Thursday, October 27, 2011

Former US Secretary of Health and Human Services Saunters Through Revolving Door, Ends Up as Director of Medtronic

There they go again.  Another US government health care leader, this time the top health care leader at the end of the previous George W Bush administration, has wound up in a leadership position in a big, for-profit health care corporation.  As per the press release published in the Minneapolis-St Paul Business journal,
Mike Leavitt, the former Governor of Utah who also oversaw the Food and Drug Administration for four years, has been elected to the board of Medtronic Inc.

Leavitt is the founder and chairman of Leavitt Partners, which advices clients in the healthcare and food safety sectors, according to a news release from Fridley-based Medtronic (NYSE: MDT).

He served as governor of Utah from 1993 through 2003. Former President George W. Bush appointed Leavitt administrator of the Environmental Protection Agency in late 2003 and secretary of Health and Human Services in January 2005. Leavitt served in that position into January 2009.

At Health and Human Services, he oversaw the FDA and the Center for Medicare and Medicaid Services — two agencies that are important to Medtronic, which makes medical devices.

Mr Leavitt's full-time job is to chair Leavitt Partners, which advertises that it "advises clients that invest in health care and food safety." It does not publicize its client list, but that list apparently includes Alliance Health Networks, whose press release noted that Leavitt Partners "will help it expand its presence in the US health industry and beyond "(look here); and Connextions, Inc, whose press release noted that it would work with Leavitt Partners to " refine existing health insurance exchange models for federal and state governments, as well as private sector organizations that are navigating health care reform law," (look here.)

Note that Mr Leavitt's official Department of Health and Human Services biography listed no training or experience in direct health care (or in biomedical sciences or the engineering of health care devices, for that matter.) Before he was Secretary of HHS, he was Governor of Utah, and before then, he was the CEO of an insurance company.  Since I very much doubt Mr Leavitt is a large Medtronic shareholder, it would appear that the rationale for his position on its board is his conectedness with other powerful health care insiders.

Summary: the Revolving Door

Mr Leavitt did not transit the revolving door as quickly as did other health care leaders from that administration.  We noted in 2010 that the leaders of the US Food and Drug Administration (FDA), US National Institute of Health (NIH), and US Centers for Disease Control (CDC) at the end of the Bush administration had already gotten powerful positions in the health care corporate world.  Mr Leavitt is not the first recent former Secretary of HHS to become the director of a big health care corporation whose fortunes may be affected by what HHS does.  We noted in 2011 how rapidly the Secretary of HHS at the end of the William Clinton administration, Donna Shalala, signed up as a director for UnitedHealth.  We have also noted a variety of other examples of the revolving door phenomenon.

These examples suggest how the leaders of government health care agencies and health care corporations are becoming interchangeable, forming a giant embedded network of influence.  Furthermore, they suggest how top government health care leaders can now expect a cushy corporate position to open up as soon as they can legally accept it.  Whether government leaders who expect such future job opportunities will avoid offending possible corporate employers while in office, even if giving such offense would be good for patients' or the public's health, is an open question.  The answer, I fear, may be obvious.   

These examples suggest that the US is becoming increasingly corporatist, a country dominated by an unholy alliance between top leaders of government and of large corporations, who are becoming increasingly interchangeable.  Another way of putting it is the country is increasingly dominated by an insider elite that manipulates the system for its own benefit. 

A recent article in the Atlantic juxtaposed two cases, one that of a CEO given a golden retirement package after presiding over the decline of his media company, and two union lobbyists who gamed the system to get outsized pensions.  While the first example would commonly draw condemnation from the left wing, and the second from the right, they are similar, and similar to those of  revolving doors we have discussed.   Author Conor Friedersdorf summarized the cases thus
neither the CEO nor the lobbyists were paid what they earned, nor were they compensated in a way that made the relevant stakeholders better off. Instead they were taken care of in a way that reflected their elite insider status and their ability to take advantage of wrinkles in the system while breaking no laws. In both cases, less politically connected people -- other Gannett employees, Gannett shareholders, readers of Gannett newspapers, Illinois school teachers, and Illinois taxpayers -- were unjustly made worse off by what transpired. And isn't the overlapping ethic that guided the behavior of these people a big part of what's wrong with America?

Behavior like theirs is one reason Americans on the right and left have recently taken to the streets. Ours is a society that has always tolerated inequality of wealth; and so long as some imperfect degree of fairness is maintained in the getting of material goods, the system functions smoothly. But if people feel that wealth they struggled to earn is being taken from them to pad the nest eggs of dishonorable union lobbyists; or that they're at risk of being fired from their $14 an hour job if they're ten minutes late, whereas their ultimate boss retires with an eight-figure package after presiding over plummeting stock prices and massive layoffs; people put in situations like that eventually revolt, if they've concluded that injustice is the norm rather than an aberration.

I would propose that the fundamental injustice of having an insider elite run health care so as to put their self-interest first is the basis of what has gone wrong with health care (and the rest of the country, and maybe the world.) If we do not have the courage to first say this out loud, and then restore some rationality and justice to the structure and leadership of health care, the spiral will continue downward.

Additional Thought

I expect if any of the insider elite's defenders bother to read this, one argument they might propose is it was always thus.  How can one expect people who work as government leaders for a short time not to take advantage of the best possible job offers when they leave?  My answer is that an admittedly cursory look at history suggests it has not always been thus.  Using Wikipedia as an imperfect but quick source, I found that Joseph A Califano Jr, the last Secretary of Health, Education and Welfare under President Carter worked at a law firm, founded the National Center for Addiction and Substance Abuse, and wrote books after he left office.  He did serve on a corporate board (CBS), but not for a health care corporation.  Patricia Roberts Harris, the first Secretary of HHS under President Carter, became a law professor.  Dr Otis R Bowen, the last Secretary of HHS under President Reagan, retired after that, but served on some non-profit boards and government committees.


Steve Lucas said...

Medtronic makes it into this Fox article regarding payments to surgeons:

The article highlights how Medtronic is at the heart of these payments, paying out millions of dollars to surgeons to use their products.

Steve Lucas

Afraid said...

I say, the fundamental injustice of having an insider elite run health care so as to put their self-interest first is the basis of what has gone wrong with health care.

And I agree that we the people have had enough of this bull-crap.

I am not unique in my support for BOTH the Tea Party AND the Occupy movement.

Oddly, no one seems to be doing the pole that would show widespread support for both movements.