September 22, 2020
Nancy-Ann DeParle: 00:00 What I will tell you is that no man that I worked with ever hesitated to assume that he should sit at the table. And as President Obama once said to me, look, it’s life in the West Wing. People are aggressive. That’s just what it’s like.
Lan Nguyen: 00:17 That was Nancy-Ann DeParle, Partner and Co-founder Consonance Capital Partners, and Former Assistant to President Barack Obama. As the architect for one of the most significant pieces of healthcare legislation in our nation’s history. Nancy-Ann discusses her path to the White House and the leadership needed to pass the Affordable Care Act.
Nancy-Ann DeParle: 00:39 Was the law perfect? No way, not from day one and not certainly day 365 after lots of sausage making had occurred, but was it a step forward towards goals, that on a bipartisan basis, all the people that I spoke with shared, which was getting everybody covered, bringing the rate of healthcare cost growth down. Not a day goes by that I haven’t wished we had Republican support for the law. It would have been so much stronger if it had been bipartisan.
Ceci Connolly: 01:11 In this conversation hosted by Ceci Connolly, President and CEO of the Alliance for Community Health Plans. We learn about Nancy-Ann’s trailblazing journey from her early days, practicing law in Tennessee to becoming one of Washington D.C.’s brightest political minds to co-founding her own private equity firm and the highs and lows along the way.
Nancy-Ann DeParle: 01:33 You might be surprised at the people who become your mentors, as I was when Donna Shalala called and said, Come over. I want to talk to you about your career. I didn’t even think she liked me much less, that she would help me achieve one of my career dreams to run HCFA.
Lan Nguyen: 01:48 We’re delighted to welcome Nancy-Ann DeParle and Ceci Connolly to Her Story.
Ceci Connolly: 01:53 Well, it’s been a while, but Nancy-Ann Deparle, it’s great to have you with us. Welcome to the program.
Nancy-Ann DeParle: 01:59 Thanks. Good to be here.
Ceci Connolly: 02:00 We are going to try to tell your life story in 30 minutes or less. Really, you have had such a remarkable career, such a woman leader very early on. And I think that our Her Story audience would just love to get a little bit of that trajectory from you today, and maybe some insights along the way for other women that are hoping to follow your trailblazing. Maybe we’ll start back around the HFCA days. Now, of course, the agency has been renamed CMS, but that was when you started here in Washington, D.C. And, I think, probably burnished your political policymaking chops. You want to talk a little bit about how you got pulled into that government assignment?
Nancy-Ann DeParle: 02:54 I will. And we’re dating ourselves to call it HCFA. But that is the name back in ’97. So I actually started here in Washington at the Office of Management and Budget at the White House during the Clinton administration. And why did I go there? Because I had run the Department of Human Services in Tennessee as the Commissioner before I moved to Washington.
And I decided that I wanted to be where the money was, which was OMB. I’d seen that, as Commissioner of Human Services, I can have all the great ideas, but I needed the money to accomplish them. So in that job, my role was to usually be Dr. No. I felt like a lot of my time was spent critiquing and saying no to the Department of Health and Human Services, and specifically to Secretary Donna Shalala.
So imagine my surprise, in the summer of ’97, when she called me up and said, “I want you to come over and talk to me about coming to work at HHS.” President Clinton had been reelected and she was putting together her team for the second term. And I really was surprised because I thought I’m clashing with her all the time. There’s no way that she would want to promote me within the department.
She sat me down and she said, “Let’s talk about your career,” and was just a great mentor. And then we talked about coming out to run HCFA. And that the person who’d been in the job was about to move back to New York. And so she said, “I think that’s what we should do.”
I told her then, Ceci, I felt I should tell her this–we’re sitting in our conference room. And I said, “Well, you know, I just got married and my husband and I want to start a family. So that’s really important to me.” And Secretary Shalala said, “Oh, well, that’s great. We’ve had a lot of babies here. Kevin Thurm had a baby and Rich Tarplin had two babies, I think, and that’ll be great. We’ll do it here.”
Well, I remember thinking Donna was and is such an infectiously happy person and optimistic. I thought why I don’t want to put a damper on this, but it is a little bit different when you’re the mom having the baby. But who knows, we’ll see how this works out.
And it came to be an issue after I’d been confirmed around HFCA and run it for about a year. This was during the Balanced Budget Act, as you’ll recall, in ’97 the implementation of that, which remains the largest cuts ever to the Medicare program. It was a 14% cut, year over year, for a period of years. Every provider in healthcare got cut.
That’s what we were implementing and I was pregnant. And I went in to talk to them about how we were going to handle it. And she said, “Well, of course, you’re going to take maternity leave.”
Well, it turned out there was no provision, in law, for a Senate-confirmed appointee to take maternity leave. There is no provision in law. As far as I know, it’s never been changed. You’re technically on duty 24/7, and there is no provision for leave. And in fact, she said, “I can’t believe that’s right.”
So she had the General Counsel call over to the Justice Department. And they produced a memo that had been written for Elizabeth Dole when she was the chair of the FTC and wanted to take leave to campaign for Senator Bob Dole, who was running for President.
And they said, “There’s nothing in the statute that allows you to take a leave.” So Donna, uncowed and unbowed by that, said, “Well, this is what you need. This is what the baby needs. So you’re taking the leave. Here’s the list of Senators. You call 50 of them and I’ll call 50 of them. And we’ll just tell them, that’s what you’re doing. You’re taking three months.” So that’s what we did. And to their credit, they were all very nice and supportive of it, bipartisan. And so I took three months off, but it was a fantastic experience. And it’s a theme. You said, let’s talk about my career and insights. A theme is mentors and especially women mentors.
When that administration was over with, I started getting calls from the Robert Wood Johnson Foundation and others that were looking for board members and invariably, they would say, “Oh, so we called Donna Shalala, and she said we needed you.” So that’s an example of the kind of women mentors I’ve been fortunate enough to have in my career.
Ceci Connolly: 07:16 Oh, that really is. And it’s funny, you mentioning then Secretary Shalala, now Congresswoman, and I was chatting with her not long ago. And she mentioned that she got herself a pandemic puppy and named it Fauci. So she’s still as fun and rollicking as ever. You mentioned, of course, that you started in state government. You experienced the tensions. You realized that so much of policy-making does come down to dollars, and came to Washington, D.C. Do you have a favorite, state government versus federal government?
Nancy-Ann DeParle: 07:53 Well, it would be hard to say, but I’ll tell you what I learned in state government. I became the Commissioner of the Department of Human Services at a time when we were being cut. This was in the late Reagan administration. I guess our budget was being cut substantially, the social services block grant, and other big chunks of money that the state government depended on to run its discretionary foster care and all those kinds of programs, which is what my department did. AFDC, foster care, senior care, all that.
And so the governor said to me, “I’m going to need you to do about a 10% RIF.” So I had 6,000 employees–that meant 600 people. It was the hardest thing I’ve ever been through, even now. It was harder than the Affordable Care Act because my mother had been a state employee. And I just couldn’t get out of my mind, gee, what if that were my mom supporting three kids on her own and then finding that she’s been riffed from her state job? So I drove to all 95 counties over the course of a year and sat down with our staff.
We couldn’t communicate the way you and I are communicating , live through a virtual medium. So I sat down with staff, talked to them about it, spent time in the county and met with our beneficiaries–whether it was foster kids or parents who were receiving welfare or Medicaid.
And there’s nothing like showing up at someone’s home and community, and really hearing directly from them how hard it is to sign up for Medicaid. Why do you have to repeat the process three times for food stamps, Medicaid, and AFDC? What is all this paperwork about? There’s nothing so vivid as that, that can really give you a sense of both the power and the humility that I think you need to have as a government official.
It’s just different at the federal level. Policymaking is removed from people in a way that it isn’t at the state government level. So I don’t know that I have a favorite between the two, but I think one was informed by the other, for sure. And even at the federal level, I always wanted to have time and tried to take the time to get out and really see the impacts of our policy.
And really, I think it’s one of the reasons why I related so much to President Obama, because even though he’s known as the sort of consummate , cool intellectual. What he drew upon as he was reading the policy memos were very specific people that he met. And how would this help Laura Kletchker? How would this help Natoma Canfield?
Wouldn’t it leave out this aspect of their needs? He was grounded in that. And that’s what I think is important about having that state government experience or local experience.
Ceci Connolly: 10:45 I suspect, in many of your roles over the years, you were often a first woman or an only woman in the room, on the dais–you name the setting. But I want to confirm that theory. Yes. And then I want to ask, how did you manage that? Is it still the case today?
Nancy-Ann DeParle: 11:11 No, it is not still the case today in the same way that it was 10 and 20, and even 30 years ago. So it wasn’t. And I should acknowledge having had some really important male mentors as well.
So why did that happen? I mean, I’m thinking of someone that we both know who’s involved in Her Story, Gary Bisbee. So Gary was there. I was the first woman on a board with Gary. I was nursing my baby during the board meeting– not in the boardroom, but they made it possible for me to have a young woman come down and babysit my infant.
He was, I think, six weeks old, the day of my first board meeting. And they would have breaks from the board meetings so I could go out and take care of him. So I’ve had a bunch of supportive male mentors as well, who wanted to see that change, who knew that boardrooms are better and more representative of shareholders and able to do a better job for shareholders if they have diversity of viewpoints and experiences sitting around the table. And that means having women as well as men. So it doesn’t happen nearly as often now as it used to. And it’s extremely meaningful to me.
I can remember being up at the Senate during some of the considerations of Affordable Care Act. And on one of those days when there was only a few people in the chamber, Senator Maria Cantwell was speaking on the floor and Senator Blanche Lincoln was in the chair and my son happened to be with me that day. And I was like, “We’re going to go in the chamber. And you’re going to be in here for this, to have a woman presiding and a woman speaking.”
And that is normal in the United States of America now, but that wasn’t the case when I was an intern on Capitol Hill in the late seventies. So there’s been a dramatic change.
Ceci Connolly: 13:08 Over the years. Have you had your own little tricks and strategies for when you have found yourself in those circumstances? You know, what your default mode is for sitting there being the lone female, or being the woman who has to give unhappy news and unpleasant instructions to a room full of men?
Nancy-Ann DeParle: 13:30 Well, when you said that about getting unhappy news, you reminded me of a situation where I had to do that with the House leadership But I was lucky because I wasn’t the only woman. Speaker Pelosi was sitting there to be supportive.
I grew up with two brothers and I had close-by relatives, cousins–four boys, four male cousins. And I grew up playing with them and being part of the mix with them. And I think that prepared me, in a way, for being the only woman in the room and not being shy. So I felt that I had to speak up. Certainly, President Obama encouraged that. There were times when I was the only woman in the room, even with him. That was unusual because he had a lot of women in strong roles around him.
But when I was in that role, he expected me to speak up and make sure that he heard my point of view. So that’s the way that I’ve always approached it. Now that said, I remember seeing some research sometime in the early 2000s that had been done at Harvard Business School that came to the conclusion that having three women on a board made a difference. And Ceci, I’m not proud of this, but I remember reading that and thinking, that doesn’t make a difference.
I don’t know. I’m sitting there on these boards and I’m the only woman in there, but I don’t think it makes a difference. And then I was on a board where there were three women–or actually, four women on one of them. It makes a difference. It makes a difference to have the House Ways and Means, and Energy and Commerce, and Education and Labor staff directors, and main healthcare staff people, and the Senate Finance Committee and the Senate Help Committee, staff members, and leadership staff members all be women who’ve worked on these issues before. That made a difference in our ability to get things done.
And why is that? You know, I’m not really comfortable, certainly not clinically or professionally trained, to speculate about gender differences, but it makes a difference.
Ceci Connolly: 15:40 I agree. One of the fun questions that we are using with our Her Story series is, do you consider yourself an accidental or an intentional leader?
Nancy-Ann DeParle: 15:55 That is a fun question. And I would say intentional. And by that, I mean–it’s interesting that you chose those words, accidental or intentional–not natural. I don’t think I’m a natural leader.
I think I’m, among other things, an introvert, I’ve come to realize. I need a lot of time alone. And I find, for example, what we did during the Affordable Care Act from seven in the morning, till nine at night, being with other people and leading, if you will, to be very draining.
So for me, it’s intentional. I have to force myself to do the things that I think a leader does: to be outspoken, to deliver the bad news, as you say, to be pragmatic and push forward. So in my case, I think it’s intentional.
Ceci Connolly: 16:43 I think though, that those aspects of leadership are tough. I would think of myself as an extrovert and I like being around people, and the pandemic has been hard for me to not have that kind of interaction. And yet, I found when I moved into leadership positions that I also needed to find that quiet alone time to rejuvenate and restore a little bit, cause you are always “on”. And so I think this is a good segue to that stretch.
When you were at the White House, really spearheading that incredible and successful drive to enact the Affordable Care Act, and you described the long hours being in the spotlight so much, recount a little bit of that experience, highs and lows, maybe for you, personally.
Nancy-Ann DeParle: 17:34 Well, the highs were frequent. And for me , as someone who’s always loved public policy and government and been very interested in politics, to see the way that members of Congress really thought about and grappled with policy and tried to understand how it would affect the people that they represented.
That was a high for me, to see them really do that. The lows those were there too, sometimes in my dealings with Congress and seeing members who, despite those things, and even acknowledging those things, couldn’t support the law. I’m not cynical–I’m still not cynical–but if you want it to be cynical, you could be cynical after having some of those experiences to see that they were truly instances where I believe that it was political.
Was the law perfect? No way, not from day one and not certainly day 365 after lots of sausage making had occurred. But was it a step forward toward goals that, on a bipartisan basis, all the people that I spoke with shared, which was getting everybody covered, bringing the rate of healthcare cost growth down.
The two things were inextricably linked. People understood that reforming the delivery system so that we got more value for what we’re spending the money for; reforming the insurance laws so that women didn’t pay 27 times more than men in some states, which was the case in the individual market when we started this, so that people who had a preexisting condition wouldn’t effectively be priced out of the marketplace. So all those things were things that, on a bipartisan basis, members agreed with. And I think, still agree with today. And as the law evolved, I believe it still embodied those principles and has been successful in meeting a lot of those goals.
So why didn’t some members vote for it? And in some cases, I joked to the President that some of them have more in the law than he does. We listened to all their ideas. We had incorporated a number of them into the law, but they didn’t support it. So that was a low, because not a day goes by that I haven’t wished we had Republican support for the law. It would have been so much stronger if it had been bipartisan.
Ceci Connolly: 19:55 And I don’t want to turn Her Story into a political or partisan show, necessarily, but a lot of your hard work has been taken apart and dismantled, and is certainly under serious threat right now.
Nancy-Ann DeParle: 20:13 It has been from day one.
Ceci Connolly: 20:15 Are you more concerned?
Nancy-Ann DeParle: 20:17 I guess I’ve gotten a little bit numb to it at this point. I do think that one silver lining, if you will, to what’s happened over the past few years–and even the pandemic, which has been so challenging for everyone. And especially for people whose health has been compromised by it, or the 200,000 Americans that we’ve lost.
But I think it’s highlighted the importance of reliable, dependable, affordable health coverage. It’s highlighted the importance of protection against preexisting condition exclusions COVID-19–having had that is a preexisting condition. We don’t even know yet all the implications that flow from that, in terms of other disease burden and long-term consequences.
Ceci Connolly: 21:04 In addition to your distinguished government career, you then have moved over into the private sector, founding Consonance Capital Partners. And as you’ve mentioned, you serve on a number of boards: CVS Caremark, HCA. You had been on the Cerner board, a terrific company.
Talk a little bit about when you made that shift into the private sector, again, especially as a woman with great experience. What have been the particular challenges for you?
Nancy-Ann DeParle: 21:36 Well , being in the private sector now, I basically returned after I left the White House to what I’d been doing before, although I chose to do it on a smaller scale, in a way. I was in a much larger firm when I joined the Obama administration in 2009.
When I left in 2013, I wanted to be, after that experience in a smaller organization where I had more of a say in what we did, as opposed to being in a large place where I wouldn’t necessarily have that kind of control over what we decided to do with our investors’ dollars. So I co-founded Consonance Capital Partners, a healthcare-focused, private equity firm with three other people–two other guys I’ve worked with before.
So we’re a small firm with all that entails, which means that I walked into the office the first day and the back fell off my chair, because we were just building this thing. It was like a startup, and I’ve never thought of myself as an entrepreneur, but essentially, that’s what it was. And fortunately, we had the support of some great investors and limited partners, and we’ve been successful in building this firm now. And we’re on our second fund, which is great.
It is rare for women to be in private equity. The financial world, perhaps, is behind certainly healthcare and everything else. What I noticed, Ceci, from when I left this world in January 2009, when I joined the Obama administration, was gone for four years, it was a little bit like Rip Van Winkle, will coming back and seeing what was there.
And I noticed that much more frequently, now, when we’re talking to the management teams of companies that we might invest in–these are private companies, small, medium-sized, private companies. It’s much more frequent that there’s a woman at the table. And the top–either the CEO, the COO, the Chief Clinical Officer, Chief Strategy Officer, Chief Legal Officer–the top four or five people, often there’s at least one woman, if not more. That had not been the case four or five years earlier, and it does make a difference.
It makes a difference that there are starting to be more women in private equity, that there are certainly more women making investment decisions on behalf of pension, funds and other entities that invest in private equity.
Often, women are the decision makers now. So that’s starting to change. But it’s taken a long time and the financial sector, I would say, is behind the rest of the world there. And in board rooms, I’m happy to say I’m not the first woman or even the second woman on any of the boards I’m on now.
And I was often the first woman and often the only woman on boards back in the early 2000s. So that’s definitely been a change.
Ceci Connolly: 24:24 Well, that’s striking, because I hear you saying, in a lot of instances, there may be one other woman–not the 50% goal.
Nancy-Ann DeParle: 24:35 It’s not 50%.
Ceci Connolly: 24:37 Yeah. So on this topic of women and ascending and representation and equity, are you feeling optimistic? Has it been a slow slog?
Nancy-Ann DeParle: 24:50 Yes, both. I am feeling optimistic. It’s been slow, but then again, we’re talking about 20 years, basically. And in some ways, that’s a long time. And in some ways, that’s pretty quick for a societal change to take effect. I’m optimistic, in part, because of what I see other women doing and leading, and we have to be the change that we want to see. Right. So when I’m sitting in the boardroom, I’m advocating for other women to join us. And I would say that now it’s like pushing an open door, as opposed to silence after I make that comment. I think there’s a growing recognition that we’re stronger if we’re representing the shareholder base, the people that we serve our customers in a more holistic way, and that includes having women and blacks and everyone sitting at the table.
And so I think speaking up is such an important point that you make. Are there other approaches that you try to bring to your own work and activities, or that you think are good strategies for continuing to build on this progress of advancing women, minorities, et cetera. The speaking-up piece is great. What other kind of elements in your leader position have you found to be useful?
Speaking up can sometimes be in a room of people who are least, on paper, equal. So in a board room, we’re all directors speaking up in there. That’s one configuration, but another place to do it is in a room with people who are junior, and where they hear you’re asking the question and they know, hey, that means I’m supported. Or that means there is someone here who sees me and sees that I’m adding to the organization.
It also means active mentoring. So one of the young women that I recruited to the White House wrote up a story about something that I did, and I didn’t even remember it. But it is something that I’ve done and it’s something I try to do. She’d come into the Roosevelt Room to give her first briefing and she sat–and you’ve been in that room, Ceci, you know–there’s a table that has about 15 chairs around it. And then there are outside chairs, maybe 10 or 12 of those. So she came in–she was early because she knew she was on the agenda, and she sat in one of the outside chairs.
And she said that I came in–I was chairing a meeting. I think I came in and sat down at the table. And I looked at her and I said, “Look at your Blackberry.” Again, not to date myself, but we had Blackberries back then. So this woman, Raquel Russell, who’s now an executive at Zillow, looked down at her Blackberry and my terse email message to her was,.”Sit at the table.”
And so she said, “I blushed and I went over and made room for myself.”
Now, what I will tell you is that no man that I worked with ever hesitated to assume that he should sit at the table. And as President Obama once said to me, “Look, it’s life in the West Wing. People are aggressive. That’s just what it’s like.”
And you have to be aggressive to it. You have to put yourself out there, but I know a lot of women, even women with senior titles, who would not assume they should sit at the table. They would assume, “Oh, well, someone else should sit there. I should make room for them”. Well, it’s an interesting gender difference. Raquel tells that story to other young women now. As I said, she’s a senior executive at Zillow.
She said, “Nancy-Ann talked to me after the meeting. And she said, ‘You were there to make a presentation. You had something that we wanted to hear, that we needed to hear, and you need to sit at the table and tell them, and not be reticent or assume that someone else is more deserving and you of a seat at the table.’”
Ceci Connolly: 28:59 But how did you feel or react when the president said, “Hey, this is the West Wing.” I mean, a little bit of, “Get over it, sister.” Were you hoping, maybe, for a little more empathy?”
Nancy-Ann DeParle: 29:11 He had empathy. He was teasing with that remark. This is the same guy who came to me at a time when things were rough around there and said, “I’ve got your back.” So he had empathy.
So the context for, “It’s life in the West Wing,” was a dinner with women who were working in the West Wing, some of whom had complaints. Not many leaders of the Western world would take their time to sit down with a group of women. To hear that and to say, “I hear you, I want you to speak out, and it’s life in the West Wing. You need to be here. I want you here, but it’s also on you to speak up.”
I felt empowered by that. And he certainly saw me speak up after that.
Ceci Connolly: 29:54 Terrific. We are supposed to ask if you’ve got a title in mind for your story, and if you don’t have one, I might have one for you. But what would you maybe title your book? And I know you are married with an amazing author and writer. So I don’t know if you’ve got some inside help there.
Nancy-Ann DeParle: 30:13 I don’t. And actually, his last book–we debated the title, and he was right and I was wrong. So I guess I should ask his advice on this. I had trouble sleeping last night, trying to think about this, Ceci, just so you know. If I have dark circles, it’s because of that.
Her Leadership Story is not a bad title, and I think I could go with that. Affordable Care Act Architect.
Ceci Connolly: 30:38 May I suggest one for you?
Nancy-Ann DeParle: 30:40 Sure.
Ceci Connolly: 30:40 Sit at the Table. I like your Blackberry message to the point.
Nancy-Ann DeParle: 30:47 That works. And it’s something, as we said, that didn’t come naturally to me, but it’s something with years of experience that I certainly see. And I’m actively mentoring other women to do that.
Ceci Connolly: 31:00 I want to close for our listeners of all ages, and probably both genders. But I think we’re hoping many young and mid-career women out there. Do you have a piece of advice for them or maybe one that you would have given your younger self, a lesson you’ve learned along the way?
Nancy-Ann DeParle: 31:22 You’ve heard me say I’ve benefited tremendously from the mentors that I’ve had, especially women mentors, but both women and men. So I would just say to really invest in those relationships, people that you meet along the way, and take the time to be present for them.
You might be surprised at the people who become your mentors, as I was when Donna Shalala called and said, “Come over, I want to talk to you about your career.” I didn’t even think she liked me, much less that she would help me achieve one of my career dreams, to run HCFA.
I had someone like that in the law firm that I worked with . He wasn’t even someone I worked with closely, but who took the time to mentor me. So I would just urge any young woman listening to this to really look for who can be a mentor–who can really be a sponsor for you, because those people are really just priceless.
Ceci Connolly: 32:14 Agreed. And I just want to thank Nancy-Ann Deparle for your incredible service over the many years, and for such a delightful conversation.
Nancy-Ann DeParle: 32:24 Thank you.
Lan Nguyen: 32:27 For more stories, tune into Her Story every Wednesday on YouTube, your favorite podcast platform, or by visiting thinkmedium.com/herstory.