Schwartz on IPAB

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SCHWARTZ TESTIMONY ON IPAB AT ENERGY AND COMMERCE SUBCOMMITTEE HEARING

Washington, D.C. – U.S. Rep. Allyson Schwartz (PA-13) gave the following testimony at an Energy and Commerce Health Subcommittee hearing, IPAB: The Controversial Consequences for Medicare and Seniors. Schwartz has been outspoken on the need to repeal the Independent Payment Advisory Board that was created in the health care reform law, saying ‘it is the wrong approach to achieving the right goal.’

The Congresswoman believes that ‘we cannot conceal fundamental flaws in our health care system by simply cutting reimbursements to hospitals and physicians or, even worse, ending Medicare as we know it, as Republicans have proposed…IPAB has the potential to stifle implementation of promising innovations that would address those cost drivers just as they are beginning to take shape.’

“Chairman Pitts, Ranking Member Pallone, thank you for the opportunity to testify today.

“I have been and continue to be a strong supporter of the Affordable Care Act because it will extend access to affordable, meaningful health coverage to all Americans, strengthen Medicare and contain costs for American families, businesses and government.

“The potential for savings is significant.

“The Centers for Medicare and Medicaid Services (CMS) Office of the Actuary estimates that – over the course of 10 years – the Affordable Care Act will save Medicare more than $400 billion by:

· attacking fraud and abuse,

· reducing overpayments to insurance companies,

· reducing medical errors and unnecessary duplication of services,

· increasing access to cost-effective primary care services,

· improving care coordination across health care settings, and

· transitioning to payment systems that reward value.

“The Congressional Budget Office (CBO) estimates that the law will reduce the deficit by more than $1 trillion over the next 20 years. And that's just the beginning.

“Health care reform has the potential to fundamentally transform the health care delivery and payment systems by creating a variety of models for improved delivery of care by incentivizing high quality, greater efficiency, and better outcomes.

“Successful implementation will ensure that seniors get the right care at the right time at a lower cost to taxpayers.

“My decision to support repeal of the Independent Payment Advisory Board (IPAB) reflects my confidence in the many cost-containment measures in the law. Despite Republican claims, IPAB is not a ‘death panel’ or a ‘rationing board.’ These are merely scare tactics. IPAB is simply the wrong approach to achieving the right goal.

“We all agree that the rate of growth in Medicare spending must be contained and that current Medicare payment systems are flawed and need to be reformed. But, we cannot conceal fundamental flaws in our health care system by simply cutting reimbursements to hospitals and physicians or, even worse, ending Medicare as we know it, as Republicans have proposed.

“The Republican plan to convert Medicare into a voucher program means that seniors will no longer have access to a guaranteed set of health benefits and, according to CBO, the resulting premiums and co-insurance would increase out-of-pockets costs more than $6,000 per senior per year and increase as health care costs rise.

“This is neither better quality care nor genuine cost savings – it is merely shifting the burden of increased costs to seniors.

“Congress must accept its responsibility for legislating sound health policy for Medicare beneficiaries, including reforms to payment systems.

“Turning over this responsibility, whether to insurance companies as proposed in the Republican plan, or to an unaccountable board, undermines our ability to represent the needs of seniors and the disabled and ensure their access to care.

“Repealing IPAB – while preserving essential health reforms in the Affordable Care Act – enables providers to focus on innovations that will achieve cost savings by incentivizing efficient, high-quality health care.

“If we do not, IPAB is structured in such a way that the Board may be forced to impose cuts on a narrow sector of the health care system, ignoring the need for broader changes.

“Arbitrary caps on spending, absent fundamental reforms to underlying cost drivers, simply shift the cost burden.

“Thus, IPAB has the potential to stifle implementation of promising innovations that would address those cost drivers just as they are beginning to take shape.

“The Obama administration is already implementing health care reforms to reduce the rate of growth in health care spending by holding providers accountable for reducing costs through:

· more coordinated care,

· the adoption of health information technology,

· improved quality, and

· better outcomes.

“Accountable Care Organizations, which create incentives for health care providers to work together to lower costs while meeting quality standards and putting patients first, could save up to $750 billion over the next 10 years.

“The Center for Medicare and Medicaid Innovation, established under health care reform, is advancing initiatives such as the Patient-Centered Medical Home, Healthcare Innovation Zones and other innovative delivery models with the potential to achieve significant additional savings.

“The Center’s recently launched Partnership for Patients initiative will save costs by bringing together hospitals, physicians and patients to dramatically reduce hospital-acquired conditions and hospitals readmissions.

“This program alone is expected to generate savings of up to $35 billion.

“These are reforms that we should build upon to achieve greater cost efficiencies without risking access or quality.

“It is our job to identify the most effective cost saving innovations and ensure that they are implemented broadly and successfully across the nation.

“There are tough choices ahead as we work to contain the rate of growth in health care costs.

“We should eliminate IPAB, reject Republicans’ efforts to dismantle Medicare and focus on reshaping payment and delivery systems to reward coordination, efficiency and value to achieve cost savings.

“In so doing, we can meet our obligations to both seniors and taxpayers.”