In the speech President Obama gave responding to Congressman Ryan’s budget plan (the one in which he lured Ryan to sit in the front row in order to be publicly pilloried), the President did something DrRich did not think he would do before the next election. He openly invoked, and openly embraced, the Independent Payment Advisory Board (IPAB) as the chief mechanism by which Obamacare will control the cost of American healthcare.

“IPAB” might be a new term to many Americans, but DrRich pointed his readers to this entity, within a few weeks of the passage of Obamacare, as the lynchpin (and a very scary lynchpin at that) of the whole enterprise.

Until President Obama’s recent “outing” of IPAB, however, this new board has been almost entirely ignored by most commentators. Since the President’s speech, of course, many have written about it, either to celebrate it or to castigate it. (Of all these commentaries, DrRich most highly recommends the analysis provided by Doug Perednia at the Road to Hellth. In fact, DrRich recommends Perednia in general, as he is regularly producing some of the most insightful commentary, anywhere, on health policy.)

DrRich does not wish to simply repeat here all the observations that have lately been made by others regarding the IPAB. Rather, he will emphasize three particular features of the IPAB, features which are remarkable indeed, and which will tell us something very important about our Progressive leaders.

Three Remarkable Features of the IPAB

1) It has dictatorial powers.

The IPAB is a 15-member board appointed by the President.  Section 3403 of the Obamacare legislation tells us that the purpose of this board is to “reduce the per capita rate of growth in Medicare spending,” a noble goal indeed. Furthermore, in a superficial reading of Section 3403, one might think of the IPAB as a sort of Mr. Rogers of healthcare – a mild-mannered, friendly, always-helpful, but ultimately undemanding agent for good. This is the impression imparted by the first few paragraphs of the Section, which paint the new entity as an “advisory” board, whose main task is to develop “proposals” and “advisory reports,” which “proposals” and “advisory reports” would solely consist of various “recommendations,” that ought to be “considered” for the purpose of cost reduction.

Indeed, one might get the impression that the main difference between the IPAB and DrRich (another Mr. Rogers-like, mild mannered and undemanding personage) is that the former is appointed by the President and has a travel budget.

Nothing could be further from the truth. The IPAB is actually all-powerful.

Once the Chief Actuary of CMS determines that the projected per capita growth rate for Medicare exceeds a certain target growth rate (which it inevitably will), the IPAB is required to submit a so-called “proposal” which will cut healthcare costs sufficiently to bring the growth rate back in line; which is to say, the IPAB will determine what will be paid for and what will not. Then, the Secretary of HHS is required to implement that “proposal” in its entirety, unless Congress acts to block implementation. However, Congress is hamstrung.  The representatives of the people are forbidden from taking any action “that would repeal or otherwise change the recommendations of the Board,” unless it replaces those “recommendations” with its own legislation that would cut healthcare spending to the same target level.

For all practical purposes, then, the cost-cutting “recommendations” which the IPAB would “propose” for “consideration” will be implemented nearly automatically, with the full authority of the Federal government.

And, for all practical purposes, the IPAB will become a new agency of the executive branch, with near-dictatorial authority to cut healthcare spending where and when and for whom it sees fit.

2) It will control all healthcare spending, not just Medicare spending.

A common accusation, heard these past few weeks from conservative commentators, is that the secret desire of the President and his supporters is to make it so that the IPAB will have these same dictatorial powers over not just Medicare, but over all healthcare spending – public or private. DrRich believes these conservative commentators are unnecessarily accusing the President of being conspiratorial. In truth, no conspiracy is necessary, as this result is already law.

DrRich recommends that these conspiracy theorists read the actual legislation. It is a bit difficult to sort out, but in fact the IPAB is already granted the authority to control private as well as public healthcare spending.  It got this authority in a suitably convoluted way.

Those who paid attention to the remarkable process that brought us our new and transformational healthcare system might recall that the Senate bill, which ultimately became law of the land, was never designed to be actually implemented. It was designed solely to assure 60 votes in the Senate, after which the Joint Conference with the House was to meld the House Bill and the Senate Bill into a workable law.

As part of the negotiations to gain those original 60 votes in the Senate, five or six Democrat Senators went behind closed doors to cobble together a list of amendments to the original Senate Bill – the so-called Manager’s Amendments. It is in the Manager’s Amendments that one can find such famous niceties as the bribes paid to Nebraska in order to obtain an extra vote. But the Manager’s Amendments (which, contrary to the expectations of the actual Managers, are now part of our new healthcare law) contained lots of other stuff as well.

One of the more interesting parts of the Manager’s Amendments (Section 10320) is entitled, “Expansion Of The Scope Of, And Additional Improvements To, The Independent Medicare Advisory Board.” (The original language in Section 3403 did not actually create something called an IPAB – it created an IMAB. The Manager’s Amendments re-christened it as the IPAB, as explained below.)

Section 10320 (which can be found way down on page 2210 of the new law) grants the IPAB (beginning in 2015) the authority to limit all healthcare expenditures, that is, all healthcare expenditures, and not just expenditures by Medicare or government-run programs.

To emphasize this expanded authority, Section 10320 changes the name of the “Independent Medicare Advisory Board” (created in Section 3403) to the “Independent Payment Advisory Board.” It directs the IPAB, at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private (non-Federal) healthcare programs. Furthermore, it designates that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies “administratively” (that is, without the interference of Congress).

The justification for this expansion of the IPAB’s authority is that controlling private healthcare expenditures will directly impact Medicare, since the “target” Medicare growth rate which the IPAB is charged with achieving will be determined by overall healthcare expenditures. Therefore, it is necessary to control those private expenditures. More practically, if Medicare patients (who are subjected to arbitrary cost-cutting measures) see their younger counterparts enjoying less restricted healthcare, we old farts are likely to become inconveniently rowdy.

Once the Managers had devised enough paybacks in the Managers’ Amendments to get the needed 60 votes, and the law finally passed in the Senate, President Obama and his Congressional allies, Mr. Reid and Ms. Pelosi, determined that allowing the new law to go to Joint Conference would be counterproductive (in particular, they would undoubtedly have lost Section 10302 if the House Democrats ever saw it). So the entire Congress was coerced into voting on the bill as passed by the Senate – including all the Managers’ Amendments – under the reasoning that passing the law right then was a manifest emergency.  And Congress, like the rest of us, could find out what was in it after it became law.

We are likely to hear grumbling from even some House Democrats as the real implications of the IPAB become more apparent to the public, since the House Democrats really didn’t get an opportunity to vote on (or read) this provision, except as part of an “all or nothing” healthcare reform bill.

Whatever. While the IPAB may begin by only controlling the cost of Medicare, it already has the authority to control all healthcare spending, including private spending. That’s you, dear reader. No further legislative action is needed.

3) It is an immutable entity.

Section 3403, the section that creates the IPAB and spells out its functions, contains some remarkable language that, DrRich suspects, has never been seen before in American legislative history. To wit:

“It shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.”

So, the astounding truth, dear reader, is that the IPAB and all its designated dictatorial functions are in force for perpetuity. Our Congress has passed legislation that purports to bind all future Congresses from altering it in any way.

We can surmise from this fact that those who wrote this law must consider the IPAB to be very, very important. Of course, we know this because President Obama said so just the other week. However, what many Americans may not yet realize is that the IPAB provision of Obamacare must necessarily be not only the most important feature of our new healthcare system, but also the most important legislative provision ever written. We know this because no other provision has ever received such extraordinary protections from any future alterations whatsoever.

DrRich asks his readers to bask in the utter audacity of our current crop of leaders, leaders who are so sure they know what’s best for us that they were willing to engage in all manner of legislative legerdemain to pass Obamacare, not only against the apparent expressed will of the people, but also (as it turns out) against the objections any future American Congress may have that is sent to Washington by those people.

Not even our Constitution itself – a document that attempted to establish a government for all time – was as audacious as this. For the Constitution, at least, provided a mechanism for its own alteration.

As DrRich racked his brain to think of the last time a law was promulgated with such audacity – not with the audacity of hope, but the audacity of perpetuity – he initially drew a blank. Even monarchs who purported to reign under Divine Right understood that future monarchs, who would also rule under the same God-given right, might thus alter any laws they made.

DrRich believes we need to go all the way back to Moses, coming down from Mt. Sinai and holding aloft his awesome Tablets filled with divine writ, to find a law or set of laws that, from the moment they were written, were decreed to remain in force for ever and ever.

Only God has ever tried this before.

What Does This Tell Us About Progressives?

DrRich has gone on at some length about the Progressive program and the Progressive mindset. The creation of the IPAB, its configuration, and the manner in which it was created, simply reflects that program and that mindset.

Progressives are dedicated to “progressing” to a perfect society, and they know just how to achieve it. Unfortunately, a whole bunch of people – not merely right-wingers and a few Republicans, but most of the masses – just don’t see it their way. Specifically, the Progressive program requires individuals to subsume their own individual interests to the overriding interests of the collective – and human nature just doesn’t function that way.

Thus, the Progressive program inevitably relies on a cadre of elites – those who have dedicated themselves to furthering the Progressive program – to set things up the right way for the rest of us, while manipulating we in the teeming masses to let them. And the rest of us, once the correct programs and systems are in place, will at last understand that it was all for our own good. (Those of us who still don’t get it, to extrapolate from the actions of various collectivist governments of the past century, will either have to be re-educated or eliminated.)

The IPAB would serve as an ideal poster child for the Progressive program. It is an all-powerful commission of experts, appointed by Progressive leaders, which will make decisions based on only the “best” available data (and they are the determinants of what is “best”), that deeply affects the lives of every individual American, whatever the decisions might be that individuals would have made for themselves.

The manner in which the IPAB was created is a model for the Progressives. It involved manipulating the body of government that the Progressives find most problematic – the Congress, the voice of the people – and entirely marginalizing it.

The immutability of the IPAB is also a Progressive dream. Congress was manipulated into creating an all-powerful entity which it (the voice of the people) is enjoined from ever altering, down into perpetuity.  The IPAB is forever within the control of the executive branch, which the Progressives, of course, intend to hang on to at all costs.  (And, if lost, is relatively easy to regain.)

The fact that President Obama has at last brought the IPAB out of the closet, and has deemed it to be ready for public scrutiny, indicates that he is confident that the people will not understand the profound nature of what has been accomplished by the establishment of such an entity, or if they understand, will still be indifferent about it.

DrRich dearly hopes the President is wrong about this.

___

A well-known Progressive blogger has taken issue with this post – and with DrRich.  See DrRich’s reply to said well-known blogger, here.

DrRich is amazed at all the attention being paid to the impending mid-term election.

Breathless commentators speculate endlessly whether Republicans will take over the House and Senate, or just the House; and small-time operatives who in the heat of battle blurt out words like “whore,” or “bitch” (it truly is the Year of the Woman!), or inflammatory phrases like “punishing our enemies,” are subjected to endless public psychoanalysis. The angst is palpable.

For those of us interested in healthcare reform the coming election is an interesting sideshow, but it will not substantially change the cascade of events that has been set in motion by a) history, b) the election of Mr. Obama and his dogged persistence in passing his healthcare legislation by whatever means necessary, and c) the implications of the election of New Jersey Governor Christie a year ago.

As DrRich has said to his readers countless times, the real meaning of Obamacare is that the job of covertly rationing America’s healthcare is being formally transferred from the insurance companies (which have had quite enough, and which did everything they could to see that Obamacare became law), to the government. That transfer of the responsibility for covert rationing to the government is merely the natural culmination of 50 years of history. And the fortuitous election of Mr. Obama is merely the particular event (like the dropping of a crystal into a supersaturated solution) that finally brought a historical inevitability to fruition.

But the election of Governor Christie – now that was a real Wild Card. Christie’s election revealed (to DrRich, at least) that the government’s takeover of covert rationing (which, obviously, requires a government takeover of healthcare) may not be the end of the story.

At this point, some of DrRich’s readers undoubtedly think he is referring to Christie’s conservative economic outlook; his willingness to take on public employees, teachers, and others whose unions, over the years, coerced and/or bribed corrupt politicians into awarding them unsustainable entitlements that are incompatible with a stable society. They think DrRich is referring to the fact that, if even the people of very-blue New Jersey are willing to elect such a conservative Republican, then the Progressive agenda (and hence Obamacare) must actually be in real trouble.

While there may indeed be something to this argument, it’s not at all what DrRich is referring to.

Rather, DrRich is referring to the fact that the voters of New Jersey, at a time when Mr. Obama’s popularity was still quite high, chose to violate a pattern they had established over the manifold generations, chose to knock the stars out of alignment, chose not to return to office Mr. Corzine, the incumbent Democrat in a strongly Democratic state, who was strongly supported by President Obama himself, and instead chose to break with all of history, with all tradition, with their primeval instinct, and with their common sense, and elect instead – a fat guy.

Electing a fat man, DrRich must point out, was not incidental. Corzine cagily made it a campaign issue by running campaign ads reminding New Jersey voters that Mr. Christie was obese, and that he was not. Mr. Christie himself was driven by this tactic into a public admission that he indeed was quite overweight (and offered the lame suggestion that his obesity was irrelevant to the job he was seeking).

Any voter pulling the lever was necessarily thinking, “fat guy, or skinny guy?” And they, with malice aforethought, picked the fat one.

This was absolutely stunning. The implications are too far-reaching to exaggerate.

For a long time now – but especially since the beginning of the Obama Presidency – a concerted and sophisticated campaign to begin “culling out” the obese has taken place. This campaign has been conducted with great energy by everyone who matters – the government, academia, various covertly-funded consumer groups, and numerous industries and enterprises whose success depends on lots of fat people becoming desperate to lose weight. We have been assured that the obese are fat by choice, and that as a result, by their own volition they have allowed themselves to become a threat to humanity (by, among other things, increasing global warming), and most especially, a threat to the fiscal stability of our healthcare system and therefore our nation.

The message is clear: If we don’t get the obesity epidemic under control we are lost as a people. (Historians may find it interesting to note that this epidemic was greatly accelerated in 1998, when the NIH changed the definitions of “overweight” and “obese” from a BMI of 28 and 32, respectively, to a BMI of 25 and 30. The very next morning, tens of millions of previously healthy Americans woke up to find themselves fat. Even more than most epidemics, this one developed with the speed of a tsunami.)

Obamacare – which places the control of the healthcare system into the beneficent hands of our political leaders – finally provides the tools to eliminate this scourge. It will take some tough love. But for the good of America (and, who knows? possibly for the good of the obese themselves) we’ve got to do it.

Central to our efforts to save our country is the conviction that the obese are different, and while they may be potentially salvageable as worthy humans, in their present state (posing as they do such an existential threat to the rest of us), they need to be (at the very least) ostracized.

Perhaps the most telling example of just how far we had come in this regard occurred in July, 2009, when President Obama named Dr. Regina Benjamin as Surgeon General. When it appeared from certain pictures and television images that Dr. Benjamin may be somewhat overweight, critics pounced immediately. How can one become the epaulet-wearing Head Doctor of All America, in the middle of a life-threatening obesity epidemic no less, and be fat? No fat person should ever rise to any position of prominence (where he or she could potentially become a role model for young Americans) – much less this particular position.

It must have brought a tear of joy to the anti-obesity crowd to learn that being obese now so demonstrably trumped being: a) an African American, b) a woman, c) a hero who dedicated herself to providing medical care to the Katrina-ravaged poor, and d) strongly supported by President Obama himself.

But all this progress (and all this hope) was dashed just a few months later by the voters of New Jersey, when they chose to elect a fatty.

When an obese Republican can be elevated to such a position of prominence and responsibility, and by a Democratic electorate to boot, the anti-obesity campaign has been set back by decades. That a rotund candidate could emerge victorious despite such an onslaught – and not, as the breathless conjectures of our professional punditry suggest, a Republican resurgence – is the real threat to healthcare reform.

A government-run healthcare system permits – nay, demands! – that we declare to the obese that their unsightly physiques are no longer a matter of personal choice, but are now a matter of legitimate public concern. The choices they are making – that is, their gluttony, sloth and all other manner of self-indulgence – are placing unwanted and unsustainable demands on us purer, svelter, fellow-citizens.

More importantly, ostracizing the obese sets an important precedent for our wise leaders to restrict, control and tax virtually any human behavior they can claim may lead to an increased risk of healthcare expenditures – which, really, encompasses virtually any human behavior you can think of. Furthermore, successfully dehumanizing the obese will establish that our society may, whenever it needs to, discriminate against the lower economic classes (since these classes are well known to indulge in becoming overweight). And finally, since obesity (despite our decision to blame it on personal failings) is largely determined by genetic predisposition, our success in dehumanizing the obese will give us a useful tool which we can later employ to withhold healthcare expenditures for other genetically-mediated medical conditions.

It is clear that successfully demonizing the obese is a vital pillar of Obamacare.

Now perhaps, Dear Reader, you can see why the election of Christie in New Jersey was such a potential catastrophe. It is his obesity, rather than his Republicanism, that poses such a threat to healthcare reform and thus to the Obama administration.

It was the result of the New Jersey election a year ago, and not the results of the impending mid-term election (which will merely add an exclamation point to New Jersey’s declarative statement) that changed the landscape. Clearly, the anti-obesity movement, despite concentrated, coordinated and sustained efforts to make overweight Americans feel subhuman, has failed. The election of Christie – wherein the electorate of a Democratic state has raised up to prominence a fat guy, despite the damage that does to the long-term prospects of Obamacare – was the real blow.

For if We the People (even that part of “We” who are Democrats) refuse to follow the dictates of the Central Authority as it attempts to educate us on Right Thinking, then the passage of Obamacare cannot actually represent the culmination of Progressive history. It means that the final chapter has not yet been written, and real hope remains for those of us who do not buy into the Progressive program.

And this is true whatever the results of Tuesday’s election. Thank you, New Jersey.

Why Demonizing Obesity Is So Important

As regular readers will know, DrRich thinks President Obama’s healthcare reform is very bad for America, and in particular, that it threatens the Great American Experiment. At the same time, DrRich is fundamentally an optimist, and finds in Obamacare a thin thread by which some good might result. That thread goes like this:

In practice, Obamacare will become a government-run system of covert healthcare rationing. And DrRich is reasonably confident that in the government’s hands the covert rationing will become so amazingly ham-fisted and inept that even us Americans, distracted as we are by Lady GaGa, performance-enhancing drugs in baseball players, and Shark Week, will finally be forced to notice that there’s actually a whole lot of healthcare rationing going on. And once we are all forced to acknowledge the rationing, perhaps we will insist on trying to figure out how to do it as fairly, efficiently, and effectively as possible. In other words, DrRich clings to the hope that the Obamacare might end up being the cataclysm that precipitates a public discussion of healthcare rationing. And a public discussion of healthcare rationing is critical, since continuing to conduct the rationing covertly will destroy us.

It’s a slim thread, to be sure. But, especially in a new era of hope, one must embrace what hope one can.

Accordingly, DrRich feels obligated to do his part in supporting some of the main pillars of Obamacare (as odious as Obamacare itself may be), whenever they come under attack. And one of those pillars is the proposition that obesity is a scourge on our civilization, and for the good of the whole, those who are guilty of it must be reformed or stamped out.

Obesity, we are assured, is a main cause of heart disease, hypertension, stroke, arthritis, diabetes, (and even, some insist, cancer), and so is largely responsible for the runaway cost of our healthcare. This simple fact alone allows us to – indeed, demands that we – use every public and private intervention at our disposal to fight this great scourge.

The fact of publicly funded healthcare permits us to say to the obese: “Your unsightly obesity is no longer a matter of your individual choice; rather, it is now placed squarely within the realm of legitimate public concern. Since everyone else has to pay for your heart attacks and knee replacements, all those donuts and double cheeseburgers you insist on shoveling into your mouth are no longer your business. All your protestations to the effect that you can’t help it are revealed by simple math (i.e., calories gained = calories consumed minus calories burned) to be sad prevarications. Indeed that same simple formula reveals the true cause of obesity – gluttony and sloth. Like other heretics of an earlier time, you deserve no sympathy nor special considerations, but only a firm – though ultimately compassionate – hand to push you toward the right path, or alternately, toward the just punishment you have brought upon yourselves.”

So clearly, the obese are now become fair game for whatever manipulations our government can devise to cause them to either lose weight, or pay for their sins. The authorities can begin with simple maneuvers – taxing soft drinks and Twinkies, and whatever other foodstuffs they (in their wisdom) deem to be illegitimate sources of calories – but the sky’s the limit. For instance, under the undeniable proposition that it costs more energy to move a fat person from point A to point B, whatever the mode of transportation, the obese could be subjected to a special carbon tax, based on their BMI. The periodic mandatory “weigh-ins” such a tax would require would serve the useful purpose of public humiliation, an important incentive to weight loss.

Further humiliations could be visited upon the fat by designating special isolated areas in the workplace (ideally, an area fully exposed to the elements) for fat people to consume their calories. This latter strategy, of course, is derived from the same restrictions placed on smokers, and can be legitimized by the same sort of logic. That is, the authorities can invoke the prospect of second-hand obesity to induce fear and loathing of the fat, and cause them to become socially isolated. (The “scientific” conclusion that obesity is contagious, i.e., that those who associate with the obese are more likely to become obese themselves, has been proffered by academics employing the same kind of statistical legerdemain used to blame global warming on fat people. It appears to DrRich that obesity has now become so toxic that any paper submitted to medical journals offering a new reason to despise the fat – no matter how absurd – will be cheerfully accepted by the editors, and published with fanfare. These editors, one can only presume, must also be great supporters of Obamacare.) And finally, it goes without saying that the ultimate censure would be simply to withhold healthcare services for medical problems which can be associated with having allowed oneself to become too fat – a strategy that has already been employed by the British healthcare system, which we are urged by Dr. Berwick to employ as a model.

Demonizing the obese and subjecting them to such restrictions, of course, carries with it implications that go far beyond merely inducing the obese to lose weight or causing them to pay more in taxes. It sets an important precedent that will finally allow our central authorities to restrict, control and tax virtually any human behavior they can claim may lead to an increased risk of healthcare expenditures. Such behaviors may include (in addition to obvious things like smoking and alcohol consumption), one’s choice of occupation, participation in sports, hobbies, hours spent or miles traveled on the highways, etc. Indeed, it is difficult to conceive of any choice one makes in daily living that does not, in some manner, impact on one’s likelihood of requiring medical services.

Furthermore, successfully demonizing the obese will establish that our society may, whenever it needs to, discriminate against the lower economic classes – which will prove a useful tool when setting future behavioral standards to reduce healthcare spending. (Obesity, rather than starvation, is the chief nutritional problem of the poor in America. This is the the direct result of plentiful and cheap foods that are often loaded with empty calories. Making such foods more expensive – by imposing punitive taxes on them – will disproportionately affect the poor, who still won’t be able to afford the highly nutritious stuff, especially since the price of that good stuff will go much higher as a result. Rendering it permissible to inflict such pain on the poor, in the name of the greater good, will be an immeasurably important precedent to establish.)

In terms of providing strategies for controlling healthcare costs, it is clear that our response to obesity is key. Fighting obesity is a vital pillar of Obamacare.

Accordingly, DrRich is very sorry to report that this anti-obesity pillar may not be nearly as robust as we might hope. Certain clueless medical researchers – ones who have apparently not received the official memo – have been reporting that obesity might not be quite as bad a thing as we have all been saying. So, in the spirit of advancing Obamacare, DrRich will address in his next post some of this counterproductive new research on obesity, and will show how it can be marginalized.

As DrRich helpfully pointed out in his last post, our new healthcare law (Section 3403) creates a new and apparently immutable entity called the “Independent Medicare Advisory Board,” whose job is “to reduce the per capita rate of growth in Medicare spending.” This, in fact, is the right goal. For it is the rate of growth in healthcare spending (and not the absolute amount being spent) that threatens us with societal disintegration within the next couple of decades.

But it is mathematically impossible to attribute this explosive growth rate in healthcare spending to waste and inefficiency. Most of that growth must necessarily be caused by healthcare expenditures that are actually producing some benefit (though, to be sure, some of that benefit is marginal). And this means that in order to reduce the rate of growth, we have to ration healthcare (i.e., to withhold at least some beneficial healthcare from at least some of the people who would benefit from it).

We can only conclude that, in order for the new IMAB to do its designated job, it must ration healthcare. But since the same law that creates the IMAB also stipulates that it must not ration care, the IMAB must necessarily perform that unavoidable rationing covertly. This is a very difficult job, as demonstrated by the fact that the private health insurers (even with the wonderful incentive of profits, and with the full support of Congress) have utterly failed to develop a sustainable business model based on the covert rationing of healthcare.

But still, this is the job that our leaders have now assigned to the IMAB. And so, DrRich has attempted to tease out some of the options which remain available to the Immutables as they embark on their difficult but necessary assignment of covertly rationing our healthcare. (As DrRich will shortly explain, the legal nomenclature for the IMAB is actually a bit confusing and misleading. So for clarity’s sake, DrRich will hereafter refer to this Board as the Immutables.)

DrRich has found, so far, at least three powers which our new healthcare law grants to the Immutables, that will give them at least a fighting chance at success.

1. The most fruitful pathway to covert rationing remains open to them.

The new healthcare law specifically does not allow the Immutables “to ration health care, raise revenues or Medicare beneficiary premiums. . ., increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria.” While these prohibitions might appear on the surface to greatly limit the options available to the Immutables, in fact all this language does is to formalize their directive to ration covertly instead of openly. Since covert rationing has long been our society’s policy regarding healthcare, these prohibitions actually change nothing.

What is left to the Immutables, of course, is the most time-honored pathway to covert rationing – coercing the healthcare providers to place the needs of the payers ahead of the needs of their patients. DrRich has posted innumerable examples over the years showing how payers do this. He is confident that the Immutables will employ all the methodologies which have been devised to date for coercing providers, and (with the awful power of the sovereign authority behind them) they will invent some really useful new ones.

2. The Immutables have been granted near-dictatorial authority.

On the surface, one might think of the Immutables as a sort of Mr. Rogers of healthcare – a mild-mannered, friendly, always-helpful, but ultimately undemanding agent for good. One might get this impression by reading the first few paragraphs of Section 3403, which paint the new entity as an “advisory” board, whose main task is to develop “proposals” and “advisory reports,” and these “proposals” and “advisory reports” would solely consist of various “recommendations,” that ought to be “considered” for the purpose of cost reduction.

Indeed, one might get the impression that the main difference between the Immutables and this blog is that the former is appointed by the President, and has a travel budget.

Nothing could be further from the truth. Once the Chief Actuary of CMS determines that the projected per capita growth rate for Medicare exceeds the target growth rate, the Immutables are required to submit a “proposal” which will cut costs sufficiently to bring the growth rate back in line. Then, the Secretary of HHS is required to implement that “proposal” in its entirety, unless Congress acts to block implementation. However, Congress is forbidden from taking any action “that would repeal or otherwise change the recommendations of the Board,” unless it replaces those “recommendations” with its own legislation that would cut Medicare spending to the same target level.

For all practical purposes, then, the cost-cutting “recommendations” which the Immutables would “propose” for “consideration” will be implemented nearly automatically, with the full authority of the Federal government.

And, for all practical purposes, the Immutables will become a new agency of the executive branch, with near-dictatorial authority to cut Medicare spending as it sees fit.

3. The Immutables have been granted the authority to limit private health-care expenditures.

Those who paid attention to the process that brought us our new and transformational healthcare system might recall that the Senate bill, which ultimately became law of the land, was never designed to be actually implemented. It was designed solely to assure 60 votes in the Senate, after which the Joint Conference with the House was to meld the House Bill and the Senate Bill into a workable law.

As part of the negotiations to gain those original 60 votes in the Senate, five or six Democrat Senators cobbled together a list of amendments to the original Senate Bill – the so-called Manager’s Amendments. It is in the Manager’s Amendments that one can find such famous niceties as the bribes paid to Nebraska. But the Manager’s Amendments (which, contrary to the expectations of the actual Managers, are now part of our new healthcare law) contained lots of other stuff as well.

One of the more interesting parts of the Manager’s Amendments (Section 10320) is entitled, “Expansion Of The Scope Of, And Additional Improvements To, The Independent Medicare Advisory Board.”

Section 10320 (which can be found way down on page 2210 of the new law) grants the Immutables (beginning in 2015) the authority to limit all healthcare expenditures, and not just expenditures by Medicare or government-run programs.

To emphasize this expanded authority, Section 10320 changes the name of the Immutables from the Independent Medicare Advisory Board to the Independent Payment Advisory Board. It directs the Immutables (and now readers will understand why DrRich has resorted to this more descriptive name), at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private (non-Federal) healthcare programs. Furthermore, it allows that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies administratively.

Ostensibly, the justification for this expansion of the Immutables’ authority is that controlling private healthcare expenditures will directly impact Medicare, since the “target” Medicare growth rate which the Immutables are charged with achieving will be determined by overall healthcare expenditures. More practically, if Medicare patients (who are subjected to arbitrary cost-cutting measures) see their younger counterparts enjoying less restricted healthcare, the old farts are likely to become rowdy. But DrRich suspects there was an even stronger reason to give the Immutables this authority over private healthcare expenditures.

DrRich has often speculated that the real fight regarding healthcare reform will come when the government attempts to limit the ability of American citizens to spend their own money on their own healthcare. This limitation is absolutely necessary if we’re to have a single-payer healthcare system, since if you can spend your own money on your own healthcare, that would be at least two payers. (It would also be “unfair.”)

Many of DrRich’s readers think it’s absurd to think we’re headed toward a single-payer system. DrRich hopes these readers are correct. But he also thinks there’s plenty of evidence that some of our leaders are intentionally taking us there. The new healthcare law, at least arguably, is entirely consistent with such an ultimate goal. And if we are ever to have a single-payer system, the government ultimately will need the authority to limit private expenditures.

DrRich does not believe that the Immutables will act immediately to limit the ability of private citizens to spend their own money on their own medical well-being. Such an action would create a great uproar today, and likely for several years to come, at least until those of us who still cling to the quaint notion of individual autonomy are finally worn down, or re-educated, or otherwise made to see the light.

But whenever that time comes, Section 10320 of the new healthcare law appears to give the Immutables all the authority they will need.

(At the same time, those who castigate DrRich for paranoia might consider reading just how far our healthcare system has already come in limiting the prerogatives of individuals.)

Now that the great campaign to transform the American healthcare system has passed a critical milestone – the passage of President Obama’s healthcare reform legislation – many Americans find themselves confused about what it all means. What just happened here? What will happen to our healthcare insurance? How much will it cost, and who will pay for it? Why does the whole process seem so darned difficult and confusing?

The confusion is quite natural, since, in fact, nobody really understands what the new legislation says. It is common knowledge that only one or two of our legislators actually read the whole 2700 pages, and those who did only read it so they could make trouble for the President at his Bipartisan Healthcare Roundtable this past spring. (You know who you are, Paul Ryan.)

Remember when Nancy Pelosi said, “We have to pass the bill so we can all find out what’s in it,” and all the Republicans jumped all over her for making such a stupid remark? Well, DrRich is here to tell you that Nancy was displaying uncommon wisdom. Because DrRich now has read large parts of the legislation himself, and can say with confidence that the bill is not merely lengthy, convoluted, and difficult to understand. Rather, its meaning is fundamentally indeterminate.

The indeterminacy of the bill’s language was, of course, intentional. It was done so that, for instance, some legislators could be assured that the bill disallowed Federally funded abortions, and other legislators could be assured that the bill encouraged Federally funded abortions, while the actual language of the bill could be construed to bolster either assertion. Therefore, Speaker Pelosi’s silly-sounding statement was not only correct, but also was probably the most insightful commentary on the bill we’ve heard from any public official.

The bill is now being torn into bits by multitudes of officious bureaucrats, and translated into millions of pages of rules, regulations and guidelines, and then key aspects of those new rules, regulations, &c. will be fought over in courts of law. Once all that is finished, we can all find out what was in it. Just like Nancy said.

In the meantime, whatever the details of our new healthcare system turn out to be, there is a certain clear narrative to our ongoing healthcare saga that, once you understand it, will go a long way toward enlightening you about what’s really going on.

And so, as a public service, DrRich will now explain all this to you in a very simple way, so that – whatever jive you’re hearing from politicians or journalists – you will always get it. For, once you understand a few key concepts, this thing is really pretty easy to follow.

The Fundamental Problem

The fundamental problem with American healthcare is this: None of the pools of money we have created (or ever could create) to pay for our healthcare – whether those pools of money reside with the insurance companies or the government or both – can possibly buy all the healthcare that might benefit all Americans. This means we have to ration healthcare (i.e., intentionally withhold at least some beneficial healthcare from at least some of the people who would benefit from it). But because we’re Americans and Americans don’t ration, we (and in particular, our political leaders) are unable to address this need to ration openly and forthrightly. Therefore, the unavoidable rationing is being conducted covertly.

Until now, most of the covert rationing has been overseen by the health insurance industry. This, indeed, from the very beginning was the primary purpose of modern health insurance companies, as determined by Congress itself when it legislated the formation of HMOs. (See the ruling of the U.S. Supreme Court in Pegram et al. v. Herdrich (98-1949), 530 US 211, 2000.) So, when the health insurers engage in cherrypicking patients, denying medically necessary services, coercing doctors to ration at the bedside, retrospectively canceling the policies of patients after they get sick, and doing everything short of dispatching teams of Ninjas in the dark of night to slaughter some of their more expensive subscribers in their sleep, they are not really being evil. They are only carrying out the job that had been assigned to them by our society. Covert rationing is a dirty, thankless job, but somebody’s got to do it.

The major sin of the health insurers is that, despite their Herculean efforts to harness covert rationing to control costs – and despite the wondrous incentive of greater profits if they do so – they have utterly failed in their assignment. Healthcare costs continue to rise at 3 – 4 times the rise in the cost of living, and within the next couple of decades promises to bring our republic to its fiscal knees (even without all the other stuff that’s making our deficit explode).

This is the healthcare crisis, and it’s real. We simply cannot actually spend $40 trillion on Medicare patients over the next three or four decades (as we’ve explicitly promised the baby boomers). The only real question is whether we will avoid spending all that money thanks to societal disruption and revolution, or by some more civilized means. (The fiscal implosion of our society would of course finally fix our healthcare crisis. Healthcare, far from being an essential and indispensable human need, actually is a luxury, a recent artifact of our advanced, stable, and affluent culture. Runaway healthcare costs, by bringing down our societal stability, will eventually provide its own cure.) Our current “healthcare reform process,” such as it is, is our stab at a more civilized means of addressing our looming impossible fiscal obligations.

What Is Healthcare Reform Actually Going to Reform?

What we are witnessing today is merely a rather messy changing of the guard. The primary responsibility for covert healthcare rationing is going to shift from the health insurers to the government.

The health insurance industry has run out its string. They have had 15+ years of virtually unfettered opportunity to get healthcare costs under control, and they have utterly failed. Over those 15 years, their attitude has evolved from arrogance to concern to abject fear. They finally and starkly realize that they have no clue as to how to control costs. As DrRich has pointed out for three years, the insurance industry has not been looking to block healthcare reform, but rather, was partnering with the reformers in the hope of finding for themselves a graceful exit strategy. They hope to gain one last windfall in profits and stock prices (from mandates and insurance subsidies for the tens of millions of currently uninsured Americans), and once that happens, they hope to settle into the business of administering, and processing transactions for, government controlled healthcare. That is, the insurers hope to become public utilities, since that’s way better than collapsing into oblivion.

So the overriding aim of healthcare reform, with the complete support of the insurance industry, is to conduct an orderly transfer of the pools of money with which we pay for our healthcare – along with the responsibility of managing “risk” and controlling the cost of care (i.e., covert rationing) – away from private insurers and to the government.

Understanding the Players

Government control of healthcare, of course, is precisely what the Republicans accuse the Democrats of wanting, and what the Democrats angrily deny they want.

Understanding the Republicans. Republicans as a group cling to the quaint notion that competition among insurers is all that is needed to reduce healthcare costs; that given the right market incentives, the insurance industry – in its wisdom – will bring healthcare inflation under control. They utterly fail to hear what the insurance companies themselves have said (by their actions): “No mas!”

The Republicans’ arguments ring hollow. It is useless to protest that the Democrat plans will lead to rationing, when not only do we already have rationing, but covert rationing in fact has been the official cost-cutting “plan” assigned to HMOs for decades now. It is useless to protest that 85% of Americans like their current health insurance, when the fiscal reality is that health insurance will change drastically for all Americans over the next decade or so, whether we change it by design or not. It does not matter that a lot of Americans like the health insurance they have now. Keeping it over the long term is not an option.

To a very large extent (DrRich is sorry to say, what with his conservative leanings and all), with such arguments the Republicans have made themselves nearly irrelevant in the current discussion.

Understanding the Democrats. The Democrats were handed the opportunity of a generation. They had a major advantage that Democrats of the Clinton era did not have: the health insurance industry is finished, and the industry knows it. The insurance industry was not going to let this effort fail.

The chief difficulty remaining for the Democrats is that (for their own survival) they must pretend they are not engineering a government takeover of healthcare, when in fact they are. As we have seen, there is not really much choice here. They must take over healthcare even if they don’t want to (though many of them do), because the health insurance industry is finished. The pretense is necessary, however, because the notion of government-controlled healthcare is not something the people – or even many Democrats – want, or are willing to tolerate.

Like the odious job of rationing healthcare (which they have now inherited in entirety), the Democrats must attempt to keep the complete government takeover of the healthcare system as covert as possible.

Which brings us to the biggest problem of all for the Democrats. They now have to take control of covert healthcare rationing. Covert rationing will be much more difficult for a government-run system than it has been for insurance companies. A government healthcare system will not have the opportunity to incorporate the most effective rationing techniques that have been available to the insurance industry – cherrypicking patients, for instance, or canceling the policies of people who get sick. Nor will the government be able to get away with summarily denying patients needed medical services – a standard tactic of HMOs. This is especially true now that chief Republican intellectuals have called everyone’s attention to the possibility of death panels. The unwashed masses, having been duly alerted to the government’s intentions of withholding life-saving healthcare, will now be on the lookout for “unreasonable” denials of care. Any move by the government to refuse to pay for a particular medical service will have to be supported by extremely convincing clinical data (which itself will be very expensive to collect), and even then Americans may not quietly accept such denials. The “death panel watchdogs” will be alert for every move the government makes, and will be quick to howl an alarm.

So the Democrats have won a huge and historic victory. But they are just beginning to figure out what a tiger they have by the tail.

The Bottom Line

As long as we pretend we don’t have to ration our healthcare, any reforms we invent – whether we do it as Republicans or Democrats – will merely add to the confusion, inefficiency, waste, inequity, and ineffectiveness of our healthcare system. How anyone can think that a process so fundamentally grounded in obfuscation and deception as the one we’ve just witnessed will result in anything good is quite beyond DrRich’s comprehension.

Real reform would require us to:

A) Minimize the necessity of imposed rationing by having patients themselves make as many of the spending decisions as possible, using their own money. (Subsidies could be provided to people who don’t have enough of their own money to pay for routine healthcare.)

B) Provide everyone with a high-deductable, catastrophic insurance product to cover non-routine medical expenses. This is where the necessary rationing would take place, but the rationing would be open, transparent, and determined through a public process.

C) Create a private market for “extra” health insurance for those who choose to supplement the universal catastrophic plan with their own funds.

But of course, any plan that relies on both personal responsibility and open rationing is a non-starter. Which is why we are going to get what we are going to get.