In 2021, Elliot Malin did something heroic: He donated a kidney to save the life of his distant cousin Scott Kline, who was suffering from end-stage renal failure. Although third cousins, the two men were close and Malin was happy to make the sacrifice. Unfortunately, his spirit of altruism was matched by an opposing spirit of rapacity in the private health care system. Even though living kidney donors are not supposed to be charged for their surgery, a firm called NorthStar Anesthesia tried to stick Malin with a bill for $13,064. Despite Malin’s explaining that the bill was supposed to be taken care of by Kline’s insurance company, NorthStar Anesthesia even threatened to unleash a collection agency to get the money. This could have wrecked Malin’s credit. Only after receiving a call from ProPublica, a nonprofit journalistic outlet reporting on the case, did NorthStar acknowledge that Malin should never have been charged.
NorthStar’s behavior in this case is not uncharacteristic. The company has a history of surprise medical billing. In a 2022 interview, Adam Spiegel, CEO of NorthStar Anesthesia, complained that “the biggest challenge to securing anesthesia reimbursement in 2023 is the impact of the No Surprises Act. The act has tilted the scales in contract negotiations in favor of payers, making it difficult to predict future payment amounts and driving a trend of lower reimbursements in a period of increased costs of doing anesthesia.”
Since 2018, NorthStar has been owned by Cranemere Group, an investment firm. This fact makes NorthStar’s notorious history of looting through unfair billing a matter of wider public interest. The president of Cranemere Group starting in 2017 was Jeffrey Zients, who took a leave from that position in December 2020 to join the Biden administration, where he helped oversee staffing and served a brief and controversial term as Covid czar.
On Sunday, multiple news outlets announced that Zients was about to be tapped to be the new White House chief of staff, replacing Ron Klain, who has announced that he is stepping down.
The possibility that the new chief of staff could be someone so closely tied to corporate predation should worry Democrats. It has the potential to be a political disaster.
The president’s chief of staff is arguably the most important nonelected position in the White House and one of the most powerful posts in Washington. A chief of staff is both an agenda setter and gatekeeper for the president. A poor chief of staff, such as Rahm Emanuel in the first two years under Barack Obama, can inflict massive damage. An adept chief of staff, like James Baker under both Ronald Reagan and George H.W. Bush, can be something close to the president’s alter ego.
Much of Joe Biden’s success in his first two years as president can be credited to Ron Klain. As Jeff Hauser, executive director of the Revolving Door Project, a nonprofit that monitors political appointments, told me, “Ron Klain was far from a movement progressive, but he sought out strong lines of communication with most branches of the progressive movement. Klain didn’t punch hippies even when he was choosing the path halfway between progressives and neoliberals. But most importantly, he seemed to embrace the idea that action was preferred to inaction and that progressives had roughly the right idea for the direction the administration and party ought to be taking. Considering that neither Bernie nor Warren was the nominee, the Biden administration has been a pleasant surprise—and I believe Klain is more responsible for that than any other individual.”
Hauser worries that the Zients pick will mark a major change for the Biden administration. On Twitter, he described it as a “catastrophic decision.” Conversely, former Obama senior adviser Dan Pfeiffer tweeted, “I was fortunate enough to work with Jeff for many years when he was in a number of different roles. He is a great choice to replace Ron.”
Hauser’s fears are well founded. In 2022, Daniel Boguslaw and Max Moran, both attached to the Revolving Door Project, wrote a devasting profile of Zients for The American Prospect. They noted,
Over the span of two decades, the health care companies that Zients controlled, invested in, and helped oversee were forced to pay tens of millions of dollars to settle allegations of Medicare and Medicaid fraud. They have also been accused of surprise-billing practices and even medical malpractice. Taken together, an examination of the companies that made Zients rich paints a picture of a man who seized on medical providers as a way to capitalize on the suffering of sick Americans.
The business model Zients’s firms follow seems to be smash and grab—while also being prepared to pay the occasional fine if patients and governments object.
Zients’s tenure as Covid czar has been controversial. Writing in The American Prospect last January, Boguslaw wrote, “Amid an entirely predictable viral mutation and a winter surge, Zients has failed to provide the materials necessary to improve the U.S. response, or the guidance necessary to keep the pandemic under control. He’s proven himself not up to the task, and Biden should relieve him of his duties.” Zients did in fact unexpectedly resign from the post a few months later in April.
Eric Levitz of New York magazine called such criticism unfair, tweeting recently that “Biden’s pandemic management has left much to be desired. But given Omicron’s contagiousness, the popularity of anti-vax ideology, and the federal structure of the U.S. government, I have a hard time envisioning how the White House could have prevented death on a massive scale.” But Levitz also linked to a report on Zients’s corporate practices and acknowledged that “Zients seems like a real step down from Klain.”
In a note to me, Hauser summed up the case against Zients: “Biden at his best has picked battles with corporate America, from the tax plan funding the IRA to appointing regulators like Rohit Chopra, Gary Gensler, and Lina Khan to take on predatory behavior. With limited legislative possibilities over the next 24 months, Biden can only attain populist bona fides against populist wannabes Ron DeSantis and Donald Trump by unleashing the executive branch against corporate miscreants. Unfortunately, many of the most promising targets for Executive Branch scrutiny are industries Zients has gotten rich from, including private equity, health care, and Big Tech. Will Zients turn on people like himself, or will he acknowledge implicitly that his riches came at society’s expense and unleash the Executive Branch to enforce existing limits on corporate greed stringently?”
If appointed, Jeffrey Zients will be the White House chief of staff as Biden gears up for reelection in 2024. The strongest case against Zients is a simple political one. How will Biden be able to present himself as the champion of working Americans when his chief of staff is a plutocrat whose companies have a reputation for preying on Americans in moments of medical emergency? Zients would offer an irresistible target for Republicans. His elevation to the post of chief of staff is an unforced error.