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Healthcare reform czar has insider's view of the industry

Obama appointee Nancy-Ann DeParle may find conflicts of interest difficult to avoid, given the companies she has worked for.

March 29, 2009|Andrew Zajac

WASHINGTON — After years as a top state and federal healthcare official, Nancy-Ann DeParle turned her attention to the business of medicine, serving as a board member for more than a dozen companies and managing a private equity portfolio over the last eight years.

In 2006 and 2007 alone, DeParle collected at least $3.5 million in fees and the sale or awards of stock from healthcare firms, according to regulatory filings.

Now DeParle is the White House czar for healthcare reform, charged with fulfilling President Obama's promise to make healthcare more affordable and broadly available. The task is sure to have an effect on the fortunes of the industry in which she recently served.

DeParle's business experience, coupled with her management of government medical programs, gives her an insider's perspective on the machinery of healthcare delivery.

But it also raises questions about Washington's revolving door between government and industry: Can DeParle avoid conflicts of interest, given the size and market share of some of the firms she has worked for?

Four companies where she was a director -- pharmacy benefits manager Medco Health Solutions Inc., health information technology firm Cerner Corp., cardiac device maker Boston Scientific Corp., and dialysis provider DaVita Inc. -- are among the largest firms in their fields.

The firms will probably feel the effects of DeParle's healthcare overhaul efforts, said Steve Ellis of the nonpartisan Taxpayers for Common Sense.

On the other hand, "you can recuse yourself so much that your effectiveness is diminished," Ellis said. "What the administration is going to have to guard against is this perception that there is some benefit given to companies who know people in the administration."

Others believe that DeParle's private-sector dealings will be an asset as she negotiates changes.

"Most of the healthcare in this country is paid for by government, but it's delivered by industry," said Dan Mendelson of consulting firm Avalere Health. "In order to get reform, the administration needs a realist" who understands "what [the industry] will accept and what they won't."

In the latter years of the Clinton presidency, DeParle -- onetime commissioner of the Tennessee Department of Human Services -- oversaw Medicare and Medicaid as administrator of the Health Care Financing Administration.

In the Obama administration, she is to serve as an advisor to and work with Kathleen Sebelius, current Democratic governor of Kansas and Obama's nominee for Health and Human Services secretary. But unlike Sebelius, DeParle will not have to undergo the scrutiny of a Senate confirmation.

The White House declined to make DeParle, 52, available for an interview or have her respond to most questions about the firms she worked with.

White House spokesman Tommy Vietor said DeParle had severed her board and private equity firm ties upon accepting her new position.

"Nancy DeParle has a long and distinguished history as a leader in the drive to bring affordable healthcare to all Americans," Vietor said in a statement.

"Nancy will recuse from each and every particular matter involving a specific company on whose board she served," he said. But he declined to say how the recusal rule would apply to major policy decisions affecting companies that she had worked for.

Craig Holman of Public Citizen, a liberal-leaning advocacy group, said he wasn't worried about DeParle's business ties. "There are significant conflicts, but they're not overwhelming," he said. "You can't set up a reverse revolving door to exclude everyone who's ever worked in the healthcare industry."

But Ellen Miller, executive director of the Sunlight Foundation, which works for transparency in government, said that "no one can evaluate whether there's a conflict of interest or how deep it is" because neither DeParle nor the White House has released an accounting of her finances.

DeParle isn't legally required to make public a personal financial disclosure statement until 60 days after her March 2 appointment.

Delayed disclosure, Miller said, makes it much harder to raise objections, because an appointee's work will probably already be underway.

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azajac@tribune.com

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