analysis of articles regarding a significant provision within the Patient Protection and Affordable Care Act

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Yet steadily winnowing the spaces in which smoking is le- gally allowed may be leading to a kind of de facto prohibition. Smoking bans imposed by states and municipalities have been ac- companied by comparable mea- sures in the private sector. Some employers and property owners prohibit smokers from congre- gating in building doorways; col- leges and universities have banned smoking on their campuses; condominiums, apartments, and other multi-unit dwellings have passed requirements for smoke- free apartments. As the historian Allan Brandt has noted, smokers may soon have nowhere left to hide. Pressed by a city council member about where he believed people should be allowed to smoke in New York City, Farley

responded, “I’m not prepared to answer that.”1

In the absence of direct health risks to others, bans on smoking in parks and beaches raise ques- tions about the acceptable limits for government to impose on con- duct. In 2008, legal scholar Robert Rabin, the former program direc- tor for the Robert Wood Johnson Foundation’s Tobacco Policy Re- search and Evaluation Program, commented, “We should not lose perspective on the question of how restrictive a society we want to create — that is, how far we want to go in reducing individual au- tonomy, including what can be perceived as self-destructive be- havior.”5 This question should be central as we pursue the critically important goal of reducing rates of smoking.

Disclosure forms provided by the authors are available with the full text of this article at NEJM.org.

From the Mailman School of Public Health, Columbia University, New York.

This article (10.1056/NEJMp1104637) was published on May 25, 2011, at NEJM.org.

1. The New York City Council. Transcript of the minutes of the Joint Committees on Health and Parks & Recreation, October 14, 2010. (http://legistar.council.nyc.gov/Legislation Detail.aspx?ID=773185&GUID=FD6CB044 -E7FC-497B-A487-7B9457D760FC&Options =&Search=.) 2. Klepeis NE, Ott WR, Switzer P. Real-time measurement of outdoor tobacco smoke particles. J Air Waste Manag Assoc 2007;57: 522-34. 3. Chapman S. Should smoking in outside public spaces be banned? No. BMJ 2008;337: a2804. 4. Bayer R, Stuber J. Tobacco control, stig- ma, and public health: rethinking the rela- tions. Am J Public Health 2006;96:47-50. 5. Rabin R. Tobacco control strategies: past efficacy and future promise. Loyola Los Angel Law Rev 2008;41:1721-68. Copyright © 2011 Massachusetts Medical Society.

The banishment of smoking from public spaces

The Independent Payment Advisory Board — Congress’s “Good Deed” Henry J. Aaron, Ph.D.

Among the most important at-tributes of legislative states- manship is self-abnegation — the willingness of legislators to ab- stain from meddling in matters they are poorly equipped to man- age. The law creating the Federal Reserve embodied that virtue. Congress recognized the abiding temptation to use monetary pol- icy for political ends and realized that it would, at times, prove irre- sistible. To save themselves from themselves, wise legislators creat- ed an organization whose fund- ing and operations were largely beyond the reach of normal leg- islative controls. Short of repeal- ing the law, Congress denied it- self the power to do more than kibitz about monetary policy.

In establishing the Indepen- dent Payment Advisory Board (IPAB) in section 3403 of the Af- fordable Care Act (ACA), Congress may once again have shown such statesmanship. For several rea- sons, however, it is too early to be sure. The board must surmount major challenges — first to sur- vive and then to function effec- tively. Harold Pollack has neatly summarized the problem, the so- lution, and the problem with that solution: “Every Democratic and Republican policy expert knows that we must reduce congressional micromanagement of Medicare policy. Unfortunately, every Demo- cratic and Republican legislator knows that mechanisms such as IPAB that might do so would

thereby constrain their own indi- vidual prerogatives.”1

Medicare’s founding legislation stated that “Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or con- trol over the practice of medi- cine.”2 Duly warned, Medicare administrators have largely for- borne from using coverage policy or financial incentives to discour- age ineffective or needlessly cost- ly methods of care. Members of the legislative branch have not, however, displayed similar re- straint. They have pressured those same administrators on coverage policies and passed laws to im- pose them.

In the view of many observers,

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both executive inactivity and leg- islative intrusiveness have been unfortunate — the former be- cause the leverage that the coun- try’s largest single buyer of health care could wield to effect reforms has gone largely unused, the latter because few members of Con- gress are well enough informed to make such decisions wisely, and some are in thrall to cam- paign contributors and producers and suppliers of medical services.

Enter section 3403 of the ACA. This lengthy and complicated pro- vision establishes the IPAB, con- sisting of 15 full-time members appointed for staggered 6-year terms, plus 3 ex officio members from the administration.3 The IPAB is charged with reporting to Congress, beginning in 2013, on ways of holding Medicare spending within legislated limits, starting with spending in the “implementation year” of 2015. For implementation years 2015 through 2019, the limits are equal to the average of actual or projected growth of the general Consumer Price Index and health care prices over 5 years centered on that implementation year — that is, over 2013 through 2017, for implementation year 2015. For implementation years start- ing with 2020, the target will be the growth rate of the per capita gross domestic product (GDP) plus 1 percentage point, again averaged over 5 years. If per cap- ita Medicare spending as project- ed by the chief actuary of the Centers for Medicare and Medic- aid Services exceeds the limit for a given year, the IPAB is required to present the President with rec- ommendations for reducing an- nual per capita spending — by 0.5% in 2015 (or less, if a small- er cut suffices to meet the limit) and by increasing amounts in

succeeding years, up to 1.5% in 2018 and beyond.

The legislation requires the President to transmit the IPAB’s recommendations to Congress promptly. It specifies a tight time- table during which Congress must consider the board’s proposals and strict rules under which the House and Senate must vote on them or come up with alterna- tives that achieve similar savings. If no legislative action is taken, the IPAB’s recommendations take effect, and the secretary of health and human services is directed to implement them. The IPAB may also propose changes in health care financing outside of Medicare, but these recommen- dations are not required to be implemented and are not cov- ered by the rules governing pres- idential transmission or Con- gressional voting. Strengthening the IPAB by authorizing it to pro- pose changes in payments by all payers under similar “fast-track” legislative procedures would in- crease the chances that it can ful- fill its advocates’ hopes.

For several reasons, it remains unclear whether the IPAB will succeed.4 The first challenge is political: Can the agency survive and, if so, in what form? Senior administration officials touted the IPAB as one of the most impor- tant provisions in the ACA. Presi- dent Barack Obama, in his plan for deficit reduction, proposed even stricter targets for spending reduction than those contained in the ACA and stronger, but un- specified, powers for the IPAB. The President’s budget commis- sion also proposed strengthening the board’s powers. Still, Con- gressional calls for repealing or weakening the IPAB are legion.5 The board, critics allege, would impose price controls or supplant

Congressional legislative preroga- tives. Many physicians’ groups seek at least to put physician fees off-limits.

Second, although the IPAB’s targets for slowing spending growth are specific and the pro- cedures for consideration of its recommendations are detailed, the actual changes that it may rec- ommend are circumscribed and the resources at its disposal for preparing those recommendations are modest. The IPAB may make no recommendations that would result in “rationing” health care (a term that the law does not de- fine); raising revenues, premiums, or cost sharing; limiting bene- fits or changing eligibility stan- dards; or reducing payments to acute care or long-term care hos- pitals or to hospices before 2020 or payments to clinical laborato- ries before 2016. Any legislative “fix” for the sustainable-growth- rate (SGR) formula used to calcu- late Medicare’s physician payments would probably put physicians’ fees off-limits, as well. As Ebeler et al. point out, these limits mean that through 2020, savings would have to be found in private Medi- care Advantage plans, Medicare’s Part D prescription-drug program, or spending on skilled-nursing fa- cilities, home-based health care, dialysis, durable medical equip- ment, ambulance services, and services of ambulatory surgical centers.3

Third, whether the IPAB will have sufficient resources to carry out its responsibilities is unclear. The board’s chair will have to run the now-infamous Senate confirmation gantlet and, once in office, will face formidable political and administrative chal- lenges. All appointed IPAB mem- bers must commit to serving 6-year terms at modest pay and

The IPAB — Congress’s “Good Deed”

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may not simultaneously have out- side employment — conditions that will make it difficult to re- cruit senior professionals. Staff- ing will also be hampered by a tight agency budget and restric- tive salary limits.

Despite these impediments, the survival and strengthening of the IPAB is of critical importance. Critics allege that the ACA doesn’t do enough to control the growth of health care spending. That criticism is unjustified. In enact- ing the ACA, Congress created a broad and potentially powerful portfolio of cost-control instru- ments, containing virtually every method that analysts have ad- vanced for slowing growth of spending in a rational fashion — accountable care organizations, comparative-effectiveness analy- sis, bundled payments, value-

based insurance design, limits on the exclusion of employer-financed premiums from personal income tax, and health insurance ex- changes to promote competition among insurance plans.

Over time, we will learn which of these instruments work best and how to implement them. Once we have done so, the IPAB can mobilize the power of the country’s largest health care buyer to effect health system change. Were Congress to succumb to calls to weaken or kill the IPAB now — to paraphrase Talley- rand’s famous comment on the execution of the Duc d’Enghein by Napoleon — it would be worse than a crime; it would be a blunder.

Disclosure forms provided by the author are available with the full text of this arti- cle at NEJM.org.

From the Brookings Institution, Washing- ton, DC.

This article (10.1056/NEJMp1105144) was published on May 11, 2011, at NEJM.org.

1. Pollack H. The real problem with the In- dependent Payment Advisory Board. The American Prospect. April 23, 2011. (http:// prospect.org/csnc/blogs/tapped_archive? month=04&year=2011&base_name=the_ real_problem_with_the_inde.) 2. Social Security Act amendments of 1965, P.L. 89-97, sec. 1801. 3. Ebeler J, Neuman T, Cubanski J. The Inde- pendent Payment Advisory Board: a new ap- proach to controlling Medicare spending. Kaiser Family Foundation Program on Medi- care Policy, April 2011. (http://www.kff.org/ medicare/8150.cfm?RenderForPrint=1.) 4. Jost TS. The Independent Payment Advi- sory Board: prepared for the FRESH-Think- ing 2.0 Medicare workshop, May 3-4, 2010. (http://www.fresh-thinking.org/publications/ IPAB_Jost.pdf.) 5. Pear R. Obama panel to curb Medicare finds foes in both parties. New York Times. April 19, 2011. (http://nytimes.com/2011/04/ 20/us/politics/20health.html.) Copyright © 2011 Massachusetts Medical Society.

The IPAB — Congress’s “Good Deed”

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