Obamacare: Full Employment Plan For Technocrats

The New England Journal of Medicine has become a leftwing journal on issues of public policy. Demonstrating its progressive bona fides, it just published an article—based on a symposium sponsored by the hard left think tank, Center for American Progress—proposing ways to control costs under the Affordable Care Act.  Since it is generally a politically liberal document, we should not be surprised that many of the suggestions involve increasing centralized control and/or imposing rule by “experts”—the progressive answer to every problem.

Also note that the authors are many of the usual suspects, e.g., Ezekiel Emmanuel (pro quality-of-life rationing), Tom Daschle (pro NICE rationing), Donald Berwick (pro NICE rationing), John Podesta, and Andrew Stern (former head of the SEIU)  etc.  From, “A Systemic Approach to Containing Health Care Spending:”

Global Target Rates For Payments:

Under a model of self-regulation, public and private payers would negotiate payment rates with providers, and these rates would be binding on all payers and providers in a state. Providers could still offer rates below the negotiated rates.

The privately negotiated rates would have to adhere to a global spending target for both public and private payers in the state. After a transition, this target should limit growth in health spending per capita to the average growth in wages, which would combat wage stagnation and resonate with the public. We recommend that an independent council composed of providers, payers, businesses, consumers, and economists set and enforce the spending target.

Eradicate Fee for Service:

Fee-for-service payment encourages wasteful use of high-cost tests and procedures. Instead of paying a fee for each service, payers could pay a fixed amount to physicians and hospitals for a bundle of services (bundled payments) or for all the care that a patient needs (global payments).

Competitive Bidding: I should like this, but get this part:

To oversee the process, we recommend that Medicare establish a panel of business and academic experts. Finally, we recommend that exchanges — marketplaces for insurance starting in 2014 — conduct competitive bidding for these items on behalf of private payers and state employee plans.

That’s a one-way “competitive system,” which isn’t really competitive at all since the providers would all appear to be bound by the same terms.

Require Exchanges to Offer Tiered Products:

The market dominance of select providers often drives substantial price variation.14 To address this problem, insurers can offer tiered plans. These insurance products designate a high-value tier of providers with high quality and low costs and reduce cost sharing for patients who obtain services from these providers. For instance, in Massachusetts, one tiered product lowers copayments by as much as $1,000 if patients choose from 53 high-value providers. We suggest that exchanges and state employee plans offer at least one tiered product at the bronze and silver levels of coverage. This requirement can be implemented by 2016 or sooner if feasible.

But insurance companies would do that on their own if left to their own devices. Again, it is one-way competition with technocrats calling the shots.

Require Exchanges to be Active Purchasers:

If exchanges passively offer any insurance product that meets minimal standards, an important opportunity will be lost. As soon as reliable quality-reporting systems exist and exchanges achieve adequate scale, it is critical that federal and state exchanges engage in active purchasing — leveraging their bargaining power to secure the best premium rates and promote reforms in payment and delivery systems.

That sounds suspiciously like a public option by the back door. And even if not, more experts, more centralized rating systems, etc..

I won’t go into them all, and not all the ideas are bad. It’s just that they are to be imposed and administered from the top-down, by expert panels—each with six figure salaries and backed by armies of professional staff—rather than allowed to bubble up through truly competitive processes. In that regard, I notice that no one apparently suggested allowing companies to compete nationally and across state lines. That could really save money, but it would make technocratic control more difficult.

This country is too big, too diverse, and too varied in its regions for rule from on high. Heck, look at the UK’s NHS mess. Worse, under technocracy, when things go wrong the answer is always increased technocracy. I am increasingly convinced that health care is the excuse to begin the process of transforming the USA into a system like the EU’s, governed by unaccountable bureaucratic technocrats of the ruling class. That’s the liberal way, but it isn’t, nor should be,  the American Way.

The article should be entitled: “Full Employment Plan for the Technocratic Class.” If President Obama is elected and Obamacare remains the law, we will have to fight the increased impetus to centralized control at all quarters.

HT: Matt Hanley