Lobbyists That the Founders Just Never Dreamed of

The “right … to petition the government” has come a long way in over 200 years, and health care organizations are not shy in exercising it.

“Those who are organized, have the most money, the most influence, the most mobilized memberships are the ones whose viewpoints are being most heard.”

Cynthia Berry rises at 6 a.m. to dress for the $500-a-plate fundraising breakfast she arranged for Arizona Sen. Jon Kyl at La Colline, a French restaurant near Capitol Hill. By 9:30 a.m., the health care lobbyist and lawyer is back in her Washington office at Wexler & Walker Public Policy Associates, returning calls and e-mail messages and arranging educational briefings for congressmen and staff members.

A medical client is in town, so she dashes out to Capitol Hill, darting from office to office to introduce the client and to talk about the client’s issues.

At 4 p.m., Berry, former Washington counsel to the AMA, has arranged for Erik Lindbergh, grandson of Charles, to talk to congressmen and staff members in a briefing room about early diagnosis and treatment of rheumatoid arthritis.

At dinner, she reconvenes with her morning client to assess how the meetings went and to discuss follow-up.

Such is a day in the life of one of 17,800 registered Washington lobbyists upon whom interest groups spent $1.56 billion last year to sway Congress and the executive branch — numbers that are grossly understated due to the narrow definition of “registered lobbyist,” says Jeffrey Birnbaum, author of The Lobbyists: How Influence Peddlers Get Their Way in Washington.

An estimated 40 percent of those 17,800 lobbyists promote health care agendas, according to James Albertine, president of the Alexandria, Va.-based American League of Lobbyists. To put it another way, there are 13 health care lobbyists for each of the 535 members of Congress. Among their most passionate causes this year are Medicare reimbursements and tort reform.

Health care agendas

Hundreds of medical groups have a lobbying presence in Washington. The AMA — the third-largest lobbying group (based on expenditures) — spent about $17 million in 2000, the latest year for which figures are available.

On the other hand, there’s the American Association for Cardiovascular and Pulmonary Rehabilitation, which spent less than $10,000.

Collectively, health care groups spent $209 million in 2000 to gain passage of bills that benefit their members or to sideline legislation that might harm them. That places health care interests third in lobbying expenditures, behind power brokers for finance, insurance, and real estate, who spent $229 million, and manufacturers and retailers, who invested $224 million in their work.

In Washington, a vote in Congress, a presidential directive, or new regulation can positively or adversely affect the pocketbook of an entire industry.

For example, in 2000, just before he left office, President Clinton issued an executive order mandating, among other things, that doctors and hospitals that receive federal Medicare and Medicaid funding make translators available to patients who do not speak English.

One result of that: Physicians whose practices depend on federal reimbursement will have to endure huge expenses, or “sick taxes,” to learn the languages of the communities in which they practice, or else hire translators or multilingual staff. The alternative is to refuse to accept Medicare and Medicaid patients. The AMA and the medical societies of all 50 states lobbied — to no avail — to force the federal government to find the cash somewhere other than physicians’ pockets.

Despite this failure, the AMA has chalked up at least one sick-tax victory. The association averted a proposed $1-per-claim surcharge on Medicare claims that are not sent electronically. “Our most important role is to prevent things from happening to doctors,” says Timothy Flaherty, MD, who chairs the AMA board of trustees.

In 1994, when the not-for-profit, nonpartisan Washington-based Center for Public Integrity tracked them, there were at least 660 medical organizations lobbying Congress. Besides the AMA, some of the physician groups include the American College of Physicians-American Society of Internal Medicine, which spent $2.1 million in 2000; the American Academy of Family Physicians, which spent $1.6 million; and the American College of Obstetricians and Gynecologists, which funded $450,000 in lobbyist activity, according to the Washington-based Center for Responsive Politics (CRP), an organization that tracks such expenditures.

“A number of interests compete against doctors in Washington. Without the lobbyists, doctors and their patients would not have the same rights,” says Christian Shalgian, senior government affairs associate at the American College of Surgeons in Washington.

Big spending

Nonphysician health groups with sometimes similar interests are the American Hospital Association, the sixth-largest spender in 2000 at $12 million; Blue Cross, the 18th largest at $8 million; and the American Association of Health Plans, whose $4 million made it the 67th-largest spender. The reported numbers account only for what lobbyists spend on Congress and the executive branch, says Therese Foote, a CRP researcher. They do not include advertising, PR, state lobbying, or grass-roots efforts.

Member dues, some of which support lobbying, can add up to hundreds — or hundreds of thousands — of dollars annually per member. Membership is $420 for the AMA, up to $25,000 for the AHA, and from $2,500 to several hundred thousand dollars for the AAHP.

What are these lobbyists fighting for? Tort reform has been on the AMA’s list for years, but it may never have bee/n so high as it is this year. Malpractice premiums have shot up at least 30 percent in eight states, including Texas and Illinois, according to the association’s analysis of state insurance department and insurer records.

The association wants Congress to pass legislation that would put a $250,000 cap on noneconomic damages (pain and suffering), often seen as the key to holding down malpractice premiums. The thrust is similar to California’s 1975 MICRA (Medical Injury Compensation Reform Act) legislation. Many other groups consider the cap a top priority too, including the American Association of Obstetricians and Gynecologists, the American Hospital Association, and the American Association of Health Plans.

On this issue, state medical groups and hospital associations are also putting some lobbying clout to work on Capitol Hill. Then there are the many coalitions, such as the Health Care Liability Alliance and the American Tort Reform Association — organizations that push professional liability insurance limits.

With the tremendous financial resources of these groups, why hasn’t Congress passed a tort reform bill? Indeed, between 1995–2001, a tort reform measure that included a $250,000 cap on noneconomic damages passed in the House alone six times. Only once has a similar bill, one with a $500,000 cap, reached the Senate floor; it was defeated 56–44 in 1995.

“Trial lawyers have had more influence in the Senate and are pumping more money into Senate campaigns,” says James Thurber, PhD, director of the Center for Congressional and Presidential Studies at American University in Washington.

Albertine of the American League of Lobbyists adds: “ATLA [Association of Trial Lawyers of America] is uniformly preventing any, even minor, revision in the tort reform laws because it is a bread-and-butter issue for them.”

ATLA is No. 5 in Fortune magazine’s 2001 “Power 25” list of Washington’s most powerful lobbying groups, while the AMA is 12 and the AHA 13. ATLA’s lobbying expenses were $3 million in 2000. But, then, ATLA doesn’t need a big lobbying budget: It has power in numbers — of bodies. There are only nine physicians in Congress, but there are 218 representatives and senators with law degrees.

The AMA has tried a number of strategies over the years to combat the enormous power of the lawyers, one of which was the 1988 creation of a campaign school to encourage and train physicians to become legislators. “It would help the medical groups if there were more doctors in Congress,” Albertine says.

Washington is a confusing place where groups can be buddies and enemies. Though ATLA and the AMA are diametrically opposed on the issue of physician tort reform, they cozy up to each other against the health plans regarding the Patients’ Bill of Rights, united on the key issue of a patient’s right to sue HMOs.

The lawyers want the right to sue health plans. The AMA thinks that it is OK to reduce liability for doctors but to expand liability for health plans, because doctors feel the plans are forcing them to deny care and therefore leave them holding the malpractice bag. Health plans argue that allowing patients to sue HMOs will drive up health costs and, as a result, force businesses to drop employee health insurance coverage.

“How can the AMA say it wants tort reform if it supports suing health plans?”, AAHP spokesman Mohit Ghose asks rhetorically.

The AMA and AAHP also butt heads over antitrust legislation, called the Barr-Conyers bill. That bill would permit independent doctors to band together to bargain collectively with health plans for better rates. The AMA feels it would reduce the plans’ disproportionate power; the AAHP sees it as price fixing.

While the AMA and AAHP duke it out over these two issues, they are bedfellows when it comes to tort reform for physicians. Both are members of the American Tort Reform Association, a lobbying coalition that supports a cap on pain-and-suffering awards.

The AMA runs afoul of drug makers over direct-to-consumer advertising, though drugmakers fund many educational programs for physicians. Doctors want the FDA to study the effects of the ads, because patients sometimes request medications that they have seen on television that may be inappropriate. PhRMA, the drug manufacturers trade association, is standing behind the First Amendment. The organization spent $7.5 million on lobbying in 2000.

Sibling rivalry

Sometimes health care groups play as friends; other times, they argue like siblings. Nowhere is this truer than with Medicare. The AMA, AHA, and AAHP are asking Congress to rescind Medicare payment restraints included in the Balanced Budget Act of 1997. AAHP wants Medicare+Choice to be well funded. AMA and AHA want provider payment levels increased.

“Before the 1980s, there was plenty of money to go around, so doctors, hospitals, and health plans didn’t fight with each other,” says Robert Zinkham, a lawyer at Venable, Baetjer and Howard, a Washington firm that handles health care lobbying. “Now that money is tight, everyone is fighting for limited funds.”

The AMA’s Flaherty says the federal government unwittingly inspires conflict between the AMA, AHA, and AAHP by taking Medicare funds from doctors and giving them to hospitals or plans. Rarely are there turf wars between specialty societies, though there remain long-simmering power scuffles between groups representing nurse anesthetists and anesthesiologists, optometrists and ophthalmologists, psychologists and psychiatrists, and physicians and pharmacists. Sometimes these are pitched battles as one group seeks to gain more privileges by legislative decree.

More unusual are lobbying efforts that do not pay off by lining the pockets of group members. For instance, the AMA has taken positions against smoking, alcohol, and firearms. The AMA wants to boost funding for the Centers for Disease Control to study guns and children. It also supports a plan to have the U.S. Food and Drug Administration regulate tobacco products, because it holds that the FDA’s objectivity regarding product safety would reduce or eliminate tobacco.

“Historically, we’ve been the umbrella organization for doctors. We take a broad view,” says Flaherty.

But such actions may not be wholly altruistic.

“The AMA selects issues specifically to forge alliances that work to serve other bread-and-butter issues for its members,” says Washington health care lobbyist Thomas Donnelly of Jefferson Government Relations. Some AMA lobbying has balanced the lobbying of other big spenders, such as the National Rifle Association and Philip Morris.

Few medical organizations had a lobbying presence in the capital before the mid-1970s. Some relied on the AMA or other groups to do their bidding. Some had public affairs directors who did the job on their own, and some hired lobbyists when they needed them, says Paul Herrnson, director of the Center for American Politics and Citizenship at the University of Maryland.

After Watergate, freshmen legislators bent on change entered Congress as the infamous “Class of 1974.” The seniority system ended, the number of subcommittees increased substantially, committees became more democratized, and power became diffuse, writes Charles Lewis, in The Buying of Congress.

At the same time, instead of patients paying doctors, hospitals and pharmacies for services, patients paid third parties, and government stepped in to control how those payments were made.

“There was a confluence of events, and as government expanded, so did the number of lobbyists,” says Lewis, who is also the founder of the Center for Public Integrity.

Adds Albertine, “There is a direct relationship between the size of government and increases in the number of Washington lobbyists.”

A free-for-all

What used to be the domain of a small group of people has become a free-for-all. Today, it’s inconceivable that medical organizations would not have a lobbying presence for self-preservation. It’s easy to spot their agenda on their web sites under such euphemisms as “advocacy” and “health policy.”

What often goes unrecognized, however, is that while lobbyists bring home legislative gifts to hungry memberships, they also aid members of Congress in drafting complex medical legislation. Says Foote, the CRP researcher, “They are not just vultures. Their technical advice can be invaluable.”

Maureen Glabman, of Miami, is the 2000 Columbia University Reuters Fellow in Medical Journalism.

Buyers and sellers of medical care lead lobby list
Top lobbyists in 2000
1. U.S. Chamber of Commerce $26.2 million
2. Business Roundtable $21.5 million
3. American Medical Association $16.6 million
4. General Electric $16.0 million
5. Edison Electric Institute $12.0 million
6. American Hospital Association $11.9 million
Blue Cross has the cash
After the AMA and AHA, the Blue Cross Blue Shield Association and the American Association of Health Plans were the big health care spenders.
Sampling of medical lobbyists’ budgets in 2000
Blue Cross Blue Shield Association $8.0 million
American Association of Health Plans $3.6 million
American College of Physicians/ASIM $2.1 million
American Academy of Family Physicians $1.6 million
American College of Obstetricians and Gynecologists $450,000
American Association of Oral and Maxillofacial Surgery $20,000
American College of Emergency Physicians $60,000
Expenditures on lobbying by industry in 2000
1. Finance, insurance, real estate $229 million
2. Misc. business/manufacturing, retail, etc. $224 million
3. Health care $209 million
MANAGED CARE August 2002. ©MediMedia USA