Why Congress Shouldn't Dictate Health Care Payments

The Wall Street Journal has a solid profile today of budget director Peter Orszag, which nicely illustrates the appeal of having an independent agency empowered to trim health cares costs. (The agency would make recommendations on how to save money, which Congress could vote down in their entirety but not adjust.) Says the Journal:

The battle heated up in June, when Mr. Orszag visited Capitol Hill to discuss health care with a small group of House Democrats. The meeting started well, with one lawmaker after another echoing his message that spending controls were critical to any health-care overhaul, according to two administration officials.

Then one member said her top priority was winning higher payments for oxygen suppliers, the officials say. Mr. Orszag was taken aback. Officials had been trying for years to cut payments to suppliers of oxygen and other medical equipment, which critics say are inflated. Yet when a new competitive bidding process was set to take effect last year, industry supporters in Congress were able to delay the plan. They are still fighting to block changes.

Not surprisingly, every congressman wants overall spending reduced, but gobs more spending that benefits interests in their districts. It's not so different from any other kind of spending, it turns out. Or, for that matter, from the way people view Congress itself (i.e., like their own congressman, hate everyone else's).

P.S. Don't miss Orszag's terrific exchange with Sen. Chuck Grassley earlier this year:

At a March hearing, when Mr. Grassley raised concerns about the impact of cuts [to managed-care plans that receive generous subsidies from Medicare], Mr. Orszag responded: "I very firmly believe that capitalism is not founded on excessively high subsidies to private firms. That is what this system delivers right now."

Sen. Grassley shot back: "Well, you're going to take half of my time lecturing me on capitalism." He later asked for extra time "because I was lectured on capitalism, and I studied that in economics."

"No more lectures," Mr. Orszag promised.

A rare political misstep for Orszag. But, man, is it satisfying to hear him tell it like it is...

--Noam Scheiber