Reading Between The Lines At HHS

he president's proposed budget tells us much more about agencies than just how they plan to spend their money. It contains obscure, but important, information about their approaches to management.

The Department of Health and Human Services' fiscal 2003 budget submission is a perfect example. Tucked in the overview is a centralized strategy that shifts authority from the program offices to the secretary. The management approach, coined as "One Department," would consolidate administrative functions for personnel, public affairs, legislative affairs and facilities management activities under headquarters.

Last November, the agency created two offices that report directly to Secretary Tommy Thompson-the Office of the Assistant Secretary for Administration and Management and the Office of the Assistant Secretary for Budget, Technology and Finance-clearing the way for his larger role in agency management. This strategy is a reversal of the Clinton administration's decentralized approach when Donna Shalala was at the helm. But given the chain of events after Sept. 11 and the agency's management track record, HHS' current drive for centralization is problematic.

Thompson's attempt to speak for HHS during the anthrax scare left the public with inaccurate and misleading information. It was too late before he recognized it was the experts-the agency's program chiefs-who should deal with the press. Centralizing public affairs functions would only perpetuate Thompson's tendency to offer general, not expert, views on the issues.

Through the years, secretaries have tried command-and-control strategies at HHS, seeking to mold the department into a homogeneous and unified entity. But HHS is far from such an entity.

HHS manages more than 300 programs, covering a vast range of activities that affect the health and welfare of nearly all Americans. The department has nearly 60,000 employees nationwide and a variety of professions, specializations and skills. HHS is the largest grant-making agency in the federal government, distributing some 60,000 grants per year to organizations, states and communities that provide health care and financial assistance. It is also the nation's largest health insurer, handling more than 800 million claims per year.

Over the years, this complexity has created numerous management challenges for HHS secretaries. The secretary is ultimately accountable for the performance of agency programs, but when issues arise, Congress and the public invariably focus on the department's operating arms.

The programs at HHS represent a diverse array of objectives, cultures and approaches. Attempting to homogenize them within a centralized unit-even for planning purposes-dilutes their strengths and unique values. Some of the programs are as large as whole Cabinet departments. The top executives needed to run them would be unlikely to want positions that are constantly pre-empted by the secretary.

Another challenge is the multiple program goals that are often contradictory, vague, disjointed and difficult to measure. Efforts to find common goals and objectives that link separate programs often result in the abstract treatment of issues that need customized responses.

The accountability structures at HHS resemble the fragmented nature of the American policy-making system. Its program chiefs must answer to multiple budget, oversight and congressional committees that represent varied expectations.

HHS' portfolio represents some of the most controversial domestic policy issues. Issues such as funding for abortion, welfare reform and health services evoke a variety of perspectives on politics and policies. The agency might seek to take a clear position on such issues, but external forces work in different directions.

The diversity of HHS' programs is paralleled by an even more diverse set of constituencies. The department acts as a juggler, attempting to deal with multiple views in each program area. In such situations, ambiguity rather than clarity often serve the department well.

Past HHS secretaries who have tried Thompson's centralized approach were frustrated. Shalala employed a different strategy. She was comfortable serving as an advocate for the program units and supporting their agendas-relying on personal relationships and policy discussions instead of bureaucratic processes to arrive at decisions. She was not interested in second-guessing or micromanaging the program chiefs.

The system was flexible enough to provide the public, the press and Congress with a unified response to issues or specific program perspectives. It also was robust enough to address the different views that emerge when players look at issues from a political rather than a programmatic lens.

Managing HHS as a largely decentralized department is a viable alternative to the traditional command-and-control method. Thompson should take another look at his approach.