Obama Health Care Overhaul Depends on Government-Enforced Rationing

Published January 7, 2010

President Obama promised that under his health care plan the government wouldn’t ration medical care based on cost. But in December Obama quietly dispatched his lawyers at the Department of Justice into federal court to fight a patient for the authority to do just that.

Ilene Hays sued the federal government after Medicare refused to pay for a medicine a doctor prescribed to treat her obstructive lung disease. The agency wanted to pay only for an older and cheaper substitute. Last year a court ruled in favor of Hays. Now the Obama legal team has finished oral arguments in an appeal to the DC Circuit.

At stake for the administration in Hays v. Sebelius is more than just the cost of Hays’ medicine. The Obama administration wants the agency that oversees Medicare to be able to make its own clinical decisions about when a medical treatment can be replaced with a cheaper option.

If it wins on appeal, the government will have more authority to pay only for the “least costly alternatives” when it comes to the drugs or medical devices physicians prescribe.

Empowering Bureaucrats

Rather than leave decisions and considerations about cost to patients and doctors, the Obama health care plan empowers a myriad of new government panels, commissions, and expert advisory boards to take on judgments about what treatments and medical products are the most cost-effective.

Under the Obama health care plan, the results of these decisions could apply not only to patients on Medicare but those on private insurance plans as well.

The president revealed his political philosophy on personal medical decisions when discussing the cost and utility of a hip replacement that his grandmother received near the end of her life. Speaking to The New York Times, he said: “It is very difficult to imagine the country making those decisions just through the normal political channels. And that’s part of why you have to have some independent group that can give you guidance.”

One of these independent cost-control bodies the president’s health care plan creates is given carte blanche authority to “innovate” new systems for paying doctors and medical suppliers to “reduce spending” under Medicare. Its actions are explicitly exempted from review by the courts or other executive agencies. Another new commission is charged with going after “sources of excess cost growth,” which includes newer treatments whose coverage will boost spending.

Real World v. Washington

There is incredible variation in how illness presents, how doctors approach medical problems, and how patients respond to their treatments, and for valid reasons. It’s impossible for treatment guidelines created in Washington to be reasonably applied to all the circumstances that arise in the real world. This is especially true when these health care policy decisions start turning more on global budget priorities set in Washington rather than clinical considerations made at the bedside.

Take the recent decision by the United States Preventive Services Task Force (USPSTF) that most women under the age of 50 no longer need mammograms to screen for breast cancer.

In part the USPSTF didn’t think the routine screening was cost-effective thanks to additional testing sometimes triggered by an ultimately benign finding on mammograms. The panel decided that, in aggregate, the medical burdens and expense of these “false positives” weren’t offset by the value of discovering earlier some additional cases of breast cancer. Yet the American Cancer Society and the Komen Advocacy Alliance both recommend screening for women starting at age 40 based on their own systematic reviews of the latest medical evidence.

The disagreement shows the USPSTF, like other similarly empowered new panels, may have the imprimatur of the government, but it doesn’t have a lock on scientific truth. Yet in the near future it may be hard to tell the difference between the two.

Rationing Fiscally Necessary

Effective rationing requires a process that gives a veneer of scientific rationale to the resulting decisions. So the Obama health care plan puts Washington in charge of developing both the edicts and the science to support them.

The plan creates a new federal program charged with generating government-directed research on the “comparative effectiveness” of different medical treatments. This “science” will mostly take the form of weakly powered studies of archived medical data or reviews of existing medical literature, used to justify decisions to substitute older medical treatments for newer but more expensive alternatives.

Overall, the Obama health care plan contains all of the necessary tools for controlling medical costs through rationing. The plan was always premised on a false economic promise: It was never fiscally possible to give new health insurance subsidies to tens of millions of Americans without also limiting the medical care people can get.

Factoring economics into these decisions requires the clear legal authority to make decisions based on utilitarian judgments about costs. The Hays case is a clever way to get the explicit ability to ration health care without publicly asking Congress for the controversial authority. Despite his protestations to the contrary, the President’s intricate vision for reigning in spending depends on rationing access to medical care.

John Cornyn is a Republican senator from Texas. Scott Gottlieb ([email protected]), a former senior official at the Centers for Medicare and Medicaid Services, is a physician and a fellow at the American Enterprise Institute. This column is reprinted from Forbes.com with permission.