In a Wall Street Journal op-ed Sunday, former Vermont governor Howard Dean (D) pointed to what he believes is the “one major problem” plaguing the Affordable Care Act: the Independent Payment Advisory Board (IPAB).
Dean, who begins his op-ed by referencing the future benefits of Obamacare, describes the controversial 15-member IPAB as “essentially a health care rationing body,” one that has the ability to establish doctor reimbursement rates for Medicare and determine “which procedures and drugs will be covered and at what price.”
The IPAB’s sole mandate is simply to drive down Medicare spending; in order to do so, it can dictate Medicare spending cuts without congressional approval.
Dean, a longtime Obama supporter, is not the first critic of the IPAB. In fact, he is one of many who believe that the board’s power to cut doctors’ payment rates could – and eventually will – lead to worse care for patients.
Dean writes that the “nonpartisan Congressional Budget Office has indicated that the IPAB, in its current form, won’t save a single dime before 2021.”
He adds: “If Medicare is to have a secure future, we have to move away from fee-for-service medicine, which is all about incentives to spend more, and has no incentives in the system to keep patients healthy.”
For slightly different reasons, most Republicans also oppose the IPAB.
In May, as part of their campaign to block the Affordable Care Act’s implementation, House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) declared that they would not make any appointments to the IPAB, whose members must be confirmed by the Senate.
“Because the law will give IPAB’s 15 unelected, unaccountable individuals the ability to deny seniors access to innovative care, we respectfully decline to recommend appointments,” Boehner and McConnell wrote in their letter to President Obama. Additionally, Senate Republicans have threatened to filibuster any IPAB nominee.
Dean is more concerned with the irony and probable ineffectiveness of the panel. According to him, the IPAB will never be able to actually control spending, and will merely create a “more bureaucratic” system that ends up driving up administrative costs.
The former governor of Vermont has quite a reputation with regard to health care. As a doctor (whose wife is also a doctor), Dean successfully implemented universal coverage for Vermonters under the age of 18 for almost two decades, and allowed families with a household income of less than $65,000 to buy into Medicaid. Under Dean, 96 percent of all young people in Vermont grew up with health coverage, and Vermont’s insurance costs have been significantly lower than those of Massachusetts, New York, and New Jersey for the past 18 years.
While Dean acknowledges that controlling costs is essential to any health care system, he writes that rate setting “has a 40-year track record of failure.”
Even as a longtime supporter of a single-payer health care system, Dean still opposes the board that could essentially make it easier to sustain the single-payer structure of the program.
Perhaps Dean’s greatest fear – which is shared by the 20 Democrats who have joined Republicans in opposing the IPAB – is that most doctors will not accept lower Medicare reimbursement rates. Consequently, doctors would limit the amount of patients they see – primarily the elderly – along with the services and resources they provide to their patients.
And, as nearly all opponents of the IPAB argue, the board will do all this without outside regulation.
To describe the IPAB as a self-governing body under Obamacare, however, completely ignores the roles that Medicare’s chief actuary and Congress are still able – and expected – to play.
The Washington Post noted a “trigger” set by legislators who drafted the Affordable Care Act: The IPAB could only come into effect when “Medicare’s per-enrollee spending grew faster than the average of overall price growth (measured by the Consumer Price Index) and medical price growth.” The purpose is to ensure Medicare costs would not “rise as quickly as the rest of the health care sector,” but could still “grow faster than the rest of the economy.” The law established April 30, 2013 as the deadline to determine whether the program would “hit the trigger point.”
Medicare’s acting chief actuary, Paul Spitalnic, decided that Medicare cost growth would not be high enough to trigger the IPAB’s possible action, essentially “neutralizing” the body through 2015.
The Post also pointed out that “Medicare cost growth has been, perhaps surprisingly, pretty much under control.”
Even if the IPAB were to go into full effect, Congress would still retain a level of authority. Congress can override an IPAB cut by “passing equally large cuts with a simple majority or waiving the cuts entirely with a three-fifths majority.”
Even so, Dean’s op-ed piece provides a strong argument: If the IPAB is free to cut doctors’ payment rates, and Congress is unable to or chooses not to override the IPAB, patients can and will suffer.
American Medical Association president Ardis D. Hoven urges lawmakers to “ensure that funding for Medicare’s payments to physicians is sufficient to allow for sustainable practice environments that give physicians the ability to invest in new ways of improving care for patients.”
He adds that lawmakers should be wary of implementing a “new regiment that adds administrative burdens and could distract more effective efforts to improve patient care.”
Dean firmly ends his piece by suggesting that “getting rid of the IPAB is something Democrats and Republicans ought to agree on.”
Photo:Center for American Progress via Flickr.com