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Better Conservatives Needed

Posted By Robert Moffit On June 26, 2008 @ 2:40 pm In Economics | Comments Disabled

The Left is winning the big health care policy victories with the help of rank and file GOP members and their feckless Republican Leadership in Congress.

The latest example is the enactment of H.R.6331, The Medicare Improvements for Patients and Providers Act. In spite of threatened Presidential veto, the bill passed the House this week by a lopsided 355 to 59 vote. The bill does nothing at all to reform the Medicare dinosaur, and every provision simply reinforces its worst features, bureaucratic central planning and its mind numbing price controls. Because physicians are facing a 10.6 percent Medicare payment cut under Congress’s own administrative pricing formula, the House voted to stop its own handiwork from actually taking effect (good idea), but of, course, it preserved the very administrative pricing formula that causes this annual Chinese fire drill in the House and Senate (bad idea [1]). So, this is Victory #1 for the Left’s prized Medicare’s pricing regime. This means that Congress will continue to exercise even greater control over physicians’ livelihood next year and the year after that, when the magnitude of the congressionally ordained and scheduled payment cuts become even larger.

Under the curious scoring for entitlement spending, this delay in the scheduled Medicare physician cuts is, of course, going to cost money. So, the congressional liberals think that the best way to offset that assumed cost is to cut $13.6 billion out of the popular and successful Medicare Advantage program over the next five years and $50 billion over the next 10 years. If you think that this is because Congressional liberals have come down with a sudden case of fiscal responsibility, you haven’t got a clue. Scott Gottlieb,M.D. a former HHS official writing in the June 24th edition of The Wall Street Journal, said it best,”Democrats hate Medicare Advantage and have been trying to cut it for quite some time, because they don’t like health care markets.” The urgency for congressional liberals and ideological opponents of health care markets is that today one out of five seniors today are choosing private health plans, exercising an unprecedented level of personal choice in a consumer driven market that is rapidly growing, especially in rural America [2]. For congressional liberals, many of whom are wedded to a “single payer” government run health care system, its essential to cut off this initial success at the knees. The fewer private health plans in Medicare, the better. None at all would be best. Meanwhile, chalk up the bill’s Medicare Advantage provisions as Policy Victory # 2 for the Left.

The bill also terminates new contracts, and blocks and delays competitive bidding for durable Medical equipment and supplies (scooters, wheelchairs, hospital beds and oxygen equipment,etc) in the Medicare program, a process which Congress authorized in 2003. The new competitive program, starting in 10 metropolitan areas, was supposed to go into effect on July 1, 2008. The competitive bidding for durable medical equipment and supplies would result in a 26 percent reduction in Medicare payment for these items [3]. Competition does that sort of thing in controlling costs. But the medical suppliers complained to lawmakers about competitive bidding, and wanted it stopped before it got off the ground, and the House of Representatives, in a bipartisan spirit, complied. For good measure, the House revised the government existing fee schedule downward 9.5 percent (Doctors please take note) in order to make up for the savings that would have otherwise come by making the dreadful competition legal. Killing competition and market based pricing in Medicare and tightening up Medicare’s administrative pricing in one bill. A double play! Chalk that up as health policy Victory #3 for the Left.

Meanwhile, the bill expands benefits and contains no serious reforms of the Medicare program. Medicare spending is up 47 percent in the last four years. That is just the beginning. The Congressional Budget Office projects that Medicare costs will rise an additional 7 percent annually over the next decade – nearly doubling in nominal dollars. Over the long-term, the combination of 77 million retiring baby boomers and rising health care costs is projected to push Medicare spending from 2.7 percent of GDP today to 9.4 percent of GDP by 2050 – which would require massive tax increases or spending cuts. Congress needs to reform the program, not just add benefits and reinforce the worst features of a broken system.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/06/26/better-conservatives-needed/

URLs in this post:

[1] bad idea: http://www.heritage.org/research/healthcare/wm1931.cfm

[2] one out of five seniors today are choosing private health plans, exercising an unprecedented level of personal choice in a consumer driven market that is rapidly growing, especially in rural America: http://www.heritage.org/research/healthcare/bg2142.cfm

[3] The competitive bidding for durable medical equipment and supplies would result in a 26 percent reduction in Medicare payment for these items: http://www.heritage.org/research/healthcare/wm1959.cfm

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