On Monday, the White House announced that President Obama was nominating Donald Berwick to run the Centers for Medicare and Medicaid Services (CMS), the most important subsidiary of the Department of Health and Human Services. CMS oversees around $800 billion dollars of annual U.S. health-care expenditures, affecting the lives not only of Medicare and Medicaid recipients but of all Americans, since we all use the same hospitals and doctors.
If confirmed, Berwick will lay the groundwork for Obamacare’s most fiscally consequential elements: its massive expansion of Medicaid and its elimination of Medicare Advantage subsidies. So it’s worth asking: Who is Donald Berwick, and what would a Berwick-run CMS look like?
Berwick, a decorated triple-graduate of Harvard with faculty appointments both at Harvard Medical School and the Harvard School of Public Health, embodies the technocratic element of the president’s governing philosophy. As with any decent technocrat, Berwick’s nomination has a good side and a bad side.
First, the good. Berwick is a serious and credible health-care analyst. In his capacities both as a Harvard professor and as founder and CEO of a Cambridge-based think-tank called the Institute for Healthcare Improvement, he has written extensively about health-care policy in all of the leading scholarly journals. His focus, in most of these writings, is on the quality and efficiency of health care: things like avoiding medical errors and unnecessary spending. He was granted an honorary knighthood by Queen Elizabeth for his role in shaping Tony Blair’s (mostly futile) attempts to modernize Britain’s National Health Service.
While he was a big supporter of Obamacare, Sir Donald acknowledges its core failing; in an October lecture, he said, “Health-care reform without attention to the nature and nurture of health care as a system is doomed. It will at best simply feed the beast, pouring precious resources into the overdevelopment of parts and never attending to the whole — that is, care as our patients, their families, and their communities experience it.” Indeed, if you put Berwick in a room with a leading market-oriented health-care analyst, the two would find broad areas of agreement as to where our health-care system fails patients.
But they would diverge on the most important questions of all: can, and should, the state provide quality health care for all? Can enlightened, public-minded experts effectively manage one-sixth of the U.S. economy? Consider this excerpt from a recent piece Berwick and two colleagues wrote for Health Affairs:
If we could ever find the political nerve, we strongly suspect that financing and competitive dynamics such as the following, purveyed by governments and payers, would accelerate interest in [our policy ideal] and progress toward it: (1) global budget caps on total health care spending for designated populations, (2) measurement of and fixed accountability for the health status and health needs of designated populations, (3) improved standardized measures of care and per capita costs across sites and through time that are transparent, (4) changes in payment such that the financial gains from reduction of per capita costs are shared among those who pay for care and those who can and should invest in further improvements, and (5) changes in professional education accreditation to ensure that clinicians are capable of changing and improving their processes of care. With some risk, we note that the simplest way to establish many of these environmental conditions is a single-payer system, hiring integrators with prospective, global budgets to take care of the health needs of a defined population, without permission to exclude any member of the population.
Ideologues on the left favor a single-payer system for, well, ideological reasons of material egalitarianism. But for technocrats like Berwick, who shape the liberal policy consensus, the single-payer system is the most efficient way to manage health care. Top-down control, in their minds, ensures that every participant in the system serves the broader public good: hospitals and doctors only perform the tests and procedures they need to; private companies make enough money to get by, without excessive profits; and “integrators” mandate best practices for all parties based on the best available evidence.
But the technocratic approach has fatal flaws. First off, as William Schambra observed in National Affairs, it assumes that politicians — and politics — play no role in forming health-care policy. Even if you believe that technocrats could better organize our health-care system, Berwick’s approach only works if the narrow interests of Congressmen, labor unions, general hospitals, the AARP, etc., have no influence on the writing of law. No one who watched Democrats make the Obamacare sausage can harbor any illusions on this score.
Secondly, as Friedrich Hayek pointed out back in 1945, the command approach is doomed to fail because its commanders do not gain accurate information about what is happening on the ground. Technocrats may believe they can marshal statistics and analysis to optimize the health-care system, but they are not omniscient. Their analyses rely on too many assumptions and on unreliable data. This is why government programs always result in colossal amounts of waste, fraud, and abuse. On the other hand, a truly free market for health insurance could efficiently allocate health-care resources to those therapies and tests that patients and doctors most need.
Conservatives have persuaded a majority of the public that Obamacare is fiscally and morally flawed. But they would be unwise to ignore the technocratic arguments for socialized medicine. Just imagine how Berwick’s confirmation hearing could go: Berwick will make his case for top-down management of the nation’s health-care system; Senate Republicans, unable to challenge him intellectually, will praise his Harvard degrees, ask him easy questions in an angry voice, and move on to the next order of business.
And then imagine the same confirmation hearing in an alternate scenario, one in which Senate Republicans go toe-to-toe with one of liberal wonkery’s leading lights. They highlight Berwick’s own critiques of Obamacare; they ask him how his “integrators” are doing in Britain. They ask him what procedures Medicare pays for that he thinks the Independent Payment Advisory Board should eliminate. They take on his advocacy of the technocratic approach, with facts and analysis, and win. By doing so, they meaningfully build the case for repeal.
In short, the Berwick nomination is Republicans’ first opportunity in Congress, since the passage of the Affordable Care Act, to show that they have better solutions for the nation’s health-care problems. Will they seize it?