This is the third part in my examination of the controversial Independent Payment Advisory Board, created by the Patient Protection and Affordable Care Act. Part one explained who is on the board and what their qualifications must be. Part two looked at what the board can do. The IPAB develops proposals and submits them to the president and the Congress. What happens next?
Starting in 2014, the IPAB must submit a proposal to the president and Congress by January 15 if the chief actuary of the Centers for Medicare & Medicaid Services has projected that Medicare costs will grow faster than the targeted rate or that medical inflation will grow faster than consumer inflation. The proposal must contain recommendations for meeting the savings target, along with explanations and justifications for them. It must also contain an actuarial opinion from the chief actuary, certifying that the proposal will meet its objectives. Finally, the proposal must contain an actual legislative proposal for implementing the recommendations, and any other information the board deems appropriate. If the IPAB fails to make this proposal, the federal Department of Health and Human Services must do it. The president then has two days to submit the proposal to Congress.
Once Congress receives it, the proposal is formally introduced in each house as a bill and referred to the appropriate committees (Ways and Means and Energy and Commerce in the House; Finance in the Senate.) The committees must report the bill with Medicare-related amendments by April 1. The IPAB's recommendations cannot be repealed or changed in ways that would cause them to miss the savings target or increase Medicare spending.
The recommendations go into effect unless three-fifths of the voting members of each house vote to reject them. Significantly, the bill cannot be filibustered in the Senate, and there are specific time limits for Senate debate on amendments to the bill. If Congress does not override the recommendations, HHS must implement them by August 15 of that year.
And that's the IPAB. Essentially, Congress has admitted that it's not capable of controlling Medicare spending through the normal legislative process, so it has ceded the work to a Federal Reserve-like commission. Congress still has the last say, but a large majority of members must agree to reject the recommendations to stop them from becoming law.
To be sure, Medicare is a very politically sensitive program; the people who benefit from it tend to vote in greater proportion than do their younger fellow citizens. Reports that Congress is "cutting Medicare" tend to alarm them, and they respond accordingly. Consequently, Congresses for the last 47 years have tended to expand Medicare, not reduce it. The most recent example was the addition of the prescription drug benefit nearly 10 years ago.
On the other hand, making decisions about the best way to allocate public funds is kind of the Congress's job. Is the IPAB an admission of failure by our national legislative body? Yes, the members of IPAB are subject to Senate confirmation, but does it not still represent a large delegation of power to people who do not appear on any ballot?
Also, given the constraints on the IPAB (no rationing, no benefit cuts, no increased deductibles or co-pays), its recommendations will be limited to procedural and medical practice reforms. How many options will it really have? Can it be effective with these constraints? The great thing about being a blogger is that I can ask all kinds of rhetorical questions for which I have no clue as to the answers.
I will say this: The IPAB is not socialism. Socialism is government ownership of the means of production and allocation of the goods and services produced. IPAB is just a method for government to attempt to get a handle on the costs of one of its three largest programs (Social Security and national defense being the other two.)
"Faceless bureaucrats" are not going to look at grandma's medical file and decide she doesn't need that heart valve repair. However, I can see them them deciding that paying for some medical treatments does not make sense in some cases because the evidence shows that the treatments are ineffective for certain groups. Is it rationing if the IPAB recommends against having Medicare pay $5,000 per year per patient for a certain diabetes drug if the evidence shows that the drug lengthens lifespans by more than six months for only 15 percent of patients? Or is that prudent decision-making? And would my answer change if the patient in question is my grandma? It's not hard to imagine the answer being "yes" to all three questions.
Health care spending is a difficult topic, which is why we as a country have struggled so much with it. If a state government decides not to build a new highway or resurface an old one, the effects may be tragic for my car's suspension but not for the vast majority of people. If government (which already pays for half the health care in the U.S.) decides not to cover a certain medical procedure, someone's life will change and perhaps end.
I don't know whether IPAB is the best way to control Medicare costs, but there's no denying that growing Medicare costs are a national problem. When people complain about runaway government spending, whether they realize it or not, they're talking about Medicare. And let me be clear -- Medicare is one of the programs that makes this country great. A great country takes care of its senior citizens, and the U.S. is a great country. But Medicare is incredibly expensive, and we must do a better job of managing it. No one likes higher tax bills, and no one likes being denied medical care. Until we work out a good balance between the two, we will continue to struggle.
I will now climb down off my soapbox and turn the discussion over to you. What do you think? Is IPAB worth trying or is it a horrible idea? I'd love to hear your thoughts. I just ask that you keep the discussion civil and respectful. We're all Americans who want what's best for our country.
Chime in when ready.