Main menu

Health Care Industry Giving Big Bucks to Congress

For some individuals, how Congress aims to reform America's health care system is literally a matter of life and death. For some industries, it could mean the difference between weathering the economic storm or shuttering their businesses. Nobody knows yet what the shape or scope of the final bill will be. It may not even make it to President Obama's desk. But one thing is certain: The American health care system is set to get a lobotomy and diverse special interests are spending big bucks to make sure they're in the surgery room when it happens. Contributions from the Health Sector to Congress

"Whenever the government delves into some part of the private sector, by necessity it triggers the interest of any private entity involved in that area," said Michael Franc, vice president of government relations at the Heritage Foundation. "When the government has the authority to determine prices for any kind of service or the terms and conditions under which people receive health care, all of the different provider groups will have to get involved. They'll have to or they won't survive."

Health care reform is nothing new. For years it has been a buzzword, a broken promise and a looming threat, distant on the horizon but still ominous to the industries that could lose money at the hands of change. So even before various committees circulated their proposals at the start of this month, when the possibility of health care reform transformed from talking point to reality, the health care sector planned and plotted, using its cash to curry the government's favor and shape the outcome.

Starting in the 2008 election cycle, the health sector has given more money to Democrats--who had seized control of Congress in 2006--than to Republicans, according to the nonpartisan Center for Responsive Politics. This was the first time since the 1992 election cycle, right before the Clinton administration's failed health care reform attempt, that the health sector made Democrats its financial darlings.

In the 2008 election cycle, the sector gave $90.7 million, or 54 percent of the total, to Democratic candidates and party committees, compared to $76.6 million to Republicans. That difference is even more pronounced in the first three months of 2009, when Democrats collected 60 percent of the total $5.4 million in contributions*. Obama, who made health care reform a large part of his presidential election platform, brought in $18.8 million from the health care sector in the 2008 election cycle--far more than any other presidential hopeful. Money follows power as the industries ride the tides of Obama-styled change.

Health providers, insurers and pharmaceutical companies have taken multiple approaches to winning over the federal lawmakers shaping the legislation. The health sector boosted its campaign contributions compared to the last presidential cycle, to $167.7 million in 2008 from $123.7 million in 2004. The various health industries have also steadily increased their lobbying efforts, from $448.1 million in 2007 to $484.4 million in 2008. So far this year, the sector has paid lobbyists $126.8 million to do its bidding on Capitol Hill. And those expenditures will only increase as the chairs of the five main committees working on health care legislation continue to iron out the details: Will the plan include a government insurance option? Will Congress mandate that all individuals, including the 47 million that are currently uninsured, purchase health insurance? And where will the money come from to pay for the reforms? The health sector--which includes some industries that are diametrically opposed to one another in their answers to these questions--eclipses all other sectors but the financial sector in lobbying spending since 1998, putting $3.4 billion into its efforts.Lobbying expenditures by the Health Sector Of course, it's not just the health sector that has something at stake--or something to gain. Business associations, labor unions, environmental groups, high-tech companies and consumer advocates are also trying to shape the final outcome, weighing in on the public option, the individual mandate and how best to cut costs. They're also mining through the more nuanced, industry-specific details among the hundreds of pages of draft legislation. Because Democrats hold comfortable majorities in both the House and Senate, the industries now face an atmosphere that is much different from the Clinton years, when it was easier to oppose proposals without much fear of retribution. And with a Democratic president whose vows of comprehensive reform helped get him elected, industries that traditionally didn't feel they needed to make concessions are growing defensive.

"The burden is on opponents of reform. Even though they may be large [campaign] contributors, voters are expecting meaningful reform, Obama is making this a key element of his appeal to the American public and [opponents] will have some explaining to do if they vote against this," said Judy Feder, a professor at Georgetown University and senior fellow at the Center for American Progress. "All the industry elements that have and may oppose reform know that business as usual is not working for them."

This has made for some unlikely coalitions. Pharmaceutical companies, insurers, health providers, unions, business associations and consumer groups are pooling some of their lobbying resources. They've also vowed to reduce national healthcare spending by $2 trillion over 10 years in exchange for measures that don't detrimentally affect one industry significantly more than another. Doing so means that no single industry will shoulder the cost of the reforms alone.

But as details of the plans emerge, the coalitions may be tenuous at best, said William Hayes, president of the University of Ohio's Health Policy Institute. "When the details of the bills become clearer and people see the gains and risks for loss, then I think some of the coalitions that have been able to stay together will start to be challenged," Hayes said.

Download a list of contributions from the health sector to all current members of Congress (including to their candidate committees and leadership PACs) since 1989:Health Sector_Contribs.xls (Note: If you do use this data, please be sure to credit CRP.)

*Because PACs may file either on a monthly or semi-annual basis in 2009, many PACs will be reporting for the first time on July 31st, so these figures are subject to change.

Over the next month, Capital Eye will be following the money as the various special interest groups continue to play politics in response to Congress's proposals. Follow along as our "Diagnosis: Reform" series explores:

-- The high-profile industries with a stake in the debate, and their efforts at politicking.

-- The less obvious players, and how they stand to benefit.

-- How to answer the question: "What, exactly, is the pharmaceutical industry spending $1 million per day to lobby on?"

-- Where the health-professionals-turned-lawmakers are getting their campaign cash and how they feel about the various proposals.

-- The five major congressional committees with legislation on the table--Senate Finance; Senate Health, Education, Labor and Pensions; House Education and Labor; House Ways and Means; House Energy and Commerce--and their sources of campaign funds.

-- The members of Congress who are invested in pharmaceutical and insurance companies that will be affected by how they legislate.