The Case Against The IPAB

No, it has nothing to do with rationing care or making coverage decisions for seniors. Rather as the Incidental Economist’s Don Taylor points out in a recent interview with Medicare actuary Charles Blahou, the real danger is that Congress will override the 15-member board and undermine any real opportunity to reduce the growth of health care costs:

Q: What are your views of the cost saving approach represented by the Independent Payment Advisory Board (IPAB)?

A: As a Trustee, I really can’t have a view. If the law states that the IPAB will produce a certain amount of savings and that it will occur unless Congress acts to override it, then we have to assume those savings will materialize. But as a long-serving Senate staffer, I’m much more skeptical. I can’t count the times that we have turned to mechanisms like this to produce savings in Medicare, only to have Congress override the savings when they begin to bite. If we have the political will to cut spending, then cut it. If we don’t have the political will, then IPAB doesn’t have much of a chance. The fact that IPAB was a product of a bill supported by one party while strongly opposed by the other makes its long-term prospects even weaker.

This strikes me as a smart answer and one that should push advocates who support the board to continue pressing the case that while these cuts may be politically difficult, it makes far more sense for a Senate-confirmed commission of various stakeholders to make reductions in payment rates in an accountable and transparent process than it does to leave such decisions to politicians, industry, and lobbyists. But Blahou is right to be skeptical, especially given Congress’ past experiences with reversing the cuts for doctors in Medicare under the Sustainable Growth Rate (SGR) formula and the repeal of 1988’s Medicare Catastrophic Coverage Act.