President Obama’s decision to name Dr. Donald Berwick the country’s chief Medicare officer by recess appointment means senators won’t get a chance to question him anytime soon about a nonprofit job that has boosted his profile and personal fortunes.
Last year, Dr. Berwick received nearly $900,000 in salary, bonus and deferred compensation as chief executive of the nonprofit Institute for Healthcare Improvement, which has fewer than 150 employees and describes itself as a “small organization with a very big mission.”
In addition, Dr. Berwick has a seven-figure executive retirement plan from contributions paid out by the nonprofit group since 2002. As administrator of the Centers for Medicare and Medicaid Services (CMS), Dr. Berwick will oversee many of Mr. Obama’s health reforms and an agency with a budget of about $800 billion.
Dr. Berwick, 63, would have faced standard questioning about pay and the finances of the Massachusetts-based nonprofit group if he had gone through the normal confirmation process, but his recess appointment means he can serve until the end of the next session of Congress without a Senate vote or a hearing.
“One of the reasons for vetting nominees is to look at who funds a nominee’s compensation, along with potential conflicts of interest, to make sure the nominee will serve the best interest of taxpayers,” Sen. Charles E. Grassley, Iowa Republican and ranking member of the Senate Finance Committee, said Thursday. “Even though the recess appointment is an attempt to short-circuit the official vetting process, I intend to pursue this line of questioning with Dr. Berwick,” Mr. Grassley said.
Dr. Berwick is a co-founder of the Institute for Healthcare Improvement. On his standard U.S. Office of Government Ethics disclosure form, he reported receiving $509,600 in salary, an $88,200 bonus and $275,849 in deferred compensation last year from the nonprofit group.
The institute’s most recent IRS filing, covering the year from May 1, 2008, to April 30, 2009, shows overall compensation for Dr. Berwick of about $2.3 million. But that figure includes about $1.4 million in executive retirement plan contributions paid out during previous years, according to the filing and officials at the organization.
In a statement to The Washington Times, the institute said Dr. Berwick’s compensation and his executive retirement plan, estimated at between $1 million to $2.35 million on his ethics form, won’t affect the organization’s finances.
“These disbursements have either already happened and are accounted for in our financial statements … or are budgeted and planned for… ,” officials said in an e-mail to The Times. “IHI is a fiscally sound not-for-profit, and our financial position continues to be healthy.”
Dr. Berwick has won broad support from health care groups and endorsements by previous CMS administrators from Democratic and Republican administrations. But his nomination had long been shaping up to be an battle in the Senate, with Republicans raising concerns about whether Dr. Berwick would push rationing of health care.
Dr. Berwick also reports holding more than a dozen positions apart from his regular job at the institute on his ethics form. Cited on a White House biography, they include two Harvard professorships and senior scientist position at Brigham and Women’s Hospital in Boston. The Times reported earlier this week that those jobs were essentially honorary professorships, where Dr. Berwick holds two or three lectures, seminars or meetings a year.
Dr. Berwick’s ethics filing also reports payments for services provided to more than a dozen entities, including to the health insurance company Kaiser Permanente, which paid the institute an unspecified sum for “teaching, advisory and research activities.”
“Like every administration appointee, Dr. Berwick’s previous employers and clients were examined by ethics officials …,” White House spokesman Reid Cherlin said in response to questions by The Times last week.
“Specifically, as a result of certain relationships such as his outside position with Harvard and client relationship with the Cincinnati Children’s Hospital Medical Center, Dr. Berwick will be recused from being personally involved in specific party matters involving those organizations,” he said.