New York Times: Obama Taps Health Aide With Links to Industry

By Sheryl Gay Stolberg. Published March 2 in the New York Times

WASHINGTON — In picking Nancy-Ann DeParle to champion an overhaul of the nation’s health system, President Obama selected someone with deep roots in the Washington bureaucracy, an intimate familiarity with health policy and respect on both sides of the political aisle — not to mention degrees from Harvard Law School and Oxford University.

But in putting Ms. DeParle in charge of an issue that has bedeviled presidents for decades, Mr. Obama also chose to overlook Ms. DeParle’s business ties to companies that have a direct stake in the health care debate.

In announcing her appointment Monday as the director of the White House Office of Health Reform, Mr. Obama expressed “absolute confidence” in Ms. DeParle, who ran the agency that oversaw Medicare and Medicaid during the Clinton administration. But the White House instantly faced questions about whether her appointment was skirting the spirit, if not the letter, of the president’s tough conflict-of-interest policy.

Since leaving the Clinton administration, Ms. DeParle has been managing director of a private equity firm, CCMP Capital, and a board member of companies like Boston Scientific, Cerner and Medco Health Solutions. White House officials said Ms. DeParle was severing ties with those companies and would recuse herself from participating in any matter that was “directly or substantially” related to former clients or employers.

“It is our view, and the view of counsel here, that the incidence of that will be very low,” an administration official said of the need for Ms. DeParle to recuse herself from decisions. The official, who was not authorized to speak publicly, said Ms. DeParle would be working mostly with federal agencies and lawmakers, and not directly with companies.

Allies of Ms. DeParle described her work in the private sector as a plus, because her familiarity with the industry would enable her to lean on companies to make tradeoffs essential in expanding access to the uninsured.

“She can call their bluff far more credibly and say, ‘Come on, guys, I’ve seen the books, I know you can do this with lower margins and higher market share, and you’ll do quite well,’ ” said Chris Jennings, who was President Bill Clinton’s top health policy adviser. “To me that’s very, very helpful.”

The appointment drew praise from some Republicans, including Bill Thomas and Jim McCrery, both former House members who worked closely with Ms. DeParle on health care. Mr. McCrery described her as “very knowledgeable, and very reasonable.”

At 52, Ms. DeParle, who is married to a New York Times reporter, Jason DeParle, is also no stranger to personal hardship. She grew up in a small town in eastern Tennessee and was raised by a single mother who died of lung cancer when Ms. DeParle was 17.

She went to college on scholarships and loans (she was the first woman president of the student body at the University of Tennessee) and attended Oxford on a Rhodes scholarship. At 29, she was hired by Ned McWherter, then the governor of Tennessee, to run the State Department of Human Services.

After working as a lawyer in Washington, Ms. DeParle joined the Clinton administration in the budget office and later oversaw a vast overhaul of the way Medicare operated.

Donna E. Shalala, a good friend of Ms. DeParle’s who was health secretary to Mr. Clinton, called Ms. DeParle “smart, fair, highly ethical and tough as nails,” and said her appointment, and the nomination of Gov. Kathleen Sebelius of Kansas as health secretary, should erase any concern about the withdrawal of the man Mr. Obama originally wanted for both jobs, Tom Daschle, the former Senate Democratic leader.

“This is a very good one-two punch,” Ms. Shalala said. “This is as good as it gets if you can’t have Daschle.”

This article has been revised to reflect the following correction:

Correction: March 6, 2009
An article on Tuesday about the appointment of Nancy-Ann DeParle to run the White House Office of Health Reform referred incorrectly to the ancestry of Ms. DeParle’s mother. She was a native-born American, not a Chinese immigrant. (Ms. DeParle’s father was from China.)