Independent Payment Advisory Revolt

Public opposition to the Affordable Care Act has grown in surprising and unpredictable ways since the entitlement passed two years ago, but few would have predicted then that so many Democrats would repudiate so many of President Obama’s core promises. Yet that is happening now, as Congress targets the 15-member central committee that is supposed to control health costs.

The vehicle is a bill from Tennessee Republican Phil Roe that would repeal the Independent Payment Advisory Board, or IPAB, the new ObamaCare bureaucracy with vast powers to control health care and health markets starting next year. A straight majority of the House has joined Mr. Roe as co-sponsors—some 234 Members, including 20 Democrats. The bill cleared the Energy and Commerce Committee this week with a vote from its ranking health Democrat and the Ways and Means Committee Thursday, on a voice vote with no recorded objections.

This turn is remarkable because the IPAB really does embody ObamaCare’s innermost values and beliefs—to wit, that health decisions are too important to leave to the people receiving the care (patients), the people providing the care (doctors and hospitals), the people paying for the care (taxpayers), or even the people who got the government involved in the first place (politicians).

Instead, supposedly independent experts will run a battery of small experiments, figure out which ones “work” and then impose them through Medicare’s price controls on all U.S. medicine. When health spending in a given year exceeds a budget benchmark, as it always does and will, the 15 White House-appointed wise men will work their miracles.

Former White House budget director Peter Orszag designed the IPAB to insulate it from the political system, akin to the Federal Reserve. This displeased liberals in Congress because for them entitlements aren’t merely about social welfare but advancing their political agenda. If the IPAB succeeds in quarantining Medicare from politics, Washington would lose its powers to direct spending to political clients.

The irony is that the White House is expanding the government-run health care that it says the government can’t be trusted to run by itself, even as its unaccountable, unelected board undermines democratic consent. The IPAB was relieved of the normal checks and balances of notice-and-comment rulemaking, and its edicts aren’t subject to administrative or even judicial review. Consumers have far more rights of legal recourse under the private health plans that Mr. Obama deplores.

The double and more dangerous irony is that such technocratic dreams have been consistently frustrated, despite three or four decades of trying. Now that Mr. Obama has rewarded the planners for their failures with new authority, the question is what they’ll do with it when they fail this time, too.

In January, the Congressional Budget Office surveyed the results of every major Medicare demonstration project over the last 20 years. Among 34 programs to reduce hospital admissions, all 34 “had little or no effect on hospital admissions” and “spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program.” Out of four so-called value-based payment programs, only one saved money, and then not that much.

Everyone hopes that this time is different and that the Affordable Care Act’s new attempts find more efficient ways of delivering care. But even considering its track record, there’s reason to doubt they will make any difference. Last year the Administration disclosed that Medicare’s payment system will crash if it stops processing bills for more than a week or two, because it doesn’t have enough computing power to handle a major backlog. One of the only things this entitlement does well is push money out the door.

The larger problem is that even successful pilot programs are hard to replicate. “This usually does not work,” as David Petraeus writes in his military counterinsurgency manual, which as it happens is the best deconstruction of “large-scale, mass programs” that we’ve seen. General Petraeus notes that “small-scale programs succeed because of local conditions” and he recommends keeping them that way, so that they’re “cheap, sustainable, low-key, and (importantly) recoverable if they fail.” This advice applies as much in health care as in the military, and it’s among the reasons that markets are so much better than national centralization.

It’s also among the reasons Paul Ryan’s Medicare reform is so much better than Mr. Obama’s. Beneficiaries would receive a “premium support” payment to buy insurance, and insurers and providers would compete for business on value for money. What “works” is what millions of consumers decide.

The only alternative, and the IPAB’s true end game, is harsher and more arbitrary price controls and eventually limits on the care patients are allowed to receive. The New England Journalists (of Medicine) deny this reality because ObamaCare has a clause that prohibits “rationing,” even as the law leaves that term undefined. But reducing treatment options will be inevitable as government costs explode.

The IPAB revolt among House Democrats comes as the White House demands even more powers for IPAB in its budget, including an automatic sequester. Whatever is motivating House Democrats, they deserve some credit for making Mr. Obama’s vision somewhat less likely.