Wednesday, June 22, 2011

Old Pharma Wine in New Democrat Bottles

Sebastian Jones over at the Washington Monthly--
--tells us the background on the New Democrat Coalition, a group of 42 House members who are poised to give the Obama administration major headaches.

A brief digression--a fight is brewing in Washington that in many ways is all about the future of health care cost containment in the US, whether or not "Obamacare" goes forward or is shot down in flames. The fight, which is getting much less media attention than it deserves (except for demogoguery about "death panels"), addresses Medicare's proposed Independent Payment Advisory Board (IPAB). The health reform law calls for a 15-member appointed board, made up of medical experts, to recommend to Congress how Medicare can cut costs. The goal was to re-0create for health care the Pentagon's base-closure commission, that managed to create a rational system to replace the old district-by-district Congressional bickering.

When Obama was challenged with the Ryan Plan from the House GOP, claiming to do a better job of Medicare cost-cutting (a claim later shown to be mostly smoke and mirrors), he responded with his own proposal to strengthen the role of IPAB.

Time out for a health policy announcement. If you are like any of my health-policy-wonk friends, you realize that there are basically two ways to trim Medicare costs. One is the IPAB way--try to decide on a scientific basis what works and what does not, and selectively eliminate payments for what doesn't work. Best estimate today is that if we fully implemented such a scheme we could save 20-30% of Medicare costs. The other way is the usual Congressional way--wait till a last-minute crisis, then impose an emergency across-the-board cut of so many percentage points, and don't worry if useful care gets eliminated alongside useless "care."

The predictable response of the GOP has been to denounce the IPAB as unelected bureaucrats who want to kill Grandma. But what has thrown the media for a loop (when they pay attention at all) is the group of Democratic congresspeople who have joined in GOP calls to repeal IPAB.

Jones tells us just who these "New Democrats" are--they basically have sold themselves to two major interest groups, the financial services and the health care lobbies. Their buzzword is "innovation," and they oppose meassures that are said to stifle innovation--but by the merest coincidence, what they oppose is regulations that would cut into the profits of their corporate handlers. And according to Jones, guess who's heavily investing in these House members from the industry side--Big Pharma leading the pack. Every deep-pockets interest group that now sells a lot of stuff which would not stand muster if Medicare monies were spent in accord with the best scientific evidence are lining up to try to kill IPAB, and the New Democrats are scarfing up the campaign cash.

Jones goes on to tell us how the media get suckered by people like the New Democrats because they've drunk the same Kool-Aid that Obama has, and go into raptures over anything that even vaguely looks bipartisan. But what is really bipartisan over the fact that special interest groups have bought a small bunch of Democrats retail, in the same fashion that they've bought the Republicans wholesale?

Finally, Jones reviews several political scenarios for future votes on IPAB and issues this dire prediction: "It’s hard to imagine, then, that the New Democrats will be able to repeal IPAB before the 2012 election. But, by joining with Republicans in the attempt, they may well succeed in turning Medicare from a winning issue for Democrats into a losing one." And, if that happens, look for boom times for Pharma, device companies, hospitals, and procedural subspecialists, while Medicare costs continue to bankrupt the nation (

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