Obama health czar directed firms in trouble

DeParle, 52, was the first woman to be president of the student body at the University of Tennessee, a Rhodes Scholar, and graduated from Harvard Law School. She ran the Medicaid program in Tennessee before going to Washington. Since leaving the Clinton administration, in addition to serving on corporate boards she was a managing director of a private equity firm that invested in health care companies, a trustee of the Robert Wood Johnson Foundation, and held fellowships at two universities.

'Makes you more valuable'
Growing concern over fraud in the health care industry has led federal officials in recent years to warn directors that they must make “good faith” inquiries into business practices, particularly when there’s reason to suspect wrongdoing. Federal officials are requiring more rigorous oversight by board members of the effectiveness of a company’s formal plan for complying with federal laws and regulations.

“Having government experience is a plus. It is one of the things that make you more valuable,” said Lynn Shapiro Snyder, a Washington lawyer and corporate defense counsel.

In DeParle’s case, four corporations paid her a total of $533,189 last year for serving as a director, according to SEC filings. The year before, she made $549,322 from three board positions. Of the $6.6 million she made from 2001 to 2009, about $2.2 million came from directors’ fees, and $4.4 million from stock options and trades. Her DaVita shares made her at least $1.8 million, and she made $1 million when Triad Hospitals Inc., a Texas company, was sold in 2007.

DeParle’s White House financial disclosure form shows that in 2008 she received $1 million in salary and bonus from CCMP Capital Advisors, LLC, a private equity firm she joined in August 2006 as a managing director helping oversee health care investments. Those interests included a Medicare managed care plan and a start-up hospital chain. She resigned from the firm in March.

Her White House biography mentions that she had served on corporate boards, but doesn’t name any of them. Though it dwells on her government career, it states that she “also brings a unique industry perspective from her work in the private sector.”

The investigations and lawsuits are at odds with DeParle’s reputation in Washington as a progressive, highly respected health policy analyst. During the late 1990s, when she ran Medicare, she pushed hard to raise medical quality standards and to clamp down on fraud and waste in the massive federal health plan for the elderly.

“In my experience, she’s the one administrator who really was tuned into the fraud issue,” said William J. Mahon, a former director of the National Health Care Anti-Fraud Association. “She distinguished herself in putting fraud on the agenda.”

Other companies with much to gain
Whether DeParle’s time in the private sector will influence the shape of health care reform remains to be seen. But there’s no doubt that the decisions will have significant impact on the corporations she formerly served. The Obama administration’s decision to spend billions of dollars promoting the use of electronic medical records offers an example.

INTERACTIVE Who's who in the health care debate A look at the key players shaping the national debate over health care — including the legislators and policymakers at the center of it all.

In an April 15 media briefing in Washington, DeParle mentioned electronic medical records twice, first saying that an electronic system will help prevent medical errors and ensure that patients get “the right treatments.”

In response to a question, she added: “We want to incentivize physicians to use electronic medical records in a meaningful way for better treatment, better care, more convenience, better administration in their offices.”

Nobody mentioned her lengthy relationship with the Cerner Corporation, a major manufacturer of electronic medical records software based in Kansas City. From May 2001 until the day after her White House appointment, DeParle served on the board at Cerner, which has not reported any investigations into its finances or business dealings in recent years.

DeParle earned at least $680,000 from director’s compensation and stock options while she was on the Cerner board.

Mia Steinle contributed to this report.

MORE FROM HEALTH

Health Section Front

It's down to the final four on 'Biggest Loser' Being thankful ... you’re not like mom and dad Woman meets the stranger who saved her life Holiday gatherings could spread swine flu   Women bare all for prostate cancer Gasp! Babies’ fat rolls being airbrushed away? Is your medication making you sick?   Rebecca Meyer talks ‘Loser’   St. Jude's 'little princess' battles brain cancer Resist the temptation! 8 portion control tricks Health Section Front   Add Health headlines to your news reader: