Obama Said to Weigh Cleveland Clinic Chief for Top VA Job

The head of the Cleveland Clinic is under consideration by the Obama administration to lead the delay and scandal-plagued Department of Veterans Affairs, according to a person familiar with the deliberations.

Delos “Toby” Cosgrove, 73, the clinic’s chief executive officer since 2003 and a Vietnam veteran, was contacted about the job, though the discussions are in the earliest stages, said the person, who asked not to be identified because the talks are private. If nominated and confirmed, Cosgrove would succeed Eric Shinseki, who quit May 30 after a system review found treatment delays, mismanagement and falsified records.

As head of the Cleveland Clinic, one of the world’s foremost medical and research centers, Cosgrove has built a $6.2 billion system expanding from the a main campus in the organization’s namesake city to more than 75 other facilities, including in Florida, Las Vegas, Toronto and Abu Dhabi.

Cosgrove “would be excellent,” said Senator John McCain, an Arizona Republican who also served in Vietnam. “Everything about the Cleveland Clinic is outstanding.”

A heart surgeon by training, Cosgrove would have no trouble getting confirmed by the U.S. Senate, McCain told reporters in Washington today. He said he’d met Cosgrove “casually,” and that he would “respect the president’s decision on something like this.”

Shinseki’s departure came after lawmakers from both parties demanded his resignation from an agency that spends $160 billion annually, including providing medical care to more than 8.3 million veterans. The department’s troubles have emerged as a top priority for members of Congress.

McCain Legislation

McCain, who spent more than five years in captivity as a prisoner of war in Vietnam, unveiled a proposal yesterday that would give veterans a “choice” card allowing them to seek care outside the VA system under certain circumstances.

In the House, Jeff Miller, a Florida Republican who chairs the Veterans Affairs Committee, said he’s drafting legislation that would require care be offered outside the VA system to veterans who waited at least 30 days for a medical appointment.

“This is a critical moment for the VA,” said Allen Taylor, chief of cardiology at MedStar Heart Institute in Washington, D.C., who previously held the same position at Walter Reed Army Medical Center. “They aren’t going to be able to do things the way they always have.

Cosgrove is ‘‘a very creative man,’’ Taylor said. ‘‘He’s entrepreneurial and he’s been highly successful in what he’s done.”

Innovation Center

Along with his work in expanding the clinic’s everyday medical services to other areas, Cosgrove has driven the development of new facilities for the Heart and Vascular Institute and Glickman Urological & Kidney Institute and opened an innovation center to work with entrepreneurs to bring medical breakthroughs to the market.

He also revived the Clinic’s focus on empathy and care with the appointment of the first chief experience officer in 2009. Cosgrove, who made about $3.2 million in salary and other compensation in 2012, is an Air Force veteran who was awarded the Bronze Star for his service.

Since taking the clinic’s top job, his direct political involvement has been limited. He gave about $13,000 to federal candidates and political organizations dating back to 1992, most of them Republicans, including former Senate Majority Leader Bill Frist, a fellow heart surgeon, according to the Center for Responsive Politics.

Conflicts of Interest

Cosgrove became entwined in the debate about conflicts of interest in medical research in December 2005 when it was disclosed that he had ties to a hedge fund investing in companies that conducted studies of experimental products at the clinic. He ended his link with the fund, Foundation Medical Partners, and a review by the clinic in 2006 criticized his disclosure practices but didn’t question his ethics.

The clinic tightened its rules governing how its scientists and physicians work with drug and device companies in the aftermath of Cosgrove’s case and that of a cardiologist who was associated with a separate hedge fund.

A White House spokeswoman declined to comment yesterday, as did Eileen Sheil, a spokeswoman for the clinic. Cosgrove’s consideration for the Veterans Affairs job was reported earlier yesterday by the Wall Street Journal.

At the VA, Deputy Secretary Sloan Gibson took over on an interim basis after Shinseki’s resignation. White House Deputy Chief of Staff Rob Nabors remains on temporary assignment to the VA to assist with the transition and complete his review.

VA Report

A Veterans Affairs inspector general’s report on May 28 said that some VA hospitals kept phony records to hide delays in treating veterans. Richard Griffin, the department’s acting inspector general, said there were repeated instances of altered waiting lists in a review of 42 VA medical facilities.

Obama said May 30 after that the agency’s Veterans Health Administration needs a new information system and may need more doctors and nurses.

“That’s going to cost some money,” the president said.

The Cleveland Clinic is Ohio’s second-largest employer with about 40,000 workers. In September, the clinic said it would cut yearly spending by 5.5 percent and offer early retirement to 3,000 workers with a goal of saving $330 million this year. The move was designed to prepare for the roll out of Obamacare, which was intended to bring insurance coverage to the nation’s 50 million uninsured citizens.

Cosgrove Interview

During an interview on Bloomberg Television’s “In the Loop” in March, Cosgrove stopped short of criticizing the Obama administration over its efforts to educate the public on the Affordable Care Act following a roll out marred by technical troubles in the federal website consumers used to purchase health coverage.

“There’s lots of people who have been involved in trying to educate people about what to do,” Cosgrove said in the interview. “You need to understand that as all of your coverage for people across the country is changing there’s an awful lot of complexity to this.”

To contact the reporters on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net; Michael C. Bender in Washington at mbender10@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net; Jodi Schneider at jschneider50@bloomberg.net Jodi Schneider

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