Today’s Agenda

Today, Senator Lee is attending the Uintah Energy Summit.


From the Senator’s Desk

Courtesy of the Republican staff of the Joint Economic Committee:

In his weekly Bloomberg column today, former Obama Administration budget director Peter Orszag once again attempts to defend Obamacare’s Independent Payment Advisory Board (IPAB), the group of 15 unelected bureaucrats who will be empowered to make binding rulings on how to reduce Medicare spending.  His arguments are based on two premises – each of which contains flaws.  The first premise is that providers, not patients, should affect most health care spending:

Focusing on providers is key because health-care expenses are so concentrated: High-cost cases account for the vast majority of the total.  In those cases, the care provided is, as it should be, mainly the services and tests recommended by the provider.  So if you do not influence provider recommendations in those cases, you cannot do all that much to improve the system.

This premise is valid – to a point.  Obviously, heart attack patients rushed to the emergency room will have little substantive opportunity to influence their health care spending decisions.  But the statement lands on shakier ground in other cases; Orszag’s statement that care “should be” directed by the provider also implies that, for instance, knee replacement patients will not, and should not, be able to influence their course of treatment.  In some cases, our health system currently lacks the proper tools to allow such patients to make fully informed choices – but enhanced price and quality transparency data can remedy this defect.

Orszag makes an even less compelling case when he argues that only Medicare can influence provider behavior:  “For better or worse, only Medicare is large enough to lead the health-care system toward a new structure of payment for providers.”  The problem with this argument is that Orszag and his fellow liberals only want to follow the logic one way.  Because if liberals want to argue that only Medicare has the market clout to change the health care system, that also means Medicare’s size was large enough to cause the system’s current problems.  And, nearly 50 years after Medicare’s creation, liberals haven’t explained how “This Time Is Different” – how a Medicare system can help solve a problem of exploding health costs that it helped to create.  In fact, the Congressional Budget Office noted earlier this year that most Medicare demonstration programs over the past several decades have NOT saved money – suggesting Obamacare’s efforts to control costs by micro-managing Medicare in  different fashion won’t work either.

The bottom line is that the philosophy Orszag approvingly recommends in which “direct modification of the behaviors of providers (versus consumers or payers)” by a board of government bureaucrats isn’t likely to be successful, in two respects.  First, as noted above, CBO has taken a dim view towards the notion that better bureaucratic tinkering will change the dire direction of health spending, and the Medicare program.  Second, and more fundamentally, the American people won’t take kindly to the idea of government bureaucrats engaging in “direct modification” of providers – while ignoring patients entirely.  That smacks of everything Democrats said Obamacare was not – namely, a government takeover of health care.  And it might explain why President Obama, despite blowing full speed ahead on virtually every other aspect of Obamacare implementation, has yet to appoint a single individual to IPAB – because he doesn’t want to reveal the board’s true design until after the November election.


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Around the Water Cooler

Survey finds U.S. competitive ranking down again

The United States’ ability to compete on the global stage has fallen for the fourth year running as confidence in the country’s politicians continues to decline, an annual survey from the World Economic Forum found Wednesday.



The United States Treasury reports that the total public outstanding debt is: $16,015,769,788,215.80. This is the first time in American history debt has eclipsed the $16 trillion mark.


Looking Ahead

Tomorrow, Senator Lee will fly to Seattle to tour Microsoft’s Future Technology Lab and meet with business and technology leaders working there.