Addressing the growth of Medicare spending is a challenging dilemma. On one hand, Medicare is extremely popular and effective; on the other, Medicare spending growth threatens the program’s continued ability to fulfill its mission.
Medicare spending is driven primarily by excess cost growth throughout the health system, which also is putting pressure on state and local governments, businesses, and households. Therefore, treating it only as a Medicare issue can lead to inappropriate policies that will fail to address the problem.
The Independent Payment Advisory Board (IPAB) can serve as a useful vehicle to address these issues, by focusing attention on a broader consideration of policy imperatives. This will require a broader view of the role of IPAB and collaboration across the executive and legislative branches, and also with state and local governments, providers, patients, and private sector payers and purchasers. The emphasis should be on:
- total health care costs, rather than only federal spending;
- enhancing access and quality;
- being sensitive to distributional impacts;
- emphasizing the need to improve performance; and
- establishing coherence and alignment of incentives across the entire health system.
Read the complete testimony.