IPAB is no Fed, will fail

What Congress gives, it can take away. Particularly if a different Congress is doing the take-away. That’s why the Independent Payment Advisory Board (IPAB) is doomed to failure, assuming that it can get off the ground. Laws can be changed. In the case of the inaptly-named sustainable growth rate (SGR), they are changed several times a year—a testament to the practical realities of price controls and formula-driven decision-making. The IPAB was created by an act of the last Congress and is supposed to meet an arbitrary spending target that is not feasible without structural changes in Medicare and the health care delivery system. The IPAB has one tool—price controls—to hit the same kind of fiscal target that the SGR has. If the board requires politically unacceptable payment cuts, a future Congress will neutralize IPAB just as it has neutralized the SGR. Congress could pass its own version of the IPAB cut if it plays by the Affordable Care Act’s (ACA) rules. Congress could also change IPAB’s charter or even abolish it. But that probably will not be necessary as IPAB is unlikely to become the policy authority that some hope it will be. Senate confirmation of 15 experts to dictate Medicare policy is a near-impossibility. Any group that size is designed to debate issues, not decide them. It took the Federal Reserve two decades before it had the tools (with the Federal Open Market Committee) to directly affect our money supply. The IPAB won’t have that much time.

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute.

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About the Author

 

Joseph
Antos
  • Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute (AEI), where his research focuses on the economics of health policy — including the Affordable Care Act, Medicare, the uninsured, and the overall reform of the health care system and its financing. He also studies the impact of health care expenditures on federal budget policy.

    Before joining AEI, Antos was assistant director for health and human resources at the Congressional Budget Office (CBO). He has also held senior positions in the US Department of Health and Human Services, the Office of Management and Budget, and the President’s Council of Economic Advisers. He recently completed a seven-year term as health adviser to CBO, and two terms as a commissioner of the Maryland Health Services Cost Review Commission. In 2013, he was also named adjunct associate professor of emergency medicine at George Washington University.

    Antos has a Ph.D. and an M.A. in economics from the University of Rochester and a B.A. in mathematics from Cornell University.



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