THE BLOG
03/04/2012 02:54 pm ET Updated May 04, 2012

The Democratization of Health Care: The Independent Payment Advisory Board

You probably missed this one, but this bit of legislation will have profound implications not only for your health, but the health of our economy. A provision of the Patient Protection and Affordable Care Act (PPACA) created a 15-member Independent Payment Advisory Board (IPAB), delegating to it the responsibility to develop specific proposals to contain the growth rate of Medicare spending if it is projected to exceed targets also established by the law. These proposals are transmitted to Congress in the form of legislative proposals that must be enacted or substituted on a legislatively mandated basis.

Once it is in place, IPAB can be discontinued only by a joint resolution that must be introduced in January 2017. Since IPAB is not a government agency, and is not promulgating regulations, it is subject neither to open meetings or public comment requirements. There are no options for appealing the IPAB recommendations. The provisions for judicial review appear to be limited to the recommendations issued by IPAB based upon deliberations that are not open to the public. Judicial or administrative review of the Secretary's implementation of those recommendations is prohibited. The clear intent of the law is to insulate the board and its decision from the full range of traditional democratic processes.

The IPAB approach to problem solving in a democracy is unwarranted under all but the most dire of circumstances. Moreover, if enabled, an approach such as IPAB should have a reasonable chance of solving the stated problem. It does not. The dire circumstance of "unsustainable" health care expenditures that IPAB is built to help resolve is truly a manufactured crisis. That statement may resonate as heresy to established dogma to many readers, but the facts support the statement.

The health care sector is a vibrant part of our national economy. It creates more jobs than any other sector, including those hard-to-find unskilled jobs that are protected from global competition. It also has a much sought after manufacturing base which, with encouragement, could help to correct our export imbalance. It contributes to wealth creation (protestations to the contrary notwithstanding). And the best kept secret? The United States has a world class health services research and development infrastructure that can meet future consumer demand here and abroad if we stop systematically trying to drown it in the bathtub.

On consumer demand: It will continue to grow at a rapid rate for the foreseeable future -- driven by the aging of a baby boomer cohort that is healthier than any senior population yet seen on this planet, and an emergent market of new consumers, including the previously uninsured and minorities who have historically under-consumed healthcare. These consumers will use their political clout to demand better service in the healthcare marketplace. In other sectors of our economy, we would be celebrating rising consumer demand, and the market would be rushing to meet the need. For reasons that can only be viewed as perverse, growing consumer demand in health care is viewed as a curse, and efforts to crush it with IPAB-like initiatives abound.

The health care reform initiative undertaken by President Obama and Congress has taken a good first step in addressing the financial inequities that have kept some consumers out of the health care market. Much more needs to be done. Rather than employing an IPAB to suppress prices by cutting payments to providers or finding other ways to reduce consumer demand, Congress and the president must be proactive in encouraging the market to make more strategic investments by rewarding innovations that will improve the quality of care and reduce health care expenditures. Technological advances will be expensive and incremental. But in due course, as we bring real solutions to the diseases that currently compromise our nation's health, reductions in expenditures can be anticipated. If IPAB is not allowed to frustrate improvement and innovation, future generations will be spared the medical and financial challenges that currently beset this generation.

To be sure, it will be a generational struggle, but we can and must succeed. Along the way we cannot allow rhetoric on either side of this discussion to mask the real issues at stake here: America must invest in the health and productivity of the American worker, American families and American communities; and our American government, the manifestation of our collective will, must not be permitted to lose faith in the ability of the market to correct, to ultimately drive down health care costs.