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Former Congressman Dr. Phil Gingrey provides public policy and government relations counsel to clients on a variety of issues. Here at Phil on the Hill, Phil draws upon his long career in public service to provide perspective and context on policy topics such as health care, the federal budget, annual appropriations, regulatory reform, and life sciences.

IPAB Meat Ax Should Go

Friday, September 15, 2017

In medicine, decisions about cost are decisions about care. It is impossible to untangle economics from the practice of medicine.

That is why hospitals, physicians, medical associations and the federal Centers for Medicare and Medicaid (CMS) are increasingly turning to “value-based care” — health care with incentives that center around patient wellness and outcomes.

Instead of encouraging more tests and procedures, value-based care orients the deployment of services and resources to improve the patient’s condition. Value-based care focuses on outcomes. In short or using the vernacular, we are moving from “volume to value” in health care services and delivery. How quickly did she recover? Did she avoid the need for re-hospitalization? Did she avoid an infection while in the hospital? 

In institutions ranging from the Mayo Clinic to county hospitals, healthcare practitioners are finding better outcomes and resource management in value-based care. This is not just a good idea, but a necessary one. Next year, CMS plans to tie one-half of reimbursements to such alternative payment models. 

Physicians, nurses and administrators are working diligently to innovate our processes to lead us to this Holy Grail of health care — improved outcomes at less cost.

In the midst of these efforts to innovate, however, there is a glaring exception — the Independent Payment Advisory Board (IPAB) — that brings back the old, meat-cleaver approach to containing costs.

IPAB shows the worst aspect of the one-party vote on the Affordable Care Act, a fat bill that contained specific provisions many members of Congress had overlooked and now find objectionable. (As a Member of the House Energy and Commerce Committee at that time, I proposed language that at least would prevent IPAB from engaging in the explicit rationing of health care).

In essence, IPAB is an independent body that comes into play if the Medicare Chief Actuary determines that net spending exceeds a given target. We dodged a bullet on July 13 when the Actuary sent a letter to CMS declaring that we are not projected to exceed the target at this time. But we won’t be lucky forever. With 15 board members, less than half of IPAB members can be health care providers. None of them can be practicing physicians — even though their decisions intimately dictate how physicians provide their care.

The way IPAB is structured, physicians would be first in line to fall under its arbitrary rules and reductions. As a physician, I lived through a similarly flawed Medicare payment system — the sustainable growth rate or SGR formula. The last thing we need is another rigid program that relies solely on payment cuts to control Medicare spending.

Under some scenarios, the powers of IPAB would devolve to one man, the HHS Secretary. I trust my good friend Secretary Tom Price to make better decisions than almost anyone, but no one person can know enough to make all the calls for an entire medical system.

Worse, under the statute, it takes a supermajority of three-fifths of the Senate to alter IPAB’s decisions. IPAB looks much more like the command and control approach of the UK than the American way. Perhaps that is why polls show the vast majority of Americans are opposed to this approach.

We all agree that our country needs to restrain health care costs, but there are smarter ways to do it. 

Fortunately, it looks as if Congress is paying attention. Bipartisanship on the Hill has been rare lately, but IPAB has brought Republicans and Democrats together to repeal it, including Sens. John Cornyn of Texas, Ron Wyden of Oregon, and by Reps. Phil Roe of Tennessee and Raul Ruiz of California.
They appreciate that we need to put scalpels, not axes, into the hands of the healers.