Health Care Reform: Obama Proposes to Give More Authority to MedPAC

Yesterday, I had the opportunity to attend President Obama’ speech to the American Medical Association (AMA) in Chicago, he did a great job outlining his goals for healthcare reform.  One part of the speech that made my hear sink was his desire to put more power into the hands of the Medicare Payment Advisory Council (MedPAC), this something new in his talks on healthcare reform. 

He noted: that Because our health care system is so complex and medicine is always evolving, we need a way to continually evaluate how we can eliminate waste, reduce costs, and improve quality.

That is why I am open to expanding the role of a commission created by a Republican Congress called the Medicare Payment Advisory Commission  – which happens to include a number of physicians. In recent years, this commission proposed roughly $200 billion in savings that never made it into law. These recommendations have now been incorporated into our broader reform agenda, but we need to fast-track their proposals in the future so that we don’t miss another opportunity to save billions of dollars, as we gain more information about what works and what doesn’t in our health care system.

MedPAC is a commission created to advise Congress on the inner workings (or problems) associated with the complex Medicare system.

But looking at the Committee Members bios, it is clear that MedPAC has little clinical expertise on the Committee and no one on the Committee would be directly affected by their recommendations.

 Moreover, although MedPAC is supposed to represent the views of all stakeholders including payers (insurance companies, health plans and government agencies), there is no manufacturer or researchers on the commission, and there is little provider representation on the Committee (see Breakdown).

President Obama further noted that because Congress never accepted MedPAC’s recommendations to save roughly $200 billion, he is going to incorporate them into the President’s “Broader reform agenda.” In unison with President Obama’s efforts to “beef up” the commission, MedPAC issued a letter on their recent report to Congress to improve the Medicare Payment Policy.

According to Glen Hackbarth, Chairman of MedPAC, “To achieve better care coordination and efficiency, Medicare must change the way it pays health care providers.” The report then discusses several ways to modify incentives in the Medicare program and payment system:

• Graduate medical education: The report reviews medical education and residency training programs and reflects the Commission’s discussions of possible ways to use graduate medical education to better support the future needs of the Medicare program by promoting coordinated care, quality improvement, and judicious use of resources.

• Accountable care organizations: The report explores how accountable care organizations (ACOs) could promote care coordination and potentially increases quality and lower cost growth.

• Physician resource use measurement: The report describes principles that should guide CMS as it implements legislation passed by Congress in 2008 to direct CMS to measure and report physician resources used to provide care.

• Self-referral in imaging: The report shows that when physicians have a financial interest in imaging equipment, they are more likely to order imaging tests and incur higher overall spending on their patients’ care.

• Follow-on biologics: The report discusses policy issues to establish a regulatory pathway for follow-on biologics (FOBs), and how Medicare may need to change in order to extract greater value from its spending on biologics.

• Benefit design in traditional Medicare: The report discusses whether cost sharing can be used as a tool for increasing the value of care while ensuring beneficiary access to needed services.

• Medicare Advantage payments: In 2009 Medicare is paying about $12 billion more for the beneficiaries enrolled in MA plans than it would have spent if they were in FFS Medicare. The report discusses options that encourage efficient plans and reward quality.

• Chronic care management: The report discusses strategies that may enable the Medicare program to accomplish a cost saving goal more effectively.

In addition, President Obama is open to giving special consideration to proposals made by MedPAC, such as “recommendations on cost reductions that would be adopted unless opposed by a joint resolution of the Congress,” Obama said in a letter.

Presently, MedPAC can only give Congress advice on Medicare matters. It cannot implement its recommendations.   However, Sen. Jay Rockefeller (D-WV) last month introduced legislation to turn MedPAC into an independent executive agency. The “Medicare Payment Advisory Commission (MedPAC) Reform Act of 2009” is similar to a recommendation Tom Daschle made over a year ago about creating a ‘Federal Health Board’ for the purpose of ‘oversight. ’

Rockefeller’s proposal with MedPAC only deals with Medicare, which does not solve many of the concerns for consumers or patients because Medicare dictates the way private insurance companies create their rates.

Ultimately, it is unclear whether a plan to give MedPAC ‘legs’ will actually save any money, as Rep. Michael Burgess (R-TX), a physician, put it. He further noted that “a commission is a way for congress to weasel out of tough decisions, to insulate us further from the people we represent."

If Congress had to create a commission almost forty years after Medicare and Medicaid became law, in order to ‘oversee payments’ (more like oversee problems), how long is it going to take for Congress to make a commission to oversee a government run health care plan?  

Before answering that question, Congress needs to open the Committee up to a broader group of stakeholders that would still include the payors but also researchers, private practice physicians, academic physicians, physician and patient groups, manufacturers and others who these proposals would affect. 

It would also be helpful for MedPAC to open their process to input from more than just one perspective on each issue. 

After sitting through several MedPAC meetings it is clear that the MedPAC staff in their 20’s comes up with the recommendations, they are then presented by staff and refined by discussions with the members.  

Time for outside input after each presentation and discussion is limited to only 15 minutes for each two hour report session, and 30 minutes is the length of time for all outside input time prior to the vote.

So there ends up being little to no input from outside organizations.  Though they advertise the meetings on their website, unless you follow MedPAC you would not know as is the case most of the time.

Giving more power to MedPAC is a really bad idea, though all MedPAC members are experts in their fields (managed care and cost savings), it would be equivalent of giving a blank check to the government and managed care to cut all the expense they want with no thought to the cuts effects on patient care.   Congress should be very concerned in giving up their rights to legislate to a commission so dominated by managed care companies.