This week, Sarah Kliff at the Washington Post had a piece on the formation of the Independent Payment Advisory Board, which, beginning in 2015, will be tasked with finding savings within Medicare to keep the program’s growth close to a certain target rate (assuming the board is not eliminated or defanged by Congress). It will do so by cutting payment rates for health-care providers, in part based on what the board deems the best evidence as to what treatments and procedures are most cost-effective (this is literally the only avenue available; IPAB is specifically not allowed to propose increasing cost-sharing in Medicare or curtailing eligibility). For many Obamacare opponents, of course, this is a perfectly sound system, since we’ll be having America’s best experts decide what’s worth paying for what — right? Maybe not. Kliff’s story explains:
Obama’s former health policy advisers worry that other top health economists, those in hot demand in academia and in the industry, won’t be interested in a federal job where the compensation is low, the political controversy high and the ultimate payoff unclear.
“It is supposed to be 15 members, with limited salaries who can’t do any outside work,” says Peter Orszag, the former director of the Office of Budget and Management under Obama who was a key proponent of IPAB. “It will be challenging to find top 15 health-care experts are who would want that job.”
“You’re joining an organization that has uncertain authority with the certainty of being deeply political and widely criticized,” says Bob Kocher, a former Obama health policy adviser. “It doesn’t make sense for current thought leaders in American health care to want this.”
Kliff notes that, specifically, IPAB members will be paid an annual salary of $163,500 and won’t be able to engage in “any other business, vocation or employment” during their six-year appointments. That’s in exchange for joining a board which apparently large numbers of Americans consider a “death panel,” and which, as Kocher notes, will have “uncertain authority” and will likely be widely criticized for its decisions no matter what they are. The statute calls for the board to be filled with “individuals with national recognition for their expertise in health finance and economics, actuarial science” and related fields; obviously, anyone who meets that description will be taking a significant pay cut out of the goodness of his heart to join a board which will likely become quite unpopular with the Right and the Left. Might be time for some other ideas: First 15 names in the Boston telephone directory, anyone?
Ironically, of course, the board which isn’t being paid enough to attract top-quality talent will be tasked with cutting pay for doctors and health-care professionals — but that’s not going to affect the quality of the care they provide or the talent the profession attracts.
NR’s editors called for the repeal of IPAB back in 2011; you can also check out Josh Barro’s take on why we need to keep it. Michael Cannon and Diane Cohen have written for NRO about why it might be a lot more difficult to rein in IPAB than we think.