GOP should rethink opposition to health care's cost-control board

By Ezra Klein
Sunday, August 15, 2010

I've got some good news for deficit hawks: This year, Congress passed legislation reducing the deficit by about $125 billion over the next 10 years. But, as they say on the infomercials, that's not all! The bill cuts the deficit by $1.3 trillion in the second decade. That more than pays for every dollar we've spent on stimulus since 2008. It also sets up a new -- and credible -- system to keep Medicare's costs under control. So, hear that, fiscal conservatives? Hear that, bond markets? This is progress, baby. We'll lick our deficit problem yet.

The bill in question, of course, is the Patient Protection and Affordable Care Act, better known as health-care reform. The numbers come from the nonpartisan Congressional Budget Office. But as always, there's a catch: The savings arrive only if the policies behind the savings are allowed to do their jobs. And in the GOP's zeal to repeal a bill it considers a deficit-increasing nightmare, Republicans are focusing their fire on the parts they should like: The cost controls.

On July 27, Sen. Jon Cornyn (R-Tex.) introduced the Health Care Bureaucrats Elimination Act, co-sponsored by Sens. Orrin G. Hatch (R-Utah), Jon Kyl (R-Ariz.), Pat Roberts (R-Kan.) and Tom Coburn (R-Okla.). The legislation doesn't seek to repeal health-care reform (though many Republicans would also like to do that). Instead, it takes aim at perhaps its most promising cost control: the Independent Payment Advisory Board.

It's a boring name, but the board -- IPAB to its friends -- is a radical idea. Over the past decade, Congress has not exactly been a profile in courage when it comes to reforming Medicare. The program might be bankrupting the country over the long run, but congressfolk face reelection every few years. So they've punted. Some Republicans say IPAB is just one more punt: It hands the hard decisions off to someone else. But that's exactly why it might work.

Behind the acronym will be 15 presidential appointees, each confirmed by the Senate. They'll be drawn from the health-care industry, academia, think tanks and consumer groups. Their reform proposals will have to pass through Congress, but they will have some advantages: If Congress doesn't act, their recommendations go into effect. If Congress says no but the president vetoes Congress and the veto isn't overturned, their recommendations go into effect. If Congress wants to change their recommendations in a way that'll save less money, it will need a three-fifths majority. Oh, and no filibusters allowed.

The hope is that this will free Congress to permit cuts by making it easier for them to dodge the blame. "Putting the knife in someone else's hand will be a relief," says Robert Reischauer, director of the Urban Institute and a former director of the Congressional Budget Office. "It will allow Congress to rant against the cuts without actually stopping them."

The board's first recommendations will be for 2015, but it'll take until 2018, when its purview expands to cover hospitals, for it to really start swinging its weight around. If the board makes it that far, it'll be the most aggressive effort lawmakers have ever made to control Medicare's costs.

That's a big if. Republicans have zeroed in on the board as a soft target in their campaign to gut the health-care reform bill. "In true fashion of Obama- Reid-Pelosi hubris," Cornyn said, "the IPAB is the definition of a government takeover." A government takeover of . . . Medicare?

Putting aside the metaphysics of the government taking over a government program, Cornyn makes two arguments, and they show the difficulty Republicans are having opposing health-care reform without opposing fiscal responsibility and much-needed deficit reduction.

One of his arguments is that IPAB would take these decisions away from Congress, which is more accountable to voters (and thus hasn't been able to make any of these decisions). "America's seniors deserve the ability to hold elected officials accountable for the decisions that affect their Medicare," he said.

"I think that's dead right," Reischauer said. "And when the political system is willing to assume those responsibilities, they should get them back." But in recent years, Congress has been feckless in the face of Medicare's spending. Repeal IPAB and you've restored the status quo on Medicare. That status quo was leading to federal bankruptcy.

Cornyn knows this, and so his other argument is that Congress buckled before lobbyists and that IPAB doesn't go far enough. "Special-interest groups cut deals with Democrats to specifically exempt hospitals, 28 percent of Medicare's budget, from the IPAB's ax," his statement points out.

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