Healthcare drive fanned by lobbyists

As debate rages, industry groups see opportunity

By Ricardo Alonso-Zaldivar
Associated Press / July 26, 2009

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WASHINGTON - A strong force, perhaps as powerful in Congress as President Obama, is keeping the drive for healthcare going even as lawmakers seem hopelessly at odds: lobbyists.

The drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year. Television ads paid for by drug companies and insurers continued to emphasize the benefits of a healthcare overhaul - not the groups’ objections to some of the proposals.

“My gut is telling me that something major can pass because all the people who could kill it are still at the table,’’ said Ken Thorpe, chairman of health policy at Emory University in Atlanta. “Everybody has issues with bits and pieces of it, but all these groups want to get something done this year.’’

As a senior official at the Health and Human Services department in the 1990s, Thorpe was deeply involved in the Clinton administration’s failed effort.

This time, the healthcare industry groups see a strategic opportunity. As lawmakers squabble, the groups are focused on how to come out ahead in the end game. “We’re still optimistic that we can get healthcare reform accomplished,’’ said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the main insurance industry trade group. “There is strong support from policy makers and from across the healthcare sector.’’

It’s all got to do with shifts in the economy. Even before the recession hit, employer-sponsored health coverage had been steadily shrinking, and many people couldn’t afford the premiums for individual policies. Meanwhile, government programs have been expanding - and they’ve gotten increasingly friendly to private insurance companies. Insurers now play major roles as middlemen in Medicare, Medicaid, and the children’s insurance program.

And if the government requires everybody to get coverage - just what the overhaul legislation calls for - it could guarantee a steady stream of customers subsidized by taxpayers not only for insurers, but for all medical providers.

The industry groups have invested heavily to make sure their views get taken into account. The healthcare sector gave $167 million in campaign contributions to congressional candidates in the 2008 election cycle, according to the watchdog group Healthcare companies poured $484 million into lobbying efforts in 2008, and are on pace to exceed that this year.

Separately, the drug companies have offered up $80 billion over 10 years to reduce prescription costs of seniors if a deal goes through, while major hospital groups agreed to a $155-billion reduction in Medicare and Medicaid payments to free up funds that would help subsidize coverage for the uninsured.

The political infighting on Capitol Hill has strengthened the hand of the healthcare groups, since liberals have been thwarted so far in their attempts to win speedy passage of the legislation through the House and Senate.

One of the liberals’ main objectives is to include a strong government-sponsored insurance plan in the legislation, to compete against private insurance. Stopping or weakening the government plan is a top priority for the insurance industry. Other healthcare interest groups are also leery because the public plan could put a dent in their budgets. The House version, modeled on Medicare, would pay doctors and hospitals less than private insurance.

All eyes are now on Senate Finance Committee Chairman Max Baucus, Democrat of Montana, who has never been friendly to the idea of a government-sponsored insurance plan. Baucus is trying to broker a bipartisan deal with a handful of Republican colleagues.

It is not clear if Baucus will succeed, but his group is looking at creating nonprofit co-ops that would lack Medicare’s power to dictate payment levels and tell providers to take it or leave it. Instead, the co-ops would have to negotiate payment rates with hospitals, doctors, and drug makers, just like private insurance plans do.