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IPAB Repeal: Why It Continues to Matter

April 25, 2013
4:25 pm

Defense of the Independent Payment Advisory Board (IPAB) has grown weak with time.  It was once hailed as a mechanism that would put real teeth into the effort to reduce healthcare spending, making the tough cuts that Congress didn’t have the intestinal fortitude to carry out.  Now, though, its advocates say that IPAB is just a harmless ol’ bear that will just keep hibernating since per-capita Medicare spending has slowed considerably.

Reassurances that IPAB is likely to remain dormant for years, because Medicare spending increases won’t hit the statutory level to force the 15-member board of political appointees into action, doesn’t suddenly make it a good, or even acceptable, idea.  It remains a fatally flawed concept, designed to make indiscriminate cuts in what Medicare pays for healthcare goods and services without adding value or long-term sustainability to the program.  If our goal is to hit short-term spending targets without making Medicare more quality-focused or cost-effective, then IPAB is one heck of a tool.

We shouldn’t be lulled by the current lack of IPAB appointees or comparably low Medicare spending levels into setting aside a repeal effort.  Left in existence, IPAB continues to be a bad excuse – but an excuse, nonetheless – for avoiding genuine Medicare reforms.  Why pursue structural changes to Medicare that might achieve greater cost-efficiencies when we already have a spending-reduction weapon assembled, poised and ready?

Today, over 500 organizations representing patients, healthcare providers and employers sent a letter to Capitol Hill urging the elimination of IPAB.  Their arguments are correct.  This board assumes powers that are intended for Congress and will reduce healthcare access through provider cuts rather than by improving delivery and payment systems.

Given comparably low Medicare spending rates and the lack of IPAB nominations, one could certainly make the argument that the board is the bureaucratic equivalent of a hibernating bear.  The logical response is that, hey, it’s still a bear and you don’t leave open the possibility that it could eventually do significant damage.  Medicare does need strengthening and stability, but a panel of 15 political appointees empowered to do little more than shred budgets is not the answer.  The imperative remains to repeal IPAB and then start to work on actual Medicare reform.

National Healthcare Decisions Day Spotlights Advance Directives

April 16, 2013
1:10 pm

Each April 16, the Healthcare Leadership Council joins organizations across the nation in raising awareness of the importance of advance care planning.  Of course, this is an issue with year-round importance, but the April 16 date is set aside as a day for public initiatives to make more Americans aware of the importance of advance directives and living wills.

This is an aspect of healthcare that warrants greater attention, study and conversation.  Physicians and hospital leaders have spoken compellingly about the significant amount of resources directed to advanced illness care and the difficulty involved in delivering that care in a way that is in the best interests of patients and their loved ones.

The Healthcare Leadership Council is a partner in the Coalition to Transform Advanced Care (C-TAC), a nonprofit organization that has conducted consumer research on advance planning and care for serious illness.  In a report, C-TAC discussed the importance of doctor-patient communication and education on types of treatment, which can raise awareness and help patients and their families create a more specific advanced care plan.

The C-TAC report states, “Efforts around advanced illness care should focus on ensuring that the proper mechanisms are in place for shared discussion and decision making among the triad of patients, family members and physicians at the time care decisions need to be made.”

The report also discusses an online tool, Making Your Wishes Known, which has proven to be a simple method of creating effective advance directives.  Tools such as this need to be widely promoted so that the benefits of advance planning can be shared with those patients who are not yet prepared for these critical decisions.

For more information on National Healthcare Decisions Day, please visit www.nhdd.org.

Dr. Noseworthy Meets the Press

April 11, 2013
11:49 am

In a week that has featured the back-and-forth crossfire between pundits and lawmakers over budget priorities, it was refreshing to have a genuine healthcare expert, Mayo Clinic President and CEO John Noseworthy, M.D., come to Washington and share a comprehensive vision of the steps needed to improve our nation’s medical system.

In his speech at the National Press Club, Dr. Noseworthy said that we are facing “the most profound challenge in our history” in terms of the state of healthcare in the U.S. and that a growing senior population , rising costs, fragmented care and uneven quality are presenting a “threat to the economic health” of the nation.

The Mayo CEO cited three imperatives that must be addressed in order to achieve health care progress.  The first, he said, is to put proven medical knowledge into practice more consistently.  He said this require better tools for synthesizing the massive amount of new health care information that inundates medical professionals.    Dr. Noseworthy, who defined knowledge as Mayo’s “most scalable asset,” said it is necessary to deliver new information as fast as it is known to assist health care providers in their communities.

Secondly, he said, it is necessary for all players in the health care system to embrace value, or higher quality at lower cost.  And his third cited imperative was that government must fund excellence, support scientific discovery and create payment systems that reward quality, value, excellence and innovation at each level of care – primary, intermediate and complex.

He explained that government, in administering the Medicare and Medicaid programs, must find ways to reward those systems that provide excellence care, rather than try to achieve a sounder financial footing through across-the-board cuts.  “If you pay everyone less, you turn health care into a commodity, and it isn’t a commodity,” he said.

Other significant comments from Dr. Noseworthy included:

•    That federal budget sequestration will cost the Mayo Clinic $47 million in one year, half of it coming out of medical research.  “It will slow us down,” he said, “and this is not a time to restrain racehorses in America.”

•    That Medicare cuts to health providers have extensive ramifications.  Dr. Noseworthy said close to 60% of Mayo’s patients are on Medicare.  He said Medicare cuts slow the pace of research and make it more difficult to attract top professionals.

•    The Affordable Care Act does much to improve primary care, “but sooner or later, and particularly as we age, most people will need intermediate care and complex care.  More work is needed to create and ensure a high-quality continuum of care for Americans.”

The Sequester and Lessons About Health Spending Cuts

April 04, 2013
10:13 am

A post by Sarah Kliff on the Washington Post’s Wonkblog site is getting a lot of attention this morning.  She reported that cancer clinics across the country are turning away patients because sequester cuts.

Here’s the essence of this issue:  Most pharmaceuticals are covered by the Medicare Part D program.  That’s not the case with injectable drugs administered by a physician, such as those used for chemotherapy patients, which are covered under Medicare Part B.

Physicians are reimbursed for these drugs at the average sales price plus six percent – the six percent add-on is there to cover the costs of acquisition, storage and administering the medicines.  For many physicians, particularly those in rural areas without the heavy patient volume to negotiate significant discounts, this reimbursement barely covers their costs, if it does at all.

So, when the sequester makes cuts in that Part B payment level, a story like Ms. Kliff’s results – that cancer centers aren’t seeing Medicare patients because the financial losses they would take on these drugs would force them out of business.

But, here’s the rub.  During congressional deliberations over budget reductions, cuts in Medicare Part B drug payments were proposed….well before the sequester went into effect.   Congress was, in fact, considering reducing the average sales price-plus-six percent payment level to ASP-plus-3%.

So, while the sequester cuts are hurting some patients, they are also providing an object lesson to policymakers.  We can’t make Medicare or our nation’s health system better by constantly chipping away at payments for healthcare goods and services.  Such cuts may help meet short-term budget targets, but the reduced access to critically-needed care is both unconscionable and counterproductive because of the increased acute care and hospitalizations that will eventually be required by sick patients.

It has been difficult for the White House and Congress to start serious negotiations on structural Medicare reform.  Wouldn’t it be far better, though, to focus on health-affirming ways to make Medicare more financially sustainable and cost-effective than to continue with the kind of reimbursement nibbling that results in severely ill patients being turned away by caregivers?