New Czarina of Health Reform Has Strong Industry Ties

(MoneyWatch)  President Obama has started his term like St. George going off to fight the dragon of special interests. But the health-care industry is so big and powerful that he can't seem to find a czar or czarina of reform who isn't tied into those interests.

Tom Daschle, Obama's original nominee for both reform chief and Secretary of Health and Human Services, had to withdraw because of a flap over unpaid taxes. But other details in his background also raised questions about his objectivity. For example, he received $390,000 for giving speeches to such organizations as America's Health Insurance Plans, and he got $5,000 for advising UnitedHealth Group, one of the nation's largest health insurers.

Now it turns out that Nancy-Ann DeParle, the new pick to run the White House Office for Health Reform, sits on the boards of Cerner, Medco Health Solutions, and Boston Scientific. Cerner is a leading vendor of hospital information systems; Medco is a pharmacy benefit manager that works for many health plans; and Boston Scientific is a medical device manufacturer. In the past, DeParle has also been a director of Triad, a for-profit hospital chain, and DaVita, which runs a chain of dialysis centers.

Of course, DeParle will resign from all of her current boards, as well as from her position as managing director of CCMP Capital, a private equity firm in New York. According to Politico, the Administration sees no conflict of interest in her case, so it won't have to waive its own conflict-of-interest rules to install her. And DeParle has reportedly promised to recuse herself if her office has to address any matter involving one of the companies she has been associated with.

Still, it's hard to believe that someone who has been so closely connected with the health care industry won't consider the interests of some of its major sectors when she helps design and promote the Administration's health-reform proposals. I don't mean that DeParle would try to advance the particular agendas of Cerner, Medco, or Boston Scientific. But these firms, and many others like them, have contributed to and profited from the rapidly growing cost of healthcare. There's nothing wrong with that, but there's also no way to get health spending under control unless some industryites' wings are clipped. Is DeParle the one who can do that?

It is no criticism of President Obama to point out the difficulty of finding qualified people who can lead the charge on healthcare reform. DeParle, who was administrator of the Health Care Financing Administration (now CMS) in the Clinton Administration, has excellent qualifications. So does Kathleen Sebelius, the governor of Kansas, who has just been nominated as Secretary of Health and Human Services. Earlier in her career, Sebelius served as insurance commissioner in Kansas, so she certainly knows the industry. And, unlike DeParle, she has never received money from a healthcare organization.

I wish the President all the luck in the world in his admirable fight to reform health care. He clearly knows the strength of the forces arrayed against him, but he must also make certain that he can rely on his own troops on the day of battle.