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The Pros And Cons Of IPAB And Why It Shouldn’t Be Repealed

ipab21 IPAB: Fix It, Dont Repeal It

In recent weeks, several Democrats and some health reform advocates including the AMA have joined Republicans in calling for a repeal of provisions in the new health law that create the Independent Payment Advisory Board (IPAB). For these people, IPAB represents the worst aspects of the new law–an unelected, centralized planning authority empowered by government to make decisions about the peoples’ health care. Arbitrary cuts to providers, short-sighted decisions that stifle innovation and rationing of care are sure to follow, they claim.

While it’s true that the rules governing IPAB are flawed and should be fixed, eliminating IPAB altogether would be a mistake. Read more »

*This blog post was originally published at Pizaazz*

Conservative Viewpoint: The IPAB Is The Frightening Lynchpin Of Obamacare

In the speech President Obama gave responding to Congressman Ryan’s budget plan (the one in which he lured Ryan to sit in the front row in order to be publicly pilloried), the President did something DrRich did not think he would do before the next election. He openly invoked, and openly embraced, the Independent Payment Advisory Board (IPAB) as the chief mechanism by which Obamacare will control the cost of American healthcare.

“IPAB” might be a new term to many Americans, but DrRich pointed his readers to this entity, within a few weeks of the passage of Obamacare, as the lynchpin (and a very scary lynchpin at that) of the whole enterprise.

Until President Obama’s recent “outing” of IPAB, however, this new board has been almost entirely ignored by most commentators. Since the President’s speech, of course, many have written about it, either to celebrate it or to castigate it. (Of all these commentaries, DrRich most highly recommends the analysis provided by Doug Perednia at the Road to Hellth. In fact, DrRich recommends Perednia in general, as he is regularly producing some of the most insightful commentary, anywhere, on health policy.)

DrRich does not wish to simply repeat here all the observations that have lately been made by others regarding the IPAB. Rather, he will emphasize three particular features of the IPAB, features which are remarkable indeed, and which will tell us something very important about our Progressive leaders. Read more »

*This blog post was originally published at The Covert Rationing Blog*

Patients Do Not Want Their Doctors Paid On Salary

One question that occasionally comes up is whether doctors should be paid a flat salary or not.

Currently, the majority of physicians are paid fee-for-service, meaning that the more procedures or office visits they do, the better they are reimbursed. This, of course, gives a financial incentive to do more, without regard to quality or patient outcomes.

One proposed solution is simply to pay doctors a flat salary, with bonuses for better patient outcomes.

Well, according to a recent Kaiser/NPR poll, that idea is a no-go for patients. 70 percent of patients think its better that a “doctor gets paid each time they see you,” while only 25 percent think a yearly salary is better.

As an aside, I find it interesting that any public poll result that goes against the progressive health policy agenda is considered a “weak opinion,” but really, this isn’t a surprising result.

Economist Uwe Reinhardt hinted at the cause when he said that most Americans believe “that they have a perfect right to highly expensive, critically needed health care, even when they cannot pay for it.”

Perhaps the public believes that a salary is similar to the capitation debacle in the 1990s, where doctors were paid a fixed fee, which gave them an incentive to deny care. And any perceived attempt to restrict care will be met with visceral opposition by the American public.

Which again shows how difficult it will be to engage patients with any dialogue that involves cost control.

*This blog post was originally published at KevinMD.com - Medical Weblog*

How Medicare Controls Costs: Insight From Biotech

At the recent Medicare Policy Summit, Tim Hermes, the Senior Director of Government Affairs for Sepracor, offered an overview of Medicare’s current cost control strategy. These six strategies are part of Medicare’s policies, but are not necessarily applied evenly or consistently.

1. Functional Equivalency: if 2 drugs are deemed to be functionally equivalent, then their average sales price may be linked so they are reimbursed at the same rate.

2. Inherent Reasonableness: CMS has the right to decrease payments for treatments, that are deemed not to be inherently reasonable, by increments of 15% at a time.

3. Widely Available Manufacturing Price (WAMP): when the average sales price of a drug is higher than the WAMP, CMS has the right to reduce the drug’s price to the WAMP.

4. Coverage Restrictions: CMS can choose to restrict coverage for any drug, especially for off-label uses.

5. Judicial Bar: Only Medicare beneficiaries can sue CMS. Manufacturers may not.

6. Congress: there are several committees that have jurisdiction over Medicare, including the Senate Finance Committee, the House Ways and Means Committe, and the House Energy and Commerce committee. Congress can enact legislation to decrease the average sales price of drugs, and can influence Medicare cost control mechanisms.

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