctors.  The SGR places a broad cap on payments without addressing any of the reasons those payments are increasing.  If the cap is exceeded, payments are supposed to be simply cut across the board.  It’s much easier to slap a cap on spending than to get into the weeds of making policy changes to constrain that spending.  It generally doesn’t work, though.

Some may view Orszag’s criticisms of the sustainable growth rate as a bit rich, as Orszag himself was one of the prime architects of the effort to create a new “super SGR” as part of Obamacare.  Thanks to Orszag, Obamacare established the Independent Payment Advisory Board, a board of 15 unelected and unaccountable bureaucrats empowered to make binding rulings reducing Medicare spending.  And while the SGR applies only to Medicare physician payments, IPAB will enforce a new spending cap that will apply to ALL Medicare spending.

Orszag goes on to criticize the House Republican budget for implementing a premium support system for Medicare – even though premium support payments will rise by the same level as Medicare spending under Obamacare.  Why the different stance?  Because in Orszag’s view, the Republican plan doesn’t “get into the weeds of making policy changes to constrain” spending; in his view, policy makers must “make specific adjustments in the health care payment system to constrain costs.”

In other words, Orszag wants policy makers – read: “government bureaucrats” – to micro-manage the health care system, because he thinks that will control costs.  Giving patients the tools to control their own health care is a concept foreign to Orszag, and one he effectively criticizes in the article.  It’s yet more evidence of the dividing line between two philosophies of government that evidenced itself during the debate over Obamacare – one side wants patients in charge, while the other side is on the side of government.