Monday, December 28, 2009

Healthcare Interests Spend $600M to Sway Congress; Revolving Door Between Lobbyists and Congress in Full Tilt

It was very nice to get away from the news for a period of a few days; truly, ignorance is bliss.  Unfortunately, I had to come back to reality.  As I am catching up, I am reading of the "Christmas Eve" surprise done by the US Treasury; which deserves it's own post for multiple factors.  But first let's look at the best investment for corporate America today.  Research & Development? Nah.  Investing in human capital? Nope.  Try lobbying - which has far and away the best ROI (Return on Investment) by what has to be a factor of 1000x. Why bother with any of the other things that used to be critical to running a corporation when simply running around with your hands out to accept the gifts from the US taxpayer can now become the central tenet for success?

Bloomberg: Health Interests Spend $600M to Sway Congress
  •  More than $600 million has been spent so far this year trying to influence U.S. lawmakers working to overhaul the health-care system, reports show.   The health industry spent $396 million through Sept. 30, more than any other industry and up 9 percent over the same period a year ago
  • Those numbers don’t include spending on lobbying by insurers such as the Blue Cross and Blue Shield Association and its member companies.  “The Blue Cross and Blue Shield companies represent 100 million people across the country in every zip code and have 80 years of experience in health care,” said Brett Lieberman, a spokesman for the Blue Cross and Blue Shield Association in Washington. “We’ve been working with members of Congress sharing that experience.”   (I love how these things are worded - usually they use the phrase "helping to educate" Congress people... but "sharing the experience" is even softer)
  • The Senate health legislation exempts some nonprofit health plans from a $70 billion tax on the insurance industry, including some Blue Cross plans in Alabama, Michigan and Pennsylvania.
  • The S&P index of six managed-care insurers has jumped 12 percent since Dec. 9, when Senate Democrats dropped a proposal for a government-run plan to compete with private insurers.
  • “The health-care industry has a full-court press on members of Congress,” said Representative Dennis Kucinich, an Ohio Democrat.
  • Another $200 million has been spent on television advertising for and against overhauling health care.
  • The Senate on Dec. 15 rejected an amendment to allow imports of cheaper drugs from Canada, (remember, Canadian drugs are a danger to Americans per dogma we've heard for 2 decades) a provision opposed by the pharmaceutical industry. Drugmakers earlier agreed to contribute $80 billion over 10 years in return for blocking other profit- endangering proposals
  • Pfizer’s trade group, the Pharmaceutical Research and Manufacturers Association, spent $19.9 million through September. That’s the third-highest amount behind the U.S. Chamber of Commerce and Irving, Texas-based Exxon Mobil Corp., and almost as much as the $20.2 million the group spent in 2008.
Those are some fun numbers, but it gets better; think about it - in this one industry alone there are 6 lobbyists for each breathing representative.  That is one industry - multiply that across all the competing special interests and you can imagine 40, 50, 60 lobbyists, working over each Congress folk.  With promises of jobs (wink wink) in the lobbyist profession post "public service", as long as they "play along".
  • There are 3,300 lobbyists registered to lobby on health care, Senate records show, six for each of the 535 members of the House and Senate.
Who are these people?  Well, hello.... the revolving door is spinning so fast one's eyes cannot focus.
  • More than 1,400 of those lobbying on health care formerly worked for Congress, the White House or federal agencies, including 55 former lawmakers.
  • Many of those lobbyists visited the White House to meet with President Barack Obama and top administration officials, according to visitor logs.

Another look via the Chicago Tribune.
  • David Nexon had a big problem. An early version of national health care legislation contained a $40 billion tax aimed squarely at members of the medical device trade association he represents.  Nexon, a former adviser to the late Massachusetts Sen. Ted Kennedy, went to work. He marshaled 14 people like himself -- lobbyists who were once congressional aides, many of them from staffs of congressional leaders or committees that had a hand in crafting the health care overhaul.  When Senate Democrats unveiled their bill in mid-November, Nexon's handiwork was evident. The tax on device-makers was still large -- $20 billion -- but only half what it might have been without the efforts of Nexon and his fellow lobbyists.
  • Nexon's team is an illustration of how deeply the health care industry has embedded itself on Capitol Hill, using former aides of lawmakers and ex-lawmakers themselves.
  • At least 166 former aides from the nine congressional leadership offices and five committees involved in shaping health overhaul legislation -- along with at least 13 former lawmakers -- registered to represent at least 338 health care clients since the beginning of last year, according to the analysis.  The total of insider lobbyists jumps to 278 when non-health-care firms that reported lobbying on health issues are added in, the analysis found.
  • The largest insider lobbying cadre belongs to the Pharmaceutical Research and Manufacturers of America, or PhRMA, which employs at least 26 former congressional members and staffers, according to Medill/CRP research.
  • Two other drug interests, biotech firm Amgen Inc. and the Biotechnology Industry Organization trade group, with at least 24 and 16 insiders respectively, ranked second and fourth among reported hiring over the past two years of lawmakers' former staffers and members of committees considered in the analysis.
And why is this so effective? Aha, the lucrative post Congressional world ...
  • Part of the lobbying pressure on current members of Congress and staffers comes from the powerful lure of post-congressional job possibilities.  "There's always a worry they may be thinking about their future employment opportunities when dealing with these issues, particularly with health care, because the stakes are so high and the breadth of the issues -- pharmacies, hospitals, doctors," said Emory University political scientist Alan Abramowitz.
  • Lobbyists' earnings can dwarf congressional salaries, which currently top out at $174,000 annually for lawmakers and $156,000 for aides, though committee staff members can earn slightly more.
  • Health care lobbyists increase their effectiveness by strategically targeting their campaign contributions or the donations of the interests they represent, Edgar said.  Health industry contributions to congressional candidates have more than doubled so far this decade, rising to $127 million in the 2008 election cycle from $56 million in the 2000 election, with disproportionate sums going to the party in power and to members of committees that oversee health care, according to the Center for Responsive Politics.

[Sep 24, 2008: As Economy Gets Tough, Americans Begin to Cut out "Extras" - Like Healthcare]

Speaking of those drug companies, if you have not seen the 60 Minutes piece: "Under the Influence" on how Medicare Part D was passed... deep in the night, with threats and some people reduced to tears, it's a good video.

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