HCFA ADMINISTRATOR CANDIDATE DREW ALTMAN

HCFA ADMINISTRATOR CANDIDATE DREW ALTMAN, New Jersey Commissioner of Human Services, is HHS Secretary Louis Sullivan's top choice for the Health Care Financing Administration's top post. Altman was expected to meet with the secretary during an April 27-28 visit to Washington, D.C. He is also expected to test the waters for nomnation through interviews with Washington health groups.

Altman is described as the front runner on a short list of potential candidates Sullivan sent to the White House April 21. Altman's tie to Sullivan developed when the two worked together during Altman's stint with the Robert Wood Johnson Foundation and Sullivan's tenure at Morehouse Medical School. Altman served at the RWJ Foundation from April 1981 to June 1986, first as assistant vice president and then as a vice president beginning in July 1984.

While Altman appears to be working to gain ground as a potential nominee, he is battling two key obstacles: industry groups suggest his government experience may have given him a penchant for regulatory approaches to health care problems and he may not have sufficient conservative credentials to satisfy some top White House officials. Some opposition could be buffered by Altman's reported backing by New Jersey Gov. Thomas Kean (R), an early and strong supporter of President George Bush.

Altman is characterized as a "liberal" Republican. He served for two and one-half years at the Health Care Financing Administration as assistant to the deputy administrator. His previous HCFA tenure was under the Carter Administration.

Another potential problem for Altman is that New Jersey's Division of Developmental Disabilities -- one of five agencies that Altman oversees -- allegedly spent $ 15-30 mil. without official authorization and the funds have not been made up. The missing funds have been widely reported in New Jersey newspapers in recent weeks. Altman apparently was not directly involved in the spending, and has fired suspected division employees and promised a full investigation of the matter.

Working in Altman's favor are his relationship with Sullivan; his background in issues related to AIDS and Medicaid, two stated priorities of the President; and a reputation among a number of health policy observers as an advocate of innovative health programs.

Serving in his present post since 1986, Altman oversees New Jersey's Medicaid and welfare programs, mental health institutions, developmental centers and youth residential programs. He is credited with developing a cost-saving program called "REACH" -- "Realizing Economic Achievement" -- which extends health care coverage for one year to working mothers (and their children) after the mothers leave the welfare rolls. Also during Altman's tenure, the "Garden State Health Plan" was implemented. It provides a health maintenance organization option for Medicaid enrollees. Another initiative was a Medicaid waiver to provide home health care to patients with AIDS and AIDS-related complex.

A number of other names also have surfaced as contenders for the top HCFA slot. They include Sheila Smythe, senior health policy analyst at the General Accounting Office; Chip Kahn, a Republican staffer on the House Ways & Means health subcommittee; and Kenneth Kizer, director of health services for California. Kahn recently withdrew from the running for HHS assistant secretary for planning and evaluation. Kizer, a physician, oversees California's Medicaid and public health programs (see related story, p. 13).