Healthcare Lobby Dictates Terms

Published on September 22, 2009, 2:44 pm
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The frequently imbibing comedian W. C. Fields once proudly declared: “Everything I do is either illegal, immoral, or fattening.” The adjectives used by Fields perfectly characterize the role of the private health insurance industry in the debate about health care reform.

As the debate intensifies more and more private health care profits are being recycled into the political decision-making process – framing debates, shaping legislation, padding election war chests, and marginalizing increasingly popular attempts at the abolition of private health insurance.

Overwhelming Democracy

“It’s a bonanza!  Hallelujah!” declared ex-private Health Insurance CEO Robert Laszewski when asked about the health care reform being proposed by the US House of Representatives (HR 3200).  A seemingly strange reaction, after all the high-sounding rhetoric from the White House about the deficiencies of the private health care industry.  Strange, that is, until you begin to follow the money. The health insurance and pharmaceutical lobby works from the top to the bottom of the political system. Large-scale contributions to the presidential campaigns of Barack Obama and John McCain coupled with smaller payments to all the legislative players in Washington serve to infect all parts of political decision making.

The powerful lobbying arm of health care was on an unusually public display during a sensitive period in the health care reform debate from May to July of this year. The lobby spent a massive $1.4 million a day to ensure their control over the proceedings. This frenzy contributed to the sector racking up $133 million in lobbying expenditures in the second quarter of 2009 alone, by far the highest total of any interest group.

Lobbying is an insider game and the health care lobby has assembled an impressive collection of former congressmen, aides, and even congressional family members to do its bidding. All told, more than 350 former government staff members are employed as lobbyists by private health insurers and pharmaceutical companies. This army of insiders is deployed each day in Washington to ensure privileged access to elected representatives who hold the fate of health care reform in their hands.

The line between private industry and public office is, therefore, a frequently crossed one. Examples abound, but the political careers of two insiders best illustrate the incestuous relations between politics and industry. After a political career that saw him transform himself from a “Blue-Dog” Democrat to a full-fledged Republican, Louisiana native Billy Tauzin realized his true calling as a health care lobbyist. The Pharmaceutical Researchers and Manufactures of America jumped at the chance to capitalize on Tauzin’s 24 years of insider connections. For Tauzin, the handsome sum of more than $2 million a year far eclipsed the meager salary of a public official. Jack Ebler took a different route working from his job as president of the Alliance of Community Health Plans to a position as a senior adviser for health policy to the House Energy and Commerce Commission. The Commission played a key role in crafting the current HR 3200 proposal.

Ebler continued to receive consulting fees from at least five private health insurance companies while he advised the Commission. Together, Tauzin and Ebler have profited from the revolving door between government and industry, accumulating fat paychecks while placing limits on much needed reforms.

Corporate Family Values in Indiana

The corporate hand directing legislation is so thorough that, in Indiana at least, it even extends to the dinner table. Here Evan Bayh, House Representative from Indiana, and Susan Bayh, member of the Board of Directors of Wellpoint Health, sit down for nightly meals to discuss the events of the day. Evan could mention the latest proposal for health care legislation while Susan might offer details of a recent diatribe against the role of the public sector in health care. This power couple has profited mightily from their relationship. February 3, 2006 was a particularly good day. Evan had just passed legislation which allowed seniors to extend long-term medical care offered by private companies, while Susan exercised stock options to buy 20,001 shares of Wellpoint stock. Joyous dinner table talk indeed.

Susan Bayh is not just any private health care executive and Wellpoint is not just any private health insurer.  Bayh is a leading voice in opposition to public health care. “Traditional Medicare,” she argued in a recent BusinessWeek article, “pays for quantity rather than quality, and all of the pilot programs that were intended to help government change that… have failed.” Bayh spoke against any public option, but claimed to support reforms that provide coverage to everyone through private insurance plans to ensure that “everyone is in the pool.” The acceptable role for the government, according to Bayh, is to enforce requirements that people purchase private health insurance. No surprise then that Evan Bayh has followed his wife’s lead by declaring opposition to single-payer (HR 676) and describing himself as “agnostic” on the issue of the public option.

Susan Bayh is not, of course, the only resource mobilized by Wellpoint. As the nation’s largest private health insurer, selling plans to more than 80 million people through its Blue-Cross/Blue-Shield network, the company has much to lose in the health care reform debate. It has swamped the political process with money to limit any potential reforms. In 2008, Wellpoint made $2.6 million in campaign donations split evenly between Democrats and Republicans.  This includes 265 members of the House and 71 Senators. Not surprisingly, representatives sitting on the House Ways and Means and Energy and Commerce Committees, the two key committees for health care reform, were targeted by Wellpoint campaign contributions – more than $200,000 each.

The Real Town Hall Disrupters

Not satisfied with purchasing the legislative process, health care companies have now embarked on an attempt to shape town hall meetings on health care being conducted throughout the country.  Private health insurance, it seems, merely suffers from an image problem. To combat this, the industry is dispatching thousands of employees to participate in the town halls. The goal, according to a spokesperson for America’s Health Insurance Plans (AHIP), the leading industry group for private insurers, is to use the meetings as a forum “to strongly push back against charges that we have very high profits.”  AHIP reports that more than 50,000 employees have also participated in letter-writing and phone call campaigns to elected representatives to push a pro-private health care agenda.

In many cases, however, there is little need for health insurance employees to shape the agenda at public town halls on health care. Politicians, flush with campaign contributions, have already completed that task. In the Bronx, New York, an advertised town hall meeting was transformed into one-on-one meetings where Representative Joseph Crowley (D) spoke against single-payer and refused to commit to supporting a public option. Crowley received $5,000 in contributions from Pfizer, Abbott Technologies, and Blue Cross/Blue Shield (Wellpoint). A Brooklyn, New York town hall was reduced to an adolescent classroom as the crowd was prohibited from speaking and asked to silently write questions out on index cards.  Representative Yvette Clark (D), the host of the meeting, received $3,000 from GlaxoSmithKline, $2,000 from Pfizer, and $2,000 from Blue-Cross/Blue-Shield (Wellpoint).

Thinking beyond Health Care

Considering the number of resources mobilized by the private health insurance lobby, there can be little surprise that HR 3200 is a 1,000-page legislative mess. The pressure of the lobby ensured that any reform is framed as part of new “health insurance exchanges.” This idea was concocted by the conservative Heritage Foundation, transmitted by the health care industry lobby, and is now being mouthed by an assortment of politicians as a trailblazing virtue – note Obama’s “choice and competition” slogan. Yet, the exchange is one part of a multi-pronged strategy which aims at allowing mega-corporations the right to sell policies across state lines. This is the real motivation behind Susan Bayh’s desire to make sure “everyone is in the pool.”  Once in, the private insurers would do what they do best – monopolize market shares and inflate prices in the service of enhancing corporate profits. They own the pool.

What passes for democracy in America these days feels like little more than one facet in a well-financed public relations campaign. This is why the struggle over health care is no longer just about this or that reform; it is about the expression of public will inside a democratic system. The question now is how, or even whether, this will can be expressed. Industry pressure, media silence, and politicians on the payroll have managed to effectively marginalize the only proposal for real health care reform – a single-payer system. Americans should recognize that every day the private health insurance companies are allowed to exist is one day more of illegal, immoral, and fattening acts. One more day without health care. One more step away from an increasingly distant notion of democracy.


Jonas Bronck is the pseudonym under which we publish and manage the content and operations of The Bronx Daily.™ | - the largest daily news publication in the borough of "the" Bronx with over 1.5 million annual readers. Publishing under the alias Jonas Bronck is our humble way of paying tribute to the person, whose name lives on in the name of our beloved borough.