Enacting a safeguard against congressional inaction sufficiently unpalatable that it spurs compromise and bipartisan action? This rationale backing the sequestration agreement is similar to one supporting the creation of the Independent Payment Advisory Board (IPAB), the 15-member panel created by the Affordable Care Act and tasked with controlling Medicare spending. Given the scrambling that is occurring to undo the pain of sequestration, it is also time to reconsider the critical flaws of the IPAB approach and focus instead on meaningful Medicare reforms.
Regardless of the state of Medicare spending, IPAB remains a problematic delegation of congressional responsibility that cannot, by design, deliver the system improvements Medicare badly needs. As it is structured, IPAB has a limited view of reforms -- largely focused on payments -- that do nothing to address the primary drivers of costs -- chronic diseases. Just think, today 27 percent of seniors are diabetic and another 50 percent pre-diabetic. These populations have doubled over the past 20 or so years. Moreover, virtually all of the spending -- 95 percent -- in the Medicare program is associated with chronic disease. Over half of Medicare beneficiaries are treated for five or more chronic conditions.
We clearly need comprehensive, evidence-based Medicare reforms designed to lessen the burden of chronic disease and slow the rise in prevalence. Since there is no comprehensive care coordination in traditional Medicare, rates of preventable use of services are high and provide a ripe target for reforms that the IPAB cannot address.
Here's the core problem with IPAB. When Medicare annual spending exceeds an arbitrary level set in statute, this panel of appointees will make recommendations to bring expenditures back into line. Those recommendations can only be overturned by a super-majority in Congress. And because spending excesses must be corrected immediately, IPAB does not lend itself to long-term, structural reforms that will improve Medicare's value, effectiveness or lasting sustainability. The only solutions that fit the IPAB charter will be cuts in what Medicare pays for health care services, medications and medical technologies. These are the same cost-containment policies that have consistently failed to lower costs, but have negatively affected patient access to providers, medical advances, and better health outcomes.
Thus, IPAB won't improve the quality of care received by Medicare beneficiaries and, as we already know, deeper cuts in provider payments can also make it more difficult for seniors to find doctors. When we already face shortages in primary care providers, creating greater access issues isn't the way to go.
This type of approach completely misses the problems that are ailing Medicare. We're not treating patients in the most effective possible ways to maintain their health and well-being and keep them out of hospital beds and emergency rooms. We know that millions of Medicare beneficiaries have multiple chronic diseases and yet there are not systemic plans in place to effectively treat these patients' complex conditions. An IPAB is not going to improve this situation. In fact, it could make it worse by implementing cuts that restrict access to needed care.
This commentary is not an argument against constraining spending escalation in the Medicare program. Clearly, we need to find ways to control these costs before they occupy too great a share of the nation's economy.
Turning congressional responsibilities, though, over to a board of political appointees with no judicial oversight is not the right answer. Neither is leaning toward mechanisms that will simply cut Medicare spending without strengthening the value or the quality of the program or the care it offers to beneficiaries.
Better care that successfully combats the high costs of chronic disease will bring greater financial sustainability to the Medicare program. IPAB doesn't do that and Congress should move it out of the way so that work on real solutions can progress.