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Robert Coughlin

Health care law puts seniors at risk

By Robert Coughlin
May 31, 2011

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ASIDE FROM Representative Paul Ryan’s plan for privatizing Medicare, the 1 million citizens of Massachusetts enrolled in the plan may be in for a rude surprise as a result of last year’s health-care reform legislation. One of its provisions, if allowed to stand, could impinge on seniors’ access to quality care.

The health reform law established the Independent Payment Advisory Board, or IPAB, which is charged with developing proposals to keep the cost of Medicare down. The panel consists of 15 presidential appointees. Any year Medicare is projected to exceed target spending amounts, IPAB is charged with instituting program changes that will bring overall costs down.

Proponents tout IPAB as health-care reform’s solution to rising costs. It isn’t.

A real solution would spell out proposed changes so that seniors understand them and have a chance to make their voices heard, especially through members of Congress voting on reforms. That’s what the democratic process is all about. But instead of spelling out proposed reforms, last year’s legislation covered them up — by vesting in IPAB vast power to order changes in care.

When the board makes its “recommendations’’ for bringing costs down, federal legislators have four months either to accept them, find equivalent cost-savings in Medicare, or block them with a supermajority vote. The system also denies patients and doctors the option of challenging its decisions in court. In effect, the creation of IPAB takes our elected officials out of the decision-making process. Medicare enrollees and providers will be left with little means to make their voices heard.

Supposedly as a protection, IPAB is limited in the changes it can mandate. It’s not allowed to impose taxes or increase premiums. It’s not allowed to cut payment rates to hospitals until 2020. But Medicare reimbursements to doctors are on the chopping block from the beginning, as are payments for Medicare drug benefits. What this means for seniors is that IPAB will be able to “control costs’’ by offering doctors and other Medicare providers only cents on the dollar for their services caring for Medicare patients.

The harsh truth is that if IPAB decides to cut payments to physicians to save money, many doctors will simply no longer accept Medicare patients.

“It’s creating an environment that’s not conducive for physicians to survive in terms of practicing medicine with predominantly Medicare patients,’’ said Alice Coombs, president of the Massachusetts Medical Society. “Doctors want to take care of all patients, but it becomes increasingly difficult for them to have an operational budget to be able to do that.’’

According to an American Medical Association survey of 9,000 doctors nationwide, current reimbursement rates have already led 17 percent of all doctors, including 31 percent of primary care physicians, to restrict the number of Medicare patients in their practices. IPAB will only make this serious problem worse.

Something similar will happen with prescription drug coverage. IPAB is empowered to cut reimbursement rates to providers under Medicare Part D. If and when it does, providers will likely respond with more restrictive drug formularies, ceasing their coverage for more expensive medicines. Seniors will lose access to life-saving treatment options.

Reducing reimbursements will also impact investments in research and development at the nation’s pharmaceutical and biotechnology firms — those companies that are on the frontlines looking for the medical miracles of tomorrow. Developing a successful new drug can take decades and cost billions. Many initially promising avenues of research turn out to be dead ends. These are expenses companies will be unwilling to make if they are concerned, quite rightly, that an all-powerful and unaccountable board will ultimately decide whether and how much they will be paid.

Before we cut health-care products and services, let’s first eliminate more of the fraud, mismanagement, and high administrative costs. And let’s make sure the process of finding ways to economize is not a closed system, but one open to the input of seniors and their doctors, as well as accountable to the public. Handing discretionary power over to IPAB will end up hurting the Americans who need our help the most. IPAB is not the prescription for what ails Medicare.

Robert Coughlin is the president & CEO of the Massachusetts Biotechnology Council.

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