President Obama's decision to bypass Senate confirmation hearing for Donald Berwick's nomination as director of the Center for Medicare and Medicaid Services has less to do with Berwick's romance with Britain's healthcare system (first reported here) and support of rationing. The President's other nominees handled questions about controversial statements with aplomb. No doubt Berwick, a charming man and gifted speaker, would have done the same.
Rather, the White House wants to avoid hearings for the following reasons, starting with his tenure as president and CEO of the nonprofit Institute of Healthcare Improvement (IHI):
1. For several years Berwick's annual compensation at IHI averaged about $600,000. In 2008 his compensation jumped to $2.36 million while compensation for IHI's executive vice president went from $520,000 to $1.25 million. Other senior executives received increases of similar magnitude. Yet in 2008, IHI revenues fell by $7 million and ran a deficit of approximately $616,000. According to IHI, this additional amount reflects the vesting of additional compensation necessary to maintain the talented team required to accomplish its mission of improving healthcare. By comparison the CEO of PartnersHealth, Massachusetts' biggest HMO with revenues of $6.4 billion, made $2.6 million in 2008. According to Berwick, in America "each seeks to increase his share of the pie, at the expense of others." Guess that applies to a nonprofits too, even if it means losing money.
2. At the same time, IHI receives nearly $ 2 million a year in federal grants. These grants appear to be awarded by the Department of Health and Human Services. Will Berwick recuse himself from grant-making decisions pertaining to IHI?
3. More troubling is the complex web of contracts, consultants, and grants that comprise IHI. The Institute receives about $40 million each year from a combination of grants, fees and consulting contracts from managed care companies, major academic medical centers, hospitals and health care foundations. Many of these organizations such as Kaiser Permanente, Blue Cross Blue Shield, and the Josiah Macy Foundation are already participating or seeking to influence boards and panels established by Obamacare to cut Medicare spending, ration new technologies, and only pay doctors when they meet the government's definition of quality care.
Berwick has not only worked with these organizations, he has taken their money and funded projects of mutual interest, particularly those designed to reduce how much medical care patients use when they are critically ill.
All this may be to the good, but questions remain about the value of the IHI work product. These same organizations funded IHI's "100,000 Lives Campaign" a program to reduce deaths in hospitals from preventable heart attacks, infections and adverse drug reactions by "deploying rapid response teams at the first sign of patient decline." Berwick claimed the campaign saved 122,300 lives between 2004-2006.
Yet the estimate of lives saved was controversial. IHI took data from 33,000 patients and "adjusted" the number to arrive at 122,300. Robert Wachter, MD, a leading health quality researcher, noted: the difference between the unadjusted and adjusted number of "'lives saved' reflects a change in patient severity of illness and case mix during a short period of time that would be unprecedented in health services research…. An adjustment resulting in 89,000 additional saved lives continues to strain credibility."
Finally, Berwick works closely with the Dartmouth Institute and the Foundation for Informed Medical Decisionmaking (FIMD). Why is this relevant? As CMS administrator, he will be developing guidelines for and spending millions of dollars on "Shared Decision-making Resource Centers." The Disease Management Care Blog points out:
Google the term "Shared Decision Making" and guess what comes up: Dartmouth's Hitchcock Center for Shared Medical Decisionmaking, which was founded by a grant from the FIMD and Health Dialog [a private company formed out of the Dartmouth Institute], which was built "in collaboration" with the same Foundation to sell programs that reduce the variation described in the Dartmouth Institute and in the Dartmouth Atlas….
Care to guess which institution(s) will be weighing in on the creation of federal standards on shared decision making, helping to promote their use and helping with the Centers?
Berwick calls the institute's Dartmouth Atlas, showing regional variations in Medicare spending, "the most important health-service research of this century." He invokes Dartmouth data when claiming half of health care spending in America could be cut without harming people, an assertion that is now largely discredited. Yet Berwick thinks shared decision-making, because it discourages about 15 percent of people from seeking additional care, should be mandatory. And now he is in a position to directly fund his friends and fondest dreams.
If a Republican president nominated a managed care executive to run CMS and rammed him through in a recess appointment, allegations about conflicts of interests would abound. Berwick made millions working with for-profit firms that will make money off Obamacare. But because he believes in central planning he gets a recess appointment. That's why elections, including the upcoming mid-term elections, matter.