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Congress and Medicare: Letting Go Is Hard to Do

Dec 16, 2009

In an effort to rein in health costs, Senate Democrats are proposing steps that would give federal agencies more power to overhaul how Medicare pays for medical care – and thus reduce Congress’ own role in running the giant program for the elderly.

But the big question is: Could Congress really bring itself to surrender power over a program as politically sensitive as Medicare? Put another way: If Medicare officials wanted to implement promising new ideas to cut costs and improve care, would lawmakers be able to fend off entreaties from local hospitals and doctors, whose incomes might be hurt?

Maybe, says Sen. Ron Wyden, D-Ore., but it wouldn’t be easy and Congress could always change its mind. “I’ve heard senators say this time they are prepared to swallow hard and accept tough decisions,” he said. “There’s no question, given the history, there ought to be a real concern about backsliding and people saying I like giving these important responsibilities to expert agencies until something comes up.”

The pending Senate Democrats’ health care plan calls for creating a new “innovations center” within the Centers for Medicare and Medicaid Services that would be permitted to expand, on its own, the duration and scope of pilot programs shown to reduce spending and improve care. Currently, Medicare officials need to check with Congress first.

Separately, a group of freshmen Democrats, led by Sen. Mark Warner of Virginia, wants to give the secretary of Health and Human Services more power to test and expand pilot programs that would "bundle” p ayments to providers in an effort to improve care coordination.

Some experts are skeptical that Congress would cede such power to the executive branch -- even if there's robust data suggesting a particular cost-cutting approach would work. “Data don’t prove anything to politicians,” said Joe Antos of the American Enterprise Institute, a conservative think tank. “It’s ‘What are you doing to my hospital?’ I don’t think the political process stops because of this….I don’t think it’s in the cards.”

Other analysts say that delegating the details of major decisions – especially sensitive ones, such as payment changes -- to government experts is exactly what must happen to increase health care efficiency and control costs. And they argue that bureaucrats would be empowered to make better decisions – and withstand congressional pressure – if they’re armed with evidence of a successful pilot or demonstration project.

“I think that does give you a stronger case as the (Medicare) administrator to say, ‘I’m not doing this to save money. I’m doing this because it’s in the patient’s best interest,’” said Mark McClellan, a former CMS administrator who now heads the Engelberg Center for Health Care Reform at the Brookings Institution. “That’s what these reforms really ought to be about: better care and lower cost.”

Warner knows that giving bureaucrats more power may make lawmakers uncomfortable. But unless changes are made in how health care is delivered and financed – and Medicare leads the way – current inefficiencies will continue indefinitely, he says.

“What if Congress had to weigh in every time the Federal Reserve set interest rates? We’d never have monetary policy,” Warner said recently. “What I believe in is having Congress as the ultimate backstop. The notion of allowing the health care professionals to make appropriate health care decisions is where we’re trying to head here.”

Staying In The Game

Congress always wants the final say on key issues, but once in a while it delegates the politically painful details to others, said Ross Baker, a political science professor at Rutgers University.

“It’s third-rail issues that generally Congress, if they can, tries to hand off to someone else," he said. But he added that it such a handoff was rare.

Facing shortfalls in the Social Security Trust Fund in the early 1980s, President Ronald Reagan, along with Republican and Democrats on Capitol Hill, handed the politically volatile issue over to a commission, Baker said. The result: the panel, headed by Alan Greenspan who later became chairman of the Federal Reserve, produced a package of recommendations to strengthen the program’s finances.

The Defense Base Closure and Realignment Commission created in 2005 also gave Congress cover on the difficult issue of deciding which military bases to close.

“The Pentagon had to draw up the list so that no individual member could be singled out for censure by the voters by having failed to protect the base,” Baker said. Lawmakers then voted up or down on entire slates of closures and consolidations, which gave them political cover and kept them in the process.

As Congress debates sweeping changes to the nation’s health care system, lawmakers will be reluctant to give up any clout, especially on how to spend federal funds, because it's hard to reclaim power once it's surrendered.

Giving HHS, CMS or any other government agency more authority is the last thing Republicans want to do. They have said repeatedly that the Democrats’ plan would delegate too many decisions to federal agencies. “Why not have some more bureaucracy?” said Sen. Orrin Hatch, R-Utah.

To be sure, Wyden said, Congress can’t have it both ways if it creates an entity like the CMS Innovations Center “where clearly we want to take major decisions out of politics and make calls on the merits.”

If Congress steps in and overrules the center when it makes an unpopular decision, “this will just be business as usual,” Wyden said.

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