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The Hardest Job To Fill (And Keep) In Washington: CMS Chief

President Obama is fighting to save his signature health law on two fronts: in the Supreme Court and on the campaign trail, where Republican candidates are promising to kill the Affordable Care Act.

Yet even if the president prevails, he faces another daunting challenge: implementing the law in a seamless, timely manner. The Centers for Medicare & Medicaid Services is charged with making the health law work, drafting regulations, setting up new programs and providing oversight. But for years Congress has undermined the agency’s leadership and potential effectiveness, raising questions about its capabilities and resources even as the health law ramps up its responsibilities.

For starters: consider the revolving door leadership at CMS.

Since its creation in 1977 as the Health Care Financing Administration, the agency has had 29 administrators in 35 years – an average tenure of just 14 months. The longest-serving administrator held the job for four years and five months. The shortest: two months.

The most recent CMS administrator, Dr. Donald Berwick, resigned in December after 16 months. His replacement, Marilyn Tavenner, currently holds the title of acting administrator. That’s hardly uncommon.

Acting administrators have run the agency 20 percent of the time. And the trend appears to be increasing: the Senate hasn’t confirmed a full-time CMS administrator since 2006, when Mark McClellan resigned midway through the second Bush administration.

“Imagine if somebody went two years without a Secretary of Defense,” Thomas A. Scully, who was CMS administrator under President George W. Bush, told the journal Health Affairs in April 2010.

For decades, government and private researchers have pointed to a widening gap between the agency’s responsibilities and resources. As the largest purchaser of health care in the world, with a budget of $820 billion, CMS pays for the care of one in three Americans, and interacts daily with thousands of hospitals, doctors and other providers.

4,900 vs. 62,000 Employees

The number of Medicare and Medicaid beneficiaries has soared since the programs started in 1966, with tens of millions of Baby Boomers and uninsured expected to swell the rolls even more in coming years. Yet today the agency has the same number of employees it had during the during the Carter administration – about 4,900.

By comparison, the Social Security Administration, with a smaller budget, has 62,000 employees. Even including work that CMS outsources to private contractors – bill-paying, coverage decisions and quality oversight – the agency operates with about half as many employees as Social Security.

The shortages have hurt the agency’s ability to implement crucial reforms, ensure adequate oversight of hospitals and other providers and find ways to stem spiraling medical costs, researchers say. For years, CMS executives weren’t even sure if they could consider cost as part of their coverage decisions, paying high-quality and low-quality providers the same amount.

In 1999, a bipartisan group of former administrators and health policy experts wrote an open letter to Congress decrying “the mismatch” between the agency’s resources and its “mammoth assignment.”

Three years later, the nonprofit National Academy of Social Insurance wrote, “This mismatch has grown worse in recent years as CMS’ responsibilities have increased dramatically.”

“Really, when you consider what they have to work with, they do a fairly remarkable job,” adds Robert A. Berenson, a former CMS administrator, and now a health researcher at the Urban Institute. “Assuring adequate staff at CMS has not been a priority for Congress even though it might more than pay for itself in more efficient programs.”

‘What’s Missing Is … A Consolidated Strategic Vision’

Berwick, a physician and national expert on health quality, said he was “impressed and gratified” by the way senior staff rallied around his calls to implement the sprawling health law. But much of staff time is taken up writing rules and regulations.

Career executives “perform these core components well,” said Berwick. “What’s missing is a kind of coherence and consolidated strategic vision of where to head next.”

In recent years, Congress has added more programs and complex legislation to the agency’s plate, including overseeing a 2003 prescription drug benefit for seniors, ensuring patient privacy, helping to weed out waste and fraud and developing a system for grading hospitals and nursing homes.

The Obama administration’s nearly two-year-old health law adds yet more duties: helping to oversee insurance exchanges in 50 states, operating a program to spur ways of delivering care more efficiently, and guiding big expansions of Medicare and Medicaid, the agency’s core programs.

CMS will be expected to do so even as “frequent changes” at the top “have inhibited the implementation of long-term Medicare initiatives or the pursuit of a consistent management strategy,” according to a 2000 study by the U.S. General Accounting Office.

For years, the agency was criticized for focusing more on getting checks out to hospitals and doctors than ensuring quality or finding ways to trim health spending. Part of that had to do with Medicare’s unique history. For the first 11 years of its existence, the program was housed in the Social Security Administration, which issues monthly income support checks to retired Americans.

But even after the Medicare and Medicaid programs were put under one roof in 1977, the agency continued to struggle, facing criticism from Congress and medical providers. “It’’s almost paradoxical the extent to which Medicare is so important and valued in the lives of so many families and communities, and the overwhelming communication the people running the program get is hostility,” said Bruce Vladeck, an administrator in the Clinton administration.

Not Just A Check-Writing Agency

Gail Wilensky, who ran the agency for two years under President George H.W. Bush, said CMS has evolved into a much more sophisticated operation. “It’s not just a check-writing agency anymore,” she said. But the turnover at the top sends the wrong message to employees, who respond by being “more inward and protective.”

The CMS administrator’s position is a political appointment requiring Senate confirmation. Berwick’s name surfaced as a potential CMS leader shortly after Obama’s election. A pediatrician by training, Berwick gradually shifted his focus to quality improvement, steering the nationally recognized Institute for Healthcare Improvement, a nonprofit based near Boston.

The Obama administration waited to submit his name for the CMS position until April 2010, one month after it won passage of the Affordable Care Act. By then, Republicans were openly attacking the legislation as unduly burdensome and costly. Berwick never did get a Senate hearing and was appointed by the president during the congressional recess that July.

The recess appointment avoided what many predicted would be a losing battle with Senate Republicans. Some of them accused Berwick of promoting rationing, based on favorable comments he had made in the past about the British National Health System. Sen. Pat Roberts, R-Kan., said Berwick’s focus on cutting costs would lead to a rural health system consisting “of a Band-Aid and a bed pan.”

In an interview, Berwick said Republicans “twisted and distorted” his words and used the agency as “a political football. It’s a game to them,” he said. Berwick added that the churn in administrators “demoralizes and confuses” senior staff and hurts the agency’s ability to develop a consistent long-term vision. “What happens, I think, when you have a lot of turnover is senior staff loses its confidence and is less willing to take risks.”

Wilensky said she was “especially frustrated” with what happened to Berwick. “I like Don Berwick. I don’t always agree with him but I have a lot of respect for what he has done and for his passion for the great issues he takes on.”

Berwick had little choice except to resign. His acting term was set to expire at the end of 2011 and 42 Republican senators had already announced their intentions to block his confirmation as a full-time administrator. The administration nominated Tavenner, a former Virginia health official and executive with the for-profit Hospital Corporation of America, just days later.

Several prominent Republicans, including Republican House Majority leader, Eric Cantor, said Tavenner was “eminently qualified” to run the agency. But months later Tavenner still hasn’t gotten a hearing and, with the heated politics of an election year, some wonder if she will.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

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Medicaid Medicare The Health Law