Obamacare's Rationing by Another Name

How the Independent Payment Advisory Board gives sweeping powers to an unelected and unconstitutional board of bureaucrats.

The stunning post-debate reversal in Mitt Romney’s fortunes may not last through the elections. But win or lose, he’ll do the country a big favor if he continues to expose the Independent Payment Advisory Board—the beloved center-piece of Obamacare—for what it is: An effort to give an unelected and unconstitutional board of bureaucrats sweeping powers to determine whether grandma gets her bypass surgery from Medicare, or a boot off the cliff.

Liberal fact-checkers have been working overtime to discredit Romney’s claim that this board will “ultimately tell patients what treatments they can receive.” PolitiFact, one self-appointed guardian of truth, rated Romney’s statement as “mostly false.” The board, it insisted, “can’t deny treatment” or “ration care” or “make health care decisions for individual Americans.” Rather it can only determine what doctors and hospitals are paid. Likewise, The Los Angeles Times maintained that the board could merely “recommend ways to reduce Medicare spending”—not cut benefits.

But the whole point of the board is to use price controls to discourage expensive treatments. Yes, it is possible that some good doctor will be willing to perform bypass surgeries for Medicare patients even when the board only allows, say, payment for aspirin. It’s also very unlikely. If the board decides to set payment for state-of-the-art dialysis at below cost, reasoning that the benefits of the procedure aren’t commensurate with the added expense, it isn’t rationing care directly. But it is indeed rationing care, because this would effectively consign patients to older treatments.

Before the recession, Medicare spending had been growing 2.6 percentage points faster than GDP. The program already pays out roughly $290 billion more in benefits than it receives in taxes, and it constitutes somewhere between $38.6 to $90 trillion in unfunded liabilities for the federal government.

The main reason for the government’s out-of-control Medicare spending is that Uncle Sam picks up most of the tab for seniors’ health care, giving them little incentive to curb consumption or shop for better prices. Instead of restoring this incentive, Congress has historically tried to curb spending by cutting reimbursement rates for providers. But this has repeatedly failed because providers are politically powerful. Every time automatic cuts have loomed, Congress has undone them by passing the so-called “doc fix.” But instead of solving this problem by exposing doctors to market accountability, Obamacare tries to solve it by shielding the IPAB bureaucracy from political accountability.

Here is how it would work: When ever Medicare inflation threatens to exceed GDP growth plus 0.5 percent—by historical standards, that’s probably every year there isn’t a recession—the 15-member board would develop a “detailed and specific” “legislative proposal” laying out which treatments Medicare would cover and at what rate. President Obama describes this as “institutionalizing best practices.” In plain English, it means determining whose ox gets gored.

What distinguishes the IPAB from the Environmental Protection Agency or the Federal Drug Administration is that those agencies give affected parties opportunities to weigh in before issuing their rules. This board would not be required to offer any avenue for patients and providers to air their concerns, nor could its decisions be challenged in court. Coaxing coverage out of heartless private insurers will seem like a piece of cake compared to confronting this all-powerful bureaucracy, which allows neither access nor appeal.

The IPAB’s proposals would automatically become law unless Congress came up with its own equivalent spending cuts—or both houses, including a three-fifths majority in the Senate, waived it and the president signed the waiver. This is an exceedingly high hurdle that would effectively turn the IPAB into a super legislature.

But the most troubling thing about the board is this: Under the constitution, the legislative power—the supreme power—is lodged in Congress along with a democratic check. Courts avoid the democratic check but forego legislative powers. But no government entity, not even the Federal Reserve, gets unchecked legislative powers. This is what the IPAB will have, contravening the core of the Constitution’s scheme of checks and balances.

Medicare spending is a pressing problem, no doubt. But the IPAB is a cure worse than the disease. It thwarts seniors’ treatment options, providers’ independence, and the constitutional balance of powers. The more Romney makes it an issue during his campaign, the more likely that the IPAB itself will be thwarted, whether he ends up in White House or not.

This column originally appeared in the Washington Examiner.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fist of Etiquette||

    This board would not be required to offer any avenue for patients and providers to air their concerns, nor could its decisions be challenged in court.

    The right to petition is pre-9/11 thinking.

  • Marshall Gill||

    So Sarah Palin was absolutely correct when she named them "death panels". Heck, only took you how many years to catch up, Shikha?

  • Question of Auban||

    I remember several people around me took the McCain / Palin bumper stickers cut off "McCain" and threw that part away and then put the "Palin" half of the bumper stickers on their cars.

  • Palin's Buttplug||

    "Big Gov SoCons for Sarah!"

  • Question of Auban||

    At the time, manywere under the impression that Palin was far more a supporter of limmited government than McObama.

  • Palin's Buttplug||

    Her breezy defense of TARP should have been your first clue.

    That is if you missed her Bridge to Nowhere hustling.

  • Question of Auban||

    I did not say I agreed with the assessment. Also, I said in comparison to McObama - in comparison to McObama is starting from near zero.

    For example, Revenge of the Sith is horrible in comparison to the original Star Wars Trilogy. But if one compares Revenge of the Sith to the Star Wars Holiday Special it is a work of cinematic genius.

  • Heroic Mulatto||

    Lies.

    Revenge of the Sith has whiny Anakin.

    The Star Wars Holiday Special has Chewbacca's dad watching a porno.

  • ||

    And the first appearance of the enigmatic Boba Fett!

  • ||

    Technically, until Lucas added him later in the updates to SW:ANH, in which he was in the screenplay.

  • Rich||

    With all due respect, what is *that*?

  • Heroic Mulatto||

    It's a..."wow".

  • Marshall Gill||

    Her breezy defense of TARP should have been your first clue.

    You defend TARP, so what is your issue here?

    Opps, my mistake. For a second I was thinking that you were something other than a sock puppet.

  • ||

    Yes, she was. I anticipate the many guffaws that Tony and Turdpolisher will inspire tying themselves in knots defending this panel. .....Talk about tortured logic.

  • Bardas Phocas||

    They prefer to be referred to as "Life Panels".
    They decide who LIVES.

  • Palin's Buttplug||

    So now Reason is an unabashed supporter of "all you can eat" unfunded unnecessary state-run healthcare?

    Scooters for everyone!

  • Question of Auban||

    No, how about getting government out of the healthcare biz altogether?

  • BigT||

    Sarah, you were right. Now please flush your shit-filled buttplug down the toilet.

  • Palin's Buttplug||

    Fine. Start with Medicare.

  • Question of Auban||

    Assuming that we reimbuse everyone who had ever paid into the program the exact ammount that they paid plus interest (to make up for inflation and opportunity costs) I would support getting rid of Medicare. Are you now a Strict Constructionist?

  • buybuydandavis||

    Make everyone in a pyramid scheme good on their "investment". Yes, quite a fine plan.

    From whom exactly do you think it's just to extract that money from?

  • Question of Auban||

    Well, first of all, people were FORCED to pay into the pyramid scheme whether they wanted to or not. I would have not suggested what I did were it otherwise.

    Second of all, if the criminals in DC who claim to represent us were to shut down every single department that is not authorized by the U.S. Constitution, end the pointless wars, and shut down military bases overseas they could easilly find the money.

  • Alan Vanneman||

    You already posted this. Why do you keep doing this?

  • Cdr Lytton||

    If there's anyone who knows about turning in crap over and over again...

  • ||

    Indeed. Vanneman is, if nothing else, but dedicated to the religion of recycling.

  • Tim||

    Soylent Green reference here.

  • XM||

    People are soylent green.

  • Ted S.||

    We need an IPAB for determining how much to pay lawyers.

    After all, everybody knows there's not a single lawyer who does anything worth more than minimum wage.

  • Rich||

    board would develop a "detailed and specific" "legislative proposal" ..., contravening the core of the Constitution’s scheme of checks and balances.

    Much recent legislation is full of TBD-bureaucrats being enabled to institute TBD-"solutions". Wesley Mouch rules!

  • John||

    In a free market people may die because they don't have money. In a government run system, people die because the government decides they should. When you think of it that way it is no surprise that progressives and demonic little weirdos like Shreek love government run health care. Whether it be eugenics, abortion or outright death camps, it always comes down to creating paradise by killing the undesirables with these people.

  • John||

    Here is a good example of what I am talking about.

    http://washingtonexaminer.com/.....H1bIaCX-YJ

    "Choice" means forcing people to pay for abortion coverage. And "contraception coverage" means trying to get as many women as possible to sterilize themselves. Progressiveism is a fucking death cult.

  • Marshall Gill||

    John, the best description of Socialism is that it spreads misery equally. Socialize medicine is no different. Since some people are unable to afford premium health care socialized medicine denies this and makes everyone have the same bad care.

    Rather than have some people with better care than others we will make everyone have the same, shitty care no matter how much they work or produce.

  • Staup||

    Our country's healthcare system is probably the furthest from socialized medicine than any other first world country in the world, to be honest.

    And in most countries with universal healthcare, there is basic care provided for everyone, but what also exists is a luxury market for those who want more or better care can simply pay for it.

    It's easy to come on a board like this and criticize the idea of universal healthcare, but not so easy when your loved one gets in a car accident and you are faced with letting them suffer without care or possibly go bankrupt because you don't have insurance or your insurance doesn't cover half of what is needed.

  • KDN||

    It's easy to come on a board like this and criticize the idea of universal healthcare, but not so easy when your loved one gets in a car accident and you are faced with letting them suffer without care or possibly go bankrupt because you don't have insurance or your insurance doesn't cover half of what is needed.

    This is one of the worst arguments I have ever read.

  • Staup||

    And you likely have never been in the situation. There's a reason medical bills are the number one reason for personal bankruptcy in the this country.

  • ||

    Actually, no, the belief that evidence free emotional assertions win arguments is the number one reason that people like you make evidence free emotional assertions.

  • Staup||

    "Actually, no, the belief that evidence free emotional assertions win arguments is the number one reason that people like you make evidence free emotional assertions."

    That statement alone proves that you don't understand healthcare.

    But assuming you're a Libertarian, I will offer that there is almost no evidence whatsoever that a Libertarian economic policy fully works for a society but you guys will insist it does until the cows come home.

  • tarran||

    And here is a classic example:

    [The harming of patients] is quite evident in the sad case of British Corporal Matthew Millington of the Queen’s Royal Lancers who died at the age of 31 from lung cancer, after receiving – in a transplant – the cancerous lungs of a smoker who averaged 30 – 50 cigarettes a day.

    Why would a hospital implant the lungs of a person who smokes so many cigarettes a day into a patient? Was it the result of an inexperienced surgical team making a ghastly mistake? No. The surgery was performed by Papworth Hospital in England, which is the main transplant hospital in the United Kingdom, whose spokesmen claim that in fact everything was done properly!

    A spokeswoman for Papworth, the UK’s leading cardiothoracic hospital, said that it was not unusual to use smokers’ lungs, adding that all organs are “screened rigorously” before a transplant. “We have a strong record of high quality outcomes and this is an extremely rare case.”

    In the past year there were 146 lung transplants in the UK, and 84 people died while waiting on the transplant list, she added. “If we had a policy saying we did not use the lungs of those who smoked, then the number of lung transplants would have been significantly lower.”
  • Staup||

    This has to be one of the most ignorant articles Reason has ever produced. You can debate whether you think the IPAB is a good idea or not, but it's certainly better than what we have now. What do you we have now? Something called the "RUC", or review utilization committee, which is a group of doctors sponsored by the AMA that gives Medicare recommendations on what to reimburse for medical care. That's right, it's basically doctors recommending how much doctors get paid. And it's followed to the law. Independent of any kind of market forces or anything else.

    The reason the IPAB was created was the because many congressman have been trying to pass laws to reduce payments for years, but medical lobbyists keep preventing it. It was created as a way around that.

  • tarran||

    Yes, I'm sure this intervention will improve the problems created by all the other interventions.

    It's time to end medicare and force medical service providers to cut their prices to what their patients can actually afford.

  • KDN||

    Nonsense, you always double down on 16.

  • Staup||

    Honestly that will never work. Medicine does not behave like a normal market and is just too complex.

  • tarran||

    Honestly that will never work. Medicine does not behave like a normal market and is just too complex

    No it's not. Medicine is like any other service.

    The reason why the government doesn't allow people are able to freely purchase and sell medical services is that under a free market it's too affordable.

    See How Government Solved the Health Care Crisis: Medical Insurance that Worked — Until Government "Fixed" It by Roderick T. Long

    Today, we are constantly being told, the United States faces a health care crisis. Medical costs are too high, and health insurance is out of reach of the poor. The cause of this crisis is never made very clear, but the cure is obvious to nearly everybody: government must step in to solve the problem.

    Eighty years ago, Americans were also told that their nation was facing a health care crisis. Then, however, the complaint was that medical costs were too low, and that health insurance was too accessible. But in that era, too, government stepped forward to solve the problem. And boy, did it solve it!
  • Staup||

    Tarran, with all due respect, those articles you posted are horsh**.

    In no way is Medicine like any other service.

    I will venture a guess that you have never experienced a significant financial burden or emotional challenge because of health care. I could be wrong, but that's my best guess.

    Ask yourself this question. If you had a 10 year old daughter who got into an accident and became seriously ill, and the technology was there to save her, but market forces dictate that she not be saved, would you be willing to accept that.

    For most people, that answer is no.

  • tarran||

    I will venture a guess that you have never experienced a significant financial burden or emotional challenge because of health care. I could be wrong, but that's my best guess.

    ... and you would be completely fucking wrong.

    Ask yourself this question. If you had a 10 year old daughter who got into an accident and became seriously ill, and the technology was there to save her, but market forces dictate that she not be saved, would you be willing to accept that.

    If I couldn't find someone willing to help me make it happen of their free will, I would accept it.

    The alternative is forcing people to treat my daughter at gunpoint, which would probably not work out very well.
  • tarran||

    One last thing, asserting that the links I posted are horseshit without actually addressing why they are horseshit tells me that you are out of arguments.

    You'll note, I have educated you out of charity... You're welcome.

  • Staup||

    Trust me, you're not going to educate me. I have no idea who you are, but about .5% of the country knows more about healthcare than me, and from the articles you provided, you're not one of them.

    Those articles are so simple and written by people who clearly have very little understanding of healthcare, they're honestly not worthy of a response. But I'll play: so the first article talks about charity taking care of those who can't afford insurance. Really? Seriously? Of course in this radicalized system prices would readjust, but right now one heart attack costs around $1,000,000 to take care of. Not to mention a life of specialized cardiology care after that. So since heart disease is the number one killer in this country, you expect the majority of poor americans be able to get millions in charity care?

    And I love the whole bit about licensing in that article. Such a Libertarian concept, and so ridiculous. The next time you have heart attack, you're free to go to your all kinds of quack doctors right now that aren't licensed, but I rarely see anyone going. And the ones I do see go, I don't see come out.

  • ||

    Ah, yes, the evidence-free emotional assertion. Wins the argument every time.

  • ||

    This confirms my belief that there it some left-wing group that looks for libertarian post on the intertubes and posts knee-jerk true-believer nonsense in response to any comment they find.

  • pantathalos||

    Well written comments Staup. While it would be great if charity could supply the necessary funds, the reality is, that we even have trouble supporting health care with taxes! So the idea that charity will magically step in (which if it had, we wouldnt be worried about health care at all), is unrealistic.

  • ||

    Staup said:
    "about .5% of the country knows more about healthcare than me"

    but then he said:
    "you're free to go to your all kinds of quack doctors right now that aren't licensed"

    Actually, practicing medicine without a license in a serious crime. I know it's a felony in my state (Florida).
    http://www.leg.state.fl.us/Sta.....8.327.html

    Are you sure you're in the 99.5% percentile of healthcare knowledge proficiency?

  • Staup||

    Really Brian? Because around where I live they still practice, they just don't call themselves the same words as actual licensed physicians. Because they are NOT licensed. Ever hear of an integrative medicine clinic or something like that? If you live in a major city, they're definitely there. And yes, people go to them to get treatment for heart attacks and heart failure. Unfortunately most of it is scam and people lose their money.

  • ||

    Staup said:
    "Really Brian? Because around where I live they still practice, they just don't call themselves the same words as actual licensed physicians. Because they are NOT licensed."

    but you originally said:
    "you're free to go to your all kinds of quack doctors right now that aren't licensed"

    If your point isn't that people are free to go to unlicensed physicians, then you're argument is ignoratio elenchi.

    Still, licensing requirements vary from state to state. For example:
    Arizona Board of Homeopathic and Integrated Medicine
    http://www.azhomeopathbd.az.gov/
    "The Board’s mission is to protect the health, safety and welfare of Arizona citizens by examining, licensing and regulating homeopathic physicians."

    The New York State Education Department
    http://www.op.nysed.gov/prof/acu/
    "An acupuncturist is a licensed health care professional who, based on the concepts of oriental medicine, maintains the health of patients and evaluates and treats their illness and pain."

    And I can go on and on. Practically all the searches for integrated medicine providers claim government licenses of some sort. If they're all quacks, then our governments are licensing quacks, which is hardly a case for government quality control.

    I'm still not buying the 99.5th percentile comment.

  • Raistlin Majere||

    "about .5% of the country knows more about healthcare than me"

    Oh. Well why didn't you say so at the begining. Now we're all convinced.

  • Staup||

    I didn't need to. I brought up points that couldn't answered with Libertarian reasoning.

  • Raistlin Majere||

    Except you didn't. So, you know, there's that.

  • buybuydandavis||

    Daniel Hannan is a British Member of the European Parliament who seems quite libertarian. It's interesting to get the perspective of a libertarian outside the US on the US system, and it's differences from Europe.

    The Death Panel is right out of the European model. Turn power over to a bureaucracy that is insulated from democratic pressures. Without overturning the entire government, you have no power to effect this board's decisions.

  • Ballz||

    Soylent Green is People!

  • pradaguccioutlet@gmail.co||

    It’s a tie game, folks: With the first of three presidential debates down and the vice presidential sideshow over, the two men at the top of the major party tickets will face off once again in yet another 90 minute debate, but putting on a carefully scripted show. cheap nfl jerseys positions. If either candidate started talking a good libertarian talk, even if only on a few subjects, they wouldn't ever be trusted this late in the game. And the game here is not just this general election but the whole of their political careers.

  • pradaguccioutlet@gmail.co||

    Let us hope the preceding paragraphs rouse the nation’s guardians from their torpid slumber, and alert them to the peril that threatens the very fabric of our nation. Let us hope. This insouciance seems ill-advised, when you reflect that Virginia’s Eastern Shore, where the chicken attack took place, is home to the Wallops Island Spaceport – a crucial piece of the nation’s transportation infrastructurecheap nfl jerseys positions. I can't tell if this article was Hinkle trying, poorly, to make a point about regulatory waste or Hinkle doing a rambling Andy Rooney schtick, poorly.

  • Sarah Conner||

    It's always a question of consent. The main reason that these things are so objectionable is that they are coercive and no one has a choice of whether or not to participate. If they were totally voluntary nobody would be angry about them for the most part.

    Forcing people into involuntary associations through these kinds of schemes always rubs most Americans the wrong way, even if that instinct is buried deep under layers of guilt that is induced in people over notions of helping the poor and disadvantaged.

    The method of coercion has usually been to alternately preach the best intentions while falsely shaming anyone who doesn't want to go along with the scheme. It's a nasty trick that power-hungry sociopaths who populate government employ against normal people time and again. And then of course once the violent power of the government is employed, people fall totally silent. The sick monsters always get what they want.

  • شات عراقنا||

    thank you

  • دردشة عراقنا||

    Nicest chat and chat Iraqi entertaining Adject all over the world

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