America's healthcare industry has spent hundreds of millions of
dollars to block the introduction of public medical insurance and stall
other reforms promised by Barack Obama. The campaign against the
president has been waged in part through substantial donations to key
Supporters of radical reform of healthcare say
legislation emerging from the US Senate reflects the financial power of
vested interests ‑ principally insurance companies, pharmaceutical
firms and hospitals ‑ that have worked to stop far-reaching changes
threatening their profits.
The industry and interest groups have
spent $380m (£238m) in recent months influencing healthcare legislation
through lobbying, advertising and in direct political contributions to
members of Congress. The largest contribution, totalling close to
$1.5m, has gone to the chairman of the senate committee drafting the
A former member of Bill Clinton's cabinet says fears
that the industry could throw its money behind the populist rightwing
backlash against public insurance have scared the Obama White House
into pulling back from the most significant reforms in return for
healthcare companies not trying to scupper the entire legislation.
and insurance companies say they are merely seeking to educate
politicians and the public. But with industry lobbyists swarming over
Capitol Hill ‑ there are six registered healthcare lobbyists for every
member of Congress ‑ a partner in the most powerful lobbying firm in
Washington acknowledged that healthcare firms' money "has had a lot of
influence" and that it is "morally suspect".
Reform groups say
vast spending, and the threat of a lot more being poured into
advertisements against the administration, has helped drug companies
ensure there will be no cap on the prices they charge for medicines ‑
one of the ways the White House had hoped to keep down surging
Insurance companies have done even better as
the new legislation will prove a business bonanza. It is not only
likely to kill off the threat of public health insurance, which
threatened to siphon off customers by offering lower premiums and
better coverage, but will force millions more people to take out
private medical policies or face prosecution.
"It's a total
victory for the health insurance industry," said Dr Steffie Woolhander,
a GP, professor of medicine at Harvard University and co-founder of
Physicians for a National Health Programme (PNHP).
"What the bill
has done is use the coercive power of the state to force people to hand
their money over to a private entity which is the private insurance
industry. That is not what people were promised."
PNHP blames a
political process it says is corrupted by millions of dollars poured
into the election campaigns of members of Congress and influencing the
discourse about health reform by funding advertising campaigns,
supposedly independent studies and patients rights organisations that
press the industry's interests.
A primary target of criticism is
Senator Max Baucus, the single largest recipient of health industry
political donations and chairman of the finance committee that drafted
the legislation criticised by Woolhander.
The committee this week twice voted against including public insurance in the legislation, with Baucus opposing it both times.
took $1.5m from the health sector for his political fund in the past
year. Other members of the committee have received hundreds of
thousands of dollars. They include Senator Pat Roberts, who last week
tried to stall the bill by arguing that lobbyists needed three days to
Baucus holds dinners for health industry executives at
which they pay thousands of dollars each to be at the table, and an
annual fly-fishing and golfing weekend in his home state of Montana
that lobbyists pay handsomely to attend. They have included John Jonas,
who represents healthcare firms for Patton Boggs, widely regarded as
the top lobbying firm in Washington. Jonas, who formerly worked on the
congressional staff, acknowledges that political contributions are
intended to buy influence and says it works.
"It would be very
naive to say they're not influenced. The contributors certainly hope
they're influencing and the recipients probably ultimately are
influenced," he said. "I think it's a morally suspect practice, and
then you have to look at its application to see if it's morally
bankrupt ... I think what's bad about the system is it's got more and
more lax over time.
"When I started in this practice you did not
talk issues at a fundraiser. It was impolite. And then with this need
for money, the system has got coarser over time so that they go around
the room asking what issues you're interested in, much more of a
linkage of dollars to a discussion of the issues now."
industry permeates the process in other ways. At Baucus's side,
drafting much of the wording of the reform, was Liz Fowler, a senate
committee counsel whose last position was vice-president of the
country's largest health insurer, Wellpoint, which stands to be a
principal beneficiary of the new law.
Health companies and their lobby firms also recruit heavily among congressional staffers as a means of maintaining influence.
declines to discuss political donations but told Montana's Missoulian
newspaper earlier this year that "no one gets special treatment".
Reich, the labour secretary in the Clinton administration, says the
Obama White House, mindful of how the health industry killed off
Clinton's attempts at reform, has grown so fearful of industry money
that it has quietly reached agreement to pull back from price caps and
public health insurance.
"The White House made a Faustian bargain
with big pharma and big insurance, essentially scuttling both of these
profit-squeezing mechanisms in return for these industries' agreement
not to oppose healthcare legislation with platoons of lobbyists and
millions of dollars of TV ads."
The pharmaceutical companies are
apparently pleased enough that they are now putting $120m into
advertising supporting the emerging legislation.
Jonas described the bill emerging from the Senate as "in realm of what is politically possible".
the bill overly distorted by money? I don't think it actually is," he
said. "It's a good bill in the sense that it's a net improvement in the
system ... [but] it's a bad bill if you think it's supposed to be a
comprehensive solution to the US healthcare problems."