JONATHAN COHN NOVEMBER 16, 2010
A few days later, my impressions of the president's bipartisan fiscal commission proposal haven't changed that much: The parts still seem better than the whole. Plenty of the chairmen's recommendations make sense to me: Curbing or eliminating the mortgage interest deduction, as my colleague Alex Hart explains today, is a particularly good idea. I'm less wild about the emphasis on spending cuts over revenue increases. And I think the commission loses credibility points for failing to specify the cuts that would yield expected much of its expected savings. It's the Reagan-era magic asterisk all over again. You can read either Henry Aaron or Paul Krugman, or both, if you want to learn more.
But do take note of what the commission chairmen, Erskin Bowles and Alan Simpson, said about health care.
First, they called for strengthening the Independent Payment Advisory Board. The IPAB, as it's known, will be responsible for studying and recommending changes in the way Medicare pays for services. It's a key component of the Affordable Care Act's cost control apparatus. Even more interesting was the suggestion that another effective means for reducing the deficit was to "add a robust public option and/or all-payer system in the exchange."
By "all-payer system" I assume the chairmen had in mind some kind of centralized pricing, similar to what Maryland now does with its hospitals, although it's possible the chairmen meant something else. There's no ambiguity about the public option, though, and no mystery why it's on the list: As the Congressional Budget Office confirmed last year, a robust public option would have more power to drive down the prices doctors, hospitals, and drug or device makers charge for their services and products. That would save the government money.
Of course, Republicans have vilified the IPAB: It's one of the core elements of reform they say they want to repeal. And they (along with a handful of Democrats) always hated the public option. They have their reasons for these positions. Controlling costs through these means, they claim, would reduce access to or quality of medical care.
I don't agree, obviously, but this is not the place to have that debate. On the other hand, it does seem like a good opportunity to remind everybody that there are lot of different ways to reduce federal spending, whether on health care specifically or in the budget as a whole. A debate that consists mostly of Republican ideas, like the one we increasingly seem to be having in Washington, isn't really a debate at all.