Lost in the Beltway media morass of the GOP health plan and Trump Jr. is the fate of a little-known provision of the Affordable Care Act (ACA) that offers a pathway for Medicare to control its costs. It’s the Independent Payment Advisory Board, IPAB for short, set up by Congress as an independent body that could make expert recommendations about Medicare spending. In other words, it was to separate Medicare policymaking from the Congressional politics rampant when it comes to getting Medicare to pay for new tests and treatments, even if there’s no or little evidence of efficacy.
Too many times forceful lobbying on behalf of sellers has resulted in Medicare payments for interventions regardless of scant or negative evidence. Targeted cancer therapies and immunotherapies, which my colleague Alan Cassels just reported on comes to mind. So does renal stenting, which is placing a stent in the renal arteries to improve blood flow to the kidneys. The procedure took off in the 2000s, and in 2008 Medicare issued a national coverage determination that called for payers nationwide to cover the service. Since then a well-done randomized clinical trial showed there was no clinical benefit to renal stenting.
Like most parts of the ACA, the IPAB was controversial. Its 15-member board was never appointed, and it never got off the ground. But that hasn’t stopped opponents from trying to get rid of it once and for all, and enlisting the help of patient and physician advocacy groups in their cause. The ACA also put in place restrictions that try to limit the ability of Congress to discontinue the Board. But the law does allow for a one-time fast track consideration of a joint resolution to dissolve the IPAB that requires action before August 15, 2017.
$2 million ad campaign
Sensing the time was right to kill off the IPAB once and for all, the Healthcare Leadership Council, an influential coalition of chief executives representing various healthcare interests, have swung into action with a $2 million ad campaign to repeal the IPAB.
The coalition includes drug and device makers like Eli Lilly, Novartis and Stryker, and heavy-hitter hospital systems like the Cleveland Clinic, the Mayo Clinic, and New York Presbyterian. Many members of the Council would surely benefit from getting rid of an independent overseer which might evaluate the evidence and judge whether new drugs or imaging machines should be paid for.
Untamed use of these products has huge implications for Medicare’s future finances. “As long as there’s an automatic market for new technology even if it’s not any more effective, cost growth will keep going up,” Medicare’s former actuary Richard Foster told me.
The campaign to dump the IPAB is a familiar story with all the fingerprints of other campaigns orchestrated by healthcare interest groups that clamor for more Medicare dollars. America’s Health Insurance Plan (AHIP), the insurers trade group, along with sellers of Medicare Advantage plans (MA), a private alternative to traditional Medicare, have over the past few years persuaded Medicare to reverse proposed cuts in annual payments to MA plans and turn them into increases using the same grassroots outreach that the Healthcare Leadership Council is using. They enlist Medicare beneficiaries as pawns in their quest for government dollars by scaring them into believing that they will lose their benefits and possibly their doctors.
One ad (shown above) running this summer is scary indeed, warning seniors that “time is running out to save Medicare from massive cuts that will harm millions of Americans” and that there’s a need to “stop these devastating cuts by repealing this misguided law.” If Congress doesn’t act by August 15, there will be “arbitrary cuts restricting patient access to doctors and to the essential treatments they need for their health and well-being.” The ad urges seniors to call Congress today.
The website Protect Medicare Now furthers the Leadership Council’s objectives by urging beneficiaries to send emails to their members of Congress “To protect Medicare” because “Time is Running Out.”
Never mind that the legislation setting up the IPAB says it cannot ration care, raise premiums or revenues, increase cost sharing, reduce benefits, change eligibility, or reduce payments to providers affected by productivity adjustments called for by the Affordable Care Act, says Tricia Neuman, senior vice president of the Kaiser Family Foundation. It’s a good bet that information never reaches beneficiaries sending pleading letters to Congress.
Council is full of groups who stand to benefit from rolling back IPAB
For extra measure, the Leadership Council also has signed up some 750 organizations that are like a who’s who of patient and physician advocacy groups and others with a stake in rolling back any threat from the IPAB. On the list are drug companies, trade associations, mental health organizations, veterans groups, chambers of commerce, employers, and senior associations like the 60 Plus Association, AARP North Carolina, and the National Association of Nutrition and Aging Services Programs, which have signed a letter to members of Congress urging repeal of the IPAB. Many of the signatories receive substantial funds from drug and device makers or have other ties as we’ve pointed out many times. Signing such a letter is a small favor to return to help out their benefactors.
Last December I reported on the group Mended Hearts whose corporate advisory council included representatives from Pfizer and Novartis, which also were corporate sponsors in 2014. Both Pfizer and Novartis are members of the Health Leadership Council. Mended Hearts also signed the Healthcare Leadership Council letter.
The letter writing campaign, which has been going on since late last year apparently has been successful. The Council reported on its website that bipartisan legislation to repeal the IPAB has now gained 219 sponsors, “a majority of the U.S. House demonstrating the level of support necessary to do away with IPAB before it harms beneficiaries.” Council president Mary Grealy also stressed that Congress needs to act on the IPAB before it adjourns for its August recess. In a statement also on the council website, Grealy said “the need for Congress to eliminate the threat to Medicare beneficiaries posed by the Independent Payment Advisory Board remains both urgent and essential.”
Containing costs for Medicare is crucial
I discussed the IPAB with David Blumenthal, president of The Commonwealth Fund, a private U.S. foundation focused on improving health care. He told me the U.S. has never succeeded in controlling Medicare costs directly. Although the country has succeeded in reducing costs through payments to providers, he said, “we’ve never taken a comprehensive or thoughtful approach to controlling costs by making the system better, more efficient, and effective.” He said it was fairly simple to reduce payment rates, but it’s not as effective as getting rid of wasteful care.
“If the IPAB could undertake those changes, it would be an important contribution. I think it would be a helpful step toward cost management.” The fight against the IPAB is about just that. Those who want to get rid of it believe that down the road some of their products might be considered “wasteful” and would not be reimbursed.
Containing costs for Medicare is crucial. As costs rise in the long run, Congress will try to shift more of the burden from the government to beneficiaries in the form of higher premiums and additional cost sharing. Half of all beneficiaries had incomes below $26,200 in 2016. They will struggle mightily to pay more medical bills out of pocket.
An alternate solution is to eliminate wasteful, ineffective care that benefits industry, not patients. I wish we’d hear more from the news media about that option.
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