IPAB Repeal Not Warranted

The Independent Payment Advisory Board has come under a lot of criticism of late — including flat-out false allegations — from Republicans, whose declared objective is to repeal the entire health reform law, and Democratic members of Congress, who fear loss of congressional prerogatives. Both are wrong.

The IPAB is a central component of an integrated menu of provisions in the health reform legislation that promises to slow the runaway growth of health care spending. The rules governing the advisory panel are far from perfect — and amendments are called for — but repeal would be a serious blunder.

The IPAB is to be a board of 15, appointed by the president and confirmed by the Senate. The president must consult with members of Congress in the selection of 12 of the members. Far from being faceless bureaucrats, as critics allege, IPAB members will be fully vetted by the elected representatives of the people, and the chairman or chairwoman would be obliged to appear before any congressional committee that invited him or her — just as are members of the president’s Cabinet.

Once confirmed, IPAB members are charged with making recommendations on how to prevent Medicare spending per person from rising at excessive rates. These rates are set in a law that Congress enacted and can change at any time.

The law creating the IPAB clearly bars the panel from doing the things that critics now allege the IPAB will do. The IPAB is barred by law from rationing care; from raising taxes, premiums or cost sharing; and from restricting benefits or modifying eligibility.

So what can the IPAB do? The answer requires that one appreciate the range of the provisions in the health reform legislation to slow the growth of spending. The law sets up pilot programs and experiments to test new ways of organizing the delivery of care — the Accountable Care Organizations, for example or paying for care with bundled payments. It expands research on the relative effectiveness of different methods of treatment — comparative effectiveness analysis.

Each of these provisions — and many others — is intended to provide information on how to deliver care more effectively and efficiently. As of now, no one knows exactly how to bring ACOs into existence or make them work. No one knows how to bundle payments to provide incentives for high-quality, cost-efficient care. Comparative effectiveness analysis is needed because, rather surprisingly and very distressingly, most of what doctors and hospitals do has never been subjected to careful evaluation.

When the results are in, many health care providers will discover that they should do things differently. Many are likely to respond promptly to the new findings. But people often resist change — even physicians and hospitals. It took decades, for example, before as many as 90 percent of cardiologists routinely recommended patients take a baby aspirin daily after a coronary — a cheap treatment with huge benefits.

That is where the IPAB comes in. The law specifically authorizes the advisory board, among other things, to recommend changes in relative payments under Medicare for different forms of care. Such changes don’t ration care. Physicians would remain free to practice medicine as they wish. But changes in financial incentives can nudge both providers and patients to pay attention to the findings of research a bit sooner than they might otherwise.

In addition, if Congress doesn’t like what the IPAB recommends, a simple majority of both Houses of Congress can replace the IPAB’s recommendations with alternative ways of meeting spending targets that Congress laid down.

What Congress cannot do is ignore the IPAB’s recommendations. Specific procedures, which can be waived only by a three-fifths majority, prevent Congress from refusing to do anything — a course members too often take.

If Congress does not act, the IPAB’s recommendations take effect automatically. Of course, if Congress is really upset about what the IPAB has done, it can — with a three-fifths majority in the Senate — pass new targets or simply kill the IPAB.

I admit that the provisions governing the IPAB are less than optimal. For example, recommendations regarding payments to acute and long-term care hospitals, hospices and inpatient rehabilitation and psychiatric facilities are off-limits until 2o20; and those to clinical laboratories are off-limits until 2016. These politically motivated restrictions should be repealed as early as possible so the IPAB’s recommendations can comprehend the delivery system as a whole.

The law effectively bars recommendations that would cost money in the short run — even if they would save money in the long run. This restriction also should be repealed, as some investments — such as those in information technology — cost money upfront but save money over time.

But the message should be to fix it, not repeal it.

It is ironic that some critics of the Patient Protection and Affordable Care Act, including those who most loudly bewail what they regard as its lack of measures to slow spending growth, are now calling for repeal of the IPAB — a key element of the bill’s cost-control strategy.

Could it possibly be that some of these criticisms are politically motivated rather than analytically sound?