MedPac on Steroids

I’ve long argued that Medicare reform will pave the way for healthcare reform, and that the Medicare Payment Advisory Commission’s (MedPac’s) recommendations could serve as a brilliant blue print for overhauling Medicare.  (Also see our Century Foundation report on Getting More Value From Medicare).

Now President Obama appears to be backing a proposal that would empower MedPac to realize its vision for reform.  Earlier this week, in a White House meeting with Senate Democrats, the president  reportedly “went out of his way” to mention a bill, introduced by Senator Jay Rockefeller ( D-W.Va)  that would move decisions about Medicare benefits away from Congress, by turning MedPAC into an independent executive agency.  Currently, MedPac is an independent panel that advises Congress. It has no formal power. But under Rockefeller’s bill it would be able to implement its recommendations and fund policy initiatives.

Wednesday afternoon, the White House announced that the President has gone a step further by releasing a letter from President Obama to Senators Max Baucus and Ted Kennedy.  The letter extends the remarks that the president made yesterday, which came close to endorsing Rockefeller’s bill. Writing to Kennedy and Baucus, the  President indicated that the administration could find another $200 to $300 billion for health care reform, linking that proposal to “giving special consideration to the recommendations of the Medicare Payment Advisory Commission” (MedPAC), “a commission,” he noted, “created by a Republican Congress . . . Under this approach,” the president continued, “MedPAC’s recommendations on cost reductions would be adopted unless opposed by a joint resolution of the Congress. This is similar to a process that has been used effectively by a commission charged with closing military bases, and could be a valuable tool to help achieve health care reform in a fiscally responsible way.”

These savings,  he added, “will come not only by adopting new technologies and addressing the vastly different costs of care [in different parts of the country], but from going after the key drivers of skyrocketing health care costs, including unmanaged chronic diseases, duplicated tests, and unnecessary hospital readmissions.”

Giving MedPac the Authority to Take the Politics Out of Fees for Doctors & Hospitals

Under Senator Rockefeller’s bill, MedPac would have the authority to set reimbursements for doctors and hospitals.  As Rockefeller explained in a recent Senate Finace Committee meeting:  “I think that [this is] the best way to take politics out of all of this is to take Congress out of the setting of reimbursements for doctors under Medicare and Medicaid and for hospitals, because there  is a group of 17  . . . completely dispassionate people,” who could do this, Rockefeller explained, referring to MedPac.

“And I think one of the [reasons] you have your $700 billion of wasted money every year,” Rockefeller added,  “is the fact that there are too many political judgments made because there’s too much lobbying and Congress can — you know, unless they’re all health care experts, can fall victim to that. So the idea of MedPAC having the power to set those fees, reimbursement fees, to me is enormously attractive, takes politics right out of it and takes Congress right out of it.”

At the hearing, White House budget director Peter Orszag indicated circumspect support for Rockefeller’s bill: “Your idea of — I think we’ve referred to it as  MedPac on steroids, or a much more powerful role for a body that is widely respected– is one approach.”

What Exactly Does MedPac Recommend?

Until now, most reform advocates have ignored MedPac. The reports that the independent advisory panel issues in March and June of each year are long.  They are dense with detail. And they are very, very smart. The commissioners  understand that health care quality could be higher if we spent less on care.

They have digested the Dartmouth research revealing that when patients in some parts of the country receive more aggressive and more expensive care, outcomes often are worse.  They realize that doctors and hospitals should be rewarded for the quality of the care they provide, not the quantity.  As HealthBeat has reported, they know that the fee schedule that Medicare now follows favors specialists while underpaying primary care physicians,  and they have suggested re-distributing Medicare’s dollars “in a budget neutral way”– hiking fees for primary care while lowering fees for some specialists’ services. They have pointed out that some very lucrative procedures appear to be done too often, in part because they pay so well. The Commission has advised targeting these procedures and comp ring them to alternative treatments—just in case a less expensive approach might turn out to be more effective (and not as risky for the patient), as pricier, more aggressive treatments.

Finally, MedPac notes that some hospitals actually make a profit on Medicare’s payments. This is because these hospitals are more efficient: patients typically spend fewer days in the hospital and see fewer specialists. There are fewer readmissions, And generally, outcomes are better. MedPac suggests that when private insurers pay hospitals more, they may simply be rewarding less efficient hospitals for lower quality care. (And of course, private insurers pass those higher payments along to their customers in the form of higher premiums.)

MedPac goes beyond looking at how we pay providers.  Investigating Medicare Advantage, it has described the care that private insurers are providing as somewhere between “disappointing” and “depressing.”  Taking a look at the boom in hospital construction, MedPac noted, in its March 2008 report that “much of the added capacity is located in suburban areas and in particular specialties, raising the possibility that health care costs will increase without significantly improving access to services in lower income areas”. (Here, I can’t help but think about the current controversy over whether Hackensack University Medical Center should be building a new for-profit facility in a nearby suburb.)

As for the drug industry, in its June 2008 report to Congress MedPac observed that “researchers have shown that bias in industry-sponsored trials is common.” Because we lack disinterested, “evidence-based” information about new products, MedPac noted “we do not know which treatments are necessary for which types of patients. Guidelines do not exist . . . to delineate how much care is typically needed . . . and when patients are unlikely to improve with additional treatment.” In the same report, MedPac cast a cold eye on just how quickly we adopt bleeding-edge medical product and procedures to treat “most common clinical conditions” without “credible, empirically based information” to tell us “whether they outperform existing treatments and to what extent.” In other words, we need unbiased comparative effectiveness research. Those who make a profit on new products and procedures should not be involved.

These are exactly the radical but truthful recommendations that would make any well-paid health care lobbyist shudder.  No wonder the Bush administration ignored MedPac’s advice for eight years.

Now, a new White House is taking MedPac’s recommendations to heart. And Congressional leaders also seem to recognize the link between Medicare reform and national healthcare reform.  In April, HealthBeat reported that Senate Finance Chairman Max Baucus had declared that Medicare would become “the big driver” behind national health reform. Now, it’s becoming clear what Baucus meant.

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in Barron’s and Institutional Investor. She is the author of “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the healthcare system, and the increasingly influential HealthBeat blog, one of our favorite health care reads and where this piece first appeared.

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15 replies »

  1. I’m looking for a citation/source which may outline the MedPac recommended cuts over time, specifically what may occur on 1/01/2011, following the prospect of a 21.3% cut from 6/10-12/31/2010.
    Thanks in advance!

  2. Just glanced through the transcript of the Senate Finance Committee hearing that Ms. Mahar cites. Before Senator Rockefeller made the comment cited on the $700 billion in valueless (aka wasted) medical services spending above he states this:
    “and that is, it’s always bothered me in the system of lobbying that we have in this country, and particularly on this subject — I don’t know how many thousands of health care lobbyists there are. I think there were 14,000 at the end of the Clinton effort; higher-paid, more niche-oriented now. And so you get these heads of all these huge organizations saying, “We’re going to be different. We’re going to be different. We’re going to cooperate this time,” which I guess means that the lobbyists will stop lobbying and they’ll just rely on the facts.”
    I assume his last sentence is cynical based on the sentences preceding it. At least he almost alone, if not alone, among Senators close to the action is willing to make statements and introduce legislation based on analysis and fact. Remarkable in that almost all of the remainder of discussion from politicians who will have influence on legislation is shockingly devoid of consideration of fact or factually-based analysis.
    I find the points made by Ms. Mahar about MedPac in this posting and the suggestion from tcoyote that MedPac would in effect become the “Federal Reserve” of healthcare administration/policy-making enlightening.
    Given that tcoyote seems to have direct exposure to or involvement in the political decision-making on policy/spending, I assume that his (her) comment is accurate that the frankness exhibited in MedPac reporting is due to the fact that MedPac has no power.
    I might note to Ms. Mahar that I read her book Money-driven Medicine last year and found it to be excellent.

  3. being young also means I know how to internet search…
    “I imagine you are too young to remember this, but there was a time –before the 1980s–when for-profit insurers did not sell health insurance. They just didn’t think they could make money on it.”
    “Health insurance was all non-profit.”
    Figure 2 illustrates the growth of commercial insurance relative to Blue Cross and Blue Shield. So successful was commercial insurance that by the early 1950s, commercial plans had more subscribers than Blue Cross and Blue Shield. In 1951, 41.5 million people were enrolled in group or individual hospital insurance plans offered by commercial insurance companies, while only 40.9 million people were enrolled in Blue Cross and Blue Shield plans (Health Insurance Institute 1965, Source Book, p. 14).
    Can you self report yourself Maggie or would you like me to eamil you about you spreading non factual information? Do take time to look at the chart they prepared it is pretty dramatic.
    Youngins 1 Old Media Type 0

  4. Maggie,
    Yes, yes and yes, I think that answered all of them. I love their suggestions, please take a moment and compare your examples to HMOs in 1970 though. Ignore the fact they are directed at Medicare and not private insurance and they are proposing exactly what HMOs originally were designed to do. Nothing they have suggested is new, its common sense answers to known problems that have been around for decades.
    What I believe you and the left in general are ignoring is the reality of what happens when a plan goes from concept to being in place. Initially they want to limit high cost procedures, what happens 5 years from now when during a budget crunch Congress cuts funding by 10%? MedPac would then be forced to cut reimbursements on procedures already fairly priced. Look at the current reimbursement rates, Medicare Acts clearly demand providers be reimbursed fair rates for their service. This is standing law, I don’t think you can find more then a couple primary care physician out there that would say Medicare pays their cost let alone a fair profit.
    We have 40+ years of solid proof that what was intended with reform isn’t what is actually delivered. You can’t look at these proposals and not take into consideration what the real results will be.
    This is what Ted Kennedy said about HMOs in 1978;
    “The current revival of the HMO movement should come as no surprise. HMOs have proven themselves again and again to be effective and efficient mechanisms for delivering health care of the highest quality. HMOs cut hospital utilization by an average of 20 to 25 percent compared to the fee-for-service sector. They cut the total cost of health care by anywhere from 10 to 30 percent. And they accomplish these savings without compromising the quality of care they provide their members.”
    Substitute MedPac for HMO and they are recanting the exact same lies they have for every year since the 1930s. You need to stop falling for the propaganda, look behind the curtain and figure out what their true goal is. Congress wants to control the rationing, delivery, and finance of Healthcare in America, they want to do it in a way that insulates them from any blame though. They have been proposing nationalized healthcare through different boards and delivery methods since before the 1930s. Congress created Federally regulated HMOs specifically so they could control the healthcare system at arms length, that is why they exempted them from State law, funded their start up, and gave them every unfair advantage they could think of. As an investigative author how do you ignore 80 years of history when discussing these proposals? Do you really see no correlation to HMOs in the MedPac proposal? Do you really not believe Congress is and has been trying to take over healthcare under the guise of reform?
    It was not Regan that launched HMOs with tax changes in the 80s. Ted Kennedy in his own words demands the credit for them.
    I might be younger then you but my health insurance history is 100 times deeper. In fact private insurers were dominate in insurance prior to the 80s, ERISA in 1974 was a huge event but private insurance carriers like Transamerica, Prudential, ULICO, and others were already every active. Few of the dominate names today were known back then but it is inaccurate to say private insurance was not dominate. I grew up with my father working for Transamerica in the 70s and 80s, unless he was lying to us all those years and not driving downtown every day you are wrong. I think I am going to have to report that claim to your blog. Private insurers had all the Unions and large employers back then.

  5. I just read the Gawande article. Very nice indeed. In my opinion, it reinforces the point that excellence and improved quality of care accompanied by reduction of waste, whether driven by health care organizations, (Mayo, Intermountain…) or payer lead (Grand Junction) has one thing in common – non profit.
    I like MedPac’s recommendations, but I doubt we can achieve significant cost reductions and better quality of care simultaneously as long as the health care “industry” is so blatantly profit driven.

  6. Nate, tcoyote, docanon, Joe, medical innovation,
    Thanks much for your comments. And let me invite anyone interested in the Dartmouth Research to the NY premeiere of a 90-minute documentary that Alex Gibeny (Enron: The Smartest Guys in the Room”) has made of my book, Money Driven Medicine–thus Thursday, June 11.
    Admission is free.
    Jim WEinstein (who now heads the Dartmouth research and Don Berwick, head of IHI, are both in the film
    Details on premiere here http://www.healthbeatblog.com/2009/05/moneydriven-medicineny-premiere-of-film-june-11-.html
    Nate– Have you read any of MedPac’s reports?
    Do you know who is on the commission or how they are picked?
    The reports are excellent and recommend many things that even you might agree we need. For example, Medpac has repeatedly recommended that Medicare raise fees for
    primary care physicians.
    AT the same time, MedPac recommends that Medicare carefullly cut fees for some procedures provided by some specialists. MedPac advises looking first at particuarly lucrative procedures that have been increasing, in volume, in recent years. MedPac suspects that in some cases, fat-fee-for-service is driving overtreatment.
    MedPac would use the savings to pay primary care physicians more. The total amount it spend on physicians would remain the same. But since doctors would likely do less of the formerly very-lucrative procedures, Medicare’s total spending would fall–and patients would be spared overtreatment.
    MedPac also recommends eliminating the windfall bonus for private insuers offering Medicare Advantage. They would get a bonus only if they could show better quality care.
    MedPac recommends that Medicare begin experimenting with various ways of paying hospitals for quality not quantity.
    MedPac recommends using comparative effectiveness reasearch to find out which treatments work best for which patients– and then make sure the financial incentives steer doctors and patients toward the most effective treatments. (The newest, most expensive treatment is not always best for most patients.)
    MedPac’s recommendations are all about lifting the quality of care while reducing waste.
    This was the original idea behind HMOs–back when they were all non-proift, in the 1970s. In 1980, Reagan changed the tax laws so that it became attractive for for-profit insurers to come into the healthcare market– and they began to take over the HMO industry.
    I imagine you are too young to remember this, but there was a time –before the 1980s–when for-profit insurers did not sell health insurance. They just didn’t think they could make money on it. Companies like Aetna didn’t offer health insurance—just life insurance, property, etc.
    Health insurance was all non-profit. And the best insurers actually tried to improve the quality of care they provided. (These are the non-profit insurers ATul Gawande writes about in his most recent New Yorker article– people like Geisinger, Intermountain, Kaisern of Northern California etc.)
    But in the 1980s, for-profit companies figured out that they could make money on HMOs –if they just refused to cover expensive treatments, avoided selling to people who were sick, and wrote the policies in such a way that it was very diffcitult to tell what they did and didn’t cover–until you got sick..
    Unlike the non-profit HMOs, most of the for-profit HMOs ignored quality. They decided what to cover based on costs.
    For examplpe, they would cover a new drug if the manufacturer would give them a deep discount on some of
    its other drugs. Was the new drug any good? Who knew?
    Not the insurer’s problem.
    Meanwhile non-profit insurers like Kaiser actually looked at the quality of the new drugs. It decided that Vioxx was no better than much less expensive pain-killers for most patienits–and the reserach suggested it might be much riskier. So Kaiser stopped covering Vioxx for most patients more than a year before the drug-maker was forced to take the drug off the market–becaues of the risks. (Mayo and VA also stopped covering it for most patients)
    For-profit insurers continued to cover Vioxx.
    At the end of the 1990s, there was a backlash against for-profit HMOs. So, they stopped saying “no”–started saying “yes” to many more treatments –and passed the cost along in the form of higher premiums, which is why premiumms have sky-rocketed over the past 10 years.
    But some non-profit HMOs have survived–and are thriving– in the Northwest, places like Minnesota.
    If you ever read MedPac’s recommendations, you will find that it is recommending that Medicare do many of the things that the most innovative non-profit insurers do– paying for quality, not volume.
    It’s nice to hear form someone who has read MedPac’s reports.
    I agree–who is on MedPac, and how they are shielded from lobbyists and politiicans is key. I think it is very important that we start with the people who are on the commission now.
    Congress will have to confirm them, but I suspect that Obama and Rahm Emanuel will figure out how to put the votes togehter. Ideally, it would be an up or down vote for the group–not confirming them one at a time.
    Rockefeller’s idea that Congress will have to approve MedPac’s recommendations with an up-or-down vote–and with no power to change them– is excellent, and gives MedPac some protection.
    Six-year terms of MedPac members will also help.
    Finally, I would very much like to see the White House recommend that MedPac be based somewhere other than Washington D.C.
    I think of FASB– the board reponsbile for setting rules for corporate accounting. It’s located in Norwalk Connecticut. (The accountants on the board are called the gnomes of Norwalk) And they have done their best to stand up to Congress and lobbyists. In particular they
    refused to bend on the whole issue of whether corproatoins had to disclose the true value of the stock options they were giving to their exectuives. Eventually, FASB won on that one.
    So rather than changing their phone numbers, maybe the members of MedPac would be better off if they just got out of town. The government could set them up somehwere in Southern California . . . .
    (I’m actually half serious. Many people have observed that money managers who are not located in NY tend to think outside the pack; some were quicker to see a bubble forming in the 1990s. I’m thinking of people like Steve Leuthold in Minnesota or Jeremy Grantham Boston.)
    docanon– see my reply to tcoyote.
    I agree that there is a danger that the commission will be politicized. Grassley has already said something about putting people on the commission who represent hospitals, etc.
    But I suspect Obama will stand firm on this. He and Orszag understand that we have to contain health care costs, that Medicare reform is, as Baucus said, the driver for healthcare reform, and that if the Commission represents the interested parties, we’ll never do it.
    Have you noticed that, so far, Obama has gotten nearly everything he has really wanted through Congress?
    The conservatives will wail; the blue dogs will howl,
    but Obama, Emanuel, Orszag et. al are proving a very effective team. This is a very strong White House.
    By contrast, this it is not a very strong Congress. Few really good leaders. Few brilliant minds. Few street-fighters with Emanuel’s talents in that area. . .
    Finally, the voters are not terribly enthusiastic about this Congress. The economy melted down on their watch. They got us into a long, pointless and very expensive war. They generally lacked the spine to stand up to GWB–even when he was spending like a drunken sailor (something fiscially conservative Republicans should have stopped.)
    But Obama is hugely popular. And I think he’s going to be able to keep the voters’ trust for the foreseeable future. He’s a very shrewd politician; seems to have complete impulse control, and is deeply intelligent . .
    Moreover, while he would to see more bipartisan co-operation, when push comes to shove, he understands: “We won.” He doesn’t have to compromise on principles.
    You’re right, when it comes to healthcare, doctors and hospitals tell us what we need–espeically when it comes to the big ticket items.
    And MedPac could set Medicare on the right path if
    some of its reocmmendations were implemented this year.
    But I suspect that the administration is going to hold out for giving MedPac the power Rockefeller describes.
    It’s a brilliant idea.
    medical innovation–
    I guess you’ve never read the Dartmouth research.
    For more than two decades they have been adjusting for diffrences in local prices, race, sex and the underlying health of the population (i.e. Medicare should be spending more on patients in Alabama than on patients in Denver Colorado because Alabama is a much less healthy environment.)
    After all of the adjustments, the variations still can’t be explained– except by supply. In areas where there are more doctors and more hospital beds, patients receive more aggressive, intensive and expensive trreatment. Outcomes are no better. Often they are worse.
    The other factor is the “medical signature” of the location. Gawande’s recent article on overtreatment in that Texas town, driven by a “culture of money” is very good.
    Btw, Gawande got all of his data from Datrmouth.
    Far from being “insane,” the DArtmouth research is now accepted and highly regarded by both the cognoscenti of the medical community, but by mainstream jouranlists . It’s frequentlly quoted in the New York Times, the Wall Street Journal, etc. etc. etc. Reader’s Digest, of all places, recently ran a cover story by Shannon Brownlee (author of Overtreatment) all about unwarratned variations, based on the Dartmouth reserach.
    In the blogosphere, bloggers like Matthew, Merrill Goozner and Ezra Klein cite the Dartmouth reserach–and understand it.
    And in Washington, people like White House Budget director Peter Orszag, Zeke Emanuel his health adviser and Hillary Clinton understand and fully appreciate the Dartmouth reserach.
    People on the Senate Finance Committee get it. (The majority of the Senators represent states where Medicare spends less; they are not enthusiastic about the fact that citizens of their states are supporting overtreatment in Manhattan, Miami and Southern California–especially when that overtreatment isn’t even doing those patients any good.
    tcoyote– I agree that what drives overtrreatment in Boston is different from what drives over-treatment in McAllen. I wrote about Gawande’s most recent piece here– http://www.healthbeatblog.com/2009/05/dr-atul-gawande-on-the-fight-for-the-soul-of-american-medicine.html (Yes, it’s a great piece.
    The DArtmouth research is pretty persuasive that in towns like Boston, the fact that there are so many hospital beds and doctors drives much overtreatment.
    A doctor has a congestive heart patient. Should she be hospitalized and when? No clear guidelines. If he knows that there are plenty of hospital beds available in his town, he is much more likely to hospitalize her. It’s easier– no more late-night calls from her husband. the nurses will be taking care of her. And it will be easier to call other specialists in ot consult on some of her other problems . . . .more tests, more procedures . . .
    Similarly, if a cardiologist practices in a town where there are twice as many cardiologists, he is likely to see his congestive heart patient more often. Doctors keep their appointment books full. If you practice in a place where ther eare more cardiologits, you have more open spaces in your book. Again there are no clear rules on how often you should see that congestive heart pateint–every 3 months? every six months?
    This is how Jack Wennberg explains it. Usually the doctor is not making a conscious decisoin to see the patient more often. He probably doesn’t have a clue that he sees his patients more often than doctors in New Haven (fewer doctors per capita)
    MedPac has a couple of very good ideas regarding dealing with this. The first is to compare hosptials all over the country to benchmarks like the Mayo Clinic.
    (It costs Medicare less when patients are treated at Mayo because it’s more efficient. They see fewer speicalists, spend less time in the hospital, undergo fewer tests and procedures, outcomes are better, patient and doctor satisfaction higher.
    Hospitals would be expected to approach the benchmark in terms of better outcomes and lower costs. (Say, get to 80%). If they are far below the benchmark, they will be informed that they are an outlier. AFter a couple of years, if they don’t improve, their outlier status will be made public. Then, if they don’t improve significantly, Medicare will stop paying for patients at that hospital. Hospital closes. (Or finds new management)
    There are various ways of adressing the problem. Moving away from fee-for-service (which clearly encourages over-treatment) and toward paying doctors salaries,
    capitated pay, ot bundled payments for episodes of care to the doctors and hospital involved are all idea that can work in different places. Paying “medical homes” bonuses for keeping patients out of the hosptial and the ER is another good idea (though I think this would be very hard for a small practice.)
    MedPac understands that we need many pilot programs to discover what works where. We also have to change the way we educate medical students. (I recently went to a conference at Mayo on that. Right now, studentsare being trained to do too much—too many tests, not enough hands-on diagnosis. They need palliative care training in end-of- life care. Etc.
    MedPac also understands that this will take time-ten years, or more to really begin to change how doctors think.

  7. It’s obvious to someone who’s worked in all those places most of his professional life that a lot of the variation is caused by a sophisticated form of theft. Joe is exactly right. Read Atul Gawande’s marvelous New Yorker article. What’s going on in McAllen (and Miami and Los Angeles and Las Vegas and Phoenix and Baton Rouge, etc.) is an abuse of professional power, greedy physicians exploiting the moral hazard opportunities enabled by open ended fee for service payment.
    There are other markets where the moral hazard disease is not the main cause: the teaching hospital dominated markets like Boston and Philadelphia, where a different form of abuse- anti-trust abuse-as well as excessive reliance on expensive places to perform a lot of routine care, has pushed rates and costs up. There are lots of approaches needed to control variation besides elaborately refining unit payments, MedPac’s principal forte.

  8. Get real. To have MedPac dictate Medicare rates based on the Dartmouth obsession with “unwarranted practice variations” in different sections of the country borders on the insane.
    To say that rates ought to be the same in Manhattan versus rural Alabama or Los Angeles versus Rochester, Minnesota ignores cultural and socioeconomic differences and sickness differences and points of patient entry into the system (ERs, hospitals, urgiclinics, primary care offices or specialty offices).
    No Washington-based panel, no matter how neutral or how comprised of the best and the brightest, no matter how loaded with data, can possibly judge what goes on on the ground, can parse what motivates hospitals and doctors, or can pre-judge or post-judge all the permutations and combinations of patient-doctor-hospital interactions.
    MedpAC on steroids is another top-down pipe dream, and is another example of tilting with windmills.

  9. Oh dear.
    Patients demanding X treatment and not getting it is not the problem. Doctor ordering up X&Y, when patient only needs X ( or Doctor A ordering X, Doctor B ordering Y and Doctor C order Z) is the problem.
    Anyway if we implemented most of the med-pac ideas that exist now–without giving them on-going rule making authority you still have goen a long way in terms of putting the right incentives in place regarding the right kind of practices.

  10. I was comparing MedPac to HMOs. Congress is proposing this additional power for MedPac so they can be the bad guy. When MedPac cuts reimbursement or says some procedure will not be covered people will blame MedPac. Congress controls them by who they appoint and how much money they give them to spend.
    This is the exact same reason why Congress created HMOs. No Congressman wants to vote for the bill not allowing a proecedure someone thinks will save their life. No COngressman wants to cut healthcare spending by the billions it should be. To protect themselves yet still control healthcare they created HMOs and now want to empower MedPac.
    The Supreme court ruling was to show how Congress took something that was illegal and built it into a dominate entity in healthcare. They now want to take this little toothless MedPac and make them the gatekeeper of healthcare. Wizard of Oz all over again, people need to look behind the curtain. MedPak is a tool of Congress so they don’t get blamed for the results. We tried this once and it failed miserably, why are we trying it again?

  11. Thanks for picking this up, Maggie! Those of us who have been privileged to see how the “sausage” of Medicare payment policy gets made have been calling for this for years. It’s time to get a less-conflicted, non-secretive body in charge of Medicare payment policy.
    My only worry is exactly what tcoyote mentions: MedPAC has been the lone voice of sanity in a toxic stew of greed and corruption precisely because it’s an obscure body with basically no power. Give MedPAC power, and all of a sudden you’ll have huge political fights over who’s on it, direct lobbying and harrassment of members and staff, etc. The details of how to keep MedPAC’s composition beneficial to public health (and not overrun with members who make money off Medicare waste and overuse) will be key.
    [Nate, I’m having trouble following you on this ERISA thing. What has MedPAC written about ERISA? MedPAC’s main writings relevant to managed care have been to recommend against continuing overpayments to Medicare Advantage plans. Or are you referring to friendly language about the idea of ACOs?]

  12. So the Rockefeller idea is to make MedPac into Daschle’s National Health Board.
    It will be interesting to see how this changes the composition of the organization.
    I think MedPac’s done a great job, but the “safety valve” has always been the ability of a disadvantaged interest group to simply “roll” the MedPac recommendation in Congress. You make that much more difficult, and all of a sudden, MedPac Commissioners have to change their phone numbers and hire people to start their cars for them and taste their food, etc. And you start getting demands for “representation” on MedPac from the relevant groups.
    Nonetheless, it’s way faster than starting from scratch. MedPac has had enlightened leadership, a great staff and really superb commissioners. It’s worth a shot. Right on, Maggie!

  13. It’s interesting what history shows us when we open our eyes and are willing to look. Compare what Maggies says about this wonderful salvation MedPac;
    “They realize that doctors and hospitals should be rewarded for the quality of the care they provide, not the quantity.”
    “patients typically spend fewer days in the hospital and see fewer specialists.”
    MedPac will ration care but in a smart omnipresant way where no one gets hurt.
    Read PEGRAM et al. v. HERDRICH, Supreme Court decision
    “Consideration of the consequences of Herdrich’s contrary view leave no doubt as to Congress’s intent. Recovery against for-profit HMOs for their mixed decisions would be warranted simply upon a showing that the profit incentive to ration care would generally affect such decisions, in derogation of the fiduciary standard to act in the patient’s interest without possibility of conflict. And since the provision for profits is what makes a for-profit HMO a proprietary organization, Herdrich’s remedy–return of profit to the plan for the participants’ benefit–would be nothing less than elimination of the for-profit HMO. The Judiciary has no warrant to precipitate the upheaval that would follow a refusal to dismiss Herdrich’s claim. Congress, which as promoted the formation of HMOs for 27 years, may choose to restrict its approval to certain preferred forms, but the Judiciary would be acting contrary to congressional policy if it were to entertain an ERISA fiduciary claim portending wholesale attacks on existing HMOs solely because of their structure. The Seventh Circuit’s attempt to confine the fiduciary breach to cases where the sole purpose of delaying or withholding treatment is to increase the physician’s financial reward would also lead to fatal difficulties.”
    People forget that prior to giving HMOs ERISA premption it was illegal in most states to pay doctors to deny someone care. Congress wanted to ration care though, and not be blamed, so they just wiped all those pesky state laws aside. The same people that blame the evil insurance companies for denying treatment and making a profit give a free pass to the very same politicians that created them and gave them the mandate to do so. Those same suckers now support Obama, Baucus, and even Teddy, the father of original sin as far as healthcare is concerned, as they attempt to do the exact same thing. Are they so partisian they don’t care or so blind they can’t see? How can you advocate replacing HMOs with MedPac, your changing the sign above the door but still serving the same rotten reform, and still the suckers line up by the millions. Every liberal vote is testiment to the power of media to obscure the facts.

  14. Sounds a lot like a 2010 version of HMOs. Not so much in the nuts and bolts of how it operates but the intent behind it. Everyone knows the only way to control cost is for someone to stand up to consumers and tell them no. This has been clear since the late 60s when Medicare started the finacnial arms race of spending. The reason Ted Kennedy so staunchly supported HMOs was he and the rest of Congress saw them as a vehicle to ration care and spending at arms length. They would cut or raise funding to the HMOs as needed there by forcing the HMOs to ration the care. As history proved the public directed their anger at the HMOs and didn’t blame Congress at all. So here we are a good 10-15 years after HMOs died as a Congressional Tool and now they propose MedPac, an “independent” body that will determine reimbursements and set care protocals. How is any organization appointed by Washington and funded by Washington truely independent? Were Fannie and Freddi Independent? Was the SEC independent? MedPac will follow the agenda of it’s overlord just as all the other “independent” organizations in DC do.
    The Millitary base closing have been far from successful, they haven’t closed nearly as many as they were supposed to and it has been highly political. Our Military build up in Murtha’s district alone these past 10 years is larger then most other countries.
    MedPac is the failed HMOs concept repackaged, to see people falling for it is sad, we really do never learn from our mistakes.

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