Last month, President Obama made a recess appointment, which put Donald Berwick, MD as administrator for the Centers for Medicare and Medicaid Services (CMS). In doing so, the President bypassed the Senate, and specifically the Senate Finance Committee, which had the jurisdiction to hold the confirmation hearings of Dr. Berwick. During such hearings, Senators are allowed to vet candidates through questions and document requests about their prior work experience, history, education, and ideologies.
In response to this appointment, Senator Charles Grassley (R-IA) asked Dr. Berwick in a letter to follow through on promises he made to provide information regarding potential conflicts of interest stemming from his prior work. Specifically, Grassley asked Berwick to disclose information about the sources of funding for the Institute for Healthcare Improvement (IHI), where Berwick previously worked, to provide some transparency regarding actual or potential financial conflicts of interests in his role as CMS administrator.
The letter also asks whether “IHI continues to provide benefits” to Berwick and his family, “including health care coverage as indicated in IHI’s audited financial statement.” Last year, Dr. Berwick received nearly $900,000 in salary, bonus and deferred compensation as chief executive of the IHI, which has fewer than 150 employees and describes itself as a “small organization with a very big mission.”
According to the Washington Times, “a review of some of the funding sources of the nonprofit think tank he co-founded and until recently headed show health care entities that don’t appear on Dr. Berwick’s financial disclosure or on the standard ethics agreement that officials use to root out potential conflicts of interest.”
Companies that were publicly disclosed donors for IHI included The BlueCross BlueShield Association of America, Cardinal Health Foundation, Aetna Foundation, the RX Foundation and Baxter International, but “it’s unclear whether they figured into the government’s standard ethics review.”
The article reported that these “entities have provided anywhere from $50,000 to as much as $5 million each to the institute’s “5 Million Lives Campaign,” which aims to improve hospital safety.”
To Senator Grassley, these associations are troubling, especially because he feels that “the public has the right to know whether the numerous and significant policy decisions that Dr. Berwick will make are vulnerable to these potential conflicts of financial interest.” As a result, Grassley specifically asked for Berwick to disclose Internal Revenue Service filings from the nonprofit for the past three years, including the so-called Schedule B list of revenue sources, which is not included on publicly available forms. He asked that the materials be submitted no later than August 13, 2010.
Jonathan Small, a spokesman for the institute, told the Washington Times that “about 25-30 percent of the organization’s income comes from well-known foundations publicly disclosed by the organization, but the majority of the income comes from revenue generated from fee-based programs.”
White House spokesman Reid Cherlin responded to Grassley’s inquiry by noting that “Dr. Berwick will be responding to Senator Grassley’s letter.” He also indicated however, that “the independent office of government ethics has certified that Dr. Berwick is in full compliance with all of the ethics rules and conflict rules that Congress has set forth.”
Consequently, given the fact that he has already worked with industry, Dr. Berwick made an agreement “to avoid any actual or apparent conflicts of interest, and that he would recuse himself from specific matters involving the institute.” However, Dr. Berwick has already announced that he “will seek a limited waiver from the rules to allow him to participate in matters involving Kaiser Permanente, which has had contracts with the institute, and the New York-based Commonwealth Fund, where Dr. Berwick served on an advisory panel.”
The Washington Times reported that according to the agreement, “if granted, the waiver won’t allow his participation on contracts, audits, investigations, disputes or appeals involving either entities, and at least one Department of Health and Human Services employee must be with Dr. Berwick involving any contacts with Kaiser Permanente or the Commonwealth Fund,.
Responding to pressure about other potential conflicts of interest, Dr. Berwick also “resigned from several unpaid positions as part of the agreement, including at BlueCross BlueShield of Massachusetts, the Robert Wood Foundation and the Journal of the American Medical Association.”
Interestingly, the Washington Times pointed out that “his ethics agreement does not indicate that he will have to recuse himself from matters involving other entities listed as major donors on the institute’s website.”
Ultimately, what is interesting about this appointment is that although Dr. Berwick is a straight forward guy who admittedly works with industry to find efficiencies in the healthcare system, the “conflict of interest police” are still out to get anyone who works with industry. As this case demonstrates, there are no exceptions. Politicians and policymakers will go after anyone when it comes to exploring the “potential” conflicts that may exist in healthcare, even when such partnerships have improved patient care and outcomes.
What these critics must realize is that the best and brightest officials and experts in all health care fields at one point or another have worked with or for industry to help bring about progress, advances and innovation in health care. There is almost no exception. And it is these relationships that have uniquely shaped individuals to be in a position like CMS administrator to truly make our healthcare system more efficient and quality based by working with solutions, products, and capabilities that industry can offer.