OP-ED

Why Obama Made the Right Call on Berwick

The recess appointment of Don Berwick to lead CMS can be seen as a cynical act of political opportunism, sidestepping the Congressional approval process using a tactic worthy of Machiavelli, or Karl Rove. Or it can be viewed as a pragmatic decision by Obama to avoid a lengthy and exasperating re-litigation of the healthcare reform debate.

Death Panels. Been there, done that. So I’m going with Choice #2.

The right side of the blogosphere has erupted, painting Berwick as an effete academic who would have withered under the Klieg lights and piercing questions of the likes of John Ensign and Jim Bunning. Those of us who know Don have no doubt that he would have more than held his own in debating the lessons of England’s healthcare system and the necessity of clear-headed rationing choices. Don is serious, hyper-articulate and intellectually nimble; in a real debate with members of the Senate Finance Committee, all my money would have been on him.

But the Berwick “situation”, like they say on Jersey Shore, demonstrates a larger challenge. In the old days, when Medicare was a dumb payer of invoices, its chief could be a bureaucratic functionary, charged only with making the trains run on time. But today we need the Centers for Medicare & Medicaid Services (CMS) to be so much more: promoting new and innovative care (medical homes, accountable care organizations, healthcare IT) and payment (bundling, pay for performance, “no pay for errors”) models, extracting waste and fraud from the system, facilitating new levels of transparency (by healthcare organizations, hospitals, and individual doctors), catalyzing new ways of training future doctors (Medicare funds most of the nation’s residency training slots); the list goes on. In fact, the healthcare reform bill grants CMSextraordinary new powers to develop and implement these ideas.

In that context, CMS’s head honcho now needs to be someone with a point of view, passion, and a backbone. Although I guess there might be a healthcare version of Elena Kagan – a brilliant, charismatic leader who manages to come with a scanty written and oral footprint to be dissected and distorted – it seems unlikely that a healthcare figure with the Right Stuff won’t have a voluminous record that gives evidence that the person, at times, has done battle with the status quo. I certainly hope so.

So we’re stuck: The very things that make Berwick right for the CMS role also make him a target in today’s political environment, where all serious debate is trivialized and caricatured via talking points and schoolyard name calling. (This week’s na na na na na was calling Berwick “Rationer-in-Chief.” One can hardly resist a comeback like, “And so’s your mother.”) In such an environment, the ends do justify the means. In making this recess appointment, Obama did not bypass a substantive airing of Berwick’s qualifications to run the most important healthcare organization in the country. Rather, he avoided a sandbox brawl. As Jonathan Cohn wrote in the New Republic,

For the record, a serious conversation about Berwick’s qualifications and plans would have been worthwhile. I’ve heard even people sympathetic to Berwick question whether his administrative experience is adequate. But, again, it’s hard to have a serious conversation when one of the two political parties refuses to be serious.

The Dems were well within their rights to use the recess appointment mechanism (as the Bushies did hundreds of times in their day), just as they were to use the reconciliation mechanism to pass the healthcare reform bill. Of course, the GOP is now completely free to paint the Berwick appointment as unacceptably anti-democratic. Who’s right? Who cares? The voters will ultimately decide.

But while we’re mulling it over, CMS will have its first permanent boss since 2006, and we’ll have healthcare’s most innovative and influential leader at the center of the action, when the need to improve the quality, safety, and efficiency of care has never been more pressing. I look forward to seeing how Don tackles these challenges – I think he’ll be terrific.

I’d be lying if I didn’t admit that – as a healthcare political junkie – I’ll miss watching the Senate hearings. But I’ll try to catch a little World Wide Wrestling tonight on the tube. That should give me my fix.

Robert Wachter, MD, is widely regarded as a leading figure in the modern patient safety movement. Together with Dr. Lee Goldman, he coined the term “hospitalist” in an influential 1996 essay in The New England Journal of Medicine. His most recent book, Understanding Patient Safety, (McGraw-Hill, 2008) examines the factors that have contributed to what is often described as “an epidemic” facing American hospitals. His posts appear semi-regularly on THCB and on his own blog “Wachter’s World.”

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Nate
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Nate

not sure how they develope the rates they report. something i do need to read up on some day

ddaveve
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ddaveve

Nate- crunch numbers all you want- it wont really matter. Pain is the most common reason people seek health care- and it costs the country 300 billion/year. Few physicians are required to have any education in pain care and according to Dr Landis – a member of the pain consortium treatments for pain are “woefully inadequate” So what difference does it make how jhospitals save money or bill when doctors are incapable of successfully treating the most common reason people seek medical care pain.

Barry Carol
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Barry Carol

“I’m looking at a bill we audited a few months back. Billed charges were $282,260.85. After reducing to cost plus we allowed $93,421.52. $188,839.33 was denied as excessive.” So, if this was a case where you paid the hospital 125% of costs, it implies that their costs were $74,737.22. If they were paid their full billed charges of $282,260.85, their profit margin would have been 73.5% which, presumably, is what they would expect to collect from people without insurance but with significant assets. It’s outrageous on its face. Hospital billing practices need a lot more focus and attention, in my… Read more »

Nate
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Nate

when hospital’s bill everything goes back to a department or revenue code. The UB92 has general master categories. If you get the bill itemized every single service and supply is broken out on its own line. A big bill can have hundreds if not more lines. Our audit partners go line by line, review each one and cross reference it to the hospitals cost to perform/deliver as they report to the government. They then tally up what it supposedly cost the hospital to provide the services they did. I’m looking at a bill we audited a few months back. Billed… Read more »

Barry Carol
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Barry Carol

“When we audit bills now we request bills itemized by revenue code.”
Nate – I don’t understand what this means. Could you provide some more color and, perhaps, a specific example? Thanks.

Nate
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Nate

sadly we don’t get to choose our generators, unless you buy a hampster and wheel yourself, and NV is seeing huge growth so capital projects are a recurring cost.
wonder how many hampster it would take to power a house?

Barry Carol
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Barry Carol

Nate, Allowable costs would include the cost of capital within the 125% that you referred to but I would add the following comments. First, the notion of “prudently incurred costs” does not mean a hospital should feel confident that its payment rates will reflect wildly extravagant construction costs. If a community hospital, for example, doubles its size for $1,000 per square foot when everyone else in the region is building comparable space (when needed) for $500-$600, the excess construction costs should be disallowed unless it can be shown to be unique or highly specialized in some way. If higher cost… Read more »

Nate
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Nate

There aren’t enough nuns in the world for the system you dream of

ddaveve
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ddaveve

Your comments only prove the system is intent on continuing its self maximizing behavior. Its a psychopathic system which hurts the rest of society. Lets get to the cause and not the symptoms. Lets train health care industry to be more human compassionate and other regarding-only then will we have a better system that is more focused on the good of the public

Nate
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Nate

when you say recover the cost of capital would allow for that in the calculating of cost or expect that be paid from their 25%? I would love to see Paul’s take on that. I have a very good friend who works for the local power company. Never ever ever would I duplicate the utility system of cost plus on capital projects. They undertake capital projects just so they can get their 10%. Those capital projects they do undertake are the most inefficient boondoggles imaginable becuase it drives their profit. Why do something for 50 million when you can turn… Read more »

Barry Carol
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Barry Carol

“I don’t like doing it this way but it would be very easy to accomplish by saying any hospital receiving federal funds can’t bill more then 125% of their cost.” Nate, I like this idea conceptually. However, I recall Paul Levy, CEO of BIDMC in Boston, commenting that while his hospital can quantify exactly what it cost to provide every service it offers, the need to allocate indirect and joint costs to various departments requires a degree of subjectivity and judgment. Unfortunately, every institution tackles this issue somewhat differently. He noted that when he was a regulator of utilities, the… Read more »

daveve
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daveve

More pilpul for the sake of pilpul. Whoever you put their- including Berwick will engage in self-maximizing feudalistic behavior and minimize the voice of the people health care is supposed to serve- and this is the tragic flaw in the system. As Einstein indicated you cant solve problems with the same consciousness that created it. The experts like Berwick will serve the expert class and continue the dominium over non-experts- and so the tragic anti-pattern in health care will continue-rearranging the deck chairs on the Titanic wont solve the problem.

Margalit Gur-Arie
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If you were a social business trying to cut your costs, you would have another constraint – no off-loading of expenses to beneficiaries. That would make it much tougher to solve the problem, but still possible. The only suggestions that make sense from that point of view are #3 and #5, albeit somewhat modified. For #3, no balance billing should be allowed. Patients should not find themselves having to fight hospitals in court. This translates into the Maryland solution, give or take a little. For #5, there should be no need to have people dying just to maintain hospital incomes… Read more »

Nate
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Nate

“How will your free market principles deal with that? (I really want to know; not just being sarcastic.)” You sure your not being sarcastic? That was a very sarcastic font you typed that in. Since you stood up to Matt on my behalf I’ll give you the benefit of the doubt. Speaking of which first LeBron then Matt, talk about a bad day and getting piled on. If only I had a free market, (various ideas for discussion, not necessarly in favor of all of them); 1. Reimburse hospital services at HP levels and make member responsible for the difference.… Read more »

bev M.D.
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bev M.D.

Nate; The issue with Partners (I assume you know they are Mass General + Brigham and Womens’) is that they ARE ” a company run[‘s] efficently to make a profit and compete I understand that, I can see the goal and the outcome.” All agree that they have executed that business model very well – by buying up suburban hospitals and arm-twisting the insurance companies into 2x larger reimbursements for the same care due to their market share. (No one knows if their care quality is higher, lower or the same as others, b/c they don’t release any data.At least… Read more »