Background: The Former Health Care Reform Czar's Past Career
It appears that Ms Nancy DeParle, formerly a White House Deputy Chief of Staff, and before then, from 2009 - 2011, the Director of the White House Office of Health Care Reform, has gone through the revolving door again.
We raised concerns about Ms DeParle's strong ties to the commercial side of health care at the time she was put in charge of getting health care reform legislation passed (look here.) Specifically, her background for shepherding this legislation included being on the boards of directors of three large health care corporations, Boston Scientific, a medical device company, Cerner, a vendor of health care information technology, and Medco, and pharmacy benefits company. She had previously been on the boards of DaVita, a commercial kidney dialysis care delivery company, and Triad Hospitals, a for-profit hospital system. At the time, I wondered whether this set of relationships with multiple health care corporations would lead to "health care reform" that was more about the interests of big health care corporations and their top executives than about us, the people.
As it turned out, there is a case to be made that a lot of the health care reform legislation that eventually passed was in the interests of big corporations. It enabled for-profit health care insurance companies to continue to dominate the insurance market, and created no "public option" that could have competed with them. It fostered the development of "accountable care organizations," (ACOs), and thus fostered a wave of consolidation in the hospital market favoring ever larger hospital systems, including for-profit ones, and the rise of the corporate physician. It pushed the use of commercial health care information technology without requiring these devices' effects on patients to be rigorously assessed, and with no obvious concerns about the risks posed by these systems. It did nothing to stop concentration of power in health care, nothing to support small private practices, small non-profit hospitals, or non-profit health insurance. While it required more disclosure of conflicts of interest affecting physicians, it did nothing to reduce them, or to combat deception in health care marketing and public relations, or to reduce manipulation or suppression of clinical research to serve commercial vested interests, or even to combat blatant health care corruption.
A Brief Stop at a Think Tank
At any event, Ms DeParle left the government early this year. She did not immediately go back to the commercial world, however. Instead, as reported by The Hill, she went to a think tank.
Nancy-Ann DeParle, a White House deputy chief of staff and the president's point person on his signature health care law, is leaving the West Wing to join the Brookings Institution.Brookings president Strobe Talbott announced in a post on Twitter that the longtime Obama staffer would work as a guest scholar for the think tank.
Through the Revolving Door to Private Equity
That position did not last long, however. A few days ago, a Wall Street Journal blog announced she was moving again,
As health care-focused private equity firms navigate the nuances of the Affordable Care Act, one such shop, Consonance Capital, has decided to go straight to the source, hiring Nancy-Ann DeParle, the former director of the White House Office of Health Reform.
So now she will be with private equity, and in particular, with a private equity firm specializing in, of course, health care:
Consonance has been out targeting between $350 million and $450 million for its debut fund.
The fundraising effort appears to have gained traction in recent months. LBO Wire reported in February that the firm had raised $30.3 million for Consonance Private Equity PV LP. According to a person familiar with the fundraising, the vehicle has gathered as much as $200 million so far from investors including Ohio Public Employees Retirement System, Travelers Insurance and LGT Group.
The fund is earmarked for buyouts and recapitalizations of health-care providers, payors, pharmaceutical and specialty distributors and device manufacturers with between $20 million and $150 million in annual revenue.
Finally, it seems Ms DeParle will be suited to this new employment opportunity since she knows so much about how the new supposed health care reform will create investment opportunities,
Ms. DeParle said the changing regulatory environment will give rise to a host of new investment opportunities. 'There’s a lot that’s changing in health care,' said Ms. DeParle. 'There will be millions of new customers for hospitals and health care providers, much stronger demand for health care services....'
So to recapitulate, Ms DeParle came from roles as a steward of multiple large health care corporations to lead the health care reform efforts of the executive branch. In that capacity, she helped to create and enact legislation that she would later say created many "new investment opportunities." Now, as the legislation is going into operation, she has spun over to private equity to take advantage of these opportunities.
This seems to be a great example of why the revolving door is bad for government, health care, and the American public. People in responsible government positions, in which they are supposed to represent all the people, may be constantly thinking about impressing those who might employ them in the private sector when they leave government service. What better way to impress these potential employers than to take actions which may later improve these companies' commercial prospects, whatever effect they may have on us, the people?
I am no political scientist, but in my humble opinion, there should be multi year cooling off periods before someone who worked in the commercial world can get a job in a government agency whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in a government agency whose work had direct effect on a particular economic sector can accept a job for a company in that sector. Now that would be a real reform.