(Bloomberg View) — Health care costs are starting to accelerate again in the United States, a sign that more effort is needed to constrain cost growth. Yet the House of Representatives is set to vote this week to do the opposite — by repealing the Independent Payment Advisory Board (IPAB). Following a 31-8 vote for repeal in the Ways and Means Committee, the vote in the full House looks to be overwhelming. It’s crucial that the Senate not follow suit.
Several years of modest increases in health care costs have dramatically improved the country’s fiscal position, helping to free up resources for more productive purposes. Yet there are worrying signs of increased health spending pressure, especially the higher growth in Medicare outlays this year, even after factoring out one-time payments. (Medicare spending is a more troubling signal even than the Quarterly Services Survey for the first three months of 2015, which also showed an uptick in spending.)
In the face of this pressure, it’s crucial to move more forcefully away from fee-for-service payments and toward payments that reflect the value of care. Doing so will require a series of nimble adjustments based on evidence showing which incentives and other strategies work well. It would be foolish to bet the ranch on any one untested approach.
IPAB was created by the Patient Protection and Affordable Care Act (PPACA) expressly to help with this.
In particular, the IPAB is designed to provide a backstop if health costs grow beyond Congress’s control. Presumably, Congress will be more likely to act if members know that failing to do so means the IPAB will step in. Those favoring repeal of the IPAB either oppose a shift away from fee-for-service payment, or believe that Congress is about to become much more adept at complicated payment reform than it has ever been in the past.