Howard Dean: PPACA’s payment board won’t work

By Dan Cook

July 29, 2013

Associated Press

Overall, Howard Dean is fine with the way the Patient Protection and Affordable Care Act is shaping up, but he’s no fan of the Independent Payment Advisory Board.

The former Democratic presidential hopeful (2004) offered his (latest) no-holds-barred assessment of the PPACA in a weekend op-ed piece in the Wall Street Journal. First, he upbraided members of the GOP who are trying to kill the PPACA. Says Dean:

“Continuing efforts by congressional Republicans to ‘defund’ further implementation of the Patient Protection and Affordable Care Act, even if it takes shutting down the federal government, are willfully destructive. … Like it or not, the law — at least its foundation — is here to stay, and lawmakers ought to focus over the next year on ensuring a relatively smooth implementation.”

Some of the other big takeaways from the mind of the former Vermont governor and Democratic Party chair:

• The end result of healthcare reform may well be the end of company-sponsored health plans. Says Dean:

The administration's decision to delay implementation of the employer mandate until 2015 will help funnel individuals and families who do not get insurance through their employer into the exchanges. While this may benefit the participating insurers in the short term, this also accelerates the trend toward divorcing health care from employment. … That development will lead to the end of job lock for workers and contribute to a more competitive American business community in the longer run.

• Another major consequence may be the death of the fee-for-service system. Says Dean:

“Accountable Care Organizations could eliminate duplicative services and prevent medical errors while seeking to reduce costs for individuals, particularly if their creation ultimately leads to the end of fee-for-service medicine, as I believe it will.”

• The health exchanges will prove to be hugely beneficial to average Americans who now have little or no control over any aspect of their health coverage. Says Dean:

“The Health Insurance Marketplace exchange systems, once implemented, will provide individuals with competitive plan options based on price, services, quality and other factors. Even more important, the exchanges will make the process of securing health insurance much easier and more transparent for millions who don't currently have it.”

• Despite his effusive praise for most aspects of the PPACA, Dean has little use for the Independent Payment Advisory Board. It can’t and won’t work, he says, and will only wind up giving a small group of politically motivated individuals too much power that they will wield inappropriately. Says Dean:

“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.

“The nonpartisan Congressional Budget Office has indicated that the IPAB, in its current form, won't save a single dime before 2021. As everyone in Washington knows, but less frequently admits, CBO projections of any kind — past five years or so — are really just speculation. I believe the IPAB will never control costs based on the long record of previous attempts in many of the states, including my own state of Vermont.

“… The IPAB will cause frustration to providers and patients alike, and it will fail to control costs. When, and if, the atmosphere on Capitol Hill improves and leadership becomes interested again in addressing real problems instead of posturing, getting rid of the IPAB is something Democrats and Republicans ought to agree on.”

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