IPAB Is an Acronym for 'Death Panel'

IPAB Is an Acronym for 'Death Panel'
By David Catron on 4.22.11 @ 6:09AM

Contemplating the 2012 election that can already be seen looming on the distant horizon, the President's advisors were no doubt hoping that the "death panel" debate was… well… dead. But Obama himself inadvertently resurrected it when, in response to Republican budget proposals, he claimed that Medicare costs will be kept under control by the Independent Payment Advisory Board (IPAB). Obamacare opponents have been screaming about this committee since it was first added to the "reform" bill. And, since that time, anyone with the temerity to call it by its proper name -- death panel -- has been vilified by the Democrats and the "news" media. Nonetheless, that's precisely what IPAB will be. Its sole purpose is to cut funding for some health care services seniors now take for granted. And those cuts will kill people.

IPAB was created pursuant to section 3403 of the ironically named Patient Protection and Affordable Care Act (PPACA), and its ostensible purpose is to "control costs." In reality, it will do nothing at all about costs. Instead, the board's fifteen "experts" will impose old-fashioned price controls. Before Obamacare was signed into law in March of 2010, only Congress had the power to make changes to Medicare's reimbursement rates. But PPACA, for all intents and purposes, transfers that power to this tiny cadre of presidential appointees who will have no accountability to the voters. In theory, IPAB can only propose changes to Medicare's payment rates. In practice, however, the board's proposals will take effect automatically unless Congress passes contrary legislation and the President signs it into law.

This concentrates a huge amount of power in the hands of these fifteen people. As Obama's former Director of the Office of Management and Budget, Peter Orszag, phrased it last year in a discussion at the Economic Club of Washington: "This institution could prove to be far more important to the future of our fiscal health than, for example, the Congressional Budget Office. It has an enormous amount of potential power." This comment suggests that the Obama administration always intended to maintain the country's "fiscal health" by stinting on Granny's physical health. Hyperbole? Consider Orszag's description of the automatic implementation feature of IPAB's proposals: "So the default is now switched in a very important way on the biggest driver of our long-term costs, which is the Medicare program."

Considering that IPAB's mission involves Medicare cuts, one can't help but wonder if Obama's political team was comfortable with how much emphasis he put on it during last week's budget discussions. He made it abundantly clear that, if spending rises faster than expected, he "will give the independent commission the authority to make additional savings by further improving Medicare." But the relevant provision of PPACA was obviously written to keep IPAB below the radar until the President, and the Democrat majority in the Senate, have survived the 2012 election cycle. The law doesn't require the board to produce its first recommendations until 2014. Thus, a safely reelected Obama would have time to submit even controversial nominations for IPAB membership, which a friendly Senate would happily confirm.

Such political considerations notwithstanding, Obama probably wasn't worried. He no doubt sees PPACA's death panels as a feature rather than a bug. This sentiment is shared of most advocates of socialized medicine. In a piece titled, "Why 'death panels' are a necessary evil," columnist Jay Bookman captured this progressive consensus when he wrote that "Death panels exist, they will exist in any conceivable system of health-care delivery, and we all know they are necessary but prefer to ignore it." For these people, it's either us or Granny: "Somebody has to say no to the terminal patient who refuses to acknowledge that he or she is terminal and demands hopeless if expensive treatment.… Somebody has to have the power to rule that Procedure A or Drug A is more cost-effective than Procedure B or Drug B.… Even Heaven has a gatekeeper."

With this last snide flourish about St. Peter, Bookman inadvertently stumbles upon the thing that makes many people, of all political persuasions, uneasy about the amount of power that has been given to IPAB. The members of this board will be mere mortals, installed by a president whose choice of appointees thus far has shown little divine inspiration. Thus, even some Democrats have grave concerns. Rep. Allyson Y. Schwartz (D-PA), for example, is among the co-sponsors of a bill that would repeal IPAB. In a statement released last week she said, "Congress must assume responsibility for legislating sound health care policy for Medicare beneficiaries.… Abdicating this responsibility, whether to insurance companies or an unelected commission, would undermine our ability to represent the needs of the seniors."

The tragic irony here is that costs can be controlled without pulling the plug on Granny. There are market-based alternatives to government rationing. Despite what we have been repeatedly told by progressive policy wonks, health care is not a unique universe in which economic forces fail to operate properly. It is, in reality, possible to utilize the market to control costs. One plan for doing so has been put forward by Budget Committee Chairman Paul Ryan, who would introduce competition among insurers, realign tax incentives and remove some of the regulatory morass that reduces the efficiency of health care providers. This market-based approach was used with success in the Medicare Part-D program, which was actually starting to drive down drug costs until the Democrats began meddling with it after retaking Congress in 2006.

Another alternative is the "Purple Health Plan," proposed by Boston University economist Laurence Kotlikoff. As David Hogberg reports at Investor's Business Daily, this plan seeks to "achieve the liberal goal of universal care via a market-oriented voucher." A lot of prominent economists have endorsed it, including Nobel laureates George Akerlof and Thomas Schelling. Kotlikoff's basic idea is to "trade in" outmoded ideas, like the employer-based tax exclusion and the major federal health programs, and use the money thus saved to provide Americans with vouchers that we would use to buy our own health insurance plans. There are features to this plan that will incur the displeasure of free market purists, including its own panel of physicians who would make arbitrary decisions, but the point is that it is another choice.

Unfortunately, choice is not a popular concept with the President and his health care apparatchiks at the Centers for Medicare and Medicaid Services (CMS). For them, "cost control" means government-imposed rationing of care to the elderly. Obama's CMS administrator and lead health czar has often praised IPAB's deadly British prototype, the National Institute for Health & Clinical Excellence (NICE) and has famously averred that "The decision is not whether or not we will ration care; the decision is whether we will ration with our eyes open." The problem is that Obamacare's death panel, as Sarah Palin correctly dubbed IPAB in the Wall Street Journal, will end up closing a lot of aging eyes -- permanently.