April 7, 2008

A summary of daily news relevant to the federal workforce produced by the Partnership for Public Service.

1. Lawmakers, OPM Clash Over How to Promote SES Diversity
2. DHS Pushes for Reauthorization of E-verification Program
3. Medicare Finds How Hard It Is to Save Money

Lawmakers, OPM Clash Over How to Promote SES Diversity

Federal Times
By Stephen Losey

 

The senior executive ranks are more diverse than seven years ago, but some leading lawmakers say the improvements aren't enough.

 

Rep. Danny Davis, D-Ill., and Delegate Eleanor Holmes Norton, D-D.C., say the slim gains minorities have made in the Senior Executive Service since fiscal 2000 -- and especially a 0.5 percentage point decline in the representation of black men -- show that the federal government still needs to overhaul how it chooses its top career executives. 

 

Minorities made up 15.8 percent of SES in fiscal 2007, an increase of two percentage points since fiscal 2000, the Government Accountability Office told a joint hearing of the Senate and House federal work force subcommittees April 3.

 

The diversity of senior executives lags far behind the rest of the federal work force. In fiscal 2007, minorities made up 32.7 percent of the work force -- twice their representation in the SES. And women made up 44.2 percent of the overall federal work force, compared with 29.1 percent of the SES.

 

Davis and Sen. Daniel Akaka, D-Hawaii, have introduced bills that would create a Senior Executive Service Resources Office within the Office of Personnel Management. The office would oversee SES policies and standards and promote more SES diversity.

 

But OPM is cool to the idea. Nancy Kichak, OPM's associate director for strategic human resources policy, said one of the bill's provisions -- to reserve two of the three seats on each agency's SES candidate evaluation panel for a woman and a member of a racial or ethnic minority -- may not stand up in court.

 

"We have serious concerns about the potential impact on the merit system principles of injecting race and gender into the examination process in this manner," Kichak said. "The Department of Justice has advised that these race- and gender-based requirements for the composition of the SES panels are very likely unconstitutional under governing equal protection precedents."

 

Norton disagreed, and said a federal court in 1990 ruled that a panel with similar set-asides at the General Services Administration was lawful.

 

Kichak also objected to centralizing SES operations into one office. Such a move would undo the benefits from a 2003 reorganization that disbanded an OPM office devoted to SES and spread the responsibilities throughout OPM. Decentralizing how OPM handles SES matters better serves the government's executives, Kichak said.

 

"Instead of having a small office devoted to one topic, we bring together experts in various aspects of personnel management, such as how you recruit, how you evaluate, how you service, how you rank applications and things like that," Kichak said. "There are more people working on the SES today -- although not full time -- than there were when we had an individual office."

 

The reduction of black male representation in SES "is just the tip of the iceberg," Norton said. "Minority applicants today do not have the same incentive to work for or stay in the federal government that they had in my generation and in my parents' generation. The private sector is out there, looking for them, reaching for them, giving them the kind of pay that we don't give them."

 

Kichak acknowledged that SES diversity is not where it should be. But she said the small increases in minority representation at SES show that agencies are setting their leadership succession strategies and development programs with an eye on improving diversity. But lawmakers remained skeptical.

 

"The numbers don't bear that out," said Rep. William Lacy Clay, D-Mo. "You don't look nationally diverse."

 

While the results are mixed for minorities, women made great strides into the Senior Executive Service over the last seven years. Their 29.1 percent representation in SES last fiscal year is 5.5 percentage points more than in fiscal 2000.

 

Of all the demographic groups analyzed by the Government Accountability Office, white women saw the greatest increase since fiscal 2000. Their representation increased by 4.2 percentage points, making them 23.3 percent of SES in fiscal 2007.

 

Norton worried that Hispanics -- who make up the nation's fastest-growing population -- are particularly underrepresented in SES. Hispanic men make up 2.7 percent of SES, and Hispanic women, 0.9 percent.

 

White men were the only demographic group other than black men to decline in representation. The executive ranks at the State and Defense departments remained the whitest in the government in 2007, although both made slight improvements in diversity.

In fiscal 2000, State had only one black woman and four Hispanic men among its senior executives. The other 96 were white men or women.

 

By last year, State had added two black men and two men who were Asians or Pacific Islanders. But State also lost two of its male Hispanic executives, and still does not employ any American Indians or Alaska natives or Hispanic women in its top ranks.

 

Defense did slightly better. SES representation of most minority groups at that agency increased at least slightly between 2000 and 2007. Asian and Pacific Islander women stayed level, making up nine of Defense's 1,123 senior executives.

 

Defense also has 43 black executives, 10 American Indian and Alaska native executives, 16 Hispanic executives, 15 male Asian and Pacific Islander executives, 1,023 white executives, and seven of other races.

 

Minorities are making greater headway into the upper ranks of the General Schedule, from which most SES members are drawn. GS-14 and -15 employees were 22.5 percent minority in fiscal 2007, which is 5.5 percentage points higher than seven years earlier. 

 

DHS Pushes for Reauthorization of E-verification Program

Congress Daily 

By Chris Strohm

 

A top legislative priority for the Homeland Security Department this year is having Congress reauthorize a program that enables employers to electronically verify the legal status of newly hired workers, the department's policy chief said Friday.

 

Stewart Baker, Homeland Security's assistant secretary for policy, said he does not expect much homeland security legislation to come out of Congress this year.

 

But the department needs Congress to reauthorize its E-verify program, the free Internet-based service that employers can use to check Social Security numbers of employees and verify they are legally eligible to work in the country.

 

Baker said the promise that E-verify holds to ensure workers are legal was a primary selling point of the Bush administration's push for comprehensive immigration overhaul last year. Congress never passed a bill, however.

 

This year, only bills focused on limited immigration reforms or border enforcement have been proposed. Nearly 60,000 employers participate in E-verify on a voluntary basis, and some of the pending bills would make the program mandatory.

 

Baker said the department expects reauthorization language for E-verify to be attached to any of the smaller bills that might be approved. He said the department is not backing any specific immigration overhaul measure; it is letting Congress decide how to proceed. It is not clear if any bill will make it through this year, given that immigration is a hot-button election issue that Democrats and Republicans find hard to handle.

 

If "push comes to shove," Baker said, Homeland Security would ask appropriators to reauthorize E-verify through the department's fiscal 2009 budget.

 

Homeland Security announced Friday an increase in the length of time that foreign science and engineering students can remain in the country if they are working for an employer enrolled in E-verify.

 

Under a new interim final rule, visas for F-1 non-immigrant students with a degree in science, technology, engineering or mathematics will last for 29 months, up from 12 months. The rule also allows F-1 students to remain in the country if they are awaiting approval of an H-1B visa, which allows them to work in the high-tech sector.

 

"This rule will enable businesses to attract and retain highly skilled foreign workers, giving U.S. companies a competitive advantage in the world economy," Homeland Security Secretary Michael Chertoff said. Baker said the department had been working on the rule for nearly two years. Public comment on it is open for 60 days.

 

Medicare Finds How Hard It Is to Save Money

The New York Times

By Reed Abelson 

An ambitious three-year experiment to see whether the Medicare system could prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes has suggested that such an approach may cost more than it saves.

The test borrowed a practice long available through private health plans. Nurses periodically place phone calls to patients to check whether they are taking their drugs and seeing the right doctors. The idea is that keeping people healthier can help patients avoid costly complications.

After paying eight outside companies about $360 million since mid-2005 to try to improve such patients' health, Medicare is still trying to figure out whether the companies were able to keep people healthier. But the preliminary data indicate that the government is unlikely to save money.

The experiment, meanwhile, is proving something else: how difficult it can be, politically and practically, to make fundamental changes in the sprawling $400 billion federal Medicare program, which now covers some 44 million Americans.

With health costs soaring, few would dispute that the government needs to find better ways to spend its Medicare dollars. But because the system relies heavily on private industry and is subject to Congressional oversight, few changes come easily, and even experimental programs can take on lives of their own.

Several of the companies, including two that specialize in disease management, Healthways and Health Dialog, are pressing Medicare to continue the project in some fashion beyond the end of this year, saying the government mishandled the experiment.

The senators from the home states of those two companies, including John Kerry, Democrat of Massachusetts, and Lamar Alexander, Republican of Tennessee, have taken up their cause, demanding that Medicare rethink ending the experiment.

"Stopping this program," the senators wrote in a letter to Medicare last month, "creates serious health risks for the Medicare beneficiaries already enrolled and heavily reliant" on the services provided by the experiment.

Medicare, for its part, says the experiment so far has not reduced medical bills enough to offset the fees the companies are charging the government -- as much as $2,000 a year for each patient. A final accounting of the experiment is likely to come no sooner than next year.

About 160,000 people have taken part in the test, known as the Medicare Health Support program, and some 70,000 are still receiving calls from nurses employed by the companies.

Experts say that Medicare and the companies alike were too optimistic about how easy it would be to prevent costly complications and hospital visits by patients who are very sick.

"Everybody shares some blame," said Dr. David B. Nash, a health policy professor at Thomas Jefferson University in Philadelphia, who at the outset was enthusiastic about the program's prospects for transforming Medicare.

On the experiment's front lines are nurses like Jill Coker, who works for Healthways and makes 25 to 30 telephone calls a day, trying to ensure that each patient receives a call every few weeks. Through dozens of such nurses, Healthways, based in Nashville, is overseeing the care of 16,000 people in Maryland and Washington.

Ms. Coker said she spent most of her time on rudimentary issues, like explaining to patients what prescription drugs they are on and helping them devise ways to make sure they remember to take their medicine. She may also arrange a conference call with a patient's doctor if there are some worrisome new symptoms, or she may direct someone to a specialist to get better care.

"There have been numerous diabetics who didn't even know what an endocrinologist was," she said.

Medicare has not finished studying how well patients do under the program and whether patients are satisfied with the help. Three of the original companies -- Cigna, McKesson and LifeMasters -- eventually dropped out.

The program has failed to meet the government's original financial target: an overall savings to Medicare of 5 percent after factoring in the companies' fees and the patients' medical bills.

Initially, the companies were supposed to return their payments if they did not hit that target. Late last year, Medicare relaxed its standard, requiring only that the experiment not end up costing the government money.

The agency says that it will consider keeping any promising pieces of the program. But it says it cannot legally extend the experiment beyond December if it is not budget neutral.

"We want to lift up the seat cushions to find every nickel and dime we can find," said Herb B. Kuhn, the deputy administrator for Medicare. The agency says no final decision on the fate of the program has been made.

But some health care experts say Medicare should move on to seek other ways of managing the care of the chronically ill, if alternatives seem to hold greater potential to deliver both cost savings and better care.

"Medicare is doing exactly what we should want Medicare to do -- to test different life forms of disease management and see what works best," said Dr. Arnold Milstein, the chief physician for Mercer Health and Benefits, a consulting firm. But, he said, "This particular form of disease management is not looking promising."

Medicare is already exploring other ideas, like the development of so-called "medical homes," where a doctor with a team of other professionals oversees a patient's care. A few doctors' groups involved in a separate Medicare experiment have reported some success in saving the government money by more actively managing their patients' care.

Dr. Mark B. McClellan, who was the head of Medicare when the experiment began and is now a policy analyst at the Brookings Institution in Washington, says the point of Medicare's experiments is to find out which approaches might work. "This is a hard problem that is not going to be solved all at once," he said.

Many of the companies involved in the program say the experiment was flawed in the way it was designed and that Medicare has failed to work with them to make the program a success.

"We haven't proven anything," said Dr. Jeffrey L. Kang, a former Medicare official who is now the chief medical officer for the insurer Cigna.

The companies say Medicare signed up patients who were much sicker than they had expected. Instead of giving companies a chance to intervene before someone went to the hospital, Dr. Kang said, most of the patients were already so ill that it was "no longer a preventive program."

The companies also say Medicare failed to make good on its promise to give them timely information about the use of prescription drugs, for example, or lab results that would have allowed them to help direct the patients' care.

"We overestimated the real desire expressed by the organization," said Ben R. Leedle Jr., the chief executive of Healthways, who has been an outspoken critic of Medicare. His company's stock fell by 16 percent in a single day after the agency announced the experiment's preliminary results in January.

Mr. Leedle says that Healthways will probably be able to demonstrate savings from at least some of its Medicare efforts, although the company also says it is projecting a loss on the experiment because it may have to pay back federal fees. Medicare has not made public data on the results for individual companies.

For its part, Medicare said that it had worked extensively with the companies to address their concerns and that its final analysis would take into account how sick the patients initially were.

One thing that already seems clear is that after the fees are paid to the contractors, any cost savings may be elusive. In late January, the agency estimated that to meet their targets the five remaining companies would need to reduce their monthly claims by an average of $300 to $800 per patient for the remainder of the experiment. That would represent a 20 to 40 percent reduction in the patients' current medical bills.

George B. Bennett, the chief executive of Health Dialog, which is overseeing about 15,000 Medicare patients in western Pennsylvania, favors continuing the experiment, but with adjustments. He wants Medicare to give the companies more flexibility to manage patients in ways they say have already been proven to work among the employees they cover in commercial plans. Such measures, he said, include giving the insurer a bigger role in selecting the patients, with an eye toward identifying the ones most likely to be helped.

"Medicare actually has the possibility of saving $20 billion to $30 billion," Mr. Bennett said, "if they undergo what is being done in the private sector."

Whatever happens with this particular program, Medicare says it wants to keep experimenting. "We're not giving up on this stuff," said Mr. Kuhn, the Medicare deputy. "We definitely want these programs to work."