Most of the money the industry spent from Jan. 1, 2017, through Nov. 30, 2020, funded the defeat of two union-backed ballot measures that would have regulated dialysis clinics — and eaten into their profits.

This article was published on Thursday, December 10, 2020 in Kaiser Health News.

 SACRAMENTO — The nation's dialysis industry has poured $233 million into California campaigns over the past four years, establishing its leading companies as a formidable political force eager to protect their bottom line and influence state policy.

Most of the money the industry spent from Jan. 1, 2017, through Nov. 30, 2020, funded the defeat of two union-backed ballot measures that would have regulated dialysis clinics — and eaten into their profits. But the companies and their trade association also stepped up their offense, dedicating about $16.4 million to lobbying and political contributions during the same period, a California Healthline analysis of state campaign finance records shows.

Nearly every member of the legislature, Democratic Gov. Gavin Newsom and his predecessor, former Gov. Jerry Brown, the Democratic and Republican parties, and dozens of political campaigns — including some local school board and city council races — received a contribution from a dialysis company.

"These are very large, very profitable companies," said Mark Stephens, founder of Prima Health Analytics, a health economics research and consulting firm. "They have a lot to lose. The fear would be that if some of this stuff passed in California, the union would certainly try to get similar measures on the ballot or in the legislatures in other states. The stakes are higher than just California for them."

Staking Ground in Sacramento

California has about 600 dialysis clinics, which are visited by an estimated 80,000 patients each month, typically three times a week. At the clinics, patients are hooked up to machines that filter toxins and remove excess fluid from their blood because their kidneys can no longer do the job.

Medicare, which covers most dialysis patients, pays a base rate of $239.33 for each dialysis treatment.

DaVita and Fresenius Medical Care North America are the largest dialysis providers in the state and country, operating roughly 80% of clinics nationwide. Last year, DaVita reported $811 million in net income, on revenue of $11.4 billion. Fresenius posted $2 billion in operating income on revenue of $13.6 billion.

DaVita was responsible for about $143 million — or more than three-fifths — of the political spending in the past four years, and Fresenius gave about $68 million.

Until four years ago, the dialysis industry's political spending was relatively modest compared with that of the hospital, physician and other health care associations so well known in Sacramento. In those days, dialysis lobbyists focused on regulatory issues and health care reimbursement rates, and companies gave minimal campaign contributions.

The industry's transformation into one of the biggest spenders in California politics began in 2017, the first of four years in which it faced ballot or legislative threats. In 2017, a Democratic lawmaker introduced a bill that would have set strict staff ratios at dialysis clinics. The bill, SB-349, which failed, had faced opposition from the California Hospital Association, the California Chamber of Commerce and the dialysis industry.

The SEIU-United Healthcare Workers West union (SEIU-UHW) followed the next year with Proposition 8, a ballot initiative that would have capped industry profits.

DaVita and Fresenius were forced to defend their huge profits and allegations of subpar patient care, turning the competitors into allies — at least in politics.

The industry spent $111 million to successfully defeat the measure, breaking the record for spending by one side on an initiative.

"I think it's very natural for these private chains to spend millions to make billions of profits," said Ryan McDevitt, associate professor of economics at Duke University. "They're lobbying to protect their profits."

Last year, the industry fought AB-290, a bill that aimed to stop a billing practice dialysis companies use to get higher insurance reimbursements for some low-income patients. But the legislature wasn't swayed, and Newsom signed the bill into law, which is now tied up in federal court.

And this year, the industry spent $105 million to block Proposition 23, which would have required every clinic have a physician on site and institute other patient safety protocols.

Kent Thiry, the former chairman and CEO of DaVita, said the industry had no choice but to spend heavily to defeat the ballot measures, which he said would have increased costs and harmed patient care.

"When someone does that, you have to use some of your money to defend yourself, your patients and your teammates," Thiry said in an interview with KHN, which publishes California Healthline. "It forces companies to allocate precious resources to do something that never should have been brought up to start with."

In an emailed statement, DaVita said it would continue to work to "educate lawmakers and defend against policy measures that are harmful to our patients." Fresenius also defended its advocacy, saying the company needs to protect itself against special interests intent on abusing the political system. The company will "continue to support legislation that improves access to quality care and improves patient outcomes," said Brad Puffer, a company spokesperson.

By comparison, SEIU-UHW, which sponsored the ballot measures, spent about $25 million to advocate for the initiatives, and $7.8 million on lobbying and political contributions. The union lobbies lawmakers on a wide array of health care issues

"They've got tons of money. We understand that," said Dave Regan, the union's president. "We've seen them spend a quarter of a billion dollars in a very short period of time. I hope they're prepared to spend another quarter of a billion dollars, because we're not going to go away until there's legitimate commonsense reforms to this industry."

From Defense to Offense

While most of dialysis companies' political spending in California has been used to defeat ballot measures, several of the largest companies also dedicated about $16.4 million to lobbying and political contributions over the past four years.

The companies and their trade association, the California Dialysis Council, put almost three-fourths of that — nearly $12 million — into hiring veteran lobbyists to advocate for dialysis companies when lawmakers consider legislation that could affect the industry.

For instance, when Newsom took office in 2019, both DaVita and Fresenius added Axiom Advisors to their lobbying teams, paying it $737,500 since then. One of the firm's partners is Newsom's longtime friend Jason Kinney, whose close relationship with the governor was highlighted by the recent French Laundry dinner fiasco. Newsom came under intense criticism for attending the early November dinner at the exclusive restaurant, held to celebrate Kinney's birthday, because he and his administration were asking Californians not to gather.

The industry has also given at least $4.6 million in contributions to political candidates and committees, both directly and to entities on behalf of a lawmaker or candidate.

All but five state senators and Assembly members who served during the 2019-20 legislative session received a direct contribution from at least one of the companies or the California Dialysis Council.

Most of the donations to individuals went to state lawmakers, but DaVita dipped into local races, too. For instance, it contributed $10,000 to a Glendale city council candidate in February, $7,700 to an El Monte school board candidate in October and $3,500 to a Signal Hill city council candidate last year.

Dialysis companies also gave to the state Democratic and Republican parties.

"They're spreading it out. They're doing the full gambit," said Bob Stern, former general counsel for the California Fair Political Practices Commission, which enforces state political campaign and lobbying laws.

Legal Loopholes

State law limits how much a company or person can give to a political candidate in an election, but there are legal loopholes that allow individuals and corporate interests to give more. The dialysis industry has taken advantage of them.

Under state campaign finance rules, lawmakers can accept only $4,700 from any one person or company per election.

But some lawmakers operate "ballot measure committees" so they can accept unlimited contributions. These committees are supposed to advocate for a ballot measure, but lawmakers often use them to pay for political consultants and marketing, and to contribute to state and local initiatives they support. Candidates can also get unlimited help from donors who independently pay for campaign costs, such as mailings and digital campaign ads.

For instance, DaVita chipped in $93,505 to help pay for a direct mail campaign on behalf of state Sen. Steve Glazer (D-Orinda) in this year's primary election. Glazer also received $55,600 from DaVita, Fresenius and the California Dialysis Council in contributions to himself and his ballot committee, Citizens for a Better California.

In some cases, lawmakers such as Glazer who netted some of the biggest contributions from dialysis companies voted with the industry. That was the case last year when the legislature approved AB-290, the bill limiting the dialysis billing practice.

Glazer voted no, as did Assembly member Adam Gray (D-Merced), whose Valley Solutions ballot measure committee had received $112,500 from DaVita and Fresenius since 2017. Gray also received $36,900 in direct contributions from Fresenius, DaVita and U.S. Renal Care.

Gray issued a statement saying campaign contributions play "zero role" in how he represents his district. Glazer did not respond to a request for comment.

Targeting Legislative Adversaries

Assembly member Reggie Jones-Sawyer's 84-year-old mother is on dialysis. The Los Angeles Democrat and SEIU-UHW member has called for improved staffing ratios at dialysis clinics and has voted repeatedly to regulate them.

DaVita wrote a $249,000 check in October to a political committee supporting Jones-Sawyer's opponent, Efren Martinez, another Democrat, but one the industry considered more friendly. DaVita followed up with a $15,000 check the week before the election.

Jones-Sawyer, who won the race, said he's frustrated dialysis companies aren't willing to make changes to improve patient safety on their own, saying it would cost them far less than the nearly quarter-billion dollars they have spent on political contributions. So for now, he said, he will continue to push to improve conditions at dialysis clinics from the Capitol, despite the industry's growing political clout.

"I think dialysis is saying, 'Look, we can be the 800-pound gorilla now,'" Sawyer said. "It's not just influence for a day; it's longevity."

Rae Ellen Bichell and Elizabeth Lucas of KHN contributed to this report.

Methodology

How California Healthline compiled data about dialysis companies' political spending

Among the ways dialysis companies exert influence on the political process is by contributing money to campaigns; hiring lobbyists; and paying for advertising and marketing on behalf of candidates.

Opposition to ballot measures: Using the California secretary of state's website, California Healthline downloaded the contributions made by DaVita, Fresenius Medical Care North America, U.S. Renal Care, Satellite Healthcare, Dialysis Clinic Inc. and American Renal Management to the campaign committees formed to defeat Propositions 8 and 23. This includes some non-monetary contributions.

Lobbying: We created a spreadsheet of expenses reported on lobbying disclosure forms, also available on the secretary of state's website, by DaVita, Fresenius, U.S. Renal Care, Satellite Healthcare and the California Dialysis Council. We found details about how much the industry paid lobbying firms, what agencies it lobbied and which bills it tracked.

Political contributions: DaVita, Fresenius, U.S. Renal Care and the California Dialysis Council made direct contributions to more than 100 candidates, which we compiled from the secretary of state's website. DaVita and Fresenius made other contributions, often large, to Democratic and Republican committees, and ballot measure committees led by lawmakers. The two companies also made contributions known as "independent expenditures" that benefited candidates' campaigns and "behested payments," which are donations to nonprofit organizations and charities in lawmakers' names. Behested payments are disclosed on the California Fair Political Practices Commission website.

The SEIU-United Health Care West union uses two political committees for its giving. Its PAC contributes mostly to lawmakers and county and state Democratic parties while its Issues Committee gives to local hospital ballot measures. We did not tally spending for local hospital ballot measures for this story, but we did include contributions made by the Issues Committee to the California Democratic Party, which helps state lawmakers.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Samantha Young: syoung@kff.org, @youngsamantha

The move has met a fierce backlash from health providers and consumer advocates who fear it would hamstring federal health officials while they seek to control the COVID-19 pandemic.

This article was published on Thursday, December 10, 2020 in Kaiser Health News.

By Phil Galewitz

The Trump administration wants to require the Department of Health and Human Services to review most of its regulations by 2023 — and automatically void those not assessed in time.

A proposed rule would require HHS to analyze within 24 months about 2,400 regulations — rules that affect tens of millions of Americans on everything from Medicare benefits to prescription drug approvals.

The move has met a fierce backlash from health providers and consumer advocates who fear it would hamstring federal health officials while they seek to control the COVID-19 pandemic, which has killed more than 250,000 Americans.

The HHS proposal appears designed to tie up the incoming Biden administration, say critics. They note the timing of the proposal, which was issued Nov. 4 — the day after Election Day, when it appeared President Donald Trump would likely lose his bid for a second term.

"The cynical part of me thinks this is a perfectly designed way to bring the department to a standstill in the next administration," said Mary Nelle Trefz, health policy associate at Common Good Iowa, a consumer advocacy group.

She said HHS does not have the bandwidth to review all these regulations during the next two years while running its many programs, including Medicaid and Medicare.

If the proposal is finalized before Jan. 20, it is likely to be undone by the incoming Biden administration. But the chore would add to duties of HHS officials trying to attack the pandemic, she said.

HHS officials deny their proposal was aimed at the Biden administration. Brian Harrison, chief of staff at the department, said he first sought legal review of the proposal in April. "Our lawyers moved as fast as they could," he said, and the rule was written with the expectation it would be implemented during Trump's second term.

"The outcome of the election had nothing to do with it," he said.

Democrats and Republicans for the past 40 years have failed to review existing regulations, leaving unnecessary and irrelevant rules on the books, Harrison said.

But Andy Schneider, a research professor at the Center for Children and Families at Georgetown University who has written about the proposal, said he fears the sunset provision will be one of many actions the Trump team will take to distract the incoming administration.

"It speaks volumes that they waited until the end of the fourth year of the administration to decide that the regulatory process needs to be improved," he said.

Incoming administrations have typically frozen new rules that were pending but have not taken effect before Inauguration Day. That gives new administrations time to unwind them.

Efforts to enact reviews of funding bills and other legislation, known as sunset clauses, have been popular among conservatives for years. The federal government has occasionally used sunset provisions in legislation, such as the tax cuts enacted during the George W. Bush administration, but it is rare to make department regulations subject to these types of mandatory deadlines.

The option is more popular among states, which have adopted varying procedures for measures passed by the legislatures or regulatory boards. Those efforts run the gamut from requiring most initiatives to be reviewed to identifying specific agencies or legislation that must be reconsidered on a regular timetable.

HHS accepted public comments on the proposal though Dec. 4, except on part of the rule affecting Medicare regulations, which has a Jan. 4 deadline. A final rule is expected before Biden becomes president on Jan. 20.

HHS officials don't point to any specific regulations they say are outdated. However, in their supporting material for the proposal, they note in part:

"An artificial-intelligence-driven data analysis of HHS regulations found that 85 percent of department regulations created before 1990 have not been edited; the Department has nearly 300 broken citation references in the Code of Federal Regulations, meaning CFR sections that reference other CFR sections that no longer exist."

Harrison said the scarcity of reviews is due to "inertia" and "lack of an incentive mechanism."

"Many presidents have formally ordered their agencies to review existing regulations, and it has been existing law for 40 years, so simply asking the divisions to review these regulations has been tried for decades and proven to be ineffective," Harrison said.

"We need to incentivize their behaviors," he said.

With more than 80,000 employees, the department should be able to complete the review of 2,400 rules in 24 months, he added.

Harrison said the proposal is authorized by a law signed by President Jimmy Carter in the late 1970s requiring federal agencies to review existing rules. But that law has no provision that calls for cutting regulations that are not reviewed within a certain time frame, Schneider said.

The proposal says the HHS secretary would have flexibility to stop some regulations from being eliminated "on a case by case basis."

HHS estimates the reviews would cost up to $19 million over two years. Regulations would have to be reviewed every 10 years under the proposal.

When he took office in 2017, Trump vowed that for every regulation his administration issued, it would remove two. In July, he said his administration had more than exceeded that goal.

"For every one new regulation added, nearly eight federal regulations have been terminated," he said in a Rose Garden speech. The Washington Post Fact Checker said that claim was based on "dubious math and values each regulation as having equal weight."

One of the few groups to endorse the HHS proposal is the National Federation of Independent Business. The group said the proposal would alleviate regulatory burdens on small businesses.

But other groups, such as the American Academy of Neurology, suggest the proposed rule would limit input from interest groups on changes to existing regulations, because it would not follow the usual process of seeking public comments when altering rules. "The AAN is highly supportive of the current process to modify and rescind regulations through the notice and comment period, as it affords stakeholders the necessary opportunity to provide feedback on proposed regulations prior to changes being implemented," the group told HHS.

The Medicaid and CHIP Payment and Access Commission, which advises Congress, opposes the proposal. "MACPAC questions the need for a proposed rule that creates a duplicative and administratively burdensome new process that is likely to create confusion for beneficiaries, states, providers, and managed care plans," the group said in a letter to HHS. "The new requirements will create additional unnecessary work that will distract the department and CMS from the critical roles they play in our health care system, Medicaid and CHIP amid the pandemic and its resulting economic challenges."

It's unclear how the proposed rule would affect long-standing regulations for product safety and standards, said Betsy Booren, senior vice president of the food lobbying group Consumer Brands Association. "The idea that these regulations would be sunset because a regulations timer went too long is not acceptable," she wrote in comments on the proposed rule.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Committees responsible for vetting HHS nominations may not hold hearings on Biden's pick to lead HHS, until the Senate approves organizational details for the new Congress.

This article was published on Tuesday, December 8, 2020 in Kaiser Health News.

By Emmarie Huetteman

Senate Republicans are signaling they will delay considering President-elect Joe Biden's nominee to run the Department of Health and Human Services, threatening to slow the Biden administration's response to the pandemic that has killed more than 283,000 Americans.

On Monday, Republican spokespeople for the committees responsible for vetting HHS nominations said the Senate may not hold hearings on California Attorney General Xavier Becerra, Biden's pick to lead the department, until the Senate approves committee assignments and other organizational details for the new Congress.

Republicans, who will hold at least 50 seats next year, remain in control of the Senate until Jan. 20. But Georgia has two Senate runoff elections scheduled for Jan. 5, and those results will determine which party controls the chamber in the new, 117th Congress.

Political observers say the results could take days or even weeks.

"Every day is a wasted day," said Kathleen Sebelius, who served as President Barack Obama's first HHS secretary. (Sebelius is on the board of KFF, and KHN is an editorially independent program of KFF.)

On Monday, Biden announced he has asked Becerra to serve as HHS secretary. Becerra mounted a vigorous defense of Democratic health laws against the Trump administration and other Republicans. He led the effort by 20 states and the District of Columbia to fight a suit brought by Republican state officials and supported by President Donald Trump to overturn the Affordable Care Act. That case was argued before the Supreme Court last month.

The early reaction from Republicans signaled Becerra could face strong political opposition to his nomination, with critics like Arkansas Sen. Tom Cotton citing Becerra's opposition to abortion restrictions and calling him "unqualified" to lead HHS.

"I'll be voting no, and Becerra should be rejected by the Senate," he wrote on Twitter. Becerra also supported single-payer healthcare reform.

In addition, Biden intends to name Dr. Rochelle Walensky, chief of infectious diseases at Massachusetts General Hospital, as the head of the Centers for Disease Control and Prevention, and private equity executive Jeffrey Zients to be his COVID "czar" heading up a task force in the White House. Those jobs do not require Senate confirmation. Biden is nominating Dr. Vivek Murthy as surgeon general, who must face hearings before the Senate.

Becerra would be the first Latino to lead HHS. Before becoming attorney general, he served in the House of Representatives, representing Los Angeles for 24 years. There, he was a member of Democratic leadership and served on the Ways and Means Committee, the House committee charged with writing health-related tax policy.

Becerra returned to California in 2017, replacing the outgoing attorney general who had just been elected to the Senate — now Vice President-elect Kamala Harris.

The HHS secretary is responsible for one of the federal government's largest departments, coordinating not only the Centers for Medicare & Medicaid Services but also the Food and Drug Administration and the CDC — agencies critical to the nation's pandemic response.

Although Biden has created his own task force to address the pandemic, the White House lacks many of the powers of the HHS secretary — including the authority to implement its own recommendations, said Donna Shalala, who served as HHS secretary under President Bill Clinton for eight years.

"Any delay [in confirmation] delays COVID, despite a strong White House coordination," Shalala said, "because you've got to get the agencies in sync and you can't do that from the White House."

In 2009, as H1N1 flu began to spread and Obama's first HHS pick withdrew from consideration, the administration was forced to improvise. With no confirmed health secretary, Obama turned to Janet Napolitano, the Homeland Security secretary, to coordinate a plan to distribute vaccines with the CDC.

Sebelius was sworn in as HHS secretary in late April, two days after the Obama administration declared H1N1 a public health emergency.

It would be hard to mount a pandemic response without a secretary, she said. "That pressure falls on Congress," Sebelius said. "There's just a sense we can't screw around with this."

She also added that the Obama administration did not pursue any lower-level health appointments before confirming the secretary, a protocol that left many offices vacant. She expects Biden will follow the same process.

The Senate can, and often does, begin considering nominees before a new president is sworn in, in particular by arranging one-on-one meetings for senators and examining a nominee's qualifications and background. Presidents Donald Trump and George W. Bush's nominees for HHS secretary both received confirmation hearings before Inauguration Day, though Democrats later fought Trump's nominee, then-Rep. Tom Price (R-Ga.), by boycotting his committee vote.

Republicans say that until the Senate approves what is known as an organizing resolution, which formalizes details like which senators sit on which committees, they cannot move forward with confirmation hearings.

A further complication is that while Republicans already control the two committees tasked with vetting an HHS secretary, neither chairman is staying in that job next year. Sen. Lamar Alexander of Tennessee, who runs the Health, Education, Labor and Pensions Committee, is retiring from Congress. And due to term limits, Iowa Sen. Chuck Grassley, who runs the Finance Committee, will move to a different committee.

Senate Democrats, who would take control of the confirmation process next month should they win both of Georgia's Senate seats, praised the selection of Becerra and promised to push for a speedy process.

Becerra "has been a staunch defender of affordable healthcare and preexisting condition protections in the face of Trump's attacks in court and federal regulation," said Oregon Sen. Ron Wyden, the Finance Committee's top Democrat. "I look forward to Attorney General Becerra's hearing in the Finance Committee as soon as possible next year, so he is on the job quickly."

"Xavier Becerra is a highly qualified nominee, and I will be pushing for a swift, fair confirmation so we can get to work on the serious health issues our nation faces," said Sen. Patty Murray of Washington, the HELP Committee's top Democrat.

If Democrats win both of the Georgia elections next month, the Senate would be evenly split 50-50, likely leading to debates about how to divide control and distracting senators from nomination hearings.

When that happened in 2001, Senate Democrats held the majority for a couple of weeks until Bush was sworn in, making Vice President Dick Cheney the tie-breaking vote and giving Republicans the majority on Jan. 20. Bush's first HHS secretary, Tommy Thompson, was confirmed four days later.

Bill Dauster, who advised Democrats on the Senate's procedural rules for decades, said that the split took a long time to negotiate in 2001 but that it left behind a model that senators can use today.

Senate Republicans could follow the precedent of holding hearings before the inauguration, especially due to the urgency of responding to the pandemic, Dauster said.

"If they don't, it will clearly be foot-dragging," he said.

Emmarie Huetteman: ehuetteman@kff.org, @emmarieDC

Although he would bring years of health politics and policy work to the role, none of it comes from front-line experience as an executive or administrator running public health programs, managing patient care or controlling the spread of disease.

This article was published on Tuesday, December 8, 2020 in Kaiser Health News.

By Rachana Pradhan and Angela Hart and Julie Rovner and Jenny Gold

Xavier Becerra, President-elect Joe Biden's choice to head the Department of Health and Human Services, is set to be a pandemic-era secretary with no public health experience. Whether that matters depends on whom you ask.

Becerra built his career in the U.S. House of Representatives before becoming California's attorney general, and some wonder whether his political and legal skills would be the right fit to steer HHS through a health catastrophe that's killing thousands of Americans every day.

Although he would bring years of health politics and policy work to the role, none of it comes from front-line experience as an executive or administrator running public health programs, managing patient care or controlling the spread of disease.

Yet beyond the immediate COVID-19 crisis, many Democrats see Becerra as an important ally to undo what they view as years of damage from the Trump administration's efforts to undermine the Affordable Care Act; the Medicaid program, which provides coverage for more than 70 million Americans; reproductive health; and more.

As California's attorney general since 2017, Becerra has been a thorn in the side of the Trump administration, filing 107 lawsuits to overturn federal action on the Affordable Care Act, contraception, immigration, workers' rights, LGBT rights, education, consumer protection, gun violence and the environment.

"COVID is the biggest issue on the table, but it is not the only issue on the table," said Dr. Georges Benjamin, executive director of the American Public Health Association. "If you look at his body of work, he is not your traditional attorney. His body of work in the health area is substantial. And I think that counts."

On Tuesday, Biden will formally introduce Becerra along with other candidates for top health jobs, many with deep public health experience.

They include Dr. Rochelle Walensky, an infectious disease expert at Harvard Medical School who practices at Massachusetts General Hospital in Boston, as the next director of the Centers for Disease Control and Prevention. Biden's choice for COVID "czar" is Jeffrey Zients, a private equity executive and former Obama administration official who will steer the pandemic response from the White House. Dr. Vivek Murthy is the nominee for U.S. surgeon general, a position he held in the final Obama years.

Biden has said he will let the federal government's longtime scientists guide his pandemic response, in particular those at the CDC, which is overseen by HHS. President Donald Trump sidelined the agency, damaging its reputation as the world's most trusted public health institution.

That Becerra's deepest experience is political makes some observers wary.

"I think there's always a danger of letting that sort of cloud the scientific and medical judgment of how best to do things. I hope they can manage that well," said Jeffrey Morris, a biostatistics professor at the University of Pennsylvania who has worked on COVID issues. He said he had mixed feelings about the Becerra selection. "What is the leadership style, and is there going to be micromanaging from the top down into these organizations? To me, that's the key aspect."

Garry South, a Los Angeles-based Democratic strategist, called Becerra's appointment "curious."

"A lot of people are raising eyebrows — even those who are pleased and proud that Biden picked another Californian to join his administration," South said. "If Republicans are looking to target a few Biden appointees for rejection, you can expect them to make the case that there is no logical nexus between a state attorney general and serving as secretary of Health and Human Services."

Still, Becerra, who as a member of Congress worked in the House Democratic leadership and was a member of the powerful Ways and Means Committee, has more health policy background and knowledge of U.S. healthcare finance and delivery systems than many previous heads of the sprawling HHS, which employs more than 80,000 people and has a $1.3 trillion budget.

For three years, Becerra has managed California's Justice Department, with a $1.1 billion budget and 4,800 employees. As attorney general, he's been deeply involved in crafting health policy. His office has gone after anti-competitive behavior from hospitals. And he's sponsored legislation to take on drugmakers and pay-for-delay schemes.

"He's gone after powerful healthcare interests," said Anthony Wright, executive director of the nonprofit Health Access California.

Antitrust enforcement is more commonly handled by the U.S. Department of Justice and the Federal Trade Commission. But Becerra made it a priority as California's top cop. In May 2018, he brought an antitrust case against nonprofit healthcare giant Sutter Health, accusing the system of monopolistic practices that drove up the cost of medical care in Northern California.

"This is a big 'F' deal," Becerra said at a news conference unveiling the lawsuit. The case — which encompassed years of work by the department and his predecessors and millions of pages of documents — alleged that Sutter had aggressively bought up hospitals and physician practices across the region and illegally exploited that market power for profit. Healthcare costs in Northern California, where Sutter dominates with its 24 hospitals, are 20% to 30% higher than in Southern California, even after adjusting for Northern California's higher cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley that was cited in the complaint.

In December 2019, Sutter agreed to pay $575 million to settle the case and promised to end a host of practices that Becerra alleged stifled competition.

Becerra channeled lessons learned from the Sutter case into an antitrust bill in the California legislature. The legislation ultimately failed, but it would have given the attorney general power to review private equity- or hedge fund-led mergers or acquisitions of a healthcare system or hospital.

"The Sutter case is a blueprint for a national policy that could start to restore competition for the healthcare system and save American healthcare consumers billions of dollars right away," said Glenn Melnick, a healthcare economist at the University of Southern California. He views Becerra as "a real expert in some of the most important issues facing our healthcare system, not just in California but nationally."

If confirmed by the Senate, Becerra supporters say, he will bring to the job a political acumen from his two decades-plus on Capitol Hill that's likely to be an asset for the Biden administration as it negotiates pandemic relief bills and other health legislation with a politically divided Congress.

Former California Democratic member of Congress Henry Waxman worked with nearly a dozen HHS secretaries during his time on the House Energy and Commerce Committee. He said he's not worried that Becerra lacks experience leading a vast healthcare bureaucracy. The HHS secretary job, he said, is one "where you need political skills to see how far you can get with other people in a political context." That's why most HHS secretaries, Republicans and Democrats, have had political backgrounds.

Becerra "understands the policies and has a deep commitment to them," he said. "I think he'll do well."

Public health officials say the job before Becerra is gigantic.

Dr. Gary Pace, the health officer in rural Lake County, California, said Becerra would be tasked with rebuilding a broken public health system.

"We want a federal partner who can give us good guidance — we haven't had that," Pace said. "For him, I'd say what we need first is starting to get the CDC back into a flagship public health role, with trusted and timely evidence-based guidance."

Born in Sacramento to Mexican immigrant parents, Becerra would be the first Latino HHS secretary. He was elected to Congress in his 30s and has been involved in national health legislation during the past two decades, even though he is more widely known for his involvement in immigration and tax issues. He joined the powerful House Ways and Means Committee, which oversees tax and health legislation, in the 1990s. The committee played a central role in the drafting of what would become the Affordable Care Act in 2010.

While HHS oversees major federal health agencies, including the CDC, the Centers for Medicare & Medicaid Services, the Food and Drug Administration and the National Institutes of Health, it also has a wide-ranging human services portfolio, including oversight of child care and welfare programs, Head Start, programs for seniors and refugee resettlement.

"It's not like any one person is going to have everything," said Dan Mendelson, a former Clinton administration health official, who called Becerra an "inspired choice." "I think that the most important point is that this is a leader of a team and not the be-all and end-all."

California Healthline staff writers Rachel Bluth and Samantha Young contributed to this story.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Healthcare Foundation.

Rachana Pradhan: rpradhan@kff.org, @rachanadixit

Angela Hart: ahart@kff.org, @ahartreports

Julie Rovner: jrovner@kff.org, @jrovner

Jenny Gold: jgold@kff.org, @JennyAGold