CALPIRG Blog

With both the House and the Senate having passed their reform bills, it'd be tempting to think that all the hard work is done.  But while there have been deals on many of the key reform issues, there are still a few outstanding questions -- some of them incredibly important.

Maybe you've heard about the fights over the employer mandate, or how the exchanges will be set up -- all of which are important.  But there's one clash between the House and Senate versions that hasn't gotten nearly the attention it deserves.  The Senate bill contains an independent board to fast-track changes to payment policy through Congress.  That may sound a little dry -- but the board could be a key to lowering the crippling costs that weigh down our families, businesses, and state budgets. 

The problem isn’t that America lacks solutions for how to make premiums more affordable.  Health care innovators like the Mayo Clinic, Intermountain Health, and Geisinger Health have proven that improving care quality can also reduce the bill we pay.

Unfortunately, they're the exception rather than the rule.  Most doctors and hospitals are rewarded for the number and complexity of  procedures and surgeries they perform, regardless of whether the care actually makes patients well, which winds up inflating costs and, ironically, leading to less-coordinated, lower-quality care.  And because fee-for-service often underpays the services that deliver the best results - basic prevention and primary care – providers who do what it takes to keep their patients healthy can see a financial penalty.
 
For years, experts have acknowledged that the best way to move towards more efficient models of care is to change provider payment policies.  If every provider in California were as efficient as Intermountain Health in Utah, we'd see our costs cut by almost 40% -- almost $100 billion in savings, every year.

But making payment more efficient inevitably means goring the ox of the same special interests that have grown fat from the waste and abuse in today's system:  the medical device industry, medical specialty societies, and certain increasingly profit-driven hospitals.  With the power those interests exert through lobbying and campaign contributions, Congress is often unable to take on the industry lobbies and adequately hold down costs.

This is where the Senate bill's Independent Payment Advisory Board comes in. Made up of doctors and health policy experts appointed by the President and confirmed by the Senate, this new board would recommend changes to Medicare’s payment policies to Congress.  And the IPAB's recommendations would have real teeth. Congress would have to consider them under a fast-track procedure that leaves little opportunity for special interest maneuvering.  Congress could consider an alternative to the Board's proposals, but only if it achieved the same level of savings.
 
And even if the special interests managed to stall the reforms, the Board’s proposals would be implemented automatically, achieving an end-run around the special interest lobbies. 

And it wouldn't just be federal programs -- to drive down costs in the private insurance market, the Board would also regularly submit a separate set of legislative and regulatory recommendations to Congress and the President on how to lower costs for everyone.

If the Board is included in the final legislation, payment policy will be made by doctors and experts weighing the public interest, not by lobbyists and politicians in back rooms. Insulated from industry pressure, the Board can dramatically accelerate the kind of cost-saving and quality enhancing reforms that have made Mayo an industry leader. 

But since the Board is only in the Senate bill, not the House version, it has to be negotiated into the final bill before it becomes law.  And the same special interests who are contemplating shrinking profits as the Board helps get costs under control are doing everything they can to sink it.  Even though we're close to the goal line, the important fights aren't all over.