The Business of Government Hour


About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Claude Allen interview

Friday, August 1st, 2003 - 20:00
Claude Allen
Radio show date: 
Sat, 08/02/2003
Intro text: 
Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership; Innovation ...

Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership; Innovation

Complete transcript: 

Arlington, Virginia

Thursday, March 13, 2003

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, the co-chairman for the IBM Endowment for the Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to approving government effectiveness. Find out more about The Endowment by visiting us on the web at

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Claude Allen. Claude is the deputy secretary of the U.S. Department of Health and Human Services. Good morning, Claude.

Mr. Allen: Good morning. Good to be here with you today.

Mr. Lawrence: Joining us in our conversation is Therese Moran. Good morning, Therese.

Ms. Moran: Good morning, Paul.

Mr. Lawrence: Claude, perhaps you could begin by giving us an overview of the mission and the activities of the Department of Health and Human Services.

Mr. Allen: I'd be glad to. The Department of Health and Human Services is the United States government's principal agency designed and created to protect the health and welfare of all Americans. We focus largely on those who least can help themselves, the disabled, the elderly, young people, children. But we impact lives every day whether it's the foods you eat, to the payments that may be made in child support, to when you go to the hospital for the drugs that you may have to take as a result of that. So we cover and impact every person's life in some way, shape, or form every day.

Mr. Lawrence: Could you give us a sense of the size of the department, the number of employees, and even the skills in the wide range of things you described?

Mr. Allen: Sure. In the department we have 65,000 employees primarily based here in the United States, but we do also through some of our agencies have activities internationally. We largely consist of a whole range of skills of our employees from physicians, to nurses, to health professionals in that regard, to researchers at the National Institutes of Health, to the Indian Health Service, for example, where we have water and sanitation specialists who build water and sewage systems on reservations.

We also have social workers, case workers, who work with abused and neglected children. We even work with gerontologists, people who work with the elderly. So those would be just a broad range of the types of individuals that we have, and we have just Americans who consider public service an honor and a privilege, and they're working throughout this country and throughout the world on behalf of the health and well-being of Americans and those that we serve internationally.

Ms. Moran: Claude, what kind of people, other than employees, do you have working at HHS?

Mr. Allen: We do have a lot of contractors, so we partner with major universities, for example, who do much of their work through the National Institutes of Health. Again, much of their work is done what we call extramurally, that means it's outside of the department, through the contract process. We also work very closely with some health professionals, dentists, medical providers, nurses, in what we call Indian country, working on reservations with tribal governments, working with them to provide care and services.

So you'll have people who come from all walks of life working with the department. But much of our work is done through contracts. HHS is one of the largest contracting agencies in the government, with more than 300 programs. We can't do it all ourselves.

Ms. Moran: Speaking of doing it all ourselves, what do you do in your role?

Mr. Allen: It depends on what day it is. Today is a good day to ask. My title as the deputy secretary implies that I'm the number-two person in the department behind Secretary Tommy Thompson, our boss. As such, I'm also the chief operating officer for the department. My principal job is seeing that the trains run on time at the department. I spend a lot of time in overseeing the day-to-day management of this vast organization that we have.

In doing that, I also focus on some specific issues often times. I focus a lot on issues that impact families, namely, issues that impact children, positive youth development issues. I spend a lot of time working on HIV AIDS issues, both domestically and internationally. And primarily working with the Food and Drug Administration, which is really one of our primary regulatory agencies. I spend a lot of time focusing on those issues that impact there. A good example was having to testify on Capitol Hill on medical liability reform. So those are issues that I will stand in for the secretary. When he cannot fulfill those obligations, I'll do that often as well.

Today would be a great example. We've been dealing with issues ranging from bioterrorism preparedness, addressing food safety issues, meeting with hospital representatives coming in to talk about what they're doing to prepare hospitals, for example, in the event that we would have any hazard that would have to be addressed. So this is sort of a typical day, no two days are alike, but one thing that is constant, the work.

Ms. Moran: How did you get here? Tell us about your career.

Mr. Allen: An interesting path. Immediately prior as the deputy secretary, I was formerly the secretary of Health and Human Resources for the Commonwealth of Virginia, where I managed 13 agencies that are very similar in scope and issues, both on the health side and the human services side, for the Commonwealth of Virginia. I did that for the last 3-1/2 years prior to coming to Washington to serve in this capacity.

Prior to that, I worked in the attorney general's office in Virginia as both the counsel to the attorney general, and then later as the deputy attorney general for the Civil Litigation Division where I oversaw the litigation on behalf of the Commonwealth of Virginia.

Before then, my career goes a little ways to working on Capitol Hill both as a staff member on the Senate Foreign Relations Committee, to working in the private sector in a law firm - I'm a lawyer by profession - where I worked on numerous issues ranging from litigation issues, to government relations issues, to international affairs issues.

So it has been a broad portfolio that brought me to where I am today, and it's just a privilege and honor to serve in this administration on issues that really impact people every day. So I'm very passionate about that and love what I do every day.

Mr. Lawrence: You worked around the health issues at both the state level and now the federal level. How would you compare and contrast the two different jobs?

Mr. Allen: That's an excellent question. I think the difference is really the magnitude. At the state level we spent much of our time, unfortunately, having to battle the federal government getting them to understand how 50 states are all different in our issues. While we look at health in very much the same way, how states approach them is a very different issue. So, therefore, as a state official I spent a lot of time managing the day-to-day activities that were impacting people directly.

In this capacity, my job, while I'm the chief operating officer and looking at operations, brings a very unique perspective. The President and Secretary Thompson both being governors understand the important partnership that needs to exist between federal agencies in the federal government and states and state agencies. We have brought a very unique blend of that to work in department of how we can partner with states rather than dictate to states in terms of improving the quality of health care and delivery of services to those in need of health care and human services. So it's really been a great fit coming from the state to the federal government in that regard that I think I bring a certain set of skills of having seen it on both ends.

Mr. Lawrence: How about comparing the different management styles or skills you use in both jobs? Were they the same or are they different?

Mr. Allen: Pretty much the same. I'd probably say to be very frank, I think probably the greatest skill that you bring to a job like this is communication. It's so important that when you have a large organization such as HHS, and just the numbers don't belie the size of the department, we have 65,000 employees, but our budget in fiscal '03 this year was $503 billion. Our proposed budget for fiscal year 2004 is $529 billion. If you put that into context, if our department were a country, we would be the fifth-largest country in the world based upon that budget. So we do have a broad impact.

When you look at that, you've got to have not only the ability to know what's going on throughout the department, but you need to have processes in place so that you can manage such a mammoth organization. That's what we have spent a lot of time at the department, the senior leadership in the department, bringing those processes and hiring the best-skilled people to run and manage the programs.

So I think those are the skills that I learned at the state level starting small. I had 17,000 employees, and I forget the size of the budget. It was nowhere near in this regard. But learning that at that level prepared me for what I had to come here to undertake.

The biggest challenge in my job is getting people to communicate across silos, I love to call them silos, because we really do exist in silos in government. We have 300-plus programs, and if our programs are not speaking together, speaking to each other on common issues that they're all working on, then we're not serving the taxpayers nor the people that we're charged to serve in these programs. So those are the skills, of learning to identify the problems, getting the team together to bring about the solutions, and then driving those solutions through to the end so that you see across the finish line, that is what the task of I think a good manager is and a good leader in an organization this size.

Mr. Lawrence: Tell us some of your tricks. How do you get groups to communicate across the silo?

Mr. Allen: Some of the things that we have done at the department very early on, Secretary Thompson had a vision of having HHS be one department, one HHS. Again, we have facilities, we have staff, we have programs scattered throughout the country. Under the prior administration, it was very decentralized. Decision-making was done at the farthest way from the central office. We have recentralized our activities for the purpose of trying to get a common theme, common message, so that we can move across those.

My task is I bring people together. I spend a lot of time in meetings with senior management and hear out the issues where they're working on issues, and when I hear that they're not working together or one agency hasn't consulted with the other agency about something that both are working on, then that tells me there's a problem, and my job is to drive that home. When are you going to get together, how are you going to work this out, and bring that plan back to me so that I can present it to the secretary to ensure that we're collaborating, that we're communicating, and that we're solving and tackling problems together, again, with the mind of serving the customer and not serving the convenience of government employees.

Mr. Lawrence: That's a good stopping point. We have to go to a break. Rejoin us in a few minutes as we continue our conversation with Claude Allen of HHS. What's the department doing to combat bioterrorism? We'll ask Claude when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with Claude Allen. Claude is the deputy secretary of the U.S. Department of Health and Human Services. Joining us in our conversation is Therese Moran.

Ms. Moran: Claude, you mentioned earlier about some programs that go across agencies. Of course, one of the major ones right now is bioterrorism. Can you tell to us a big about what HHS is doing in that area?

Mr. Allen: I certainly can. Having been in the department on 9/11/2001, it was a wake-up call to all of us. This is one of the areas that HHS has a primary responsibility in response to any bioterrorism event, not only bioterrorism, but also all hazards, because we have the health component of what would be part of that response, the doctors and the hospitals. We coordinate with the Centers for Disease Control, the Food and Drug Administration, and even the research aspect of it through the National Institutes of Health. So we have a lot of the assets that would be called upon.

Very recently, President Bush and Secretary Thompson announced a major project that the department is undertaking called Project Bioshield. Project Bioshield is a comprehensive effort to develop and make available modern, effective drugs and vaccines to protect American citizens against attack by biological or chemical weapons, or other dangerous materials or pathogens.

This project cuts across the department. It involves the National Institutes of Health in investing resources into research of new and innovative ways of developing vaccines, for example, for many of the agents that we hear a lot about today. A new smallpox vaccine, we need to accelerate that. We have an existing vaccine that works effectively, but we need to get a new generation vaccine. Anthrax, we experienced that in 2001 as well. Those are the sorts of other pathogens, whether it be Ebola or tularemia, plague, a 14th century disease, these are the sorts of things that we don't have right now effective responses for. So Project Bioshield focuses our activities to develop and push science and the research.

Then the Food and Drug Administration, for example, in terms of approving those products in a timely manner so that they can be put into the marketplace and be effective as tools in our arsenal against bioterrorism.

Ms. Moran: On the Medicare and Medicaid side, what is HHS doing to modernize and strengthen Medicare and Medicaid?

Mr. Allen: Two very important issues, again, for the department. The President's proposal to reform Medicare would give seniors choices in what we're looking at. We want to ensure that seniors have access to very needed pharmaceuticals and drugs that they need so they don't have to either go without food or shelter or engage in very dangerous practices in ordering things over line (phonetic) that may not have been approved for safety or efficacy.

We're providing options for seniors. We have three programs under Medicaid that we're talking about in our reform package, namely, traditional Medicare. Many seniors like their doctors, like their plans, and they want to just have access to drugs. Under the traditional proposal, we would allow them to continue with what they have, stay where they are, and give them a discount for drugs between 10 to 25 percent. For very low-income individuals, we would even give them $600 a year to purchase pharmaceuticals.

We also would help to cover what often times are considered catastrophic care costs. These are very large out-of-pocket expenses if you had to go into the hospital. Under the existing system, if you had to do that, you have to put a lot of money out of pocket which many, many of those who benefit from Medicare, the elderly, the disabled, often times aren't able to do. So that's one proposal.

The second aspect of it is what we call Enhanced Medicare. Enhanced Medicare is for those who are willing to accept some management of their care and coordinate it, and these individuals would have the enhanced benefit of getting preventative care. Right now, Medicare treats you when you're ill, when you're sick. We think we need to move the focus from treatment and care to prevention, and our Medicare system needs to reflect that. So under Enhanced Medicare we would have that prevention available as well.

Under what we call Medicare Advantage, this is where we would have programs throughout each region that would allow for individuals who are willing to go into managed care be able to access increased benefits, and even have subsidized prescription drugs. So these are some of the advantages that we look to in terms of Medicare reform.

On the Medicaid side, this is another major area that we spend a lot of time and attention on. It serves often women and children. Here we believe that we need to be working with the states to give, once again, states flexibility to deal with populations that often times, either because it's mostly absorbed in what we call mandatory populations, those are the populations that Congress has mandated that we need to cover, and, therefore, it leaves out others: the disabled sometimes, unless they're in a nursing home, for example. This is where we see states at a very difficult time making very difficult choices of cutting people off of programs.

We believe that by giving states more flexibility in looking at across the board how they want to serve populations with benefit packages that are tailored to that state's needs and the people in that state's needs, that we can maximize not only the access to care and the coverage of individuals, but we could also maximize the use of tax dollars. So these are areas that we believe are very important in terms of both Medicare and Medicaid reform.

Mr. Lawrence: One can't help but notice that a lot of HHS's spending is mandatory spending as opposed to discretionary spending. So I'm curious, how does this affect the management of the department?

Mr. Allen: It has a very large impact on the department. For example, discretionary programs comprise only about 11 percent of the department's budget, or about $65 billion out of, again, that large budget of $543 billion for '04. So as you can see, we have much of our budget tied up in what we call mandatory spending that we're required to spend it on.

Whether the source of the funding is mandatory or whether it's discretionary, however, doesn't change our mission. Our mission is to deliver health services and human services, and ensure the customers and the taxpayers get the best benefit from either of those. The President has made a commitment to not only providing the very best health care in the world, but also to provide it in a way that is fiscally responsible. So that's what we're really tasked with, working with Congress to come up with those sort of solutions.

Ms. Moran: One of the main areas in the President's Management Agenda is to integrate performance and budgeting. What is the department doing in this area?

Mr. Allen: I've spent a lot of time working within the department in terms of integrating performance and budgeting. In fact, we believe that is an excellent way for the department to run.

We look at, for example, Medicare, HHS through the Medicare program, is the largest insurer in the country. As such, we need to have what are our outcome measures, how are we tackling the issue of managing that large agency and that large task with ensuring that we have performance and outcome measurements.

So some of the things we're committed to doing is refining the links between performance and budgeting. We are working very aggressively to have performance measures for all of our agencies in terms of what we've expecting them to product in very, very massive documents that come out, but we go down to the program level and ask how are you going to tie your budgeting, what your request is, to the outcomes that you hope to achieve in terms of performance.

We've even gone so far as now that the managers of these agencies, senior managers, have performance contracts that, again, reflect on the outcomes that they're hoping to achieve. Such that when we ask for the dollars, we say we want the taxpayers to give us and allow us to use money for an important program, which they're very important, many of them, then we should be able to say this is what you will get for your return on your investment.

We need to treat the taxpayers, as someone who is entrusted with their money, they want to see a return on that investment, and performance and budget integration is one way to accomplish that. So it's an exciting process. It's wonderful that we have a President, the first President who has an MBA, and he wants to see government run like a business. I know that your listeners very much understand that at the end of the day the stakeholders want to know how have you used my investment and what is my return going to be. That's how we need to be running government, and that's what my job is, to oversee that process for HHS.

Mr. Lawrence: Earlier you described that there are something like 300 programs, and a lot of them are executed by non-HHS employees, contractors and the like, spending or handling funds. How do you ensure the accountability of these funds handled by these folks?

Mr. Allen: Of course, Medicare and Medicaid are the largest programs that we have that would, for example, utilize third-party financial arrangements through a lot of contractors or intermediaries. As such, we have the Health and Human Services Office of Inspector General. The inspector general's office is taxed with overseeing and monitoring both Medicare and Medicaid in terms of ensuring accountability, fiscal responsibility, and also ensuring that they're minimizing and prosecuting fraud and abuse. They also work very closely with the department to root out waste. That's big part of what the Office of Inspector General works with us in as well.

Outside of Medicare and Medicaid, we also through the agencies we have nonentities that if a nonentity that is a federal partner in a sense, let's say it's a grantee or a contractee, spends more than $300,000 annually in federal grant awards, then we require them to have organization-wide or program specific accountability measure in place. Those are reviewed very carefully at the very senior levels of the department, but also they're done at the agency level to be ensured as well.

We're also in the process of planning for and establishing erroneous payments for many of our programs that are state-run programs such as the Temporary Assistance for Needy Families Program, or any program where we make payments. We're establishing in conjunction with the Office of Management and Budget an erroneous payment rate. These are tools that we can use to look at and drill down through the programs to find out where do we need to strengthen our management systems.

At the state level, again, having come from a state where I oversaw many of these programs, we had to do that at the state level because the state tax dollars were running out the door, and we weren't seeing an impact, and much of it was because of errors. So error rates are one way for us to look at how can we improve not only the programs themselves, but how can we improve our system so that we can understand where the dollars are going and stop the erroneous payments so those who truly need the assistance can get it.

Mr. Lawrence: That's a good stopping point. We have to go to a break. Come back in a few minutes as we continue our conversation with Claude Allen of HHS. How is HHS doing with the other items called out in the President's Management Agenda? We'll ask Claude when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with Claude Allen. Claude is the deputy secretary of the U.S. Department of Health and Human Services. Joining us in our conversation is Therese Moran.

Ms. Moran: When the President's Management Agenda scorecard was first released, HHS had all red light scores. What specifically has the department been doing in each of the five areas to increase its scores?

Mr. Allen: You can only go up from red. That's the first realization. Like many of the other agencies in government, we needed this. We needed to know if we were going to be rated in the five areas of budget integration, financial management, human capital, information technology, and competitive sourcing. If you look at all five of those areas, we needed to be performing very well in those areas.

But what we have done as a department is we've taken that very seriously. Not only do we take the scores that we've received in those areas, but our department has developed our own scorecard that we give to each of our agencies in each of those five areas to address. To give you some examples, in the area of budget and performance integration, even though we were red on the initial scorecard, our score now is green because we have made considerable progress in that area.

How we've done that is that we've had substantial increases in the number of reportable national health outcome measures that we are not scoring in terms of performance outcome measurements. So we now go back and look with a very serious eye of asking how we're tying our budget request to our commitment to perform at a stated level. If we're going to ask for money to say that we want to address chronic disease in this country, whether it be obesity, diabetes, or asthma, then we should be willing to say what we expect to see in terms of infusions of that money into programs that are targeting those areas. That's how we've gone from red to green in budget and performance integration.

In the area of e-government, we've worked very aggressively there on IT security. These are issues that not only HHS, but across the government we need to be reflecting. We now are looking at enterprise architecture for the department for public health enterprise architecture, which is a radical thought for government. This is something where the private sector is very much on the cutting edge, government is slowing coming there. But HHS is actually on the cutting edge of looking at how do we create a public health architecture that will benefit not only us in terms of our delivery of service through government, but that will address many of the concerns that the commercial or private sector has in terms of these areas.

We are also looking at financial performance, and we have asked to show progress in two areas: one, resolving material weaknesses identified by auditors; secondly, to develop a unified financial management system. In both of those areas, we're moving very aggressively and doing very well in moving that forward. We have a council of chief information officers throughout the department who spend their time focusing on the tasks of not simply moving us from red to green, but actually developing a system that will be useful in the department that will allow us to address these deficiencies that were identified, and why we got a red score to begin with.

So those are just a few of the areas that we're working on. I could give you more, on human capital, even competitive sourcing. We actually believe that we're doing very well in those areas. But we'll always have some tension, because it requires change and trying to move the Titanic with a toothpick in a bathtub is not a very easy task to accomplish.

Mr. Lawrence: Speaking of financial management, one of the things often done is financial systems. You did mention the unified financial management system. Could you tell us more about that?

Mr. Allen: Certainly. We are developing a unified financial management system, or what we all UFMS system, that is consistent with Secretary Thompson's vision of one HHS. What we're doing here is the project will produce a single financial reporting system for the entire department, which will address many of our Medicare and Medicaid issues as we're trying to look at their specific needs of having a unified system.

We've already brought up the application, Oracle Financial General Ledger. That's a part that has already been brought online. The balance of the unified financial management system will be currently on schedule and on budget. So we're doing pretty well with that. We plan a target date of September of year, of 2003, for beginning pilot testing of the software requirements and the hardware configuration for the UFMS system in terms of financial management.

At the Centers for Medicare and Medicaid Services, they are planning on piloting the system with two Medicare contractors later this year as well, in October of 2003; so we think we're on track with our financial management system. And many other agencies and departments are looking at how we progress along with this as this is something across government that we need to be doing. We believe that because of these efforts is why we will see great progress in terms of the report card that HHS receives.

Ms. Moran: You mentioned that the unified financial management system reflects the one HHS. What are some other things going on that reflect that concept?

Mr. Allen: A couple of great areas. Bioterrorism, again, is a major area that required many assets within the department. It required the Food and Drug Administration, it required the National Institutes of Health, it required the Centers for Disease Control, it required the Health Resources Services Administration, all of these different agencies, and our Public Health Services, to come together in one place to say here is a unified plan of how we're going to address research, address prevention, address treatment and care, address response and recovery across the department.

This is the first time that we believe the department has ever sat down across the board on that sort of issue, for example, to develop a unified plan, and we have that and it's moving forward. Just this afternoon we had meetings within the office talking about food senior issues. We had not only our agencies within the department working together, but we had the U.S. Department of Agriculture working with us across the board on these sorts of issues. Chronic disease is a major area as well.

But also in terms of our budget and performance integration we have agencies now that are picking up what would be performance measures that historically they would find in one other agency. But because it's a shared value of one HHS, you're finding that picked up across the board so that we can pick up the agency that focuses on prevention and can work together with the agency that's focusing on treatment and care.

Just sort of an anecdote: the department really had many different identities. In fact, you would go out and someone would say, "Do you work for HHS?" and the response was, "No, I work for this agency." Well, one day the secretary did something that was very funny. We had a senior staff meeting where we had all the agency heads and we brought in the chachkas, the little trinkets, the little things that you would have that were branded items. None of them had HHS on them. You go around now and you will find that HHS is probably on everybody's business card, on everybody's coffee mug or whatever goes out the door, so that we have a corporate identity that we can all rally around. As we do that, that works its way down through the organization and you build the morale and the pride of those agencies, and it doesn't detract from the work of that individual component, but it actually adds to the work of the whole as HHS.

Ms. Moran: HHS I know is responsible for managing e-grants, one of the e-government initiatives. How is progress going on the e-grants effort?

Mr. Allen: We are very pleased that HHS has the lead on the e-grant initiative, and it's been identified as one of our highest priorities in terms of what we're doing. We're the managing partner for that. Last February, 26 federal grant-making agencies came together, and we decided to work together on this as one of the major tasks. We met to agree on the vision, on the goals, and the objectives for e-grants. In short, e-grants was tasked to produce for grantees a unified way to find grant opportunities, and a unified way to apply for grants electronically, and these find-and-apply goals drive the whole initiative. We have worked very aggressively there.

Here are some of the milestones that we've achieved in just a little over a year. We have developed, with OMB approval, the e-grants business case. That has gone forward. We've had approval of a governance and financing strategy that assigns e-grant funds and staff resources responsibilities all across the board. We've got that accomplished. We've worked with the General Services Administration to develop, pilot, and fund deployment of the unified find system. We've also deployed a website which is now out there. We've awarded contracts for support and development. We started pilots of the apply function with 12 volunteer agencies.

So the e-grant initiative is actually going very well, and that's another good example of how we were able to not only work within our department in terms of e-grants, but across the board. So we've very, very proud and very pleased with the results thus far, but we will not stop until we've accomplished and moved it forward to get everybody on board and have the find-and-apply functions working effectively.

Ms. Moran: Earlier we talked about the challenge of the silos within the department of HHS. With e-grants you have to work across various departments and agencies. How difficult has it been to get agency cooperation and money also to get this done?

Mr. Allen: Of course, that is always a challenge when you have 26 different grant-making agencies to come together. I have to say our President has done an outstanding job in tasking the deputies. We are the chief operating officers of our organizations.

One of the things the President did very early on is that he challenged us. In fact, he reminded us that we work for him and that his expectations were that we would work across agency lines and department lines to accomplish the common goal. E-grants is a wonderful example of how that's happening. While there are 26 agencies that grant-making agencies, 11 of us came together to share the responsibility for the bulk of e-grants for the government.

Some of the things that we've been able to accomplish through regular meetings and collaboration at the senior level that force working in cooperation at the lower levels within the agencies and departments was very instrumental in accomplishing several very important tasks. For example, all 26 of the grant-making agencies participated in the pilot of the unified find system, and 15 agencies have already posted live announces in the system. That's a great success. All 26 grant-making agencies completed an in-depth survey of their grant systems, identifying how e-grant application data would be used.

Then also, 12 of the agencies have volunteered specific grant programs for use in the upcoming pilot of the e-grant's electronic applying system. We think this initiative will be one of the great successes of this administration in terms of the Performance Management Agenda of the Bush administration.

Mr. Lawrence: It's time for a break. Rejoin us as we continue talking about management with Claude Allen of HHS. What does the future hold for the department? We'll ask Claude for his perspective when The Business of Government Hour continues.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with Claude Allen. Claude is the deputy secretary of the U.S. Department of Health and Human Services. Joining us in our conversation is Therese Moran.

Claude, as the deputy secretary, you're a member of the President's Management Council. Could you tell us a little bit about the council and your role on it?

Mr. Allen: Certainly. The President's Management Council are senior managers. Typically, they're either the deputy secretary for the department, or they may even be an agency head for an independent agency that works together with the Office of Management and Budget and other senior leaders from the White House. Our task is to address the five major areas that the President has identified as part of his management agenda.

We meet periodically, actually, very regularly, both at the full committee level, but in subcommittees, to address each of those five areas. I want to remind viewers of those again, budget and performance integration, financial management, capital resource management, information technology, and then also competitive sourcing, which is important. So we break down into five subcommittees.

We are driving as a council in each of those areas the work of the government through our various departments and agencies, and we come together and hash out the very serious issues in terms of where do we put resources across the government, not just as independent individual departments and agencies, but what can we do as government across the government to accomplish those five objectives that the President has laid out. So it is a very dynamic organization, a very strong leadership at the departments.

Of those who can get the job done - we are tasked by the President with managing government, and this is what the council's role is. It's sort of the board of directors of government to come together. We, of course, have our principals, Secretary Thompson in my case, but my task according to the President is to be the chief operating officer. Therefore, we implement the President's Management Agenda.

Ms. Moran: What would you say is the greatest management challenge facing HHS today?

Mr. Allen: I think part of it is always conflict. Again, we have a one HHS philosophy, and it's actually working through that agenda, getting the agency heads and actually having them embrace that idea of one department and coming out, breaking out of the mold of living and working in silos, or being parochial in our interests, and looking more broadly at the mission of the department. That's a major challenge.

I would say the other challenges that we have, probably one of the largest challenges not only that HHS has, but government has, is that we have a very large retiring work force. More than 30 percent of our employees are eligible for retirement in the next 5 to 10 years, and that means we need to be investing significant resources right now in human capital. So that is a big challenge for the department, bringing in the best and brightest of the research community of skilled workers, health professionals, skilled lawyers, skilled auditors, financial managers, all of that, information technology specialists, those are the biggest challenges that are confronted with at the department, and I think that's across government as well.

Mr. Lawrence: In terms of pressing public health issues, what's at the top of the list?

Mr. Allen: I would say at the top of the list of public health issues, first and foremost, is the issue of prevention. Our system is built upon an idea that we will treat and care for diseases. Medicare is a great example. It is a dinosaur in many ways that we treat the elderly and the disabled, we treat their diseases and care for them, but a person, for example, with diabetes, we will pay for amputating of a leg, we will pay for their dialysis, but what are we doing to get them exercising, eating right, and to preventing the onset of diabetes? That is a major challenge, of shifting not only the resources that we have towards a prevention model, but actually shifting the public view of the importance of prevention and diet and exercise, and the secretary is passionate about that. That is one major challenge.

The other major challenge I think is the crisis that we're facing in health care. We have hospital systems closing, we have health care providers leaving the practice of medicine, and we have access issues for rural areas and urban areas. Much of that is driven by the cost of litigation.

We know that medical litigation reform is an absolute must in order to ensure quality health care, patient safety, and ensuring access to health care. So those are issues that we're looking at in terms of what we can do to address that. As I said, the administration supports medical liability reform not because it takes away from the individual who has been injured by an individual practitioner, but because there are system changes that can be implemented using technology that can improve the quality of health care for all Americans, and so that's what we're focusing on, some of those areas.

Ms. Moran: What is your vision for the department over the next 5 to 10 years?

Mr. Allen: Well, the first vision is this administration will continue into that next time period, so that clearly is a vision that we know is important. But beyond that, I think most importantly, is that Americans would enjoy healthier lives in terms of their physical and emotional health, and those are areas that we're very heavily focused on; that the Department of Health and Human Services really focuses its priorities and gets those priorities straight in terms of prevention, treatment and care; that we reform our systems. Medicare is operating with 40-year-old technology. I don't know of any corporation in this country that would have the magnitude of work that the Centers for Medicare and Medicaid Services have and use 40-year-old technology. So we're moving aggressively to change that system.

Then over the long haul, we have major issues in terms of bioterrorism preparedness, of making sure that America remains a leader in terms of innovation, of creativity, and bringing products to market, whether they be pharmaceuticals, biologics, or medical equipment, devices, for example, but that we use the talent pool that we have in this country, the skill base that we have in this country, and use it to drive and improve health care throughout not only this country, but throughout the world.

And I would be remiss to say one of the major challenges not only confronting us as a country but confronting the world is HIV AIDS. We believe over the next 5 or 10 years that if we don't do something to address HIV AIDS in Africa, the Caribbean, and in Southeast Asia, that we would see a reduction of anywhere between 480- to 500,000,000 people in the world over the course of the next 10, 15, to 20 years. So those are key priorities for us at the department over the next 5 or 10 years.

I think if I had to personally add one thing, I think that we need to focus a lot on the family. That's an area that our department also focuses on, is that many of these issues, if we could strengthen the family in terms of parent-to-parent relationships, in terms of parent-to-child relationships, and in terms of intergenerational relationships, recognizing the growing of the seniors that are in our society, that they're going to add additional burdens to the health care industry as the baby boomers move into that, and we need to be preparing for that now.

Part of it is strengthening the family. So these are areas that we're looking to work on in the course of the next 5 to 10 years with great excitement.

Mr. Lawrence: You've spent a lot time in public service, so I'm curious, when people come up and ask you for advice, what do you tell them in terms of should I have a career? What would you recommend in terms of a career in public service?

Mr. Allen: First and foremost, I think public service is a great privilege and a great honor. I love what I do every day, and they actually pay me for doing it, because I can go away every day and say that something I've done that day has impacted the life of somebody in this country, and that is a great privilege and a great honor.

It is a great privilege to serve under a President such as President Bush who has not only a vision for the country where he sees it going, but has a passion for its people, and so that is a real privilege.

I say for a young person or anybody who's interested in public service, get a vision larger than yourself. Fine the place in government where your skills and talents can be utilized and be willing to step in there, recognizing that you're not going to necessary get the financial or monetary remuneration that you might think you might otherwise command in the private sector, but the satisfaction, you can't beat it. You can go away at the end of the day and say I've given my very best not only to serve my family, but also my country, and I've done it in a way where I can enjoy what I do.

So I think that's what I would tell someone who was interested in public service. We have a lot of opportunities at HHS, and so I would direct them to our website. I would say if you're interested, please check our website at and look up some of the programs and initiatives that we have there. We need health professionals, we need skilled technicians. You name the resource, we have it probably here. We need auditors, we need economists, we need doctors, we need researchers, we need them all. So look at that website and see if there's an opportunity for you to participate in the health of this nation.

Mr. Lawrence: Claude, I'm afraid we're out of time. Therese and I want to thank you for being with us this morning.

Mr. Allen: Thank you, Paul, thank you, Therese. It's a real privilege to be with you as well.

Mr. Lawrence: Would you like to give the website one more time?

Mr. Allen: The website address is I look forward to hearing from you and seeing you there on the website. Thank you.

Mr. Lawrence: Thanks, Claude. This has been The Business of Government Hour, featuring a conversation with Claude Allen, deputy secretary of the U.S. Department of Health and Human Services. Be sure and visit us on the web at There you can learn more about our programs and research, and you can also get a transcript of today's very interesting conversation. Again, that's This is Paul Lawrence. Thank you for listening.

Claude Allen interview
Claude Allen

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