Rationing Under ObamaCare GALEN GUIDE No. 8
FALL 2012
The health overhaul law creates at least 159 new agencies, boards, commissions, and government offices dedicated to putting our health care system under Washington’s control. These and other ObamaCare programs will inevitably lead to rationing of health care. Some examples: Independent Payment Advisory Board The IPAB will be composed of 15 experts appointed to enforce limits on how much the government spends on Medicare each year. It will become the primary rationing board for Medicare. The IPAB will make recommendations about how Medicare spending will be cut, and its recommendations will go into effect automatically unless Congress overrides them with supermajority votes. There can be no judicial review of IPAB’s decisions. Democrats and Republicans have said they fear the board’s powers, which will impact hundreds of billions of dollars in Medicare spending.
Patient-Centered Outcomes Research Institute This new government agency is charged with determining which medical treatments are more “effective” than others. The judgment of doctors will be subordinated to this body of government experts. PCORI will have incentives to recommend the cheapest therapies that may work for most patients but that may disregard the needs of individual patients for whom the recommended therapies are not “effective.” PCORI also could quell medical innovation by throwing up another hurdle to getting new treatments to patients.
Center for Medicare & Medicaid Innovation The center is charged with “testing new payment and delivery system models that reduce costs while maintaining or improving quality.” While these are worthwhile goals, the HHS Secretary has considerable authority to decide how the center spends its $10 billion in direct funding over the coming decade. Political decisions are likely to determine which proposals are selected.
Rationing Under ObamaCare
Medicare Value-Based Purchasing Program This establishes a program to pay hospitals based on their “performance” in meeting governmentdetermined “quality measures.” It also will implement “value-based purchasing programs” that once again could have government picking winners and losers, disregarding the preferences of doctors and patients.
Physician Value-Based Payment Modifier This new rule changes the way doctors will be paid for taking care of Medicare patients. Doctors will be judged according to their compliance with government-determined “cost and quality measurements” — measurements that will be “defined by the secretary of HHS.” This will become “checklist medicine.” Doctors whose costs are above the threshold will be penalized financially.
Value-Based Insurance Design The Departments of HHS, Labor, and Treasury are charged with developing guidelines for health insurers to make sure they use its “value-based insurance designs,” particularly regarding preventive health services. Consumers will be encouraged to use the “higher value providers, treatments, and services” — as determined by government bureaucrats, not doctors and patients.
Coverage of Preventive Health Services The law requires new health plans to provide coverage without cost-sharing for preventive services recommended by the U.S. Preventive Services Task Force. This is the group that has recommended limiting mammogram tests for women and prostate screening for men.
Galen Institute is a not-for-profit public policy research organization devoted to promoting an informed debate over free-market ideas to health care reform. Request additional Galen Guides by emailing galen@galen.org and access our research online at www.galen.org.