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Saving Medicare: Truth and consequences

Let’s face it; Medicare’s future is looking grim. Recently the Kaiser Foundation predicted that Medicare would be insolvent by 2024 unless we take action.

Let’s face it; Medicare’s future is looking grim. Recently the Kaiser Foundation predicted that Medicare would be insolvent by 2024 unless we take action. Regardless of one’s political persuasion, we can no longer kick the problem down the road by ignoring escalating costs. What makes it even worse is trying to sort through the lies, distortions and half-truths from interest groups and ideological extremists on the political right or left. They perpetuate provocative claims that reforming Medicare will result in either establishing “death panels” or “throwing granny off a cliff.”

 We should expect such rhetoric because Medicare is our country’s single largest purchaser of health care, accounting for nearly 14 percent of the federal budget. The crucial question is how can we “bend the cost curve” when the number of Medicare recipients is rapidly rising, health-care costs are increasing at an unsustainable rate and a toxic political environment is threatening to derail any efforts to rein in costs.

 We often hear political leaders and pundits call for a “national conversation” on important issues like Medicare, only to see such efforts undermined by special interests. Unfortunately, our country “doesn’t do” national conversations; our political discourse thrives on 30-second sound bites.

Even if we reach agreement on meaningful Medicare reform, implementation involves a long, tough slog: ongoing review, analysis, policy development, more tough choices and more revision. Who will do this, and how will it be done? Ideally we need health-care experts to advise the president and Congress how to achieve quality health care at a reasonable cost. Congress, however, is so polarized and beholden to lobbyists and special-interest groups that it appears incapable of making difficult decisions based on what will work for all Americans.

Best hope: the IPAB
Our best hope is the Independent Payment Advisory Board (IPAB). Created by the Affordable Care Act of 2010 (ACA), the IPAB would consist of 15 appointed full-time members. The board’s specific responsibilities would include reducing the per capita growth rate in Medicare spending while maintaining or improving the quality of care. The board is also charged with making recommendations that would extend Medicare solvency as well as recommend measures to improve our health-care delivery systems and health outcomes.

The Secretary of Health and Human Services would be required to implement IPAB proposals unless Congress approves legislation that would provide a similar amount of savings. A major reason for including this process was to avoid special interests from hijacking Medicare reform. Congress does have authority to override the IPAB but only if it takes action to avoid Medicare insolvency.

Although the IPAB is a new board, Congress and Medicare currently have a similar advisory board: The Medicare Payment Advisory Commission (MedPAC). Many of its recommendations go unheeded because MedPAC recommendations are advisory; lobbyists and interest groups often intervene and Congress fails to act.

A recent article in the New England Journal of Medicine quotes Harold Pollack: “Every Democratic and Republican policy expert knows that we must reduce congressional micromanagement of Medicare policy. Unfortunately, every Democratic and Republican legislator knows that mechanisms such as IPAB that might do so would thereby constrain their own individual prerogatives.”

Unfortunately, Congress imposed certain restrictions on the IPAB, which will limit its recommendations. For example, hospitals will be exempt from IPAB budgetary recommendations until 2020. The Deficit Reduction Commission subsequently recommended strengthening the IPAB.

Consider the choice
Many Republicans and a few Democrats currently characterize the IPAB as “a group of unelected bureaucrats who would make decisions about your medical care.” Relying on Congress, however, is risky. Who would have more objectivity, knowledge, understanding and experience, health-care experts or a Congress seemingly controlled by lobbyists, interest groups and ideological extremists?

There may be better solutions but they aren’t on the table. The Republicans’ proposal, the so-called Ryan Plan, is inequitable; it asks for no new sacrifice from current recipients or those who will qualify in the next 10 years. After that time period, Medicare would provide recipients with a voucher to buy health insurance from a government-approved list of private insurance plans. Each year the voucher would increase no more than inflation, even though health insurance costs would surely increase at a higher rate. Seniors would pay a much larger percentage of their own health-care costs.

Democrats will probably support the IPAB. Yet Minority Leader Nancy Pelosi grabbed headlines recently by proposing no Medicare changes: “I could never support any arrangement that reduced benefits for Medicare.” Such statements may make political points, but they won’t solve our problems.

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Although there is no guarantee that IPAB will solve the Medicare problem, given the current options, it’s the best bet.

Robert Knopp, a physician and medical educator, lives in St. Paul.