Rush Limbaugh has recently described the Independent Payment Advisory Board (IPAB) as a “death panel.” Another critic argues that IPAB’s “ultimate function will be to serve as a lever with which to pry the entire health care industry from private hands,” while another sees IPAB culminating in “the slippery slope to a Canadian-style health system.” Who would have thought a 15-member board, appointed by the President, would have such power?
The truth about IPAB depends on whether you believe what is written on paper or instead take into account the messy politics of entitlements as they have played out since the inception of Medicare and Medicaid. On paper, IPAB is restricted to making recommendations to Congress regarding how to help Medicare provide better care at lower cost. Since Medicare alone accounts for nearly one-quarter of personal health care spending, this is not a trivial degree of authority. But as the White House Blog correctly observes: “IPAB is specifically prohibited by law from recommending any policies that ration care, raise taxes, increase premiums or cost-sharing, restrict benefits or modify who is eligible for Medicare.” Indeed, IPAB’s paper powers are so weak that CBO predicts it will not be required to produce any cost savings between now and 2021.
What IPAB is most likely to do to control costs and do what Congress has neglected for decades: cut provider payments. This, in turn, will lead to reductions in access to care. Indeed today, seniors find it harder to find providers willing to take Medicare than 15 years ago and the IPAB has yet to even be appointed, much less issued its recommendations to Congress.
A decade ago, Congress failed to adopt a 30 percent reduction in physician fees codified in a statutory payment formula more. Due to politics, it kept kicking the can down the road (they refused to follow their own law). Yet this is exactly what IPAB was designed to achieve: to use experts to force Congress to do what it could not do politically.
So what would happen if IPAB succeeded where Congress could not? First, even the Medicare Payment Advisory Commission (MedPAC) — the panel of experts that currently advises Congress with voluntary recommendations –concedes that “fee cuts of that magnitude would be detrimental to beneficiary access to care.” But we don’t need to speculate on this score. Just this week, the Massachusetts Medical Society released its latest survey showing that less than half of family medicine doctors now accept new patients (compared to 70 percent in 2007 just before “Romneycare” was adopted). More worrisome is the vast difference between acceptance of Medicare and various flavors of Romneycare. Whereas 87 percent of family practitioners in Massachusetts currently accept Medicare, only 62 percent accept Medicaid, 56 percent accept Commonwealth Care (the heavily subsidized plan offered through the Connector to low-and middle-income individuals without insured and only 44 percent accept Commonwealth Choice(the unsubsidized plan provided through the Connector to uninsured adults above 300 percent of poverty).
President Obama himself acknowledged the similarity between his plan and Massachusetts’ new healthcare law. Yet access to care for those obtaining coverage from a Connector that is nearly identical to a program in Obamacare is not only far worse than Medicare, but even worse than Medicaid.
Once IPAB is done with its cost-cutting why should anyone believe that access to Medicare will be any better than Massachusetts citizens have to Romneycare? Given that high-level White House officials have explicitly expressed interest in IPAB being extended to all health care while another key federal healthcare official has expressed a great fondness for NICE (the British version of IPAB which does have the power of a “death panel”) what does that bode for the rest of us?
Conover is a research scholar at the Center for Health Policy and Inequalities Research at Duke University.