G
The Reorganization Option: Views from Former Secretaries of the U.S. Department of Health and Human Services

Paul C. Light, Ph.D.

Robert F. Wagner School of Public Service

New York University

INTRODUCTION

Structure is a central contributor to the overall performance of any organization. It affects the movement of information up and down the chain of command, the level of cooperation between divisions, the development and implementation of policy, and workforce morale. Whether measured by centralization, job specialization, height and width, complexity, implied autonomy, professionalization, or administrative red tape, structure has been repeatedly shown to affect the profitability, innovativeness, customer satisfaction, and flexibility of organizations.

This relationship between structure and performance is so powerful and easily designed relative to policy change that it has often prompted calls for reorganization—dozens of bills are introduced in each Congress to create new departments and reshuffle existing agencies. In government, restructuring has been a particularly popular response to national crisis and the desire for greater administrative accountability, even though it is rarely accompanied by reorganizations of basic oversight structures such as the congressional committee system. Built on the foundations of scientific management—that is, the notion that there is one right way to organize a given activity such as homeland security—the federal government has generally been constructed around a common architecture of hoped-for centralization, specialization, and professionalism.



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 191
G The Reorganization Option: Views from Former Secretaries of the U.S. Department of Health and Human Services Paul C. Light, Ph.D. Robert F. Wagner School of Public Service New York University INTRODUCTION Structure is a central contributor to the overall performance of any organization. It affects the movement of information up and down the chain of command, the level of cooperation between divisions, the development and implementation of policy, and workforce morale. Whether measured by centralization, job specialization, height and width, complexity, implied autonomy, professionalization, or administra- tive red tape, structure has been repeatedly shown to affect the prof- itability, innovativeness, customer satisfaction, and flexibility of organizations. This relationship between structure and performance is so powerful and easily designed relative to policy change that it has often prompted calls for reorganization—dozens of bills are introduced in each Congress to create new departments and reshuffle existing agencies. In govern- ment, restructuring has been a particularly popular response to national crisis and the desire for greater administrative accountability, even though it is rarely accompanied by reorganizations of basic oversight structures such as the congressional committee system. Built on the foundations of scientific management—that is, the notion that there is one right way to organize a given activity such as homeland security— the federal government has generally been constructed around a common architecture of hoped-for centralization, specialization, and professional- ism. 191

OCR for page 191
192 HHS IN THE 21ST CENTURY This paper analyzes the need for structural reform at the Department of Health and Human Services (HHS). Drawing upon interviews with the six former secretaries who began their tenures at the start of the past six presidential administrations (Gerald Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush), this paper fo- cuses on their views of reorganization as a palliative for achieving and maintaining high levels of performance in the future. 1 The paper begins with a brief overview of the rationale for reorganization and then turns to the general conclusions that emerged from the interviews. THE ALLURE OF REORGANIZATION There are many perfectly legitimate reasons to reorganize, but one of them is not immediacy. History suggests that reorganizations of any size are rarely complete upon signing. Congress often goes back into reor- ganizations to fine-tune, reconsider, and rearrange its work long after passage. This is certainly the case with the Departments of Defense and of Health, Education, and Welfare, for example. Congress has returned to Defense Department reorganization at least five times over the past 50 years, for example, starting with (1) the 1958 Department of Defense Reorganization Act (P.L. 85-599), which strengthened coordination among the armed services; (2) the 1980 De- fense Officer Personnel Management Act (P.L. 96-513), which revised military promotion and retirement practices; (3) the 1985 Defense Pro- curement Improvement Act (P.L. 99-0145), which was a direct response to the procurement scandals of the early 1980s; (4) the 1985 Goldwater- Nichols Department of Defense Reorganization Act (P.L. 99-433), which once again sought to strengthen coordination; and (5) the 1989 Base Clo- sure and Realignment Act (P.L. 100-526). Congress has returned to health, education, and welfare reorganiza- tion even more frequently, most notably the Department of Education Organization Act in 1979 (P.L. 96-88), which set asunder what President Eisenhower had joined together, and the 1994 Social Security Independ- ence and Improvement Act (P.L. 103-296), which separated the Social Security Administration from what had been renamed the Department of Health and Human Services in 1979. 1 The six secretaries interviewed for this project were promised anonymity. Therefore, all quotes in this paper are on a not-for-attribution basis.

OCR for page 191
193 APPENDIX G History suggests that government reorganizations are usually a work in progress. Indeed, this author cannot find a single reorganization over the past 70 years that has not been changed in some material way at a later time. Indeed, the U.S. Government Manual (http://www.gpo access.gov/gmanual/) provides more than 50 pages of executive organi- zations that have been terminated, transferred, or changed in name since March 4, 1933, the date of Franklin Roosevelt’s inauguration. Congress and the President create new agencies, then rearrange, downsize, coordi- nate, and rearrange them again. For example, Congress and the President began thinking about how to reorganize the new Department of Homeland Security on the day they created it. In all, there have been at least two internal reorganizations since the department opened for business in March 2003 and a legislative reorganization that involved the Federal Emergency Management Agency in 2006. Indeed, the President anticipated the need for reorgani- zation in Section 733 of his original proposal, which gave the new secre- tary authority to “establish, consolidate, alter, or discontinue such organization units within the Department, as he may deem necessary or appropriate.” Although the White House rightly notes that this is the same authority granted to the secretary of education under the 1979 stat- ute, one must remember that the Department of Education consisted of less than 5,000 employees, while the new department started with 170,000 employees and has grown since. The decision to create a new federal entity or reorganize existing agencies is not bound by a hard calculus, however. Rather, it involves a balancing test in which one must ask whether the nation would be better served by a new sorting of responsibilities. Simply asked, if a cabinet- level department or agency is the answer, what is the question? At least five possibilities come to mind. • Reorganization can give a particular issue such as homeland se- curity or veterans affairs a higher priority inside the federal es- tablishment. That is certainly what Congress intended when it elevated the Veterans Administration to cabinet status in 1988. Although the bill was delayed in the Senate due to concerns re- garding veterans appeals of benefits decisions, Congress eventu- ally concluded that veterans policy merited the heightened visibility and importance that would come with a statutory seat at the cabinet table, and the perquisites that come with it.

OCR for page 191
194 HHS IN THE 21ST CENTURY • Reorganization can help integrate, coordinate, or otherwise ra- tionalize existing policy by bringing lower-level organizations together under a single head. That is clearly what Congress in- tended in creating the Department of Energy in 1977. Congress and the President both agreed that the nation would be better served with a single entity in charge of energy policy than a tan- gled web of diffuse, often competing agencies. That is also what Congress tried to accomplish in establishing the Department of Defense in 1947 and the National Aeronautics and Space Ad- ministration in 1958. It is useful to note that all three of these ex- amples were in response to perceived threats: the Cold War and communism in 1947, fears of losing the space race in 1958, and the moral equivalent of war for energy independence in 1977. • Reorganization can provide a platform for a new or rapidly ex- panding governmental activity. That is what drove Congress to create the Department of Housing and Urban Development (HUD) in 1965. Although the federal government was involved in housing long before HUD, the new department was built as a base for what was anticipated to be a rapid rise in federal in- volvement. However, Congress did not place all housing pro- grams within the new department. • Reorganization can help forge a strategic vision for governing. This is what Congress expected in creating the Department of Transportation in 1966. The federal government had been in- volved in building roads and bridges for almost 200 years when Congress created the department, but needed to coordinate its highway programs with its airports, airways, rail, and coastal programs. By pulling all modes of transportation under the same organization, Congress improved the odds that national transpor- tation planning would be better served. Congress expected the same in not disapproving the reorganization plan that created the Environmental Protection Agency in 1970. • Reorganization can increase accountability to Congress, the President, and the public by making a department’s budget and personnel clearer to all, its presidential appointees subject to Senate confirmation, its spending subject to integrated oversight by Congress and its Office of Inspector General, and its vision plain to see. Although it is tempting to believe that such account- ability is only a spreadsheet away, cabinet status conveys a megaphone that little else in Washington does. One should never

OCR for page 191
195 APPENDIX G discount the impact of perquisites in the political island called Washington, DC. This is certainly what Congress intended to convey in not disapproving the reorganization plan that created the Department of Health, Education, and Welfare in 1953. It is also what it intended 25 years later when it split the Department of Education from that entity. Even if one can find ample history to support reorganization, it is important to note that creating or redesigning departments or agencies is not a panacea for all that ails a given function. Merely combining similar units will not produce coherent policy, for example, nor will it yield bet- ter performance, increase morale, or raise budgets. It most certainly will not make broken agencies whole. If an agency is not working in another department, there is no reason to believe that it will work well in the new department. Conversely, if an agency is working well in another depart- ment or as an independent agency, there is no reason to believe that it will continue to work as well in the new department. Bluntly put, “If it’s broke, don’t move it; if it ain’t broke, leave it alone.” The elevation of an existing agency to cabinet status is no guarantee of success either, a point well illustrated by the elevation of the Veterans Administration to cabinet status in 1988. Congress and the President felt that the department would use its newly granted status to provide better, faster health care and benefit processing. Yet neither came to pass. From this author’s perspective in studying the reorganization, veterans won a seat at the cabinet table, but no guarantee of stronger leadership, more funding to replace antiquated systems, or a greater commitment to veter- ans care. HOW THE SECRETARIES VIEW REORGANIZATION Department secretaries bring an important perspective to the analysis of reorganization and its costs and benefits. Some secretaries enter office at the beginning of the implementation process, while others are in office when the reorganization takes effect. Some recommend reorganizations, whereas others oppose them. However, all of the secretaries interviewed for this paper understood that reorganization is a difficult task—simply put, it should only be undertaken with a clear rationale and reasonable expectations.

OCR for page 191
196 HHS IN THE 21ST CENTURY The Costs of Reorganization Much of the concern involved the size of the reorganization. Two of the six secretaries interviewed for this project had been through large- scale reorganizations—Donna Shalala was secretary when the Social Security Administration (SSA) was removed from the department, while Tommy Thompson was secretary when the Department of Homeland Security absorbed several high-profile units from HHS. A third spent his first months in office rationalizing a host of programs in one “fell swoop”—Joseph Califano moved quickly to implement the most signifi- cant organizational reforms since the department was created. The rest of the secretaries had been through smaller-scale reorganizations—general tightening of authority, the statutory creation of the Office of Inspector General in 1975, streamlining of the drug approval process, and so forth. Whether pushed from outside the department by Congress or inside by the secretary, the secretaries interviewed for this project emphasized the costs of large-scale versus smaller-scale reorganizations. First, large- scale reorganizations absorb much greater political capital even when compared to major policy reforms such as the back-to-back Social Secu- rity crises in the late Carter and early Reagan administrations. At a minimum, large-scale reorganizations create enormous turmoil within the department as pieces break off rather like icebergs from an ice shelf. “Reorganization is not a lever for changing culture,” said one former sec- retary. “Confidence does not improve by reorganizing chaos—greater efficiency, yes, but no effect on positive motivation to serve the cus- tomer.” Nevertheless, given greater legislative freedom and White House support, several argued that the department was due for a major over- haul—once every 50 years is not overkill. Reorganizations also tend to create temporary, but significant, short- term declines in productivity as staffs try to untangle shared systems. Even reorganizations that involve clean breaks such as the creation of the Department of Education create significant effects as they back out of what was then the HEW hierarchy. “The last thing we should focus on is structure—too many jurisdictions to deal with in any reasonable time,” said another secretary. “It is a huge commitment of energy with much less yield than policy change or more aggressive leadership.” Reorganization does not always involve structure. All of the secretar- ies interviewed for this project had been through some kind of manage- ment reform—management by objectives under President Ford; zero- base budgeting under President Carter; the war on waste, fraud, and

OCR for page 191
197 APPENDIX G abuse under President Reagan; the quality movement under President George H. W. Bush; reinventing government under President Clinton; and the President’s Management Agenda under George W. Bush. Many secretaries had also instituted their own internal reforms, most of which were designed to strengthen secretarial oversight of the budgeting and policy process or to create a greater sense of collective endeavor such as Thompson’s “One HHS” campaign. “Don’t move boxes,” said a secre- tary about the first days in office. “Work with the Senior Executive Ser- vice until your political help arrives, adopt a 4-year agenda, and get the budget together quickly.” Like structural reorganizations, these process changes vary in size and complexity. Large-scale reforms such as Reagan’s war on waste or Clinton’s reinventing government create significant obligations for the secretary, while smaller reforms that originate either outside or inside the department can be more easily delegated to the deputy secretary or an assistant secretary. According to the secretaries, the most successful process changes have involved efforts to create synergies between the operating units within the department, which sometimes act as quasi-independent states. “The Food and Drug Administration and Centers for Disease Control acted like independent agencies,” one secretary said. “The secretary had little impact on their agenda; Congress did. So the key is to get them to stop going around the secretary to Capitol Hill, not merge or reorganize them.” The Impact of Change Some reorganizations are doomed to failure from the very beginning. All of the secretaries interviewed opined that some reorganizations may not be immediately “implementable” given the systems and structure that currently exists. Although all acknowledged the inertia that resides within any government organization, they also pointed to the deleterious effects of “moving boxes” as a fad that has less than ideal effects. Thus, just as the reasons for reorganization vary, so do the impacts. Some are better designed to deal with a particular problem such as wel- fare fraud, while others bear little connection to bureaucratic reality. As one secretary noted, “The organizational challenges were the size of the department, but department reorganization was not at the top of the list of fixes—[the] major problem was creating a unified identity in the

OCR for page 191
198 HHS IN THE 21ST CENTURY minds of advocacy groups and Congress, not split things off or add new functions. You have to address the independence instincts by vision, re- gional offices, hammering the message, opening channels directly to you.” As a result, the secretaries were clearly in favor of deep consultation with the White House and Congress before, not after, a major reorganiza- tion occurs—consultation that was perhaps less robust than warranted in the Department of Education, SSA, and homeland security reorganiza- tions. Whether well designed or not, the department needs to have its say, particularly given the potential effects of large-scale reorganizations. Surprise is not well tolerated within any organization, let alone one with such significant responsibilities. The secretaries also listed a number of caveats connected to reor- ganizations, large scale or small scale. • Reorganizations may do little to alter organizational culture. Several secretaries noted that the department’s primary problems involved organization culture, not structure. Yet whether culture was the problem or not, all of the secretaries were hesitant to embrace large- or small-scale reorganization as a particularly ef- fective method for changing culture. In this regard, their views fit well with research in public administration, which views structural reorganization as a very inefficient tool for creating a new culture: Well designed and implemented, structural reor- ganization can produce economies of scale and integrated policy, but it is far down the list of interventions that shape culture, ex- cept perhaps to the detriment of a shared commitment to values such as customer service, collaboration, and a shared sense of mission. “Symbolic change is more important than organization. You’ve got to find good people and trust them, create an envi- ronment in which people feel comfortable investing in shared ideas. It is better to be a respected manager by walking around, rather than a good box mover.” This does not mean that the secretaries were unalterably op- posed to reorganization as a tool for creating synergies surround- ing a particular mission. Several were quite willing to endorse small-scale reorganizations such as merging the food inspection function at the Food and Drug Administration with elements of the food inspection function at the Department of Agriculture. “That makes sense to me,” said a recent secretary. “There’s no

OCR for page 191
199 APPENDIX G reason to have the responsibilities divided. No benefit for the public.” At least one secretary was quite concerned about the continued disputes over the department’s role in homeland secu- rity. However, synergies and pass-backs are not guarantees of a greater sense of shared mission or ways to create a common cul- ture. “The department is a confederacy,” said a secretary. “You’ve got all these semiautonomous agencies. My transition into office involved a White House plan to add an entirely new layer of political appointees to corral the agencies, but that would have weakened my role as secretary. I was used to a dif- ferent style as a university president—appoint very talented peo- ple, coordinate them through the secretary’s office.” • Reorganizations can eclipse major policy concerns. The next HHS secretary will face a long list of major policy challenges, most notably the rapidly approaching Medicare crisis. All of the secretaries agreed that even a small reorganization could create a significant distraction from such issues. Again, the literature on public administration reinforces the worry. It is safe to suggest that reorganizations of any kind will force the secretary to deal with a host of unanticipated issues, not the least of which is re- cruiting or merging the leadership of the new or reorganized agency. “You lose two years of other opportunities,” said a sec- retary. “[You] can get to the same place by other means, by tak- ing control of the bureaucracy, by putting very smart people in key jobs.” The secretary and his or her team must maintain their focus on key issues, whether operations or new policy initiatives. De- veloping the testimony, completing studies, outlining new organ- izational charts, generating the political momentum, and soothing employee concerns—all the efforts needed for a suc- cessful reorganization require time and energy that might be bet- ter spent on addressing operational problems at agencies such as the Food and Drug Administration and preparing other agencies such as the Centers for Medicare and Medicaid Services for coming policy challenges. The secretary must also prepare for the onslaught of oversight and legal challenges. “I was the most sued person in Washington at the time,” said a secretary. “I was the target of 20,000 lawsuits, and had 200 lawyers working full- time to respond. And I was personally liable in many cases be- cause the liability laws were not changed until I left office.”

OCR for page 191
200 HHS IN THE 21ST CENTURY Notwithstanding these costs, reorganizations can improve efficiency and effectiveness. Although the secretaries were generally cautious about the value of reorganization, several did suggest that efficiencies and ef- fectiveness can be found through changes in both structure and process. Indeed, all engaged in at least one or more small-scale reorganizations such as combining the budget and personnel function during the Clinton administration. The combination put the two functions together in an ef- fort to ensure increased accountability among the department’s units and appears to have accomplished its goal. “I wanted more decisions made by the secretary,” said one secretary of his own small-scale reorganiza- tions. “I wanted a more synchronized budgeting process, not one in which agencies went directly to Congress or the White House. I also wanted to pull information up to the top and coordinate action across the agencies. Anything that Congress couldn’t fund somehow found its way to HHS, so I wanted a better sense of common mission.” Such secretary-driven reorganizations are more difficult to design and implement today than they were in the 1970s and 1980s, in large measure because Congress has become much more directive in specify- ing the functions of each unit of the department in statute. Whereas the department’s organic statute gave the secretary significant discretion in determining the job description of Senate-confirmed appointees, recent augmentations in that authority have been more precise, or limiting per- haps. As the secretary’s authority to undertake small-scale reorganization has dwindled, so too has the secretary’s ability to move quickly to adjust to changing circumstances such as the threat created by biological weap- ons or potential pandemics. Reorganization clearly carries costs and benefits, which the secretar- ies noted in the interviews. Also, there may be equally effective ap- proaches that avoid the greatest costs. Congress can lower the operating cost of the department without sig- nificant reorganization, for example. As the congressional role in limit- ing executive discretion has grown, so has congressional engagement in the fine details of program delivery, including floors and ceilings on spending and services, as well as a rising tide of earmarks, or what Con- gress now calls “congressionally directed funding.” Some of these ear- marks involve what appear to be backdoor requests by the department’s own operating units, but others appear to reflect the more traditional dy- namics of incumbency advantage and parochial interests. “The Hill was a problem for me,” said a secretary. “There was nothing that the commit-

OCR for page 191
201 APPENDIX G tees set as out of bounds. There are so many things the department does that matter back home that Congress really can’t stay out of it.” Although all of the secretaries interviewed for this paper recognized the value of congressional engagement, including the salutary benefits of a close and positive working relationship with their authorizing and ap- propriating committees and subcommittees, there were occasional com- plaints about the many sources of congressional inquiry and the ongoing clearance requirements for responding to congressional requests for tes- timony, reports, and constituent services. Secretary Richard Schweiker may have entered office with the great- est advantages in negotiating with Congress—after all, he had served in both the House and the Senate, had served on the key health authorizing committees in both chambers, and was the ranking member of the Senate health appropriations subcommittee at the time of his appointment. How- ever, other secretaries entered office with good personal relationships as well. “I took advantage of the celebrity of the cabinet post, and always went to the member’s office rather than holding court in the secretary’s suite,” said one secretary. “I also focused on small reorganizations that involved things like technology. The Hill doesn’t really know much about running things, so there was room there.” Alternatives to Reorganization Whatever the reorganization agenda, all of the secretaries were sensi- tive to the need for close working relationships with the White House. Although all understood the President’s stake in overseeing what is one of the flagship departments of government, there were occasional—but intense—concerns about the degree of White House engagement in the department’s policy and operational agenda. There was also great con- cern about the department’s participation, or lack thereof, in several high-profile decisions over the past 30 years. Nevertheless, Congress and the President remain at the center of the HHS universe and have constitutional responsibility for enacting and executing the laws. One device for avoiding the elongated process for securing organizational reform while honoring the separation of powers would be the restoration of the President’s reorganization authority as a tool for smaller-scale reorganizations that must now wind their way through a highly complicated congressional structure. This authority once gave the President the freedom to propose reorganization plans to

OCR for page 191
202 HHS IN THE 21ST CENTURY Congress under a one- or two-house legislative veto. Overturned by the Supreme Court in the early 1980s as an unconstitutional delegation of legislative power, the reorganization authority has never been restored. It could easily pass constitutional muster today under a fast-track process modeled on the approach used in the military base closing act and might be one way to give secretaries of all departments greater leeway in gov- erning their organizations. Hence, the secretaries tended to focus more on the problems a new secretary might face, rather than the value of a particular reorganization strategy. • Connective tissue and shared vision are essential for organ- izational success. Again to the issue of process and culture, the former HHS secretaries argued that the biggest organizational problem in the department is not the lack of formal integration of its units, but the effectiveness of the connective tissue through information technology, budgeting, policy development, strate- gic messaging, and so forth. This connective tissue can be man- dated through legislation—note the current emphasis on cybersecurity measures—but it is implemented through secretar- ial persuasion and employee commitment. Thus, the secretaries generally agreed that Congress and the President should consider the potential cost and benefits of major initiatives, including their own management agendas, on the departments of government. Many of the secretaries interviewed for this paper created that connective tissue by holding frequent meetings with their inter- nal “cabinet” of operating officers. Many also spent time reach- ing out to front-line employees, and several were intimately involved in the civil service recruiting process. One even had an explicit commitment to “capture” as many high-level interns as possible in competition with other departments. Yet whatever their strategy, almost all put an unyielding emphasis on commu- nication through the department. Although this communication involved secretarial messages down through a dense hierarchy, it often involved independent channels from the bottom up, includ- ing ad hoc meetings with employees during lunchtime at the de- partment’s cafeteria. • Appointees matter. No matter when they served, all of the sec- retaries interviewed for this project said that the secretary of HHS should have the ability to appoint his or her team to senior

OCR for page 191
203 APPENDIX G positions in the department. They recognize that they and their staffs operate on behalf of the President in faithfully executing the laws, but also believe that creating a common culture starts at the top with agreement and loyalty from their top lieutenants. Appointees have different roles at different points of time on the secretarial calendar, however. Each secretary interviewed for this project expressed somewhat different priorities in filling po- sitions, priorities that changed with circumstances, crises, and particular controversies such as stem cell research. All also un- derstood the difference between their personal staff in the secre- tary’s office and the Senate-confirmed staff that ran the operating units such as the Food and Drug Administration (FDA). The secretaries were unanimous in their desire to bring their own team into office as quickly as possible, a commitment that required fast action “before the White House personnel of- fice was able to step in and stop my appointments,” as one secre- tary put it. “I brought 25 people with me,” another secretary remembered. “The top operating people were experts, all knew health care, and I had veto authority because of my relationship with the President.” The appointments process has clearly changed dramatically over the past 30 years, of course. There are now more appointees subject to Senate confirmation, including the inspectors general for example, and the White House now plays a much more aggressive role in making the initial decisions about who will occupy the 3,000 or so political positions at the top of the execu- tive hierarchy. There are ways to circumnavigate this centralization—all of the secretaries recognized the value of entering office at the start of the term with a firm list of candidates for the top jobs. Doing so places the secretary at an advantage in dealing with a rela- tively young Office of Presidential Personnel. Secretaries can also use their influence with the President and/or Vice President to ensure that their chosen candidates for the top posts end up on the lists of three or four White House recommendations that ar- rive at the department. “I had my team in place before the White House did,” said one secretary, “and I always arranged to have my top choice end up on the interview lists that came from the White House later in the term. I took the White House role as a given, and worked around it.” Another secretary did the same.

OCR for page 191
204 HHS IN THE 21ST CENTURY Frustrated in appointing a trusted aide as deputy secretary, he appointed the aide to a newly created chief of staff post within the secretary’s office. There is little the secretary can do by him- or herself about the sluggish appointments process, however. Secretaries cannot accelerate the vetting process that requires so much time to com- plete; they cannot require the White House to move more quickly in filling vacancies late in the term; and they cannot force the Senate to hold the requisite hearings that precede con- firmation. The secretaries interviewed for this project certainly understand that some appointments such as surgeon general and FDA commissioner are particularly controversial, but contro- versy need not create long vacancies. If there is one reform on which the secretaries emphatically agreed, it is a long-overdue reform of the presidential appoint- ments process to (1) give the secretaries more authority to ap- point their own teams, especially in the secretary’s suite, and (2) accelerate the nomination and confirmation process to fill vacan- cies as fast as possible. This is no insignificant task, especially in an era when the presidential appointments process has slowed dramatically. As Table G-1 shows, secretaries are always con- firmed quickly, but lower-level offices take more time. The next secretary will be lucky to have most of his or her Senate- confirmed officers in place by early summer and will almost cer- tainly wait longer to fill more controversial posts such as surgeon general. • The department’s people matter most. Whatever reorganiza- tion might emerge through future legislation or executive order, the secretaries believed that the department’s people are its most important resource. Without indicting the current civil service for its own sluggish performance per se, several secretaries did emphasize the need for better recruitment, retention, promotion, and training programs to ensure a steady supply of talent as the baby boom generation retires over the next decade. Such reor- ganization need not be restricted to one department but appears to be a prerequisite for effective performance as one generation of employees arrives and another leaves. The secretary is the most important person in the depart- ment, of course. In leading the flagship domestic policy depart- ment, the HHS secretary sets the tone for a long list of other

OCR for page 191
205 APPENDIX G departments and agencies and is easily one of the most visible cabinet secretaries in government. Each secretary brings a somewhat different style into office, of course. Several of the secretaries interviewed for this paper were former members of Congress; several others were gover- nors; and several others were former university presidents. The experiences could not be more different. Governors tend to have a command-and-control orientation, wanting to centralize au- thority upward, while university presidents are much more famil- iar with a collegial approach that involves an acknowledgment of decentralization. Some experiences emphasize informal relation- ships, while others place the focus on tight direction. TABLE G-1 Confirmation Dates for Initial Appointees to Key Depart- ment Posts Position George H. W. Bush Bill Clinton George W. Bush Secretary 3/1/89 1/21/93 1/24/01 Under or deputy Secretary 5/10/89 5/24/93 5/26/01 Assistant secretary for health 4/19/89 7/1/93 1/25/02 FDA commissioner 10/27/90 Holdover 1/25/02 Heath Care Financing Administration— Centers for Medicare and Medicaid Services 2/1/90 5/24/94 5/25/01 Assistant secretary for program evaluation 1/30/90 5/28/93 5/25/01 Assistant secretary for management and budgeta 5/1/89b 5/24/93 1/25/02 National Institutes of Health director 3/21/91 11/20/93 5/2/02 Surgeon general 3/1/90 9/7/93 7/23/02 a The title and division of responsibilities associated with this position have varied over time. b This position was not subject to Senate confirmation in 1989.

OCR for page 191
206 HHS IN THE 21ST CENTURY The choice of style depends in part on what the President wants from the department. Indeed, the relationship with the President is by far the most important resource a new secre- tary can have. Secretaries having close personal relationships with the President have a greater chance to influence every- thing from appointments to the policy agenda. “I had no sur- prises,” said one. “I knew the President and could play that card at any time. I never did, but the fact that people knew I could mattered most.” Advice to the Next Secretary These views from the past six secretaries provide valuable advice to the next HHS secretary. Indeed, several of the secretaries interviewed for this project were quite explicit about what the next secretary should do to take hold of the department in the first few months of service. Suffice it to say that large-scale reorganization is not on the list. All of the secretaries suggested that the next secretary focus first on a unifying vision for the department. Although they recognize that the de- partment has many responsibilities, dozens of which are spelled out in the annual performance report, the secretary needs to identify a very small number of priorities that should preoccupy the operating units (e.g., obesity, evidence-based management). Instead of the 11 priorities currently listed on the HHS website, the secretaries seemed to favor five or fewer. The past secretaries also put a premium on developing a strong rela- tionship with the White House. Much as they may have bristled at White House involvement in the appointments process, they all understood that they had to forge strong ties to the White House surrounding key policy issues such as welfare and health care reform. Several noted that they had been surprised by White House policy decisions in part because they lacked strong ties to the executive staff. The secretaries also talked about the value of good metrics for meas- uring performance. However, they did not uniformly embrace the highly detailed reporting required under the 1994 Government Performance and Results Act. Rather, they focused on the need for evidence-based care, value for the dollar, and a strong scientific rationale for making decisions ranging from Medicare and Medicaid reimbursement to risk-based food inspections.

OCR for page 191
207 APPENDIX G Finally, the secretaries put their emphasis on building a mission- centered culture within the department. It is easy for HHS to divide into a series of isolated silos that are far from a “family of agencies,” as the department’s current metaphor describes them. If the department is to restore and maintain public confidence in its programs and priorities, it must articulate a unifying message that reinforces its role as the premier locus for protecting and enhancing the quality of life for all Americans. CONCLUSION The secretaries interviewed for this project agreed that reorganiza- tion is one of many tools for improving organizational performance. Be- cause this philosophy of reform originates in the scientific management movement spurred forward by operations research and Frederick Taylor, it also carries the hubris perhaps that there is “one best way” for building an efficient bureaucracy. Scientific management still holds promise for improving organiza- tional efficiency, whether through shared administrative, or “back office” functions or through organizational synergies that might not otherwise exist under a “czar” or other integrative mechanism. However, it is only one of several philosophies for reform and competes against those who believe that increased performance comes from more aggressive over- sight against fraud, waste, and abuse; more transparency regarding organizational action; or breaking free of the rules that scientific man- agement creates. This is not to argue that reorganization is unwarranted in all cases— to the contrary, it provides significant benefits as discussed earlier in this paper. However, the history of reorganization suggests that it may be most effective when used as a tool of last resort—that is, policy makers might be well advised to try other methods for improvement before they use reorganizations. Such methods can be more easily reversed but may solve the problem at lower cost. Being conservative may be just as wise in reorganization as it is in medicine.

OCR for page 191
208 HHS IN THE 21ST CENTURY Interview Schedule Tommy Thompson, July 7, 2008 David Matthews, July 8, 2008 Donna Shalala, July 10, 2008 Richard Schweiker, July 11, 2008 Louis Sullivan, July 31, 2008 Joseph Califano, August 19, 2008