#262: Alas, Don Berwick

#262: Alas, Don Berwick
March 7, 2011

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

Alas, poor Don Berwick, beset on all sides. Who will come to his aid in a time of need? Not, it appears, the Senate Democrats.

Last week, 42 Senate Republicans wrote a letter to President Barack Obama requesting the withdrawal of Berwick’s renomination to remain head of the Centers for Medicare & Medicaid Services. A recess appointee last year who never had a Congressional hearing prior to taking on his role, Berwick has been under fire constantly--in part fueled by video footage first unearthed by The Heartland Institute of Berwick praising the British health system (for which he was a consultant), in part by his past quotes, which are very blunt about his views on government rationing and a host of controversial subjects.

Now comes the news via Politico that this letter may have hit its mark: Sources: Democrats giving up on Donald Berwick.

Senate Democrats have given up on confirming Don Berwick as CMS administrator in the wake of a letter from 42 Republican senators opposing the nomination, sources tell POLITICO.

Citing the GOP letter, a person familiar with the situation said Senate Democrats and the White House “can do the arithmetic” and now see that there’s no way for Berwick to get the 60 votes needed to clear the Senate.

At a meeting with health care lobbyists Friday, Democratic Senate Finance Committee staffers indicated that the nomination is dead, that there will be no confirmation hearing, and that they’ll soon be discussing “next steps” for CMS, sources said.

A correction is in order, however, regarding one line in the Politico piece, which states that “If he is not confirmed by the Senate, Berwick will have to leave by the end of 2011.” In reality, Berwick could stay on as acting administrator if he were once again a recess appointee--he just could not be paid for the position, thanks to a 2009 Omnibus Appropriations law. For already well-off true believers, this may not be a powerful disincentive--but the fact that Finance Committee Chairman Max Baucus has thus far declined to announce any hearings regarding the renomination should be taken as a sign that his tenure is likely to be very brief.

On the whole, the Berwick era’s brevity can in retrospect serve as a sign of the White House’s attempts to adjust to the unexpected pushback from the American people on its health care policies. Berwick was nominated in April of last year, immediately in the wake of the health care law’s passage, and still at a point where the president and his allies apparently believed that as people came to understand the law, they would like it more. Installing someone with Berwick’s ideological persuasion--more philosopher than pragmatic manager, he has nothing in terms of past experience running an organization of the size or scope of CMS--was a clear sign that the administration intended to take this newly enshrined power and use it.

Yet elections, as they sometimes do, intervened. There was little stomach for the political fight on the part of Senate Democrats during Berwick’s first nomination, and there is none today. Bureaucrats sense defeat, in this case as in others--and on the whole, it is unlikely that the next few months will allow Berwick to be anything more than a lame duck administrator.

The irony, of course, is that had Berwick gone through the normal nomination process at the time, the political hit against his views would’ve happened, yes--but he also would be able to act, to have an impact at CMS that went beyond roughly a calendar year. Instead, today there is apparently no one interested in standing up on the Senate floor to defend Berwick’s views.

As it has proven in so many areas, this White House’s hubris is once again their undoing.

-- Benjamin Domenech


IN THIS ISSUE:


WHY MEDICAID IS A HUMANITARIAN CATASTROPHE

Over at the spiffily True/Slant-redesigned Forbes, Avik Roy’s excellent update on the humanitarian catastrophe that is Medicaid is a sad read, in many respects. But the roundup of academic papers needs to be read to grasp the true depth of this failure of government and policy. An excerpt from the opening:

Last July, I wrote about a landmark study conducted at the University of Virginia that found that surgical patients on Medicaid are 13 percent more likely to die than those without insurance of any kind. The study evaluated 893,658 major surgical operations from around the country from 2003 to 2007, and normalized the results for age, gender, income, geographic region, operation, and 30 background diseases.

Despite all of these adjustments, surgical patients on Medicaid were nearly twice as likely to die before leaving the hospital than those with private insurance.

Patients on Medicare were 45% more likely to die than those with private insurance; the uninsured were 74% more likely; and Medicaid patients 93% more likely. That is to say, despite the fact that we will soon spend more than $500 billion a year on Medicaid, Medicaid beneficiaries, on average, fared worse than those with no insurance at all.

This is, simply put, the greatest scandal in America. Bigger than Madoff, bigger than the Wall Street bailout, bigger even than the plight of the uninsured.

Roy has further notes here.

SOURCE: Forbes


HOW STATES CAN SURVIVE THE MEDICAID CRISIS

Brian Blase of The Heritage Foundation provides a useful guide to a number of steps state officials ought to consider in order to reduce the burden of Medicaid’s finances.

Increase enrollee cost-sharing. Overutilization of medical services is a serious budgetary concern at all levels of government. Cost-sharing would give program recipients some “skin in the game” and exert downward pressure on program spending. Cost-sharing should increase when program beneficiaries utilize expensive care settings, such as the emergency room, for non-emergency care needs.

Sliding scale for premiums. Premiums for Medicaid should be based on a sliding scale so that households with greater amounts of income pay a greater portion of the premium. The availability of funds is limited, and the sliding scale would provide greater funds to those who need them more. At the same time, the sliding scale would reduce both the perverse incentives that discourage upward mobility and the crowd-out of employer-sponsored insurance for individuals at the top of the eligibility thresholds.

Manage program eligibility. Within federal guidelines, states should limit program eligibility to what is affordable to taxpayers. Eligibility should include a strong income and asset test that is reviewed several times a year to ensure the temporary nature of the safety net program. States might also wish to tighten retroactive eligibility.

I’d add that Rahm Emanuel’s intonations about the foolishness of wasting a crisis apply here: The current upward slope of Medicaid costs has to be considered as the basis for real reform, not just nibbling at the edges. Obama’s health care law only accelerated the problem.

SOURCE: The Heritage Foundation


THE LONG-TERM IMPACT OF MEDICARE PAYMENT REDUCTIONS ON PATIENT OUTCOMES

Vivian Wu and Yu-Chu Shen have a new study based on their research into the impact of Medicare payment reductions. The key trendline here: Cuts in payments have a measurable effect on mortality rates in hospitals.

This study examines the long term impact of Medicare payment reductions on patient outcomes using a natural experiment – the Balance Budget Act (BBA) of 1997. We use predicted Medicare revenue changes due to BBA, with simulated BBA payment cuts as an instrument, to categorize hospitals by degrees of payment cuts (small, moderate, or large), and follow Medicare patient outcomes in these hospitals over a 11 year panel: 1995-1997 pre-BBA, 1998-2000 initial years of BBA, and 2001-2005 post-BBA years. We find that Medicare AMI mortality trends stay similar across hospitals when comparing between pre-BBA and initial-BBA periods. However, the effect became measurable in 2001-2005: hospitals facing large payment cuts saw increased mortality rates relative to that of hospitals facing small cuts in the post-BBA period (2001-2005) after controlling for their pre-BBA trends. We find support that part of the worsening AMI patient outcomes in the large-cut hospitals is explained by reductions in staffing level and operating cost following the payment cuts, and that in-hospital mortality is not affected partly due to patients being discharged earlier (shorter length-of-stay).

SOURCE: The National Bureau of Economic Research


THE PROBLEMS WITH COMPARATIVE EFFECTIVENESS RESEARCH

Writing at the Washington Examiner, I note that the use of comparative effectiveness research sounds good from the perspective of the politician and the taxpayer--but that ultimately it will inevitably result in the elevation of the government’s role in the doctor’s office.

This brings us to the principled reason why those who favor small government should oppose CER, which functions as a mandate to doctors: Government shouldn’t be in the business of deciding these questions. Even if we had the data, the decision power should not rest in the hands of what is becoming a government monopoly on health insurance, which does not provide real freedom to doctors and patients to come to any alternate decisions for those who live on the edges of the bell curve.

Advocates of CER often say their goal is to find and encourage what is best for patients, and certainly CER can be used in this way. But when the data gathered is used by government agencies to lower spending – such as by favoring older, cheaper drugs over newer, more expensive ones, as has been the case in Britain – the priority becomes the financial bottom line, not the best interests of the patient.

I understand that more research is being done along these lines by colleagues, and I’ll be interested in further studies as to the actual outcomes. I’d also encourage you to read Tomas Philipson’s study on how the market responds to CER.

SOURCE: Washington Examiner


NUMBER OF HEALTH CARE REFORM LAW WAIVERS CLIMBS ABOVE 1,000

While most of the waivers in question concern mini-med plans that offer extremely limited annual coverage, the sheer size and scope of the waivers granted by HHS is incredibly high--and now it has crossed the threshold into four digits.

The number of temporary healthcare reform waivers granted by the Obama administration to organizations climbed to more than 1,000, according to new numbers disclosed by the Department of Health and Human Services.

HHS posted 126 new waivers on Friday, bringing the total to 1,040 organizations that have been granted a one-year exemption from a new coverage requirement included in the healthcare reform law enacted almost a year ago. Waivers have become a hot-button issue for Republicans, eager to expose any vulnerabilities in the reform law.

In order to avoid disruption in the insurance market, the healthcare overhaul gives HHS the power to grant waivers to firms that cannot meet new annual coverage limits in 2011.

We’re truly entering an era of “bureaucratic burdens for thee, but not for me.”

SOURCE: The Hill.

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)