Grading PolitiFact (Florida): The IPAB, rationing, and Pat Boone

PANTS ON FIRE – The statement is not accurate and makes a ridiculous claim.
--Principles of PolitiFact and the Truth-O-Meter

The issue:

(clipped from PolitiFact.com)

The fact checkers:

Angie Drobnic Holan:  writer, researcher
Aaron Sharockman: editor

Analysis:

The Independent Payment Advisory Board is a "death panel" as Sarah Palin originally used the term.

PolitiFact is dead set against admitting it.

It's fun to watch the contortions as PolitiFact does its usual denial in the context of the Pat Boone television ad.

PolitiFact:

Here’s part of Boone’s criticism; it focuses on the law’s Independent Payment Advisory Board, or IPAB:

"This IPAB board can ration care and deny certain Medicare treatments so Washington can fund more wasteful spending. Your choices could be limited and you may not be able to keep your own doctor. ... Washington politicians, like Bill Nelson, are ignoring the problem, putting their own re-elections first. Call Sen. Nelson. Urge him to support real Medicare reform and protect our seniors."

The ad makes several claims, but here, we’re going to specifically fact-check Boone’s claim that the IPAB "can ration care and deny certain Medicare treatments so Washington can fund more wasteful spending."

The statement PolitiFact chooses is obviously a compound claim, including the assertions that the IPAB can ration care, that it can deny certain Medicare treatments, and that some combination of the former two enable Washington to fund "more wasteful spending."  The obvious warrants mention because PolitiFact makes little effort to keep its treatment of the constituent statements distinct from one another.

PolitiFact:

Under the health care reform law, if Medicare spending growth is projected to exceed pre-set targets, the IPAB must come up with plans to slow that increase. If Congress does not act on the recommendations within a set time, IPAB’s recommendations automatically go into effect. (For a more detailed explanation of how this would work, we recommend this April 2011 report from the independent Kaiser Family Foundation.)

PolitiFact summarizes the function of the IPAB reasonably well.  The challenge comes from trying to identify IPAB recommendations that do not result in economic forces that result in the rationing of Medicare services, though there's always the option of ignoring the economic implications.

We should emphasize here that IPAB recommendations would not apply to any particular individual, but would be across-the-board policy recommendations applied to the entire program. Given Boone’s rhetoric, some people could get the wrong impression that the board would review individual patient treatments and deny care. That’s not the case.

There's nothing about Boone's statement that particularly suggests he's talking about a policy managed at the level of individual patients.  No statement is idiot proof, so PolitiFact's observation is effectively irrelevant without something straight from Boone that contributes to a misleading impression for a reasonable person.

PolitiFact (bold emphasis added):

Boone calls the members of the IPAB "15 unelected, unaccountable bureaucrats." Rather than career government workers, the law says IPAB members shall include people with national recognition for health care expertise, including "different  professionals, broad geographic representation, and a balance between urban and rural representatives." (Board members are nominated by the president and confirmed by the Senate.) On the point of accountability, we’ll just repeat that Congress retains the power to overrule any IPAB recommendations, though there are special rules in place so that the recommendations cannot be filibustered or otherwise delayed. 

Though it's a bit of a digression, it is useful to point out PolitiFact's failure to address Boone's point about a lack of accountability for the IPAB.  The IPAB is parallel to the Supreme Court in some ways.  The board members have no constituency or higher body to which they are accountable.  It is an independent board.  It says so right on the label.  It is irrelevant to the accountability of the board members that Congress has a shot to overrule its recommendations.  That is a check on its power, not a form of accountability.

The IPAB has restrictions on what it can recommend in the name of cost savings. It can’t raise rates, drop beneficiaries or ration care. Here’s the exact language from the law itself:

"The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria."

Boone says the IPAB seeks to reduce Medicare spending so the government can spend money on other "wasteful" things. But the IPAB is intended to slow Medicare spending if its growth exceeds pre-defined targets. It’s also capped on how much it can reduce spending: It can recommend measures to bring Medicare within specific cost-savings targets and no more.

1)  Given the second paragraph above along with the stipulation that the IPAB cannot recommend rationing, we again find ourselves confronted with the question of what IPAB can do to control costs--and whether those measures result in rationing after all.

2)  The third paragraph repeats the pattern noted above regarding Boone's point about accountability.  PolitiFact does not address the congressional option of wasting money saved through the implementation of IPAB recommendations.

3)  One continues to wonder what the IPAB can do to cut Medicare spending without encouraging rationing as a result.  The "pre-defined targets" are a soft cap on Medicare spending.  Capping spending directly encourages rationing of services.  If a family goes out to dinner with a cap on spending then it is price-rationing the meal.  If a dining-out IPAB finds a way to reduce the tab to bring the family's meal down within the bounds of a soft cap that is likewise a rationing force.  It's inevitable.  One can plan to stiff the server, but that route by analogy leads to yet more rationing in the health care context.

PolitiFact:

Our ruling

Boone said, "This IPAB board can ration care and deny certain Medicare treatments so Washington can fund more wasteful spending." Actually, the law specifically states that the board cannot ration care. The board doesn’t look at individual patients or deny individual treatments. Instead, it makes system-wide recommendations to rein in the future growth of Medicare spending, and it makes those recommendations within limited parameters. It also was created to stop runaway spending growth within the Medicare program itself, not to divert money to other budget items. We rate Boone’s statement Pants on Fire.

It's just crazy to render a ruling without giving a single example of a cost-cutting strategy the IPAB can recommend without some type of rationing occurring as a result.  If the IPAB can only recommend measures that lead to rationing then the ruling "Pants on Fire" cannot reasonably apply to Boone's claim.

Maybe the IPAB has tools at its disposal that will limit costs but PolitiFact simply failed to take note?

Let's look at the Kaiser Family Foundation summary of the IPAB to see if it helps answer that question.

The statute sets target growth rates for Medicare spending. The target is not a "hard cap" on Medicare spending growth, but if spending exceeds these targets, IPAB is required to submit recommendations to reduce Medicare spending by a specified percentage (discussed below).

There's the soft cap.  It's important to note that a soft cap is nothing like no cap at all.  The IPAB is charged to act any time Medicare spending exceeds the targeted goal.  The recommendations must reduce the amount of excess spending:

If projected growth for the implementation year exceeds the target, and the medical care component of the CPI-U exceeds the CPI-U, then IPAB is required to develop and submit a proposal to bring Medicare per capita growth within the target in the implementation year, subject to the applicable limits (maximum savings) on reductions described below.

Congress cannot overrule the Board's recommendations without substituting its own recommendations to meet the cost reduction goal:

Finally we get to see some examples of recommendations the IPAB might make (bold emphasis added):

IPAB is prohibited from including any recommendation that would: (1) ration health care; (2) raise revenues or increase Medicare beneficiary premiums or cost sharing; or (3) otherwise restrict benefits or modify eligibility criteria. In addition, for implementation years through 2019, mandatory proposals cannot include recommendations that would reduce payment rates for providers and suppliers of services scheduled to receive reductions under the ACA below the level of the automatic annual productivity adjustment called for under the Act.16 As a result, payments for inpatient and outpatient hospital services, inpatient rehabilitation and psychiatric facilities, long-term care hospitals, and hospices are exempt from IPAB-proposed reductions in payment rates until 2020; clinical laboratories are exempt until 2016. These exclusions leave Medicare Advantage, the Part D prescription drug program, skilled nursing facility, home health, dialysis, ambulance and ambulatory surgical center services, and durable medical equipment (DME) as the focus of attention.

The above implies that price controls on some services and medical supplies will end up the IPAB's method of choice for controlling costs.  It is widely recognized in economics that price controls--price ceilings--reduce supply.  Reducing the supply results in a rationed market for those services or goods.

Put simply, text of the health care law is incorrect when it says the IPAB cannot cut costs via rationing.

Journalistic curiosity ought to prompt hard questions on these points--especially in a fact check.  One could hazard a guess that journalistic curiosity was anesthetized by ideology.


The grades:

Angie Drobnic Holan:  F
Aaron Sharockman:  F

The first PolitiFact Bias research project will suggest that all "Pants on Fire" ratings are unfair and the result of a subjective determination by the responsible PolitiFact teams.  Pat Boone's statement was neither false nor ridiculously false in any non-subjective sense.  It was at least somewhat accurate when considered objectively.

These journalists are probably either biased in favor of health care reform roughly along the lines of the ACA or else painted into a corner on this ruling by other PolitiFact rulings that were influenced by ideology.  It's hard to explain the collected set of rulings on health care reform any other way.


Addendum:

After publishing, I ran across "The Coming Medical Ethics Crisis" over at Reason.com:

In 2010 the Patient Protection and Affordable Care Act established an Independent Payment Advisory Board (IPAB). Beginning in 2014, the 15 presidential appointees on this board will determine what therapies, procedures, tests, and medications will be covered by Medicare, using advice provided by the FCCCER. Such determinations will then be used to design the coverage packages for the non-Medicare insurance offered through the government–run exchanges. The decisions of the IPAB are not subject to Congressional oversight or judicial review.

I have not corroborated some of the information from the article.  Read it all, and consider that the source is a doctor.  Then stay on the lookout for information that confirms (or contradicts) the details and don't say nobody warned us.


Update:  Altered the title and tags to reflect the fact that the fact check was done by PolitiFact's Florida franchise.