The Revolving Door Spins Again: the Now Constant Coziness Between the Health Care Industry and US Government

Just because Washington DC is now crazy town does not mean the revolving door has stopped spinning.  We have been dutifully accumulating cases, so it is time to present our latest update.

I will divide this into two sections 1) the incoming revolving door, through which come people from the health care industry to enter US government positions in which they may influence health care regulation or policy relevant to their former positions; and 2) the outgoing revolving door, through which go people from US government positions in which they influenced health care regulation or policy to industry positions which were relevant to the scope of their government work.  In each section, we will list cases chronologically according to when they were made public.

Incoming Revolving Door Transitions

James Parker from Multiple Positions in For-Profit Health Insurance Companies to Director of DHHS Office of Health Reform

This was reported in Health Leaders Media in April, 2018:

Parker's profile on LinkedIn says he worked for Anthem from 1995 through 2004, serving more than four years as president of Anthem Blue Cross and Blue Shield of Maine.

Parker then worked about five years for WellPoint after it was acquired by Anthem, serving as president of federal employee benefits, then president of federal government solutions, then chief of staff to President and CEO Angela Braly.

Parker spent more than three years as an independent healthcare consultant before landing his job as president and CEO of provider-sponsored IU Health Plans in 2012. Last year, he was named president and CEO of MDwise, an Indianapolis-based Medicaid managed care organization.

Note that current Secretary of DHHS Alex Azar, who came to his job from a top management position in pharmaceutical giant Eli Lilly, rationalized Parker's appointment thus:

His knowledge and expertise will be vital to our work at HHS to ensure that Americans have access to insurance that meets their needs,

Funny, he did not seem at all worried about putting a long term leader of for-profit health insurance companies in charge of ... health care (but operationally largely health insurance) reform.

Andrew Smith from a Legal Firm for which he Represented Numerous Large Health Care Corporations to Head of Federal Trade Commission Consumer Protection Bureau

This was summarized in The Hill in December, 2018:

The top consumer protection official at the Federal Trade Commission (FTC) is barred from handling cases involving more than 100 different companies due to conflicts of interest from his prior work as a private sector attorney, according to documents obtained by the consumer group, Public Citizen.

Andrew Smith, who was tapped as the chief of the FTC’s Consumer Protection Bureau in May, listed 120 conflicts on a financial disclosure form that Public Citizen released on Thursday.

The Hill's reporting emphasized Smith's representation of financial and technology firms, but he also represented a number of big health care corporations, based on the disclosure form that Public Citizen obtained via a freedom of information act (FOIA) request.

These included Bioverativ (a Sanofi subsidiary), Cardinal Health, GlaxoSmithKline, and the Pharmaceutical Research and Manufacturers of America (PhRMA).

Lisa Gilbert, Public Citizen Vice President of Legislative Affairs, was quoted:

Even in an administration full of unprecedented conflicts of interests, Mr. Smith’s conflicts stand out from the pack

An article in GizModo noted

Senator Elizabeth Warren was another staunch critic of Smith’s hire who in May said the agency’s decision was 'outrageous' and added that the FTC 'should pick someone with a track record of protecting consumers, not companies that cheat people.'

Dr Amy Abernethy from Chief Medical Officer for Roche Subsidiary Flatiron Health to Principal Deputy Commissioner of the FDA

Per Matthew Herper writing for Forbes in December, 2018:

The Food and Drug Administration has named Amy Abernethy, currently the chief medical officer at Flatiron Health, a unit of the drug giant Roche, to one of its highest positions. She will start in a few months.

Abernethy, an oncologist who is credited with helping Flatiron transform data collected from electronic medical records into information that might become acceptable to FDA regulators, will be the Principal Deputy Commissioner for Food and Drugs. This is the highest position at the FDA that is not a political appointment. It cuts across all areas of the agency’s remit, overseeing initiatives that cut across offices that oversee the regulation of drugs, medical devices, tobacco and food. Flatiron was purchased by Roche at a valuation of $2.1 billion earlier this year.

Mr Herper did include this dry statement

That potential conflict of interest could be an issue for some outside the FDA.

Of course, the current FDA commissioner was rather blase about any conflict of interests Dr Abernethy might have:

In his memo to staff, Scott Gottlieb, the FDA commissioner, said that Abernethy’s ethics review is still pending. It will likely help that she is unlikely to own large amounts of stock in either Flatiron or Roche, because Roche paid for Flatiron in cash.

There was considerable discussion of  Dr Gottlieb's own conflicts of interest at the time of his appointment (see, for example, this article from the New York Times).  

Outgoing Revolving Door Transitions

Multiple High Ranking FDA Officials to Pharmaceutical Companies

This was reported in April, 2018 in the newsletter of the Regulatory Affairs Professional Society:

Twenty-year FDA veteran Badrul Chowdhury, most recently director of the Center for Drug Evaluation and Research’s (CDER) Division of Pulmonary, Allergy and Rheumatology Products, has taken a job this month as senior vice president at AstraZeneca.

FDA confirmed to Focus that Chowdury joined the agency in 1997 and left on 16 April. And Chowdury isn’t the only one to leave in recent months for an industry job, FDA said.

Sarah Pope Miksinski, former director of the Office of New Drug Products in FDA’s Office of Pharmaceutical Quality, left the agency in February, also for AstraZeneca. And last July, Geoffrey Kim, former director of FDA’s Division of Oncology Products moved to AstraZeneca to become its VP of oncology and head of oncology strategic combinations.

Meanwhile, Jean-Marc Guettier, former director of FDA’s Division of Metabolism and Endocrinology Products, left FDA in December 2017 for Sanofi, Niraj Mehta, former associate director for global regulatory policy at FDA moved over to Merck as a director in March 2018....

So where could former FDA officials get such well compensated, top positions outside the pharma industry?

Bruce Greenstein, Chief Technology Officer of DHHS to LHC Group (For-Profit Home Health Care Provider)

Reported in the Home Health Care News in May, 2018:

HHS CTO Bruce Greenstein will become LHC Group’s first chief innovation and technology officer in June, the home health, hospice and personal care services provider announced Tuesday.

Note that in 2017, we discussed how Greenstein had transited the incoming revolving door from a health care technology company to DHHS.

Once a revolving door transitioner, always a revolving door transitioner? 

Dr Tom Price, Former Secretary of DHHS to Jackson Healthcare

As reported in Health Leaders Media in January, 2019:

Tom Price, MD, the scandal-plagued former secretary for the Department of Health and Human Services, has been named to the advisory board of Jackson Healthcare.

A spokesperson for the Atlanta-based healthcare staffing firm said that the company is privately held and would not detail Price’s compensation.

It is interesting that Health Leaders Media inserted that phrase, "scandal-plagued," in such a prominent way.  Nonetheless, the leaders of Jackson Healthcare was effusive:

'Nobody has as profound an understanding of the national healthcare landscape as Dr. Price,' Richard L. Jackson, chairman and CEO of Jackson Healthcare, said in a media release. Tom has exhibited an unwavering commitment to preserving the patient-physician relationship. That mindset, along with his physician, business and policy experience, will make him an invaluable addition to our board.'

No scandals to see here, please move on. 

Courtney Price, Assistant Secretary for Legislative Affairs at DHHS to Cigna

In February, 2019, ProPublica published an article documenting the departure of 33 top  executive branch officials for lobbying positions.  These included:

Courtney Lawrence was a longtime aide for Reps. Bill Cassidy and Tom Price and a federal lobbyist for the insurance trade association America’s Health Insurance Plans before taking a job as assistant secretary for legislative affairs at Health and Human Services in March 2017, when Price briefly headed the agency. Lawrence stayed for 18 months before leaving in August 2018 for a director role at Cigna Corp., the health insurance conglomerate.

Lawrence registered as a lobbyist with Cigna in October. Her disclosure forms state that she was working on proposed changes to Medicare, the Affordable Care Act and prescription drug rebates. Federal lobbying disclosures show that Lawrence was one of several lobbyists to communicate with federal agencies and the White House, and not just members of Congress. In a statement, Cigna asserted that the lobbying disclosure — which was prepared by the company — is inaccurate. Cigna blamed a 'formatting issue.' The statement said Lawrence 'does not and will not lobby the Executive Branch.' The company said it would correct her lobbying disclosure form.

So where will she lobby instead?

Alex Campau, White House Health Policy Aide to Cozen O'Connor

ProPublica also briefly noted

Alex Campau, a White House health policy aide now running the health lobbying team at Cozen O’Connor

That should do it for now.

Summary

With so many crises appearing during the Trump regime, the issue of the revolving door seems to get lost in the fray.  However, the Trump regime has supercharged a chronic problem, especially in its proclivity to hire people direct from industry to regulate and set policy that affect their old employers.  As we have said again and again, that is three times in 2018,  

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump regime once again suggests how the revolving door may enable certain of those with private vested interests to have disproportionate influence on how the government works.  The country is increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

Remember to ask: cui bono? Who benefits? The net results are that big health care corporations increasingly control the governmental regulatory and policy apparatus.  This will doubtless first benefit the top leadership and owners/ stockholders (when applicable) of these organizations, who are sometimes the same people, due to detriment of patients' and the public's health, the pocketbooks of tax-payers, and the values and ideals of health care professionals.  

 The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

How Stupid Do They Think We Are? - Plutocrats Using Logical Fallacies to Defend the Health Care Status Quo

In the early 21st century, the debate about health care reform in the US ramped up.  The result ultimately was the Patient Protection and Affordable Care Act (PPACA, ACA, "Obamacare"), which arguably improved access to health care, made some reforms in the regulation of health care insurance, but did not affect the fundamental reliance of the US on employer-paid, for-profit health care insurance to finance health care for many patients.  Nor did it really affect the issues we discuss on Health Care Renewal (look here for details).

After the tumultuous election of President Donald Trump, the debate started up again with his and his party's attempt to "repeal and replace" Obamacare.  Arguably, Obamacare ended up damaged but not repealed.  Once again, the issues we discuss on Health Care Renewal were ignored, including threats ot the integrity of the clinical evidence base, deceptive marketing, distortion of health care regulation and policy making, bad leadership and governance, concentration of power, abandonment of health care as a calling, perverse incentives, the cult of leadership, managerialism, impunity enabling corrupt leadership, and taboos, or the anechoic effect.  (Look here for a detailed discussion. )

It is time once again to discuss health care reform in the US.  Now the push is from the Democrats and the left, with the stated goals of making care more universal, and perhaps decreasing or even ending the role of for-profit commercial health care insurance companies.

It is no surprise that those who benefit the most from the current system (even as modified by Obamacare) are rushing to its defense. 

Dark Money to Defend Commercial Health Insurance

We already discussed  how large health care corporations, including pharmaceutical and biotechnology companies, have been using dark money to funnel money for distinctly partisan purposes, to defeat whom they perceive as too left-leaning politicians, almost all Democrats.  They seem to fear such politicians might promote health care reform efforts that would be based on "anti-free-market, anti-business ideology," that is efforts to decrease the role of commercial, for-profit health insurance in financing health care.

More recently, the focus has shifted to Democratic proposals for government run single-payer, or "Medicare for all" health insurance. In early January, 2019, the Hill reported

Thomas Donohue, the president and CEO of the Chamber of Commerce, on Thursday vowed to use all of the Chamber's resources to fight single-payer health care proposals.

'We also have to respond to calls for government-run, single-payer health care, because it just doesn't work,' Donohue said during his annual 'State of American Business' address.

The US Chamber of Commerce historically has had many executives of big health care corporations on its board.  We listed 10 such members in 2015.   It also historically has received financial support from some corporations.  We listed 17 in 2018.


Then later in January, The Hill reported that a group called Partnership for America's Health Future started digital ads attacking "Medicare for All."  The Hill stated its

members include major industry players such as America’s Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America

So here we have the leaders of big health care corporations funneling corporate money into propaganda campaigns to defeat government run single payer health insurance, an old policy idea that suddenly is looking politically credible.  Current US regulation and practice allows them to hide the exact amounts spent on such campaigns by processing them through dark money organizations.

Such stealth health policy advocacy is now not new.  What is surprising now is how some top leaders are willing to jump into the debate themselves, rather than just trying to manipulate public opinion through public relations/ propaganda proxies.  Here are some telling examples. in chronological order.

Quest Diagnostics CEO Attacks "Medicare-for-All" Using an Appeal to Authority, an Argument by Gibberish, the Non Sequitur Fallacy, (and an Incomplete Comparison) 

On January 24, 2019, Yahoo Finance reported

A top health care CEO is sounding the alarm on 'Medicare for All,' an idea gaining steam in political circles, including from newly-elected Rep. Alexandria Ocasio-Cortez (D-NY).

'Most people don’t understand the basics of health-care economics in the United States,' said Steve Rusckowski, chairman & CEO Quest Diagnostics (DGX), in an interview with Yahoo Finance editor-in-chief Andy Serwer at the World Economic Forum in Davos, Switzerland....

Mr Rusckowski implied that he knows a lot more about health care economics than most people, so most people should listen to him.  Thus, he began with an implied logical fallacy, the appeal to authority.

He then presented the justification for his argument.

'The majority of people get their health care from their employers, and the majority of healthcare costs are paid by employers and employees,' he said. 'If you look at the $3.5 trillion spent on healthcare costs, that portion is actually funding the Medicare and Medicaid programs throughout this country.'

The syntax was fractured, and so this was incoherent and confusing. In particular, it was not clear to what "this portion" referred.  $3.5 trillion? Health care costs paid by employers and employees?

The context of  his use of that phrase did not help.  Note that US total health spending was reported to be approximately $3.5 trillion in 2017 by the US Center for Medicare and Medicaid Services (CMS).  However, that was total health spending, not just the amount spent by Medicare and Medicaid.  Furthermore, Medicare and Medicaid are funded by sources other than employers and their employees.  While employers and employees pay tax on employee income to fund Medicare, general funds from the federal government, and from state governments funds Medicaid. Furthermore, many employers pay parts of their employees' private health insurance premiums, while the employees make up the difference in premiums. Self-employed people may may for their own insurance, etc, etc.


Mr Ruskcowski, not to put to fine a point on it, seemed to speaking gibberish, and would use this gibberish to justify his next point.  So in formal terms, he used the logical fallacy of an argument by gibberish.

When incomprehensible jargon or plain incoherent gibberish is used to give the appearance of a strong argument, in place of evidence or valid reasons to accept the argument.

In any case, Mr Rusckowski went on to argue that he

remained skeptical of a Medicare-for-all plan funded by corporations and employees. 'I don’t think [corporations and employees] can afford to provide that access as described.'

However, not only were his earlier statement gibberish, they were not clearly arguments in support of his contention that corporations and employees cannot "afford to provide that access as described."  So this appeared to be an example of the logical fallacy of the non-sequitur.

Mr Rusckowski's total compensation as CEO of Quest was over $10 million in 2017, as estimated by Bloomberg News.  So it is perhaps not surprising that is self-interest in preserving the status quo was strong enough to motivate him to jump into the debate.  One would think, however, that someone who managed to become a rich CEO of a medical diagnostic company could manage to be a bit more logical.

Anyway, he has some strange bed-fellows in this cause, including two billionaires who are not directly involved in health care corporations, but who have obviously benefited from the current economic status quo.

Michael Bloomberg and Howard Schultz Used the Incomplete Comparison Fallacy

Two billionaires provided striking examples of one logical fallacy. 

First, from the New York Times, January 29, 2019:

Mr. Bloomberg, the former New York City mayor who is considering a 2020 bid on a centrist Democratic platform, rejected the idea of 'Medicare for all,' which has been gaining traction among Democrats.

'I think you could never afford that. You’re talking about trillions of dollars,' Mr. Bloomberg said during a political swing in New Hampshire, which holds the nation’s first primary in 2020.

'I think you can have ‘Medicare for all’ for people that are uncovered,' he added, 'but to replace the entire private system where companies provide health care for their employees would bankrupt us for a very long time.'

Second, from CNN on January 30, 2019:

'Why do you think Medicare-for-all, in your words, is not American?' CNN's Poppy Harlow asked Schultz on Tuesday.

'It's not that it's not American,' Schultz said. 'It's unaffordable.'

'What I believe is that every American has the right to affordable health care as a statement,' Schultz said, lauding the Affordable Care Act, otherwise known as Obamacare, as 'the right thing to do.'

He added, 'But now that we look back on it, the premiums have skyrocketed and we need to go back to the Affordable Care Act, refine it and fix it.'

He argued that the Democratic progressive platform of providing Medicare, free college education and jobs for everyone is costly and as 'false as President Trump telling the American people when he was running for president that the Mexicans were going to pay for the wall.'

So both billionaire Bloomberg and billionaire Schultz stated that Medicare-for-all would cost too much.  Yet neither addressed how much our current health care system costs.  However, as a subsequent op-ed in the Washington Post by Paul Waldman pointed out, it only makes sense to talk about affordability in the context of a comparison with a reasonable alternative, say, the current health care system:

there is one thing you absolutely, positively must do whenever you talk about the cost of a universal system — and that journalists almost never do when they’re asking questions. You have to compare what a universal system would cost to what we’re paying now.

there have been some recent attempts to estimate what it would cost to implement, for instance, the single-payer system that Sen. Bernie Sanders (I-Vt.) advocates; one widely cited study, from a source not favorably inclined toward government solutions to complex problems, came up with a figure of $32.6 trillion over 10 years.

That’s a lot of money. But you can’t understand what it means until you realize that last year we spent about $3.5 trillion on health care, and under current projections, if we keep the system as it is now, we’ll spend $50 trillion over the next decade.

Again, you can criticize any particular universal plan on any number of grounds. But if it costs less than $50 trillion over 10 years — which every universal plan does — you can’t say it’s 'unaffordable' or it would 'bankrupt' us, because the truth is just the opposite.

These are text-book examples of the fallacy of incomplete comparison.

By the way, buried amongst his use of gibberish and non-sequiturs, Quest Diagnostics CEO Rusckowski also opined that Medicare-for-all would be unaffordable without any reference to the costs of the status quo, and hence also provided an example of an incomplete comparison.

The Waldman op-ed noted

The fact that these two highly successful businessmen — whose understanding of investments, costs and benefits helped them become billionaires — can say something so completely mistaken and even idiotic is a tribute to the human capacity to take our ideological biases and convince ourselves that they’re not biases at all but are instead inescapable rationality.

Maybe.  However, it may also be a tribute to their arrogance bred by decades of public relations (which Bernays thought sounded better than "propaganda") and disinformation meant to soften up the minds of the public so that they will follow the lead of the rich and powerful.  

Schultz Also Added an Appeal to Tradition (or to Common Practice)

Also on January 29, the Washington Post reported that

Schultz referred to a town hall hosted Monday night by CNN in which Harris embraced a 'Medicare-for-all' single-payer health insurance system and said she would be willing to end private insurance to make it happen.

'That is the kind of extreme policy that is not a policy that I agree with,' Schultz said on 'The View,' adding that doing away with private insurers would lead to major job losses.

'That’s not correct. That’s not American,' Schultz said on CBS. 'What’s next? What industry are we going to abolish next? The coffee industry?'

Presumably, by saying "that's not American," Schultz means that is not what we have always done, that is not what has been traditional American practice, begging the question of whether that practice could be ill-advised.  Thus Schultz appeared to ladle on an appeal to common practice, otherwise known as an appeal to tradition. 

As an aside, the quote also suggests that Schultz's real concern is not with the affordability of Medicare-for-all, particularly in comparison with that of the current system, but with the financial health of the insurance industry.  But that is for another day....

Summary

So, to protect against the dread "Medicare for all," that is, proposals for a government single-payer health insurance system to replace our current practice of financing health care through large, mainly for-profit  insurance companies, we see an acceleration of public relations/ propaganda paid by undisclosed donors, that is, via dark money.  We also see prominent multi-millionaire and billionaire executives laying down a barrage of logical fallacies to support the status quo.


It is hard to believe that the defenders of the current system are not mostly self-interested.  That status quo has made some people very rich.  

It is also hard to believe they are stupid.  However, a close reading of their arguments suggests they may think we are stupid, or at least befuddled by repeated public relations/ propaganda/ disinformation campaigns.

In 2011, we wrote,

Wendell Potter, author of Deadly Spin, has provided a chilling picture of health care corporate disinformation campaigns and the tactics used therein.

In particular,

Mr Potter recounted how deceptive PR campaigns subverted the health care reform plans of US President Bill Clinton, reduced the impact of Michael Moore's movie, 'Sicko,' and helped to remodel the recent health care reform bill to reduce its threat to commercial health insurers.  He further noted how PR distracted public attention from the growing faults of a health care system based on commercial health insurance, and how practical and legal safeguards against abuses by insurance companies were eroded.

Furthermore, Mr Potter

described 'charm offensives;' the deliberate creation of distractions, including the planting of memes for short-term goals that went on to have long-term adverse effects; fear mongering; the use of front groups, including 'astroturf,' (faux disease advocacy and/or grass roots organizations), public policy advocacy groups, and tame (and conflicted) scientific/professional groups; and intelligence gathering.  He provided some practical advice for detecting such tactics. For example, be very suspicious of policy advocacy by groups with no apparent address or an address identical to that of a PR firm, or with anonymous leaders and/or anonymous financial backing.

Now it is 2019, once again health care reform is in the air, and once again the defenders of the status quo are hard at work.  Now, they are even wealthier than they were 10 years ago, and have even more sophisticated tools, like social media and its hacks, at their disposal.  Still, however, their arguments are ultimately built on sand.

As I did in 2011, it makes sense to quote Wendell Potter

onslaught drastically weakened health-care reform and how it plays an insidious and often invisible role in our political process anywhere that corporate profits are at stake, from climate change to defense policy.
[Potter, Huffington Post]

So,

The onslaughts of spin will not stop, the distortions will not diminish, and the spin will not slow down. To the contrary, spin begets spin, as the successes of corporate PR functionaries increase the revenues of their employers, further funding their employers' efforts to create a more hospitable climate for their business interests. Americans are thus being faced with increasingly subtle but effective assaults on their beliefs and perceptions. Their best defense right now is to understand and to recognize the sophisticated tactics of the spinners trying to manipulate them.

Most important is a singular mandate: Be skeptical.
[Potter, Huffington Post]

I still hope that summarizing some of Mr Potter's amazing points will help us all to be much more skeptical.

You heard it here first.

ADDENDUM (22 February, 2019) - This post was re-posted on Naked Capitalism.  See the comments section for a quite interesting discusison.