Transcript: Donald Berwick on Medicare, Medicaid, ‘Rationing’ and Who Decides

Edited selections from KHN’s interview with former CMS Administrator Donald Berwick.

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PHIL GALEWITZ: This is Phil Galewitz with Kaiser Health News. I am today with Don Berwick, the former administrator with the Centers for Medicare and Medicaid Services, and I would like to welcome you to the interview.

DONALD BERWICK:  Thanks a lot, Phil.

PHIL GALEWITZ:  It’s been an interesting couple of years for you, both outside government and then your experience – almost 17 months — running CMS. I’m wondering if you could talk about how much of a difference did it make or not make as far as not being confirmed, not having your appointment confirmed. CMS has not had a confirmed CMS administrator in almost six years. Does that make a difference?

DONALD BERWICK:  Well, time will tell as to whether the brevity of my tenure made a big difference.  A lot of stuff I tried to get started, and I hope it will endure. I knew right from the start, of course, that as a recess appointee I might not get confirmed.  So I think on the positive side it … generated urgency to what I was doing. I was also aware that it might end when it did end, so it gave me perhaps even more energy than I had when I started. A recess appointee according to the law has full powers. I was not tactically compromised whatsoever. Anything a confirmed administrator could do I could do. So on the whole, I would have liked to stay longer  … but it was a period very intenseness and made more intense by the time frame.

PHIL GALEWITZ:  Obviously, you made a lot of decisions while you were in this role. What stands out in your mind as maybe the toughest … one or maybe even two decisions stand out as things that really you were staying up late at night poring over?

DONALD BERWICK:  The two that leap to mind, Phil. First, anything around the accountable care organization rule. Tough isn’t quite the wrong word, but challenging yes. It was one of the most exciting endeavors  I’ve been engaged in professionally to figure out what the framework for the ACO should look like. It’s a brilliant idea. I never would have thought of it. But having been given this opportunity in the law, how could we craft that program in a … way that is likely that it would succeed in the midst of course, as you know, of a tremendous amount of public dialogue. … I think the other sleep-loser for me was always Medicaid. The states are under enormous financial pressure. I am a pediatrician. For almost all my years of practice I think probably the majority of my patients were Medicaid patients, and I had a deep sense of how important that program is. … And yet I was also was constantly aware of how much pressure Medicaid was under due to the pressures of state budgets. And the political fact that the poor generally don’t vote with as much reliability as the non-poor. So just trying to hold the line and maintain the health and robustness of Medicaid. It’s crucial important American investment.  That was on my mind all the way through.

PHIL GALEWITZ:  I know this subject has come up a lot in the last year and a half: dual eligibles.   There’s been a lot of movement to say this is a big area of cost, we need to do a better job about that, and the administration has been working on that.  How well can we do as a country with this population if dual eligibles continue to get their care from two different systems?

DONALD BERWICK:  Congress sort of answered that question in setting up the Federal Coordinated Care Office under the Affordable Care Act.  They said that it isn’t a sustainable plan.  The dual eligible population – people who have both Medicare and Medicaid – they need the best of coordinated services.  Medicare and Medicaid have to work well together, states and the federal government have to work well together, and caregivers have to work well together in order for these people to get a fair shake.  And Congress was absolutely right.  I think the dual eligible population, they’re the test case for the integrity of American health care; its ability to really help people.  … Now getting them into the right care system where they’re absolutely going to have the benefit of firm, really superb world-class care coordination — they’re going to be at the center of everyone’s concerns, their needs will be met – that’s a big challenge.  That’s where some of those capacity issues arise.  For duals it’s actually a bigger issue, because a lot of the people who are dual eligibles, their needs go outside the health care system.  Their asthma may get worse because they have bad housing.  They may fall because they’re not in a safe nursing home.  And so being able to think about health care even more broadly than we do for duals, that’s pretty important.

PHIL GALEWITZ:  One area on Medicaid I was curious to ask you, some states have been pushing this, is to limit hospitalization coverage.  Arizona, Hawaii are a couple of states.  Should that be allowed?  There are some states that want to cut back hospitalization under Medicaid to as little as 10 days per year.  What do you think?

DONALD BERWICK:  I don’t know if it will legally be allowed, but it’s a nonsensical idea.  The amount of care that a Medicare beneficiary should get should be the amount of care they need.  Otherwise, isn’t that rationing?  It seems to me that if a Medicare beneficiary needs 20 days in a hospital, they need 20 days in a hospital, and writing an arbitrary number down makes no sense at all.  So I don’t understand the scientific rationale, the moral rationale, or the policy justification for an arbitrary limit on something someone may need so badly.

PHIL GALEWITZ:  Another area I had to ask you on Medicaid is a number of states are trying to increase fees to stop the non-urgent use of the emergency room — more than just nominal fees.  Again, with the goal of saying we’ve got to kick these people out of the emergency room, give them incentives.  What do you think of that approach?

DONALD BERWICK:  Blunt and dangerous, in my opinion.  Why do people go to emergency rooms when they could go elsewhere?  Well, maybe there is no elsewhere to go.  Maybe the primary care structures are simply not responsive to what these people need and if they have pain, the pain needs to be addressed.  Maybe they’re confused and don’t know about their options.  That’s not a pain issue, that’s an education issue.  I’ve never thought that patients use their health care as a recreational activity.  They’re going to get their needs met.  And if they’re going to the wrong place, in our opinion, then let’s provide the right place.  That’s, to me, a much more enlightened approach.  And when you use a blunt tool, like a co-payment or cost shifting, you can be guaranteed that even though you may dissuade people whose use is inappropriate, you will also be dissuading people whose use is quite appropriate and therefore harming them.  So I don’t think it’s a particularly good approach.

PHIL GALEWITZ:  You mentioned the “rationing” word.  I think that’s a word that I’m assuming you tried to avoid during your time as administrator.  Why do you think the public seems to accept it to a certain degree when it’s done by the private sector, but when they hear it in some ways being done by government, they get up in arms?

DONALD BERWICK:  It’s a war of words, not of ideas.  If you’re a private individual not yet in Medicare, Medicaid, and you have an insurance policy, right in the middle of that insurance policy there are going to be restrictions.  This is covered, but not that.  Somebody made that decision.  I don’t know whether you want to call that rationing or not, but it certainly is a decision as to what you can get and what you cannot get under  your insurance policy.  I am very concerned about the lack of accountability and transparency of those decisions.  Indeed, as a father of children I’ve seen the same problem.  I’ve seen my kids be told that something’s not covered for their care, when I can’t figure out why not, and I don’t know who to ask?

So, yes, the public — perhaps too silently — accepts the idea that there are restrictions in the care they you get that are being created by parties not accountable to them.  Medicare is an insurer as well, as is Medicaid.  Those systems will make some decisions about what benefits are included and what not.  Some of them are written right into the Medicare law. I think an informed public ought to want to know what they can get, what they cannot get, and who is making that decision, so that those people can be accountable for those decisions.

PHIL GALEWITZ:  There’s still a debate going on in this country about both Medicare and Medicaid and [some people] say that both of these programs are going to have to dramatically change.  The country can no longer afford it. Does there need to be a better option right now than just, like in Medicare, we have Medicare fee-for-service and we have Medicare Advantage.   Does there need to be another option to fix Medicare?  And then I want to ask you secondly about Medicaid.

DONALD BERWICK:  At one level, the accountable care organization framework and all of its cousins, like bundled payment, for example – these are now and they’re new ways to pay to encourage value-based payment and care.  So I think there are changes under way. 

Medicaid, we talked about some of the progress that ought to be made into effective…  managed care. 

But you see, Phil, I don’t think Medicare is broken.  I don’t think Medicaid is broken.  They’re very important social programs of good intent that are accomplishing largely what they intend to accomplish.  Health care is broken.  The delivery system isn’t working.  That’s the problem. 

We set up a delivery system which is fragmented, unsafe, not sufficiently patient-centered, full of waste, unreliable, despite …  great efforts of the workforce.  We built it wrong.  It isn’t built for modern times. 

Medicare doesn’t need fixing.  Health care needs fixing.  And that’s the agenda that I’ve been trying to focus on in my whole career, and also as administrator.  Now, Medicare and Medicaid have opportunities to provide incentives and information and encouragement to get us those changes, but the problem of American health care is not Medicare, it’s the delivery system.  And now, thank goodness, we seem to be en route toward better delivery options, better delivery configurations.   It’s only a matter of:  Are we going to get that fast enough? 

But that’s how I’ve seen it.  I think Medicare and Medicaid were are and remain brilliant social investments.