The Medicare and Medicaid Nominee

Inside Washington, attention is turning to the Obama Administration's nominee to run the Centers for Medicare and Medicaid Services (CMS) Dr. Donald Berwick.

The pediatrician and head of Harvard's Institute for Health care Improvement has made frequent and sometimes colorful statements in both print and public speeches citing virtues of the British National Health Service and its arm for cost-based rationing of drugs and medical devices, the National Institute for Clinical Excellence.

In an environment where the administration's critics fear that the multitude of new commissions and bodies embedded in the Obama health plan will lead to similar kinds of government rationing, Berwick's quotes observing advantages in these approaches are going viral.

The nominee has the misfortune of a rich paper trail.

But the attention trained on Berwick conceals a larger story unfolding inside CMS--one that has meaningful implications for the private health insurance market and for implementation of the new Obama healthcare plan.

There has been an exodus of many of the more experienced (and capable) staff--in some cases out of CMS entirely, but in most cases into the new work groups that are being formed to write the regulations implementing the new health plan.

In many respects this is an extension of the spirit of the Obama health plan, which raided the MA program of its money to pay for the new health coverage.

This could spell trouble for existing programs, especially Medicare Advantage. The scuttlebutt is that the Obama team is gutting the MA program of its experienced career staff, in part out of the administration's reluctance to hire similar experts from outside the agency. That's because anyone with know-how of insurance markets who hails from outside CMS will invariably come from insurance or managed care companies. Word is anyone with industry experience isn't welcome.

Stripped of its experienced staff, the Medicare Advantage program could face significant hurdles, not only completing routine regulations on time but just in the day-to-day management that's required to keep Medicare Advantage plans operating smoothly. In many respects this is an extension of the spirit of the Obama health plan, which raided the MA program of its money to pay for the new health coverage. Now the Administration is raiding the program of its staff to get its new plan up and running.

As for Dr. Berwick, his views are no different than any nominee this administration would have put forward. They are also widely shared in the administration--especially among the unelected appointees inside HHS who are calling significant shots on the regulations that implement the Obama plan.

Dr. Berwick's political mistake may have been candor.

It's noteworthy that the White House delayed the official appointment of Dr. Berwick long after news of his nomination leaked. The White House only sent Berwick's papers up to the Senate Finance Committee this week.

If the White House fails to fight hard for their nominee it won't be because they deviate from Dr. Berwick's views. It's just that they would prefer to exercise their agenda in the quiet process of writing regulations than defend it in the public heat of a Senate hearing.

Scott Gottlieb, M.D., is a resident fellow at AEI.

Photo Credit: Tom Grill/Corbis

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