Advisory board vs. Medicare

By Jim Swanstrom

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More than 500,000 seniors in Iowa rely on Medicare for their health-care needs - and they might be in for a surprise next year.

Unless Congress takes action to stop it, a new all-powerful government panel called the Independent Payment Advisory Board (IPAB) could soon force dramatic reductions in seniors' access to health care under Medicare.

The intention behind IPAB, to slow the rising cost of Medicare, is certainly laudable. By 2035, Medicare is expected to account for nearly 7 percent of our nation's gross domestic product. People on all sides of the debate agree that such a level of spending is simply unsustainable. In Iowa alone, Medicare spending grew by an average of about

7 percent a year between 1991 and 2009.

In a misguided effort to address this problem, the 2010 health-care reform laws created IPAB, a board of 15 advisers tasked with laying down cuts in spending whenever Medicare's projected costs exceed specified target levels.

The first problem is that these 15 members aren't elected officials, but appointed bureaucrats. Though they're empowered to make binding decisions about Medicare finances and even to override decisions by Congress, they are accountable essentially to no one.

And since IPAB is prohibited by law from making proposals for structural reform to Medicare, the only way the board will be able to meet spending targets will be to reduce payments to health-care providers. Doing so will have an immediate and direct adverse effect on seniors' access to treatments and procedures.

How? By arbitrarily reducing the amount physicians are reimbursed by Medicare, IPAB's decisions will make doctors far less willing to treat Medicare patients. Seniors in Iowa and throughout the country could lose their doctor, struggle to find a new one, and find themselves making more trips to a crowded emergency room every time they need medical attention.

Payment reductions to doctors are already a serious problem. In 2009, Dr. Michael Kitchell, president of the Iowa Medical Society, was warning that “here in Iowa, every hospital, every doctor loses money every time they see Medicare patients.”

Expect that problem to get worse, fast, once IPAB becomes operational next year.

Scaling back Medicare reimbursement rates also means that the unreimbursed cost of treating seniors will be shifted to those with private insurance. The average Iowa family with employer-provided coverage already pays nearly $3,700 a year in premiums on top of the more than $13,000 that employers contribute.

Lawmakers need to act quickly to undo this damaging “reform.”

Last month, the House Energy and Commerce Health Subcommittee overwhelmingly voted to repeal IPAB. This a good start, but there's a long way to go. The Senate needs to get on board with a repeal measure, and the president must recognize that IPAB is a significant flaw and agree to roll it back.

Medicare is in serious need of a structural overhaul that contains growth in spending without curtailing access to quality care for all seniors. IPAB is a step in the wrong direction - indeed; it's precisely the kind top-down reform that will only make Medicare's inherent problems worse.

Jim Swanstrom is president and CEO of Community Health Charities Iowa, which represents 24 charitable non-profit health organizations working to raise charitable income. Comments: info@health

charitiesiowa.org