ONE OF THE MOST promising cost-control measures in the new health-care law is an entity called the Independent Payment Advisory Board, or IPAB. To be launched in 2015, IPAB will have the authority, if growth in health-care costs exceeds a certain target, to recommend changes to the Medicare program. Those changes would take effect automatically unless Congress came up with equivalent savings elsewhere.
The 15-member board of experts from across the health-care field, in other words, is a break-in-case-of-emergency provision; if other parts of the health-care law work as hoped to keep costs down, there will be no need to invoke IPAB’s powers. But if there is such a need, IPAB, if anything, should be made stronger. Current law gives it no sway over hospital payments for several years, the board cannot push changes in benefits or cost-sharing, and its purview is limited to Medicare.
You can probably guess where this is going. Rather than embracing IPAB, Republicans, joined by some Democrats who chafe at ceding control of Medicare policy to an unelected body, are trying to dismantle the program even before it gets started. Republican presidential candidate Mitt Romney has denounced IPAB as “an unaccountable board to ration care for today’s seniors,” notwithstanding the fact that the law creating IPAB specifically prohibits it from making any recommendation “to ration health care.” A conservative group called the 60 Plus Association is running $3.5 million in ads that target Democratic senators up for reelection. “This IPAB board can ration care and deny certain Medicare treatments so Washington can fund more wasteful spending,” the ad warns. “Your choices could be limited and you may not be able to keep your own doctor.”
Meanwhile, the House of Representatives is expected to vote this week on a measure to repeal IPAB. The Congressional Budget Office estimates that repeal would add $3.1 billion to the deficit over the next 10 years, so Republicans have coupled the dismantling of IPAB with the adoption of medical malpractice reform.
The attack on IPAB reflects a depressing reality of the current Medicare debate and of the broader debate over entitlement reform. Politicians of both parties are fond of proclaiming their willingness to make hard choices, but reluctant, when the time comes, to do anything that would discomfit those who voted for them or helped finance their campaigns. The history of congressional oversight of Medicare underscores the willingness to spend and the reluctance to impose cuts. So Republicans attack President Obama for cutting Medicare spending and rail against an effort that promises to save even more, even as they piously assert their commitment to fiscal discipline. For their part, Democrats denounce Republicans for pushing premium support plans that would, they assert, “end Medicare as we know it,” even though all rational observers agree that the existing program, with its ever-mounting costs, cannot go on.
Perhaps enough cost savings can be achieved through innovations such as electronic medical records and delivery system reform to avoid the need to resort to more painful measures. But that happy result cannot be assumed, which is why repealing IPAB would be a mistake. An even bigger mistake would be to pretend that the current arrangement is sustainable.