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Monday, July 29, 2013

In which "strategic advisor" Howard Dean attacks IPAB

Why would Howard Dean -- physician, former governor, former meteoric presidential candidate and current "strategic advisor" to healthcare clients at a lobbying firm, stick a knife in IPAB, the Independent Payment Advisory Board created by the Affordable Care Act to rein in the federal government's Medicare spending?

In a Wall Street Journal op-ed published this morning, Dean first pays lip service to core aspects of the ACA before launching into a perfunctory, mail-it-in attack on  IPAB:

One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.

There does have to be control of costs in our health-care system. However, rate setting—the essential mechanism of the IPAB—has a 40-year track record of failure. What ends up happening in these schemes (which many states including my home state of Vermont have implemented with virtually no long-term effect on costs) is that patients and physicians get aggravated because bureaucrats in either the private or public sector are making medical decisions without knowing the patients. Most important, once again, these kinds of schemes do not control costs. The medical system simply becomes more bureaucratic.
Damned bureaucrats! That's Ryan-speak.  Never mind that Ryan's 2009 Patients' Choice Act featured a stronger version of IPAB. Or that Congressional legislation has successfully curbed Medicare spending growth several times (e.g., in 1990, 1993, 1997 and 2005). Or that, as Ezra Klein recently forced healthcare free market evangelist Avik Roy to admit, in every country in the world that controls healthcare costs more effectively than the U.S., "government bureaucrats" control pricing by ones means or another: 
KLEIN: But in these systems, right, because when you talk about the one-seventh, Singapore is very cheap. Great Britain is very cheap compared to us. Canada is cheap. Sweden’s cheap. France is cheap. Everybody’s cheap. And what all of them do, the thing that they all do, is not health savings accounts, right? That is not the common denominator. The thing every single one of those systems do is the government is a primary negotiator. The government says how much can a drug company charge. The government says how much will a doctor’s visit cost. The government says how much a hip replacement will cost. And the per-unit price of health care in those countries is way, way, way down.

ROY: Right.
But really, Dean's not even trying here. He brings no evidence to bear that IPAB can't work. And in fact, IPAB is (unfortunately) prevented by statute to use outcomes research to disfavor specific treatments and drugs, as Dean implies it will. So again: why, Howard, why?

It's germane that Dean "is a Senior Strategic Advisor and Independent Consultant for the Government Affairs practice at McKenna Long & Aldridge LLP."  The firm's health care clients "range from providers and managed care organizations to pharmaceutical manufacturers and technology vendors."  Those clients "turn to us for issues related to.. Reimbursement under federal, state and private health care programs...Medicare cost report and fee-for-service appeals...Contract disputes with commercial payors...Pharmaceutical pricing."

Back in 2009, Dean notoriously went to bat for biopharmaceuticals to increase their patent protections in the ACA. But here he's apparently representing broader interests than just biotech firms.

Earlier this month, the Washington Post delved deep into an open secret: that Medicare reimbursement rates are based on time estimates for each procedure produced by a committee of the American Medical Association, which -- surprise -- grossly overestimates the per-procedure time investments (that's the AMA/Specialty Society RVS Update Committee, a.k.a. RUC). The Centers for Medicare and Medicaid services accept these inflated estimates almost without question.

IPAB could change that, as Kate Pickert points out today for Time:
The law creates an entity known as the Independent Payment Advisory Board (IPAB). The group will make recommendations to Congress about Medicare physician payment levels if the growth of Medicare spending gets too far ahead of inflation. The recommendations will automatically go into effect unless Congress votes to rein in spending another way.

IPAB has tremendous potential to curb physician payments in Medicare, which is why the AMA opposes it. An existing method to keep Medicare physician spending under control, called the Medicare Sustainable Growth Rate Formula (SGR), is easier for Congress to override. In a move known as the “doc fix,” Congress regularly votes to cancel SGR reductions in physician pay under heavy pressure from the AMA.

In addition to making recommendations that cannot be easily undone, IPAB has another advantage over RUC. It will operate in the open, with its members announced publicly and its procedures made public.
I will not make an unfounded allegation, but I would like to know whether the McKenna Long represents the AMA. Chuck McMullen, a partner who practices in public policy and government affairs and healthcare, is a former regional political director for the AMA, covering 127 congressional districts in 12 states. When Congress postponed its annual "doc fix" in May 2010, the firm's weekly healthcare wrap-up included in its quotes for the week a tsk tsk from AMA President James Rohack:“Senators are more interested in heading home for the holiday than in preventing a Medicare meltdown for seniors.”

Speculation, that. But Dean is clearly working for healthcare provider interests.

Update: Damn -- WSJ op-ed page watcher Jonathan Chait beat me to it

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