HHS Will Be Shepherding Health-Care Reform

Even Without That Task, Huge Agency Poses Challenges

With Thomas A. Daschle, as secretary of health and human services, focused health-care legislation, the agency will need strong deputies, experts said. (By Charles Dharapak -- Associated Press)

Under the best of circumstances, overseeing the Department of Health and Human Services is an enormous undertaking. With 65,000 employees and a budget of $707.7 billion, it accounts for nearly one-quarter of all federal spending, second only to the Defense Department.

But in the Obama administration the job is taking on a second, perhaps more daunting, responsibility: shepherding health-care reform legislation through Congress.

Unlike his predecessors, Thomas A. Daschle, President-elect Barack Obama’s choice for HHS secretary, will be given an expanded role, leading administration efforts to overhaul the U.S. health system.

“This really creates a new type of secretary,” said Charles N. “Chip” Kahn III, president of the Federation of American Hospitals. In the past, “HHS was more or less a service organization to the White House,” while White House advisers drove policy initiatives.

In broad terms, Obama campaigned on the idea of reducing medical costs, improving quality and eventually achieving universal insurance coverage. He promised to cover every child and to reduce the average family’s medical bill by $2,500 a year. He advocated a greater emphasis on prevention and expanding participation in the government-subsidized Medicare and Medicaid programs.

“There are two aspects to the challenge of pushing for health reform,” said Dan Mendelson, a budget and health adviser in the Clinton administration. “One is to get the right concepts together with what Congress wants to do, and the other is managing the disparate concepts and generous egos.”

A serious restructuring of the health system will require extensive data and analytic capabilities to dissect the proposed changes and the impact they might have, said Karen Davis, president of the Commonwealth Fund, a private, nonpartisan research foundation. “Right now, there’s nothing other than the Office of the Actuary to do back-of-the-envelope estimates,” she said.

With the expectation that Daschle, a former Senate majority leader, will focus heavily on crafting and pushing legislation, there will be an even greater need for a strong No. 2. HHS is a collection of 11 agencies including the Food and Drug Administration, the National Institutes of Health, the Centers for Medicare and Medicaid Services, and the Centers for Disease Control and Prevention.

“He’ll need to have deputies who are well-versed in the agency as a whole and who can manage the ongoing operation of HHS while he leads the health reform discussions,” said Len Nichols, director of health policy at the New America Foundation. One of those will likely be Jeanne Lambrew, a veteran of the Clinton administration and a co-author of Daschle’s book “Critical: What We Can Do About the Health-Care Crisis.”

Lambrew, in a chapter of a book published by the liberal Center for American Progress outlining a proposed agenda for the incoming president, agreed that fixing the health system is a top priority. However, she noted, “these urgent problems overshadow persistent, neglected and potentially deadly infrastructure gaps in the system.”

According to her assessment, the nation’s ability to respond to natural or man-made crises is weak, as evidenced by the poor response to Hurricane Katrina. Chronic illnesses such as diabetes have been given short shrift, and little has been done to prepare for the long-term health needs of an aging population.

The Commonwealth Fund, after interviewing two dozen health leaders, issued its own set of recommendations. It urged the next administration to make a “real focus on what it takes to improve health outcomes,” as opposed to secondary issues related to insurance markets, Davis said. That means tackling childhood obesity, racial disparities and preventable illnesses.

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