Medicare head pushes health care test sites

Bay State’s Berwick off to a fast start

By Christopher Rowland
Globe Staff / September 6, 2010

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WASHINGTON — Newly installed Medicare chief Donald Berwick, keeping a low public profile after encountering controversy over his appointment, is moving quickly behind the scenes to seed the US health care system with 100 to 300 sites to test new models of caring for patients.

Since July 6, when President Obama bypassed the Senate confirmation process and named Berwick with a recess appointment, the Cambridge health guru and former Harvard professor has made launching the sites a high priority, according to officials and industry executives.

Already, health care lobbyists are seeking to influence how Medicare will decide which physician groups and hospitals to include in the first wave of pilots. Providers from Massachusetts are expected to be among groups from across the country vying for designation as “accountable care organizations’’ under the program.

Berwick is using a tool that Congress included in the new health care law: an innovation center with $10 billion to spend over the next decade in a quest for the best ways of improving care and reducing costs.

The launch of the test sites by the end of 2011 is just a first step in changing the fundamental ways the government pays physicians and hospitals. Over 10 years, the innovation center’s work is expected to save $1.3 billion on the $500 billion annual budget of the Centers for Medicare and Medicaid Services, the sprawling federal insurance bureaucracy Berwick now leads. Health care policy advocates had sought far more aggressive cost-control measures.

But Medicare officials and advocates still expect that the center will help the government begin to phase out wasteful “fee-for-service’’ health insurance and increase the use of “global payments.’’

Under global payments, physicians are paid flat fees for coordinating care for populations of patients, with built-in financial incentives for keeping them healthy and reducing hospital stays.

In Massachusetts, private insurers such as Blue Cross and Blue Shield have begun expanding the use of global payments for the care of diabetes, high-blood pressure, and cardiovascular disease. Bay State political leaders, seeking ways to control costs in the Commonwealth’s pioneering health care initiative, are considering whether to expand the adoption of such systems.

“Among the lessons of Massachusetts is that you can’t sustain coverage reform without taking big steps on affordability,’’ said Andrew Dreyfus, chief executive of Blue Cross and Blue Shield of Massachusetts. “No one understands that better than Don.’’

Berwick, widely hailed in health policy circles, faces multiple political and administrative challenges in Washington. Most immediately, he has come under heavy fire by Capitol Hill Republicans, who were denied the chance to use his confirmation hearings as a proxy fight to skewer the Democrats’ health care law.

Unless he can win over some GOP senators, who voted uniformly against the health care law, Berwick won’t be able to win a 60-vote confirmation in the Senate and will be forced to leave office when his recess appointment expires at the end of 2011.

Berwick has declined media interview requests and has kept a low public profile, except for a few tightly controlled appearances. But in a web video produced by the Department of Health and Human Services public affairs staff, he says of his new job: “I love it. This agency has just won my heart.’’

Aside from touring offices and meeting employees in his new domain, officials say, Berwick is quickly kicking off elements of the health care law, which is so complex most Americans have little understanding how it will work. The biggest change in the law is the requirement that nearly all Americans purchase health insurance, beginning in 2014. Before then myriad elements must be put into place.

Berwick must reduce the extra money the government pays to private insurance companies for sponsoring Medicare Advantage programs, which are essentially HMOs. He must grapple with a huge expansion of Medicaid programs in individual states. He must determine how the agency will reward hospitals with low rates of patient readmissions and penalize hospitals with the highest rates of hospital-acquired conditions such as infections and bedsores.

Dozens of smaller initiatives, too, require his attention. For example, he recently announced that Medicare will cover smoking cessation programs. (States, which operate Medicaid in partnership with the federal government, cover smoking cessation under Medicaid to varying degrees.)

Politically, Berwick must reach out to members of Congress in a bid for support, say observers.

“You can have all the authority in the law, but if you don’t have support in Congress, you are going to have trouble with your funding, you are going to have trouble with the way you are treated at hearings,’’ said a Berwick supporter, James Roosevelt Jr., chief executive of the Tufts Health Plan, the third-largest insurance company in Massachusetts.

Senate Finance Committee chairman Max Baucus, Democrat of Montana, has said he expects Berwick will appear before the committee to discuss the agency’s operations, but nothing has been scheduled. Baucus did not respond to questions. The White House also did not respond to a request for comment.

With a swoop of silver hair, round glasses, and an unpretentious bearing, Berwick, a pediatrician by training, seems an unlikely target for controversy.

He has won accolades for his efforts to promote efficiency and reduce medical errors as head of the Institute for Healthcare Improvement, based in Cambridge. Yet he has an intellectual’s penchant for metaphor that has sometimes gotten him into trouble.

Whether it was intentional or not, the web video comment that Medicare has “won my heart’’ echoes remarks he delivered about England’s single-payer medical system, words that Republicans have used to paint him as an advocate of health care rationing:

“I am romantic about the NHS,’’ Berwick said in the 2008 speech marking the 60th anniversary of England’s National Health Service. “I love it.’’

His defenders, including the White House, have said the words were taken out of context for political purposes.

In a related development, Berwick rebuffed a request for a list of Institute for Healthcare Improvement’s large financial donors from Iowa Senator Chuck Grassley, the ranking Senate Finance Committee Republican. Grassley said the lack of a public confirmation hearing has prevented the public from learning of Berwick’s potential conflicts of interest.

Berwick responded in a letter to Grassley that he does not have authority to release information about the institute’s finances because he no longer works there.

Health lobbyists and executives said Berwick brings vision to the government’s sprawling health care programs.

“The thing that is most encouraging is that Don Berwick will bring some fresh perspective, novel thinking, and innovation to an agency that really needs that creativity,’’ said Blair Childs, vice president of public affairs for Premier Inc., an advocacy and purchasing alliance operated by 200 nonprofit healthcare systems in the United States.

“Don Berwick has a history of being an innovator, and CMS does not have a history of being innovative — in fact it’s the opposite.’’

The innovation center has about 150 employees around the country and will double in size over the next year and a half, said Anthony Rogers, director of the center. Many of its employees will be closely working with local physician groups, experimenting with ways to measure quality and patient outcomes, Rogers said.

The work will dovetail with the installation of new technology under a $44 billion electronic records initiative under the 2009 economic stimulus package. Rogers said Berwick is very engaged in the details of the center’s operation.

“It’s his vision, his energy that we are feeding off of,’’ he said.