NC Health News editor Rose Hoban speaks with former CMS Administrator Don Berwick in Charlotte.

NCHN: You’ve been doing a lot of speaking around the country since you left CMS. What’s been the topic you’re talking about mostly?

Berwick: To explain what I see is the health policy scene right now, and help people understand the Affordable Care Act, which is important.

Former CMS administrator Don Berwick listens to a question.
Former CMS administrator Don Berwick listens to a question. Photo by Kelsey Tsipis

I also have a feeling that a lot of action is happening independent of that law in the private sector and I want to explain and understand how hospitals and insurers and clinicians are moving.  My basic main theme is that action is switching to local communities and states.

NCHN: I wish I was talking to you on Friday, after the Supreme Court ruling…

Berwick: I know what the Supreme Court will say on Thursday, but I can’t tell you. laughs

NCHN: What are the biggest barriers to health care organizations making the changes they need to to make in the health care world today?

Berwick: The legacy system has a lot of inertia. I think almost everyone knows – even in corners of the country I would expect to be more isolated – everybody understands now the kind of care system that we need to move to: integrated care, seamless care, focus on patient safety, containing costs, but doing it by making processes more efficient, not by hurting patients, and I think in general, wanting people to have access to health care.

We need to become less hospital-dependent, for example, in such a system, but hospitals have a lot of capital invested. There’s stranded capital. Figuring out how to transit out of that structure is hard. There are labor force changes that we’ll need to make, like much better use of  non-physician providers of care. The role of specialists will change. And most important is weaning us from fee-for-service payment. That’s going to happen at different paces in different communities around the country.

We have entire structures of billing and business models and plans, hospital board beliefs, accountabilities that rest on fee-for-service and revenue-based care. That’s a very different economic environment from one in which payment is more bundled, and we’re much more addressing the needs of the patient, wherever they are.

NCHN: Are you finding that there’s one particular segment of the health care marketplace that’s been slowest to embrace change, digging in their heels in?

Berwick: Every segment has some intransigent people. Some physicians really don’t want to change out of the fee-for-service mode and they’re kind of holding on.  Some hospitals want to maintain a top-line driven revenue model, in which keeping beds full is a good idea.

Former CMS administrator Don Berwick sat down with NCHN editor Rose Hoban to talk about the health care system.
Former CMS administrator Don Berwick sat down with NCHN editor Rose Hoban to talk about the health care system. Photo by Kelsey Tsipis

It’s that technically, this is a very, very difficult problem. If you ran a hospital and totally understood that five years from now, you needed to be in an integrated care environment, it would still be a really hard problem as to how to migrate the business model, especially when the payment system is completely chaotic. Half the time you’re getting paid in essentially fee-for-service and half the time you’re having contracts with integrated care systems, and bundled payments.

NCHN: We’re seeing a lot of hospital consolidation here in NC. For example, Carolinas Health Care system has just signed a contract to manage Moses Cone Health System in Greensboro, Wake Forest Baptist Hospital is expanding into neighboring counties. What are your thoughts on hospital consolidation?

Berwick: There’s cooperation and there’s consolidation, and they overlap. if you’re going to have patients get seamless care, where it doesn’t matter where they go, people will remember them, the handoffs go well, they’re back in their home as fast as they can be, you need high levels of cooperation among all the players – specialists and primary care people, hospitals to hospital, hospital to nursing home, nursing home to home. So, you need new forms of corporate structures to support that cooperation.

If it’s leading to concentration of markets in hospitals that are acquiring practices and merging with others, then that’s worrisome.

I think there’s a window in which the hospital industry can build trust or lose it. If the hospitals take advantage of the slack that’s being cut for them by the regulators, and there is some, to make care better and reduce costs, then they’ll be able to continue and everyone wins. If they take advantage of that window to consolidate markets, control prices and raise costs, I don’t imagine that the patience of the regulators is infinite, And I think that the window is rather narrow.

So, I’m hoping that the hospital industry acts very responsibly and contributes to what we call the Triple Aim: better care, better health and lower costs. Hospitals that participate in lowering costs for communities while helping patients I think will thrive.

NCHN: You have said you really lost sleep over Medicaid while you were at CMS. We have a model Medicaid program here in NC, but this year, we had a cost overrun, and people here have talked about Medicaid being a problem. How do you solve a problem like Medicaid?

Berwick: Well, Medicaid is not the problem. The problem is the health care system at large. Any player in the system – Medicaid, Medicare, private insurers – everyone is experiencing the same defects, which is a fragmented system that costs too much and has a lot of non-value added work in it. Medicaid is just a part of that. But it’s most vulnerable. I still lose more sleep over Medicaid than Medicare.

In a country that’s still struggling to get out of a recession mentality, with a state budgets so stressed, with a zero-sum view of how we’re going to use resources, it’s the poor who get hurt first. And we need real backbone, fiber in the country to defend the disadvantaged. They don’t contribute to political campaigns, they don’t write op-eds, they don’t vote as much as others do, and so the political support for the safety net has got to come from all of us. And that is very fragile right now, and that worries me.

NCHN: One of the chairs of the HHS subcommittees in the NC General Assembly suggested that Medicaid would be better as a block grant program. Is that the answer?

Berwick:I think a block grant model is probably not a good idea. Right now Medicaid is a state-federal partnership. So, there’s some counter-cyclical federal support, if there’s a recession or an influenza outbreak that would really hit Medicaid patients very hard, you have the federal government there as a backup and to buffer the burdens on the states. I think it’s a real mistake to break that partnership.  I think its actually quite successful.  I think Medicaid overall is really quite successful in providing access and getting it’s job done.

A block grant system will inevitably result, in my view, in the shifting of more and more cost to the poorest people that we have, and increasing vulnerability.

NCHN: You know, in the eastern part of North Carolina, we have some big health issues: obesity, diabetes rates are high, stroke rates are high… If you were talking to policy makers, what would you say to them about what to do first in Eastern North Carolina?

Berwick: Yes, I know about Eastern NC, it’s an interesting part of the state with a lot of problems. I’d say supporting primary care and integrated care models, where you really can get physicians in the primary care system, communities and patients working very well together to keep them home and well.

NCHN: The problems have been there for a long time, it’s quite rural and access to care is a real problem.

Berwick: But it’s really promising. If everyone just remembers the patient, just keeps focus on the patient and the family, we’ll get through this the right way, and that’s what I see happening out there.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...