Morning Read: Why Obama's Medicare advisory board matters

Highlights of the important and the interesting from the world of healthcare:

Why Obama’s Medicare advisory board matters: Well aware that his legacy will in large part be shaped by how well health reform does or doesn’t work, President Obama is pushing to move up the implementation of the Medicare Independent Payment Advisory Board. The board, set to get up and running in 2014, is tasked with coming up with recommendations for how to cut payments to health providers every year that Medicare exceeds targeted spending levels–and that’s expected to be just about every year, the New York Times reports. With Congress generally unwilling to do its job in making the hard choices that could limit payments to doctors and hospitals for various tests and procedures, the board could give politicians some political cover as they take the heat for essentially doing Congress’ job.

The board’s structured in a way designed to insulate it–to some extent, at least–from political pressure. The president will nominate the board’s 15 members for jobs that will be full-time and encompass terms of six years, requiring Senate approval. The idea is that Congress couldn’t just ignore the board’s recommendations: the board’s proposals would go into effect unless Congress modified or rejected them within 30 days. And even then, the president could veto a disapproval resolution from Congress.

Importantly, the soaring federal deficits that are expected in coming years could end up the board’s best friend, providing political and public impetus to make cuts.

“I’m modestly optimistic because the fiscal environment which we will be in, in three or four years, will be so desperate that the Congress and the administration will be looking for any mechanism or device that can hold down the growth of spending,” one prominent health economist says.

Insurance companies under fire for fast-food investments: A Harvard researcher has heaped more criticism on insurance companies, which have already earned tons of public scorn and criticism this year as the whipping boy in the health-reform debate. This time, 11 large insurers have drawn heat for investing $1.9 billion (as of June 2009) in the stocks of the five-biggest fast food companies in the U.S., which include McDonald’s and Burger King.

“The insurance industry cares about making money, and it doesn’t really care how,” says the study’s author. “They will invest in products that contribute to significant morbidity and mortality if doing so is going to make money.”

Insurance companies dispute the study’s figures and note that a number of their holdings of fast-food stocks aren’t direct investments, but instead come through mutual funds. While there are plenty of legitimate reasons to criticize insurance companies, this one is pretty low on the list. Insurers’ direct holdings in fast food companies amount to only pennies when viewed in relation to all of their assets. Plus, one could argue that insurers could–and should–use their voting power as stockholders to attempt to influence fast food companies to change their menus for the better, which indeed some have in recent years–the Double Down notwithstanding.

Debating doctors’ incomes: The right-leaning InsureBlog hosts a lively debate about physician pay, with the blog’s writers ganging up on one dissenting commenter. The post is titled “The Myth of the Richdoctor,” and though the author argues in the comments that the post’s focus is on office-visit reimbursement rates, the title clearly implies that physician salaries are its focus. So, is it a myth that doctors are “rich”? Hardly. If the author, Dayton, Ohio, medical office manager Kelley Beloff, is arguing that primary care docs should be paid more, then certainly that’s a legitimate point but nowhere in her post does the word “primary care” appear.

So let’s look at the numbers: cardiologists average a whopping $442,000 in income, while internists come in at $194,000, according to Forbes. One could certainly argue that the proper amount for each specialty belongs somewhere in the middle, but Beloff never makes that point. Indeed, the lowest-paid types of doctors make $178,000, and the vast majority of the population would love to have a salary so “low.” So when doctors complain that “Obamacare” is somehow running them out of medicine, don’t believe it.

To be sure, a few doctors–likely those who hold MBAs or are medical-device innovators–could make more money doing other things. But the vast majority of doctors can’t make more money doing anything else so they simply won’t leave the profession, even if they are anti-Obama crazies. Beloff misses a chance to stump for a worthy cause–increasing payments to primary care docs (which health reform does, by the way) and instead fails to demonstrate that the idea of rich doctors is a “myth.” And her attempt to easily write off any argument to the contrary as “wealth envy” is offensive and immature. The more doctors making hundreds of thousands of dollars a year whine about being underpaid (except primary care docs, who have a legitimate beef), the more they’ll be viewed by the public as greedy and selfish. Ask insurance companies how that’s working out for them.

Photo from flickr user Akash_Kurdekar