Don't Just Keep the Medicare Commission, Strengthen It
The Independent Payment Advisory Board (AKA the Medicare Commission) is one of the most important pieces of healthcare reform. This commission should not only remain in the bill, but should be given as broad a mandate a possible.
Under the Senate version of the bill, the commission would be required to make recommendations to reduce Medicare spending, which would be automatically enacted if not modified by Congress, whenever it grew by more than 1 percent beyond GDP after 2019 (a more complicated measure would be used from 2015 through 2019).
The bill would require the commission to recommend a certain amount of savings each year, but limit its preview primarily to reducing provider payment rates and private insurer subsidies from the Medicare system. The commission could also make recommendations for reforming the private health care system - but these would be completely advisory in a nature.
To really make a difference, though, we recommend a broader mandate. The commission should be able to reform Medicare benefits and contribution levels, where it makes sense, and also make changes to Medicaid, SCHIP, the exchanges being created in the bill, and even the excise tax on high costs plans.
Focusing on Medicare provider payment rates, alone, may prove politically and economically unsustainable. Medicare payment rates cannot grow significantly slower than private insurance rates forever without causing providers to begin dropping Medicare payments altogether. If this occurred, policymakers might begin overruling the commission's recommendations just as they have with scheduled cuts in Medicare physician payments. By sharing the pain more broadly, though, cuts will be much easier to maintain.
Moreover, a broader mandate maximizes the chance of being able to control health care costs. There is no question that provider payment schemes in Medicare can help lead the way to system-wide reform. But expanding these schemes to other federally-run or federally-subsidized insurance programs would increase the chance for success. And other types of changes such as increased patient cost-sharing and a smarter health insurance excise tax can also help to push down prices.
The bottom line is, if reform passes this time, it might be a while before we have another chance. Yet the measures in this legislation, alone, are unlikely to control costs to the extent we need them to. Empowering a Medicare health care commission to make these changes for us - especially as we better learn what works and what doesn't - may be the best hope for bringing public and private health care cost growth under control. And if we don't do that, we have little hope of avoiding the coming debt crisis.
