Medicare board remains best bet

  • Updated: May 2, 2011 - 3:54 PM

But Obama needs to spell out how it will achieve savings.

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The 2010 Affordable Care Act contains strong but controversial medicine for reining in Medicare's soaring costs: the Independent Payment Advisory Board (IPAB).

While serious questions remain about how this board of unelected experts will work, the IPAB offers hope that the country's fiscal concerns can be balanced with the health care promises made to senior citizens.

The board, which faces mounting congressional attempts to repeal it, needs to be preserved. Critics contend it usurps congressional authority or could ration care.

At the same time, the Obama administration and other IPAB supporters need to end the vagueness and efficiency euphemisms typically employed to describe the board and its work.

Current Medicare enrollees and those who will depend on the program need to be educated about what the IPAB is, who will be on it and how it will reduce the program's costs.

Those details remain sorely lacking, even as President Obama's recently announced deficit-reduction plan doubled down on the IPAB's role in restraining the $509-billion-a-year Medicare program's costs.

Obama has called for strengthening the IPAB, mainly by lowering the Medicare spending growth rate targets that trigger the board's involvement.

The board recommends savings policies to Congress if these targets are exceeded. Congress can then reject those proposals, come up with its own alternatives or simply let the proposals go into effect without a vote -- a reality that undermines the "usurping" argument.

The advantage of the board: It's insulated from powerful special interests that have thwarted previous attempts to rein in medical costs. The board also can take the heat for politically unpopular decisions.

It's time for further detail on when the appointment process for the IPAB's 15 full-time members (who must be confirmed by the Senate) will begin. A timeline is also needed for the rollout of the IPAB's regulatory framework. The board is expected to be operational in 2013, so the clock is ticking.

Most critically, it's time to quit sugarcoating the IPAB's mission. The board -- and other Medicare reform plans -- are intended to squeeze savings from a popular program that has imposed few limits on enrollees' choice of providers or the volume of care they receive.

The Obama administration needs to spell out how the IPAB will achieve savings and what the real-world impact might be on enrollees' medical care.

The federal health reform law places strict limits on the IPAB. It cannot ration care, or increase enrollees' premiums or cost-sharing.

It also can't raise taxes or modify eligibility. What it can affect: payments to medical providers, though certain providers such as hospitals are off-limits to the board through 2020.

The board is likely to focus on payment reform -- rewarding providers for good care instead of more care. But there are legitimate concerns about the impact of wider provider cuts the board could impose.

If reimbursements fall too far behind those paid by private insurers, some providers may choose not to see Medicare patients. A more open discussion of this is needed.

That concern illustrates the difficult choices the nation must make as it grapples with the deficit and its commitment to Medicare.

The IPAB and other cost-control mechanisms within the Affordable Care Act are far preferable to the Republican alternative: a voucher system that leaves the elderly with thousands more in out-of-pocket costs.

But there are no easy solutions. Voters need to accept that reality and demand details to figure out what is best for them.

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  • DEFINING THE IPAB

    "We certainly don't believe it is a rationing board. We certainly don't believe it's a silver bullet that will solve all health care problems ... but our organization thinks it's worthy of having a discussion about [the IPAB's] value, certainly in context of other proposals. It's more protective than other proposals out there.''

    Joe Baker, president of the nonpartisan Medicare Rights Center

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