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Monday, June 08, 2009

For those who worry about government managed CER,MedPAC may be your real worry.

From the WSJ we read about the entity that may be the group that really will pull the budget strings for Medicare and have major influence on what the third party payers pay ( if there are any left after medical care reform kick in).MedPac is not a well known word. What is it anyway? Here is what it is in their own words from their website.

The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission's statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare.

By the way, the strange sequence of capital and lower case letters in MedPAC is necessary because MEDPAC is something else entirely.It is the PAC of the Minnesota Medical Society.

Here are the current players in MedPAC. They are appointed by the director of the GAO who is the Comptroller General, who is appointed by the president subject to congressional approval.

So far, their pronouncements have been advisory but a recently proposed bill will elevate their expressed wisdom to fiat. The commission will become a government agency whose decisions regarding Medicare payments will largely be determinative.(Congress will have to work out exactly how determinative it will be, i.e. how difficult it will be for Congress to over ride their decisions).

This is being heralded by some as a way to take politics out of governmental medical payment decisions. Let's see how that won't be political. The members are appointed by a presidential appointee. Their decisions will determine how billions of dollars will be spent. Explain to me how all of the major players (drug companies,hospitals,medical equipment manufacturers, physician associations) will not do all they can to influence both the choice of those who will populate the agency and their decisions. Lobbying is not directed to just elected members of Congress. Explain to me again how investing that much power in an agency will not be the one of the best opportunities for regulatory capture ever.

The term "regulatory capture" is of fairly recent origin, but the concept is not new. Here is what President Woodrow Wilson said in 1913.

"If the government is to tell big business men how to run their business, then don't you see that big business men have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it? Must capture the government? They have already captured it."


Roy M. Poses MD said...

But will this be worse than the current situation?
Now the RUC controls payments to physicians, and they have made sure payments for primary care and cognitive services lag progressively farther behind those for procedures.
My latest discussion of the RUC is here:

james gaulte said...

I share your views on the RUC and greatly appreciate your efforts to expose exactly what has been happening in that area.I wonder if an empowered MedPAC might not just continue to allow RUC to play their game as perhaps the lobbying prowess of the procedure heavy specialties would also prevail with MedPac or with whomever holds the purse strings.
When there is a small group of government officials making decisions with such a great impact (economic and otherwise)I tend be skeptical that the notion of acting in the public interest is more mythical than real and it is often special interests than prevail.