The Washington Post’s Alec MacGillis opens his article on health reform today:

The question came from a Colorado neurologist. “Mr. President,” he said at a recent forum, “what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who . . . is going to enforce the rules for a system like that?”

President Obama called it the “right question” — then failed to answer it. This was not surprising: The query is emerging as the ultimate challenge in reining in health-care costs that now consume $2.5 trillion per year, or 16 percent of the economy. How will tough decisions be made about what to spend money on? In a country where “rationing” is a dirty word, who will say no?

MacGillis later reports:

Another idea is to empower the Medicare advisory panel whose recommendations now tend to be ignored by Congress, or to create a separate, Federal Reserve-like entity to make tough decisions about federal health-care spending.

A Federal Reserve-like entity to control how Americans spend their health care money is not a new idea. Former Sen. Tom Daschle (D-SD), who is still advising the Obama administration on health care, proposed exactly that in his book: Critical: What We Can Do About The Health Care Crisis. Heritage fellow Bob Moffit explains:

In Daschle’s version of this new public agency, its “experts” would “oversee the health care industry” and have the knowledge and power to make “complicated medical decisions and the independence to resist political pressures.” Additionally, these government experts would “help define evidence-based benefits and lower overall spending by determining which medicines, treatments, and procedures are most effective–and identifying those that do not justify their high price tags.” This means denying payment. The health board would also:

  • Set the rules for health insurers who would participate in a national health insurance exchange and recommend benefits coverage, including drugs and medical procedures backed by “solid evidence”;
  • “Rank” therapies and medical services based on their cost effectiveness;
  • Suggest priorities for medical research; and
  • “Align incentives with the provision of quality care,” as defined by the health board, through Medicare-style “pay for performance” rules for doctors and other medical professionals who comply with government practice guidelines.

The Federal Health Board’s power would not be limited to government-run health programs either. Moffit again:

While the health board decisions would initially affect enrollees in government health programs, Senator Daschle says that Congress “…could, for example, link the tax exclusion for health insurance that complies with the health board’s recommendation.” Noncompliance in the private sector, in other words, would result in a severe tax penalty on employers and employees. For ordinary Americans, there would be little point in complaining to their congressman. Independent of Congress and the White House, as the senator freely concedes, the power wielded by the health board “is not small, and delegation over health policy decisions rightly raises concerns.”