The Independent Payment Advisory Board — Congress’s “Good Deed” | Health Policy and Reform

The Independent Payment Advisory Board — Congress’s “Good Deed” | Health Policy and Reform:

“Among the most important attributes of legislative statesmanship is self-abnegation — the willingness of legislators to abstain from meddling in matters they are poorly equipped to manage. The law creating the Federal Reserve embodied that virtue. Congress recognized the abiding temptation to use monetary policy for political ends and realized that it would, at times, prove irresistible. To save themselves from themselves, wise legislators created an organization whose funding and operations were largely beyond the reach of normal legislative controls. Short of repealing the law, Congress denied itself the power to do more than kibbitz about monetary policy.

“In establishing the Independent Payment Advisory Board (IPAB) in section 3403 of the Affordable Care Act (ACA), Congress may once again have shown such statesmanship. For several reasons, however, it is too early to be sure. The board must surmount major challenges — first to survive and then to function effectively. Harold Pollack has neatly summarized the problem, the solution, and the problem with that solution: “Every Democratic and Republican policy expert knows that we must reduce congressional micromanagement of Medicare policy. Unfortunately, every Democratic and Republican legislator knows that mechanisms such as IPAB that might do so would thereby constrain their own individual prerogatives.”1

“Medicare’s founding legislation stated that “Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine.”2 Duly warned, Medicare administrators have largely forborne from using coverage policy or financial incentives to discourage ineffective or needlessly costly methods of care. Members of the legislative branch have not, however, displayed similar restraint. They have pressured those same administrators on coverage policies and passed laws to impose them.

“In the view of many observers, both executive inactivity and legislative intrusiveness have been unfortunate — the former because the leverage that the country’s largest single buyer of health care could wield to effect reforms has gone largely unused, the latter because few members of Congress are well enough informed to make such decisions wisely, and some are in thrall to campaign contributors and producers and suppliers of medical services.”

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Squandering Medicare’s Money – NYTimes.com

Squandering Medicare’s Money – NYTimes.com:

“MEDICARE has suddenly taken center stage in American politics, with Democrats now trying to score an advantage from the unpopularity of the Republican plan to overhaul the government health insurance program. Apart from the politics, though, Medicare’s financing challenges are worsening: this month, Medicare’s trustees projected that the insurance program would become insolvent by 2024, five years earlier than previously estimated.

“Much has been said about the growing gap between the program’s spending and revenues — a gap that will widen as baby boomers retire — but little attention has been focused on a problem staring us in the face: Medicare spends a fortune each year on procedures that have no proven benefit and should not be covered. Examples abound:”

Go to the original piece for the rest!

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What Is a ‘Just’ Physician’s Income? – NYTimes.com

What Is a ‘Just’ Physician’s Income? – NYTimes.com: “The payment of physician income has been the subject of a lively debate for centuries. In fact, one finds it addressed at length in the famous Code of Hammurabi, chiseled into stone tablets some 4,000 years ago by edict of the Babylonian King Hammurabi along, by the way, with a malpractice system that makes today’s look like a pussycat.

Adam Smith, who generally is regarded as the father of modern economics, mused at length on the compensation of physicians in his celebrated book “An Inquiry Into the Nature and Causes of the Wealth of Nations” (1776).

Chapter 10 of Book 1, titled “Wages and Profit in the different Employments of Labour and Stock,” is a gracefully written treatment of what we now call labor-market theory. It is well worth a read.

“Honour makes a great part of the reward of all honourable professions,” Smith wrote. “In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to show by and by. … Disgrace has the contrary effect. The most detestable of all employments, that of public executioner, is, in proportion to the quantity of work done, better paid than any common trade whatever.” (Italics added.)

Today we teach students that seemingly mysterious differences in the pecuniary income of different occupations can be explained in part by what we call “compensating variations in the psychic income” associated with different occupations.

Remarkably, in his treatise on compensation, Smith then departed sharply from the traditional demand-and-supply framework he popularized and we economists usually employ to explore employment and wages. Instead, for physicians and lawyers he appeared to lean on the medieval doctrine of “just price.” Thus he wrote:

We trust our health to the physician: our fortune and sometimes our life and reputation to the lawyer and attorney. Such confidence could not safely be reposed in people of a very mean or low condition. Their reward must be such, therefore, as may give them that rank in the society which so important a trust requires. The long time and the great expense which must be laid out in their education, when combined with this circumstance, necessarily enhance still further the price of their labour.

Although I’m a card-carrying economist who normally is quite comfortable with our supply-demand framework for virtually anything, I do find Adam Smith’s perspective persuasive.

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Bruce Bartlett: Are Taxes in the U.S. High or Low? – NYTimes.com

Bruce Bartlett: Are Taxes in the U.S. High or Low? – NYTimes.com:

“The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.

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Myopia

[Originally posted at Doctors for America’s Progress Notes Blog]

Andrew Sullivan’s tag line, via George Orwell, is that “It is a constant struggle to see what is past the end of one’s nose.” One of my favorite lines is from Upton Sinclair, “It is difficult to get a man to understand something if his livelihood depends upon his not understanding it.”

When I say “favorite,” I mean I like it because it says a lot about the human condition in general, and about our political struggles in particular. Unfortunately, in these times, this myopia in our world views has the potential to lead to human misery, and to continue America on the road to tragedy, as we already have passed farce. I consider myself an optimist, but recent events including our world class embarrassment of a debt ceiling “deal” have left me pessimistic for our short term prospects of reinvigorating our priorities as a nation and consequently our intermediate term prospects of leaving the nation better than we found it.

We have been at our best as a nation when we have had visionary leadership, from Teddy Roosevelt’s “Square Deal,” to Franklin Roosevelt’s “New Deal,” to LBJ’s “Great Society.” Even Eisenhower’s more mundane Interstate Highway System and JFK’s goal to put a man on the moon represent aspirational goals for America. (“We chose to do these things, and the others, not because they are easy, but precisely because they are hard!”) Now, our political will has been demeaned to the lowest common denominator: how will I keep more of my meager income for myself in the short term?

Paul Krugman, Robert Reich, and others have been banging this drum for over a decade now: investing in human capital is the way to grow the economy and keep us a great country. Many wish to continue the defunding of our societal investment in human capital: reducing investments in education and research, reducing money spent on the health of the population, demolishing our social welfare programs like Medicare, Medicaid, SCHIP and Social Security. This is short sighted and a recipe for disaster (with all the ingredients mise en place).

We now have plugged in a small group of Congress Persons in the wildly inappropriately named “Super Congress,” with the stated goal of resolving our budget stalemate. I am skeptical, to say the least, and two articles in this week’s New England Journal of Medicine reinforce my pessimism.
Jonathon Oberlander points out that “austerity politics” are now in force, and there are real potential dangers that Medicare and Medicaid funding could be cut substantially, including reduced payments to providers, reductions in federal funds for state Medicaid programs, increasing cost-sharing for enrollees, repealing the long term care insurance provisions in the ACA, and – per Paul Ryan’s plan – changing Medicare into a voucher plan.

While Oberlander doesn’t say it, I will: the “austerity politics” manufactured in Washington by power brokers with lots of money behind them are designed to take an axe to the programs that provide medical care to those who need it and prevent expansion to those who need it even more. We at DFA are all too aware of deficiencies in our current health care system and are not shy at all about pointing them out. But we also know that reforming health care requires a greater intellectual effort than unthinking cuts born out of myopic political calculations.

In the same NEJM issue, Christopher Jennings notes that many stakeholders in health care are coming to realize that there is almost no good that can come out of the work of the Super Committee. Because of the construction of the debt ceiling deal, if the Super Committee reaches no deal and the “automatic cuts” are enacted, Medicaid is exempt from cuts and Medicare would face “only” a two percent cut. As he explains, it is hard to imagine a deal crafted by the twelve that would so good to health care funding:

From the current vantage point of these stakeholders, the choice is therefore not a close call; the automatic cuts are by far the best poison to be forced to take, particularly in comparison to the concoction they fear the super committee could produce. It would meet the requirement of the law, protect against unknown and much larger cuts, and preserve resources and bargaining chips for the next big deal, which will probably take place in 2013 after the presidential election.

So, there is hope, if I ditch my own myopia and hope and pray and work for a new, better Congress in 2013, we may be able to get on the path to becoming a great country again, instead of the “dollar store” nation that so many seem to believe is our destiny!

FactCheck.org : Premium Nonsense On Medicare

FactCheck.org : Premium Nonsense On Medicare:

My sister-in-law sent me one of those BS right wing chain emails (they try to misinform while staying under the radar of actually informed people by sending it to their fellow in-the-Fox-bubble friends) about rising Medicare premiums because of the Affordable Care Act. Here is the original quote, in the hopes that people Googling for this nonsense will find the correct information, then the FactCheck response (the full response is at the link at the top):

The per person Medicare insurance premium will increase from the present monthly fee of $96.40, rising to: $104.20 in 2012; $120.20 in 2013; And $247.00 in 2014. These are provisions incorporated in the Obamacare legislation, purposely delayed so as not to ‘confuse’ the 2012 re-election campaigns. Send this to all seniors that you know, so they will know who’s throwing them under the bus.
REMEMBER THIS IN NOVEMBER 2012 & VOTE ACCORDINGLY

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FACTCHECK.ORG

The Real Effect of the Health Care Law

That’s not to say that the health care law won’t have an effect on the premiums paid by some seniors. It will, but not in the way this bogus message claims. The change will affect only a small minority of upper-income Medicare beneficiaries.

Currently, about the top 5 percent of seniors pay an “income-related premium” that was enacted as part of the same 2003 law that created the new Medicare prescription-drug benefit. Upper-income seniors have been paying more than the standard premium since 2007. Currently those earning between $85,000 and $107,000 for individuals (between $170,000 and $214,000 for couples) pay a total of $161.50. The amounts grow larger for higher-income groups, reaching $369.10 per month for seniors making more than $214,000 (or $428,000 for couples).

The new law doesn’t increase those premiums, but does ensure that more high-earning seniors will pay them. It does this by freezing the income brackets at 2010 levels through 2019, rather than allowing them to rise with inflation as originally enacted. The Kaiser Family Foundation released a report in December projecting that in 2019 the top 14 percent of seniors would be paying the income-related premiums — an additional 3.5 million seniors.

The law also established a separate set of income-related premiums for Medicare Part D — the prescription-drug benefit — which previously had charged only a standard premium for all. Taken together, these changes are expected to bring in an additional $36 billion over 10 years, Kaiser’s study said.

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GOP and Obama’s jobs plan: Do Republicans oppose the president’s economic policies for ideological reasons or political ones? – By Jacob Weisberg – Slate Magazine

GOP and Obama’s jobs plan: Do Republicans oppose the president’s economic policies for ideological reasons or political ones? – By Jacob Weisberg – Slate Magazine:

“You can group the conservatives who reject the economic consensus into three rough categories: fundamentalists, cynics, and sheep. The fundamentalists are ideological and come in several varieties. The more primitive prefer Hoover to Keynes, or in some cases God to Hoover. Rick Perry, the Texas governor and presidential candidate, believes that the purpose of the economic crisis is to bring us back to “Biblical principles.” Asked on the campaign trail how he would create jobs if he were in office, Perry responded: “You won’t have stimulus programs under a Perry presidency. You won’t spend all the money.” This is a pretty good summation of the Tea Party’s know-nothing view that all government spending makes all things worse, always.

“That’s not to say that everyone who rejects Obama’s stimulus spending is a default-welcoming ignoramus. Libertarians or libertarian-leaners don’t necessarily think stimulus won’t grow the economy; they just worry that it will grow the government at the same time and that it won’t ever shrink back. But they don’t mind stimulus tax cuts, which reduce the resources available to government. Rep. Paul Ryan, for instance, the government-slashing chairman of the House budget committee, has argued that stimulus spending is an evanescent sugar high that produces no lasting economic benefit.

“The cynics, by contrast, don’t offer any economic analysis at all. They simply reject whatever President Obama proposes. In the now immortal words of Senate Minority Leader Mitch McConnell: “The single most important thing we want to achieve is for President Obama to be a one-term president.” McConnell, like Boehner and House Majority Leader Eric Cantor, happily voted for the stimulus bill George W. Bush proposed in 2008, which cost $152 billion. Back then, they felt some responsibility for the economy. Now it’s Obama’s problem. Mitt Romney knows enough about finance to understand that shrinking spending would raise unemployment. But he also knows that running against Obama with a 9 percent unemployment rate is a better bet than running against Obama with an 8 percent unemployment rate. “

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Trying to understand income inequality, the most profound change in American society in your lifetime. – By Timothy Noah – Slate Magazine

Trying to understand income inequality, the most profound change in American society in your lifetime. – By Timothy Noah – Slate Magazine: Timothy Noah’s 10-part series on inequality, published in Slate last September, has won the 2011 Hillman Prize for magazine journalism, an honor awarded annually by the Sidney Hillman Foundation for reporting that “fosters social and economic justice.” It was clear from the moment of publication that “The Great Divergence” struck a chord, treating a profound and complicated issue in an engaging and understandable way, and we’re delighted that the Hillman Foundation has recognized Noah’s work. You can read the series below, or print a PDF.

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Study compares CEO pay with taxes

Study compares CEO pay with taxes: Three Pittsburgh companies are among 25 U.S. corporations that paid their CEOs more last year than the company paid in U.S. corporate income taxes, according to a study by the Institute of Policy Studies.

The local companies on the list are Bank of New York Mellon, specialty metals producer Allegheny Technologies and Mylan, which makes generic drugs.

The institute compared CEO pay with the federal tax liabilities companies disclose in their 10-K, an annual report filed with the Securities and Exchange Commission. The institute states the figure is “the best approximation of actual taxes paid to the U.S. Treasury.”

The Washington research report examines CEO pay every year. Last year it found the CEOs of companies that announced the largest layoffs earned, on average, 42 percent more in 2009 than the average CEO of an S&P 500 company.

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Cleared of wrongdoing, Penn State climatologist still sees ‘smears’

Cleared of wrongdoing, Penn State climatologist still sees ‘smears’: Mr. Mann, a doctor of geology and geophysics who serves as director of Penn State’s Earth System Science Center, already was a central figure in the controversy over climate-change science before emails were hacked in late 2009 from the University of East Anglia Climatic Research Unit in the United Kingdom.

Now he’s an even stronger lightning rod for critics of climate-change science, including Texas Gov. Rick Perry, the Republican presidential candidate who continues to claim data was manipulated to prove climate change.

But on Aug. 15, the NSF and the U.S. inspector general concluded that emails did not reflect flawed or fraudulent science and closed the case. It represents the last of seven investigations of the heisted personal emails that included flippant statements and others that were described as reckless and injudicious.

But three investigations in the United Kingdom and four in the United States including ones by Penn State, the U.S. Environmental Protection Agency, the National Oceanic Atmospheric Administration and now the NSF all have dispelled claims that climate-change research by Mr. Mann and others was manipulated to justify false conclusions.

“It’s the seventh investigation that’s arisen out of the leak of emails and false allegations by climate-change deniers who were mining for words and phrases out of context,” Mr. Mann said. “This should be the final nail in their coffin.”

But he said critics of his research continue saying “up is down and black is white in their climate-change denial.”

“I’d be lying if I didn’t say this was a major distraction for me and my colleagues,” he said. “I’ve been wasting a lot of time responding to allegations. That being said, the scientific community has understood from the start that this was a manufactured scandal and smear campaign against scientists.

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