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Commentary By David Gratzer

ObamaCare: A NICE Kettle Of Fish

Health, Health Healthcare

With the presidential ink not quite dry on the health overhaul legislation, Republicans and their conservative allies promise to repeal it. That could prove a long battle, one that could stretch out for years.

But opponents of the administration’s plan should take heart. One of its main proposals is on the cusp of being repealed. Not here in America, but across the Atlantic in the United Kingdom.

With health costs spiraling, one of the core ideas of the White House’s health takeover is the creation of an independent body of experts to steer clinical decisions.

IPAB, the Independent Payments Advisory Board, is founded on the belief that Washington bureaucrats can help manage health care decisions, adjusting Medicare payments to reward excellence and punish waste.

The idea doesn’t sound unreasonable. As the president has noted, there often is a red pill and a blue pill, with the red one costing twice as much, yet no more effective.

If the logic is seductive, it’s easy to understand why Britain’s prime minister embraced the idea in 1999. Faced with rapid inflation in the socialized National Health Service, Tony Blair created NICE, the National Institute of Clinical Excellence.

Letting Bureaucrats Decide

In 2005, his government added “health” to the title, merged it with another agency and added new powers to ration treatment on a “cost effectiveness” model. The principle purpose remains: to better spend scarce health dollars.

Fast-forward to Britain’s general election campaign. Conservative opposition leader David Cameron — no radical on medical issues and a staunch supporter of the NHS — promised in his first major announcement to reverse every decision NICE made since 2005 to defund cancer drugs.

He will pay for the change by cutting a payroll tax the Labour government imposed on the National Health Service. In other words, Cameron can buy better care by cutting the government’s tax on its own health care system.

Politicized Care

Being cruel to NICE is a great political issue for two reasons. First, NICE has angered Britain’s medical community with absurd micromanagement.

Take the case of arthritis drugs.

At a recent regional meeting of an arthritis support group, doctors complained that NICE isn’t just restricting what drugs could be prescribed; it’s now dictating the order in which they can be prescribed. Professor David Scott of Norfolk and Norwich University Hospital explains: “Patients may stay on the wrong drug longer, because they are not allowed to change.”

NICE restrictions have prolonged the suffering of thousands of Britons. The U.K.’s Rarer Cancers Forum blames up to 20,000 premature deaths due to rationing.

The figure is debatable, the rationing is not: NICE restricts treatments that are readily available in other jurisdictions.

Many rejected cancer drugs are used in the U.S. and in EU countries such as France, Poland and even Romania. Not coincidentally, U.K. cancer survival rates lag behind those of many Western nations.

If you want proof of how politically toxic “clinical cost-effectiveness” is, look no further than the agency’s announcement on April 6. To “avoid providing a focus for political debate or detracting attention from the general election campaign,” the Institute said, “NICE will not publish any guidance document, in either draft or final form,” until Election Day.

It’s a strange announcement. NICE still pretends its ruthless decisions are all about “clinical excellence” and medical science. Yet the deep unpopularity of the panel is known; NICE recognizes the toxic nature of its own announcements.

An earlier decision went even further; the panel suggests that it would review its own mandate. In other words, whether or not David Cameron lives at 10 Downing St., NICE will change significantly.

The larger issue has implications on this side of the Atlantic. For all the controversy and court challenges, the Institute’s harsh policies haven’t even dented cost inflation. Britain’s National Health Service costs twice what it did when NICE’s predecessor agency was created.

Yet White House officials still talk about NICE’s American cousin as a potential “game changer” capable of saving hundreds of billions. Just last week, OMB Director Peter Orszag boasted at the Economic Club of Washington that IPAB will help reduce the deficit by increasing heath care efficiency.

(For the record, because of widespread criticism, the Senate pushed IPAB’s implementation time to 2015 and trimmed its powers.)

In recent weeks, the White House has talked up its political success at passing legislation. But ObamaCare has practical problems. And, as NICE shows, bureaucratically trying to micromanage a health care system into cost savings just doesn’t work.

That’s why the White House can trumpet its political success while the larger task of taming health inflation remains. Conservatives need to take note: The debate is far from over.

This piece originally appeared in Investor's Business Daily

This piece originally appeared in Investor's Business Daily