Obama-care's IPAB flawed

You may not have heard much about IPAB yet – one of 150 new boards and commissions in Obama-care – because it was buried deep in the 2,000-page bill and hardly debated. But you will. You’ve never seen anything like it either, unless you count Soviet-style central planning committees.

IPAB will have comprehensive and unchecked powers to dictate medical payments – what will get paid for, who will get paid and how much – under Medicare. This 15-member board, appointed exclusively by President Obama, will be unaccountable to Congress or anybody else and not subject to administrative or judicial review. Its members may not be impeached and its rulings may not be challenged. Congress can counter IPAB’s decisions only if Congress doesn’t exceed IPAB’s expenditures.

Peter Orszag, a former Obama administration official, has called IPAB “the largest yielding of sovereignty from the Congress since the creation of the Federal Reserve.” And he’s a fan! In fact, IPAB will be the most powerful body in history that is not answerable to voters.

But if IPAB captures the authority granted to Congress under the Constitution, that is a direct attack on our system of democratic accountability. Separation of powers, with careful checks and balances, has served us well over time.

Obviously, its creators wanted IPAB to be insulated from political influences. But policy-making authority without input or oversight from elected representatives moves us dangerously far away from the rule of law.

IPAB is based on bone-headed economics too. True believers in the power of Big Government like to imagine that the problem of an economic good, like health care, costing too much is eminently fixable. You simply decree that it shall cost less.

But the evidence that price-fixing doesn’t work to permanently control prices is all around us. Since the U.K. established a board similar to IPAB in 1999, health care costs have accelerated more rapidly than in the U.S. Whether instituted by Richard Nixon or totalitarian tyrants, price-fixing always results in shortages, stimulates black markets and depresses economic growth.

President Obama likes to point out that IPAB is prohibited from rationing, which is true. But it’s a meaningless distinction, since IPAB will be able to drive the cost of selected services so low that most or all providers will stop offering them. Patients will be “eligible” for services they can’t actually receive.

It’s not hard to see where this will lead. As Baby Boomers surge into Medicare and unbearable deficits accumulate, IPAB will drive down the prices of services they consider less essential. Unhappy patients will be told their only option is even more governmental control of health care. The slide to completely socialized medicine will grind on.

The “hope and change” Obama and his ilk have been working for all along will happen. Only it won’t be the change that most Americans hope for.

Like it or not, Medicare spending must be cut. It’s a matter of arithmetic, not ideology. But there’s a choice in how to do it.

Rep. Paul Ryan’s premium support model relies on market competition and personal responsibility rather than supposedly super-smart bureaucrats. Consumers could choose the options that match their priorities rather than be forced into the one-size-fits-all dictates of a central planning commission. I know which system I would rather be in.

IPAB doesn’t go into effect until 2014, well after the upcoming election. That’s all you need to know about how the administration thinks it will be received by the public. Nancy Pelosi once famously said we had to pass Obama-care “to see what’s in it.” She got her way. Now we’re finding out that what’s in it is dishonest, stealth radicalism at its worst.

There is some good news. As the word gets out, a bipartisan coalition of political, business and health care leaders are organizing to halt IPAB. Godspeed to them.