Health Care Policy Places Too Much Emphasis on Centralized Control and Too Little on Individual Decision Making

Centralizing Health Care: Berwick Battle Begins

June 2, 2010

Reason - The coming battle over President Obama's nomination of Donald Berwick to the top spot at the Centers for Medicare and Medicaid Services is, like the health care reform debate before it, a struggle between centralizers and decentralizers. Indeed, Berwick is an almost prototypical centralizer. In particular, he has repeatedly expressed fondness for Britain's NICE, which does cost-benefit analysis for the country's government-run health care system (ie: rationing). Philip Klein has done a thorough job of digging through Berwick's record:

On a number of occasions, Berwick has praised Britain's National Institute for Clinical Excellence (NICE), a body of experts that advises the government-run health care system on how to allocate medical spending based on cost-benefit analysis. Among other decisions, they have ruled against the use of cancer-treating drugs and put a dollar value on the final six months of human life.

"NICE is extremely effective and a conscientious, valuable, and—importantly—knowledge-building system," Berwick said in an interview last June in Biotechnology Healthcare. "The fact that it's a bogeyman in this country is a political fact, not a technical one."

...In 2003, Berwick signed on to an open letter in Health Affairs, called "Paying for Performance: Medicare Should Lead." (Among his co-signers was Nancy-Ann DeParle, the current White House health care czar.)

"Our recommendation-to the executive branch; to Congress; to employers and health plans; and to hospitals, physicians, nurses, and other health professionals—is that payment for performance should become a top national priority and that Medicare payments should lead in this effort, with an immediate priority for hospital care," the letter read. It went on to say that the CMS administrator's successors must continue to show "aggressiveness and commitment" to the cause, noting that, "A major initiative by Medicare to pay for performance can be expected to stimulate similar efforts by private payers…"

The idea of paying doctors and hospitals for delivering better quality health care and of offering guidance on best practices seems benign enough. As the letter put it, "Quality is not an issue for partisanship." The problem arises when government bureaucrats or expert panels are in the position of judging quality, performance, and best practices which get applied across a broad and diverse population.

As cardiologist Sandeep Jauhar argued in a September 2008 New York Times op-ed, pay for performance initiatives can cause unintended consequences such as doctors overprescribing certain medications that are deemed effective and carry bonuses. He also recounted how an initiative in the early 1990s to give report cards to doctors performing coronary bypass surgery prompted doctors to cherry pick patients to avoid the most severely ill cases that could jeopardize their grades. The problem with any uniform medical guidance is that what's good for the "average" patient may not be right for any given patient.

Given President Obama's leanings on health care policy—as demonstrated in the recent health care legislation—it's not all that surprising that he would choose a strong centralizer for this role. But the choice continues a worrying trend toward health care policy that places far too much emphasis on centralized control and far too little on individual decision making.