1
Introduction

Men make history, and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.

Harry S. Truman


The federal government’s largest department in terms of budget, the Department of Health and Human Services (HHS) spends almost $2 billion a day. It spends more money than the Department of Defense or the Social Security Administration, and its budget dwarfs those of all other departments (see Figure 1-1). HHS has more than 65,000 full-time employees (OMB, 2008b), and actual spending in fiscal year (FY) 2007 was more than $658 billion—most of which (85 percent) was used for Medicare and the federal portion of Medicaid (OMB, 2008a).1 The President’s 2009 HHS budget request, which will undoubtedly be adjusted in various ways through the appropriations process, is for $737 billion (OMB, 2008a).

1

Medicare is a federally administered entitlement program funded through payroll taxes that are set aside for that specific purpose and outside of the department’s control; the Medicaid program is a federal-state partnership program for some categories of low-income Americans (with the largest share of payments going to the elderly and disabled individuals needing long-term care). The federal government provides a portion of the funds, and the states provide the remainder and administer the program.



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1 Introduction Men make history, and not the other way around. In periods where there is no leadership, society stands still. Progress oc- curs when courageous, skillful leaders seize the opportunity to change things for the better. Harry S. Truman The federal government’s largest department in terms of budget, the Department of Health and Human Services (HHS) spends almost $2 bil- lion a day. It spends more money than the Department of Defense or the Social Security Administration, and its budget dwarfs those of all other departments (see Figure 1-1). HHS has more than 65,000 full-time em- ployees (OMB, 2008b), and actual spending in fiscal year (FY) 2007 was more than $658 billion—most of which (85 percent) was used for Medi- care and the federal portion of Medicaid (OMB, 2008a). 1 The President’s 2009 HHS budget request, which will undoubtedly be adjusted in various ways through the appropriations process, is for $737 billion (OMB, 2008a). 1 Medicare is a federally administered entitlement program funded through payroll taxes that are set aside for that specific purpose and outside of the department’s control; the Medicaid program is a federal-state partnership program for some categories of low- income Americans (with the largest share of payments going to the elderly and disabled individuals needing long-term care). The federal government provides a portion of the funds, and the states provide the remainder and administer the program. 21

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22 HHS IN THE 21ST CENTURY $700,000 Mandatory $600,000 Discretionary $500,000 Millions of Dollars $400,000 $300,000 $200,000 $100,000 $0 Social Security Administration Health and Human Services Veterans Affairs Agriculture Defense Education Energy Interior Justice Homeland Security Labor State Transportation Treasury Commerce Housing and Urban Development Other Programs* FIGURE 1-1 Federal budget by department: actual spending FY 2007 (showing mandatory and discretionary spending). *This category includes the Corps of Engineers, Environmental Protection Agency (EPA), National Aeronautics and Space Administration (NASA), Na- tional Science Foundation (NSF), and Small Business Administration. SOURCE: OMB (2008a). More than sheer size determines the importance of a governmental activity. HHS touches the lives of virtually every American. Its agencies help pay for medical care for elderly, disabled, and low-income Ameri- cans; they protect our population against domestic and global health threats; they ensure the safety of our food and medications—regulating more than $1 trillion of the U.S. economy annually (FDA, 2008); they search for new scientific advances, tools, and techniques to prevent, manage, and cure diseases, including through grants that support the work of universities and scientists in all U.S. states and territories; they

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23 INTRODUCTION provide a safety net of services for the poor and special populations; and they work to make the entire health care system better for everyone. In addition to its health activities described below, HHS is responsi- ble for two significant human services programs—the Administration on Aging and the Administration for Children and Families. These programs support a variety of services including community-based programs for older persons, Temporary Assistance for Needy Families, Head Start, adoption and foster care services, and prevention of family violence. As is discussed in Chapter 3, an individual’s health is determined by a vari- ety of complex factors, including socioeconomic status, and the Admini- stration on Aging and the Administration for Children and Families play an important role in assuring not only the financial well-being of their constituents, but also their health. The sweep of the department and its many activities today is broad, though its beginnings were modest. For more than 200 years, the addi- tion of new programs and agencies has created a patchwork of programs that is now the responsibility of HHS. Many units that began small are now large, complex enterprises in their own right. Carrying out these diverse roles involves agencies and people who represent multiple disci- plines and organizational cultures. Biomedical researchers, regulators, service providers, payers, analysts, health education specialists—all have different priorities and ways of looking at the world and its problems. This makes it difficult to achieve organizational alignment—that is, to ensure that every agency, unit, and person in the organization is working toward a consistent set of goals. If the department leadership had to deal only with achieving internal harmony, that in and of itself would be a significant challenge. However, it also must respond to the needs and desires of many other powerful players. The White House has health care priorities; so does Congress; and so do other departments, most notably, the Department of Homeland Security. HHS must consider the priorities and needs of the state and lo- cal health officials who implement its programs in communities; of ad- vocacy groups that want attention to their issues; and of the health professions, provider groups, and institutions concerned about regulation and funding, as well as of a public that expects high-quality, affordable health care. In today’s globally connected world, the department’s role and re- sponsibilities do not end at the U.S. borders. People, knowledge, infor- mation, and goods travel across geographic boundaries more rapidly than ever. These transfers sometimes pose a risk to Americans: travelers may

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24 HHS IN THE 21ST CENTURY carry novel infections; food imports may be contaminated; products may be hazardous. Other times, information and knowledge gained elsewhere may help Americans, giving early warning of disease trends, suggesting how to prevent or treat medical problems, or providing more effective models of care. For reasons such as these, the department has an increas- ing role and expanding set of international relationships that it should pursue proactively. 2 Responsibility for HHS activities is divided among many committees of Congress that oversee specific department activities, regularly legis- late new programs and responsibilities, and control its funding. This type of oversight may address specific, current needs, but it militates against coordinated, efficient, cost-effective operations. The legislated require- ments and budget mandates associated with specific programs also can inadvertently become a strait jacket—preventing deployment of re- sources for quick response to evolving circumstances and sustained in- vestment in resolving enduring challenges. Some observers of this patchwork of responsibility, structure, influ- ence, and oversight occasionally wonder, at least rhetorically, whether such complexity can be managed at all (Shalala, 1998). CHARGE TO THE COMMITTEE In a letter to the Institute of Medicine (IOM), Representatives Henry A. Waxman and Tom Davis, chair and ranking minority member, respec- tively, of the House Committee on Oversight and Government Reform posed the question of whether HHS is “ideally organized” to meet the public health and health care cost challenges that require a focused na- tional response (see Appendix B). They requested a study of this ques- tion, which the IOM framed as follows: • What are the unifying elements of the mission of the depart- ment? What are the missions of its constituent agencies, and how 2 The Institute of Medicine’s Committee on the U.S. Commitment to Global Health re- cently evaluated the role for the United States in ensuring global health. The committee released a letter report in December 2008, titled The U.S. Commitment to Global Health: Recommendations for a New Administration, which outlined a vision for the U.S. gov- ernment to improve the implementation of the U.S. global health enterprise. The commit- tee’s final report is expected to be released in the spring of 2009.

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25 INTRODUCTION do their activities relate to the public health, health care quality, and health care cost challenges facing the United States? • Are the activities of its individual agencies aligned to optimally support the overall health mission of HHS? Should the opera- tions of individual agencies be changed, consolidated, or re- aligned to make them collectively more effective in advancing the health of the nation? • How can the governance of HHS be best organized to support and manage its responsibilities, function, and mission? How could the focus of individual agencies be improved to enhance their accountability and efficiency? • How can relevant data be collected, integrated, and shared within and outside HHS in a way that is available, transparent, and use- ful for government and public decision making? THE NATION’S HEALTH CHALLENGES As the congressmen note, threats to the health of Americans are in- creasingly diverse and urgent. They have both global and domestic ori- gins. We see an aging population and climbing rates of costly chronic diseases, evolving risks of infectious diseases, the need for stronger emergency preparedness, weaknesses in the public health infrastructure, health risks from climate change, new outbreaks of food-borne diseases, and serious shortages of many key health professionals—all in the con- text of rising national health care costs, which limits the degrees of free- dom to make system changes. Yet system changes are needed, in order to ensure that all Americans have access to basic health care and that the care we do receive is of high quality. Clearly, prompt action is needed to position HHS for these challenges. MEETING CHANGING NEEDS FOR 210 YEARS The roots of HHS stretch back to 1798, when Congress established a network of federal hospitals to care for merchant seamen. Piece by piece, the scope and importance of public health activities grew as new activi- ties were added (see Box 1-1 for a definition of public health and related terms).

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26 HHS IN THE 21ST CENTURY BOX 1-1 What Is Public Health? The following definitions may help in distinguishing among several similar terms used in this report: Public health (also “population health”)—the science and practice dealing with the pre- vention of disease and injury and the protection and improvement of the health, safety, and well-being of groups of people, as contrasted with the individual care a person receives from a doctor, nurse, or other health care practitioner. Public health programs operate at the national, state, and local levels to, for example: • Provide immunizations, • Prevent tobacco use, • Train communities in emergency preparedness, • Better manage the costly consequences of chronic diseases, • Ensure food safety, • Track disease patterns, • Prevent and control transmission of infectious diseases, • Operate health programs for pregnant women and infants, and • Research new disease prevention and treatment methods. Health of the public—a broad construct that refers to the overall health of the American people, which is affected by public health actions as well as many other biological, social, and environmental factors—from individual genetic makeup, to the environments in which people live and work, to their own behavior, socioeconomic status, and the amount and kinds of health services they receive. Public Health Service (PHS)—includes the Office of Public Health and Science, the department’s 10 regional health administrators, which are under the oversight of the assis- tant secretary for health (ASH), and the health-related operating divisions of HHS, which are: • National Institutes of Health (NIH), • Health Resources and Services Administration (HRSA), • Centers for Disease Control and Prevention (CDC), • Indian Health Service (IHS), • Substance Abuse and Mental Health Services Administration (SAMHSA), • Food and Drug Administration (FDA), • Agency for Healthcare Research and Quality (AHRQ), and a • Agency for Toxic Substances and Disease Registry (ATSDR). The PHS has been reshaped and expanded many times over the years, and a 1995 reorganization of its leadership resulted in direct reporting of PHS operating division heads to the secretary rather than, as formerly, to the ASH (Office of the Public Health Service Historian, 2004; Parascandola, 1998). _________________________________ a CDC administers the ATSDR, which, although small, is considered a separate agency of the PHS.

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27 INTRODUCTION In 1887, the federal government opened a one-room research labora- tory within the Marine Hospital Service. This small Staten Island labora- tory was the modest forerunner of the National Institutes of Health. The 1906 Pure Food and Drugs Act added regulatory authority to a small chemistry department—then in the Department of Agriculture—that we now know as the Food and Drug Administration. The Social Security program, enacted in 1935, was placed in the department, and in 1946, the Communicable Disease Center—parent of today’s Centers for Disease Control and Prevention—was born, when a highly successful Public Health Service (PHS) program on malaria control was expanded to in- clude other communicable diseases. Congress created the cabinet-level Department of Health, Education, and Welfare (HEW) in 1953. Twelve years later, the department acquired two new programs—Medicare and Medicaid, which in the past 40 years have completely reshaped the U.S. health care system. Despite its grow- ing size and multiplicity of responsibilities, the department’s three-part mission remained intact until a separate Department of Education was created in 1979. Loss of the “E” in HEW prompted a name change, and the department became HHS the following year. In 1995 it lost much of the “W,” when the Social Security Administration became an independ- ent agency. THE HHS BUDGET Today, the department has 11 operating divisions, has 15 staff divi- sions, and implements more than 300 programs (HHS, 2008). Figure 1-2 shows how total department spending for FY 2007 was distributed across agencies and programs, and Figure 1-3 shows the trend in financial re- sources of the PHS agencies, with the National Institutes of Health (NIH) accounting for the largest share.

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28 HHS IN THE 21ST CENTURY ACF 2.06% HRSA 0.96% All Other Mandatory Programs CDC 0.89% 5.07% Medicaid/ SAMHSA 0.48% SCHIP 29.32% NIH IHS 0.47% 4.31% CMS 0.47% FDA 0.26% AoA 0.21% PHSSEF 0.10% General Department Management 0.05% All Other Discretionary Programs 0.01% OMHA 0.01% ONCHIT 0.01% OIG 0.01% OCR 0.01% AHRQ 0.00%* Medicare 55.30% FIGURE 1-2 Distribution of HHS actual expenditures, FY 2007. *The AHRQ is shown as representing 0 percent of the department’s budget be- cause it receives funds only from other PHS agencies through the PHS evalua- tion set-aside and has not had its own separate budget allocation since 2002. In fact, the President’s budget request for AHRQ has been zero since 2001. Its 2009 program-level expenses were projected at $326 million, making it by far the smallest PHS agency. NOTES: ACF = Administration for Children and Families; AHRQ = Agency for Healthcare Research and Quality; AoA = Administration on Aging; CDC = Cen- ters for Disease Control and Prevention; CMS = Centers for Medicare and Medicaid Services; FDA = Food and Drug Administration; HRSA = Health Re- sources and Services Administration; IHS = Indian Health Service; OCR = Of- fice for Civil Rights; OIG = Office of the Inspector General; OMHA = Office of Medicare Hearings and Appeals; ONCHIT = Office of the National Coordinator for Health Information Technology; PHSSEF = Public Health and Social Ser- vices Emergency Fund; SAMHSA = Substance Abuse and Mental Health Ser- vices Administration; SCHIP = State Children’s Health Program, a component of Medicaid. SOURCE: OMB (2008a).

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29 INTRODUCTION 30,000 2001 (actual) 2003 (actual) 25,000 2007 (actual) 2009 (request) Spending (millions of dollars) 20,000 15,000 10,000 5,000 * 0 NIH HRSA CDC IHS SAMHSA FDA Agency FIGURE 1-3 Public Health Service budgets, by agency (actual spending FY 2001, FY 2003, FY 2007, and President’s budget request, FY 2009). NOTES: This figure does not include data for the Agency for Toxic Substances and Disease Registry (ATSDR) or the Agency for Healthcare Research and Quality (AHRQ). Funding for ATSDR is included in CDC’s budget. As noted above in Figure 1-2, AHRQ has not had its own separate budget allocation since 2002. *Although the figure shows the President’s budget request for FY 2009, an addi- tional $300 million was included to reflect funds available to the FDA for FY 2009 as a result of the June 2008 Emergency Supplemental Appropriations Bill and the September 2008 Continuing Resolution. SOURCE: OMB (2004, 2008a). As demonstrated in Figure 1-2, HHS’s budget is dominated by the Centers for Medicare and Medicaid Services, whose spending 3 grew from almost $350 billion in FY 2001 to $570 billion in FY 2007, with the President’s budget request for FY 2009 standing at $635 billion— 3 The CMS spending figures for 2001 and 2007 include discretionary spending as well as the mandatory outlays for Medicare and Medicaid/State Children’s Health Insurance Program (SCHIP).

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30 HHS IN THE 21ST CENTURY more than an 85 percent increase over the last eight years (OMB, 2004, 2008a). As Figure 1-4 shows, the vast majority of the department’s budget is designated for mandatory spending under entitlement and other service, training, and research programs. Only about 10 percent of the budget each year is discretionary (the largest share of which supports NIH). STRUCTURE VERSUS RESTRUCTURING 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 de- velopment and implementation of policy, and workforce morale (Appen- dix G). Over the years, organizational management literature has suggested many approaches to structuring large private-sector entities, and current analysis tends toward the view that “there is no single best way to organ- ize” (Bradach, 1996). In the federal government context, numerous reor- ganization efforts have been attempted, but many have not achieved substantial or long-lasting change (Radin, 2000). Medicaid/SCHIP 29.32% Other Mandatory 5.07% NIH 4.31% Other Discretionary 5.99% Mandatory Discretionary Medicare 55.30% FIGURE 1-4 HHS mandatory and discretionary budget allocations, 2007. SOURCE: HHS (2008).

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31 INTRODUCTION The organizational difficulties of the Department of Homeland Secu- rity provide a cautionary tale. Since its formation in 2003, it—and its 16 operating components and more than 170,000 employees—has been in- ternally reorganized at least twice (Appendix G). In addition, Congress stepped in with a legislative reorganization (the Post-Katrina Emergency Management Reform Act) in 2006. Despite the enormous national atten- tion, priority, and resources placed on homeland security after 2001, it still was not easy to “get it right” the first time. Since its creation in 1953, HHS has been led by 20 secretaries whose tenures in the earlier years tended to be relatively short. Since 1985, av- erage tenures have more than doubled (see Appendix D). Successive HHS secretaries have favored markedly different approaches and degrees of reorganization and report mixed success (Balutis, 1979; Appendix G). Interviews performed for the IOM committee with six former secre- taries, who began their tenures at the beginning of the past six Presiden- cies, revealed varying views on the usefulness of a major departmental reorganization. However, these former secretaries unanimously agreed that the process of changing the underlying culture that influences day- to-day operations of individual units and the department as a whole is difficult, distracting, time consuming, and often unsuccessful (see Ap- pendix G). If restructuring is to be attempted, it must begin immediately upon the secretary’s taking office. The larger—and longer—the restruc- turing project, the more turmoil and the longer are the delays in acting on the agenda of the new President and secretary. Upon deliberation, the IOM committee concluded that, given con- sensus among management experts, there is “no one best way” to organ- ize a huge, complex entity such as HHS—a large-scale reorganization at this juncture would take too much time and attention away from pressing challenges that the department currently faces. Nor would it be timely, given the likelihood of at least some health reforms in the next few years, which themselves may necessitate some structural changes within the department. The committee also recognized that success in large-scale reorgani- zation is not guaranteed, and in any case would be difficult because of the short time the secretary has to act. In an interview, HHS Secretary Michael Leavitt explained the short time frame this way (Schaeffer, 2007): The government runs in four-year cycles, but it’s really not four years. Because when it starts, there’s about a six-month period when

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32 HHS IN THE 21ST CENTURY no one’s in place, and people are trying to find their way around. Then the last year, there’s an election. So you’ve really got about two and a half years. By contrast, the Government Accountability Office (GAO) has ob- served that it generally takes government entities five to seven years to successfully complete major change initiatives (GAO, 2004). Although most recent secretaries caution against embarking on a ma- jor reorganization, even a secretary who wanted to do so would encoun- ter the growing number of restrictions Congress has placed over departmental operations, job descriptions, and details of program deliv- ery. Negotiating those restrictions—many of them statutory—would be another lengthy process of uncertain outcome (see Appendix G). Opportunities for Change Even without major structural change in the department, the commit- tee saw many opportunities for improved alignment and performance and for building more value into departmental operations. As noted, HHS is a large, complex enterprise with many constituencies, each of which wishes that the department’s activities and performance would meet its particular needs; collectively, these external forces create the complex environment that the secretary must skillfully navigate. Organizational management literature is replete with advice and tools related to improving efficiency and effectiveness. A widely used management framework that the IOM committee found useful during its deliberations takes into account the following seven essential elements, distilled from research in the private sector (Waterman et al., 1980): 1. Strategy—the ways in which an organization achieves its ends 2. Structure—how tasks and people are organized to accomplish the work and what they are responsible for 3. Systems—the formal processes and procedures the organization uses to plan, allocate resources, measure performance, manage information, and so on 4. Staff—the organization’s human resources 5. Skills—its distinctive attributes and capabilities 6. Style—how both top management and the overall organization operate

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33 INTRODUCTION 7. Shared values—the organization’s fundamental, widely shared values that signal what is important to it (Bradach, 1996) The committee believes that the department will derive great benefit from comprehensive organizational reform strategies that take into ac- count fundamental structures and processes, such as those listed above. While significant alterations in HHS structure would not be easy—or even possible—the decision-making and management processes at all levels of the department can change, and this is where the new secretary can make the most progress in responding to the concerns the House committee has raised. The IOM committee’s recommendations (see Box 1-2) are interre- lated and mutually supportive. Many of them would require involvement and approval from Congress and the White House. They would ensure value in HHS operations and would focus the department squarely on purpose, which is essential to both performance and accountability. The committee believes that improved performance and accountability could strengthen the cooperation with Congress that the department urgently needs in order to move forward. The recommendations would • focus the department on the most important health challenges for the nation (Recommendation 1), • strengthen its organizational capacity to address these challenges (Recommendation 2), • foster improved performance of the nation’s health system over- all (Recommendation 3), • ensure the necessary workforce (Recommendation 4), and • increase the department’s accountability and give it more flexi- bility (Recommendation 5). HHS has a long history of accomplishment and evolution to meet new needs, but it cannot afford to become stalemated by its own proc- esses and precedents or by statutory restrictions that impede its ability to function effectively. Implementation of the committee’s recommenda- tions would better position HHS to meet both rapidly emerging and en- during health challenges in the twenty-first century.

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34 HHS IN THE 21ST CENTURY BOX 1-2 Recommendations 1. To meet twenty-first century challenges to America’s health, the secretary of HHS should clearly articulate and actively promote a vision for the nation’s health, ensure that the department’s mission supports that vision, and establish a small number of measurable goals focused on critical challenges. a. The secretary should lead a thorough and thoughtful process to identify and prioritize the nation’s key health challenges. b. The secretary should, in this process, consult widely with internal de- partment leaders, others in the executive branch, Congress, governors and state-level officials, health care providers, scientific and professional organizations, and public interest and advocacy groups. c. The secretary should establish a vision, mission, and goals that respond to twenty-first century challenges, enable greater programmatic continu- ity over time, and that can be used to focus department staff and activi- ties on leading priorities, strengthen the public health infrastructure, facilitate assessment of impact, and lead to corrective action. d. The secretary, working closely with the White House and Congress, should take a major role in promoting and achieving health reform na- tionwide. 2. To improve the public’s health and achieve the department’s goals, the sec- retary should align and focus the department on performance and encourage creative use of scientifically based approaches to meet new and enduring chal- lenges. a. The heads of all department units should ensure that their activities and operations are aligned with the department’s vision, mission, and goals and marshal their resources to achieve them. b. The secretary should reduce directly reporting senior-level officials to a manageable number. Although secretarial management styles differ, a rigorous decision-making process for both policy and operations must be established, along with accountability for results. c. The secretary should ensure a more prominent and powerful role for the surgeon general, who, in addition to leading the Commissioned Corps, should be a strong advocate for the health of the American people and work actively to educate Americans on important health issues. The sec- retary should work with the President and Congress to establish a proc- ess for identifying surgeon general candidates for Presidential appointment that gives high priority to qualifications and leadership, and Congress is strongly urged to consider a longer term for this office. d. The secretary should work with the President and Congress to establish a selection process for the department’s senior-level officials that pro- tects the scientific and administrative integrity of major departmental units, promotes progress toward departmental goals, and is based pri- marily on the candidates’ qualifications and experience. Congress again is strongly urged to consider longer terms for some of these officials— especially the directors of the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC), and the commis-

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35 INTRODUCTION sioner of the Food and Drug Administration (FDA)—which would provide critical continuity in the nation’s public health and scientific endeavors. e. The President should make timely appointments and Congress should expedite the confirmation process for key HHS officials, including the secretary, deputy secretary, surgeon general, and the heads of FDA and NIH. Secretarial appointments, such as the director of CDC, should also be expedited. The secretary should ensure that all department health programs, in- f. cluding the reimbursement programs, reinforce public health priorities and strategies in order to provide a consistent framework for protecting the public from health risks, promoting health, preventing disease and disability, and providing health services for vulnerable populations in the most efficient, cost-effective ways. g. To maximize value in the health care system, the secretary must strengthen the scientific base and capabilities of the department and en- sure that agencies’ research findings are shared department-wide and that current best evidence is used for departmental decision making, in- cluding the Centers for Medicare and Medicaid Services (CMS) reim- bursement policy. Congress should allocate sufficient, predictable funding for NIH, CDC, h. FDA, and AHRQ in order to preserve and enhance these agencies’ sci- entific missions. Congress should also establish a specific budget line for AHRQ that is independent of appropriations to other HHS agencies. i. To address the growing threat of food-borne illnesses, Congress should unify the U.S. Department of Agriculture’s (USDA’s) Food Safety and In- spection Service and the food safety activities of FDA within HHS and ensure provision of adequate resources for high-quality inspection, en- forcement, and research. 3. The secretary should accelerate the establishment of a collaborative, robust system for evaluating the health care system that would incorporate existing department and external research, stimulate new studies as needed, synthe- size findings, and provide actionable feedback for policy makers, purchasers, payers, providers, health care professionals, and the public. a. The secretary should work with Congress to establish a capability for assessing the comparative value—including clinical- and cost- effectiveness—of medical interventions and procedures, preventive and treatment technologies, and methods of organizing and delivering care. The assessment of comparative value should begin by leveraging de- partment-wide data sources in conjunction with supportive evidence from providers, payers, and health researchers.a b. The secretary should work with Congress to ensure that the depart- ment’s programs and reimbursement policies are outcomes based, re- flecting best available evidence of value and creating incentives for adoption of best practices, including integration of care, in order to im- prove quality and efficiency. The department should collaborate with state and local public health c. agencies and community-based organizations, as both sources and us- ers of practical program guidance.

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36 HHS IN THE 21ST CENTURY The department should provide authoritative, plain-language, and cur- d. rent evidence-based information to the public regarding prevention and treatment options. e. To assess the health of the American people and overall health system performance accurately, the department needs current data from the na- tion’s health system. To facilitate collection of these data, the depart- ment should actively promote the universal adoption of electronic information capabilities—including health information exchange and elec- tronic medical, personal health records—for administrative and clinical purposes. 4. The secretary should place a high priority on developing a strategy and tools for workforce improvement (1) in HHS, (2) in the public health and health care professions nationwide, and (3) in the biosciences. a. The secretary should immediately strengthen workforce planning in the department and develop a comprehensive strategy to recruit highly qualified public- and private-sector individuals in order to offset the large number of experienced staff expected to retire soon. b. Congress should authorize the department, in cooperation with the Of- fice of Personnel Management, to assemble a package of current and innovative programs and benefits designed to encourage talented, ex- perienced individuals to transition back and forth between government and private-sector service, thereby identifying ways to leverage the best of both. Congress should provide the secretary with additional authority to re- c. ward performance, innovation, and the achievement of results, through bonuses, merit-based pay, recognition awards, or other mechanisms of proven effectiveness. d. The secretary, in concert with other public and private partners, should develop a comprehensive national strategy to assess and address cur- rent and projected gaps in the number, professional mix, geographic dis- tribution, and diversity of the U.S. public health and health care workforces. e. To help close projected gaps, the department should evaluate existing health care professional training programs, continued education pro- grams, and graduate medical education funding and should encourage Congress to invest in programs with proven effectiveness. f. Congress should give the secretary authority to create new programs that invest in the future generation of biomedical and health services re- searchers, enabling the continued discovery of new, more effective methods of preventing, treating, and curing disease; promoting health; improving health care delivery and organization; and controlling health system costs. 5. 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

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37 INTRODUCTION results; in return, Congress should allow the department greater flexibility in its internal operations and decision making. a. To enable greater accountability, the secretary should oversee devel- opment 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, learn- ing from program experience, evaluating the costs and impact of pro- grams, and determining 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 information system. Funding for such a system would benefit all department units. c. The department should use the data, evaluation, and information system to — enable the secretary to provide Congress with regular reports on progress toward achieving departmental goals, — inform policy development, — facilitate cross-department activities, provide operational information to program management 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 regarding department activities. The department should demonstrate accountability through continuous e. critical assessment of program efficiency, equity, impact on health, and cost-effectiveness, and through corrective action for underperforming programs. f. The secretary, in collaboration with the surgeon general, should present Congress and the public with an annual “State of the Nation’s Health” report that describes progress toward achieving the vision for the na- tion’s health and the department’s key health goals. Congress should establish a new, strategic initiative fund to enable the g. secretary to support cross-agency and cross-departmental activities that exhibit innovation in responding to twenty-first century challenges, and to respond quickly to new, unforeseen, or expanding public health threats. ____________________________________________________ a The committee did not reach consensus on recommendation 3a. Although the major- ity of the committee supports the language of the recommendation, David Beier, J.D., Senior Vice President of Global Government and Corporate Affairs, Amgen; Kathleen Buto, M.P.A., Vice President, Health Policy, Johnson & Johnson; and Myrl Weinberg, C.A.E., President, National Health Council, did not agree with the majority’s view and provided dissenting opinions, which can be found in Appendix F. They were not able to agree on a common statement.

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