Donald Berwick, recess-appointed by President Obama to head Medicare and Medicaid, is a well-known advocate of health care rationing and admirer of Britain's National Health Service. Rising health costs and limited resources "require decisions about who will have access to care and the extent of their coverage," Berwick wrote in 1999. Last year, he said, "The decision is not whether or not we will ration care -- the decision is whether we will ration with our eyes open." Of the NHS, Berwick says simply, "I love it," adding that it is "one of the great human health care endeavors on earth."
As it turns out, Berwick himself does not have to deal with the anxieties created by limited access to care and the extent of coverage. In a special benefit conferred on him by the board of directors of the Institute for Health Care Improvement, a nonprofit health care charitable organization he created and which he served as chief executive officer, Berwick and his wife will have health coverage "from retirement until death."
The provision is deep inside a 2009 audit report on the nonprofit's finances. On page 17 of that document, there is a paragraph headlined "Post Retirement Health Benefits":
During fiscal year 2003, the Institute created a postretirement health benefit plan for its Chief Executive Officer (CEO). It provides the CEO and his spouse medical insurance from retirement until death. The present value of the estimated cost of this benefit is approximately $120,000, which is being accrued over the CEO's estimated remaining service period. The amount expensed by the Institute for the years ended 2009 and 2008 related to this liability was approximately $12,000 and $17,000, respectively. At 2009 and 2008, approximately $84,000 and $72,000, respectively, was included in accounts payable and accrued expenses.
Berwick was the CEO in question; under the provision, he and his wife will be covered for the rest of their lives -- a benefit that was on top of the $2.3 million in compensation the nonprofit gave Berwick in 2008, the $637,006 in compensation he received in 2007, and the $585,008 he received in 2006.
The Institute describes its work as an effort "to accelerate improvement [in health care] by building the will for change, cultivating promising concepts for improving patient care, and helping health care systems put those ideas into action." It has about 110 employees and net assets of $49.5 million, according to its 2008 filing with the IRS. (2008 is the most recent year for which such filings are publicly available.) A 501(c)(3) tax-exempt organization, the Institute reported receiving $12.2 million in contributions and grants in '08, as well as $27.4 million in revenue from its various programs.
Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee, has been asking questions about the Institute's finances. Specifically, Grassley wanted to know more about the millions of dollars in grants and contributions to the organization: where did that money come from? Given the zillions of dollars that changed hands during the debate over Obamacare, it was a reasonable question.
But it was a question the White House did not want to answer. Not long after Grassley inquired about the Institute's donors, the White House decided to bypass Senate confirmation for Berwick. The president's recess appointment means that Berwick will not have to answer Grassley's, or anyone else's, questions.
Now comes word that Berwick enjoys his nonprofit's generosity in the form of health care coverage for life. That undoubtedly would also have been a topic of questioning had Berwick gone through the normal course of Senate confirmation. But the recess appointment avoided all that.