08/02/2011 09:49 am ET Updated Oct 02, 2011

IPAB: Beyond Repeal

The Independent Payment Advisory Board, or IPAB, has emerged as the latest target in the ongoing war over healthcare. Like many of the flash points in the debate, what the IPAB is and what it is designed to do has gotten lost in a steam of increasingly inflamed rhetoric.

Republicans have called it a "rationing board" while Democrats who favor repeal have expressed concern it usurps Congressional authority and worry that it will hurt the quality of care in Medicare. In a July 26th piece for the Huffington Post, Democratic pollster Doug Schoen jumped into the fray when he called for President Obama to "subtly" signal Democrats it was okay to repeal the IPAB. He wrote,

By allowing Congressional Democrats to repeal IPAB, he will also strengthen his party's chances to increase their numbers on Capitol Hill while losing nothing of any real policy consequence. As someone who has been involved in Democratic politics for more than three decades, it's as close to a win-win as one can get.

What is most unfortunate about the debate is that there is no substance to it. It is being waged purely for purposes of political posturing and advantage. Schoen's piece highlights this fact. He argues for the political benefit while dismissing the policy implications. But there are great implications if it is repealed.

The IPAB's well-known objective is to slow the cost of federal spending in Medicare if Congress does not. Born out of the frustration from the gridlock and limited tools that have plagued Congress for decades, it is an idea very similar to that of the Base Closing and Realignment Commission -- the BRAC, which was developed in 1988 as a way to close and realign U.S. military bases because Congress had failed to do so. The cause of the failure was the millions of dollars in federal money that bases bring to congressional districts and states.

The same is true with Medicare, which spends more than $500 billion every year, most of it going to the various providers of care and services including hospitals, doctors, home health agencies, medical equipment providers, pharmaceutical and device companies. All of these entities have a constituency within Congress that fights any and all attempts to reduce spending, alter how they are paid or generally reform their piece of the Medicare pie. The result is that Medicare is much the same program that it was 45 years ago when it began.

This is why the IPAB was created.

Tasked with developing specific proposals to reduce the growth in Medicare, the IPAB has become the latest target in the ongoing political struggle.

While the argument that the IPAB usurps power from Congress is legitimate, the same argument did not stop the BRAC process from being adopted and setting a precedent. But what is most troubling is that while some members of Congress talk about the IPAB usurping Congressional responsibility, history suggests they have not exercised their authority.

A look at the current debate regarding the debt limit makes this point clear. The final deal essentially avoided any real reforms of Medicare leaving it to a commission made up of 12 members of Congress (six Democrats and six Republicans). This plan was adopted because Congress could not make those decisions. The IPAB is simply, or could be reformed to be, a vehicle to carry out and develop going forward the decisions of the 12 member commission, unless of course the commission could not reach agreement, then automatic triggers would kick in including Medicare triggers.

So what is the problem with the IPAB? It sounds a lot like it or the BRAC process, which has recently been held up as a comparison to this newly developed debt commission.

Nearly everyone agrees Medicare is a financially unsustainable program, and certainly repeal of the IPAB will not address the problem. While there is broad agreement that we need to fundamentally change how we deliver health care, including within Medicare, a solution will not come soon; therefore, we need to devise interim solutions to our problems. And that is what is not being asked in the debate - if it is imperfect as currently constructed -- what can we do to make it work?

For instance, instead of just one recommendation that would be implemented unless Congress voted to reject it and offered its own approach as a substitute, the IPAB could present three options that would be subject to the Congress' "King of the Hill" rule . This rule, which can be invoked to govern floor debate, stipulates that whichever option receives the most votes prevails. This would provide plenty of political cover for members. And while in theory all three options could fail, that scenario would be difficult for Members to explain to their constituents why Congress chose to do nothing.

As a second adjustment, instead of making Congress's task a take-it-or-leave-it proposition change the requirement in the IPAB process to be a required debate and vote in both the House and Senate. The addition of this step would increase accountability by forcing a debate that the public would hear and see. It also would address the most basic problem, which is that Congress currently can't come up with proposals that are not strongly ideological, which then makes the debate a purely partisan affair with the outcome a foregone conclusion. By having the politically balanced IPAB produce the proposals they would be less partisan and the debate would be less predictable than most debates today.

The charter could also be broadened to allow recommendations to go beyond just how to reduce costs. The panel could make recommendations on ways to improve the delivery of care without changing the benefits package. And most importantly, the recommendations must apply to all parts of the program and providers of care.

Congress could also change the structure of the panel to give Congress more than a consultative role in membership. The House and Senate and majority and minorities and the White House could each be given the responsibility for three nominations to the panel, all of which would be subject to Senate approval thus increasing accountability.

Whether these are exactly the right ideas to improve the IPAB is not the point. The point is that Congress should be having this kind of debate and not the one currently underway.