In a keynote address delivered at the American Health Insurance Plan’s (AHIP) annual Medicare Conference on September 12, Donald M. Berwick, MD, administrator for the Centers for Medicare & Medicaid Services (CMS), addressed a number of issues associated with the long-term financial health of the Medicare Program.
His 45-minute speech centered on the need to address the rising costs required to fund the federal program supporting American seniors and a few special populations. In a humorous moment, Dr. Berwick noted that he just celebrated a big birthday last week and is now eligible to become a Medicare beneficiary himself, which has added some urgency to the matter.
On a more serious note, Dr. Berwick observed that there are two ways two deal with the expense side of the equation. First, the “easy way” is to just cut Medicare benefits or payments to providers. He noted that this is fairly straight-forward and can happen quickly. However, from a public policy perspective, he does not recommend it.
Rather, Dr. Berwick suggested that a “better way” is to focus on “improving care” in a comprehensive and systematic manner. He asserted that a primary strategic goal of CMS is to provide better care, improve health, and reduce costs through an integrated approach. He elaborated that this requires leveraging the strengths of both public and private sectors in a collaborative fashion. CMS has the size to implement change and can scale new ideas fairly quickly. Private health plans have maneuverability and the ability to innovate quickly. He hopes that in a “shared learning” environment, better outcomes can be achieved all the way around.
Dr. Berwick said that “waste” also must be removed from the U.S. health care system. This includes eliminating activities that do not add value to the Medicare Program. He cited a number of non-value based activities including: 1) failure to coordinate care; 2) deficiencies in maintaining appropriate care processes which can create unnecessary delays and complications; 3) patterns of overtreatment; 4) excessive administrative costs; 5) problems associated with health care pricing; and 6) those few bad actors that perpetuate fraud and abuse in the system.
In terms of health care reform and response to a question from the audience, he commented that the accountable care organizations (ACOs) are not a cure-all but do hold some promise to improve care for Medicare beneficiaries. He also stressed the need for all stakeholders to become involved in improving the Medicare Program.
Dr. Berwick’s comments were well received by the health plan audience. For someone immersed in a very political position, he appears genuinely open to hearing and discussing new ideas. That being said, the federal government is implementing significant changes to the U.S. health care system in hyper-speed. Therefore, it is important that the industry keep intact strong communication links with key policymakers like Berwick to provide feedback.
Brokers and their clients also need to keep apprised on these developments because of the echo effect that CMS has. Without a doubt, the Medicare Program does influence private sector offerings, and arguably health plans should be influencing CMS policy. Let’s hope that this synergistic relationship is appropriately balanced going forward.
BenefitMall will continue to keep you apprised of the latest developments as health care reform continues to evolve. For blog posts, legislative alerts, pools, surveys and other resources, visit www.HealthcareExchange.com or www.BenefitMall.com.
 A BenefitMall representative attended the AHIP conference and provided the background for this blog.