Mandy Cohen’s Fight to Tame DHHS

When Dr. Mandy Cohen arrived in North Carolina to work for newly elected Gov. Roy Cooper, she’d earned a reputation for fixing screw-ups.

After the healthcare.gov website crashed on its first day in 2013, Cohen was brought in from the federal Centers for Medicare & Medicaid Services (CMS) to right the listing ship. Her performance made her a rising star and fast-tracked her through the ranks to CMS chief of staff and chief operating officer, and eventually led Cooper to make her secretary of North Carolina’s Department of Health and Human Services (DHHS).

Prior to the pandemic, most North Carolinians would have been hard-pressed to name or pick any DHHS secretary out of a lineup. But after the coronavirus hit, Cohen’s near-ubiquitous media presence changed that. Her bureaucratic problem-solving skills have been tested in real time while the whole state watched. It’s fair to say that her management of the logistical nightmare has been uneven at times, especially around the early days of the vaccine rollout, when distribution lagged and complaints piled up.

“The administration had 10 months to draft and refine a plan to distribute a vaccine that everybody in the world knew was in development, but they didn’t even effectively plan for something as simple as what to do when too many people call asking to schedule their vaccination,” Sen. Joyce Krawiec (R-Davie) said during a Senate oversight committee hearing in January.

Cohen and her team had drafted a plan back in the fall, however. And they stuck with it, even when they were derided by some for spending $1.2 million to build their own data-gathering tool in lieu of using the one made by the feds.

By mid-spring, when almost every state was being scrutinized for inequitable vaccine distribution, North Carolina’s COVID-19 Vaccine Management System had gathered data for 99.6 percent of those vaccinated; it showed North Carolina was one of the best-performing states for distributing vaccines evenly among Black and white residents. By late April, everybody who wanted a vaccine could get a vaccine. No appointment required.

In mid-March, Cohen took a brief victory lap with a visit to the FEMA vaccination site in Greensboro. In one of the few times she had been out and about since the start of the pandemic, she stopped to chat and pose for selfies with workers and those being vaccinated.

Brad Wilson, former general counsel for Gov. Jim Hunt and former CEO of Blue Cross and Blue Shield of North Carolina, calls it well-earned. “I think they have done an amazing job in an extraordinary and unimaginable environment,” said Wilson. “Based on my experience in state government, you cannot fully appreciate all of the complexity that they have had to face in this unique circumstance.”

It was a monumental feat to pull off, particularly for a department known for its unwieldy size and byzantine structure. More than 16,000 DHHS employees are spread across the state, divided into 30 divisions under four broad service areas—health, human services, administrative, and support functions. DHHS also oversees 14 physical facilities, including developmental centers, psychiatric hospitals, substance-abuse treatment centers, and two residential schools for children.

It’s a complicated, at times seemingly illogical design that has presented problems for nearly every secretary since the very beginning.

No state agency can boast a more scenic placement than the DHHS. For nearly 150 years, before the sprawling greenspace south of downtown Raleigh became Dix Park, the area was home to the state’s first psychiatric hospital, named after Dorothea Dix, the mental-health advocate who persuaded lawmakers to provide humane care for the mentally ill.

Over the years, Dix Hospital swallowed up surrounding land from Spring Hill Plantation and added new buildings for patient care, offices, shops, warehouses, and employee living quarters. Alongside the patients, who tended the farms, orchards, and livestock on the 2,300 acre property, were employees of the newly formed Department of Human Resources (DHR) who occupied dozens of the site’s 282 buildings.

It was the first iteration of the DHHS, created by the General Assembly in 1971 by combining more than 300 government agencies and departments, including Public Welfare, Public Health, and Mental Health. The department continued to expand and by 1978, included vocational rehabilitation, aging, rural health, and Medicaid oversight.

In 1989, DHR created a Deaf and Hard of Hearing division and moved Public Health to the Department of Environment, Health, and Natural Resources (now DENR), only to be transferred back to DHR in 1997 when it became DHHS. Other DHHS branches include the Division of Child Development (which became the Division of Child Development and Early Education in 2011). It’s a confusing origin story for an essential institution.

“The agency evolved as needs evolved,” said Ben Money, deputy secretary for health services. “It also is reflective of how federal agencies are organized, because in many respects we respond to federal resources, federal leadership, and direction and provide that type of guidance to our local health departments and county departments of social services.”

Yes, but the labyrinthine design, ever-changing responsibilities, and divisional musical chairs beg the question: Is DHHS too big to manage?

“I am not qualified to sit in judgment about whether it’s too big or too little,” said Wilson. “But I think it is a question worth asking: Is a 30-division structure the optimal structure for the department? Sometimes fragmentation actually introduces more inefficiency.”

DHHS’ massive footprint, enormous budget, and complex mission make it a managerial nightmare for even the most competent administrator. Secretaries tend to be medical doctors, healthcare lobbyists, legislators, or some combination of the three. Regardless of expertise, every leader has had to deal with crises and criticism. Only four secretaries have completed a four-year term, including Secretary Cohen, who already has the fourth-longest tenure in department history.

The first-ever NCDHHS secretary, orthopaedic surgeon Lenox Baker, served only one year. David Flaherty and Phil Kirk each served two nonconsecutive terms under Republican governors. During his first term, Gov. Jim Hunt appointed Sarah Morrow—the first female, and also the longest-serving, secretary. Every department secretary in the 21st century seemingly began their tenure tasked with fixing a particular problem.

Carmen Hooker Odom had been a Massachusetts state legislator and a healthcare lobbyist before serving as Gov. Mike Easley’s DHHS secretary. Following a 1999 Supreme Court decision requiring states to deinstitutionalize mental health, Hooker Odom was responsible for closing Dix Hospital and moving patients to community-based programs.

The closure dragged out for more than a decade, and the move to community care was both a PR and health care disaster. Reports of patients shunted into squalid rest homes receiving little or no treatment were overshadowed by accounts of elderly patients being raped by employees. One patient died after being left in his chair without food, water, or access to a bathroom for more than 22 hours.

Gov. Bev Perdue, a Democrat, was the first and last governor to take a bipartisanship approach when she appointed four-term Republican lawmaker Lanier Cansler as secretary to clean up the ongoing problems with the mental-health division.

For both secretaries, Hooker Odom and Cansler, the constant politics was draining. Perdue may have believed that the Republican-controlled General Assembly would be more amenable to dealing with a fellow Republican in Cansler. But temperatures remained high as the administration wrangled repeatedly with the General Assembly over Medicaid and other budget issues. One Republican even filed an ethics complaint against Cansler for conflict of interest.

Three years after taking the job, Cansler announced his resignation to a near-empty Senate chamber. Saying he’d grown frustrated by the “political contest” over funding Medicaid, he lambasted the partisanship and inability to get anything done.

“This is the most frustrating part of a job like this,” he said in an exit interview with North Carolina Health News. “I can individually sit down [with] the folks in the legislature and talk about the issues, and they will agree. But there’s also this partisanship, the legislature versus the governor. How do you get anything done when it becomes so personal?”

Hooker Odom says having a Democratic legislature didn’t save her from criticism. “The relationship between the legislative branch and the executive is tense, no matter who’s in control. You just swallow that and say, ‘I’m gonna figure out what went wrong, and we’ll take care of it.’”

The pattern of crisis continued into the Pat McCrory administration. His DHHS secretary, Aldona Wos, came in determined to privatize the entitlement, but was hampered by a series of blunders, mini-scandals, and federal lawsuits. A new Medicaid payment system that Wos introduced left healthcare providers and benefits recipients in the lurch for months. Two and a half years into the job, Wos stepped down to spend more time with her family.

So far, Cohen has earned a reputation as smart and hardworking. She is praised for her team building and for adding healthcare-policy advocates from the nonprofit sector to her team. Assistant Secretary for Government Affairs Matt Gross was the policy director for NC Child. Before becoming deputy secretary, Ben Money spent nearly 20 years with the North Carolina Community Health Center Association.

“One day she called me up and said, ‘Ben, I need you on my team.’ I thought that she was referring to me being critical of some departmental policy,” recalls Money. “I said, ‘Mandy you know I’m on your team.’ It’s just [that] I didn’t like this or I had a problem with that. Then she said, ‘No, I want you on my team here at DHHS!’”

Cooper gets credit for persuading Cohen to join his administration. Her Ivy League pedigree (including degrees from Cornell, Yale and Harvard)—plus her Obamacare and Centers for Medicare & Medicaid Services expertise—made her an attractive pick for a governor who campaigned relentlessly on expanding Medicaid. But it looked like a similar pattern of crisis, one that former DHHS secretaries had also been subject to, was ready to commence from the moment Cohen arrived.

Before Cooper was sworn in on January 1, state Republicans passed new laws during the lame-duck session requiring Senate confirmation for cabinet secretaries. Cooper sued. A three-judge panel ruled that the new confirmation requirement was legal, and Cooper quickly appealed.

So Cohen arrived at her March 29, 2017, confirmation hearing under subpoena. It was an inauspicious start for a secretary who had promised to bridge the partisan-trust divide. “We can work together … we can solve problems together and if we solve one, we can solve another,” she had told NC Health News weeks earlier.

Rose Hoban, founder and editor of NC Health News, said Cohen disarmed the opposition. “You could tell they anticipated, ‘Well, we need to take her down a peg,’ but when they were grilling her, it was obvious that she’d had substantive conversations with each and every one of them. By signaling this publicly, it was like she was challenging them to deny her this role.”

Throughout the hourlong hearing, Cohen emphasized her pragmatism and ability to get things done. Her nomination passed the committee by unanimous consent.

It hasn’t been as smooth sailing since. To date, North Carolina remains one of only 12 states that has not expanded Medicaid. Republicans have instead focused on “Medicaid Transformation,” which includes a shift from fee-for-service care to managed care provided by private health insurers.

Insurers will be given a lump sum for each person they cover, and can keep what’s unused. Advocates say this provides an incentive to direct those patients towards preventive care and away from unnecessary treatments and procedures and will lead to healthier patients and cost-savings. Some Democrats have argued the set-up can lead to lax oversight of billions of dollars of taxpayer money in the hands of private companies.

Medicaid Transformation became law in 2015, but Cooper’s 2016 victory pumped the brakes on implementation. Medicaid transformation was initially slated to begin in 2020, but in October 2019, Cooper vetoed the budget, as well as a separate funding bill aimed at funding the transformation. Having lost a supermajority in 2018, Republicans could no longer override his veto. Still, nine months later, the governor signed a bill funding transformation, effective July 2021.

“Everybody was getting tired of thinking about it,” said Sen. Mike Woodard, D-Durham. “The inevitability of it is what got a lot of us there and ultimately, I think, is what moved Dr. Cohen. She also gave me the confidence that she would be able to do it successfully. We said, ‘Let’s go ahead and get the best situation we can and get Dr. Cohen the resources they need.’”

Following a 2020 election that saw Democrats fail to flip either state legislative chamber, Cooper has appeared to seek a more conciliatory approach to Medicaid policy. This winter, he rolled out the North Carolina Council on Health Care Coverage, composed of legislators and business, nonprofit, and healthcare leaders tasked with envisioning an approach to Medicaid policy that both parties can stomach.

Medicaid open enrollment began on March 15 and ended on Friday, May 14. On July 1, the state’s largest public insurer will be run by private insurers.

Meanwhile, Cooper continues to push for Medicaid expansion. He used his State of the State address to tell Republicans that there was never a better time to increase Medicaid coverage, citing access to additional federal funds and the increased need for coverage among people who were thrown out of work during the pandemic. “Circumstances about Medicaid expansion have changed dramatically since we debated it in the last budget,” he said. “Let’s make a deal. Let’s get this done.”

Cohen’s tenure will always be deeply rooted in her pandemic response. Her constant repetition of the 3Ws (wash your hands, wear a mask, and wait six feet apart) might be foremost in people’s minds. As will the delicate dance she and the agency she led had to play managing a 100 county response. Local health directors alternated over the past year between criticizing Cohen for being both too hands off and too heavy-handed, sometimes through the grapevine and sometimes in the media.

“There’s absolutely an imperative that the secretary and the individual division heads have good relationships with the counties and other county departments. Otherwise, what should be creative tension can become dysfunctional,” says Hooker Odom.

But now, as the pandemic recedes, those same relationships will be tested in new ways as Medicaid once again resumes its primacy on the state’s health care agenda and DHHS enters a more public phase of its next logistical and managerial nightmare: transforming Medicaid and moving more than 1.5 million enrollees to managed care.