As everyone knows by now, Obamacare would raise, not lower, health costs. This is the consensus view of the CBO, Medicare’s chief actuary, and the American people. However, another consensus view — shared by nearly everyone outside of the Obama White House and the Democratic Congress — is that the number one goal of health policy should be to cut costs. So, if you combine a health care overhaul that won’t cut costs, with a pressing need to cut costs, where are we headed?
President Obama’s pick to fill the top post at Medicare and Medicaid provides a strong indication. We’re going down the only cost cutting road that government can travel. More exactly, we’re heading toward a nation-defining fork in the road. In one direction lies repeal; in the other, rationed care. In one direction, liberty; in the other, consolidated power.
President Obama’s pick to head the massive Centers for Medicare and Medicaid Services, Dr. Donald Berwick, is a Harvard doctor with a stated fondness for nationalized medicine. He plainly wasn’t picked for his large-scale executive or managerial experience. He’s currently a professor, a pediatrician, and the CEO of a nonprofit whose website reports it has “a staff of over 100 dedicated and talented people.” No, he was presumably picked because he and President Obama see eye-to-eye: Both share the same academic approach to problem-solving, both think our health-care system should be run through Washington, and both support a strong degree of bureaucratic control over questions of life and death. If confirmed by the Senate, he would become head of an agency with a budget larger than that of the Department of Defense.
In the private sector, costs can be cut through increased competition and choice, which will cause resources to be allocated more efficiently. But government-run health care can’t control costs except by limiting services. Last April, President Obama said, “The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here.” Thus, he said, “There is going to have to be a very difficult democratic conversation that takes place.” Dr. Berwick agrees. In fact, he’s been involved in that conversation for awhile.
Berwick doesn’t advocate cutting health costs by letting Americans control their own health care dollars, see prices, and shop for value. Rather, he prefers the approach employed by Great Britain’s National Health Services (NHS) and its National Institute for Clinical Health and Excellence (NICE). NICE, whose name seems to have been inspired by George Orwell's 1984, decides which care people will get and which they won’t.
In an interview last June, Dr. Berwick said, “NICE is extremely effective and a conscientious, valuable, and — importantly — knowledge-building system.” He added that NICE has “developed very good and very disciplined, scientifically grounded, policy-connected models for the evaluation of medical treatments from which we ought to learn.”
Moments later, the interviewer asked, “So you are saying that the federal CER [Comparative Effectiveness Research] agency should get involved in cost determinations?” (The new Federal Coordinating Council for Comparative Effectiveness Research was created by last year’s “economic stimulus” package.) Berwick replied, “You can say, ‘Well, we shouldn’t even look.’ But that would be irrational. The social budget is limited.” The social budget? Can you even imagine an American Founder using that phrase?
The interviewer then stated, “Critics of CER have said that it will lead to the rationing of health care.” Berwick replied, “The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”
NICE certainly rations with its eyes open. On its website, it explains that “choices have to be made.” Thus, “It makes sense to focus on treatments that improve the quality and/or length of someone’s life and, at the same time, are an effective use of NHS resources.” NICE elaborates: