Mr. Quality Goes to Washington - Pharmaceutical Executive


Mr. Quality Goes to Washington
Don Berwick, whose pioneering ideas about quality and safety are all over the healthcare reform bill, was just tapped by President Obama to head the Centers for Medicare and Medicaid Services. His mission is to translate the new law he helped inspire into practice. But with Republicans, industry lobbyists, and his own bureaucracy so invested in the status quo, what are Berwick’s odds for success?

Pharmaceutical Executive

Plainspeaking and Provocation

Berwick's advocacy has been nothing if not outspoken. He has shown an admirable mettle in speaking plainly about the inefficiencies and inequities of the healthcare system. And as the crisis has accelerated, his willingness to counter the rhetoric of adherents of the status quo has only grown more pointed. A speech he delivered in London in 2008 was so deliberately provocative that it now reads like a parody.

"I am romantic about the National Health Service," Berwick said, praising the British single-payer system as "a global treasure." Among its virtues is that "you cap your healthcare budget." He added, "Please don't put your faith in market forces. In the United States, competition is a major reason for our duplicative, supply-driven, fragmented care system."

On the day of Berwick's appointment in April, Senate Minority Leader Mitch McConnell and other Republicans took to the House floor to rail against him. "Many of us are alarmed by the nominee's focus on the British healthcare system," McConnell said, slamming Berwick for "applauding a system where care is denied, delayed, or rationed." Anti-reform zealots from The Wall Street Journal's editorial page to an army of bloggers have followed suit, only identifying Britain's NICE by its negatives—never mentioning the fact that it provides Brits with universal healthcare at a per-patient cost almost 50 percent less than in the US.

Berwick clearly favors taking the battle to the enemy. It remains to be seen whether he will continue to provoke from his new pulpit—and, if so, whether his plainspeak will prove persuasive. "A lot of people make a lot of money on inefficiency—on production of things that have no value," Berwick told Health Affairs. "So the minute you try to become truly efficient, you're going to run into stakeholders who are going to tell you that you're harming care, and the knee-jerk reactions of doctors and others will be to reinforce that idea ... [Efficiency] will not come out of the supplier sector ... It will have to come out of very demanding purchasers."

Big Government or Free Market Reform?

The healthcare reform legislation got not a single Republican vote in the Senate. The right's argument is that the healthcare industry operates like any other market, with competition for consumer choice forcing price down and performance up. Certain aspects of the machine may work like that, but the usual link between cost and benefit is generally obscured from the consumer through physician decision-making and third-party payment. Value remains unpredictable at point of purchase.

Berwick maintains that commercial incentives and competition have mainly contributed to the crisis of escalating costs. "We simply have a toxic dynamic in healthcare, that if you make something it will be used. No other market works that way. We have to target supply-driven care as a matter of public policy," he said in the Health Affairs interview. He says that the goal of reform is in fact to make healthcare function like other markets, with demand rather than supply the driver, and to rid the system of wasteful inefficiencies—goals that would seem to appeal to conservatives who are not simply pro-business.

The imperative to realign the system's incentives through performance-based delivery and payment may have new urgency, but it is not new for CMS. Nor is it a partisan issue. The trend dates back at least to 1984, when the Reagan administration introduced diagnosis-related group payment. Then-CMS head Tom Scully instituted pay-for-performance reimbursement for nursing homes and hospitals in 2002. "There's agreement across the political spectrum that the private sector has failed to control costs," says Scully. "That's not exactly a radical notion." Yet pay-for-performance can breed its own waste and dangers, like doctors' cherry-picking patients for best outcomes. Similarly, cost-effectiveness drug pricing can produce its own wasteful overprescribing.


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