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	U.S. Department of Health and Human Services

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The CEG is one of the finest organizations in Washington. You do so much to remind public servants and all Americans that good government matters - and that good government is, in fact, possible.

We all believe in a free society, ultimately that's why we're here. Since September 11th, we've all been reminded of how precious our liberties are. The Fourth of July we just celebrated was especially meaningful this year, and as we consider the sacrifices of those who even now are defending our freedoms and our way of life, we are prouder than ever to be Americans.

That pride is deepened even further by the role we play in serving the people of our country. The Council for Excellence in Government is premised on the belief that public service is a noble calling. I'm here today to let you know that the President and I share that vision with you.

Throughout my 35-plus years in public office, I've worked hard to make sure that government is an agent for constructive change and compassionate action. That's why, in my great home state of Wisconsin, we transformed a fundamentally dysfunctional welfare system and provided quality, affordable health insurance to working, low-income families.

We also provided educational options through vouchers to inner city young people trapped in failing school systems … reduced the tax burden on individuals and businesses alike ... and substantially strengthened our public university system.

We had great success in these areas, and many of the things we did in Wisconsin have become the models for national policy.

I've brought the same mentality of change to my work at the Department of Health and Human Services. I should note that I believe that the men and women of HHS are the finest public servants in the federal government. I know I'm biased, but I also believe I'm right.

My friends, I abhor the status quo, just accepting the way things are because it's difficult to make change. I tell my senior managers that if they are not living on the edge, they are taking up too much room.

We can't serve the men and women who sent us to work on their behalf if we don't pursue the theme of this conference - "Excellence in Government." We in the Bush Administration are committed to excellence in the way we manage the federal government. And today, I'd like to talk with you about some steps we're taking in my own department to reach that goal.

First, I want to talk a bit about the challenges we faced when we first came into office. Next, the way we're reforming the management of the Department of Health and Human Services itself. And finally, the way we're improving the programs our Department runs.

As to the challenges, it's important to note that the Department of Health and Human Services is the largest and most diverse Cabinet department in the federal government. Our budget has 308 distinct line-items … we include the Food and Drug Administration, Medicare, Medicaid, the National Institutes of Health, the Centers for Disease Control and Prevention, welfare, substance abuse policy, the Indian Health Service and a host of other centers, agencies and bureaus.

The President ran as a compassionate conservative, and I tell the President that HHS will define his compassionate conservative agenda.

Our budget is $489 billion … I make my friend Don Rumsfeld over at the Pentagon look like a piker. We employ 65,000 men and women and provide more grants than all the rest of the federal government combined.

So, when I became Secretary last year, I was shocked by the managerial challenges I found in the Department. Let me list a few: There were 40 different personnel offices … there were more than 130 legislative affairs personnel reporting to 11 distinct offices … and there were nearly 600 press and public affairs personnel scattered from Atlanta to suburban Baltimore.

Our e-mail systems did not connect from floor to floor in the same building. The Centers for Medicare and Medicaid Services used single-entry bookkeeping, which I'd thought had gone out with "I Love Lucy."

Each little segment of the Department had created its own web sites - totaling over 2,000 sites and about 1 billion pages.

We had no one person in charge of our roughly 5,000 buildings, with the result that we had difficulty finding out how to plan for our leasing and construction needs. In many areas, we lease only parts of buildings, which means that we can't control the security of the facilities. And we've learned that in the past, we've even had two operating divisions bidding against one another for the same space. To me, that seems almost unbelievable.

And then there's the FDA, the world's premier food and drug organization - scattered among 55 separate buildings. That makes the simple act of holding a meeting almost an affair of state!

I first drew attention to the need for fundamental management reforms last year during the early budget hearings that were held on Capital Hill. And, as my schedule has allowed it, I've run HHS out of the various operating divisions for up to a week at a time … one week at the Administration for Children and Families, another week at CMS, and so on.

This has given me a hands-on feel for the real needs and concerns of each agency and how they can run better.

I'm glad to report that we're making significant progress. And we're doing so under the central theme that HHS is not a collection of disparate and unrelated agencies, but that it truly is and must be "One Department."

My goal is that every agency, every office, every branch of HHS work not as separate and sometimes competing mini-kingdoms but as units of a common whole - as "One Department."

The people of our country are not served when their officials in different agencies hardly even talk with each other. That's not prudent managerial autonomy. That's chaos.

And the people are not served if their government spends its time writing memos no one ever reads … developing new boxes in an organizational chart that no one can understand … or developing Web sites that are repetitive, confusing and irrelevant.

And as I tell the people at CMS, if they send me a set of regulations that I, as a lawyer, cannot understand, how can a doctor or other health care professional understand them?

I'm changing that whole culture. At HHS, the days of moving reams of paper from desk to desk, sending messages from in-box to in-box and keeping everything calmly humming along while real needs and problems are left unresolved are over. Period.

That's not a politician's promise. That's a solemn pledge that I'm acting on even as we speak.

My friends, I did not come to Washington, D.C. to put in time, tinker with the edges of the various departments and agencies and never take bold action. I came here taking the stewardship of HHS seriously. And I have not just pondered and studied, we am acting.

Let me discuss the way we're reforming my Department from top to bottom, the way that we have dealt with the challenges I just detailed. I should tell you, too, that the employees of HHS are buying into the changes we're making. They are excited about the new direction.

The CEG lists four goals that comprise your mission statement. I'm going to cite them, one by one, because they dovetail so well with the approach we've taken at HHS.

The CEG says that it wants to, and I quote, "encourage innovation and results-oriented performance in government." So do we.

As we update and revise our Strategic Plan for HHS we are including, for the first time, a Management Improvement Goal, with objectives and strategies to modernize and improve human, financial and technological management at HHS, all as a part of our "One Department" emphasis.

My Department is a full partner in carrying out the President's management reform agenda. We are focusing on performance during our budget reviews, and are working closely with the President's Office of Management and Budget in conducting - this summer - full-dress assessments of a number of our programs. To help raise the visibility of good management, we have established a management reform goal that covers all the areas of the President's Management Agenda.

In response to some of the things we found when we first arrived, we're taking very pointed action. We're reducing the number of personnel offices from 40 to four. That will bring some coherence and order to the way we hire, train and use personnel.

We've hired a director of facilities management. Having a single person in charge of facilities management will enable us to co-locate HHS employees who work in different divisions. That will save money and, more importantly, strengthen the security of our facilities.

The CEG also calls for, and again I quote, "attracting and developing talented people for public service."

I passionately share that goal, too. So, for example, our National Health Service Corps has recruited 40 new U.S. Public Health Service officers to serve in some of the most medically underserved communities in America. We haven't put them behind desks - they're going to be frontline responders.

They are going to serve as health professionals able to respond to medical emergencies nationwide. They will also be trained as "Ready Responders" who may be called upon to respond to regional or national medical emergencies.

And Department-wide, we've developed an innovative program designed to help young men and women with an interest in government service gain firsthand experience as they begin their careers. It will also help us avert a brain drain as many of our employees become eligible for retirement over the next few years.

It's called the "Emerging Leaders" program, and it's designed to attract exceptional individuals into public service in a variety of occupations within HHS. We have hired 62 people into the program out of the more than 8,000 people who applied. The inaugural class represents a very diverse group of talented individuals, young people from many backgrounds and regions of the country.

I'm thrilled by the response - 8,000 applicants for about five-dozen slots. I have a lot of hope for our young people, as I know you do, and when I read statistics like that, I'm very encouraged. And three other Cabinet Secretaries have asked for the list of those we did not accept so they can bring talented young people into their Departments, as well.

You also state that you want to, in your words, "promote electronic government." So do we, and we are.

We are providing government-wide leadership in the President's E-Government initiatives, including a system that will make it easier to manage our grant process and reduce burdens for agencies and organizations that apply for our grants.

We have also done something that's very satisfying to me, because it's hard to believe it wasn't done years ago. We have taken the radical step of connecting the Internet system on the various floors of my building. Now people on the third floor can e-mail people on the fifth floor. The next thing you know, we'll even start using paperclips …

And a fourth objective of the CEG is, as you put it, "improving the connection between citizens and government and encouraging citizens' participation in government."

That's so essential. We can't have a representative democracy if people won't participate in it. So, by September, we will have launched a new HHS Web Portal that will empower the users to more easily find information they need and want, while making sure that security and privacy needs are not compromised.

With two clicks of a mouse, our customers will find what they need to know about programs such as Medicare, Medicaid, and Head Start. They will have instant knowledge of what we are doing in bioterrorism, cutting edge research, and food and drug safety. They'll be able to learn about our 320 grant opportunities. And they will be able to tap into programs such as community health centers and Meals-on-Wheels.

But reforming the process and the structure of management is not sufficient in itself. We not only want the trains to run on time - we want to change the direction of the railroad, and we're doing just that. We're reforming our programs themselves.

I'll cite four examples:

First, regarding the Centers for Medicare and Medicaid Services, we changed the name from "HCFA." Who could love a "HCFA?" We gave the agency a name that describes what it does - it serves recipients of Medicare and Medicaid.

We're also bringing a dual-entry bookkeeping system to CMS. It's called the Unified Financial Management System, and we're implementing it both for CMS and for HHS as a whole. CMS processes one billion claims every year, so it's time its accounting system is brought into the modern era.

One area where we've laid out a very specific roadmap for CMS has to do with payment errors. HHS' strategy to reduce Medicare payment errors includes efforts focusing both on helping providers to file Medicare claims correctly so that Medicare pays it right the first time … and on vigilant oversight of claims payments to stem fraud, waste and abuse.

I am seeking to modernize and strengthen the entire Medicare system. We want a comprehensive modernization of Medicare, including a prescription drug benefit, something the President feels very strongly about.

Second, we've launched a 27-member commission - my Advisory Committee on Regulatory Reform - whose job is to develop a plan for comprehensive regulatory reform. When we flood doctors and hospitals with excessive paperwork, patients suffer the consequences. The commission is especially focused on CMS and the FDA, which have the heaviest regulatory burdens.

This panel, which has already held hearings all over the country, is helping us restore common sense to the regulatory process so that doctors and other health care professionals can spend more time doing what they were trained to do - spend time with their patients.

We've already made some tremendous progress in eliminating regulatory deadwood. For example, last month we launched a new effort to streamline Medicare's paperwork requirements for home health nurses and therapists so they can focus more on providing quality care for their patients.

This action stems directly from the recommendations of the Advisory Council. And there's a lot more to come.

We've also become the first Cabinet Department to institute performance contracts for the Department's senior leadership. And the contracts will affect the divisions under each senior person's supervision.

The performance contracts commit each member of the senior leadership, including everyone in the operating divisions and staff divisions, to measurable outcome goals for each year. I'm giving the flexibility and autonomy to achieve these goals, and will hold them accountable for reaching them.

So, for the first time, the people in charge have explicit standards against which their work is being measured. And that, in turn, means that the rank-and-file of the department have a clearer path for fulfilling their duties than ever before.

Third, we're reaching out as never before to the nearly 40 million Americans who lack health insurance.

Now, when I became Secretary, there was a backlog of hundreds of state Medicaid waiver proposals and plan amendments. Some of them stretched back into the 1980s. So, we started clearing the backlog, aggressively reviewing the proposals and eliminating the huge bureaucratic logjam that had clogged the system for years and years.

Our goal is now to review every waiver proposal within 90 days … and that to date, we have approve nearly 1,950 waivers and state plan amendments. So, since January 2001, we have approved waivers and plan amendments that have expanded eligibility to about 1.8 million people and enhanced benefits for about 4.5 million people.

In fact, we are today issuing a report showing that since 1997, the percentage of uninsured children in our country has fallen from 13.9 percent to 10.8 percent. That's still too many, but we're moving in the right direction.

This underscores the point I made earlier - that good management means better public policy. They go hand in hand. I like efficiency, but not just for its own sake. Efficiency is important because it's foundational to helping people, to meeting the needs of those we represent. The waiver program we've developed is Exhibit A in this regard.

And fourth and finally, we have developed model waiver programs for State Children's Health Insurance Program (SCHIP), for pharmacy coverage and for at-home care proposals. They enable state and local governments to make their proposals more efficiently than ever and in formats that will pass regulatory muster.

The model waiver programs mean more people will have access to quality care … to needed drugs … to help within their own homes … in a more timely way than ever before. Once again, good management means good, compassionate, effective public policy.

It was John Adams who reminded us that, and I quote, "Our obligations to our country never cease but with our lives." My friends, in this nation, we live our lives indebted to those who have purchased our liberty with their lives … and in obligation to sustain those liberties for the next generation.

So, while our obligations to our country never cease, we can do our best to fulfill them in pursuing excellence as public servants. None of you would be here in this audience unless you were passionate about doing exactly that.

Even as we are indebted to our country, I am indebted to you for your kind attention as I've spoken with you this morning. So now, I'll close and will be glad to answer some questions. Thank you so very much, and may God bless you all.