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Congress needs way to keep lid on Medicare spending

Published: Wednesday, Jan. 22, 2014 5:30 a.m. CDT

Even in the $1 trillion appropriations bill that passed Congress last week, a bipartisan achievement in a fractured Capitol, Republicans couldn’t resist forcing through a gratuitous shot at the Affordable Care Act, defunding for now one of its most promising elements. This shouldn’t become a habit.

The Independent Payment Advisory Board has been called a “death panel,” but it isn’t. The group of health care experts, appointed by the president in consultation with both parties in Congress, will be charged with making sure that Medicare spending doesn’t blast through generous growth caps. If the program’s actuaries project that spending will do so in a given year, the IPAB is supposed to figure out how to keep costs from expanding too quickly.

“Rationing!” critics allege. But the law explicitly bars the board from rationing care. It also cannot charge Medicare beneficiaries more for the services they get or change who’s eligible. All the panel can do is rejigger how and how much the government pays doctors, hospitals and other providers, ideally through innovative systems that reward efficiency in delivering good health outcomes – the sort of thriftiness that anyone concerned about saving taxpayer money should want to see. Lawmakers could overrule IPAB actions that otherwise would go into effect without congressional action. That’s critical, given legislators’ reluctance to offend health care interest groups.

If anything, the law constrains the panel too much. It would, for example, be valuable for a group of carefully picked experts to have the authority to evaluate whether certain procedures and products waste taxpayer money. Lawmakers aren’t experts, and they so far haven’t been willing to control costs reasonably. But the law does not allow the IPAB to weigh in on benefits.

Health care costs have slowed, for now, so the board’s defunding is not an urgent problem. But as the baby boomers retire and draw on federal entitlement programs, it will be crucial to ensure that Medicare doesn’t eat away the nation’s wealth, robbing everyone else of important public services. The strongest tool yet approved to do that should not be treated as a dispensable poker chip in budget negotiations.

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