You don't have to be a Washington insider to understand what the Democrats are up to with their last-minute plan to run the "doc fix" — postponing scheduled cuts to doctors' Medicare payments — on a separate legislative track. It's all about Obamacare, as is so much this year. The Obama administration and its allies in Congress will do just about anything to get a health-care bill to the president's desk, and that certainly includes spending whatever amount of taxpayer money they deem necessary — and doing so through a shameless ploy, offloading $247 billion in Obamacare costs onto a separate, standalone, unfinanced piece of legislation. Obama promised not to add "one dime" to the deficit for health care: Democrats now plan to dump $247 billion onto the nation's already staggering pile of debt, using this piece of accounting trickery to cover their tracks.
The "doc fix" is political shorthand for repeal of the discredited "sustainable growth rate" (SGR) Medicare-payment formula, which determines the annual update of physicians' fees. A comprehensive failure as a cost-cutting measure, SGR is a prime example of the bureaucratic central planning that Democrats now want to extend across all of American health care. SGR was supposed to keep Medicare spending on doctors' services in line with economic growth by limiting the annual increases in the prices paid for each particular physician service. The trouble is that Medicare's total cost is determined by both prices and volume, and the government has no way to control the use of physicians' services. As fees have been cut, volume has soared — necessitating even deeper cuts to keep spending in line with SGR targets.
The sensible course is a thorough reform of how Medicare operates. So long as the program is dependent on payment schemes devised in Washington, we are doomed to endure SGR-style disasters over and over again.
But the Obama administration isn't interested in serious entitlement reform. They just want to make the SGR nuisance go away, which is why the House health-care bill included a full repeal of it. Sen. Max Baucus's plan, however, only delayed the SGR cuts for another year so that he could claim his plan comes in under the $900 billion ceiling the president established for a health-care bill.
Now, as Democrats prepare to take their plans to the House and Senate floors, they are looking to spend even more money to buy votes and to make political problems go away. The catch is that pesky budget limit the president endorsed. The solution? Simply moving some of the spending out of the health-care bills and into other pieces of legislation. Presto! Now there's even more money to spend!
Fortunately, there is still some sanity on the Democratic side of the aisle. Senate Budget Committee chairman Kent Conrad has restated his opposition to repealing SGR without an offset to cover the $247 billion hole that would blow in the federal budget. Indiana Sen. Evan Bayh says he will join Conrad in opposing the Democratic plan.
So the question is, What will Republicans do when the SGR repeal is called up in the Senate? If they stick together and join Conrad and Bayh, they can defeat it and force the Democrats to address the issue responsibly. No one likes SGR, but there is no real danger of doctors' facing a Medicare fee cut in 2010 — a bipartisan consensus will ensure that doesn't happen. So the last thing Republicans should do now is to support an unfinanced repeal outside of a health-care bill. That will undermine any effort to secure meaningful Medicare reform — this year or ever. Worse, it will give Democrats cover to spend even more on Obamacare, buying off special interests and greasing the political machinery.
This is a tactical ploy by Democrats to secure a government takeover of American health care. Republicans have no choice but to oppose it.