While there has been a flurry of proposals to repeal, change or fix the Affordable Care Act, many stakeholders have come together to repeal the Independent Payment Advisory Board (IPAB).
Congress created IPAB, a 15-member board with a 10-member advisory committee appointed by the president, to reduce the per capita rate of growth in Medicare spending. Starting in 2013 IPAB has the authority to develop proposals to save costs in the Medicare program that are submitted to Congress on January 15, 2014, and each year thereafter, and become law unless Congress acts quickly to adopt alternative cost saving proposals that would save at least as much as the IPAB proposals. This is where the $500 billion in savings for the Affordable Care Act was going to come from.
The problem with IPAB is that it is doubtful that Congress will ever come up with enough votes to “veto” IPAB proposals or come up with alternatives to cut goods and services, which will directly affect the cost of healthcare services and supplies including pharmaceuticals and devices.
With Europe as our guide, price-fixing schemes such as IPAB can lead to serious access problems. According to Peter Pitts, former communications director at the FDA, in Europe people “do not have access to therapies because the government price is often lower than the cost of production or the price leaves very little to fund future research and development.”
Ultimately, on the surface, a group like IPAB— designed to save money—can make sense, but when you get down to it, the cost of restricted access to healthcare services is probably not worth it.
Tom Sullivan is president of Rockpointe Corporation