IPAB suddenly under the spotlight
posted at 9:36 am on April 20, 2011 by Ed Morrissey
In his speech last week, Barack Obama pledged to curtail health-care spending by giving more power to the Independent Physicians Advisory Board (IPAB), an unelected 15-member panel appointed by the President. Opponents of ObamaCare have had their sights fixed on the IPAB as a care-rationing board since the summer of 2009, while the media and many politicians in Congress downplayed their power. With Obama’s pledge, though, it’s suddenly cool in Washington to take a second look at the IPAB (via Stanley Kurtz at The Corner):
Democrats and Republicans are joining to oppose one of the most important features of President Obama’s new deficit reduction plan, a powerful independent board that could make sweeping cuts in the growth of Medicare spending.
Mr. Obama wants to expand the power of the 15-member panel, which was created by the new health care law, to rein in Medicare costs.
But not only do Republicans and some Democrats oppose increasing the power of the board, they also want to eliminate it altogether. Opponents fear that the panel, known as the Independent Payment Advisory Board, would usurp Congressional spending power over one of the government’s most important and expensive social programs.
Under the law, spending cuts recommended by the presidentially appointed panel would take effect automatically unless Congress voted to block or change them. In general, federal courts could not review actions to carry out the board’s recommendations. The impact of the board’s decisions could be magnified because private insurers often use Medicare rates as a guide or a benchmark in paying doctors, hospitals and other providers.
Even without the “death panels” connotation, this arrangement should offend anyone who believes in accountable government. The Constitution provides checks and balances between the legislative, executive, and judicial branches, but provides Congress with most of those checks due to its nature as the “people’s branch” of government. Placing an unelected panel in charge of spending decisions that Congress only can veto — and doing that through the executive branch rather than the legislative branch — offends the very nature of separation of powers. The Constitution gives Congress the power of the purse, not the President, and the IPAB turns that on its head.
Furthermore, Obama’s promise does push the IPAB further into “death panel” territory because of the nature of its mandate. It’s not an Independent Accountant Advisory Board, looking for bad fiscal practices to clean up. The IPAB exists to determine what kind of health services Medicare should and should not provide as a way to save money. That inevitably means that significant numbers of people on Medicare won’t get the care they desire, and thanks to the single-payer system and the fact that the government has already taken the money for those premiums, most of those will have little choice but to suffer more and die more quickly as a result. Obama’s pledge to strengthen their power to make those cuts makes the issue even more urgent.
Obama blasted Paul Ryan’s plan to transform Medicare into a voucher plan as somehow un-American, but at least Ryan’s plan would allow seniors to find other insurance if coverage for their care got denied. Even liberal Rep. Pete Stark sees the difference:
In some ways, Mr. Stark said, expanding the power of the board could be as bad as giving vouchers to Medicare beneficiaries to buy private insurance. “In theory at least, you could set the vouchers at an adequate level,” he said. “But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care.”
And that’s exactly what the Wall Street Journal sees, too:
Mr. Ryan has been lambasted for linking his “premium support” Medicare subsidies to inflation, not the rate of health cost growth. But if that’s as unrealistic as the liberal wise men claim, then Mr. Obama’s goals are even more so. Medicare grew 2.1 percentage points faster between 1985 and 2009 than Mr. Obama’s new GDP target. At least Mr. Ryan is proposing a workable model for bringing costs down over time by changing incentives.
Mr. Obama, by contrast, is relying on the so far unidentified technocratic reforms of 15 so far unidentified geniuses who are supposed to give up medical practice or academic research for the privilege of a government salary. Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.
Post-ObamaCare, Medicare’s administered fee schedule is set eventually to dip below Medicaid payments in many states, which are themselves already far lower than the rates of private insurers that reflect the true costs of health care. Medicare itself says these cuts will cause 15% of U.S. hospitals to become unprofitable in the next decade. Mr. Obama wants Americans to believe that his planners will wring out even more spending through the power of positive technocratic thinking.
So the question is this. Do we trust seniors with the decisions for their own care, or do we trust hundreds of millions of those decisions each year to 15 unelected, unassailable bureaucrats in Washington DC? Obama may have made a very large mistake in reopening this political Pandora’s Box in a thoroughly ill-advised speech.