Vermont’s version of the Independent Payment Advisory Board (IPAB)

by J. Walden Retan MD

Begin with what everyone knows.  Healthcare costs and health insurance costs are climbing more than twice as fast as the cost of living, and have been for years. There is no need for numbers to prove the point. Just ask anyone who buys health insurance on their own, any employer trying to take care of his employees, any employee whose wages are flat because of the rising cost of insurance.

There are two major ways that governments are trying to control the rising cost of care. The federal government is implementing the Independent Payment Advisory Board (IPAB). The state of Vermont is starting something that’s a little bit similar to the IPAB.  Similar but also a whole a lot different.

The IPAB has gotten the most attention lately. The board is to be made up of 15 experts, including doctors and patient advocates, nominated by the President, confirmed by the Senate.

If Medicare costs continue to rise faster than the cost of living, in 2014 the IPAB would recommend policies to Congress to help Medicare provide better care at lower cost. This could include ideas on coordinating care, getting rid of waste in the system, incentivizing best practices and prioritizing primary care.

It is specifically prohibited by law from recommending any policies that ration care, raise taxes, increase premiums or cost-sharing, reduce benefits or modify who is eligible for Medicare.

Congress then theoretically must accept or to reject IPAB recommendations. If Congress rejects recommendations and Medicare spending exceeds specific targets, Congress supposedly must either enact policies that achieve equivalent savings or let the secretary of health and human services follow the board’s recommendations.

There are critics of the IPAB.  Whether those critics are right could be beside the point.  There’s one critical flaw in way the IPAB is designed to work.  Everything depends on a future Congress following orders that the recent Congress wrote into the Affordable Care Act. Problem is, there is absolutely no reason to believe that a future Congress would feel that it had to follow those orders.  The only orders any Congress has to follow are in the Constitution.

Vermont has taken health care reform one step further.  Recently, its governor signed a law intended to give all of its citizens government-funded, taxpayer-financed health insurance.  It sets up a Board with the following duties (among others): “to oversee the development and implementation, and evaluate the effectiveness, of health care payment and delivery system reforms designed to control the rate of growth in health care costs and maintain health care quality in Vermont, including (control over) payment reform pilot projects …”

It is to “implement methodologies for achieving payment reform and containing costs, which may include the creation of health care professional cost-containment targets, global payments, bundled payments, global budgets, risk-adjusted capitated payments, or other uniform payment methods and amounts for integrated delivery systems, health care professionals, or other provider arrangements.”

Note that the Board has the power to act, not just to advise.  Starts work now, not in 2014.  No limitations.  No exclusions.  No exceptions.  All insurance, not only Medicare.

Yes, Vermont’s health care system is intended to become a single-payer system someday soon.  A single-payer system that controls the growing cost of healthcare.

J. Walden Retan is an internal medicine physician and State Coordinator, Health Care for Everyone — Alabama.

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