Whether you attribute the quote to Otto von Bismarck or Gustave Flaubert, many would agree with the sentiment that watching democracy in action is like watching sausage being made. The punchline is that while you may or may not like the result, the process will make you sick.
In that case, call the Independent Payment Advisory Board one of the sausages that came out of the process of creating the Patient Protection and Affordable Healthcare Act.
In case you forgot, the 15-member board will be comprised of doctors, nurses, medical experts, and consumers who recommend ways to reduce healthcare spending. They are allowed to analyze the drivers of Medicare cost growth and recommend policies to control Medicare costs if spending exceeds a targeted growth rate of 1% more than gross domestic product growth.
They haven't yet been appointed, and their first report to Congress isn't due until July 2014, but debates over their mandate are generating real fear—especially in the physician specialty arena.
Board members will be appointed by the president and must be confirmed by the Senate. The difference between this board and the other major board that recommends changes in Medicare policy, the Medicare Payment Advisory Commission, is that IPAB actually has the power to implement the changes it wants, with key — and very limiting — restrictions.
In fact, Congress must vote to block any of the Board's recommendations or they will automatically become policy.
Even if it does vote to block an IPAB recommendation, Congress will have to find other cost-cutting measures that will make the same budgetary impact as the rejected IPAB recommendations.
Although the board does have some power to regulate healthcare costs, which almost everyone agrees are out of control, it wields a blunt instrument where a scalpel would be more appropriate.
In short, IPAB has the ability to single out Medicare reimbursement cuts, but is unable to tweak anything else. That is, the proposals made by IPAB must not include any recommendation to ration healthcare, raise revenues, or increase Medicare beneficiary premiums, increase Medicare beneficiary cost sharing (deductibles, coinsurance, or co-payments), or otherwise restrict benefits or modify eligibility criteria.
That's quite a set of restrictions on something that is intended to do what Congress seems incapable of doing—reining in Medicare spending growth. Further, as the law stands, IPAB is prevented from making cuts to hospitals and hospices until 2020, and to clinical labs until 2016.
Conversely, it can make changes to physician reimbursement as soon as it is up and running. That's why many are predicting that medical specialists will bear the most immediate burden from IPAB's reaction to out-of-control healthcare spending growth.
But the restrictions on its power mean it won't be the benevolent dictator many wish for in healthcare. Instead, it will be forced to use the blunt tool of rate cuts, where a more nuanced approach might be the better solution. Of course, that would mean granting the board more power.
President Obama, in his latest attempt at a grand legislative bargain on deficit reduction, has recommended that IPAB be given broader authority to make its decisions—and at a lower budgetary threshold of 0.5% growth over GDP.
The Board would also be allowed to consider other, more surgical interventions to curb cost growth that would focus on value-based benefit design—something the current version of IPAB is unable to do. But it's tough to see Congress agreeing to the President's recommendations concerning IPAB, because even though it does not yet exist, IPAB has made powerful enemies.
Almost, if not all, Republicans, never wanted the board in the first place. Neither are many Democrats enthused, fearing that IPAB could limit access to medical care if reimbursements are cut to a level that would cause some providers to stop seeing Medicare patients.
What legislators ignore is that some group is going to have to take responsibility for making tough decisions on healthcare costs. Congress has already proved itself incapable. Should all the work be done by one group?
Possibly. If so, and if IPAB is that group, one of its biggest problems is not that it has too much authority, but rather that it does not have enough.
Philip Betbeze is the senior leadership editor at HealthLeaders.