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A Long Battle Ahead For Health-Care Czar
White House Event Was Early Victory

By Ceci Connolly
Washington Post Staff Writer
Thursday, May 14, 2009

Nancy-Ann DeParle was dubious. She had not even settled into her job as White House health czar when the nation's big insurance companies made her an offer.

Eager to be at the bargaining table for this year's health-care reform debate, Karen Ignagni, president of America's Health Insurance Plans, told DeParle that the health industry was willing to wring about $2 trillion in savings out of health spending over the next decade.

"I was skeptical," DeParle recalled in an interview this week. She thought, "They probably don't even know what these numbers mean."

A few weeks later, in mid-April, Ignagni, who opposed President Bill Clinton's reform effort in the early 1990s, enlisted a hospital group and a labor union. DeParle still wasn't satisfied. "I need to see that it's more than just the three of you," she said she told them.

Over the next month, as DeParle kept a wary distance, a coalition was built and the proposal refined. Finally DeParle was sold, and on Monday she brought the group to the White House, where industry titans better known for killing health-care reform 15 years ago found themselves basking in presidential praise.

"This is a historic day," President Obama declared, "a watershed event in the long and elusive quest for health-care reform."

Seated to his left in the State Dining Room was DeParle, a woman Obama had not met until he hired her in March to run the White House Office of Health Reform.

On her petite shoulders rests the administration's top domestic policy goal: to cover millions of uninsured Americans, improve care nationwide and control skyrocketing medical bills that are devouring personal, corporate and government budgets.

She was not Obama's first choice for the post. But when former senator Thomas A. Daschle withdrew because of tax troubles, White House Chief of Staff Rahm Emanuel persuaded his former Clinton administration colleague to leave the lucrative private sector and return to government.

Her first gambit in the health battle -- Monday's splashy White House event -- illustrates well the challenges DeParle faces in a role she never sought. Touted by Obama backers as a "game-changer," the industry pledge has been ridiculed by economists as an unenforceable wish list from less-than-virtuous players.

"On the one hand, it's an empty gesture," said Uwe Reinhardt, a Princeton University scholar and DeParle admirer. Yet the image of all those "erstwhile insurgents" seated at the table sans weapons was also "a stroke of genius," he said.

"It was a PR coup," he added.

'American Success Story'

The life story of Nancy-Ann Min DeParle is "the prototypical American success story," said her friend Chris Jennings, a health-care strategist who advised the Clintons. Raised by a poor single mother in East Tennessee, DeParle remembers the day in 1965 when her family first heard about a new government health program for seniors called Medicare.

Her grandmother reached for a shoebox stuffed with medical bills, DeParle said, and asked: "Do you think it will pay for these?"

By age 17, DeParle was all too familiar with the staggering cost of health care, personally as well as financially. "My mother had lung cancer," DeParle recalled. "She was very, very sick."

The disease and aggressive chemotherapy took a ferocious toll, but her mother kept working, struggling to support three children on a meager clerical salary.

Showing up for work meant the family could keep its health insurance. More important, her mother refused to take vacation time or use sick days "so we would get paid for them when she died." That came less than a year after the diagnosis.

With scholarships, loans and odd jobs, DeParle excelled in school and beyond: Harvard Law, Rhodes scholar at Oxford, youngest Medicaid director in Tennessee history. Under Clinton, she served first as an associate director in the Office of Management and Budget and later oversaw Medicare and Medicaid.

"I swore I'd never come back in this building," said DeParle, 52, in her office in the Eisenhower Executive Office Building. "I thought my stint in public service was over and I'd be a cheerleader from the sidelines."

Perhaps most daunting, DeParle is, in the words of Obama, his "point guard" on a White House team of confident -- even cocksure -- men.

"The challenge for her is there is a proliferation of cooks in the kitchen," said Dan Mendelson, a former Clinton administration colleague.

Besides negotiating with industry powerhouses, it is DeParle's job to referee the likes of chief economic adviser Lawrence H. Summers, budget chief Peter Orszag, legislative liaison Phil Schiliro, message guru David Axelrod and Ezekiel Emanuel, the physician brother of Rahm Emanuel.

"She knows what sharp elbows are," said Donna E. Shalala, a friend of DeParle's since the Clinton days. "In taking this job, she knew the risks."

At 5-foot-2, in feminine suits and pearls, DeParle was amused by Obama's designation of her as the point guard. "I'm not accustomed to being drafted for any basketball teams," she said, "so I rather liked that."

Over the years, her penchant for data, coupled with her Southern gentility, has helped her neutralize power-hungry peers, influential lawmakers and even those on the other side. She counts among her admirers Thomas A. Scully and Leslie V. Norwalk, who ran Medicare and Medicaid under Republican presidents.

"Nancy-Ann is a completely honest broker," Summers said. "People have compared health care to the Balkans. There are long-established deep rivalries, factions, differences of opinion." She transcends the skirmishes, he said, because "she doesn't have an axe to grind."

Though others may possess more expertise in a given policy area, her strength comes from a breadth of experience no one else has, Rahm Emanuel said. "She understands the size and scope of the challenge and where the pitfalls are," he said.

Since 2001, DeParle has thrived in the private sector, first at J.P. Morgan Partners and then at a private-equity spinoff, CCMP Capital. She earned more than $2 million in the past two years on corporate boards such as DaVita, Boston Scientific, Cerner and Medco Health Solutions, according to public records. Her financial disclosure form is pending.

A White House aide said DeParle, who lost money on her investments when she joined the administration, will recuse herself from deliberations about any company she previously advised. But because her job is a White House post, she will not be required to testify on Capitol Hill, giving her enviable latitude in the dealmaking.

Although some consider her lucrative stint in the corporate world a liability, Jennings argues that it is a unique asset. "She's seen the books in the private sector," he said.

On Tuesday, as other administration aides were celebrating the health industry's pledge to slow the rate of spending growth by 1.5 percentage points over the next 10 years, DeParle was guarded:

"Well, it hasn't happened yet."

Staff researcher Madonna Lebling contributed to this report.

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