National Partnership for Reinventing Government
(formerly National Performance Review)

Reinvention Express

May 15, 1995 Vol. 1, No. 8

An Information Sheet for Federal Communicators, Managers, Workers, and Their Partners--Pass It On

Vice President, Secretary Shalala Announce Health and Human Services Reinvention Plans

Vice President Al Gore joined with Secretary Donna E. Shalala on May 11 in announcing a streamlined Department of Health and Human Services of the future that will foster public and private partnerships to protect the general welfare and improve services for Americans. The announcement was made before a large audience of departmental employees, including thousands who were linked by satellite and audio hookup nationwide.

"All across the federal government, we are cutting back to basics to save money and serve better," the Vice President said. "At HHS, this means consolidating programs to give state and local communities increased flexibility, targeting Medicare abuse and misuse, and privatizing certain functions."

Secretary Shalala said, "The reinventing government effort has been a special opportunity to bring about changes that make sense, and to try new approaches." The plan will reduce the HHS workforce by 2,400 by the year 2000, but the Secretary said current employees would not lose their jobs.

HHS's Plan Will Streamline, Save, Serve

Specifically, HHS will:

o combine the Office of the Secretary and the Office of the Assistant Secretary for Health to eliminate an entire organizational layer of management;

o consolidate 107 Public Health Service (PHS) activities into five Performance Partnerships and eleven consolidated grants to give states and local communities more flexibility;

o coordinate service information for seniors in the Administration on Aging; and

o merge two PHS agencies: the Agency for Toxic Substances and Disease Registry and the Centers for Disease Control and Prevention.

Earlier, President Clinton and Vice President Gore announced another HHS reinvention effort, Operation Restore Trust, to combat Medicare and Medicaid fraud, waste, and abuse in California, Florida, New York, Texas, Illinois.

The HHS plan is expected to save $453 million by the year 2000.

What Went Before

HHS's reinvention effort is part of REGO II, the second phase of the National Performance Review, which has already proposed savings of more than $37 billion and resulted in the reduction of more than 102,000 full-time positions.

REGO II began in December when President Clinton called on Vice President Gore toeview every single government program and department for further possible reductions to identify areas that could be completely eliminated or significantly streamlined, or where the private sector or state and local governments could better serve the American people.

Agencies Explore Privatization Options

"Federal agencies have done a whole bunch of things to unclutter their plate," said Wally Keene, who leads NPR's Privatization Team. "However we do it, it's part of 'getting back to basics' that's been the NPR approach since day one."

Some activities--like consolidating and turning activities over to states--are fairly familiar. But privatization and franchising options are not as common and have often been more difficult for federal agencies to explore. "Further, it's clear that 'privatization' means different things to different people," Wally said. "We may want to refer to 'privatization' by another name, such as 'competition and choice.'" GSA Deputy Administrator Julia Stasch says that REGO II is "not a privatization exercise....This is a most cost-effective alternative exercise. It would be irresponsible to do privatization for the sake of privatization. Privatization itself is not the goal. It's only a tool."

Proposed Federal Privatization Activities

Here are some proposed federal activities:

o Transportation would convert Air Traffic Control to a government corporation.
o Office of Personnel Management would privatize its background investigations and training.
o Energy would sell the Naval Petroleum Reserves at Elk Hills and Teapot Dome to industry.
o Health and Human Services would contract out its federal employees occupational health program.

Wally and his team are coordinating a variety of activities and preparing documents to help federal organizations understand what privatization is all about and how to explore various issues and options. Copies of their draft Privatization Resource Guide and Status Report is being distributed widely. Call NPR at (202) 632-0150 to get copy. It's also on Internet. Gopher to; select Americans Communicating Electronically; select Phase II; and finally, select Privatization.

Privatization Calendar

o May 23 (Dallas) and June 6 (Atlanta): How to Win with Competitive Government sponsored by the National Council on Public-Private Partnerships. (404) 618-0499.
o June 12-13, Arlington, VA: 1995 Franchising Workshop. FAX (202) 273-4670.
o June 19-20, Washington, DC: Strategic Outsourcing for Government. (800) 882-8684.
o June 28-29, Washington, DC: Senior Executive Association's conference on Executive Survival Skills includes a panel on privatization. (202) 927-7000.
o July 31-Aug. 3, Washington, DC: Eighth Annual National Conference on Federal Quality includes an NPR panel on privatization. Conference update line: (202) 376-5041.

For more information, contact Pat Wood, Communications Team, National Performance Review, 750-17th St., NW, Washington, DC 20006. Phone: (202) 632-0150, ext. 102; FAX: (202) 632-0390; email:

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