Rationing Under ObamaCare
GALEN GUIDE No. 8
FALL 2012
The health overhaul law creates at least 159 new
agencies, boards, commissions, and government
offices dedicated to putting our health care
system under Washington’s control. These and
other ObamaCare programs will inevitably lead
to rationing of health care. Some examples:
Independent Payment Advisory Board
The IPAB will be composed of 15 experts appointed to
enforce limits on how much the government spends
on Medicare each year. It will become the primary
rationing board for Medicare. The IPAB will make
recommendations about how Medicare spending will
be cut, and its recommendations will go into effect
automatically unless Congress overrides them with
supermajority votes. There can be no judicial review
of IPAB’s decisions. Democrats and Republicans have
said they fear the board’s powers, which will impact
hundreds of billions of dollars in Medicare spending.
Patient-Centered Outcomes Research Institute
This new government agency is charged with
determining which medical treatments are more
“effective” than others. The judgment of doctors
will be subordinated to this body of government
experts. PCORI will have incentives to recommend the
cheapest therapies that may work for most patients
but that may disregard the needs of individual
patients for whom the recommended therapies
are not “effective.” PCORI also could quell medical
innovation by throwing up another hurdle to getting
new treatments to patients.
Center for Medicare & Medicaid Innovation
The center is charged with “testing new payment
and delivery system models that reduce costs while
maintaining or improving quality.” While these are
worthwhile goals, the HHS Secretary has considerable
authority to decide how the center spends its $10
billion in direct funding over the coming decade.
Political decisions are likely to determine which
proposals are selected.
Rationing Under ObamaCare
Medicare Value-Based Purchasing Program
This establishes a program to pay hospitals based
on their “performance” in meeting governmentdetermined “quality measures.” It also will implement
“value-based purchasing programs” that once again
could have government picking winners and losers,
disregarding the preferences of doctors and patients.
Physician Value-Based Payment Modifier
This new rule changes the way doctors will be
paid for taking care of Medicare patients. Doctors
will be judged according to their compliance
with government-determined “cost and quality
measurements” — measurements that will be
“defined by the secretary of HHS.” This will become
“checklist medicine.” Doctors whose costs are above
the threshold will be penalized financially.
Value-Based Insurance Design
The Departments of HHS, Labor, and Treasury are
charged with developing guidelines for health
insurers to make sure they use its “value-based
insurance designs,” particularly regarding preventive
health services. Consumers will be encouraged to use
the “higher value providers, treatments, and services”
— as determined by government bureaucrats, not
doctors and patients.
Coverage of Preventive Health Services
The law requires new health plans to provide
coverage without cost-sharing for preventive services
recommended by the U.S. Preventive Services Task
Force. This is the group that has recommended
limiting mammogram tests for women and prostate
screening for men.
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organization devoted to promoting an informed debate
over free-market ideas to health care reform. Request
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