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Death panels version 2.1?

Obama The deficit-reduction plan that President Obama announced Wednesday seeks to increase Medicare savings in part through a new "Partnership for Patients" that tries to reduce the illnesses that patients contract while hospitalized or undergoing surgery. It also tries to speed up the availability of generic biologic medicines and have Medicare seek lower prices for certain patients' prescription drugs. Those proposals are either noncontroversial or controversial only in the pharmaceutical industry.

The part that won't be so well received is Obama's call to expand the power wielded by the Independent Payment Advisory Board, which comprises 15 healthcare industry experts appointed by the president and three officials from the Department of Health and Human Services. The board was created by the healthcare reform law as a way to limit the growth in Medicare cost. If costs rise too quickly (see wonkier explanation below), the board must recommend ways to slow that increase, and HHS must implement them unless Congress comes up with an alternative.

According to a fact sheet released by the White House, Obama wants to lower the IPAB's cost targets to tighten the limit on spending growth. IPAB also would be allowed to consider a wider range of techniques to hold down costs while improving the quality of care.

Some critics have referred to the board -- known in Republican circles as "unelected bureaucrats" -- as a "death panel" that decides which procedures will be covered based solely on their cost. (That would be death panels version 2; version 1 was the doctors who would be allowed to bill Medicare for counseling their patients about end-of-life options.) If that were true, giving IPAB more power would be a really bad idea. But it's not.

Under the Affordable Care Act, the IPAB's proposals to Congress "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums." Nor shall the proposals "increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria." And until 2020, IPAB isn't allowed to recommend lower reimbursement rates for hospitals or hospices unless they reflect productivity improvements.

In other words, IPAB's mission isn't to decide what Medicare covers, who it covers or how much they must pay for it. It can't deny care to anybody. Instead, it's supposed to look for ways to make the delivery of care more effective and efficient -- for example, by implementing new approaches to wellness that have save money by reducing the demand for care.

The changes proposed would give IPAB a harder job, but they don't seem to change the board's basic role. The one exception would be Obama's call for letting IPAB advocate "value-based benefit designs that promote proven services like prevention," as the fact sheet put it. Translated into English, value-based benefit design means insurance plans that encourage people to take better care of themselves, detect health problems earlier, use generic drugs and see doctors whose work yields better results.

Does that sound like the work product of a death panel? I don't think so. It's a centralized approach to fighting healthcare inflation, though -- something that seems appropriate for a federal healthcare plan. Conservatives might argue that such techniques are no substitute for competition in the market, which is the thinking behind Rep. Paul Ryan's proposal for shifting Medicare from an insurance program to a voucher system. But that's a different debate entirely from the one invoked by the phrase "death panel."

(Here's a wonkier explanation I promised earlier. Under current law, the IPAB must recommend ways to reduce costs if the increase in Medicare spending per recipient grows more than the increase in per-capita GDP plus 1% -- in other words, a little bit faster than the economy as a whole -- starting in 2018. Before then, the IPAB's target is higher: the average of the general inflation rate and the inflation rate for medical costs. Obama's new proposal would lower the target to GDP plus 0.5%, although the fact sheet doesn't say when the new target would take effect.)

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-- Jon Healey

Credit: EPA / Mark Wilson

 

Comments () | Archives (5)

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Benita Kurtzman

Sorry, Mr. Healey, Death panel it is. The IPAB may not ration care or cause the seniors to pay more, but their only ability for several years to control costs is to cut physician reimbursements. The more the cuts, the fewer physicians who will accept Medicare patients (or for that matter, keep their practices open). This leads to what I call "death panels of neglect" where seniors do not have doctors to take care of them. Once the doctors are gone, their staff is laid off, hospitals have to fire nurses, pharmacies lay off their pharmacists as there is nobody prescribing their drugs, and the whole situation spirals. Doctors care infuses over a trillion dollars a year into the economy and employs 4 million people, most of whom will lose their health insurance once they become unemployed - a moot point if there are not doctors to take care of them.

Jon Healey

@Benita K -- Interesting argument, and I concede that artificially low reimbursement rates have driven many a provider out of the Medicare system. But I think you're thinking of IPAB in the context of MedPAC, and I think that's the wrong to view its role. IPAB is not about reimbursement rates -- that's MedPAC's job. If that's all Congress wanted to do, it wouldn't have created a new board. The goal with IPAB was to come up with a mechanism that could drive the system to be more efficient, to align incentives better -- to get at the big picture.

Benita Kurtzman

@Jon Healy - I think it is a little naive to push the reimbursement issue on the MedPac, when the IPAB is the decisionmaker on the finances to Medicare. The mandate for the IPAB is to cut the finances for physician reimbursements for the first few years - it does not even affect hospitals or drug companies until later. The MedPac might be involved in the distribution of the funds, but when the "big boss" - the IPAB cuts the amount to the significant parameters in its mandate, the reimbursements have to be cut. There was a similar mandate in the SGR, but Congress never allowed the cuts to happen, because the seniors would blame them for the loss of their medical care and not vote for their reelection. The IPAB was a way to force the cuts, while keeping Congress "blameless" to the voters.
Since you are a fan of the IPAB, I would love to see you blog on the SGR, the repeal of which was specifically excluded from the healthcare reform bill . The challenge would be to create a positive spin on allowing the SGR cuts (up to 29.5% on January 1, 2012) to occur. Blaming the greedy doctors for leaving their practices when the cuts are more than the profits would be quite a feat, so I would love to see the media come out and predict the end of Medicare patients access to their doctors, should the SGR cuts stand.

Marvin

The Republicans are the real Death Panel as proven by them voting to end Medicare and replace it with Medicare In Name Only.

Many seniors will die from Medicare In Name Only if it is every signed into law (only a GOP President would do such a thing... a very good reason to vote Democratic.)

Brian in Colorado

Medicare as it currently exists is based on unlimited patient choice of treatments and doctors, and unlimited government financial support for those choices. This model is financially unsustainable without massive tax increases on the middle class as well as the rich, which Congress will not adopt.

Changing the current Medicare model means breaking some eggs. Some kind of "rationing" of health care services is required.

The Ryan plan is one way to make patients and providers individually more concerned about treatments and costs. The Obama plan is very vague about how the panel will actually reduce costs.

Either individuals and providers together decide how to limit treatments (and cost considerations will be part of this), or bureaucrats will make this decision for us collectively.


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The Opinion L.A. blog is the work of Los Angeles Times Editorial Board membersNicholas Goldberg, Robert Greene, Carla Hall, Jon Healey, Sandra Hernandez, Karin Klein, Michael McGough, Jim Newton and Dan Turner. Columnists Patt Morrison and Doyle McManus also write for the blog, as do Letters editor Paul Thornton, copy chief Paul Whitefield and senior web producer Alexandra Le Tellier.



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