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Better Quality Would Save Medicaid Money, Berwick Tells Commission

By John Reichard, CQ HealthBeat Editor

July 12, 2006 -- With quality and cost concerns paramount in Medicaid, Institute for Healthcare Improvement President Donald Berwick's message to federal Medicaid Commission members Tuesday appeared to be music to their ears: Improvements in quality ought to be your primary tool for saving money, he said.

When Berwick abruptly ended his presentation by saying "I think I'll stop there," commission co-chairman Donald Sundquist, the former governor of Tennessee, appeared to speak for his colleagues when he said, "I wish you'd keep going."

Berwick delivered a blunt message to the commission. Although the United States excels in high-tech care, other nations provide higher-quality care overall and at a considerably lower cost, he said. Health care in the United States is "approximately fair and often poor," Berwick said.

But Berwick said there is "absolutely no question" that improvement is possible. Berwick then corrected himself to say, "Dramatic improvement is possible."

Berwick admitted that he was "on a high" because of results recently reported by the 100,000 Lives Campaign he has spearheaded to enlist hospitals to retool to provide safer care. By adopting various measures—including "rapid response" teams to swiftly respond to signs a patient's condition is deteriorating, delivering better care to heart attack patients by administering beta-blocker drugs, being more vigilant about medication errors, and adopting simple techniques to prevent pneumonia among ventilator-dependent patients—participating hospitals so far have prevented an estimated 122,000 deaths, Berwick said.

Berwick added that improvements in the treatment of the chronically ill that already are in place in other nations could sharply lower hospital admissions in the United States. He estimated that some 30 percent of hospital admissions in the United States could be avoided but said hospital administrators would be "psychotic" to reduce admissions given payment incentives in the U.S. health care system.

Instead of an "event-based" system of care, U.S. health care ought to be restructured to provide payment for keeping entire populations healthy, he said. But U.S. health care is plagued not only by poor payment incentives but also by excesses of supply of certain types of services that dictate the type of care patients get in certain markets, often resulting in worse outcomes, he said. Berwick was referring to research done by Dartmouth professor John Wennberg showing geographic variations in the types of certain services around the country.

Smart organizations throughout the U.S. economy figure out how to get better results with fewer resources, but that's not the story of U.S. health care, he said. There is no mechanism now in the United States to decide on optimal allocations of hospital beds and home care services, for example, except through managing care on a population basis, he said.

Berwick said it's time for the United States to cover everyone—the nation should waste no more time in the matter and make health care a human right, he said. But at the same time, it should spend no more money than it's spending now on health care, he emphasized, and extend coverage by adopting safer, more efficient care. Quality improvement should be the basis for cost reduction—"all other industries know how to do that" and health care should too, he said.

Whether the federal Medicaid Commission will factor Berwick's views into its recommendations later this year for overhauling Medicaid is unclear. Berwick said at the outset of his presentation that he didn't know if the commission had the leverage to make the changes he is urging, but he said he would assume for the purposes of his talk that it does.

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