Friday, July 17, 2009

BRAC for Medicare? A Good, But Not Sufficient, Idea

"CRFB Praises Proposal to Create BRAC-Like Commission for Medicare" -- that's the headline atop an important press release that hit Washington Friday night. Forgive the jargon: CRFB is the Committee for a Responsible Federal Budget; and BRAC is the Base Realignment And Closure Commission, created by Congress in 1990 to expedite the process of closing redundant or otherwise wasteful military bases.

The topic is the goal of controlling health care costs--a topic made all the more red hot because Doug Elmendorf, the Democratic-installed director of the Congressional Budget Office, delivered a "devastating" (in the words of The Washington Post, in the first sentence of the first paragraph of its front-page story on Friday) blow to Obamacare; Elmendorf declared, in Capitol Hill testimony on Thursday, that Obamacare, as drafted so far, would increase, not decrease, health care costs.

And the name of the game right now in DC is controlling health care costs. Nobody has any idea what the health care expenditures will be in the far-away "out years," but for the near term, the Democratic politicians who lead Congress and the White House would like to be able to say that they can deliver "universal" coverage to Americans for, say, $1 trillion over ten years. Yet now, thanks to Elmendorf--and earlier studies from the CBO--that particular dream seems out of reach, even in theory.

So back to BRAC. BRAC was a great idea--the brainchild of former Rep. Dick Armey (R-TX), who served as House Majority Leader in the 90s and into the next decade, till he retired in 2003. In a nutshell, the idea of BRAC was that an independent commission would determine cuts in military bases, and present these proposed cuts to Congress. For its part, Congress had to approve or disapprove of the closures as a package--it could not pick and choose. That was the genius of Armey's idea: It was all or nothing for Congress.

And CFRB is a blue-chip outfit run by my colleague at the New America Foundation, Maya MacGuineas, who has long been a leading voice on fiscal-discipline issues. As Maya's CFRB explains:

Today, the White House urged Congress to institutionalize a process of reviewing Medicare changes as part of overall health care reform. The proposal would create an Independent Medicare Advisory Council (IMAC), which would be comprised of technical experts and health care professionals and would make recommendations on payment rates and other policy reforms.

The Committee for a Responsible Federal Budget strongly supports any efforts to bring down health care costs, and believes setting up a BRAC-like commission, or increasing the independence and authority of the Medicare Payment Advisory Commission (MedPAC), as Senator Rockefeller has proposed, would be useful in doing so.

"Given that huge deficits the country faces, slowing the growth of health care costs is the most important objective of health care reform," said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. "Changes to the process to help bring the spending curve down are in order and this proposal would definitely be an improvement over the process we have now. Given what we are seeing come out of Congress so far, policymakers may end up with legislation that would bend the curve, but in the wrong direction!"

Proposals to empower an outside body with making recommendations for cost savings could help reduce political pressures surrounding some of the difficult and controversial health care and Medicare reforms ahead. This, in turn, could lead to both larger and more rational cost-reducing policies - policies which are absolutely necessary to ensure the country's long-term fiscal sustainability.

And so of course, we need to find ways to keep Medicare costs down--just as we should seek to control all health care costs, just as we should seek to make all government spending as parsimonious as possible.

But we have to control health care costs the right way--because, after all, our health and our lives are at stake. (And, as I have argued all along on the Serious Medicine blog, there's a significant economic variable, as well.)

BRAC made a lot of sense back in 1990, when the big push was to downsize the military and finally enjoy the "peace dividend." Of course, the world never became quite as peaceful as people hoped, and so quite a few military bases survive. And, of course, we have built many new bases, in places such as Iraq and Afghanistan. The point here is that a base-closing process makes the most sense when the trendline is down; that is, bases are being closed, or should be closed. But what if defense spending has hit a plateau, or should hit a plateau?

And thus to Medicare. It's worth saying again: health care costs should be controlled. But the problem with a BRAC-like process is that it leaves open the question: Which health care costs will be controlled, and how? Would Medicare BRAC-type authorities cut out empty hospitals--the proverbial waste, fraud, and abuse--or would they seek to squeeze down on medical research? After all, to put it in super-cynical cold language, old people are expensive: Some such as Richard Lamm, the former governor of Colorado, have been happy to say that seniors have "a duty to die and get out of the way." That was an extreme formulation, to be sure, but Lamm was hardly alone in thinking that oldsters are a fiscal burden that could be, uh, lightened somehow. Today, plenty of health care experts and bioethicists spend their time trying to rationalize, or euphemize, various euthanasia schemes.

What's needed for health care is what's needed for anything the government does--a policy and a strategy. We had a policy and a strategy for the Cold War, which could be summed up as "Spend what it takes to contain communism." From the Truman years in the 40s to the Reagan years in the 80s, the voters had plenty of opportunity to assess Cold War policies, and to pass judgment on Cold Warriors. And while plenty of mistakes were made along the way--Vietnam in the 60s, Lebanon in the 80s--the overall policy was a great success. Indeed, the Cold War was vindicated in 1989, with the fall of the Berlin Wall. And after that policy bore its fruit, we could look for ways to cut spending--hence BRAC, which came the following year.

So BRAC was a great approach when the new direction had been set--instead of increases, the new direction was decreases.

Today, many argue that the future direction of health care should be like that of defense spending in the 90s--downward. If so, a BRAC-like approach might make sense.

But what if we should be spending more on health care? Not more money for foolishness, of course, but more for things that save money--most obviously programs for prevention, vaccines, and cures for illnesses that strike people down in the prime of their lives? These are important policy questions, to be sure--and that's the point. These are policy questions, and they haven't yet been resolved.

Until those questions are resolved, BRAC might be too much of a blunt instrument. What we need is a policy debate, over how to proceed on health care. And after that, when we have a policy, when we have a strategy, then it will be obvious what to cut--and what not to cut.

But not until. Right now, we are still formulating--or we should be, anyway--a comprehensive strategy on health care. It is the view of Serious Medicine that the right strategy is to spend more on illnesses and problems that cost American society lots of loss and lost economic output. Those are the natural things to focus on.

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