As America's healthcare system creaks and wheezes under the weight of crushing costs, is it any wonder that the individual perceived to be the industry's single most-
What's more, HHS Secretary Mike Leavitt, who holds the purse strings
on an annual budget that dwarfs the gross domestic product of many foreign nations also happens to be directly responsible for policing and regulating this diverse and fragmented industry-a patchwork of fiercely competitive fiefdoms that has struggled frantically for years with issues such as patient access, safety, quality improvement and cost-containment.
It doesn't really matter who occupies the top job at HHS, observers say. That individual will always be at or near the No. 1 spot on any "most powerful" list. Four years ago, when the list made its debut, Leavitt's predecessor, Tommy Thompson, likewise held the top spot, underscoring a very elemental economic mantra that boils down to the age-old concept that cash is king.
Says Thomas Dolan, president and chief executive officer of the American College of Healthcare Executives (and No. 62 on this year's list), "Everyone in healthcare knows that the government is picking up half the tab ... and influencing the other half."
As diverse as the industry
Aside from the usual focus on reimbursement and payment policy, several additional healthcare priorities-access, safety, quality improvement and the push for information technology-represent recurring themes in this year's annual ranking of the powers-that-be in an industry crowded with high-profile activists, influential policymakers and supremely self-assured executives.
The list includes the most powerful man on Earth-President George W. Bush, who was ranked No. 1 in 2003 but has slipped to fourth in the past two years. And it includes the richest man on Earth-Bill Gates, making his first appearance at No. 2, just behind Leavitt. It also features politicians and patient-safety experts, academics and association executives, consumer advocates and lobbyists, big-time vendors and the leaders of some of the largest healthcare systems in the nation.
In short, the list is as diverse as the disconnected, decentralized industry that it represents.
"There is no one real single source of power in healthcare," says Kevin Lofton (No. 41), president and CEO of Catholic Health Initiatives, the faith-based giant that operates 69 hospitals in 19 states. "It's so fragmented, power comes from many different directions. I think it's spread out across different sectors. The power that's yet to be tapped in healthcare will come when we are able to demonstrate we can come together, across these different sectors, and work to improve healthcare.
"Where's the power? It's in the industry, as a whole," says Lofton, the recently named chairman-elect-designate of the American Hospital Association.
So it seems fitting that Leavitt-a seasoned administrator and professional politician who has quickly consolidated power at HHS, carving out control with a string of high-profile initiatives-has captured the No. 1 spot in Modern Healthcare's fourth annual poll of the 100 Most Powerful People in Healthcare.
Leavitt, the comparatively obscure administrator of the Environmental Protection Agency before his appointment as HHS secretary on Jan. 26, acknowledges that his role overseeing the vast healthcare bureaucracy confers the kind of political muscle no other individual or organization in the industry can hope to muster. It's no secret to the secretary himself that his lofty perch is attributable primarily to the industry's fixation on reimbursement and regulation.
"If you add up all the government sources of payment, it constitutes about 46% of the total of all healthcare spending," Leavitt said by telephone during a break earlier this month at a Medicare event in Albuquerque. "I think that clearly delineates the fact that the government has the responsibility to lead. I recognize that this stature (on the list) is because of my role as secretary of HHS. You have a significant status not only as a payer but also because of the regulatory responsibility.
"It's a great privilege, a public trust I take very seriously."
For longtime industry leaders, the vast HHS bureaucracy has always served as the starting point when it comes to a discussion of the true font of power in healthcare. Together, the 11 far-reaching operating divisions in HHS-which include such groups as the CMS, the National Institutes of Health and the Food and Drug Administration-administer more U.S. grants than all the other federal bureaucracies combined.
"The federal government controls the dollars, it's that simple," says Helen Darling (No. 49), president of the National Business Group on Health, whose 225 members represent about 45 million employees. "The people who have the money can decide what they pay for and what they don't pay for. And that's as basic as it gets."
Healthcare spending in this country now stands at $1.7 trillion, a number that is expected to nearly double to about $3.6 trillion by 2014, with approximately 50% or more coming from the government. As costs continue to rise, Darling predicts the direction of healthcare will be "driven more and more by public decisions rather than by private decisions."
That, she adds, means even more power concentrated in the federal government.
"To a lot of people in this industry," Darling says, "it feels like the government never paid the full freight. Well, if they didn't like that situation in the past, wait until they see what's in store for them in the future."
Matters of policy
The patient-safety sector, which has benefited from a flood of publicity in the national debate over health policy in recent years, is represented near the very top of the list by Donald Berwick, a physician who is president and CEO of the Institute for Healthcare Improvement and ranks No. 3, one slot above Bush.
Close behind, Sen. Edward Kennedy, the Massachusetts Democrat who has long been a powerful voice in healthcare policy, captured the No. 5 spot. He's followed by two fellow senators who, despite occupying opposite ends of the political spectrum, have somehow managed to find common ground on healthcare issues: New York Democrat Hillary Rodham Clinton (No. 6), and Republican Majority Leader Bill Frist of Tennessee (No. 7), who is one of two medical doctors in the Senate. (The other physician, Oklahoma Republican Thomas Coburn, is also on the list, at No. 91.) The odd couple of Clinton and Frist collaborated on proposed legislation to provide about $625 million over five years for matching grants to spur information technology in healthcare (June 20, p. 14).
In all, politicians and government bureaucrats hold eight of the top 10 positions in this year's ranking, further illuminating the intersection of power, politics and policy in the nation's capital. One of Leavitt's deputies, CMS Administrator Mark McClellan (No. 9), controls a budget of about $490 billion at an agency that insures one of every four Americans through Medicare and Medicaid.
"Washington is where the action is," says John Casey, chairman and CEO of MedCath Corp., a developer of specialty heart hospitals, who ranks No. 54 on the list. "Between the payment system and the regulatory environment, it's obvious that they're going to call the tune at the end of the day for almost every important policy decision."
Casey, who is leaving the top job at MedCath in about a month but will remain as chairman, makes his first appearance on the list. In the past year, he has been at the center of one of healthcare's most powerful storms-the controversy swirling around utilization, costs and profits at niche facilities specializing in high-profit services such as orthopedics, surgery and cardiac care.
Leavitt, 54, who served three terms as governor of Utah before heading to Washington last year to head the EPA, is well-schooled in the art of leadership and comfortable in the corridors of power. As the nation's 20th HHS secretary, he manages the largest civilian department in the federal government, with more than 67,000 employees, and controls a 2005 budget of $581 billion, almost twice the combined annual budgets of Mexico and Canada.
Leavitt, who was intimately involved with healthcare issues as governor, says he hopes to halt runaway costs during his tenure and turn a harsh spotlight on the waste he believes pervades a dysfunctional system. "The system of healthcare is saturated with inefficiencies," he says. "It is far too focused on treating people after they're sick. Incentives are not where they should be. We need to create a series of incentives for consumers to be cost-conscious, for providers to be efficient and for
'500 day' plan
Since assuming his post just seven months ago, Leavitt has won plaudits from industry leaders for decisive stances on several key issues, including a determined push for information technology and an emphasis on pay-for-performance as a vital step toward improving quality and cutting costs. He has taken control of an effort to overhaul Medicaid, handpicking a 15-member commission aimed at achieving as much as $10 billion in short-term savings. In so doing, he angered some Democrats, who questioned whether the group would follow a partisan line.
Meanwhile, he boldly assumed the role of the nation's new healthcare information-technology czar, taking over in June as chairman of a public-private collaboration that is being billed as the American Health Information Community.
Leavitt says it was a well-calculated part of his plan to set an ambitious, aggressive tone early in a tenure he expects will last through the final three years of the Bush administration.
"I spent three terms as governor, and I learned very quickly how fast the years go by," Leavitt says. "The opportunities to serve in a role like this are very rare, and there's not a day to be wasted. So I have followed a pattern, that I continue in this role, of developing a clear set of priorities to help define where I spend my time."
Among his top priorities, he says, is a systematic overhaul of the Medicaid system. "We've got to fix Medicaid," he says. "It's broken."
Leavitt has created a "500 day" plan as a way to help guide his stewardship of the agency, mapping out a broad and visionary outline that he hopes will "transform" the delivery of healthcare. In his first 500 days-a time frame that will take him through May 2006-Leavitt and his team will concentrate on information technology, the Medicare drug benefit and the Medicaid overhaul, among other priorities. He says he reviews his goals every 200 days, an anniversary date that was marked in the middle of this month.
His personal job assessment: "In total, I think we're very much on track."
In his first few days in office, Leavitt embraced the idea of promoting information technology as the most basic prerequisite for almost any substantial advance in America's healthcare system. "I realized very early, that almost every part of my responsibility was affected by the lack of health information technology," he says. "That is the key to virtually every possible remedy. I believe the future of healthcare is technology."
Leavitt's torrid pace thus far doesn't surprise Dolan, who, as the ACHE's top executive since 1991, knows a little bit about the industry's elite: "He was a pretty activist governor," Dolan says. "He believes-as does the Bush administration-in the importance of healthcare as a public policy issue. He has picked up that torch and moved it forward. I think he's off to a good start."
The top position in all four of Modern Healthcare's 100 Most Powerful rankings has been held by politicians and top government officials, a trend that started in 2002 with Thompson, who then was just hitting his stride as HHS secretary, and continued the following year with Bush. This year's list features 59 returnees from the 2004 ranking and 27 names that have appeared on all four rankings.Last year, the No. 1 position went to David Brailer just four months after his appointment as the president's national healthcare IT coordinator. His appointment triggered renewed interest in upgrading an industry whose high-tech gear, some critics charge, hasn't advanced much beyond the era of punch cards and dial-up modems. This year, Brailer, whose relatively small department is one of the newest additions to Leavitt's ever-expanding bureaucracy, fell to No. 8.
Brailer's slight descent is not viewed as an indication that information technology is any less important this year than last. The list is peppered with individuals who are playing important roles in this dynamic arena. Among them: Linda Kloss (No. 42), CEO and executive vice president of the American Health Information Management Association; Molly Joel Coye (No. 69), founder and CEO of the Health Technology Center; Scott Wallace
(No. 81), president and CEO of the National Alliance for Health Information Technology; and H. Stephen Lieber (No. 85), president and CEO of the Healthcare Information and Management Systems Society. Joining these IT veterans on this year's list is newcomer Gail Graham, director of health data and informatics at the U.S. Veterans Affairs Department, who holds the No. 28 spot.
Focus on IT
Graham, a relatively little-known bureaucrat, says she thinks her recognition is attributable to the intense national focus on upgrading the healthcare IT system. "Information technology in healthcare has become a major issue in the last 12 to 18 months," she says. "It's been in the news more than ever before. My position with one of the largest integrated healthcare systems in the world keeps me in the middle of that, I suppose."
It didn't hurt Graham's visibility when, in late July, Medicare announced that it would help jump-start the routine use of IT for private physicians by providing free access to the VA's Vista electronic medical-records system, a highly successful software program that has been used by the government for two decades.
Denver-based hospital chief Lofton praises the efforts of Bush and appointees such as Leavitt to highlight the urgent need for the kind of information technology that will finally pull the industry into the 21st century.
Unfortunately, Lofton suggests, the progress probably will continue to be "incremental" despite the best intentions of policymakers. "Look at bar coding," he says. "Go to any supermarket. They have it. Look at banking and ATMs. These are examples where healthcare is way behind."
Lofton is back on the list this year after missing the cut in the two previous years. In the inaugural 100 Most Powerful list, Lofton, then the chief operating officer at Catholic Health Initiatives, was 74. Does he feel like he wields power? "I have a platform, a position where I can speak my mind and people can at least hear what I'm saying," Lofton says. "I also spend a fair share of my time trying to mentor people, working toward more diversity in management across the country. That's an area were I think I've played a major role in this country, trying to open up doors, serving as a role model. I've been the 'first this' and the 'first that' African-American in healthcare many times, so that helps open up doors" for others.
The government's concern about financial accountability also appears to have played a big part in the rankings this year. And that national interest may have been fueled by months of media coverage of the sensational trial of former HealthSouth Corp. President and CEO Richard Scrushy, who was acquitted in late June of charges that he orchestrated a $2.7 billion accounting fraud at the company he founded.
This emphasis on oversight is reflected in the rankings of aggressive, tough-talking politicians and regulators like U.S. Rep. Pete Stark (D-Calif.) (No. 22), a senior member of the powerful House Ways and Means Committee; Eliot Spitzer, (No. 39), the inexhaustible New York attorney general; and Chuck Grassley (No. 18), the powerful Republican senator from Iowa who is scrutinizing the business practices and the charitable missions of not-for-profit hospitals and health systems. For that reason alone, Grassley, who has inched up the list over the past four years, exerts a large amount of power and persuasion.
Lofton says healthcare's leaders would do well to pay close attention to the rumblings in Washington.
"The whole area of what we might call 'shareholder trust,' or transparency, is becoming more and more important," Lofton says. "Hospitals have to be open with the communities they serve," especially when it comes to charity care. "They must not be afraid to open up to the general public and be accountable in everything from quality, taxes, nonprofit status."
Where are they now?
A few notable names are missing from this year's list, including one of the best-known individuals in the industry-Richard Davidson, longtime president of the AHA. (One of Davidson's top lieutenants, Executive Vice President Richard Pollack, was voted to the No. 79 spot on the list.) Other prominent individuals who missed the cut this year: Rep. Nancy Johnson, the Connecticut Republican who has been a force in healthcare for years in Congress as chairwoman of the House Ways and Means health subcommittee; Scott Serota, president and CEO of the national Blue Cross and Blue Shield Association; and Margaret O'Kane, president of the National Committee for Quality Assurance. All were on last year's 100 Most Powerful list.
A few other big-name nominees who also fell short: Risa Lavizzo-Mourey, president of the Robert Wood Johnson Foundation; and the leaders of the industry's two big national hospital alliances: Curt Nonomaque, president and CEO of VHA, and Richard Norling, president and CEO of Premier.
Dolan, the leader of the 30,000-member ACHE, says he's surprised that the list doesn't include more giants of industry, a segment that is evolving into a fearsome force in healthcare as companies like General Motors Corp. emphasize cost, quality and consumer-driven decisionmaking. Darling's National Business Group on Health and other employer associations, including the Leapfrog Group, are creating powerful corporate alliances to make substantive changes in the way healthcare is delivered. Dolan thinks the list should include businesspeople like G. Richard Wagoner Jr., GM's president and CEO; and Tom Donahue, president of the U.S. Chamber of Commerce.
"Everyone expects Leavitt to be on the list, along with President Bush and Frist," Dolan says. "What kind of surprises me is which names haven't appeared on the list. There are business people who aren't closely identified with healthcare who can have a tremendous impact on it. For example, if Richard Wagoner decides to alter healthcare benefits for GM's employees, that is definitely a use of incredible power in this industry."
Of course, the names and rankings are nonscientific and subjective, open to as much spirited debate as the very nature of power in healthcare, a fairly nebulous notion that remains difficult to define or quantify. Does money always equal power? Is power synonymous with influence? Does it emanate from an individual, an organization, a thought, an ideal or a vision?
"I think power is a dangerous word," says Douglas Hawthorne (No. 14), president and CEO of Texas Health Resources, which ranks as the third-biggest employer in the Dallas-Fort Worth area with its 13 hospitals. "When I think of power, I think about what helps make a difference in an organization. In healthcare, when we talk about leadership, I'd substitute 'power' for the notion of principled persuasion. It's nice to be recognized, but power really is how you encourage and persuade people to move forward."
'The power of an idea'
Berwick, one of the most-recognized names in healthcare quality as leader of the IHI, is back in the No. 3 slot in this year's most-powerful list after dropping to No. 17 in 2004. An articulate and forceful advocate for patient safety, he's spearheading the 100K Lives Campaign, which has already enlisted about 2,500 hospitals in an attempt to implement changes that have been proven to prevent avoidable deaths. If that's not enough to heighten a personal profile or pad an already impressive curriculum vitae, Berwick was appointed an honorary British knight last month by Queen Elizabeth II for his longtime work with the United Kingdom's National Health Service.
Though his stature and the IHI's reputation provide him with a strong voice for change, Berwick says his own personal power has had little to do with his organization's success in making patient safety a high-profile priority in this country.
"In my case, I distinguish between the power of a person and the power of an idea," Berwick says. "It seems to have hit a resonance that was quite unexpected. People seem to be listening. I haven't seen a coalition like this emerge in healthcare in my lifetime."
Berwick breaks down the power in healthcare on two fronts: "outside in" and "inside out." The external forces, such as regulators, payers and government agencies, shape and largely underwrite the system; the internal forces-doctors, nurses, administrators and others-actually run it. The external forces are the forces of traditional power," Berwick says. "The internal forces provide leadership. We're going to need to align them both to be successful."
Patricia Gabow, a physician who is the longtime CEO and medical director of Denver Health, the most important safety net hospital in Colorado, isn't particularly optimistic that the presumed powerbrokers of the U.S. healthcare industry can fix the system's many significant ailments without a dramatic shift in the business model itself.
"We don't have a 'system' of healthcare-that's the first problem," says Gabow, a newcomer to the list at No. 76. "We need a coordinated, comprehensive, inclusive system of care. We need to move away from silos and fragmentation. That's the only way we're going to achieve both quality and cost efficiency."
"I would certainly say our health system has a long way to go to be what we would want it to be."
That transformation may require a little impetus from outsiders, observers like Gabow suggest. One big surprise in this year's ranking is the inclusion of a complete industry outsider-Microsoft's Gates, making his first appearance at No. 2. His wealth and influence have a mighty impact even if it's not directed specifically at the U.S. healthcare industry.
Of course, his ranking just below Leavitt is most likely the result of healthcare's unusually specific spotlight over the past year or so on the importance of information technology in boosting safety and reducing runaway costs.
"Talk about information technology in this country and whose name comes to mind?" Dolan says.
Like Leavitt's position atop the list, Gates' ranking no doubt also has a lot to do with money. The Seattle-based businessman is co-founder of the Bill & Melinda Gates Foundation, which boasts an endowment of approximately $29 billion and has established a particular focus on global health. In 2000, the foundation provided $750 million to the Global Alliance for Vaccines and Immunization and the Vaccine Fund. Two months ago, the Gates foundation provided about $450 million for innovative health-related research projects in 33 nations.
Says Berwick of the man from Microsoft: "He's putting his footprint on the global health arena, and thank God for that. Globally, he's extremely important."
High-powered systems
Not surprisingly, most of the big healthcare systems in the nation are well-represented on the list, including Joel Allison (No. 11), president and CEO of 11-hospital Baylor Health Care System, Dallas. He has enjoyed a spot on the 100 Most Powerful list all four years. The category also includes Sister Mary Jean Ryan (No. 13), president and CEO of SSM Health Care, St. Louis; Jack Bovender Jr. (No. 23), chairman and CEO of HCA; Trevor Fetter (No. 34), president and CEO of Tenet Healthcare Corp.; and Jay Grinney (No. 35), who is helping to orchestrate a dramatic rebound at scandal-scarred HealthSouth as that company's president and CEO.
Other corporate heavyweights include George Lynn (No. 48), president and CEO of AtlantiCare, Atlantic City, N.J., and chairman of the AHA; and Lloyd Dean (No. 61), president and CEO of Catholic Healthcare West.
Among the high-powered women executives on the list is Nancy Schlichting (No. 40), president and CEO of the Henry Ford Health System in Detroit, which generates more than $2.6 billion a year in revenue. She took over the top job in Michigan's second-biggest health system in June 2003 from Gail Warden, one of the healthcare industry's best-known and most influential leaders. This is her first time on the ranking.
"This is not something that I really aspire to-in terms of being a 'powerful person,' " says Schlichting, whose system was among the first to join Berwick's safety campaign. "I'm more interested in respect and influence. For me, the most important thing is how you influence people in a positive way."
And that sentiment, she adds, extends to dealing with what many experts believe is the most pressing priority of all: The creation of a coherent national healthcare policy to deal with the estimated 48 million Americans who lack even basic healthcare coverage.
Those who consider themselves to be true leaders, Schlichting says, are not doing enough-and that includes President Bush and many of the nation's lawmakers, she says.
"In terms of his thinking about the issue of healthcare for all," she says, "President Bush could clearly have the greatest influence if his agenda was to improve access to healthcare-everyone would be responding to his lead."
Does the president show any signs of doing that?
"No," she replies. "But I wish he would."
More challenges ahead
Berwick, meanwhile, contends the most pressing problems facing the industry, such as finding a way to provide healthcare to all Americans, could grow worse: "We have Iraq, enormous federal deficits, a zero-sum federal budget system," he says. "We are definitely seeing care and security for the poor under mounting pressure. In my opinion, to call oneself a leader in American medicine, one must be concerned about healthcare disparities, racial equities and justice in healthcare. They have got to be the top priorities for anyone who deserves to be called influential."
For her part, Gabow, along with several other colleagues interviewed for this story, point to Berwick as one of the most effective and electrifying leaders in healthcare. She defines power, as it applies to Berwick and other leaders, as equal parts influence, knowledge and inspiration. "Don Berwick is definitely someone who has inspired change," she says.
In addition to Berwick, the patient-safety category of this year's list includes Carolyn Clancy (No. 25), director of the Agency for Healthcare Research and Quality (another arm of Leavitt's far-flung bureaucracy); Michael Cohen (No. 43), president of the Institute for Safe Medication Practices; Suzanne Delbanco (No. 44), CEO of the Leapfrog Group; and Kenneth Kizer (No. 84), president and CEO of the National Quality Forum. All four have been on past rankings.
Yet even despite the power and influence of these high-profile individuals, there has been little real progress in overall patient safety in the five years since the Institute of Medicine's groundbreaking 1999 report on unnecessary death in hospitals, Berwick concedes. "There are scattered examples of institutional change," he says. "But as a total system, we are not seeing anything like the momentum toward truly safer care that we really need."
"We still need both political and institutional leadership to declare safer care to be at the very top of the list of priorities. It's down on the list right now. Rhetorically, it's high. But in deed and actions, it's far too low."
Finally, consumer advocates also made their mark on the annual list of powerful players. These activists include Sidney Wolfe (No. 26), a physician who is director of Public Citizen's Health Research Group; Susan Sherry (No. 65), deputy director of Community Catalyst; and Ron Pollack (No. 86), executive director of Families USA.
Sherry, whose organization is devoted to the simple notion that "access to quality healthcare is a basic human right," says consumer-advocacy groups like Community Catalyst are the only way to effectively mobilize a loosely knit universe of patients that is just as decentralized as the healthcare system itself. While she bemoans the fact that there aren't more than a few consumer advocates on the list, she notes that Community Catalyst has helped heighten attention on several key issues in recent years, including drug-industry pricing and the costs of charity care at hospitals. Her group has also helped lead the opposition to the conversion of not-for-profit insurers in recent years.
"Four or five not-for-profit Blue Crosses were prevented from converting in the last couple of years," Sherry says. "Who would have thought you could stand up against the largest insurer in those states? But it worked. And that's an example of power."
Sherry says her organization has helped to mobilize local communities by taking the grass-roots approach, talking to "real people" and connecting those personal experiences to legal challenges and lobbying efforts. It's time, she says, for consumers to develop the same kind of political muscle that individual doctors have through their membership in the American Medical Association and hospitals have in their representation by the AHA. Only then, she says, will consumers command a true voice and political power.
"Doctors don't go out individually and take positions-they've got organizations that have lawyers, policy analysts, media and communications people to speak for them," Sherry says. "When consumers get organized and when they have the same kinds of support systems as doctors and hospitals, well ... that's when they'll start developing their own power. And that's when they'll really be able to make a difference."
