The Theoretical Bad-to-Worse Roadmap

There is a growing consensus in health policy circles that the Independent Payment Advisory Board (IPAB), a provision of the Affordable Care Act, is an ill-conceived idea.  Empowering 15 unelected government appointees to slash Medicare spending, if expenditures exceed an arbitrary level, will likely result in lower provider payments, fewer physicians seeing Medicare patients and increased healthcare access problems for beneficiaries.  Congressional Democrats and Republicans alike are wisely urging a repeal of the IPAB provision.

In a sense, I suppose we owe thanks to the liberal-leaning Center for American Progress (CAP) think tank for showing us how a bad idea can be made dramatically worse, and why it’s urgent that IPAB repeal move forward before the concept can take effect and become entrenched in healthcare policymaking.

CAP took part in a project initiated by the Peter G. Peterson Foundation, in which several advocacy groups and research organizations were asked to present their own deficit reduction proposal.  In its plan, CAP demonstrated how IPAB can be made to resemble Godzilla with an injection of steroids. This is from pages 43 and 44 of the Peterson Foundation document:

“Our failsafe would be triggered if, starting in 2020, total economywide health care expenditures grow at a rate faster than the economy. Should that happen, we would empower the IPAB to extend successful reforms in Medicare and other public programs to insurance plans offered in the health care exchanges and then potentially to all health care plans, such that the target is met. This will ensure that costs are constrained across the health care sector, preventing cost-shifting and maintaining access for all.”

Let’s be sure to understand this.  Under this proposal, these 15 unelected bureaucrats, instead of simply having budget-cutting influence over Medicare, would have expanded domain over private health insurers and their rate negotiations with healthcare providers.  That’s a genuinely disturbing vision of the future, made more so by the fact that CAP has established itself as a valuable resource for liberal policymakers.

The statement that cost-shifting would be prevented through this expanded IPAB authority is the same Orwellian logic that says Medicare is more “efficient” than the private sector because it keeps provider reimbursements artificially low through executive fiat.  Government simply decreeing that cost shifting can’t occur is not the same as addressing the factors that lead to cost shifting.

In fact, the only logical move here is to repeal IPAB before patients and health care consumers are hurt by this kind of government “efficiency.”