'We owe it to society to give the wealth back'

Uncle Sam stands alone as the No. 1 benefactor to America's ever-expanding healthcare industry, subsidizing more than one-third of the roughly $2 trillion spent each year on everything from hospitals and home-care nurses to prescription drugs and doctors' visits.

Lately, however, the federal government is getting a run for its money from another source of power and prestige: private philanthropy. On the basis of public perception -- if not genuine political power -- the goodwill and charity of the increasingly influential private sector is staking its own high-profile position among the prime-time players of the U.S. healthcare industry.

Once a marginal factor in a field built on the flow of entitlement funds from Washington, this bounty of beneficence from individuals and organizations is helping to subtly reshape healthcare and transform a pecking order that has always been monopolized by politicians, hospital executives and the leaders of insurance companies and trade groups.

And no single person better exemplifies this resurgent spirit of altruism than Bill Gates, founder and co-chairman of the Bill & Melinda Gates Foundation, a 6-year-old organization that has already had a profound impact on global healthcare, providing billions of dollars for international health initiatives in vital areas such as AIDS research and childhood immunization. The world's richest man, Gates doesn't fit the mold of the traditional healthcare heavyweight -- he's not a powerful lawmaker, a ubiquitous policy wonk or an influential heath-system executive -- but his name is No. 1 on Modern Healthcare's fifth annual listing of the 100 Most Powerful People in Healthcare.

Few individuals worldwide boast the kind of economic power and can-do clout of Gates, who will give up his post as Microsoft Corp. chairman in July 2008 to focus his considerable intellect and energy on the worldwide efforts of his Seattle-based foundation, the world's largest with more than $30 billion in assets. As the first private citizen to claim the top spot in the annual rankings, the 50-year-old entrepreneur placed one notch above President Bush, who finished No. 2 in this year's poll, and well above such high-profile industry insiders as Donald Berwick (No. 24), president and chief executive officer of the Cambridge, Mass.-based Institute for Healthcare Improvement; Jack Bovender (No. 46), chairman and CEO of Nashville-based HCA; and Karen Ignagni (No. 81), president and CEO of Washington-based America's Health Insurance Plans, the trade group for the managed-care industry

"When you talk about influencing what actually happens to people -- as an individual, not as an agency of government -- Bill Gates absolutely is making an incredible difference," says Patrick Quinlan, CEO of the Ochsner Health System in New Orleans and a first-time member of the 100 Most Powerful, ranking No. 17 in his debut on the list. "He is using his money to try to reach as many people as possible who have so little help right now. He is putting his money where the money will really matter."

The influence of Gates, who formed Microsoft in 1975 and now boasts a personal net worth of about $50 billion, is almost certain to grow in the coming years. His off-the-chart influence grew immeasurably when Warren Buffett, chairman and CEO of Berkshire Hathaway and the world's second-richest man, announced two months ago that he would donate, over time, the bulk of his estimated $44 billion fortune to the Gates Foundation, doubling its size and its annual charitable output. With that bankroll, Gates, who helped reshape information technology, now appears intent on making a similar impact on global healthcare.

"Bill Gates might not be the first name that comes to mind when I think about (powerful individuals in) healthcare," says Sister Carol Keehan, president and CEO of the St. Louis-based Catholic Health Association and another freshman on the list -- she ranks No. 26, making the grade less than a year after her appointment as the head of the 1,200-member association.

"But look at what he's doing, and it's pretty clear he is trying very hard to make a dominant difference in the problems in this world. I admire him immensely. He could have used his influence and his money to feather his own nest, but he's made a real commitment to others. He's making a huge difference on a global scale," she says.

Gates himself voiced a similar sentiment shortly after news spread of Buffett's contribution, saying simply, "We really owe it to society to give the wealth back."

The usual suspects

After Gates, the top of the list of healthcare's most powerful men and women is dominated, as usual, by politicians and political appointees. In fact, with one exception, the next dozen-plus slots are filled by elected officials, bureaucrats or hand-picked government policymakers. The exception is former House speaker Newt Gingrich (No. 5) who might be considered a hybrid of all three of these categories as he barnstorms the nation, promoting health IT and his for-profit think tank, the Washington-based Center for Health Transformation.

Bush, who topped the list in 2003, is followed by a group of dominant congressional leaders whose names have long been associated with national healthcare issues -- including Sen. Majority Leader Bill Frist (R-Tenn.) at No. 3 and Sen. Hillary Rodham Clinton (D-N.Y.) at No. 4. Other individuals in the top 10: HHS Secretary Mike Leavitt (No. 7) and his top deputy, CMS Administrator Mark McClellan (No. 8).

"One obvious point about this system is that healthcare represents more than 15% of this nation's gross domestic product," says James Mongan, a physician who is president and CEO of Partners HealthCare System, Boston, and who ranks No. 18 on this year's list. "So it's not surprising that politicians would dominate the list. They're well-known. They have the authority of funding.

"Of course," he adds, "some of these names will move off the list when they leave office, but you'll always have key political leaders at or near the top of the list. You'll also have the names of the leaders of large healthcare organizations. Why? The real answer is that as healthcare has grown, consolidation has grown.

"And it's not only the insurers," Mongan says. "The drug companies are larger and fewer. And the healthcare delivery organizations have consolidated as well. So power has become concentrated."

Systemic power

Market size and fiscal clout tend to go hand-in-hand with the names of several well-regarded individuals who follow the high-powered politicians on the 100 Most Powerful roster. These include the leaders of some of the nation's biggest and best-known healthcare systems -- including Kevin Lofton (No. 16), chairman-elect of the American Hospital Association's board of trustees and the president and CEO of Catholic Health Initiatives, Denver; Sister Mary Jean Ryan, (No. 21), president and CEO of SSM Health Care, St. Louis; Joel Allison (No. 22), president and CEO of Baylor Health Care System, Dallas; and Douglas Hawthorne (No. 23), president and CEO of Texas Health Resources, Arlington

With a certain symmetry that has characterized all five most-powerful lists, the politicians and system executives are followed in this procession of power by the big names in the insurance industry, including George Halvorson (No. 40), chairman and CEO of Kaiser Foundation Health Plan and Hospitals, Oakland, Calif.; Larry Glasscock (No. 49), chairman, president and CEO of Indianapolis-based WellPoint; and William McGuire (No. 50), chairman and CEO of UnitedHealth Group, Minnetonka, Minn. Of course, names like Glasscock and McGuire, regulars on the list, are emblematic of the increased consolidation that has swept the industry.

"The big fish are in the water," says Berwick, the IHI founder, who acknowledges that the fundamental power structure of healthcare -- status, as in the status quo -- has not changed all that much since 2002, when the list made its debut with then-HHS Secretary Tommy Thompson in the No. 1 position.

Berwick, who has always appeared in a prominent spot but fell to No. 24 this year from the third slot in 2005, suggests that subtle changes in this year's rankings reflect a delicate shift in the overall landscape of influence in the industry. These days, he says, the princely and the powerful are much more apt to flex their muscles in ways that help trigger elementary changes in the way the system operates. Recently, he notes, federal agencies such as the CMS and organizations like the Institute of Medicine, among others, have focused as never before on public reporting and pay-for-performance, two fast-developing movements certain to shake up the industry.

In the meantime, he says, there's a "continuing evolution of interest" in quality and safety by powerful groups such as the AHA, the American Medical Association and the Joint Commission on Accreditation of Healthcare Organizations, which between them exercise a huge influence on how medical care is delivered in the U.S.

"The major shift for the IOM" and other organizations like it, Berwick says, "is toward shaping the environment in terms of public reporting and interest in areas like pay-for-performance. Along with issues of safety and quality, they're more on the map for the regulatory and accrediting agencies."

Interestingly, no top IOM official made the cut for this year's list

Of course, not everyone agrees with the rankings. Some say the top spot should go almost by default to Leavitt, who ranked No. 1 in 2005 but fell six spots this year. Others would have given the nod to the CMS' McClellan, who is intimately involved in decisions about who receives federal funding -- and how much. As head of the agency that oversees funding for Medicare and Medicaid, McClellan alone controls close to $500 billion in annual federal spending on healthcare -- or more than 80% of the government's total costs.

"Mark McClellan is incredibly important," says Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology who cracked the list for the first time at No. 19 -- likely as a result of his oft-cited work in consumer-directed healthcare. "Mark decides what the government is going to pay the doctors and hospitals and how the prescription-drug benefit is paid," he says. The CMS and McClellan "set the framework."

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September 27, 2006

Cover story: 'We owe it to society to give the wealth back'

Gates tops annual 100 Most Powerful list, spotlighting growing role of philanthropy in fighting healthcare's ills

By Michael Romano

Uncle Sam stands alone as the No. 1 benefactor to America's ever-expanding healthcare industry, subsidizing more than one-third of the roughly $2 trillion spent each year on everything from hospitals and home-care nurses to prescription drugs and doctors' visits.

Lately, however, the federal government is getting a run for its money from another source of power and prestige: private philanthropy. On the basis of public perception -- if not genuine political power -- the goodwill and charity of the increasingly influential private sector is staking its own high-profile position among the prime-time players of the U.S. healthcare industry.

Once a marginal factor in a field built on the flow of entitlement funds from Washington, this bounty of beneficence from individuals and organizations is helping to subtly reshape healthcare and transform a pecking order that has always been monopolized by politicians, hospital executives and the leaders of insurance companies and trade groups.

And no single person better exemplifies this resurgent spirit of altruism than Bill Gates, founder and co-chairman of the Bill & Melinda Gates Foundation, a 6-year-old organization that has already had a profound impact on global healthcare, providing billions of dollars for international health initiatives in vital areas such as AIDS research and childhood immunization. The world's richest man, Gates doesn't fit the mold of the traditional healthcare heavyweight -- he's not a powerful lawmaker, a ubiquitous policy wonk or an influential heath-system executive -- but his name is No. 1 on Modern Healthcare's fifth annual listing of the 100 Most Powerful People in Healthcare.

Few individuals worldwide boast the kind of economic power and can-do clout of Gates, who will give up his post as Microsoft Corp. chairman in July 2008 to focus his considerable intellect and energy on the worldwide efforts of his Seattle-based foundation, the world's largest with more than $30 billion in assets. As the first private citizen to claim the top spot in the annual rankings, the 50-year-old entrepreneur placed one notch above President Bush, who finished No. 2 in this year's poll, and well above such high-profile industry insiders as Donald Berwick (No. 24), president and chief executive officer of the Cambridge, Mass.-based Institute for Healthcare Improvement; Jack Bovender (No. 46), chairman and CEO of Nashville-based HCA; and Karen Ignagni (No. 81), president and CEO of Washington-based America's Health Insurance Plans, the trade group for the managed-care industry.

"When you talk about influencing what actually happens to people -- as an individual, not as an agency of government -- Bill Gates absolutely is making an incredible difference," says Patrick Quinlan, CEO of the Ochsner Health System in New Orleans and a first-time member of the 100 Most Powerful, ranking No. 17 in his debut on the list. "He is using his money to try to reach as many people as possible who have so little help right now. He is putting his money where the money will really matter."

The influence of Gates, who formed Microsoft in 1975 and now boasts a personal net worth of about $50 billion, is almost certain to grow in the coming years. His off-the-chart influence grew immeasurably when Warren Buffett, chairman and CEO of Berkshire Hathaway and the world's second-richest man, announced two months ago that he would donate, over time, the bulk of his estimated $44 billion fortune to the Gates Foundation, doubling its size and its annual charitable output. With that bankroll, Gates, who helped reshape information technology, now appears intent on making a similar impact on global healthcare.

"Bill Gates might not be the first name that comes to mind when I think about (powerful individuals in) healthcare," says Sister Carol Keehan, president and CEO of the St. Louis-based Catholic Health Association and another freshman on the list -- she ranks No. 26, making the grade less than a year after her appointment as the head of the 1,200-member association.

"But look at what he's doing, and it's pretty clear he is trying very hard to make a dominant difference in the problems in this world. I admire him immensely. He could have used his influence and his money to feather his own nest, but he's made a real commitment to others. He's making a huge difference on a global scale," she says.

Gates himself voiced a similar sentiment shortly after news spread of Buffett's contribution, saying simply, "We really owe it to society to give the wealth back."

The usual suspects

After Gates, the top of the list of healthcare's most powerful men and women is dominated, as usual, by politicians and political appointees. In fact, with one exception, the next dozen-plus slots are filled by elected officials, bureaucrats or hand-picked government policymakers. The exception is former House speaker Newt Gingrich (No. 5) who might be considered a hybrid of all three of these categories as he barnstorms the nation, promoting health IT and his for-profit think tank, the Washington-based Center for Health Transformation.

Bush, who topped the list in 2003, is followed by a group of dominant congressional leaders whose names have long been associated with national healthcare issues -- including Sen. Majority Leader Bill Frist (R-Tenn.) at No. 3 and Sen. Hillary Rodham Clinton (D-N.Y.) at No. 4. Other individuals in the top 10: HHS Secretary Mike Leavitt (No. 7) and his top deputy, CMS Administrator Mark McClellan (No. 8).

"One obvious point about this system is that healthcare represents more than 15% of this nation's gross domestic product," says James Mongan, a physician who is president and CEO of Partners HealthCare System, Boston, and who ranks No. 18 on this year's list. "So it's not surprising that politicians would dominate the list. They're well-known. They have the authority of funding.

"Of course," he adds, "some of these names will move off the list when they leave office, but you'll always have key political leaders at or near the top of the list. You'll also have the names of the leaders of large healthcare organizations. Why? The real answer is that as healthcare has grown, consolidation has grown.

"And it's not only the insurers," Mongan says. "The drug companies are larger and fewer. And the healthcare delivery organizations have consolidated as well. So power has become concentrated."

Systemic power

Market size and fiscal clout tend to go hand-in-hand with the names of several well-regarded individuals who follow the high-powered politicians on the 100 Most Powerful roster. These include the leaders of some of the nation's biggest and best-known healthcare systems -- including Kevin Lofton (No. 16), chairman-elect of the American Hospital Association's board of trustees and the president and CEO of Catholic Health Initiatives, Denver; Sister Mary Jean Ryan, (No. 21), president and CEO of SSM Health Care, St. Louis; Joel Allison (No. 22), president and CEO of Baylor Health Care System, Dallas; and Douglas Hawthorne (No. 23), president and CEO of Texas Health Resources, Arlington.

With a certain symmetry that has characterized all five most-powerful lists, the politicians and system executives are followed in this procession of power by the big names in the insurance industry, including George Halvorson (No. 40), chairman and CEO of Kaiser Foundation Health Plan and Hospitals, Oakland, Calif.; Larry Glasscock (No. 49), chairman, president and CEO of Indianapolis-based WellPoint; and William McGuire (No. 50), chairman and CEO of UnitedHealth Group, Minnetonka, Minn. Of course, names like Glasscock and McGuire, regulars on the list, are emblematic of the increased consolidation that has swept the industry.

"The big fish are in the water," says Berwick, the IHI founder, who acknowledges that the fundamental power structure of healthcare -- status, as in the status quo -- has not changed all that much since 2002, when the list made its debut with then-HHS Secretary Tommy Thompson in the No. 1 position.

Berwick, who has always appeared in a prominent spot but fell to No. 24 this year from the third slot in 2005, suggests that subtle changes in this year's rankings reflect a delicate shift in the overall landscape of influence in the industry. These days, he says, the princely and the powerful are much more apt to flex their muscles in ways that help trigger elementary changes in the way the system operates. Recently, he notes, federal agencies such as the CMS and organizations like the Institute of Medicine, among others, have focused as never before on public reporting and pay-for-performance, two fast-developing movements certain to shake up the industry.

In the meantime, he says, there's a "continuing evolution of interest" in quality and safety by powerful groups such as the AHA, the American Medical Association and the Joint Commission on Accreditation of Healthcare Organizations, which between them exercise a huge influence on how medical care is delivered in the U.S.

"The major shift for the IOM" and other organizations like it, Berwick says, "is toward shaping the environment in terms of public reporting and interest in areas like pay-for-performance. Along with issues of safety and quality, they're more on the map for the regulatory and accrediting agencies."

Interestingly, no top IOM official made the cut for this year's list.

Of course, not everyone agrees with the rankings. Some say the top spot should go almost by default to Leavitt, who ranked No. 1 in 2005 but fell six spots this year. Others would have given the nod to the CMS' McClellan, who is intimately involved in decisions about who receives federal funding -- and how much. As head of the agency that oversees funding for Medicare and Medicaid, McClellan alone controls close to $500 billion in annual federal spending on healthcare -- or more than 80% of the government's total costs.

"Mark McClellan is incredibly important," says Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology who cracked the list for the first time at No. 19 -- likely as a result of his oft-cited work in consumer-directed healthcare. "Mark decides what the government is going to pay the doctors and hospitals and how the prescription-drug benefit is paid," he says. The CMS and McClellan "set the framework."

One well-recognized member of the list -- Rep. Fortney "Pete" Stark (D-Calif.), who is

No. 78 this year after placing no lower than

No. 22 in each of the previous four annual rankings -- questions whether any elected official should be deemed powerful in a year when Congress did so little work on major healthcare issues. The blunt-spoken lawmaker, now serving his 17th term in the House, says the true power in healthcare belongs to organizations such as the Pharmaceutical Research and Manufacturers of America, a select group of major drug manufacturers, the AMA and "the lobbyists who spend so much money" on special-interest legislation.

"What is it that we've done (in Congress) in the last year to be powerful about?" Stark asks.

Two other top government officials -- both physicians -- also retain prominent places on the list as a result of public concerns over everything from an avian flu pandemic to the threat of biological and chemical attacks by terrorists. Julie Gerberding, director of the Centers for Disease Control and Prevention, is No. 9 on the list, followed closely by Elias Zerhouni, director of the National Institutes of Health, at No. 14. Both have made the roster all five years.

'Power is derivative'

Aside from the economic and regulatory influence of the federal government, power in healthcare is dispersed across so many individuals, organizations and sectors that it's hard even to define the term, let alone identify its true source, some observers say. Yet most everyone seems to agree that power on a local or regional level involves the ability of leaders to influence their employees and help guide debates over issues such as reimbursement levels, the uninsured and patient safety. Power -- or influence -- can be fleeting and fickle, says Mongan, who served under President Carter as deputy assistant secretary of health. He jokes about how the phone never stopped ringing while he was working in the White House, but fell silent the day after Carter lost the 1980 presidential election to Ronald Reagan.

"I learned a long time ago that power is derivative -- it certainly is on the political side, at least," Mongan says. "The lesson you learn on the institutional side is that things look hierarchical, but this is a team sport. You realize that when you get on top, it means coordinating people. I don't feel like I'm individually walking around with a lot of power. I feel like I'm working with a lot of good people who are having an impact."

In one departure from the status quo, several suddenly prominent new names have been added to the list, including MIT's Gruber, Ochsner's Quinlan and U.S. Rep. Patrick Kennedy (D-R.I.), No. 15 on this year's list, who has made industry issues a top priority, especially IT and behavioral health. For most newcomers, this distinction appears to be attributable to well-publicized trends in the industry as well as major national events over the past year or so -- including the controversy over the cost and efficacy of high-deductible health savings accounts (in Gruber's case) and the still-lingering impact of Hurricane Katrina, which swept through the Gulf Coast and paralyzed the healthcare infrastructure in New Orleans, an event that seems to have vaulted Quinlan into a far more prominent position among his peers.

An industry veteran, Quinlan makes his first appearance on the list even though he has served for the past six years as the CEO of Ochsner, a highly regarded, physician-led healthcare system that includes the Ochsner Medical Center and a network of 25 clinics throughout the New Orleans region. The clinic -- and its physician leader -- attracted considerable attention along with the rest of the state's beleaguered healthcare system after Katrina wreaked havoc, leaving hundreds of thousands of people without medical care. In the year since then, Quinlan and others have been instrumental in helping to resurrect the healthcare industry in New Orleans.

Quinlan, who kept his system's doors open throughout the ordeal, absorbing about $80 million in losses as a result, solidified his position as a healthcare leader in the Gulf Coast by purchasing three Tenet Healthcare Corp. hospitals in a deal expected to close Aug. 31. "We did the right thing to survive," Quinlan says. "We're big enough to begin to shape the future."

Meanwhile, the national attention focused on HSAs, otherwise known as high-deductible insurance plans, seems to have played a part in the rapid ascension of individuals such as the once little-known Gruber, the MIT economics professor who made his debut on the list just two slots behind Quinlan. Gruber, who serves as associate editor of the Journal of Health Economics, was a key player in the national debate over HSAs, which have encountered some resistance among consumers concerned about deductibles that typically begin at $1,000. Often characterized as a fierce foe of high-deductible plans, Gruber says he is opposed only to the kinds of "regressive tax breaks" he believes are tied to these products under so-called "market-based" policies supported by the Bush administration.

If that debate wasn't enough to raise his profile and draw national attention, Gruber also was among the advisers who worked on groundbreaking legislation to create a system of near-universal healthcare coverage in Massachusetts. (The national media spotlight on that initiative helped propel the state's governor, Republican Mitt Romney, to No. 13 on this year's list. The governor is widely expected to make a run for the GOP presidential nomination in 2008.)

"A lot has happened this year that I've been involved in," Gruber says with a laugh.

The national fanfare over high-deductible health plans may also account for the sudden emergence of Allan Hubbard, assistant to the president for economic policy, who ranks

No. 10 in his first time on the list. As the administration's political point man on this hot topic, Hubbard was in the news frequently. In April, he underscored his mission in an opinion piece in the New York Times, writing that "health savings accounts will unleash" the power of the American consumer. As of last year, only about 4.3 million Americans had signed on to this new model, but experts believe the numbers will rise quickly in the coming years.

In tandem with consumer-directed healthcare, many in the industry are focusing on the concept of "transparency" -- the idea of providing the public with detailed information on the cost and quality of healthcare services to help patients make informed and efficient choices. Among those leading the way: Carolyn Clancy, director of the Agency for Healthcare Research and Quality. Clancy, whose name has never appeared below the No. 31 position in each of the past four years, ranks No. 27 this year.

"The idea that information will make a market-based healthcare system work is not new," Clancy says. "I think what's changed is that it's become indispensable. What we're beginning to see is just how powerful this is really going to be with all the work in information technology and the fact that there is more and more good information out there."

Transparency, the uninsured

Janet Corrigan (No. 60), well-known in the industry for her work with the IOM, joined the top 100 for the first time this year in her new role as president and CEO of the Washington-based National Quality Forum, which merged about six months ago with the National Committee on Quality Health Care. Corrigan, instrumental in the IOM's groundbreaking 1999 report, To Err is Human, describes transparency as the No. 1 issue in healthcare because it affects every aspect of the industry.

"Transparency reveals the gaps and the problems with the system so we can act on them," says Corrigan, whose influential group sets national standards for performance in healthcare. "So, as we move forward toward more and more transparency, we see the effect of the uninsured, safety issues and poor quality. Transparency is a pivotal issue that helps to reveal the areas where we need improvement."

The newfound prominence of names such as Gruber, Hubbard and Romney underscore the growing awareness that something must be done about the growing numbers of the uninsured, say industry leaders such as the CHA's Keehan. She says America's elected officials -- including many whose names appear on the 100 Most Powerful list -- must act decisively to repair a system in which 46 million citizens, including some 9 million children, lack basic health insurance.

"I would hope it would become clear to our elected leaders that the American public will not tolerate this," Keehan says. "Politicians need to use the great creativity of this nation to come up with good solutions and take care of the American people, not the special interests."

For her part, Keehan says she hopes the American people, a true source of power if mobilized, begin to play a more active role in pressuring their elected officials. Yet consumers, for all their supposed political clout, are not well-represented on this year's list. Traditional consumer advocates were all but shut out in 2006 with the exception of Sidney Wolfe, a physician who is director of Public Citizen's Health Research Group in Washington and who ranks No. 66 this year. Last year's list had several consumer representatives, including Wolfe; Ron Pollack, executive director of Families U.S.A.; and Susan Sherry, deputy director of Community Catalyst.

Andy Stern, president of the 1.8 million-member Service Employees International Union and No. 99 on this year's list, says the problems afflicting the U.S. healthcare industry will be solved only through collective, coordinated action by the industry's longtime power structure -- that is, the politicians, trade-group leaders, hospital executives and insurers who have traditionally dominated the 100 Most Powerful roster. It is this group of men and women, he says, that has allowed so many millions to remain powerless to change the system for so many years.

"The real issue is that the people on this list have never come together -- as powerful as we all might be -- to be advocates for change in the system," says Stern, whose union represents about 900,000 healthcare workers, including 110,000 nurses and 40,000 physicians. "I think it's nice to be recognized. If we're really so powerful, why do we live in a system where quality is eroding, coverage is decreasing and we are not using evidence-based medicine and other technological opportunities? I think we've failed as a group to even have so much as a conversation to try to find solutions."

Says Corrigan: "Power in healthcare is so fragmented -- there are so many stakeholders and interest groups -- that the only way to move this system forward is through broad-based collaboration and partnerships. (The 100 Most Powerful list) looks at individuals. But behind those individuals, if we are to improve the system, must be a set of collaborative efforts."

Philanthropic philosophy

The ascension of Gates to the top spot on this year's list shouldn't come as a shock -- after all, he finished second last year to Leavitt, a testament to the scope of a charitable foundation that is nearly three times the size of the Ford Foundation, the nation's next-largest philanthropy. The Gates' foundation is larger, in fact, than the next three-largest U.S. foundations combined.

Still, some observers, including fellow philanthropists such as Karen Davis (No. 54), president of the New York-based Commonwealth Fund, expected the usual politician or government bureaucrat to top this year's list once again. Indeed, the name of the world's wealthiest man did not routinely come up when some industry observers pondered who they might select as the most powerful person in healthcare.

"It surprised me a little," says Davis, whose organization has about $665 million in assets and dispensed some $17.6 million in the fiscal year ended June 30. "But I can't think of anyone more deserving."

The Gates Foundation, created to "reduce inequities and improve lives around the world," has provided about $11 billion in grants since its inception, giving away $1.4 billion in 2005 to organizations such as the Malaria Vaccine Initiative and the GAVI Alliance, a global group that coordinates vaccines and immunizations. (It nearly matched the $1.6 billion spent in 2006 by the World Health Organization).

Gates, speaking truth to power, outlined his personal and financial commitment to international health concerns in an address last year at the 2005 World Health Assembly in Geneva. "In my view -- and there is no diplomatic way to put this: The world is failing billions of people." Later, closing a speech in which he outlined much of his foundation's international efforts to eradicate childhood diseases, he asked: "Is the world going to take care of its children?" Gates intends to help answer that question.

Once it absorbs Buffett's contribution, the Gates Foundation expects to more than double the annual charitable gifts it dispenses to promote global health and education reforms. Total annual grants could soon reach or exceed $5 billion. (The creation of this colossus didn't contribute to Gates' rise in the most-powerful list: Voting ended before Buffett's contribution was announced in late June).

"Bill Gates is deeply interested in healthcare as the new frontier," says Uwe Reinhardt, a professor of health economics at Princeton University who ranks No. 29 in his fifth-consecutive appearance on the list. "Given the enormous resources, when he puts his mind to something, he can make a huge difference."

Of course, healthcare leaders recognize that even the vast philanthropic resources of the Gates Foundation will never come close to replacing the scope and significance of the U.S. federal government, whose leaders will always dominate any list that purports to spotlight influence and power. The federal government's share of healthcare costs amounts to about 32% of the overall spending -- or more than $600 billion. Total healthcare spending, now slightly more than 16% of the GDP, is expected to rise to about 20% by 2015 -- or an estimated $4 trillion, about double the cost in 2005. The tab per person? Approximately $12,320, according to government estimates.

"Even 10 Bill Gates couldn't replace the federal government's influence on the healthcare sphere," Mongan contends.

Still, philanthropy in healthcare continues to grow, helped in part, no doubt, by the efforts of Gates and Buffett, among many others.

"Every time Bill Gates moves, he gets press attention about philanthropy in healthcare," says Bill McGinly, president and CEO of the Association for Healthcare Philanthropy. "So, he's increasing awareness of the needs for philanthropic support for healthcare providers. There's a ripple effect that's very positive for healthcare."

Last year, McGinly says, the philanthropy association's member institutions raised approximately $7 billion, or about 15% more than in 2004, an indication that hospital executives are focusing their attention on philanthropic endeavors to help improve the bottom line. While healthcare philanthropy amounts to an average of just 1% to 3% of revenue for not-for-profit hospitals, experts such as McGinly expect that number to grow quickly.

The Healthcare Financial Management Association (whose president and CEO, Richard Clarke, ranks No. 79 on this year's list) conducted a study in 2004 that found that about half of all chief financial officers planned to boost the percentage of philanthropy as a source of capital. The respondents, who ranked philanthropy sixth as a source of capital, expected that category to move up to No. 3, behind cash from operations and tax-exempt bonds.

"Clearly, Gates has had an impact," Mongan says. "Whether it means that philanthropy will increase across the healthcare system, I don't know. We celebrate philanthropy. It's a key to our organization and lots of others. But I don't expect it to grow to the extent that it will take the pressure off. It would be unrealistic to expect philanthropy to solve the overall problems."

Clout by association

As usual, the 100 Most Powerful list is peppered with the leaders of industry trade groups, including Richard Umbdenstock (No. 30), who takes over in January as president of the AHA; Linda Kloss, (No. 53), executive vice president and CEO of the American Health Information Management Association; H. Stephen Lieber (No. 72), president and CEO of the Healthcare Information and Management Systems Society; and Kenneth Raske (No. 80), president of the Greater New York Hospital Association

This year's list is conspicuous by the absence of a handful of previously prominent names. Among the notables who have fallen off the list this year: Rep. Bill Thomas (R-Calif.), chairman of the always powerful House Ways and Means Committee, who ranked No. 10 in 2005 but was shut out this year after announcing his retirement after 14 terms in Congress; John Rowe, executive chairman of Hartford, Conn.-based Aetna, who announced earlier this year he would retire by the end of 2006; and Kenneth Kizer, who resigned as president and CEO of the National Quality Forum in Washington.

And then there were those who made the list despite their seemingly best efforts to get off it. This includes David Brailer, the national health information-technology "czar" who was No. 1 on the list in 2004 and No. 8 last year. He wound up No. 28 even though he announced his resignation in mid-April, just after the start of balloting for this year's list.

Amid all the individual names, another not-so-easily definable source of power emerged this year -- call it healthcare federalism, or the growing clout of the states in the debate over issues such as the uninsured. In some cases, states have stepped in to help fill the void that many policymakers believe has been created by federal officials preoccupied with issues such as the war in Iraq, budget deficits and an endless cycle of elections and campaigning.

For instance, Gruber, the MIT professor, says he believes that Massachusetts, with its bold attempt to offer coverage to the uninsured, is setting an example that will be followed by many other states. The Bay State's initiative, approved by lawmakers in early April, requires all residents to have insurance by July 1, 2007. Tax penalties will be imposed on those who can afford to pay for insurance but choose not to, while low-income residents will receive subsidies under the first-ever statewide plan of its kind.

With its relatively low rate of uninsured and access to hundreds of millions of dollars in federal funding from an existing uncompensated-care pool, Massachusetts represented an ideal environment that will be tough to replicate elsewhere, Gruber says. Still, he is confident that it's just a matter of time before other states launch similar efforts.

"This is a model that a lot of other states are interested in," Gruber says. "There are a lot of eyes on us."

Berwick, meanwhile, views the initiative in Massachusetts as a "glimmer of hope," a signal that some states are taking the lead in this issue because they feel they can no longer wait for Washington. Following the actions of lawmakers in Massachusetts, other states actively working to widen the scope of insurance include Florida, Maine, Vermont and West Virginia.

"What you're seeing in Massachusetts and other states," Berwick says, "is the first wave of a political embrace of justice and universality (of coverage) as vital issues. Whether we will actually swing the bat and go the whole way and erase the problem ... that is yet to be known. I don't have a crystal ball. But I'm optimistic."

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