Failure to Launch: The Institutional Defects of the Independent Payment Advisory Board

Abstract

Created as part of the Affordable Care Act, the Independent Payment Advisory Board (IPAB) is charged with saving money for the Medicare system. To that end, IPAB was set apart from the political process, which has for decades proved itself unable to control Medicare costs. Yet no members have been appointed to IPAB as of fall 2017, and a broad coalition in Congress supports its elimination. This paper develops a theoretical framework to explain this phenomenon. At first glance, IPAB appears to employ a typical congressional strategy of delegation to solve the kind of collective action problem that frequently stymies legislative action. However, IPAB does not in fact solve that problem, because the same incentives that keep members of Congress from reforming Medicare also incentivize them not to appoint members to IPAB. Moreover, IPAB privileges liberal cost-control measures over conservative approaches, thus creating another incentive for Republicans to oppose it.