The incoming leadership at the U.S. Department of Health and Human Services (HHS) face a number of serious management challenges. These challenges, recently identified by the Office of the Inspector General (OIG), will require close, sustained attention by the Secretary’s Office and the agency heads, particularly at CMS and FDA.

The nominees for Secretary and Deputy SecretaryTom Daschle and Bill Corr, respectively – are wise choices, especially given President-elect Obama’s policy perspective and strong interest in national health reform. They are smart, seasoned policy gurus with strong relationships on the Hill. However, as the Obama Administration populates the agencies with appointees, the White House and HHS leadership should seriously consider the need for strong executives and senior management types for top positions at agencies like CMS, FDA, CDC, and NIH. Yes, they will need requisite policy and technical expertise, but at the agency level management savvy should be a priority.

The reason is simple. The existing management challenges certainly require attention. Further, the ultimate success of the Obama Administration’s health care agenda may well depend on fixing these problems. Also, the HHS Secretary’s Office and the new White House Office of Health Reform will have their hands full with health reform legislation, Medicare fixes, and FDA legislation. And the White House and HHS leadership will need strong executives to effectively implement the range of major, complex new policies expected in 2009 and 2010. The Democrats have a fairly deep bench when it comes to policy wonks, researchers, and academics generally. Their bench for executives and managers is relatively thin – but they could look within the agencies themselves and in state government for management talent friendly to the Administration’s policy views.

Here is the OIG’s list of top management challenges at HHS:

Oversight of Medicare Part D Prescription Drug Benefit:

  • Drug pricing and rebates
  • Fraud and abuse safeguards
  • Access to accurate information

Medicare Program Integrity:

  • Contractor oversight
  • DME fraud, including error rate and competitive bidding
  • Medicare Advantage

Integrity of Medicaid and State Children’s Health Insurance Program:

  • Prescription drugs, including fraud and pharmacy reimbursement
  • SCHIP reauthorization and eligibility
  • Home and community-based care in Medicaid

Quality of Care:

  • Quality measurement
  • Pay for performance (P4P)
  • Failure of care and never events
  • Transparency of ownership and performance
  • Indian health care

Emergency Preparedness and Response:

  • Pandemic influenza
  • Select agent transfers
  • Laboratory security

Oversight of Food, Drugs, and Medical Devices by FDA:

  • Food safety and security
  • Drug and medical device safety
  • Transparency of provider financial interests

Grants Management:

Integrity of Information Systems and the Implementation of Health Information Technology:

  • Security of sensitive and personally identifiable information
  • Safeguards and controls over HHS information systems
  • Electronic health records and e-prescribing

Ethics Program Oversight and Enforcement:

  • Management of conflicts of interest by extramural grantees
  • Oversight of financial interests of clinical investigators and advisory board members
  • Oversight of HHS employees’ outside and post-employment activities