Healthcare Business News
CMS Administrator Dr. Donald Berwick

Exchanges will move forward—step by step, Berwick says

By Jessica Zigmond
Posted: September 12, 2011 - 12:30 pm ET

CMS Administrator Dr. Donald Berwick told reporters Monday that the CMS has the money necessary to move forward in establishing health insurance exchanges.

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“We have every intention of running the exchanges on time and helping states do the same,” Berwick said following his remarks at the America's Health Insurance Plans conference on Medicare and Medicaid, which runs through Sept. 15. “There will be federal exchanges, of course. Some states will choose that as a better way for them,” he added. We don't know how many.” When pressed for whether the CMS has the funding required to establish these insurance marketplaces, Berwick said: “Step by step, we have the money we need now to take the next steps.”

Meanwhile, Berwick said the selection process for the Pioneer ACO model—the sister program to the Medicare Shared Savings Program for accountable care organizations—is under way. Berwick said the application process, including even the number of applicants for it, is confidential, and that he suspects the CMS will announce the Pioneer ACOs before the MSSP program begins in January.

In his keynote speech earlier, Berwick emphasized that the cost of healthcare is a “center-stage issue” and one that can be addressed in two ways: either by cutting care, which he noted is “seductively easy,” or by improving care, which he said is not only the better option, but one that is within reach.

There are “direct savings policies” that reduce costs even if there are no changes in provider or patient behavior, such as changes to the level of payment to providers and productivity adjustments that he said are easy to quantify. But those policies are less than ideal and “certainly not the best route to the better healthcare that we all seek,” Berwick said. Instead, the focus should be on the “indirect savings policies,” which are ways to work with stakeholders to reduce the waste in the healthcare system.

Berwick outlined six major types of healthcare waste: failures to coordinate care; failures in the care process (such as delays or producing injuries); over-treatment; excessive administrative costs; problems in healthcare pricing; and fraud and abuse.

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