Here is what a November 18, 2012 New York Times says about the new Medicare Independent Payment Advisory Board (IPAB); what the irresponsible and incorrect Right has described as the “death panel.”
What you read below is correct, but actually that is the real problem. Look at the words I placed in bold. When you consider all that the Board is prevented from doing by law, there is nothing left but to cut provider payments.
Supporters pass over those words like it’s no big deal, like there will be no impact on the entire health care delivery system. They ignore the already scheduled cuts taking place or the coming 30% cut in physician fees next year (or the fact Congress has not allowed past scheduled cuts to take place) and they ignore the concerns about these cuts contained in the Medicare Trustees Report, not to mention the likely cost shifting to the non Medicare population that will occur.
The Right spreads false information about death panels and such while the Left looks at words on a page of the law and assumes everything will be as written with no consequences unintended or otherwise. They are both wrong!
The board, known as the Independent Payment Advisory Board, has been the subject of false attacks over the past few years by Republicans who claim that it will ration care, disrupt doctor-patient relationships, and tell patients what treatments they can receive. That is an outlandish way to describe a board that is prohibited by law from making any recommendations to ration care, raise premiums, increase cost-sharing, restrict benefits or limit eligibility.
The board will consist of 12 experts, including doctors, patient advocates, employers and financial analysts, who will be appointed by the president and confirmed by the Senate, and three nonvoting government officials. Its sole duty is to monitor and, if necessary, reduce Medicare spending, which needs to be reined in to control deficits.
If the projected growth rate in per capita Medicare spending exceeds specified targets pegged initially to an average of general and medical inflation and later to gross domestic product, the board must recommend changes (most likely cuts in payments to health care providers) to bring the growth rate back in line. Congress can override the board’s recommendations, but it must still find equivalent savings.
The Congressional Budget Office has estimated that repealing the board might drive up federal spending on Medicare by $3.1 billion over a decade. Without pressure from such a board, Congress is apt to be weak in resisting demands by powerful health care groups and industries for higher Medicare reimbursements.
Related articles
- A Bad Idea Resurfaces (nytimes.com)
- Careful Wording, Careful Reading – Is it Really a Death Panel? (plans2reality.typepad.com)
- Medicare payment board would slash government payments to SNF providers, paper says (pattidudek.typepad.com)
QUINNSCOMMENTARY 
Quoting Alfred E. Neuman… “what, me worry?”
Dick, you miss the most important point about PPACA. We’re going to add 20 – 30 MM Americans to Medicaid over the next few years, and about 5MM or so a year to Medicare (as the Baby boomers age in). Last study I saw, suggests that Medicare reimburses only $.90 on each $1.00 of cost, $70 on each $1.00 of cost for Medicaid. Specific information showed:
(1) Physician reimbursements – Medicare – 89% of cost, Medicaid – 60% of cost, while commercial insurers paid 114% of of cost.
(2) Hospital reimbursements – Medicare 90.6% of operating cost, Medicaid, 85.3% of operating cost, while commercial insurers paid 123.1% of operating costs.
http://insight.milliman.com/redirect.php?disc=health&opth=rr/pdfs/hospital-physician-cost-shifty,
So, add in another $100B or so in new taxes, on medical device manufacturers, drug manufacturers and insurers, to shift those to the private sector, and the 30% cut in physician reimbursements under doc fix, and no one will notice the impact of the reductions in reimbursement rates from IPAB.
Also, physicians will continue to accept patients, regardless of the reimbursement rates. Don’t believe me? See: http://www.forbes.com/sites/aroy/2012/08/07/health-affairs-study-one-third-of-doctors-wont-accept-new-medicaid-patients/
Soon, Medicare eligible beneficiaries will have the best coverage they can’t use.
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Good points on cost shifting. I think that deserves its own post.
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Here are the points I use in highlighting cost shifting – where more and more will be enrolled in plans where the government limits reimbursement rates to be below cost (Medicaid and Medicare); and we have a whole new group of Americans covered in exchanges where there will be massive cost pressures to ensure health reform is perceived to be a “success” (jawboning rates, encouraging new reimbursement methods, etc.):
2000: Employer sponsored insurance – 169.7MM, 65.6% of non-elderly population (EBRI, CPS)
2009 – 2019: Uninsured = 51MM (Census Bureau 2009), to decline to ~30MM (from what would have been 60MM by 2019)
2010: Massachusetts Insurance Department denies 235 rate changes (insurance companies told they need not make a profit on health insurance)
2010: Employer sponsored insurance – 156.1MM, 55.4% of non-elderly population, a 16% decline in 10 years!
2010 – 2020: Health spend increase – $2.7T to $4.7T (inflation, aging, utilization, etc.)
2011: Medicaid covers ~60MM, #1 state budget cost!
2011: New “brand” name Rx manufacturer fees – $27B
2011 – 2019: Rx manufacturers fill Medicare Rx donut hole
2011 – 2020: Medicare “productivity improvements” lower reimbursements $719B, SGR/“doc fix” cuts $300+B more!
2011 – 2030: Medicare enrollment up 72% while taxpayers decline 35%
“For the first time in the history of humanity, people over age of 65 will outnumber …children under 5.” Economist, July 2010
2012: Having failed to control costs, Massachusetts passes legislation to limit provider reimbursements
2013: 2.3% medical device manufacturing excise tax – $20B
2014: New health insurance company fee – $60B
2014 – 2019: Medicaid utilization to increase significantly, Medicaid growth ~14MM + ~17MM PPACA (CBO) – To easily top 80+MM by 2019
2018 – Excise tax on “Cadillac” plans – $32B
Where, in this morass, does anyone see any effort to reduce the cost of employer-sponsored coverage – if only to ensure that employers remain engaged in the marketplace? Isn’t it interesting that in the run up to health reform, all the talk focused on not adding to the federal deficit… but no one talked about the impact on American’s lives for those who had taken jobs with employers who offered coverage (many times, at lower wages)!
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