Health Care Policy of the Insiders, by the Insiders, for the Insiders - the Newt Gingrich Case Files

Newt Gingrich's rise to the top of the pack of Republican contenders for the US presidency has earned him increased scrutiny.  The resulting investigative reporting has provided a revealing set of case studies showing how insiders have come to dominate US health care policy.

Below I have reorganized the information presented in a series of news articles from mid-November to mid-December, 2011.

Mr Gingrich's Consulting Empire

A general description of Mr Gingrich's health care "think tank" appeared in the Washington Post.(1)

A think tank founded by GOP presidential candidate Newt Gingrich collected at least $37 million over the past eight years from major health-care companies and industry groups, offering special access to the former House speaker and other perks, according to records and interviews.

The Center for Health Transformation, which opened in 2003, brought in dues of as much as $200,000 per year from insurers and other health-care firms, offering some of them 'access to Newt Gingrich' and 'direct Newt interaction,' according to promotional materials.

Despite its name, the CHT was for-profit. Much of its actual workings are confidential, per the Post,(1)

Susan Meyers, a center spokeswoman, declined to comment on the think tank’s income or staffing levels because it is a private-sector organization.

Despite its pretentious name, the CHT was apparently a vehicle for its wealthy corporate clients to influence health policy to favor their business interests.  A NY Times article(2) reported that:

His consultancy practice was centered around his ability to help big corporate interests speak the language of Republicans and navigate the corridors of Capitol Hill on issues vital to their businesses.

According to a Bloomberg article(3), the work was quite lucrative:

Two companies founded by Newt Gingrich announced yesterday that they had grossed $55 million between 2001 and 2010, part of an effort to quiet questions about how the former U.S. House speaker earned millions since he resigned from Congress in 1999.

That revenue supports the Center for Health Transformation and The Gingrich Group LLC, which have a staff of as many as 30 people, stage health-care policy events, and provide advice to clients, Nancy Desmond, the chairman and chief executive officer of the firms, said in a written statement.

The CHT was linked to a small corporate empire, as described by the Washington Post,(4)

Former House speaker Newt Gingrich transfigured himself from a political flameout into a thriving business conglomerate. The power of the Gingrich brand fueled a for-profit collection of enterprises that generated close to $100 million in revenue over the past decade, said his longtime attorney Randy Evans.

Among Gingrich’s moneymaking ventures: a health-care think tank financed by six-figure dues from corporations; a consulting business; a communications firm that handled his speeches of up to $60,000 a pop, media appearances and books; a historical documentary production company; a separate operation to administer the royalties for the historical fiction that Gingrich writes with two co-authors; even an in-house literary agency that has counted among its clients a presidential campaign rival, former senator Rick Santorum (R-Pa.).

Separate from all of that was his nonprofit political operation, American Solutions for Winning the Future.

Relationships with Big Health Care Corporations

The Center for Health Transformation was largely funded by big health care corporations. The Post first noted,(1)

The biggest funders, ... [included] firms such as AstraZeneca, Blue Cross Blue Shield and Novo Nordisk,...

Also,(1)

The center has listed scores of firms and industry groups as members over the years, amounting to a Who’s Who of the medical field, from GE Healthcare to the American Hospital Association to Wellpoint, the nation’s largest health insurer.

Other clients were listed in a Bloomberg article,(5)

Among the member companies were drugmaker Johnson & Johnson (JNJ) and health insurer Blue Cross and Blue Shield Association....

Also,(5)

Pfizer Inc. (PFE), the world’s largest drugmaker, had consulting contracts with Gingrich, according to two people familiar with the arrangements. Pfizer spokesman Ray Kerins didn’t respond to requests for comment.

The Pharmaceutical Research and Manufacturers of America, the industry’s trade group, was also a client. His firm 'was retained by the PhRMA general counsel’s office at one time to provide advice on a positioning project,' the group said.

In addition, as noted below, clients included important firms in the health care information technology (IT) sector, including GE, IBM, Microsoft, Allscripts, and Siemens.

Below, we present several cases in which Mr Gingrich apparently intervened on behalf of his clients to promote their business interests in the guise of promoting his views on health policy solutions.  In some cases, the views he promoted did not fit with what is generally regarded as his political philosophy, suggesting that the interests of his paying clients overrode his political views.

Case: End of Life Care

The New York Times reported,(2)

Writing on the Web site of the Washington Post, Mr Gingrich praised Gundersen Lutheran Health System of LaCrosse, Wis., for its successful efforts to persuade most patients to have 'advance directives,' saying if Medicare had followed Gundersen's lead on end-of-life care and other practices, it would 'save more than $33 billion a year.'

Note that

Gundersen was one of the paying clients of Mr. Gingrich's Center for Health Transformation....

However,

within weeks, Mr. Gingrich would find himself on the wrong end of what some Republicans labeled the 'death panel' issue.

At that point, Mr Gingrich abruptly changed his tune,

As it happens, shortly after Mr. Gingrich wrote his article praising Gundersen, he joined the conservative critics of the provision. 'You are asking us to trust turning power over to the government,' Mr Gingrich told George Stephanopoulos of ABC News that August 'when there are clearly people in America who believe in establishing euthanasia, including selective standards.'

This suggested that Mr Gingrich took up the cause of end-of-life decision making not be cause he deeply believed in it, but because it was expeditious given the wishes of his clients, despite the assertion made by his spokesperson,(2)

Mr. Hammond said that Mr. Gingrich did not take policy positions for pay; rather, he said, clients sought him out because of the views he already held and his expertise in communicating ideas.

Case: Medicare Prescription Coverage Sans Negotiations about Drug Prices

As reported by Bloomberg,(5)

When U.S. House Republican leaders in 2003 were short of votes to pass a $395 billion Medicare prescription drug benefit, they recruited former House Speaker Newt Gingrich for help.

In a hushed room on Capitol Hill, Gingrich told his former Republican colleagues that if he could endorse the measure, they should be comfortable with it, too, said two former senior House aides who attended the closed-door session.

Two days later, after a vote was held open for three hours as leaders corralled the final ayes, the measure passed and was eventually signed into law by President George W. Bush.

What Gingrich didn’t mention during the Republican caucus meeting was that he was also building a for-profit, health-care research company and seeking financing from drugmakers, which were investing $128.6 million in lobbying for passage of the new benefit for seniors.

Note that the legislation that provided Medicare drug coverage forbade the government from negotiating prices with drugmakers.  This was unprecedented, because drug coverage from the US Veterans Administration and Medicaid did not come with the obligation to pay whatever the drug-makers charged.  The inability of Medicare to negotiate the prices it paid for drugs certainly helped the companies' revenues while driving up the costs of Medicare, the federal deficit and the costs of health care in general.

Case: Promoting Expensive Diabetes Care

The Washington Post reported,(4)

Novo Nordisk, a Denmark-based drug firm that specializes in diabetes treatments.... paid a total of $1.2 million to Gingrich’s foundation over six years as a 'founding charter member.'

'It was strictly a business, nonpolitical relationship,' Novo Nordisk spokesman Ken Inchausti said. 'We admired his leadership on issues related to health-care delivery systems. We thought the CHT brought something to the table to us in terms of finding ways to help people prevent diabetes.'

Gingrich loaned his celebrity to causes that, whatever their other merits, could also be good for Novo Nordisk’s bottom line. For instance, he was the keynote speaker at Novo Nordisk’s 'diabetes summit' in 2005 and joined the company in issuing a 'call to action' to fight diabetes in Texas and Georgia.

One wonders how many of the widely promoted "summits" and other star-studded conferences on health care featuring corporate  and political leaders as speakers are just stealth health policy advocacy or stealth marketing.

Case: Irrational Exuberance for Electronic Health Records

My fellow Health Care Renewal blogger has often discussed the "irrational exuberance" for electronic health records (EHRs) despite scant information about their benefits, and increasing data suggesting their harms.  It now appears that Mr Gingrich, sponsored by copious funds from the health care IT sector, has been a major source of such exuberance. 

Mr Gingrich had a complex relationship with the health care information technology (IT) industry. It began to come out first in a NY Times story,(6)

When the center [for Health Transformation] sponsored a 'health transformation summit' at the Florida State Capitol in March 2006, lawmakers who attended Mr. Gingrich's keynote speech inside the House chamber received a booklet promoting not just ideas but also the specific services of two dozen of his clients. Executives from some of those companies sat on panels for discussions that lawmakers were encouraged to attend after Mr. Gingrich's address.

Gerard White, president of Clearwave, which paid about $50,000 to become a center member, used the occasion to pitch his company's system for managing patient data.

This had all began earlier,

Two years before the Florida 'summit,' Mr. Gingrich made a presentation to Republican lawmakers in Georgia, promoting the work of his member companies by citing specific benefits if they were hired. For example, 'VitalSpring could save the State Employee Program over $20 million a year.'

Minutes of the members-only conference call from March 2004 said the center had 'arranged joint meetings' for members to present their work on electronic health records to top federal officials, noting that Mr. Gingrich 'reported very positive feedback overall from these meetings.'

He also pressed for passage of a federal bill to increase the use of electronic health records, collaborating with one of its co-sponsors, Representative Patrick J. Kennedy of Rhode Island, and Senator Hillary Rodham Clinton of New York, both Democrats.

Furthermore,

Many of the ideas he has pushed involve the increased use of information technology, and companies specializing in that are well represented in the center's roster. They also figured prominently in an early center initiative, teaming up in 2003 with the conservative Georgia Public Policy Foundation to promote changes in health care in Mr. Gingrich's home state.

At his discussion with Georgia House Republicans in 2004, Mr. Gingrich gave examples of companies whose services could 'both improve health and start saving money,' according to the center's summary of his presentation.

And there is more,

In Washington, Mr. Gingrich's push for electronic health records illustrated how his own policy advocacy and ties to former Congressional colleagues made him a sought-out consultant for companies like Astra Zeneca and Siemens. Mr. Gingrich hailed HealthTrio, one of the center's 'founding charter members,' during a hearing held in 2003 by Senator Larry Craig, Republican of Ohio. Telling the senator that HealthTrio's chief executive had helped design the electronic records program in the United Kingdon, Mr. Gingrich said the company 'estimates we could have an electronic health record for American for about 10 cents per month, per person.'

The center later arranged for HealthTrio and I.B.M to meet with senior federal health officials and congressional leaders 'to review the U.K. approach and how it might be applied in the U.S.,' according to center records.

Some of the ideas promoted by the center found their way into the electronic health records legislation proposed by Mr. Kennedy, which was prepared with input from Mr. Gingrich.

This is especially ironic, given that the UK NHS electronic health record initiative has become a crashing failure (for example, see this post).

Even more involvement with the push for electronic health records (EHRs) appeared in a Boston Globe article,(7)

Newt Gingrich seized the TV airwaves in 2009 to bash President Obama’s stimulus package, calling it 'entirely a pork-barrel bill' that would do little to solve the recession.

Later, in a separate web video, the former House speaker stepped back from his blanket criticism. He explained that he strongly supported spending $27 billion of stimulus funds to encourage doctors and hospitals to create electronic medical records for their patients. Left unsaid was that the Gingrich Group, his consulting business in Washington, received large payments from medical technology companies that stand to profit from the federal money.

In particular,

The stimulus infusion Gingrich supported is expected to benefit health care technology companies, including those who have been clients such as GE Healthcare and Allscripts.

GE Healthcare said it pays Gingrich’s center to act as a 'collaborator and facilitator' among a diverse group of health care interests.

'We work with the Center for Health Transformation in an effort to improve the effectiveness of the health system through the use of information technology,' said GE Healthcare spokesman Corey Miller.

Allscripts spokeswoman Ariana Nikitas said the company ended its relationship with Gingrich’s center two years ago but considered the venture 'a think-tank to advance health care efforts.'

It does not stop there. Per the NY Times,(8)

Mr. Gingrich was cheering a $19 billion part of the [Obama stimulus] package that promoted the use of electronic health records, something that benefited clients of his consulting business. 'I am delighted that President Obama has picked this as a key part of the stimulus package,' he told health care executives in a January 2009 conference call.

After the bill was passed a month later, Mr. Gingrich's consultancy, the Center for Health Transformation, joined two of his clients, Allscripts and Microsoft, in an 'Electronic Health Records Stimulus Tour' that traveled the country, encouraging doctors and hospitals to buy their products with billions in federal subsidies.

We, particularly InformaticsMD, have frequently commented on how health care information technology has been promoted not just by enthusiasts in the field, and by companies that manufacture such devices, but by the government.  The bandwagon has gone down the road despite little clinical evidence that such technology is beneficial, and increasing evidence of its harms.  Now it appears that an important reason for this ruch to promote expensive, but unproven devices comes from the sort of stealth health care policy advocacy on behalf of corporate vested interests described above.
Summary

So Newt Gingrich parlayed his political track record into a lucrative "consultancy" which enthusiastically promoted the health policy objectives of its clients, who included some of the biggest US health care corporations.  Some of the policy positions the consultancy promoted seemed to run counter to Mr Gingrich's political record.  Worse, some of the initiative he successfully promoted seem to have contributed to US health care dysfunction.

These stories, some of which are many years old, only came out after Mr Gingrich became the front runner for the Republican nomination for US President.  Had he not chosen to re-enter politics, it is not clear when reporters would have had time to due the required investigations.  One wonders how many similar stories have not been made public because they do not involve prominent presidential candidates.

The bottom line seems to be that there are myriad ways corporate and political insiders push health policy agendas because of self-interest, regardless of their effects on patients' and the public's health.  Health policy in the US has become an insiders' game.  Unless it is redirected to reflect patients' and the public's health, facilitated by the knowledge of unbiased clinical and policy experts rather than corporate public relations, expect our efforts at health care reform to just increase health care dysfunction. 

Physicians, public health advocates, whatever unbiased health policy experts remain must educate the public about how health policy has been turned into a corporate sandbox.  We must try to somehow activate the public to call for health care policy of the people, by the people, and for the people.

References


1.  Eggen D. Gingrich think tank collected millions from health-care industry.  Washington Post.  November 17, 2011.  Link here.
2. Rutenberg J. Gingrich faces more scrutiny over corporate clients. NY Times, November, 17, 2011. Link here.
3. Benson C, Lerer L. Gingrich health center and group paid $55M. Bloomberg, November 22, 2011. Link here.
4. Tumulty K, Eggen D. Newt Gingrich Inc.: how the GOP hopeful went from political flameout to fortune. Washington Post, November 26, 2011. Link here.
5. Davis JH, Jensen K. Gingrich campaigning as change agent profited as an insider. Bloomberg, November 18, 2011. Link here.
6. McIntire M, Rutenberg J. Gingrich gave push to clients, not just ideas. NY Times, November 29, 2011. Link here.
7. Rowland C. Newt Gingrich supported $27 billion of President Obama's stimulus for electronic medical records, helping his consulting clients. Boston Globe, December 16, 2011. Link here.
8. Rutenberg J, McIntire M. Gingrich push on health care appears at odds with G.O.P. NY Times, December 16, 2011. Link here.