Single Payer’s Road to Rationing

The reintroduction of Democrats’ single-payer legislation has some families contemplating what total government control of the health-care sector would mean for them. Contrary to the rhetoric coming from liberals, some of the families most affected by a single-payer system want nothing to do with this brave new health care world.

As this father realizes, giving bureaucrats the power to deny access to health care could have devastating consequences for some of the most vulnerable Americans.

Determining the ‘Appropriate’ Use of Medical Resources

To summarize the Twitter thread: The father in question has a 12-year-old son with a rare and severe heart condition. Last week, the son received an implantable cardioverter defibrillator to help control cardiac function.

But because the defibrillator is expensive and cardiologists were implanting the device “off-label”—the device isn’t formally approved for use in children, because few children need such a device in the first place—the father feared that, under a single-payer system, future children in his son’s situation wouldn’t get access to the defibrillator needed to keep them alive.

The father has reason to worry. He cited a 2009 article written by Zeke Emanuel—brother of Rahm, and an advisor in the Obama administration during the debate on Obamacare—which included the following chart:

The chart illustrates the “age-based priority for receiving scarce medical interventions under the complete lives system”—the topic of Emanuel’s article. If a picture is worth a thousand words, then this chart sure speaks volumes.

Also consider some of Emanuel’s quotes from the same article, in which he articulates the principles behind the allocation of scarce medical resources:

Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments.
The complete lives system discriminates against older people….[However,] age, like income, is a ‘non-medical criterion’ inappropriate for allocation of medical resources.

If those quotes do not give one pause, consider another quote by Zeke Emanuel, this one from a 1996 work: “[Health care] services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia.” When that quote resurfaced during the debate on Obamacare in 2009, Emanuel attempted to claim he never advocated for this position—but he wrote the words nonetheless.

The Flaw in Centralized Decision-Making

The father in his Twitter thread hit on this very point. Medical device companies have not received Food and Drug Administration approval to implant defibrillators in children in part because so few children need them to begin with, making it difficult to compile the data necessary to prove the devices safe and effective in young people.

Likewise, most clinical trials have historically under-represented women and minorities. The more limited data make it difficult to determine whether a drug or device works better, worse, or the same for these important sub-populations. But if a one-size-fits-all system makes decisions based upon average circumstances, these under-represented groups could suffer.

To put it another way: A single-payer health care system could deny access to a drug or treatment deemed ineffective, based on the results of a clinical trial comprised largely of white males. The system may not even recognize that that same drug or treatment works well for African-American females, let alone adjust its policies in response to such evidence.

A ‘Difficult Democratic Conversation’

The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here….There is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place.

Some would argue that Obama’s mere suggestion of such a conversation hints at his obvious conclusion from it. Instead of having a “difficult democratic conversation” about ways for government bureaucrats deny patients care, such a conversation should center around not giving bureaucrats the right to do so in the first place.

This post was originally published at The Federalist.

Lowlights of Democrats’ New Single-Payer Bill

Some might think that, having embraced socialism and taking away the health coverage of millions of Americans, the Democratic Party couldn’t move further to the left. Think again.

House Democrats introduced their single-payer bill on Wednesday, and claimed that it’s a “significantly different” bill compared to versions introduced in prior Congresses. It definitely meets that definition—because, believe it or not, it’s gotten significantly worse.

What Remains

Abolition of Medicare—and Most Other Insurance Coverage: As I noted last year, the bill would still eliminate the current Medicare program, by prohibiting Title XVIII of the Social Security Act from paying for any service (Section 901(a)(1)(A)) and liquidating the current Medicare trust funds (Section 701(d)). Likewise, the bill would eliminate the existing insurance coverage of all but the 2.2 million who receive care from the Indian Health Service and the 9.3 million enrolled veterans receiving care from the Veterans Administration.

Taxpayer Funding of Abortion: As before, Section 701(b)(3) of the bill contains provisions prohibiting “any other provision of law…restricting the use of federal funds for any reproductive health service” from applying to the single-payer system. This language would put the single-payer system outside the scope of the Hyde Amendment, thereby permitting taxpayer funding for all abortions.

Lack of Accountability: As with the prior bill, the legislation would give massive amounts of power to bureaucrats within the Department of Health and Human Services (HHS). For instance, the legislation would establish new regional directors of the single-payer system—none of whom would be subject to Senate confirmation.

What Lawmakers Added

More Spending: Section 204 of the new bill federalizes the provision of long-term supports and services as part of the single-payer benefit package. Prior versions of the bill had retained those services as part of the Medicaid program, implemented by states with matching funds from the federal government.

In addition, the revised bill eliminated language in Section 202(b) of the Sanders legislation, which permitted co-payments for prescription drugs to encourage the use of generics. With the co-payments (capped at an annual maximum of $200 in the Sanders bill from last Congress) eliminated, the bill envisions the federal government providing all health services without cost-sharing. This change, coupled with the federalization of long-term supports and services, will result in increased spending—as more people demand “free” health care.

Faster Elimination of Private Coverage: Rather than envisioning a four-year transition to the single-payer system, the revised bill would eliminate all private health insurance within a two-year period. Over and above the myriad philosophical concerns associated with single-payer health care, this accelerated transition period raises obvious questions about whether the new system could get up and running so quickly. After all, Obamacare had an implementation period of nearly four years—yet healthcare.gov failed miserably during its initial launch phase.

In theory, moving away from a fee-for-service method of paying medical providers would eliminate their incentive to perform more procedures—a worthy goal. But in practice, global budgets could also lead to de facto rationing, as hospitals that exceed their budgets might have to stop providing care to patients—just as under-funding within Britain’s National Health Service (NHS) has led to chronic hospital overcrowding.

Compensation Caps: Section 611(b)(5) of the new bill would limit “compensation costs for any employee or any contractor or any subcontractor employee of an institutional provider receiving global budgets,” by applying existing pay restrictions on government contractors to hospitals and facilities in the single-payer program. These restrictions might lead some to wonder whether hospitals could truly be considered independent entities, or merely an arm of the state.

Effective Abolition of For-Profit Medicine: Section 614(a) of the revised bill states that “payments to providers…may not take into account…or be used by a provider for” marketing; “the profit or net revenue of the provider, or increasing the profit or net revenue of the provider;” any type of incentive payment—“including any value-based payment;” and political contributions prohibited by government contractors.

Liberals would argue that eliminating the profit motive will encourage doctors to provide better care, by focusing on patients rather than ways to enrich themselves. But the profit motive also encourages individuals to invest in health care—as opposed to other sectors of the economy—by allowing them to recover a return on their investment.

Effective Elimination of Patents: Section 616(c)(1) of the bill states that “if the manufacturer of a covered pharmaceutical, medical supply, medical technology, or medically necessary assistive equipment refuses to negotiation a reasonable price, the Secretary shall waive or void any government-granted exclusivities with respect to such drug or product,” and shall allow other companies to manufacture the product. By allowing the federal government to march in on a whim and seize a company’s intellectual property, the bill would discourage individuals from investing in such intellectual property in the first place.

“Reasonable” Prices and Rationing: As noted above, Section 616 of the bill requires HHS to determine when the prices of drugs and medical devices are “not reasonable,” by taking into account among other things “the therapeutic value of the drug or product, including cost-effectiveness and comparative effectiveness.” This provision could lead to the federal government denying patients access to drugs deemed too expensive, as occurs currently within Britain’s National Health Service.

This post was originally published at The Federalist.

How Single-Payer Supporters Defy Common Sense

The move to enact single-payer health care in the United States always suffered from major math problems. This week, it revived another: Common sense.

On Monday, the Mercatus Center published an analysis of single-payer legislation like that promoted by socialist Sen. Bernie Sanders (I-VT). While conservatives highlighted the estimated $32.6 trillion price tag for the legislation, liberals rejoiced.

Riiiiiigggggggghhhhhhhhhttttt. As the old saying goes, if something sounds too good to be true, it usually is. Given that even single-payer supporters have now admitted that the plan will lead to rationing of health care, the public shouldn’t just walk away from Sanders’ plan—they should run.

National Versus Federal Health Spending

Sanders’ claim arises because of two different terms the Mercatus paper uses. While Mercatus emphasized the way the bill would increase federal health spending, Sanders chose to focus on the study’s estimates about national health spending.

Although it sounds large in absolute terms, the Mercatus paper assumes only a slight drop for health spending in relative terms. It estimates a total of $2.05 trillion in lower national health expenditures over a decade from single-payer. But national health expenditures would total $59.7 trillion over the same time span—meaning that, if Mercatus’ assumptions prove correct, single-payer would reduce national health expenditures by roughly 3.4 percent.

Four Favorable Assumptions Skew the Results

However, to arrive at their estimate that single-payer would reduce overall health spending, the Mercatus paper relies on four highly favorable assumptions. Removing any one of these assumptions could mean that instead of lowering health care spending, single-payer legislation would instead raise it.

First, Mercatus adjusted projected health spending upward, to reflect that single-payer health care would cover all Americans. Because the Sanders plan would also abolish deductibles and co-payments for most procedures, study author Chuck Blahous added an additional factor reflecting induced demand by the currently insured, because patients will see the doctor more when they face no co-payments for doing so.

Second, the Mercatus study assumes that a single-payer plan can successfully use Medicare reimbursement rates. However, the non-partisan Medicare actuary has concluded that those rates already will cause half of hospitals to have overall negative total facility margins by 2040, jeopardizing access to care for seniors.

Expanding these lower payment rates to all patients would jeopardize even more hospitals’ financial solvency. But paying doctors and hospitals market-level reimbursement rates for patients would raise the cost of a single-payer system by $5.4 trillion over ten years—more than wiping away any supposed “savings” from the bill.

Finally, the Mercatus paper “assumes substantial administrative cost savings,” relying on “an aggressive estimate” that replacing private insurance with one single-payer system will lower health spending. Mercatus made such an assumption even though spending on administrative costs increased by nearly $26 billion, or more than 12.3 percent, in 2014, Obamacare’s first year of full implementation.

Likewise, government programs, unlike private insurance, have less incentive to fight fraud, as only the latter face financial ruin from it. The $60 billion problem of fraud in Medicare provides more than enough reason to doubt much administrative savings from a single-payer system.

Apply the Common Sense Test

But put all the technical arguments aside for a moment. As I noted above, whether a single-payer health-care system will reduce overall health expenses rests on a relatively simple question: Will doctors and hospitals agree to provide more care to more patients for the same amount of money?

Whether single-payer will lead to less paperwork for doctors remains an open question. Given the amount of time people spend filing their taxes every year, I have my doubts that a fully government-run system would generate major improvements.

But regardless of whether providers get any paperwork relief from single-payer, the additional patients will come to their doors seeking care, and existing patients will demand more services once government provides them for “free.” Yet doctors and hospitals won’t get paid any more for providing those additional services. The Mercatus study estimates that spending reductions due to the application of Medicare’s price controls to the entire population will all but wipe out the increase in spending from new patient demand.

If Sanders wants to take a “victory lap” for a study arguing that millions of health care workers will receive the same amount of money for doing more work, I have four words for him: Good luck with that.

Health Care Rationing Ahead

I’ll give the last word to, of all things, a “socialist perspective.” One blog post yesterday actually claimed the Mercatus study underestimated the potential savings under single-payer: “[The study] assumes utilization of health services will increase by 11 percent, but aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit below the level [it] projects” (emphasis mine).

In other words, spending will fall because so many will demand “free” health care that government will have to ration it. To socialists who yearningly long to exercise such power over their fellow citizens, such rationing sounds like their utopian dream. But therein lies their logic problem, for any American with common sense would disagree.

This post was originally published at The Federalist.

Liberals’ “Alternative Facts” on Capping Entitlement Spending

Here’s a policy riddle for you: When is a spending cap not a spending cap? The answer: When a liberal finds it politically inconvenient.

During the confirmation hearing for Health and Human Services Secretary-designee Alex Azar, a staffer for the liberal Center for Budget and Policy Priorities tweeted that Azar supported capping Medicaid. I noted that meant he supported capping Medicaid spending like the caps Democrats enacted as part of Obamacare—and that’s when the fun began.

Then I pointed out that Section 3403 of Obamacare charges the Independent Payment Advisory Board (IPAB) with enforcing a cap on per-beneficiary spending in Medicare. She responded by saying that IPAB contains restrictions on “rationing health care, raising Medicare’s premiums or cost sharing, cutting benefits, or restricting eligibility.”

That response, while accurate, misses the point. First of all, while the law prohibits Medicare from “rationing” benefits, neither Obamacare nor any other law “defines” rationing. Former Health and Human Services secretary Kathleen Sebelius testified to Congress in 2011 that HHS would need to undertake rulemaking to define “rationing.” However, as I noted this summer, “the Obama Administration never even proposed rules ‘protecting’ Medicare beneficiaries from rationing under the IPAB per capita caps—so how meaningful can those protections actually be?”

Capping Spending Does Indeed Reduce It

Second, a cap on spending, by definition, will reduce spending. The implication that one form of cap on spending in Medicare will have no ramifications whatsoever for beneficiaries, while another form of cap on spending in Medicaid will lead to proverbial death and destruction, strains credulity.

But putting those distinctions aside for a second, I asked whether Obamacare capped Medicare spending. I sent links to the portions of Section 3403 that 1) establish a target growth rate for Medicare and 2) instruct IPAB to develop recommendations to reduce spending to meet that target—the definition of a cap in my book, and probably anyone else’s as well.

I asked a simple yes-no question: While they might be implemented in different ways than the caps in Republicans’ “repeal-and-replace” bills, doesn’t IPAB limit the growth rate of Medicare spending to meet a cap?

Answer came there none.

Politically Inconvenient Truths

The political hack—erm, I mean, “analyst”—in question, from the Center for Budget and Policy Priorities, has more than enough health policy experience to recognize a spending cap. According to the center’s website, she served in senior roles in California’s Medicaid program, worked as the primary health staffer for former U.S. senator Al Franken (D-MN), and holds a master’s degree in health policy. She knows better—she just chose not to.

As I have written previously, Democrats don’t want to admit that they imposed per capita spending caps in Medicare as part of Obamacare. They may still fear the political consequences of capping Medicare spending—and more importantly, do not want to give Republicans political “cover” to impose similar caps in Medicaid.

So rather than admit the obvious—yes, Democrats did impose spending caps in Medicare (albeit in a slightly different form than Republicans’ Medicaid proposals last year) as part of Obamacare—this person chose to obfuscate, deflect, deny, and ultimately join Twitter’s version of the Witness Protection Program rather than admit the politically inconvenient truth. And beclowned herself in the process.

After the “repeal-and-replace” process of 2017, I know full well what it means to tell politically inconvenient truths. Going out on a limb to point out flaws in alternatives to Obamacare won me no small amount of flack from others on the Right, and may have cost me business to boot.

But at bottom, I consider myself a conservative health policy analyst, not a Republican one. As such, I feel an obligation to call “balls-and-strikes” based solely on policy, regardless of party. Doing otherwise would harm my reputation and integrity. And in policy circles in this town, one’s good name is the only thing you’ve got.

People can propose “alternative facts” all they like, but not without cost. After our Twitter tete-a-tete, I think less of the analyst in question, and of the Center for Budget and Policy Priorities for employing her. While liberals can talk all they like about a “wonk gap,” or about Republican “science deniers,” they appear to have some in their own midst as well. Just ask liberal health analysts about IPAB’s per capita caps.

This post was originally published at The Federalist.

Liberals’ Hypocrisy on Per Capita Caps

It was, to borrow from Arthur Conan Doyle, the dog that didn’t bark. In releasing the annual report on its finances, Medicare’s actuary last month found that the program would not trigger requirements related to the Independent Payment Advisory Board (IPAB) this year—or for several years to come. Although the Senate and House health-care bills avoided altering Medicare, the IPAB development—or non-development, as it were—should inject some important perspective into the legislative debate.

Many liberal critics of the Republican bills have attacked proposals to impose per capita caps on state Medicaid programs, while conveniently forgetting that Obamacare imposed similar spending caps on Medicare. In fact, Section 3403 of the law empowers IPAB—a board of unelected bureaucrats—to make binding recommendations to Congress reducing program spending if Medicare will exceed statutory limits for spending per beneficiary.

We Care More About Politics than Policy

Some Obamacare supporters claim that statutory restrictions on IPAB—in enforcing Medicare spending caps, the board may not change Medicare benefits or “ration health care”—will protect Medicare beneficiaries in a way that the current bills do not protect Medicaid recipients. But IPAB’s supposed “protections” have their own flaws. The statute does not define “rationing,” and then-Secretary of Health and Human Services (HHS) Kathleen Sebelius testified in 2011 that HHS would need to draft regulations to do so. But the Obama administration never even proposed rules “protecting” Medicare beneficiaries from rationing under the IPAB per capita caps—so how meaningful can those protections actually be?

When push comes to shove, few liberals can justify their support for per capita caps on Medicare, but opposition to similar caps in Medicaid. One day on Twitter, I posed a simple question to Topher Spiro, of the Center for American Progress (CAP): If the Republican proposals for per capita caps in Medicaid included the same beneficiary “protections” as IPAB creates for Medicare recipients, would he support them? I never received a substantive answer.

Therein lies the problem: Many critics of the Republican Medicaid proposals seem to prioritize political partisanship over policy consistency. Five years ago, CAP made very clear it supports IPAB’s per capita caps on Medicare spending, denouncing a 2012 legislative effort to repeal the board. But earlier this year, the organization denounced as “devastating” Republican proposals for per capita caps on Medicaid. So why exactly does this purportedly non-partisan organization support per capita caps when a Democratic Congress enacts them, but oppose similar caps proposed by a Republican Congress?

It’s Okay, It’s Just Hypocrisy

Democratic senators appearing with disability advocates at events to denounce spending caps for Medicaid fail to recognize that they voted for similar caps in Medicare, which provides health coverage to 9 million Americans with disabilities. Moreover, despite being in place for several years, the Medicare caps have yet to be breached. So how damaging is a policy that hasn’t affected Medicare beneficiaries in the slightest, and which Democratic lawmakers themselves have voted for?

In his Sherlock Holmes story “Silver Blaze,” Doyle wrote of the guard dog that didn’t bark because it was friendly with an intruder. Likewise, many liberal advocates and Democratic lawmakers are quite friendly with per capita entitlement caps, already having imposed such caps for Medicare. Particularly given the non-factor of such caps in the Medicare program in recent years, they should perhaps “bark” less in opposing similar caps in Medicaid. Both beneficiaries and taxpayers deserve better than opportunistic—and politically inconsistent—scaremongering.

This post was originally published at The Federalist.

Is Controversy Over Mammograms Looming?

The issue of mammogram coverage is about to return to the Washington agenda.

draft recommendation from the U.S. Preventive Services Task Force last month echoes a similar recommendation made in the fall of 2009. Namely, the task force recommends mammogram screening every two years for women ages 50 to 74 but does not recommend universal screening before age 50: “The decision to start regular, biennial screening mammography before the age of 50 years should be an individual one and take patient context into account.”

That contradicts guidelines issued by the American Cancer Society and other groups for women in their 40s and is part of a long-standing debate about whether the benefits of early detection and treatment offset the costs, including false positives and additional radiation exposure.

Obamacare moved that debate from the clinical realm into the policy world by giving the task force jurisdiction over which preventive services insurers must cover. The law references the task force more than a dozen times. Any preventive service the task force grades “A” or “B” must be covered by private insurers, Medicare, and Medicaid without cost-sharing such as co-pays or deductibles. Because the draft recommendations give a “B” grade only to biennial screening between ages 50 to 74, insurers would not be required to cover mammograms for women younger than 50 or screenings more frequent than the every-two-years regimen recommended by the task force.

When the task force issued its recommendations during the fall of 2009—at the height of the Obamacare debate—critics of the bill questioned the task force’s role in the proposed regime. Sarah Palin wondered whether cutting costs played a role in the recommendations, and a group of Republican congresswomen called them a “slippery slope” on the way to rationing. Then-Health and Human Services Secretary Kathleen Sebelius issued a statement and said that the task force had no policy-making role—statements belied by the text of the bill before Congress.

In the end, the law explicitly instructed the Department of Health and Human Services to disregard the controversial 2009 guidelines, reverting instead to a prior series of recommendations that allowed for annual coverage of mammograms for all women 40 and older. If, however, the task force re-issues the same recommendations later this year—as its April draft suggested–that would supersede all its prior reports, again raising questions about coverage of annual mammograms.

A bipartisan group from Congress has already written to HHS, asking that the draft mammogram recommendations be disregarded. Congress may in time take more explicit action to overrule the task force. But the controversy in 2009 showed that the final recommendations issued by the U.S. Preventive Services Task Force are not likely to go unnoticed—in Washington or around the country.

This post was originally published at the Wall Street Journal Think Tank blog.

In Obama’s Budget, Questionable Health Care Savings

In the president’s budget released this week, the Obama administration proposed approximately $400 billion in health-care savings. While that sounds impressive, the number might actually be less—for one proposal relies on a board that does not yet exist and that the administration has made no effort to establish.

As it has in previous years, the president’s 2016 budget proposal relies on savings achieved by strengthening the Independent Payment Advisory Board–this time to the tune of more than $20 billion. Created as part of Obamacare, IPAB was intended to be a group of non-partisan experts, nominated by the president and confirmed by the Senate, who would make recommendations on slowing the growth of Medicare costs. The recommendations were to take effect automatically unless overruled by Congress.

Although the health-care law was enacted nearly five years ago, the administration has made no attempt to constitute IPAB:

* The president has not nominated members to the board for Senate confirmation;

* The president has signed appropriations legislation rescinding spending reserved for the board, most recently in Section 522 of last year’s “cromnibus” legislation;

* While secretary of health and human services, Kathleen Sebelius testified before Congress in 2011 that her agency would undertake a rule-making process to define “rationing.” Obamacare prohibits IPAB from rationing, but the term is not defined in statute. The administration, however, has not begun such a regulatory process.

When questioned on this issue, the administration has argued that the slowdown in Medicare spending makes the board unnecessary at the moment. Administration officials could also make the accurate—if politically unpopular—assertion that the Department of Health and Human Services has the power to implement Medicare savings proposals unilaterally in the absence of a fully functioning board.

Nevertheless, the administration continues to rely on budgetary savings presumed to come from “strengthen[ing]” a board that President Obama has not moved to establish. That raises questions about its commitment to budgetary savings—and to IPAB itself.

This post was originally published at the Wall Street Journal Think Tank blog.

What Is Government’s Role in Comparing Medical Treatments?

The personalized medicine initiative that President Barack Obama announced on Friday was previewed in the State of the Union address and is scheduled for inclusion in the budget to be released Monday. But in devoting federal funds to this, the administration may have made an argument against another type of medical research funded as part of Obamacare.

Section 6301 of the health-care law creates a Patient-Centered Outcomes Research Institute (PCORI), designed to study the comparative effectiveness of treatment options for diseases. Comparative effectiveness research has proven controversial for several reasons. The idea that the price of various treatments are taken into account, using cost metrics to determine coverage decisions for government health programs, raises the specter of rationed care.

But beyond the potential question of government rationing–and whether the restrictions included in Obamacare are sufficient–lies a more nuanced problem: As one administration scientist noted ahead of the president’s announcement on Friday, “Throughout history most medical treatments were designed for the average patient, meaning they can be very successful for some but not for others.” Comparative effectiveness research involves comparing the effects of treatment on average patients or average groups of patients; others may not benefit, or may even be harmed, by the average treatment or course of action.

The challenge for policymakers and medical professionals is how to respond to the growing personalization of medical treatments. In creating PCORI, Obamacare attempted to acknowledge this trend, noting that the institute should engage in “research and evidence synthesis that considers variations in patient subpopulations.” The president’s new initiative may make such research obsolete. It also raises a different question: When personalized medicine may turn patient “groups” into a subpopulation of one, what is the proper role for the federal government in comparing treatments?

This post was originally published at the Wall Street Journal Think Tank blog.

Jonathan Gruber, Transparency, and Obamacare’s IPAB

The administration faced a political firestorm last week, when videos emerged featuring MIT professor—and paid Obamacare consultant—Jonathan Gruber making comments on “the stupidity of the American voter,” and claiming that only a deliberately opaque and deceptive process was essential to the law’s enactment. But the administration may soon face a policy controversy as well—for the law features a board that can operate in nontransparent ways, and which will empower technocrats like Mr. Gruber himself.

While the Independent Payment Advisory Board, or IPAB, may bring to mind the latest Apple product offering, the reality is far different. Designed to control health spending, the board of 15 experts—nominated by the president, based in part on suggestions from congressional leaders, and confirmed by the Senate—will have the power to make binding rulings to slow the growth in Medicare outlays. Furthermore, the administration’s budget proposed giving IPAB even more authority, by reducing the caps on Medicare spending the board will be charged to enforce.

IPAB has yet to be constituted. The budget sequester and other savings proposals have thus far kept Medicare spending below the targets that would trigger IPAB recommendations, and Republican leaders have indicated to President Barack Obama their disinclination to provide the White House suggestions for nominees. As a result, the president has yet to make formal nominations—not least because, if the Medicare spending target is reached, requiring IPAB to make formal recommendations to Congress, but IPAB does not do so, that power would then lie within the Department of Health and Human Services itself.

IPAB faces several characteristics that could imbue it with the lack of transparency Mr. Gruber infamously discussed in his speeches:

  • Former Obama administration official Peter Orszag wrote a piece for the New Republic in which he cited IPAB as one way to “counter the gridlock of our political institutions by making them a little less democratic.” In 2012, Politico stated that, while in the White House, Mr. Orszag had “pushed” to include the board in the law.
  • Section 3403 of Obamacare, which creates IPAB, does not require the board to conduct any open meetings. The law merely says that “the board may hold such hearings…as the board considers advisable;” it does not require IPAB to do so.
  • Likewise, while the law prohibits IPAB from “ration[ing] health care,” the term “rationing” is nowhere defined in statute. Former Health and Human Services Secretary Kathleen Sebelius conceded this point, and acknowledged that HHS would likely have to define “rationing” before the board could begin its work—but it has yet to do so.

Prior to the recent controversies, Mr. Gruber seemed like exactly the type of expert—an “individual with national recognition for [his] expertise in health finance and economics”—that might have received an appointment to IPAB. Interviewed for a 2011 article about who might serve on the board, Mr. Gruber didn’t rule it out entirely, while admitting that statutory restrictions on IPAB members’ outside activities might dissuade individuals from applying.

As it happens, Mr. Gruber currently serves on the board of the Massachusetts Connector, an entity charged with implementing the Commonwealth’s health care overhaul. However, to judge from comments made to reporters last week, an aide to Gov. Deval Patrick seemed keen to downplay his influence: “When his term expires at some point, that will be a decision for someone else at that time.”

But beneath the political controversy lies a philosophical question. Fifty years ago last month, Ronald Reagan summarized the concern in his “A Time for Choosing” speech:

This is the issue of this election—whether we believe in our capacity for self-government, or whether we abandon the American revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

Therein lies the Obama administration’s bigger problem—how to reconcile a law that increases the influence of independent experts with a high-profile example of such an expert who repeatedly treated American voters with open hostility and contempt. At a time when both the health care law and the federal government itself remain historically unpopular with voters, the Gruber controversy only heightens the perceived distance between the governing and the governed.

This post was originally published at the Wall Street Journal Think Tank blog.

Donald Berwick’s Rationed Transparency

Dr. Donald Berwick is back in the public eye. The former administrator of the Centers for Medicare and Medicaid Services (CMS) has announced he will run for governor in Massachusetts.

Berwick first entered the public spotlight in April 2010, when President Obama nominated him for the CMS post. But Berwick never went through the regular confirmation process. Instead, the president granted him a surprise recess appointment that July.

The president renominated him in January 2011, but it became apparent that he could not garner enough votes for Senate confirmation. That December, Berwick resigned. Now, he is pursuing office as an elected, rather than an appointed, official.

Berwick’s short tenure at CMS was defined by a series of controversial statements he made before his appointment. He defended both Britain’s National Health Service and government rationing of health care. Most famously, in a June 2009 interview, he stated that “the decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”

After leaving CMS, Berwick said his comments were merely an attempt to argue for greater transparency in decision-making. “Someone, like your health-insurance company, is going to limit what you can get. That’s the way it’s set up,” he told the New York Times. “The government, unlike many private health-insurance plans, is working in the daylight,” he insisted. “That’s a strength.”

Unfortunately, Berwick himself, while head of CMS, went to great lengths to avoid transparency. He ducked reporters, in one instance even “exit[ing] behind a stage” to avoid press queries. Another time he went so far as to request a “security escort” to avoid questions.

Today, Berwick concedes his lack of transparency. According to a Politico report, he now “regrets listening to White House orders to avoid reaching out to congressional Republicans.”

The lack of transparency is endemic in the Obama administration. Case in point: the enactment of Obamacare. During his 2008 campaign, Barack Obama promised health-care negotiations televised on C-SPAN. Instead, we got a series of notorious backroom deals: the Cornhusker Kickback, the Louisiana Purchase, the Gator Aid.

“It’s an ugly process, and it looks like there are a bunch of backroom deals,” Obama feebly admitted in January 2010 — only to retreat again to the smoke-filled rooms two months later, where he cut the final deals to ram the legislation through Congress.

Obamacare is premised on the belief that government knows best. And those who share that belief all too often regard transparency and public accountability as inconveniences.

Consider the administration’s approach to regulating the proposed health-insurance “exchanges.” Obamacare requires state-based exchanges to “hold public meetings and input sessions,” but it fails to apply these same transparency standards to the federally run exchanges Washington will create in 33 states. The result: Many key questions remain unanswered.

Thus a law written in secret is being implemented in secret, with a maximum of opacity and a minimum of accountability from the administration.

This post was originally published at National Review.