6
Improve Accountability and Decision Making

I repeat … that all power is a trust; that we are accountable for its exercise; that from the people and for the people all springs, and all must exist.

Benjamin Disraeli

RECOMMENDATION 5

Improve Accountability and Decision Making

A “new compact” between Congress and the department is essential as HHS works toward achieving its vision for a healthy nation, departmental mission, and key health goals. Under this compact, the secretary would provide Congress and the nation regular, rigorous reports about departmental activities and assume greater accountability for improving performance and obtaining results; in return, Congress should allow the department greater flexibility in its internal operations and decision making.

  1. To enable greater accountability, the secretary should oversee development and implementation of a department-wide data, evaluation, and information system. The system should be based on a broad analytic framework designed to aid in managing departmental operations, learning from program experience, evaluating the costs and impact of programs, and determining whether they provide sufficient value for the investment of public funds.

  2. Congress should authorize the secretary to direct funding from the budgets of all departmental units to support the development of an HHS-wide information system. Funding for such a system would benefit all department units.

  3. The department should use the data, evaluation, and information system to



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6 Improve Accountability and Decision Making I repeat … that all power is a trust; that we are account- able for its exercise; that from the people and for the people all springs, and all must exist. Benjamin Disraeli RECOMMENDATION 5 Improve Accountability and Decision Making A “new compact” between Congress and the department is es- sential as HHS works toward achieving its vision for a healthy na- tion, departmental mission, and key health goals. Under this compact, the secretary would provide Congress and the nation regu- lar, rigorous reports about departmental activities and assume greater accountability for improving performance and obtaining re- sults; in return, Congress should allow the department greater flexi- bility in its internal operations and decision making. To enable greater accountability, the secretary a. should oversee development and implementation of a department-wide data, evaluation, and information sys- tem. The system should be based on a broad analytic framework designed to aid in managing departmen- tal operations, learning from program experience, evaluating the costs and impact of programs, and de- termining whether they provide sufficient value for the investment of public funds. b. Congress should authorize the secretary to direct funding from the budgets of all departmental units to support the development of an HHS-wide informa- tion system. Funding for such a system would benefit all department units. c. The department should use the data, evaluation, and information system to 125

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126 HHS IN THE 21ST CENTURY • enable the secretary to provide Congress with regular reports on progress toward achieving de- partmental goals, • inform policy development, • facilitate cross-department activities, • provide operational information to program man- agement for quality improvement and midcourse corrections, and • support effective long-range planning. d. For those outside the department, the system should • be accessible, transparent, timely, and reliable, and • provide useful, privacy-protected information re- garding department activities. e. The department should demonstrate accountability through continuous critical assessment of program efficiency, equity, impact on health, and cost- effectiveness, and through corrective action for un- derperforming programs. f. The secretary, in collaboration with the surgeon gen- eral, should present Congress and the public with an annual “State of the Nation’s Health” report that de- scribes progress toward achieving the vision for the nation’s health and the department’s key health goals. g. Congress should establish a new, strategic initiative fund to enable the secretary to support cross-agency and cross-departmental activities that exhibit innova- tion in responding to twenty-first century challenges, and to respond quickly to new, unforeseen, or ex- panding public health threats. The committee believes that improved accountability and more rig- orous decision making will be fundamental to the department’s success in creating more value from its activities, in responding to the key health and cost challenges of the twenty-first century, and in earning congres- sional support for increased flexibility in executing its responsibilities. To the committee, a strong system of accountability provides the in- formation needed to continuously improve program performance in ways that result in better health for Americans. As used in this chapter, the term accountability involves a systematic approach that

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127 IMPROVE ACCOUNTABILITY AND DECISION MAKING • establishes a small number of critical, measurable goals, • provides clearly delineated lines of responsibility, • sets quantifiable targets and time-specific milestones, • describes potential barriers and develops strategies to ad- dress them, • projects the investments to be made, • defines a process for regular reporting and assessment, • includes a reward and recognition system for staff that pro- motes achieving goals, • provides a clear understanding of whether progress is being made, and • implements corrective action, as needed. A key question is, “To whom is the department accountable?” The committee believes HHS is primarily accountable to the White House, Congress, and the tax-paying public. CURRENT DEPARTMENTAL EFFORTS The current administration and HHS have undertaken major initia- tives aimed at increasing performance measurement, which is an impor- tant aspect of accountability. The department currently operates under a complex web of internally and externally generated goal-setting and re- porting requirements. These requirements include exercises that relate to Healthy People 2010, the Government Performance and Results Act of 1993 (GPRA), the Program Assessment Rating Tool (PART), and the President’s Management Agenda (PMA), described below. Box 6-1 de- fines these requirements and illustrates their relationship to the depart- ment and each other. The trend toward greater HHS accountability may have begun with the first version of Healthy People, published in 1979, which set a series of 10 health goals for different age groups and described the actions the department would take to reach them. In subsequent iterations, Healthy People 2000 and Healthy People 2010, the number of health issues enu- merated has grown considerably. Healthy People 2010 includes 28 focus

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128 HHS IN THE 21ST CENTURY BOX 6-1 Selected Goal-Setting and Reporting Systems Systems Originating Within the Department: Department-wide objectives—This annual document lists 20 objectives that are “cas- caded down throughout the entire department.” While these objectives incorporate major themes from other goal-setting systems, no report is dedicated exclusively to them (HHS, 2008b). Government Performance Results Act (GPRA) of 1993—GPRA requires agencies to develop five-year strategic plans, updated every three years, as well as annual plans or annual performance budgets, and annual program performance reports. The strategic plan defines broad, long-term goals and describes broad strategies for their implementa- tion. The annual plan sets specific annual objectives related to the strategic plan’s goals and tracks progress toward them. Annual performance budgets track a broader set of performance indicators, measuring progress on all department activities. While mainly a mechanism for reporting, performance budgets also state goals that will be achieved with available funding. At the close of each fiscal year, the annual performance and account- ability report combines performance results with audited financial statements (HHS, 2007). Secretary’s 500-day plan—Implemented by Secretary Michael Leavitt, the secretary’s 500-day plan provides the department with steps to take over the course of 500 days that will produce results in 5,000 days. The 500-day plan, which builds on the secretary’s principles and priorities, is updated every 200 days. Progress is charted in the 250-day update and the report of major accomplishments (HHS, 2008a). Systems Originating Outside the Department: Healthy People—A set of national health objectives focused on prevention, Healthy Peo- ple was first published in 1979, and subsequent iterations set goals for the years 2000 and 2010. Progress is reported twice each decade as well as in the midcourse review (http://www.healthypeople.gov/). President’s Management Agenda (PMA)—The PMA, announced in 2001, identifies five critical management areas designed to produce better program results. Selected federal programs are assessed each quarter with the PMA scorecard, which uses a color-coded evaluation system—“green” indicates full achievement, “yellow” intermediate advance- ment, and “red” one or more deficiencies (OMB, 2008b). Program Assessment Rating Tool (PART)—The Office of Management and Budget (OMB) introduced PART in 2002 to examine federal programs in four areas: program purpose and design, strategic planning, program management, and program results. Based on the sum of numerical scores, with “program results” heavily weighted, pro- grams are rated effective, adequate, ineffective, or results not demonstrated. PART is designed to strengthen and reinforce GPRA reporting (OMB, 2008a).

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129 IMPROVE ACCOUNTABILITY AND DECISION MAKING areas, including one on the Public Health Infrastructure, and 467 objec- tives for the nation’s health (HHS, 2000). The welter of objectives of varying importance makes it difficult to perceive how much overall pro- gress has been achieved. Recognizing this dilemma, the department has identified 10 high-priority “leading health indicators” that include se- lected objectives that are being tracked. These leading indicators are physical activity, overweight and obesity, tobacco use, substance abuse, responsible sexual behavior, mental health, injury and violence, envi- ronmental quality, immunization, and access to health care. 1 All of these indicators represent important health problems, but they are predominantly affected by actions outside the department’s control. The problems either result from individual behavior choices or, as in the case of environmental quality, actions of other federal departments and agencies. The department’s work in these areas may be helpful at the margins, but they are not meaningful indicators of departmental perform- ance. Additional health goals for the department are identified in its five- year strategic plan, required by GPRA and updated every three years. The 2007–2012 strategic plan, HHS’s most recent, identifies the follow- ing four goals, derived from its operational responsibilities in health care, public health, human services, and scientific research and development 2 : • Improve the safety, quality, affordability, and accessibility of health care, including behavioral health care and long-term care. • Prevent and control disease, injury, illness, and disability across the lifespan, and protect the public from infectious, occupational, environmental, and terrorist threats. • Promote the economic and social well-being of individuals, families, and communities. • Advance the scientific and biomedical research and development related to health and human services. 1 The State of the USA, Inc., in partnership with the National Academies, is developing a web-based system of tracking trends to inform public policy decision making and re- search, and an IOM committee is participating in that effort by attempting to identify appropriate health indicators to track. 2 Note that the “public health promotion and protection, disease prevention, and emer- gency preparedness” goal accounts for 1 percent of the President’s proposed 2009 HHS budget, while the “health care” goal accounts for 93 percent.

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130 HHS IN THE 21ST CENTURY Because these goals cover every current departmental program and activity, they are too broad to encourage focus. (The current secretary has established 10 other, somewhat narrower priorities 3 that are not for- mally tracked and a 500-day plan for the department based on his core principles, 4 both entirely separate from the department’s strategic plan.) Under each of the four strategic plan goals, in turn, are four broad objectives. Progress toward these objectives is measured by benchmarks (called “performance indicators”) that have established targets and are reported in the annual plan and the annual performance and accountabil- ity report, additional requirements of GPRA. What is not clear from the strategic plan is the strategy for reaching the four goals (other than con- tinuing to do what is already being done) and, consequently, whether or how the performance measures relate to strategy. The goals are essen- tially an endorsement of the status quo, not a recipe for meaningful change. In a separate effort, the administration introduced the PART initia- tive in 2002, 5 managed by the Office of Management and Budget, with results available on the Internet since 2006 (see http://www.Expect More.gov). Staff members of individual programs, in collaboration with Office of Management and Budget (OMB) staff, assess their program’s performance (see Box 6-1). The following are the collective PART rat- ings for the 115 department programs assessed to date: • Effective (scores of 85–100): 16% of HHS programs • Moderately effective (70–84): 32% • Adequate (50–69): 25% • Ineffective (1–49): 5% • Results not demonstrated: 22% (OMB, 2008c) 3 These priorities are: every American insured, insurance for children in need, value- driven health care, information technology, personalized health care, health diplomacy, prevention, Louisiana health care system, pandemic preparedness, and emergency re- sponse. 4 These principles are: care for the truly needy, foster self-reliance; national standards, neighborhood solutions; collaboration, not polarization; solutions transcend political boundaries; markets before mandates; protect privacy; science for facts, progress for priorities; reward results, not programs; change a heart, change a nation; and value life. 5 In 2005, the PART program received an “Innovations in American Government Award,” from the Kennedy School of Government (Harvard University), an award pro- gram administered in partnership with the Council for Excellence in Government. In April 2006, it received the Government Performance Management Excellence Award from the Performance Institute, a leading adviser to government on performance issues.

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131 IMPROVE ACCOUNTABILITY AND DECISION MAKING According to OMB, while higher scores are desirable, the more im- portant results of the process are the agencies’ performance improvement plans, which, with occasional resetting of targets, are intended to pro- duce “continuous improvement of program performance” (OMB, 2008a). The hope is that, by making the ratings database public and by increasing its use by Congress and others, programs will work more aggressively to improve their ratings. However, OMB acknowledges that ratings will not necessarily be reflected in increases or decreases in program budgets, depending on circumstances. The White House, too, has an initiative to improve governmental op- erations, called the President’s Management Agenda. The following were the PMA’s government-wide goals and HHS scores (in italic), as of June 30, 2008: • Strategic management of human capital—Mixed results, but worsening since March 2008. • Competitive sourcing (now “commercial services manage- ment”)—HHS is successfully implementing its plans. • Improved financial performance—Initiative in serious jeopardy. Unlikely to realize objectives absent significant management in- tervention (OMB, 2008b). • Expanded electronic government—Mixed results, but improving since March 2008. • Budget and performance integration—Mixed results. Although these scores appear to be low, OMB concluded that HHS was in fact making progress in all five areas against agreed-upon deliver- ables and time lines. The IOM committee, in calling for greater accountability within HHS, recognizes that these efforts are already under way, but believes their very complexity may limit their usefulness to key audiences— especially Congress and the public. The two principal accountability sys- tems, one mandated under GPRA and devolving from the department’s strategic plan, the other OMB’s PART system, would probably benefit from consolidation, coordination, and some rethinking, so that they pro- duce more actionable results and the evaluation process becomes more efficient and less burdensome. However accurate the department becomes at documenting the hun- dreds of data points in the several required reporting systems described, these systems are not sufficient to establish true accountability.

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132 HHS IN THE 21ST CENTURY GREATER ACCOUNTABILITY As discussed in Chapter 2, a clearly aligned vision and mission and a small set of measurable, time-specific goals are essential for the depart- ment to establish meaningful accountability. Without an accountability system keyed to these most important issues, the department will be un- able to provide a cohesive, integrated picture of the nation’s health or its own performance. Current performance assessment systems, described above, do not support true accountability, as defined by the committee. In its view, true accountability requires a dual focus on program imple- mentation (process) and results (outcomes) and should have four compo- nents: 1. development of supporting information systems, 2. regular feedback and progress reports to Congress on what these information systems reveal about program management and re- sults, 3. a commitment to make the changes necessary to increase pro- gram effectiveness, and 4. a broad assessment—beyond the piecemeal approach of monitor- ing individual programs—of how well programs collectively are working to achieve departmental goals. Challenges to Creating Effective Accountability Systems 6 Accountability systems are, in large part, a means of achieving better long-term performance. However, the desire for higher performance can be thwarted if program managers feel threatened by the accountability process. “Few … officials want to publicly commit to hard-to-reach per- formance targets,” says Robert Kaplan, an originator of the Balanced Scorecard. The movement for increased transparency in government (well illustrated by http://www.ExpectMore.gov) increases the number of potential governmental critics and therefore may encourage agencies to set conservative goals and targets. “[L]ower-level department heads be- come reluctant to commit to any kind of performance target, much less one involving some degree of stretch” (Kaplan, 2000). 6 The committee owes a debt to Kaplan (2000) for the organization of this section.

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133 IMPROVE ACCOUNTABILITY AND DECISION MAKING As noted previously, HHS already receives considerable oversight from multiple organizations—the White House and the Office of Man- agement and Budget, various congressional committees, and even the public- and private-sector stakeholders involved in the delivery of medi- cal care or committed to the health of the public. These groups each have their own agendas and interests and rarely coordinate—and sometimes compete—with each other. The burden of meeting all these demands can make agencies reluctant to engage in a new process, even if it is better, unless it reduces other reporting requirements. A collateral benefit of the IOM committee’s recommendation that the secretary attempt to build broad consensus around a strong set of longer-term goals would be to counter the tendency of some outside stakeholders to focus on immediate or narrow issues. Shifting this per- spective will be difficult, but stakeholders’ understanding and buy-in for at least some longer-term goals could go a long way toward preventing the constant pull of short-term concerns that distract from long-term pri- orities. Long-term goals and explicit strategies for meeting them are essen- tial to high performance, as is an appropriate framework for measuring progress. Strategy, one of the “essential management elements” the committee considered, requires government officials to thoroughly con- sider alternatives, make explicit choices, then marshal resources—time, money, and people—to implement them, whether the goal is to improve department operations and managing costs, or the more ambitious “value creation” discussed in Chapter 4. Measurable goals and time-specific milestones are particularly important in the department’s work, since most of the major issues the department faces are inevitably long-term, and its strategies may take a number of years to unfold. Development of solid strategies may be more feasible as HHS secre- taries’ tenures are becoming longer. People who expect to hold appointed positions for only a year or two are unlikely to launch laborious strategic development and implementation processes that will play out long after their departure. This holds equally true within agencies whose leaders are appointed. The laborious federal appointment process that frequently keeps key positions vacant or with acting directors for months at a time not only hinders HHS performance, but also militates against account- ability. 7 7 The length of time it takes to fill an administration’s top 500 jobs has steadily risen. In the Kennedy administration (1960), it took 2.4 months; in the Bush administration (2000), it took 8.7 months (NRC, 2008).

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134 HHS IN THE 21ST CENTURY Finally, for the accountability system to be effective, it needs to in- clude incentives for good performance (and penalties for poor results), for both programs and people. OMB says that the program assess- ments—good or bad—in the current PART system, for example, are not linked to funding decisions. Until recently, federal agencies generally have not been allowed meaningfully to link employee performance and total compensation. “Pay-for-performance” policies now coming into play, at least for Senior Executive Service members and some other sen- ior-level positions (see Chapter 5), may enable the department to use fi- nancial incentives—a powerful motivator in the private sector—to improve program accountability. IMPROVE CAPABILITY TO MEASURE AND EVALUATE VALUE The IOM committee takes a broad perspective on the accountability issue, one that distinguishes between “data” and “information.” Data are discrete facts; when data are organized, combined, and presented in ways that enables response and action, they become “information.” PART and the HHS strategic plan provide data. The committee, by contrast, en- dorses a higher-level, department-wide information system, described below. The robust data, evaluation, and information system the committee envisions would be akin to an executive information system (EIS) in the private sector. Such systems collect and integrate selected data from across their enterprises in a timely way (monthly, weekly, or even daily). These carefully selected data provide the information needed to support a range of management decisions about • current performance, • needed changes in strategy, • potential new programs or discontinuation of underperforming ones, • improved processes and program operations, • alignment of efforts across agencies, • resource allocation, and • measuring and reporting results.

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135 IMPROVE ACCOUNTABILITY AND DECISION MAKING Developing such a system would be a large undertaking. A good starting point would be to assemble data around the department’s goals and the key health challenges, described in Chapter 2. These are—by definition—the issues of most national concern, the issues about which Americans need to know most. Over a period of years, other necessary components of the data system could be added and existing data collec- tion efforts updated and improved, through redirection, greater standardi- zation, elimination of redundancies, and so on (NRC, 2001). Starting with what is useful and available, much of the data for the information system could be drawn from existing public and private sources and assembled in creative, multidimensional ways. Although the amount of data already available is vast, it is scattered across agencies throughout government and in many private-sector databases and doesn’t necessarily produce actionable information for management. An example of creatively combining data from different sources is a surveillance system called the Sentinel Ini- tiative that captures information about Americans’ ex- perience with drugs and medical devices. 8 This system enables closer monitoring of product performance and gives rapid indication of any problems that arise, through analysis of existing national electronic claims and medical records data maintained by participating private-sector organizations and government entities, in- cluding VA [Department of Veterans Affairs], DoD [Department of Defense], and CMS [Centers for Medi- care and Medicaid Services]. Thus the information the system produces is of high value for decision making (actionable) and is sharply focused on protecting the health of the public. Some of the accountability data the department needs will undoubtedly come from the state and local levels. A relatively new branch of health services research called “public health systems research”—which examines the organization, financing, delivery, and impact of public health services (Ix, 2007)—may be especially helpful. 8 Creation of such a system was recommended in the 2006 IOM report, The Future of Drug Safety, and it was later codified in the Food and Drug Administration Amendments Act of 2007.

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136 HHS IN THE 21ST CENTURY Since HHS is the major funder of many of the activities and programs public health systems research evaluates, results of these studies would provide actionable insights regarding program design, funding, and implementation. Some new data collection efforts may be necessary to fill holes, but the committee is wary of large new efforts and more supportive of greater coordination among existing data resources, establishing inter- operability among them, and eliminating duplicative resources or ones that are no longer useful. Current data collection approaches used in the department are too in- frequent, too late, and insufficiently detailed for these management pur- poses; further, they document specific program activities rather than cross-departmental, coordinated achievement of broader goals. (Insofar as these specific program data remain useful to the program managers, they could continue to be collected. However, over time managers may find some of these efforts are unnecessary to assessing the impact of their work and their cross-agency collaborations.) The secretary should provide strong leadership to make sure the in- formation system becomes a meaningful part of the department’s opera- tions, by maintaining oversight of the system as it is developed and implemented, and by ensuring that key officials rely on it when making programmatic decisions. This will reinforce to all HHS staff the impor- tance of program performance. Related Recommendations To enable greater accountability, the secretary a. should oversee development and implementation of a department-wide data, evaluation, and infor- mation system. The system should be based on a broad analytic framework designed to aid in managing departmental operations, learning from program experience, evaluating the costs and impact of programs, and determining whether they provide sufficient value for the in- vestment of public funds.

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137 IMPROVE ACCOUNTABILITY AND DECISION MAKING b. Congress should authorize the secretary to direct funding from the budgets of all departmental units to support the development of an HHS-wide information system. Funding for such a system would benefit all department units. Uses of the New Information System As indicated, the kind of system envisioned by the IOM committee would generate actionable feedback about how health and human ser- vices programs are working, whether they need midcourse corrections, or whether they are performing poorly—in ways that cannot be corrected or are too costly for the benefit achieved—and should be terminated. The secretary must make clear that the purpose of the reporting system is to stimulate improvements in the performance of the department and its constituent units, and that system results will guide decisions about cur- rent programs and plans for new investments. As each HHS unit works toward its own integrated vision, mission, and goals, the system will be helpful in program management and tracking. This system could be described as a “neural network” for the de- partment and is a key component of value creation. It would enable a panoramic view across all health and human services programs and in- form the secretary how the department’s programs are coordinating their efforts to achieve departmental—as well as individual program—goals. It would enable the integration of data on costs and benefits to show the value received by program beneficiaries and the public. And it should allow the secretary and Congress “to periodically reexamine whether current programs and activities remain relevant, appropriate, and effec- tive in delivering the government that Americans want, need, and can afford” (GAO, 2003). The new system would not be solely an information resource for the federal government, but also could serve health care organizations in the public and private sectors at the national, state, and local levels. Just like the other performance data available today, the system also should be available to Congress and the public in an electronic, easily accessible, and readily understood form. The secretary, in collaboration with the surgeon general, could draw on this system to create a brief, annual “State of the Nation’s Health” report to Congress (perhaps in a joint session involving members of the

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138 HHS IN THE 21ST CENTURY multiple committees that oversee department activities), framed around the vision for the nation, departmental mission, and key goals. Referring back to the set of established goals in successive years would provide continuity over time and help policy makers and the public better under- stand progress made and what is needed in order to achieve further im- provements. Involving the surgeon general—“America’s doctor”—in the preparation, presentation, and dissemination of the report would further strengthen the surgeon general’s role as an authoritative voice on health issues and chief advocate for Americans’ health, and would demonstrate that the report is scientifically valid rather than politically motivated. The committee explicitly does not want such a report to stimulate another massive, micro-level data collection effort and lengthy printed document; instead it suggests that this be an orally presented report that utilizes the recommended information system and draws insofar as pos- sible on existing data and analyses. Related Recommendations The department should use the data, evaluation, and c. information system to • enable the secretary to provide Congress with regular reports on progress toward achieving de- partmental goals, • inform policy development, • facilitate cross-department activities, • provide operational information to program man- agement for quality improvement and midcourse corrections, and • support effective long-range planning. d. For those outside the department, the system should • be accessible, transparent, timely, and reliable, and • provide useful, privacy-protected information re- garding department activities. e. The department should demonstrate accountability through continuous critical assessment of program efficiency, equity, impact on health, and cost- effectiveness, and through corrective action for un- derperforming programs.

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139 IMPROVE ACCOUNTABILITY AND DECISION MAKING The secretary, in collaboration with the surgeon gen- f. eral, should present Congress and the public with an annual “State of the Nation’s Health” report that de- scribes progress toward achieving the vision for the nation’s health and the department’s key health goals. GREATER DEPARTMENTAL FLEXIBILITY: A NEW COMPACT WITH CONGRESS The IOM committee strongly believes the secretary needs greater flexibility in program management and department operations, if flexibil- ity is balanced with greater accountability, as described above. The IOM committee sees greater departmental accountability to Congress in ex- change for greater flexibility from Congress as an opportunity to create a “new compact” between these two governmental authorities. What the committee is seeking in proposing the “new compact” is a more produc- tive, working relationship between these two arms of government. Striv- ing for greater accountability and greater flexibility undergird the committee’s recommendations and can be achieved through a number of mechanisms, described in this report: 1. Meaningful engagement in priority-setting: The committee rec- ommends involving Congress (and others) from the outset in es- tablishing agreement on national priorities and HHS’s overall direction. Having to weigh future needs against the many current demands on the department—many of them congressionally mandated—may improve alignment between program needs, mandates, and the budgets to support them. 2. A responsible appointment process: The committee recommends that the appointment process for key HHS officials not only en- sure that its executives have the administrative, leadership, and technical or scientific expertise to manage their respective areas, but also that vacancies are promptly filled, so that agencies do not experience gaps in leadership. 3. Improved accountability and reporting: The committee strongly believes that the department must be held strictly accountable for its performance. To enable this, the committee recommends a robust data collection and analytic system, building on current

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140 HHS IN THE 21ST CENTURY efforts, that will provide meaningful information about the state of the nation’s health and departmental activities. HHS must use this system to inform decision making about future programs and to improve ongoing operations. 4. A staff commensurate with the needs: The work of the depart- ment demands a high-performing staff, but the committee recog- nizes that the current HHS workforce is threatened by impending retirements and, at times, inadequate scientific or public health expertise. The secretary can work with the Office of Personnel Management (OPM) to foster flexibility in the hiring process for people who are outside government, in the structuring of benefits and work schedules to retain employees who would otherwise retire, and in supporting the education of a new generation of public health professionals and health scientists. 5. Support for the department’s role in national health issues: For many reasons outlined in this report, the department must par- ticipate actively in any national health reform effort. Over time, Congress will need help in monitoring the impact of reform. It would be greatly aided by the committee’s recommendation that the department support (a) increased knowledge about the com- parative effectiveness of various preventive and treatment meth- ods and about the organization and delivery of care, as a basis for policy, (b) strengthened public information efforts, and (c) widespread adoption of health information technology. 6. Increased flexibility: Were the committee’s recommendations adopted, the department would be held to a higher standard of accountability; it would have improved capacity to document and improve its own and the health system’s performance; and it would have a strong workforce, led by competent, credible ex- ecutives, working toward widely agreed-upon priorities. In ac- knowledgement of those strengths, Congress should provide flexibility and opportunities for collaboration, and it should pro- vide the department with adequate funding for its vital work. Many factors would make this a complex set of negotiations between legislators and the administration. However, it is a worthy goal to try to rationalize this relationship, in light of the kind of responsible and nimble department the country needs today.

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141 IMPROVE ACCOUNTABILITY AND DECISION MAKING The Need for a New Compact Increasingly stringent limits on the HHS secretary’s flexibility are hampering departmental leadership. A secretary’s role is to focus on broad goals and strategies and gather the resources to meet them, as well as respond quickly and effectively to emergencies or emerging threats. But this role has become increasingly difficult to carry out, because sec- retarial authority has eroded to the point that in some areas it is no longer commensurate with the responsibilities of the position. Most of these limits on authority have come about because of Con- gress’s increased attention to the details of departmental management and operations. Some of the former secretaries interviewed for this report described the degree to which Congress “has become much more direc- tive in specifying the functions of each unit of the department,” including crafting job descriptions and the “fine details” of program operations and delivery, such as, “including floors and ceilings on spending and service, as well as a rising tide of earmarks, or what Congress now calls ‘con- gressionally directed funding’,” that reflect particular interests (Appendix G). As a result, the secretary and the department now are in danger of being hamstrung by these externally imposed restrictions. For example, until recently, 9 Medicare could not add prevention benefits without a change in statute. In other cases, Congress has taken away HHS’s flexi- bility to test new approaches. For example, it did not allow CMS to test either competitive pricing of managed care plans in areas with good plan penetration or competitive bidding of clinical laboratory services. Congress frequently adds new responsibilities to agencies unaccom- panied by the resources needed to carry out the new tasks. In a particu- larly troubling example, over the past two decades, Congress has enacted 125 statutes that directly affect FDA’s regulatory responsibilities— requiring new regulations, regulatory programs, or policy. In most cases these new requirements need scientific knowledge or expertise to de- velop and administer; in some cases they require laboratory research; but in no case has Congress provided an appropriation for staff or other re- 9 The Medicare Improvement for Patients and Providers Act of 2008, passed in July 2008, allows the Centers for Medicare and Medicaid Services to make national coverage decisions regarding prevention policies and authorizes the secretary of HHS to extend coverage to additional preventive services through the national coverage determination process.

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142 HHS IN THE 21ST CENTURY sources to implement the new program (FDA Subcommittee on Science and Technology, 2008). Amid positive comments on the value of congressional engagement and “the salutary benefits of a close and positive working relationship with their authorizing and appropriating committees and subcommit- tees,” the former secretaries who were interviewed had some significant complaints (see Appendix G). One had to do with the sheer number of these committees, each having various requests (see Chapter 2, Box 2-2). There is a burden to having so many sources of congressional inquiry and meeting the ongoing clearance requirements for responding to con- gressional requests for testimony, reports, and constituent services. For example, between January 2006 and September 2008, 22 high-level FDA staff were called on to testify before Congress on 68 occasions— averaging over two testimonies each month (FDA, 2008). The IOM committee believes that additional and reinstated decision- making authority is needed in order to give the secretary the flexibility to create value in departmental activities. This authority must come from Congress, with continued appropriate oversight. Examples where greater flexibility has the potential to increase value include the following: • Rationalize health care provider payment policies, which could not only improve health outcomes and promote better integration of care, but potentially would generate substantial short- and long-term monetary savings. • Strengthen methods to combat fraud and abuse (not only is this an essential component of program oversight, but it may be a way to recoup funds that can be used to support other department efforts and recommendations in this report). 10 • Achieve greater administrative efficiency through, for example, standardizing and improving electronic claims processing or making certain information technology investments (Kleinke, 2005; Taylor et al., 2005). • Allow Medicare payments to be made to midlevel health care professionals under the direction of physicians, when appropriate and cost effective. 10 As an indicator of the potential size of the return, the Department of Justice success- fully recovered $9.3 billion between 1996 and 2005 in 379 health care fraud and abuse cases initiated by whistleblowers (Kesselheim and Studdert, 2008).

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143 IMPROVE ACCOUNTABILITY AND DECISION MAKING • Simplify program management and oversight rules and reduce unnecessary variability—including in coverage decisions— across programs and HHS regions, not to stifle innovation, but to make working with government more equitable and transparent for program beneficiaries, the public, health care providers, re- searchers, and other key constituencies. To facilitate the increased flexibility in authority that the IOM com- mittee recommends, it also believes the secretary needs flexibility to use a modest proportion of program budgets to create a “strategic initiative fund,” that would be used to enhance cross-agency and cross- departmental activities that exhibit innovation in responding to twenty- first century challenges, such as those involving the Department of Homeland Security and the protection of the public against risks. The fund could also be used to respond to new, unforeseen, or expanding public health threats that require quick departmental response. The secre- tary would, of course, be accountable to Congress for the use of this fund, which could—if the added flexibility proves useful—grow over time. The health sector challenges today are of such magnitude that the department needs the capacity to work flexibly, creatively, and quickly in response to changing situations, and outside the confines of individual agency parameters. Many private-sector businesses have established in- dependent research units—“innovation funds”—to tackle thorny prob- lems, take advantage of new opportunities, or work across established organizational units. In the past, Congress, too, has recognized the need for this kind of capacity—notably in creation of the Defense Advanced Research Projects Agency. 11 Such flexibility exists within NIH. A previous IOM committee con- cluded that emerging biomedical challenges are such that a single NIH institute or center cannot respond adequately and that cross-NIH collabo- rations are needed. In a 2003 report, it recommended that 5 percent of the overall NIH budget be set aside to allow institute and center directors to fund trans-NIH initiatives of their choosing. A common fund of about 1 11 DARPA is the Department of Defense’s (DoD’s) central research and development organization, established in 1958 in order to prevent military surprises, such as the 1957 launch of Sputnik by the Soviet Union. DARPA’s impact outside the military may be best exemplified by its role as funder of projects that led to computer networking, hypertext, and other now-ubiquitous technologies that enabled development of the Internet and World Wide Web.

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144 HHS IN THE 21ST CENTURY percent (1.6 percent in 2007) of total NIH funding—was established in 2004 and is now a statutory requirement, with its own line-item funding. The earlier IOM committee also recommended that the NIH director have a Special Projects Program, independent of the budgets of the indi- vidual NIH institutes and centers, to support initiation of high-risk, inno- vative research. NIH has now established a Director’s Pioneer Award Program and a Director’s New Innovator Award for purposes similar to those the committee envisioned (IOM, 2003; NIH, 2008a, 2008b). Related Recommendation Congress should establish a new, strategic initia- g. tive fund to enable the secretary to support cross- agency and cross-departmental activities that ex- hibit innovation in responding to twenty-first century challenges, and to respond quickly to new, unforeseen, or expanding public health threats. REFERENCES FDA (Food and Drug Administration). 2008. Congressional testimony. http://www.fda.gov/ola/listing.html (accessed October 8, 2008). FDA Subcommittee on Science and Technology. 2008. FDA science and mis- sion at risk. Washington, DC: FDA Science Board. GAO (Government Accountability Office). 2003. Executive reorganization au- thority: Balancing executive and congressional roles in shaping the federal government’s structure. Washington, DC: GAO. HHS (Department of Health and Human Services). 2000. Healthy people 2010. Washington, DC: HHS. HHS. 2007. Strategic plan, 2007-2012. Washington, DC: HHS. HHS. 2008a. 500-day plan information. http://www.hhs.gov/500DayPlan/ (ac- cessed October 27, 2008). HHS. 2008b. President’s management agenda (PMA). http://www.hhs.gov/ pma/ (accessed November 12, 2008). IOM (Institute of Medicine). 2003. Enhancing the vitality of the National Insti- tutes of Health: Organizational change to meet new challenges. Washington, DC: The National Academies Press. Ix, M. 2007. Advancing public health systems research: Research priorities and gaps. Washington, DC: AcademyHealth.

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145 IMPROVE ACCOUNTABILITY AND DECISION MAKING Kaplan, R. 2000. Overcoming the barriers to balanced scorecard use in the pub- lic sector. Balanced Scorecard Report: Harvard Business School (November 15). Kesselheim, A., and D. Studdert. 2008. Whistleblower-initiated enforcement actions against health care fraud and abuse in the United States, 1996-2005. Annals of Internal Medicine 149:342-349. Kleinke, J. 2005. Dot-gov: Market failure and the creation of a national health information technology system. Health Affairs 24:1246-1262. NIH (National Institutes of Health). 2008a. Former Director, Elias A. Zerhouni, M.D. http://www.nih.gov/about/director/zerhouni_archive.htm (accessed No- vember 17, 2008). NIH. 2008b. NIH roadmap for medical research. http://nihroadmap.nih.gov/ (accessed November 17, 2008). NRC (National Research Council). 2001. Toward a health statistics system for the 21st century: Workshop summary. Washington, DC: National Academy Press. NRC. 2008. Science and technology for America’s progress: Ensuring the best presidential appointments in the new administration. Washington, DC: The National Academies Press. OMB (Office of Management and Budget). 2008a. Expectmore.Gov: Frequently asked questions. http://www.whitehouse.gov/omb/expectmore/faq.html (ac- cessed October 8, 2008). OMB. 2008b. The President’s management agenda: The scorecard. http://www.whitehouse.gov/results/agenda/scorecard.html (accessed October 27, 2008). OMB. 2008c. Dept of Health & Human Service Programs. http:// www.whitehouse.gov/omb/expectmore/agency/009.html (accessed October 27, 2008). Taylor, R., A. Bower, F. Girosi, J. Bigelow, K. Fonkych, and R. Hillestad. 2005. Promoting health information technology: Is there a case for more-aggressive government action? Health Affairs 24:1234-1245.

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