The New Business Coup? Increasing Evidence that Large Health Care Corporations are Funding Threats to Democracy

Introduction: Health Care Corporations' Political Contributions: From Bipartisan to Trumpian

 At one time, leadership of large health corporations were circumspect in their financial support for US politicians and political causes. They provided some funds directly to politicians and political organizations, but often amounts given to different parties and organizations with different ideologies were balanced. Presumably, the goal was to promote access to whomever was in power at any given time. 

 

With the rise of Donald Trump, things changed. Many leaders apparently went all in for Trump and his Republican supporters.  In June, 2018  we discussed how CVS channeled money to a "dark money group," that promoted Trump administration policies, including repeal of the Affordable Care Act (ACA). In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates. In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians. In March, 2019, we discussed how in the 21st century, health care corporate CEOs' personal political contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 

Some corporations paused some of their political giving after a mob whipped up by Trump at a January 6, 2021, rally violently stormed the US Capitol to try to prevent the certification of the 2020 election. However, within two months they started giving again in support of Republicans in Congress who voted not to certify the election (see this April, 2021, post, this July 7, 2021, post, and this September 7, 2021 post).

Now just after the anniversary of an insurrection that almost prevented the certification of the 2020 US presidential election results, there are new indications that leaders of big health care corporations are continuing to support Republicans in Congress who voted to overrule the results of that election.

Health Care Corporate Sponsorship of the Attempt to Overturn the 2020 Election 

Citizens for Responsibility and Ethics in Washington (CREW) has updated their report on corporate sponsorship of the politicians who wanted to overturn the election.  The January 3, 2022 version is entitled "The Corporate Insurrection: How companies have broken promises and funded seditionists." It described the "717 corporations and industry groups have donated over $18 million to 143 of the 147 members of Congress who objected to the results of the 2020 presidential election, as well as the National Republican Senatorial Committee and the National Republican Congressional Committee."  It referred to the updated data about the largest corporate funders appearing in the current version of CREW's previous report.  The health care corporations that appear in this list of 80 are:

Pfizer                                        $71,000

Merck                                      $68,000

Eli Lilly                                   $42,000

Johnson & Johnson                   $38,500

Anthem                                   $32,500

Cigna                                       $30,000

CVS Health                            $30,000 

AstraZeneca                           $26,500

Humana                                $15,000

Blue Cross & Blue Shield         $15,000 

Keep in mind that these amounts only reflect corporate donations directly to members of Congress, their own leadership PACs, and to the national Republican campaign committees, which must be disclosed by law. They do not include any amounts given by corporate executives, or amounts given to various kinds of dark money organizations, which do not have to be disclosed according to law.  Thus they may seriously undercount the financial support given by health care corporations to support those who wanted to nullify the election. But at least these figures suggest that 5 large pharmaceutical/ biotechnology companies, 4 health care insurance companies, and one diversified pharmacy company continue to be strong supporters of legislators who were willing to do so.  

Furthermore, as noted in a January 5, 2022, article in Fierce Pharma, spokespeople for some of these corporations declared they were no longer worrying about whether politicians support democracy or tried to overturn an election, but only about whether the politicians support policies that would improve their corporate bottom lines.  For example, see this from Pfizer:

Pfizer’s PAC supports policymakers who value innovation and expanded access to breakthrough medicines and vaccines that change patients’ lives,

And see this from Eli Lilly: 

[the company] supports candidates across the political spectrum who understand the value of a vibrant pharmaceutical ecosystem to address unmet patient needs.

Billionaires Who Made Their Money from Health Care Corporations Who Supported the Attempt to Overturn the Election  

A January 6, 2022 article in Forbes listed the "more than 50 billionaires [who] donated in the second half of 2021 to legislators who voted against certifying the presidential election, according to an analysis of Federal Election Commission records."  Two the billionaires made their fortunes from health care corporations.  They were: 

- Phillip Frost, worth $2,500,000,000, described as "a long-time health care investor, inventor and founder, Phillip Frost now runs diagnostics-maker Opko Health." He "joined Key Pharmaceuticals in 1972, reformulated its asthma drug and sold the company in 1986 for $836 million." Also, he "founded Ivax, a generic drugmaker, in 1987. He sold it to Teva Pharmaceuticals for $7.6 billion in 2005"  Frost supported Sen Hawley (R-MO). 

- James Leininger, worth $1,500,000,000, described as having "made his fortune founding medical devices company Kinetic Concepts (KCI), which focuses on wound care." He also runs "Medcare Investment Funds, which manages $1 billion in assets." Leininger supported Rep Cloud (R-TX). 

 Discussion

 As we said before, most health care corporations publish high-minded aspirational statements that promise pluralism, support of the community, and of our representative democratic society. Data revealed recently and discussed in our previous three posts increasingly show that some leaders of  large health care corporations saw fit to direct contributions to politicians who promoted anti-democratic policies. Funding political leaders who would challenge election outcomes in the absence of very clear evidence of election irregularities seems to violate high-minded corporate pledges of inclusiveness.

Is it that health care corporate leadership just are more interested in making money than in bettering society, despite their aspirational mission statements? As we previously discussed, that is a plausible formulation.  For example, per the Washington Post in January, 2021,

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee.

Also, the quotes above support the idea that corporate leaders put their own bottom lines ahead of supporting the republican form of government that partially made their revenues possible.

On the other hand, maybe it is not just about money.  Again, as we said before, by virtue of being top corporate managers, particular individuals can control political funds far beyond what they would  be able to control as private persons, and to do so quietly and sometimes anonymously.  Corporate leaders may thus be able to promote their own interests through their corporations' political giving.  Those interests may go beyond just personal enrichment.   Some may also be interested in personal political power, or have other ways they might benefit from anti-democratic, authoritarian, even openly fascist national political leadership.  

Big industrialists have backed authoritarian and openly fascist regimes in other countries before, some to make more money, but in retrospect, some for darker reasons. (See, for example, this article on how German industrialists financially bailed out the Nazi party in 1932.)  

There was at least one previous instance in which US business leaders tried to effect a coup to oust a President they considered too left wing.  This was sometimes called the "business coup."  According to a Washington Post article from 2021, its sponsors included "included J.P. Morgan Jr., Irénée du Pont and the CEOs of General Motors, Birds Eye and General Foods."  Their goal was to depose President Franklin D Roosevelt and 

install a dictator who was more business friendly. After all, they reasoned, that had been working well in Italy

The plot failed because the former military officer they chose to lead it informed the government.  So far, the attempt by now former President Trump and his followers to do something similar has also failed. That does not mean, however, that the next attempt will not succeed.

 

IMHO, all citizens need to wake up and  protect our republic.  Furthermore, all medical and public health professionals specifically need to take action to wake up and protect our republic specifically from self-interested health care corporate leaders.  Imagine what health care and public health might be like were they to exert near absolute control facilitated by an authoritarian they installed in office 

 

 

Leadership of Big Health Care Corporations Go Back to Financially Supporting the Opponents of Democratic Governance

At one time, leadership of large health corporations were circumspect in their financial support for US politicians and political causes. They provided some funds directly to politicians and poltical organizations, but often amounts given to different parties and organizations with different ideologies were balanced. Presumably, the goal was to promote access to whomever was in power at any given time. 

With the rise of Donald Trump, things changed. Many leaders apparently went all in for Trump and his Republican supporters.  In June, 2018  we discussed how CVS channeled money to a "dark money group," that promoted Trump administration policies, including repeal of the Affordable Care Act (ACA). In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates. In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians. In March, 2019, we discussed how in the 21st century, health care corporate CEOs' personal political contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 

 

Some corporations paused some of their political giving after a mob whipped up by Trump at a January 6, 2021, rally violently stormed the US Capitol to try to prevent the certification of the 2020 election. However, within two months they started giving again in support of Republicans in Congress who voted not to certify the election (see this April, 2021, post).

Now two new reports show continuing support by large health care corporations for Republican legislators who also supported the nullification of the election, and legislation that might decrease voting by citizens who oppose Trump

Health Care Corporate Sponsorship of Voter Suppression

In April, 2021, Public Citizen published "The Corporate Sponsorship of Voter Suppression." It detailed support from direct corporate contributions and corporate political action committees (PACs) from 2015 through March, 2021, to state legislators who authored, sponsored or voted for 245 bills that could have made it more difficult for citizens to vote in elections. 

The 25 companies contributing the largest amounts of money to these legislators included UnitedHealth Group ($411,200 total); Pfizer ($308,085); and Centene Corp ($205,200).  Companies that gave somewhat less included Merck ($180,000),  CVS ($174,000), Anthem ($138,150) Eli Lilly ($124,000) and Cigna ($109,225).

Two health care related trade groups also gave significant funds to these legislators: the Virginia Dental Association ($223,000) and the  Pharmaceutical Research and Manufacturers Association of America/PhRMA ($200,000).   

Note that the data did not include personal contributions from corporate leaders, and could not include corporate money directed to dark money organizations that ended up supporting these legislators.

Health Care Corporate Sponsorship of the Attempt to Overturn the 2020 Election

In June, 2021, Citizens for Responsibility and Ethics in Washington (CREW) published "This Sedition is Brought to You By..." It detailed contributions from corporate PACS and trade groups to those in the US Congress who voted against certifying the results of the 2020 election and the two main party organizations that supported them, the National Republican Senatorial Committee (NRSC) and National Republican Congressional Committee (NRCC) since the vote not to certify.  

The largest contributions from health care corporate PACs included those tied to Fresenius Medical Care Holdings ($76,000); CVS ($45,000); Cigna ($42,500); Johnson & Johnson ($30,000); Pfizer ($20,000); and Humana ($15,000).

Note that the data also did not include contributions from corporate leaders, and could not include corporate money directed to dark money organizations that ended up supporting these legislators. 

Discussion

Most health care corporations profess to missions that are pluralistic and support the community and society as a whole.  For example, Pfizer's mission statement includes:

We partner with governments, non-profits, and other organizations to ensure that more people around the world have access to the medicine and resources they require.

UnitedHealthCare's mission statement includes:

UnitedHealthcare is dedicated to helping people live healthier lives and making the health system work better for everyone

Merck's mission statement includes:

We demonstrate our commitment to patients and population health by increasing access to health care through far-reaching policies, programs and partnerships

However, leaders of some large health care corporations saw fit to direct contributions to politicians who promoted anti-democratic policies. Funding political leaders who would restrict voting rights in ways likely to impact already disadvantaged groups, and challenge election outcomes without strong evidence of irregularities would seem to violate high-minded corporate pledges of inclusiveness like those above.    

Is it that health care corporate leadership just are more interested in making money than in bettering society, despite their aspirational mission statements? As we previously discussed, that is a plausible formulation.  For example, per the Washington Post in January, 2021,

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee.

However, there are problems with this formulation.  As we wrote before,  it is obvious why a pharmaceutical company might want to defeat legislation that would lower its prices or raise its taxes.  It is not obvious why it would want to consistently support actions by one party, or by people at one end of the political spectrum, even if some such people seem generally "pro-business."  After all, for years big corporations and their executives openly gave money to both US parties and their candidates, apparently in the belief that this would at least allow more visibility for the corporations' priorities no matter who was in power.

Maybe it is not just about money.  Again, as we said before, by virtue of being top management of a corporation, particular individuals can control political funds far beyond what they may be able to control as private persons, and to do so anonymously.  It may be that top corporate leaders are not just interested in making more money.  Some may also be interested in personal political power, or have other ways they might benefit from anti-democratic, if not openly fascist national political leadership.  Big industrialists have backed authoritarian and openly fascist regimes in other countries before, some to make more money, but in retrospect, some for darker reasons. (See, for example, this article on how German industrialists financially bailed out the Nazi party in 1932.)

At least health care professionals, policy makers, patients and the public at large deserve to know how health care corporate leadership is directing money to political causes, and how they benefit from doing so. 

 

    

A Few Leaders of Big Health Care Corporations Hesitate in Their Support of Extreme Politics and Insurrection, But Will Anything Really Change?

 Some recent but not well publicized articles suggests how big health care corporations are still enabling some of the worst aspects of health care and larger political economic dysfunction.

Introduction - Health Care Corporate Political Donations Become More Partisan and Ideological

A long time ago in a galaxy far, far away big health care corporations in the US had an apparently straightforward philosophy of political giving.  They gave contributions more or less equally to both major political parties.  Apparently the theory was that the corporate giving would be remembered favorably by whoever won elections and got governmental power.  Corporate contributions raised major concerns about their ability to purchase access and influence policy far beyond those of less wealthy groups and the public at large.  At least, however, it was overtly non-partisan, and ostensibly not ideological.

However, things changed, and health care (and larger corporate) political giving became more partisan, and and more ideological. As we discussed here, 

- In June, 2018, we first noted how the huge pharmacy chain CVS, had been secretly making contributions to America First Policies, an ostensibly non-profit organization.  CVS claimed that it helped fund AFP because it supported tax reform.  Actually, AFP acted to promote Trump administration policies. AFP encouraged repeal of the Affordable Care Act (ACA), and building a wall on the US southern border.  These seemed at odds with CVS claims about its social responsibility.  

- In September, 2018, we noted that big health care corporations often make high-minded public pledges about supporting patients' and the public's health, and sometimes social responsibility, but have been found to be covertly supporting policy initiatives that seemed to subvert these goals, using "dark money."  The dark money groups they used to channel this money often had explicitly partisan leadership and direction, usually right-wing and Republican.

 

- In October, 2018, we discussed important but incomplete revelations about corporate contributions to such dark money groups that mainly favored again right-wing ideology, the Republican party, and Trump and associates.

- In November, 2018, we noted that health care corporations funneled funds through dark money organizations to specifically attack designated left-wing, Democratic politicians.

- In March, 2019, we discussed a study of the personal political contributions of CEOs of large corporations.  In the 21st century, the CEOs' contributions were increasingly partisan, that is individual CEOs gave predominantly or exclusively to one party, and for the vast majority, to the Republican party. 

- In October, 2020, we discussed the apparent relationship between the support to Trump provided by large pharmaceutical corporations and his inclination to outsource his coronavirus pandemic management to them. 

Corporate leadership's enthusiasm for Trump, his policies, and his associates seemed to arise from  economic interests of the corporations and the self-interest of their top management, but without consideration of how Trump and associates' actions may have harmed larger corporate, social, or national interests.  As discussed in a Washington Post article on January 8, 2021:

Business groups big and small largely stuck by Trump as he broke one norm after another over the past four years, including insulting immigrants, appearing to empathize with white supremacists in Charlottesville and clearing a Black Lives Matter protest in Washington for a photo op. They stuck by him still after he pressured the Ukrainian president in a bid to help his own election chances, after his impeachment, after he intentionally downplayed the effects of the novel coronavirus and last week after he was recorded pressuring the Georgia secretary of state to overturn the election results.

Even Trump supporters admitted the corporate leaders' extreme compartmentalization:

'It isn’t going to affect tax rates. How about monetary policy? Allow me to stay pure to my turf,' Art Laffer, a supply side economist who is close with White House economic officials and speaks to the president, said in a brief interview.

One observer described their thinking thus:

'Their attitude was: ‘Let’s take the big tax cuts and hold our noses for the obvious xenophobia and authoritarianism.’ It was a classic Faustian bargain,' said Rep. Brendan Boyle (D-Pa.), a member of the House Ways & Means Committee. 'They should have known from the beginning.'

However, the Trump administration's actions and policies often seemed to directly contradict the stated values, visions and missions of health care corporations.  For example, Pfizer declares its values to be:

customer focus, leadership, quality innovation, collaboration, respect for people, integrity, and performance

How would the value "respect for people" align with Trump's hostility toward immigrants, or sympathy for white supremacists?  How would the value "integrity" align with Trump's pressure on the Ukraine to influence his election, or his pressure on officials in the state of Georgia to alter the election results in his favor?  

Nonetheless, until very recently, hardly anyone seemed to notice that large health care corporations had changed their political giving so as to make its effects antithetical to the corporations' declared principles and values.  

Trump's Attempt to Overturn the 2020 Election Inspire A Few in Corporate Leadership to Rethink Its Political Support for Him and His Associates

Yet things apparently changed after Trump's attempts to overturn the election, including claims that he actually won despite obvious evidence to the contrary, baseless legal challenges to the election results that were almost all dismissed by the courts, and an attempt by Trump supporters in Congress to challenge and possibly override the election results in congressional proceeding.  That crossed a line.

Within days, corporate leaders who had generally been quiet about Trump administration's actions and policies that ran counter to their organizations' stated goals and mission began to speak up.  Several hundred signed a statement:  

Congress should certify the electoral vote on Wednesday, January 6. Attempts to thwart or delay this process run counter to the essential tenets of our democracy.

Most of those who signed lead financial firms, but the list did include Albert Bourla, CEO of Pfizer, a firm that had been one of Trump's favorites (see above).

Then, Trump's exhortation to his supporters at a rally to march on the Capitol while congress was debating Trump's supporters' challenge to the election results, which led to an insurrection and armed occupation of the Capitol building,  which was eventually beaten back by law enforcement with significant casualties led some corporate leaders to rethink their positions. 

The next day, per the Washington Post:

The mob scenes at the Capitol attracted harsh and unusual criticism from business groups, including the chief executive of one of the nation’s largest banks saying he is 'disgusted' and a manufacturing trade group calling it 'sedition' and suggesting that President Trump must be removed from office immediately.

It was a stunning series of rebukes for a president who had received widespread support from corporate America for most of his turbulent term, especially for his efforts to cut government regulations and reduce corporate tax rates.

But what occurred Wednesday seemed finally to be too much. Trump staged a rally in Washington a short walk from where Congress was counting the electoral college votes, with Trump whipping up his followers with fabrications about election results and urging them to march to the Capitol to protest. Later, Trump appeared to sympathize with the mob and support the violent actions.

 The National Association of Manufacturers soon after released an extraordinary statement from its president, Jay Timmons, saying Vice President Pence 'should seriously consider working with the Cabinet to invoke the 25th amendment to preserve democracy.'

At that time, one more CEO of a pharmaceutical company that had been one of Trump's favorites spoke up:

Alex Gorsky, the chief executive of Johnson & Johnson, said in a statement that he is 'devastated by this assault on what our country has stood for since its founding: free, fair and peaceful elections.' He said it is time to stand for unity, 'not face-to-face in conflict — and to chart our path to a better and healthier future.'

Furthermore, some large corporations, including health care corporations, announced a review or freeze on political donations through their corporate political action committees (PACs). Per the New York Times, January 11, 2021:

A flurry of companies have since reviewed political giving via their corporate political action committees.... Blue Cross Blue Shield, Boston Scientific... are taking a similar, targeted approach to donation freezes.

On January 12, 2021, StatNews summarized responses by health care corporations:

 The list, so far, is short: the Blue Cross BlueShield Association, an insurer federation, said this week it would pause contributions specifically to candidates who effectively voted to overturn the results of the U.S. presidential election.  Drug manufactures Gilead Scientific and Amgen, as well as BIO, the biotech lobbying group, said they would pause contributions to all candidates regardless of how they voted on election certification, according to spokespeople.  UnitedHealth Group and Boston Scientific, the medical device giant, said the same.

Others, like CVS Health and the insurance lobby group America's Health Insurance Plans, were more cautious, saying they would review their future giving.

However,

Many other health care corporations and lobby groups... have not responded publicly.

The article also noted:

Many of the GOP lawmakers who voted against certifying the Electoral College results are those whom the drug industry and other health care sectors have long viewed as allied.  

The list included Republicans in Congress whom may be regarded as extreme supporters of Trump, eg Rep Devin Nunes (R-CA), and Rep Andy Harris (R-MD).

I found one other report of a big health care corporation which changed its political donation policy in response to the attempt to overturn the election.  Per the Kansas City Star, January 13, 2021:

Cerner Corp. will suspend political donations to Sen. Josh Hawley and other politicians who it determines helped to incite the violent mob that attacked the U.S. Capitol building last week.

The North Kansas City-based healthcare IT firm is the latest to seek distance from Hawley, a Missouri Republican, and others who have supported baseless allegations of voter fraud in the November presidential election. 

A company spokesperson said:

'Effective immediately, Cerner PAC will suspend contributions to any candidate or official who took part in or incited violence last week in Washington, D.C.,' the statement said. 'Focusing on the health and well-being of the American people transcends partisan politics, and we will continue working with all elected leaders to advance policies that put the patient at the center of their care.'

I found another report of a big industry group which planned a "review" of its giving.  The American Hospital Association announced on January 14, 2021:

The tragic events last week at the U.S. Capitol were an assault on our democracy. This prompted the AHA to begin an immediate review of our political giving practices to ensure they are guided by our Association’s vision and mission, as well as the democratic values we share as a nation.

But that was it, a total of six large health care corporations and three industry groups announced a pause or review of political contributions (apparently limited to those from corporate PACs) to some of the politicians who voted to challenge the election results.  The Potter Report, authored by health care insurance whistle blower Wendell Potter, noted: 

There’s been a lot of talk this week about big corporations such as Amazon, Verizon and Comcast deciding to stop giving money to House and Senate Republicans who voted to overturn last year’s election. 

Guess which giants aren’t on that list? America’s big for-profit health insurers. 

Over the past two election cycles, Big Insurance has donated to just about all the 147 House and Senate Republicans who voted against certifying the election. That includes Cigna and Humana, where I once worked, and Centene and CVS/Aetna. Plus, the industry’s lobbying group, the American Health Insurance Plans (AHIP).

 The Blue Cross Blue Shield Association, which represents a lot of nonprofit insurers and for-profit Anthem, says it’s suspending donations to those Republicans. And UnitedHealth says it will 'pause' its political donations. But let’s see how long these 'pauses' actually last. 

So far, we haven’t heard a peep from AHIP or the other big for-profits, all of which have made huge profits during the pandemic, thanks largely to having lawmakers on both sides of the political aisle in their pockets. 

Big Insurance donated more than $9 million to House and Senate candidates during the 2020 cycle. Among their favorites? Ted Cruz and Josh Hawley, who led the effort to overturn the election. All the big for-profits donated to Cruz, and all but CVS/Aetna donated to Hawley. 

Note that no health care corporation announced changes in the donations by its top management.  Certainly none even mentioned political contributions through dark money groups (like those that CVS had been revealed to be making, see above).  So the attempt at overturning the election to keep Trump in office, first by quasi-legal maneuvering, then by an armed insurrection, had little effect on continuing underwriting by big health care corporations of the politicians who acquiesced to or actively supported this assault on the fundamentals of our representative democracy 

Two Months Later, Health Care Corporations "Back to Bankrollling Insurrectionists"

Within months, some of the few health care corporations who paused donations again seemed ready to cozy up to anti-democratic politicians.  As reported by the Daily Beast, March 24, 2021:

After the Jan. 6 insurrection, more than 120 corporations swiftly vowed to suspend campaign donations to Republicans who objected to certifying the 2020 election....

But it took less than two months for Pfizer to break that pledge. Their PAC gave $15,000 to the National Republican Senatorial Committee, led by one of eight GOP Senators who voted to decertify election results—Rick Scott of Florida—on Feb. 23.

In total, The Daily Beast identified four companies that appear to have gone back on their suspension of donations to GOP election objectors: AT&T, Cigna Health, Ford Motors, and Pfizer.

[Note that I had not earlier found notice that Cigna Health, a for-profit insurance company, had suspended donations.]

Summary

So as far as I can tell, while Trump is out of office, the big health care corporations that provided plentiful financial support for his initial election and attempts at remaining in office, through electoral and anti-democratic means, are back to supporting the political party that has become his personal sandbox.

 It is increasingly evident that big health care corporations, despite their protestations of social responsibility and non-partisanship, now are actively supporting one wing, an extreme one, of the political spectrum.  This raises big questions: cui bono? Who benefits?

It is obvious why a pharmaceutical company, for example, might want to defeat legislation that would lower its prices or raise its taxes.

It is not obvious why it would want to consistently support actions by one party, or by people at one end of the political spectrum, even if some such people seem generally "pro-business."  After all, for years big corporations and their executives openly gave money to both US parties and their candidates, apparently in the belief that this would at least allow more visibility for the corporations' priorities no matter who was in power.

Now, the most obvious theory is that the new practice of secret donations only in right-wing, Republican, pro-Trump, and/or anti-democratic directions, which must be orchestrated by top corporate management, and which are not disclosed to employees or smaller corporate shareholders, are likely made to support the top managers' self interest more than the broad priorities of the corporations and their various constituencies. By virtue of being top management of a corporation, particular individuals can control political funds far beyond what they may be able to control as private persons, and to do so anonymously.  This could present many temptations, but the rationales for particular managers directing their corporations' fund to particular politicians or organizations remain unknown.  

Thus not only is more investigation needed, at the very least, "public" corporations ought to fully disclose all donations made to outside groups with political agendas.  This should be demanded by at least the corporations' employees and shareholders, but also by patients, health care professionals, and the public at large. Furthermore, it is not unreasonable to ask that all organizations disclose all political funding which allows their leaders and managers to leverage their own political intentions.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the Trumpist movement in one giant corporatist entity which is not in the interests of health care, much less government by the people, of the people, and for the people.

 

ead more here: https://www.kansascity.com/news/politics-government/article248457745.html#storylink=cpy

 

Read more here: https://www.kansascity.com/news/politics-government/article248457745.html#storylink=cpy

 

 

Wendell Potter on "Insurers’ Cynical Calculations on the Cost of Doing Business"

On his blog, Wendell Potter, former head of public relations for CIGNA, discussed big health insurance/ managed care organizations' attitudes toward paying financial penalties for wrong-doing:

Having served as head of PR for two of the country’s largest health insurers — CIGNA and Humana — I know from personal experience that such fines are not widely considered newsworthy.

Insurers know this, and so, annoying as being charged with breaking the law might be, they largely shrug off the fines and the threat of a day’s worth of bad publicity that occasionally accompany them. They are perfectly willing to risk being caught because they long ago realized that the fines are never severe enough to make them radically change the way they do business. Such a change would involve dealing more honestly with both their customers and the doctors who provide care to the people they insure.

We have frequently discussed the parade of legal settlements involving major health care organizations, including drug, device, biotechnology companies, and hospitals and health care systems as well as insurers and managed care organizations. We have repeatedly noted that fines or payments imposed on these organizations seem to have little deterrent effect. Now we have some documentation that this is true from someone who used to be in the belly of the beast.

So I get to repeat:  we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Millions to Health Insurance CEOs, But Blame Everyone Else for Rising Health Care Costs

The revelations about the huge golden parachute given the outgoing CEO of ostensibly non-profit Massachusetts Blue Cross Blue Shield induced some public discussion about the disconnect between executive compensation and the mission of health care organization (see most recent post here).  Several other recent stories should generate more discussion on these issues. 

First, new proxy statements revealed the compensation of executives of two large for-profit health care insurers/ managed care companies.  In alphabetical order,

Cigna

As reported by the AP, via ABC news, the CEO got a big raise:

Cigna Corp. CEO David M. Cordani's total compensation more than doubled in 2010, his first year as leader of the nation's fourth-largest health insurer, and a period in which the company's earnings, revenue and enrollment all climb.

Cordani, 45, received compensation valued at $15.1 million last year from the Philadelphia managed-care company, according to an Associated Press analysis of a regulatory filing Friday.

That included a $1 million salary, a performance-related bonus totaling more than $7.3 million and stock and option awards adding up to $6.7 million.

In 2009, Cordani's compensation was $6.5 million, but he did not serve for the entire year. Note that according to the 2009 proxy, the previous CEO, H Edward Hanway, received $12,236,740 in total compensation in 2008, his last year as CEO.

What was the rationale for the huge rise in Cordani's compensation from 2009 to 2010? (And implicitly, the fairly large increase compared to Hanway's compensation in his last year?)

The company said in its proxy statement filed with the Securities and Exchange Commission that Cigna 'effectively executed on its growth strategy under Cordani's leadership last year.

'Revenue rose significantly in 2010, reflecting strong premium growth in (Cigna's) ongoing business segments,' the proxy said.

Cigna earned about $1.35 billion, or $4.89 per share, on $21.25 billion in revenue in 2010. That was up from $1.3 billion, or $4.73 per share, on $18.41 billion in revenue in 2009. The insurer's medical membership climbed 4 percent to 11.4 million people compared to the final quarter of 2009, when it fell more than 5 percent. That helped raise premiums and fees in health care, the insurer's largest segment.

Also,

Cigna shares climbed 4 percent to close 2010 at $36.66, while the Standard & Poor's 500 index rose 12.8 percent.

So to recap, Cigna's current CEO's total compensation doubled in a year while earnings and the stock price rose about 4%.

WellPoint

Also reported by AP, via the Washington Post, the CEO got a small raise (but ended up with compensation similar to Mr Cordani's above):

The president and CEO of health insurer WellPoint Inc. received a 3 percent boost in total compensation in 2010 even as the company’s profit and enrollment numbers slipped during a transitional year for U.S. health care companies.

The Indianapolis-based insurer awarded Angela Braly a total pay package worth $13.4 million up from $13.1 million in 2009. Wellpoint disclosed the compensation — which includes salary, bonus and other awards — in a filing with federal financial regulators late Friday.

On the other hand, the company did not do so well financially:

The insurer’s profit fell sharply last year compared with 2009, when the sale of its NextRx subsidiary contributed $2.2 billion in after-tax income. Medical enrollment also slid 1 percent last year to 33.3 million members.

So what was the rationale for even a small raise (over an already huge compensation package)?

In the company’s filing, Wellpoint’s board of directors highlighted accomplishments by management, including reducing general expenses by 3 percent.

Also,

A Wellpoint spokeswoman stressed Friday that the company’s pay formula rewards executives for improving enrollee health, boosting share prices and meeting other pre-set goals.

'For the CEO, almost 90 percent of total target compensation is based on company performance and is tied to meeting established goals,' Kristin Binns said in a statement.

So while Cigna did slightly better financially than last year, its CEO's total compensation doubled to well over $10 million, and while WellPoint did slightly worse financially than last year, its CEO's total compensation increased, again remaining well over $10 million.  It seems that the leaders of top health care organizations will continue to get richer, no matter how well their organizations performed financially, let alone what effect they had on patients' and the public's health.
So What Drives Up Health Care Costs?

Just to distract from CEOs getting increases in their already huge compensation that seem disproportionate to any reasonable measure of their companies' financial performance, health care insurers continued to deny any responsibility for the rise in health care costs.

For example, the San Francisco Chronicle published a story entitled, "Insurer Wants Focus on What Drives Up Health Costs," which had a familiar ring:

When health insurers notify members that rates are going up - often in the punishing double-digits - they typically blame rising medical costs.

They say the problem really isn't theirs; it's all the other pieces of the health-care puzzle that drive up costs that must be passed on to customers.

Don't blame you, don't blame me, blame that fella behind the tree.
It went on to name all the usual suspects (color-coded for comparison below):

Insurers say their costs grow in part because of new medical technologies and the rising price of pharmaceutical products and medical equipment.

The consolidation of hospitals and doctors into large networks also makes it hard to keep prices low, as do waste, fraud and malpractice, they say. The system also lacks incentives for hospitals and doctors to curb costs. For example, they can charge twice by repeating tests and procedures, and by readmitting patients.

Insurers also say they lose money with policies people buy on their own, as opposed to group coverage from employers. Because the individual policies are more expensive, healthier people tend to avoid them, leaving insurers with a sicker pool.

Poor reimbursement from government programs such as Medi-Cal also forces insurers to raise private insurance prices to make up the slack, they say.

Finally, as people get older and fatter, they gobble up more health care resources.

'When you're looking at growth in premiums, the largest engine of that growth are those medical costs,' said Charles Bacchi, executive vice president of the California Association of Health Plans, which represents health insurers. He said critics who claim that insurers raise prices to increase profits and pad executive salaries are wrong, and that insurers' average profit margin has remained at 3 to 5 percent for years.

First, note that the executive compensation, the administrative costs, the marketing, public relations and lobbying costs all come off the top of revenues before any profits are generated, and before any possible dividends get paid to stock-holders.   I suspect that the insurance industry spokespeople immediately switch the topic to profits and investors' results to distract from those who really make money from health insurance companies, the top executives, and all those managers, bureaucrats, marketers, public relations people, and lobbyists who never touch patients and never deliver any care.  As Wendell Potter has written, many people like to blame government bureaucrats for health care's problems. They may deserve some blame, but not any more, and perhaps less than corporate bureaucrats and executives.

Recall further what Wendell Potter described in Deadly Spin. All those health insurance corporate public relations people were earning good salaries in part based on their ability to distract the public and policy-makers from the insurance companies' roles in health care dysfunction. Potter wrote (p. 110):

Rather than admit responsibility for the failures, insurance executives pointed the finger of blame at their customers, the 'consumers' of health care, and, of course, the providers of care. In introducing the concept of their new silver bullet - consumer driven health care - insurance executives claimed that the 'real drivers of health care costs' (one of my CEO's favorite expressions) were the people who sought care when they really didn't need it and the doctors and hospitals who were all too willing to provide this unnecessary care. Sure, the aging population and expensive new technology were also factors, but the main culprits were people who just didn't realize how expensive health care had become.

Note the similarities among the "real drivers of health care costs" promulgated by the corporate PR people and the defense of the health insurers' role mounted above (some of the more obvious color-coded). Note that the defenses never explain why the insurance companies seem unable to negotiate prices down, and why they all use the physician payment schedule derived from the recommendations of the secretive RUC.

For some final irony, the Chronicle found an academic who was not too hard on the health insurance companies:

Glenn Melnick, a health economist at the University of Southern California, sympathizes with many of the insurers' arguments.

He blamed rising costs mainly on higher prices charged by hospitals and doctors, which account for the largest portion of health care spending.

The reporter did not note Prof Melnick's full title, Professor and Blue Cross of California Chair in Health Care Finance. Oops.

So in summary, health care costs continue rising, access keeps declining, and there is no evidence of improvements in quality. Large health care organizations blame each other for the problems, but nearly all of them continue to make their top executives extremely rich. Although the amounts diverted to these executives cannot solely account for the rise in health care costs, the perverse incentives given those who lead health care are likely a major cause of the problems. A health care system run by leaders who are comfortable becoming extremely rich while the health care crisis worsens is a likely recipe for dysfunction.

We now know commercial health insurers deploy well paid public relations departments to use stealthy if not downright deceptive means to distract those who want to address what really causes health care dysfunction (see this post.) It is likely that all large health care organizations use similar stealth advocacy strategies. These strategies have successfully distracted the conversation away from problems with health care leadership and governance, at least until now.

As we have said before, far too often the leaders of not-for-profit health care institutions seem more interested in padding their own bottom lines than upholding the institutions' missions. They often seem entirely unaware of their duty to put those missions ahead of their own self-interest. Like the financial services sector in the era of "greed is good," health care too often seems run by "insiders hijacking established institutions for their personal benefit." True health care reform would encourage leadership of health care who understand health care and care about its mission, rather than those who see a quick way to make a small fortune.

Furthermore, we need an open discussion of the real issues related to health care dysfunction, not one stifled by the anechoic effect, spun by corporate PR, and dominated by "third parties" whose conflicts of interest are hidden. 

A Multi-Dimensional Web

The important article in the Annals of Internal Medicine on the stealth marketing of Neurontin (see post here) was accompanied by an editorial (Henney JE. Safeguarding patient welfare: who's in charge. Ann Intern Med 2006; 145: 305-6.)

Its author, Dr Jane Henney, put the onus on physicians to address conflicts of interest involving pharmaceutical companies.

Steinman and colleagues' article provides numerous examples of conflicts that arise when physicians receive compensation or other benefits from manufacturers in exchange for assistance with the marketing of drugs for off-label uses. The burden of managing these conflicts is the responsibility of the physician. The first and foremost principle of conflict management is disclosure. Whether the audience is a single patient or a group of fellow physicians, when the physician has accepted financial or other support (for example, slide preparation) from a manufacturer and has not told the audience about the arrangement, then that physician has gone over the line.

Steinman and colleagues' article on gabapentin marketing and promotion points out in stark detail that no patient is well-served when a manufacturer engages in practices, whether inside or outside the law, that involve physicians in activities in which conflicts are present. But physicians are not passive participants: They can say 'No.'

We have recently posted about arguments that disclosing conflicts of interest in health care may not be sufficient to manage all their ill effects, and could possibly even enhance such effects.

Ironically (a word that I seem to be using a lot), Henney's editorial itself illustrates the ambiguities created by disclosure. In her introduction, she discloses, "I have been privileged to serve in a variety of roles, including that of oncologist, principal investigator, study manager, senior academic administrator, Commissioner of Food and Drugs at the U.S. Food and Drug Administration (FDA), and as board member for 3 Fortune 500 and Global 500 companies (AstraZeneca PLC, 2001 to present; AmerisourceBergen Corporation, 2002 to present; and Cigna Corporation, 2004 to present). "

This disclosure immediately raises questions about why the solution she advocated for the problem of stealth marketing indicated by the Neurontin case was merely disclosure, rather the abolition of particularly important conflicts of interest. Was she speaking as an academic leader of a medical center, or as someone with ficuciary responsibility to the stock-holders of a large pharmaceutical company (Astra-Zeneca), a company that acts as a middle-man between pharmaceutical manufacturers and patients and providers, including hospitals and academic medical centers (AmerisourceBergen), and/or a health insurer/ managed care organization (Cigna)?

Furthermore, all the organizations she leads ostensibly have conflicting interests, forming a multi-dimensional web. The role of these conflicting interests in controllling costs is at the heart of arguments for market based health care. In theory, pharmaceutical companies to maximize their profits want to maximize drug prices and prescribing volume. Companies that convey drugs to users and providers want to maximize profits by minimizing drug prices. Academic medical centers want to maximize their surpluses by minimizing the prices they pay for drugs and other goods and services, while maximizing their reimbursement from insurers. Insurers want to minimize reimbursements for drugs and reimbursements provided to hospitals. In theory, the competition resulting from these competing interests should control costs.

However, Dr Henney is one example of how the leadership of organizations with such ostensibly competing interests overlap. Does this mean that these organizations are not likely to negotiate as vigorously as the theory suggests? Does this suggest a reason why health care costs have not been controlled by the market model? And does this suggest that US health care diverges even more from an ideal free market than was heretofore believed?

Inquiring minds want to know.

CIGNA Can't Take a Joke

The Associated Press reported (see the Washington Post version) that the Dr. Douglas Farrago, the physician who edits the humor magazine Placebo Journal was threatened with legal action for publishing a satirical piece on managed care. The parody was of a patient satisfaction survey, by the imaginary "SICKNA Healthcare" managed care organization, signed by "W. E. Sucque" from the "Medical Thievery and Health Policy Division."
After the piece was published, his employer, Sisters of Charity Health System, received a call from CIGNA Healthcare's lawyers demanding the Farrago "cease and desist." Apparently, CIGNA Healthcare's contract with the hospital system bars physicians from "any false or disparaging communications which could, or are likely to interfere with or otherwise damage any of CIGNA's existing or potential contractual relationships." CIGNA spokesperson Lindsay Shearer suggested that the complaint arose from offended CIGNA employees, "our employees work very hard to provide high quality service to our members, our clients, our providers. And when they see stuff like that it upset them."
Perhaps CIGNA really does have some employees who are easily offended. Perhaps they were educated at some of the insitutions of higher learning, so well documented by FIRE, where a slightly offensive remark is grounds for charges under the local "speech code." (See this link for examples.)
However, it was CIGNA's lawyers, not its line employees, who went after Dr. Farrago. So maybe the company's heavy-handed approach to suppressing free expression will generate more bad publicity for it than Farrago's parody could ever have done.
I agree with Farrago's take on this, "If my hospital, who has allowed me the freedom to be creative, gets bullied to fire me over this then it proves that HMOs are really running our health care system."
File this one under "intimidation and coercion," sub-category "attacks on free expression."