Bloomberg News

New Medicare Chief Urges Cooperation With Insurers in Speech

September 13, 2010

Striking a conciliatory tone with insurers who resisted the health overhaul, U.S. Medicare chief Donald Berwick appealed to health-plan executives to work with the White House on changing the country’s system of care.

Berwick spoke today at meeting hosted by the trade group whose members include UnitedHealth Group. Inc. (UNH:US), the biggest U.S. insurer, WellPoint Inc. (WLP:US) and Humana Inc. (HUM:US) The appearance was Berwick’s first public speech since being nominated by President Barack Obama in April to lead Medicare, the government health program for the elderly and disabled, and Medicaid, the federal-state coverage program for the poor.

“All of us have the change the way we do business,” Berwick told the ballroom of health insurance executives gathered in Washington, D.C. “Those who wish to only preserve the status quo are not going to be contributors to our nation’s future. We do not have time for games.”

Berwick’s remarks were a departure from the admonishments that his boss, Health and Human Services Secretary Kathleen Sebelius, leveled in a Sept. 9 letter to the insurance industry trade group America’s Health Insurance Plans. In the letter, written to Karen Ignagni, the group’s chief executive officer, Sebelius said insurers were “falsely blaming” the health-overhaul law for premium increases.

“I think he was very straightforward, that we can actually play a role along with other stakeholders in improving care, and we’re committed to doing that,” Ignagni said today in a telephone interview after Berwick’s speech.

Private-Sector Connections

Berwick’s agency, the Centers for Medicare and Medicaid Services, oversees Medicare Advantage, the private sector alternative that is run by insurers and subsidized by the government. The agency also runs the Medicare drug benefit, which is also administered by private insurers and partially subsidized by taxpayers.

Medicare this year is projected to spend $534 billion, or about 21 percent of total U.S. health expenditures. Medicaid is expected to spend $427 billion, or 16 percent.

Asked by a member of the audience when the Obama administration would stop painting insurers (WLP:US) as villains, Berwick said industry and government should “look ahead, not back.” “If we steadily work together, to build care community by community and state by state, trust will resurface,” he said.

Berwick outlined a role insurers can play redesigning the nation’s health care system, by focusing more on primary care and collaborating with doctors and hospitals. He called on insurers to help change the way care is paid for and measured for quality.

New Methods

“You don’t get the level of improvement we need by simply trying harder the same way. You try a new way,” he said. “If you want new results, you need a new system.”

Spokesmen for WellPoint and UnitedHealth declined comment or couldn’t be reached after the speech.

Berwick was given the Medicare position in July through a recess appointment, a process that bypasses the usual procedure in which a nominee appears at a hearing and the Senate votes on the appointment.

Since then, Republicans led by Senator Charles Grassley of Iowa have asked Berwick to provide tax and other financial information that would have been provided at a hearing. Grassley also has pressed Berwick to discuss his vision for health care.

“It appears that the White House has designated Dr. Berwick as the good cop to Secretary Sebelius’ bad cop in their attempts to intimidate and silence private industries’ attempts to inform the public about the real world consequences of Obamacare,” Senator Pat Roberts, a Kansas Republican, said in a statement.

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.


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