Trump’s choice for
assistant health secretary for policy has a long association with the insurance
industry.
By DAN DIAMOND
10/30/2017 05:01 AM
EDT
Five months after President Donald Trump nominated Stephen
Parente to be an assistant secretary for Health and Human Services, the
nation's largest health insurer quietly gave a $1.2 million gift to a tiny
academic research center that Parente helped found and served as director over
the past decade.
Parente, who is still awaiting confirmation as HHS’
assistant secretary of planning and evaluation, for which he was nominated in
April, would head an office that often assesses policies that affect the
insurance industry. It is currently researching the impact of Obamacare on the
insurance market.
The gift — which comes after a long association between
Parente and UnitedHealth Group, along with other major health-insurance
carriers — raised concerns among watchdogs.
“The timing doesn’t look good,” said Scott Amey of the
Project on Government Oversight. “I think Mr. Parente should take some steps to
assure the public that he’s working in the public interest, and not on behalf
of United Healthcare or other donors" to his center.
In his role as assistant secretary, Parente would be the
"principal advisor" to the HHS secretary on policy development and
"responsible for major activities in policy coordination, legislation
development, strategic planning, policy research, evaluation, and economic
analysis," according to HHS' website. The job, known as ASPE, has been a
springboard for policy leaders; it was filled by Bobby Jindal, the future
Louisiana governor, and Ben Sasse, the future Nebraska senator, during the
George W. Bush administration.
UnitedHealth, which confirmed its decision this summer to
give $1.2 million over three years to the Medical Industry Leadership Institute
at the University of Minnesota — the largest in the center’s history — said its
decision to make the gift had nothing to do with Parente’s nomination to HHS.
“As the largest
company headquartered in Minnesota, we have a long-standing, multi-year
partnership with our home state University of Minnesota and are grateful for
and proud of the partnership,” a UnitedHealth spokesperson said.
Indeed, Parente, a 52-year-old economist, has long
maintained close ties both to UnitedHealth and to other insurers. A specialist
in health care finance, he holds an academic chair at the university called the
Minnesota Insurance Industry Endowed Chair. It is funded by Thrivent Financial
and Securian Financial Group, which offer a variety of insurance products.
UnitedHealth in 2010 made a five-year, $1 million gift to his center, and Blue
Cross Blue Shield of Minnesota also was one of five corporate donors that made
$30,000 annual gifts to Parente’s academic center.
“Without the support of corporations, MILI would not have
evolved beyond [the] start-up stage,” Parente said in a 2015 interview with his
business school’s magazine.
Beyond the university, Parente has served as the chairman of the
Health Care Cost Institute, a nonprofit research consortium backed by
UnitedHealth, Aetna, Humana and Kaiser Permanente. Parente also has a private
consulting business that has done work for UnitedHealth and other health care
organizations.
Parente, who has been awaiting Senate confirmation for six
months, declined to comment, citing his nomination.
Parente’s defenders say his consulting work with major
health care organizations would be a boon in the job, which involves analyzing
how federal policies affect the health care market.
“I think it’s an advantage,” said Michael O’Grady, who
served as ASPE in the George W. Bush administration and describes himself as an
old friend of Parente. O’Grady said that some of HHS’ struggles with the
Affordable Care Act stemmed from officials not understanding the insurance
industry — one argument for an official like Parente, who’s dealt with them
extensively. “If you’re going to negotiate with them, you want to know them,
and how they think, and will they take the deal,” O’Grady said.
Other officials who have served in the role in previous
administrations said Parente is an experienced policy adviser who will
understand how to lead the office, but noted that his ties to the insurance
industry are more extensive than the norm.
“He’s as good as anyone you’re going to get from this
administration,” said a former ASPE, who worked under a Democratic president
and requested anonymity to speak candidly. But they added that Parente’s
extensive dealings with the health care industry make him an outlier, with
previous ASPEs “less involved in commercial enterprises,” another said.
Meanwhile, Parente’s nomination has alarmed some progressive
activists, who said that his track record of working with industry and
supporting policies to roll back public health insurance would hurt the safety
net.
“He may become the most dangerous individual in government
as far as our health care is concerned,” Don McCanne, past president of
Physicians for a National Health Program, wrote in April.
Other advocates pointed to Parente’s possible conflicts of
interest if he’s confirmed as an HHS senior official.
“I absolutely think there’s a concern here,” said Wendell
Potter, a former insurance executive who’s now a consumer advocate.
Given Parente’s years of work with the insurance industry,
“I would imagine that he would certainly have a bias toward the current model
of health insurers,” Potter added.
Potter, a frequent critic of the insurance industry who once
ran Cigna’s communications, said that the industry’s gifts to universities are
“widespread” and part of a broader strategy to encourage pro-industry research.
“[Insurers] absolutely want to make sure that their interests are protected,
and they are seen by this administration as … effective and efficient and a
crucial part of the health care system,” Potter said.
Some researchers and university officials who grapple with
health care conflicts of interest say concerns can be overblown.
"There are some types of company interaction that raise
questions about … consequences that need to be monitored and prevented,"
said Jeffrey Flier, who served as dean of Harvard Medical School from 2007
through 2016. “There are many more that are necessary and needed interactions,”
like when researchers work with the pharma industry to develop new drugs.
Parente’s work with the insurance industry “is not
automatically disqualifying and a sign of ethical weakness,” Flier said, adding
that interactions with industry depend greatly on case-by-case details, like
whether there are any quid pro quos or the nature of the work that resulted
from a gift — details that aren’t always obvious and require further scrutiny.
“Does [his center] write one paper after another saying that
UnitedHealthcare is great? … That would be a problem.”
Parente’s longtime center is intended to bring together
academics and the industry and help foster career opportunities for students,
school officials say. The center supports research into industry challenges,
and students attend lectures taught by executives at UnitedHealth and other
industry companies. “MILI offers national and international firms access to the
rigorous intellectual community we have established,” the center’s website
touts.
According to a University of Minnesota department directory,
Parente is still listed as the director of the small center, which he helped
launch more than a decade ago and had led since 2006. School officials say he
is no longer leading the center. The center also has a staffer who handles
administrative duties, but the institute has been viewed as "a one-man
shop" run by Parente for years, according to two individuals who have
knowledge of its operations. Eight other people, three of whom either
previously worked for UnitedHealth or currently work there, are listed as
part-time instructors at MILI. Parente in 2008 also recruited former
UnitedHealth CEO William McGuire, who lost his job after a stock-options
scandal, to be an executive at his center.
UnitedHealth's $1.2 million gift to the center would be paid
out over three years and is intended to help train students to go into the
health care industry, according to the terms of the gift.
University of Minnesota and UnitedHealth staff say the
university formally applied for the gift in early 2016 and that UnitedHealth’s
decision to award it was not tied to Parente's nomination in April.
UnitedHealth has given more than $4 million in other gifts to the University of
Minnesota since 2010, said a spokesperson, who noted that the company has also
given millions of dollars in similar grants to other universities through its
United Health Foundation.
While some staff at the University of Minnesota were told
about the gift by the business school’s dean last month, neither
the university nor UnitedHealth has publicly announced it, as they have with
previous grants. A new academic adviser,Pinar Karaca Mandic, has been tapped to
run the center, and her name was swapped in for Parente’s on some pages of the
institute’s website last week, although her appointment also has not been
publicly announced.
UnitedHealth's gift to a center led by a nominee for a top
political job is not illegal — there are no rules barring that kind of action —
but it does raise ethics questions, experts said.
Amey, of the Project on Government Oversight, suggested one
possible path for Parente, if confirmed. “The fact that this donation was
finalized after his nomination was announced [means] he should probably take
the added steps of recusing himself from anything involving
UnitedHealthcare," Amey said.
That approach mirrors the rules that political appointees
must follow related to their place of employment, especially if they still have
ties to that organization.
“When I was at the White House, I was on leave from the
University of Minnesota, [and] I understood that I could not do anything that
would be direct and predictable on the university,” said Richard Painter, a
professor at the University of Minnesota who served as the top
ethics official in the George W. Bush administration.
While UnitedHealth has largely exited the Obamacare
insurance market, it collects billions of dollars per year from HHS, and
executives have said government programs like Medicare Advantage are a path to
grow its business. The insurer covered more than 13.7 million people through
Medicare and Medicaid last year, according to financial results published in
January.
UnitedHealth, like all insurers, also is heavily affected by
the rules and regulations published by HHS, which can be informed by the
analysis conducted by the office Parente has been nominated to run.
As an academic, Parente has played a role in the Obamacare
fight, offering supportive analysis of separate proposals by House Speaker Paul
Ryan and then-Rep. Tom Price to repeal and replace the Affordable Care Act. He’s
also criticized the law as too costly and warned that it would effectively lead
to an insurance market death spiral.
“The autopsy will show that [Obamacare] died from a lack of
affordability, leaving behind millions of Americans who were sold a bill of
goods,” Parente wrote in a 2014 op-ed for The Wall
Street Journal, in which he predicted that 40 million Americans would be
uninsured by 2024. Since that article, the number of uninsured has fallen from
36 million in 2014 to about 28 million this year.
HHS’ planning office, which Parente has been tapped to lead,
this spring turned bearish on the future of the Affordable Care Act after years
of issuing reports that largely described the
law as a success. Public health advocates were especially upset by an APSE
report in May, coming in the middle of the fight to repeal Obamacare, that they
say cherry-picked data about premium hikes to make a political attack on the
health care law.
“Disturbing that this is coming out of ASPE,” tweeted Amy Shefrin of the New York State
Health Foundation. “Know that @stparente is far
better than this.”
https://www.politico.com/story/2017/10/30/health-human-services-united-244219
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