Fiscal cliff dwellers: Don't forget, you could always beef up IPAB

Republicans are gunning for entitlement cuts as part of a deal to avert the so-called fiscal cliff. Cuts in Medicare are high on the GOP agenda (despite campaigning on a platform to protect Medicare and blame Democrats for gutting it). Meanwhile Democrats oppose these moves. But ironically, Republicans also want to get rid of the Independent Payment Advisory Board (IPAB) enshrined in the Affordable Care Act even though IPAB puts tight limits on overall Medicare spending.

As Politico (The toxic Medicare payment panel) describes, there’s almost no way Republicans and Democrats can be persuaded to work together to improve IPAB, even though there are many possible ways to do so. IPAB has been beaten up so badly by the laws detractors that it has effectively become radioactive. And no Republican wants to be seen as legitimizing IPAB even though it could well be the most effective path toward bringing costs under control.

Contrary to popular belief, the Affordable Care Act is actually quite a moderate piece of legislation. As a result IPAB’s powers were already going to be quite limited –much more so than groups like NICE in the UK. For one thing, IPAB only kicks in if Medicare spending is growing faster than a target rate. Even then Congress has the ability to implement policies other than what IPAB recommends –it just doesn’t have the option of doing nothing. IPAB is not government bureaucrats –it’s external experts. They are¬†explicitly¬†barred from “rationing” care. IPAB is supposed to make recommendations that “improve the health care delivery system and health outcomes, including by promoting integrated care, care coordination, prevention and wellness, and quality and efficiency improvement.” These ideas need to be given a chance to work and thankfully the “toxic” IPAB referred to in the Politico headline is not the only place these concepts are being promoted.

It’s a pretty easy guess that Congress won’t do anything enlightened on entitlement reform as part of the current round of negotiations. It’s more likely just to slash this or that or shift costs to others, e.g., by raising the retirement age.

Maybe next year Congress can get down to serious business on improving health care reform including IPAB, but I highly doubt it. We’ll have to wait for the 2014 Congressional elections or even longer.

December 18, 2012

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