Dave Leonhardt's NYT column today looks at ways that health care reform legislation attempts to address the rising cost of health care. One solution, he says, is of particular importance. Leonhardt says that "economists put the idea near the top of their wish list, as has President Obama. It has the potential to bend the curve of Medicare spending, as the experts say, and eventually spread to the rest of medicine."
What is this mysterious and powerful reform idea? According to Leonhardt, it's "the creation of an independent commission with the power to suggest changes to Medicare payment rates." (Bold mine.)
That's right, the key to keeping health care costs down is the power to say to Congress, "Hey, maybe you might consider cutting payments to some of your constituents. Maybe. Possibly. Perhaps. You know, if you want to." To which Congress will obviously respond by telling constituents that sometimes payment rates have to drop for the larger good, and ignoring organized lobbying efforts to keep payments from dropping.
Yes, yes, I snark—but not without cause! There's good reason to believe that Congress will simply ignore such suggestions. In the past, changes to reimbursement rates have been governed by a formula, but Congress consistently voted to avoid making cuts based on that formula. Why should this be any different?
As former CBO chief Douglas Holtz-Eakin recently wrote, "Everyone knows that Congress will never surrender its budget authority to independent commissions." And, when I reached him on the phone last week, he told me, "They surrendered their budget authority to a formula, but they took it right back." To Congress, in other words, when it comes to cutting payments to powerful constituencies, there's little difference between a formula and a commission.