During a US House of Representatives Budget Committee hearing on the Independent Payment Advisory Board (IPAB) Secretary Sebelius confirms that the structure of government health care programs is unsustainable.
While her comments were specific to Medicare, the system that she describes (fee-for-service) is the same system that Medicaid was built on. Medicaid has had more success moving away from fee-for-service through Managed Care Organizations, but many of the perverse incentives still exist. Secretary Sebelius asserts that the federal health care law holds the tools to inject the proper incentives into the program, and this tool is the IPAB. The IPAB is a 15 member board of appointed officials that determine the proper procedures and payments for Medicare enrollees. Free market health care advocates would disagree with her assessment of the IPAB’s capabilities. However, in this circumstance we agree on a major problem and that’s a start.