In recent weeks, several Democrats and some health reform advocates including the AMA have joined Republicans in calling for a repeal of provisions in the new health law that create the Independent Payment Advisory Board (IPAB). For these people, IPAB represents the worst aspects of the new law–an unelected, centralized planning authority empowered by government to make decisions about the peoples’ health care. Arbitrary cuts to providers, short-sighted decisions that stifle innovation and rationing of care are sure to follow, they claim.
Created by the Affordable Care Act, IPAB is a fundamental part of the law’s plan to control health care cost escalations. The law contemplates that each of the Board’s 15 members would be appointed to a 6-year term by the president. Members are to include providers, health policy and public health experts, and consumer representatives. Each would have to be confirmed by Congress, much like Supreme Court justices. And unlike a frightening, wizard-like bureaucrat operating behind a curtain-as critics would have you believe-the IPAB chairperson would be required to appear before any committee of Congress that desires a hearing, just as the President’s cabinet members are required to do.
IPAB’s mandate would be to recommend ways to prevent excessive escalations in Medicare expenditures. Specifically, whenever these costs grow faster than targets established by the Affordable Care Act, IPAB would propose ways to reduce Medicare spending by up to 1.5%. When that happens, Congress can either approve those recommendations, develop alternatives with the same impact, or simply allow Medicare costs to accelerate. In the last instance, a 60% majority of the Senate would be required to overrule the IPAB recommendation.
Some sort of cost-governing approach is mandatory, because we want to offer comprehensive coverage to Medicare beneficiaries within some reasonable cost structure, and because Congress has shown no inclination to do so, for example by enacting quality- and efficiency-based payment models. As Jonathan Cohn points out, Congress is unlikely to do this going forward, because its members are heavily influenced by lobbyists whose job it is to maintain the lucrative status quo. IPAB members, shielded as they would be from such influences but still wholly accountable to Congress, may well succeed where lawmakers have not. (more…)