Who Advocates For Surprise Medical Billing? - Private Equity Hides Behind Physicians' White Coats

Background: Mysterious Advocacy of Surprise Medical Bills

The issue of surprise medical bills has gotten a lot of public attention in the last year or so.  Surprise medical bills are consequences of the complex US system for financing health care through private, usually commercial insurance.  Insurance companies typically have networks of hospitals, physicians, health care facilities etc.  Patients who receive care from "in-network" physicians or facilities typically pay lower out of pocket costs, such as co-pays and deductibles.  Surprise bills are usually generated when a patient goes to an in-network facility, like a hospital, but then receives care from some out of network entity or person at the facility, and hence incurs higher out of pocket costs.  In the last year, the US congress has struggled with what to do about surprise bills, which have become notorious.

One odd aspect of this struggle has been the identity of advocates who oppose most proposed solutions for the problem, that is, who de facto appear to support surprise medical bills.  Some of these advocates appear to be physicians.  On one hand, as Axios reported briefly in October, 2018, there are those with obvious reasons to allow surprise billing to continue, such as emergency physicians.  The article noted

Two weeks after a handful of senators introduced legislation to curtail surprise medical bills, the American College of Emergency Physicians hired new lobbyists to handle the issue.

Axios further explained:

Emergency doctors obviously want their seat at the table, because they stand to lose a lot of money if their ability to do balance billing vanishes or becomes limited.

Of course, the new lobbying effort might make the emergency physician group look bad, since it seemed to be emphasizing its financial interests over those of patients, who have to pay the unexpected out of pocket charges:

At least the ACEP was somewhat open about what they were doing.


However, more recently, more mysterious advocates for surprise bills appeared.  For example, Bloomberg reported in August, 2019:

A shadowy group has spent more than $13 million since July advertising in states with vulnerable senators to oppose legislation that would rein in medical bills that take patients by surprise.

The campaign by a group calling itself Doctor Patient Unity, playing out on television, radio, and on social media in more than 20 states, is helping muddy the congressional debate over how to combat surprise medical bills and could make it harder to pass legislation this year, congressional aides familiar with the issue said in interviews, speaking on condition of anonymity.

The ad buys represent the most-expensive campaign on any health-related topic Congress has taken on this year, according to data from Advertising Analytics and Federal Communications Commission filings.

The name of the wealthy group buying advocacy advertising implies it represents doctors, but it was not clear who was really behind it.  Thus it appears to be our newest example of dark money in health care.

Who is ultimately paying for these ads is shrouded in secrecy. The television ads are known as 'issue ads' and therefore don’t require Federal Election Commission disclosure.

The ads are all being bought either by Del Cielo Media of Alexandria, Va., or its parent company, Smart Media Group, also of Alexandria, according to FCC filings. Both companies didn’t return repeated messages seeking comment.

Del Cielo has been linked to Republican campaigns. The group bought ads for political action committees opposing Democratic candidates such as Phil Bredesen, the former Tennessee governor who lost a Senate bid to Republican Marsha Blackburn in 2018, according to FCC filings. Del Cielo got more than $1.2 million from a political action committee favoring President Donald Trump, according to filings with the Federal Election Commission.

Doctor Patient Unity was formed as a corporation in Virginia by a limited liability company with the same address as the firm Holtzman Vogel Josefiak Torchinsky, according to state business filings. The law firm provides 'strategic counsel and compliance advice' to entities involved in political and policy affairs, according to its website.

Here on Health Care Renewal, we worry about threats to physicians' core values.  Physicians swear to make the care of individual patients their first responsibility.  Since caring for patients involves caring for whole patients, deliberately pushing for methods to subject patients to surprise bills which can  cause anxiety, financial instability, and probably discourage access to future care seems to be an example of physicians violating their core values.  Physicians who do so should be called out. However, at least it is possible to call out identifiable physician groups defending surprise billing.    When mystery groups with deep pockets do so, the threat may be harder to counter.   

The first step to address it would be to figure out who was behind Doctor Patient Unity. As usual, the key is to start by asking the question cui bono?  Who benefits?

Private Equity Firms Own Physician-Staffing Companies Which Benefit from Surprise Billing

The answer turns out to be private equity firms. On September 11, Kaiser Health News reported,

Often led by doctors with the veneer of noble concern for patients, physician-staffing firms — third-party companies that employ doctors and assign them out to health care facilities — have opposed efforts to limit the practice known as balance billing. They claim such bans would rob doctors of their leverage in negotiating, drive down their payments and push them out of insurance networks.

Also,

In the past eight years, in such fields as emergency medicine and anesthesia, investors have bought and now operate many large physician-staffing companies. And key to their highly profitable business strategy is to not participate in insurance networks, allowing them to send surprise bills and charge patients a price they set — with few limitations.

So it may not be that physicians in general support surprise bills.  Instead, it seems to be that some corporate physicians, that is, physicians employed by for-profit corporations, do so.  Moreover, these physicians are not employed by for-profit hospitals, but by physician-staffing companies, entities with which most patients, and even some physicians are likely to be unfamiliar.

Furthermore, these physician staffing firms are often owned by financial firms,

'We’ve started to realize it’s not us versus the hospitals or the doctors, it’s us versus the hedge funds,' said James Gelfand, senior vice president of health policy at ERIC, a group that represents large employers.

More precisely, it may be "us versus private equity."

The two largest staffing firms, EmCare and TeamHealth, together make up about 30% of the physician-staffing market.

That’s where private equity comes in. A private equity firm buys companies and passes on the profits they squeeze out of them to the firm’s investors. Private equity deals in health care have doubled in the past 10 years. TeamHealth is owned by Blackstone, a private equity firm. Envision and EmCare are owned by KKR, another private equity firm.

Private equity firms are focused on making as much money as possible in the short-term.  And they have no allegiance to physicians' core values.  In particular,

Research from 2017 shows that when EmCare entered a market, out-of-network billing rates went up between 81 and 90 percentage points. When TeamHealth began working with a hospital, its rates increased by 33 percentage points.

So,

'These physician-staffing companies are benefiting tremendously from the ability to bill out-of-network,' said Zack Cooper, an associate professor of public health at Yale, who has studied physician-staffing firms and balance billing. 'It’s a small but profitable sliver of the health care system that these firms are using to make pretty significant amounts of money.'

Cooper said the business models are built on the ability to get profits from balance billing.

'Private equity firms are buying up physician practices that allow them to bill out-of-network, cloaking themselves in the halo that physicians generally receive and then actively watering down any legislation that would both protect patients but affect their bottom line,' Cooper said.

So while some physicians may financially benefit from surprise billings, employers of such physicians may benefit even more, and now private equity firms are positioned to benefit a lot.

Private Equity Firms Funding Stealth Advocacy Campaign for Surprise Billing with Dark Money

And the plot thickens.  Since private equity now seems to be the main beneficiary of surprise billing, it is no longer surprising that they have been running a stealth advocacy campaign to support it.

On September 13, the New York Times reported on who funds Doctor Patient Unity.

in late July, a mysterious group called Doctor Patient Unity showed up. It poured vast sums of money — now more than $28 million — into ads opposing the legislation, without disclosing its staff or its funders.

Trying to guess who was behind the ads became something of a parlor game in some Beltway circles.

Now, the mystery is solved. The two largest financial backers of Doctor Patient Unity are TeamHealth and Envision Healthcare, private-equity-backed companies that own physician practices and staff emergency rooms around the country, according to Greg Blair, a spokesman for the group.
It took some effort to discover this.

Like all so-called dark money political action groups, Doctor Patient Unity is not legally required to reveal the names of its supporters and, in fact, appears to have worked hard to obscure its identity.

The bread crumbs were scant. Filings by the group to the Federal Communications Commission for purposes of advertising listed the name of a treasurer who works for a firm that often fills such roles for Republican political groups. The group’s corporate filing in Virginia lists an agent who is common to more than 150 other political action groups. Neither the treasurer, the named partners in her firm, the advertising firm or the lawyer associated with the corporate entity responded to calls or emails. An email to the address on the group’s bare-bones website went unanswered for weeks until the group’s statement on Friday.

Representatives of both companies confirmed Friday that they had funded the group....

Note that Doctor Patient Unity has used a number of the social media tools often used for various propaganda  and disinformation.

Doctor Patient Unity has also spent hundreds of thousands of dollars on Facebook and Google advertising, and has been sending direct mail to voters in dozens of congressional districts. In some cases, the group describes the legislation as the 'first step toward socialists’ Medicare-for-all dream.'

And they clearly use the current language of ideological insults.

Whether any of the people behind Doctor Patient Unity were actually doctors, particularly doctors who were not full time employees of corporations owned by private equity, is unclear.  The examples of the ads run by Doctor Patient Unity in the NYT article did not seem informed by the viewpoint of health care professionals.

In one ad, an ambulance crew arrives with a patient, only to find the hospital dark and empty.

Another

in heavy rotation in early August, featured a woman standing in front of a blank background urging voters to call their senators to stop a practice she calls "government rate setting." She warned the policy could affect patients’ access to doctors in an emergency.

However, anyone seeing the ads without knowing who was paying for them might assume that they represent the viewpoints of doctors in general.


By the way,  in an almost off-hand manner, the Kaiser Health News article adds a little explanation of how advocacy efforts around billing by one prominent medical society could be tied to private equity:

Even the groups that appear to represent independent doctors are tied to private equity and staffing firms. Out of the Middle consists of trade organizations for specialty doctors, like the American College of Emergency Physicians (ACEP) and the American Society of Anesthesiologists and many others. It’s mostly run by ACEP, whose immediate past president, Dr. Rebecca Parker, was also a senior vice president at Envision.

We thus see the latest version of a conflict of interest affecting the leadership of a medical society.



Summary

We have long been concerned about how health care has been increasingly commercialized, as hospitals and other "provider" organizations get bought out by for-profit corporations, and as physicians are increasingly employed by such corporations to provide care to individual patients, becoming corporate physicians.

Even more concerning is the intervention of private equity.  We first discussed the perils of private equity takeovers of hospitals here in 2010, and of physicians providing direct patient care as employees of corporations owned by private equity here in 2011.   The private equity business model seems particularly unsuitable for organizations which provide patient care, as we discussed in some detail in 2012.

For a quick modern summary of why it is bad to have private equity involved in direct patient care, see Merrill Goozner writing in Modern Healthcare, September 5, 2019,

The private equity business model in healthcare parallels other industries: Use highly leveraged private capital to roll up a number of small firms into one entity, with the private equity firm providing collective management. In addition to hefty fees for arranging the transaction (generally 1% to 2% of the purchase price), the private equity firm typically demands a 20% return on its investment after paying interest on the debt.

After three to seven years, assuming all goes well in achieving the promised efficiencies, the private equity firm and its junior partners (who are the specialty physicians in this latest wave of takeovers) earn a windfall by taking the company public or flipping it to another set of private equity investors. If things don’t work out as planned, the firm cuts its losses and declares bankruptcy (most of its capital will have been recouped through the 20% annual returns).

The management company has two paths to achieve its financial targets. It can either reduce costs sharply or look for ways to increase revenue.

Clearly the focus is not on the quality of the firm's products or services, and in this case, not on providing good quality, accessible, affordable patient care.  As Goozner stated,

Anyone who doubts private equity takeovers can financially harm patients and subvert cost control should take a closer look at the balance-billing fiasco. Most of the 'out of network' services that lead to large balance bills emanate from the nation’s emergency departments, which in many areas of the country have been taken over by private equity-owned firms.

So during my medical career we have gone from physicians practicing as individual professionals or in small professional groups, to physicians employed by non-profit organizations, to physicians employed by publicly traded for-profit corporations, to physicians employed by corporations owned by private equity.  Each new group of employers seems less likely than the last to uphold physicians' core values, and more likely to put short-term revenue ahead of patients, and ahead of good quality, affordable, accessible care.

Now private equity has upped the ante further by hiding behind its physician employees' white coats while promoting practices that increase revenue by harming patients.

We all need to look behind the spin, propaganda, and disinformation to learn cui bono, who benefits from our current dysfunctional health care system. Physicians in particular need to speak up for patients, and shrink from all efforts to use them as useful idiots in support of the plutocrats running the system.

A Stealth Health Policy Advocate Goes Through the Revolving Door ... Now to Chair the White House Council of Economic Advisers

In 2017, we noted that President Trump had appointed a member of his Council of Economic Advisers who previously was a master corporate stealth health policy advocate.  Now he is getting a promotion.

Prof Tomas Philipson to be Named to Chair of the President's Council of Economic Advisers

On June 29, the Washington Post reported,

President Trump plans to name economist Tomas Philipson as the next head of the White House Council of Economic Advisers, according to senior administration officials.

Philipson has worked at the White House for nearly two years as a senior economist after serving briefly on the transition team. Best known for his research on health care, Philipson has been a key player in the Trump administration’s efforts to lower drug prices and push back against Democrats’ proposals for a Medicare-for-all system.

The Post noted that during his tenure on the Council it released a report warning of the financial dangers of proposals for a national single payer health insurance system ("Medicare for all"), which is labelled "socialism."

Also, it quoted him as saying

Deregulation is the cornerstone of the president’s pro-growth economic policies that has been implemented since he took office,

The article also briefly described his "long career and academia and public service."

An article on the NPR site included this testimonial:

'Tom is a very fresh thinker,' said Mark McClellan, a veteran of the George W. Bush administration who recruited Philipson to work for him, first at the FDA and later at the Centers for Medicare & Medicaid Services. 'Tom had a great background in health economics and wanted to do work that was very policy relevant. So it was a win-win.'

A health economist as the chief White House economic adviser sounds like a good idea on its face, but the reality is much more complex.  

Philipson's Career as a Master Stealth Health Policy Advocate

In February, 2017, months before Philipson ascended to the Council, a ProPublica article noted that Philipson was "the third co-founder of Precision Health Economics" (PHE).

As we said later in 2017, PHE was in the business of using its experts' academic credentials to help pharmaceutical and biotechnology companies influence public policy in their favor. From the ProPublica article

Over the last three years, pharmaceutical companies have mounted a public relations blitz to tout new cures for the hepatitis C virus and persuade insurers, including government programs such as Medicare and Medicaid, to cover the costs.

So,

To persuade payers and the public, the industry has deployed a potent new ally, a company whose marquee figures are leading economists and health care experts at the nation’s top universities. The company, Precision Health Economics, consults for three leading makers of new hepatitis C treatments: Gilead, Bristol-Myers Squibb, and AbbVie.

Furthermore,

This is just an extension of the way that the drug industry has been involved in every phase of medical education and medical research,' said Harvard Medical School professor Eric G. Campbell, who studies medical conflicts of interest. 'They are using this group of economists it appears to provide data in high-profile journals to have a positive impact on policy.'

PHE has worked with some of the biggest pharmaceutical and biotechnology companies and trade groups. In particular,

The roster includes Abbott Nutrition, AbbVie, Amgen, Biogen, Bristol-Myers Squibb, Celgene, Gilead, Intuitive Surgical, Janssen [a subsidiary of Johnson and Johnson], Merck, the National Pharmaceutical Council, Novartis, Otsuka, Pfizer, PhRMA, rEVO Biologics, Shire and Takeda.

ProPublica described some of the tactics PHE uses:

The firm participates in many aspects of a drug’s launch, both advising on 'pricing strategies' and then demonstrating the value of a drug once it comes on the market, according to its brochure. 'Led by professors at elite research universities,' the group boasts of a range of valuable services it has delivered to clients, including generating 'academic publications in the world’s leading research journals” and helping to lead “formal public debates in prestigious, closely watched forums.'

PHE has worked on campaigns to persuade the government and insurers to increase what they would pay for oncology drugs, and for Amgen's PCSK9 inhibitor (Repatha) for hypercholesterolemia.
 
Tomas Philipson was one of the principals of PHE:

Precision Health Economics may be well-positioned to influence the Trump administration. Tomas Philipson, an economist at the University of Chicago and the third co-founder of Precision Health Economics, reportedly served briefly as a senior health care adviser for the Trump transition team. He did not respond to requests for comment.

He has taken an active role in stealth health policy advocacy campaigns run by PHE.  For example, as part of the PHE campaign to advocate for generous government and commercial insurance payments for Repatha, Philipson disparaged an analysis by the Institute of Clinical and Economic Review which had suggested the drug was overpriced:

Philipson, the Precision Health Economics co-founder, and Jena wrote an op-ed in Forbes, citing the institute’s research and deriding its approach to value pricing as 'pseudo-science and voodoo economics.'

PHE and its principals, including Philipson, often failed to disclose relevant conflicts of interest.  For example, re the above Forbes article,

Only Philipson disclosed his ties to Precision Health Economics, and neither academic disclosed that Amgen was a client of the firm.

Failing to disclose the Amgen funding of their work in this context appeared deceptive.

Up to the time of his appointment to the Council of Economic Advisers, Philipson seemed to be enhancing his position at PHE.  In particular, in 2015, after PHE was bought out by a privately held biotechnology company, "Philipson ... [was] listed as chief economist and the chair of the strategy and innovation board."


However, Philipson's previous work on stealth advocacy campaigns for pharmaceutical and biotechnology companies did not prevent him from becoming a member of the Council of Economic Advisers.  Now that Philipson is likely to ascend to the chair of the Council, Philipson's previous record of stealth health policy advocacy has been anechoic.

Summary and Conclusions

The anechoic nature of this latest case shows how we are becoming numb to many common abuses in health care in the face of even worse abuses in the larger political economy, the ultimate defining down of deviancy.

Nonetheless, let me first emphasize that Philipson came through the revolving door from his role as a stealth health policy advocate to become a major Trump regime economic adviser.

We and others have said again and again that the revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  In particular, 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.

In the Trump era, many people have come through the incoming revolving door, that is, people with significant leadership positions in health care corporations or related groups have attained leadership positions in government agencies whose regulations or policies could affect their former employers.  Many examples, starting with Philipson's initial appointment to the Council, appeared here.  The more people transit the revolving door from the world of big corporations to government, the more government appears rigged to do the bidding of big corporations and their  munificently paid leaders.


Furthermore,  have previously noted that promotion of health policies that allowed overheated selling of overpriced and over-hyped health care products and services included various deceptive public relations practices, including orchestrated stealth health policy advocacy campaigns.  Third party strategies used patient advocacy organizations and medical societies that had institutional conflicts of interest due to their funding from companies selling health care products and services, or to the influence of conflicted leaders and board members.  Some deceptive public relations campaigns were extreme enough to be characterized as propaganda or disinformation.

Philipson is not merely an adviser to pharmaceutical and biotechnology companies.  He was an active participant and innovator in stealth health policy advocacy (or maybe stealth lobbying.)   Putting an innovator in stealth health policy advocacy and lobbying in the top economic position in the White House will only amp up the power of propagandists and disinformation purveyors in government.

Meanwhile, top health care (and other) corporate management is increasingly merging with the current administration in one giant corporatist entity which is not in the interests of health care. To derig the system, we need wholesale, real health care reform that would make health care leaders accountable for what their organizations do, and 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.


However, before thinking about true health care reform, we need top accomplish wholesale government reform. We need to excise the deception, crime and corruption at the heart of our government and restore government by the people, of the people, and for the people. 

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. 

Pharmaceutical and Other Health Care Corporations Funnel Dark Money to Republicans to Defeat "Leftward" Democratic Candidates - Partisanship Trumps Social Responsibility

Introduction - Health Care Corporations Profess Social Responsibility

As we noted recently, large health corporations, which must deal with patients, health professionals, and government regulators, usually profess their social resonsibility.  For example,

Biotechnology firm Genentech, now a subsidiary of giant Swiss biotechnology and pharmaceutical company Roche, has an elaborate web page about how the company seeks to do good.  Some quotes:

we’re passionate about applying our skills, time and resources to positively impact the patients we serve, the scientific community and the places where we live and work.

Also

We approach giving back the same way we approach discovering medicines: we start by looking for the root cause of a problem and then we explore how we can contribute to a solution.

And particularly

We believe that the best work happens when everyone has a voice.

Similarly, giant American pharmaceutical company Eli Lilly espouses these core values

Three long established core values guide Lilly in all that we do:

Integrity: We conduct our business consistent with all applicable laws and are honest in our dealings with customers, employees, shareholders, partners, suppliers, competitors and the community.

Excellence: We pursue pharmaceutical innovation, provide high quality products and strive to deliver superior business results.

Respect for People: We maintain an environment built on mutual respect, openness and individual integrity. Respect for people includes our concern for all people who touch or are touched by our company: customers, employees, shareholders, partners, suppliers and communities.

Of course, in the policy arena, large health care corporations also tend to advocate for policies that are to their financial advantage.  Furthermore, top executives of large corporations have been known to donate to political candidates who favor their policy positions, although they used to consciously spread their donations out to all parties and many candidates to avoid any appearance of partisanship, while making themselves visible to whomever might be in power.

However, as the current US political chaos leads to more journalistic investigation, there is increasing evidence that large health care corporations have been secretly backing policy positions that do not correspond to their high-minded public statements about corporate social resonsibility, and are becoming quite political, even partisan in the process.  They do so through the use of dark money. 

Pharmaceutical Companies, Other Health Care Companies - and a Tobacco Company - Join Effort to Attack Left-Wing Politicians

On November 5, 2018, Lee Fang wrote about how big corporations, including big health care corporations, enthusiastically financially supported a dark money operation that specifically targeted "progressive" or "socialist" candidates:

Republican operatives and representatives from America’s largest business groups — alarmed at a wave of upset electoral victories by Alexandria Ocasio-Cortez and other avowed democratic socialist candidates — have been plotting to stem the tide of left-wing Democrats sweeping the country.

Andrew Wynne, an official at the Republican State Leadership Committee, spoke to business lobby leaders in July, encouraging them not to ignore the latest trends within the Democratic Party. He called for Republicans’ allies to enact a unified plan to defeat progressives in this week’s midterm elections.

'Recent elections have proven the leftward shift,' said Wynne. 'An anti-free market, anti-business ideology has taken over the Democratic Party, particularly this year during the primaries.'

Wynne was particularly exercised about the primary victory by Democrat Alexandia Ocasio-Cortez:

'Alexandria Ocasio-Cortez captured the energy of these voters to win a congressional nomination in New York, defeating the incumbent who many thought could be the next Democratic speaker of the House,' Wynne continued.

He noted that the defeated incumbent in the Ocasio-Cortez race, Rep. Joe Crowley, a moderate Democrat and former chair of the business-friendly New Democrat Coalition, 'was someone who the business community could have a conversation with on the Democratic side.' On the other hand, Wynne warned, Ocasio-Cortez would not be so receptive to business lobbyists.

Of course, these sentiments coming from a Republican operative are not surprising.  What was surprising was how Mr Wynne wanted to fund efforts to comabt these supposedly left-wing politicians.

Officials from the Republican State Leadership Committee, which assists Republicans in capturing power on the state level, explained during the call that they expected to raise $45 million in direct contributions and $5 million to $7 million through an allied dark money group for election campaigns this fall.

The group is organized under the IRS’s 527 rules and operates in a manner similar to Super PACs: It can raise and spend unlimited amounts from individuals and corporations. The latest disclosures suggest the group is well on track to bring in significant corporate support for electing Republican state officials.

Koch Industries, Crown Cork & Seal, Genentech Inc., ExxonMobil, NextEra Energy, Range Resources, Eli Lilly and Co., Marathon Petroleum, Reynolds American, (a tobacco company which is a subsidiary of British American Tobacco), Boeing, General Motors, and Astellas Pharma are among the companies that have already provided at least $100,000 to the committee.

Many of those companies are from industries that have long contributed to GOP causes, including resource extraction, financial services, tobacco, retail, for-profit education firms, and private health care interests.

Furthermore, the Republican State Leadership Committee has been collecting money from other dark money organizations which in turn are funded in part by health care companies:

Several of the largest donors to the Republican State Leadership Committee are themselves dark money groups. The Judicial Crisis Network, a 501(c) nonprofit that does not disclose its donors, has given $1.5 million to the group. The ABC Free Enterprise Fund, a dark money affiliate of a lobbying group that represents non-union construction companies, gave $100,000.

The U.S. Chamber of Commerce has given $1.7 million to the committee. The chamber, notably, does not disclose its donors but has been financed in the past by Goldman Sachs and Dow Chemical, among other major American and foreign companies.

We recently discussed the health care industry contributions to the US Chamber of Commerce, which came from PhRMA, Pharmaceutical Research and Manufacturers of America, the pharma trade association, and from specific companies, including contributions of at least $100K from: Aetna, Abbott Laboratories, AbbeVie, Amgen, Anthem, Celgene, Cigna, CVS, Eli Lilly, Express Scripts, Johnson & Johnson, Merck, Mylan, Procter & Gamble, and UnitedHealth.

So a lot of big health care companies, most of whom profess their devotion to the greater community and social responsibility, have been funneling considerable money as quietly as possible into an effort to thwart one particular group of politicians, that is, candidates from the leftish wing of the Democratic party.

So much for Genetech's claim:

We believe that the best work happens when everyone has a voice.

Or for Lilly's claim:

Respect for people includes our concern for all people who touch or are touched by our company: customers, employees, shareholders, partners, suppliers and communities.

 
Discussion and Summary

This is now the fifth time we have discussed the role of dark money in health care.

- In 2012 we discussed a case of "dark money" being used to conceal sources of support for particular health policy and political positions.

- Earlier this year,  we discussed the case of huge pharmacy chain CVS,which proclaims its "social responsibility," and its policy of only making charitable contributions to improve "health and healthcare nationwide."  Yet CVS was donating to America First Policies, a supposed non-profit group devoted to promoting the partisan agenda of President Trump, including "repealing and replacing Obamacare," and immigration policies such as building the "wall" and deporting  "illegal immigrants." (Note that these CVS dark money contributions were separate from those discussed above.)

- In September, we discussed how the pharmaceutical trade organization, PhRMA, and some large drug companies donated money to a dark money organization to combat a state initiative to limit pharmaceutical prices, but also to the American Action Network (see above) to "repeal and replace" the Affordable Care Act (ACA, "Obamacare") despite their previous support for and then current neutrality on the ACA.

- In October, we discussed how many health care corporations were donating to dark money groups, predominantly groups, like the US Chamber of Commerce, devoted to distinctly right-wing causes, almost all lately related to the Republican party and in sympathy with the Donald Trump regime.

Health care corporations recent and current funding of dark money groups seems to openly conflict with the corporations' promises of social responsibility.  The slanting of these efforts towards one end of the political spectrum, one party, and now the current president suggest that these corporations may have partisan agendas.

Note that without the various ongoing investigative efforts mainly inspired by the actions of the Trump administration, we would have little idea that this was going on.

May such investigations continue and intensify.  Maybe the recent elections, which gave the opposition to the Republican party and Trump control of the US House of Representatives, will lead to more such investigations.

Furthermore, the increasing knowledge of these corporate actions raises a big question: cui bono? who benefits?

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

It is not obvious why it would want to consistenly support actions by one party, or by people at one end of the political spectrum, even if some such people seem "anti-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, and/or pro-Trump 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 constitutencies.

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.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the current administration 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.

The Politicization of Pharma, and Other Health Care Corporations - Walk on the Dark (Money) Side

Introduction - Health Care Corporations Profess Social Responsibility

As we noted recently, large health corporations, which deal with patients, health professionals, and government regulators, usually profess their social resonsibility.  For example,

Giant health care insurance company Aetna advertises its social corporate responsibility, including

As a health care leader, we believe that our corporate responsibility starts with helping people live healthier lives. And that means using our resources to make the communities and world we live in better places.

and,

Our social responsibility efforts encompass how we treat our employees, improve the lives of customers, and effect positive change in community health.

Similarly, giant pharmaceutical company Merck advertises its corporate social responsibility,

Corporate responsibility is at the heart of our company's mission to discover, develop and provide innovative products and services that save and improve lives. It underscores our commitment to developing and rewarding our employees, protecting the environment, and operating with the highest standards of ethics and transparency.

Of course, in the policy arena, large health care corporations also tend to advocate for policies that are to their financial advantage.  Furthermore, top executives of large corporations have been known to donate to political candidates who favor their policy positions, although they often seemed to consciously spread their donations out to avoid any appearance of partisanship.

However, as the current US political chaos leads to more journalistic investigation, there is increasing evidence that large health care corporations have been secretly backing policy positions that do not correspond to their high-minded public statements about corporate social resonsibility, and are becoming quite political, even partisan in the process.  They do so through the use of dark money. 

Health Care Corporations Giving to Dark Money Organizations: Dark Money Illuminated

Dark money is meant to be secret, of course.  So it is not easy to find anything out about who gives to dark money organizations, and to whom they give in turn. 
 However, recently Issue One produced a report entitled "Dark Money Illuminated." It was based on an extensive attempt to pierce the veil hiding dark money. Its introduction states:

Dark money groups hold enormous sway over what issues are, and are not, debated in Congress and on the campaign trail. But the donors behind these groups rarely discuss their motivations for bankrolling these efforts, leaving the public in the dark about who funds these increasingly prominent and potent organizations.

To attempt to get the most accurate picture of the scope of dark money influence on US politics, its authors:

reviewed FEC filings, tax returns, annual reports submitted by labor unions to the Department of Labor, documents submitted to Congress by registered lobbyists, corporate filings, press releases and other sources.

This allowed them:

to be able to identify transactions — and donors — that have never previously been associated with these dark money groups.

So they were able to identify the 15 largest dark money groups in terms of donations received, and to get data on a substantial numer of donations to them, albeit likely only a fraction of the donations to dark money groups that have been made, from 2010 to 2017.  Health care corporations turned out to be major suppliers of funding to dark money group according to this data.  The report includes a summary of the top 67 donors to dark money groups, which included:

- Pharmaceutical Research and Manufacturers of America (PhRMA), the pharmaceutical industry trade association, donated over $13 million.

- Aetna, a large for-profit health insurance company, donated over $8.5 million.

- Merck, a large pharmaceutical firm, donated over $4 million.

- Anthem, a large for-profit insurance company, donated $2 million.

Perusal of the whole data base revealed significant donations by many more health care corporations (list below includes the three companies listed above).


Aetna - $3.3 million to the American Action Network

Express Scripts - $75K to Americans for Tax Reform

American Healthcare LLC - $5K to Patriot Majority USA

Abbott Laboratories  - $500K to US Chamber of Commerce (USCC)

AbbeVie - $250K to USCC

Aetna - $5.3M to USCC

Allergan - $55K to USCC

Amgen - $302K to USCC

Anthem - $2M to USCC

Celgene - $262.5K to USCC

Cigna - $325K to USCC

CVS - $825K to USCC

Eli Lilly - $350K to USCC

Express Scripts - $150K to USCC

Gilead - $13K to USCC

Johnson & Johnson - $475K to USCC

Merck - $4.4M to USCC

Mylan - $210K to USCC

Procter & Gamble - $500K to USCC

UnitedHealth - $252K to USCC

Zimmer Biomet - $75K to USCC

Where Does the Money Go?

As is evident above, health care companies donated to a limited number of the big 15 dark money organizations, the American Action Network, Americans for Tax Reform, Patriot Majority USA, but mostly the US Chamber of Commerce.

The first two organizations were all identified by Issue One as affiliated with right-wing / Republican/ pro-Trump causes.

American Action Network

the American Action Network was not publicly rolled out by high-profile Republicans until February 2010 — one month after the U.S. Supreme Court’s Citizens United decision.
The self-described 'action tank' was founded by veteran Republican fundraiser Fred Malek, the former Marriott Hotels president and CEO who has helped raise campaign cash for a number of GOP presidential candidates over the years.

Former Republican Sen. Norm Coleman of Minnesota served as the American Action Network’s first CEO and is still the chairman of the organization’s board of directors.

Brian Walsh — the former political director for the National Republican Congressional Committee who helped Republicans win control of the U.S. House of Representatives in 2010 — served as the president of the American Action Network between 2011 and 2015.

The group’s current executive director is Corry Bliss, who managed Ohio Republican Sen. Rob Portman’s successful re-election campaign in 2016.  

Americans for Tax Reform

Originally founded in July 1985 to promote President Ronald Reagan’s proposal for tax reform, Americans for Tax Reform remains a powerful lobbying organization today that also frequently spends money in elections to aid Republican candidates. The group’s founder and president is Grover Norquist, a conservative activist who once boasted that his goal was to get government 'down to the size where we can drown it in the bathtub.'

In 1994, Norquist was one of the co-authors of the 'Contract with America,' the campaign platform that helped the GOP win control of the U.S. House of Representatives for the first time in more than forty years and helped elevate Rep. Newt Gingrich (R-GA), another co-author, to the position of Speaker of the House.

Americans for Tax Reform’s primary advocacy tool is its 'Taxpayer Protection Pledge,' which asks politicians at the local, state and national level to “make a written commitment to oppose any and all tax increases.”

The third group, to which only one donor gave only $5K, was identified with Democratic / left-wing causes.

Patriot Majority USA

Patriot Majority USA, a 501(c)(4) 'social welfare' organization that often spends money in elections to aid Democratic candidates, was founded in March 2011 by political consultant Craig Varoga, a Democrat with strong ties to former Senate Majority Leader Harry Reid (D-NV). To wit: Varoga led an independent group that helped Reid win his contentious re-election race in 2010.

The fourth organization, the one to which most of the health care corporate donors gave the most money, is in a class of its own.  The Issue One description of it was

US Chamber of Commerce

the U.S. Chamber of Commerce ranks as one of the nation’s largest and most powerful lobbying groups, with an ornate headquarters in Washington, D.C., just a block from the White House.

A trade association organized under Section 501(c)(6) of the tax code, the U.S. Chamber of Commerce mostly endorses Republican candidates, although it occasionally supports business-friendly Democrats. The group says it represents more than 3 million businesses across the country and has a membership of approximately 300,000.

The USCC has received much - probably unwanted - publicity about its efforts to help President Trump's controversial nomination of Brett Kavanaugh to the Supreme Court.  An October 4, 2018, article in the Intercept included:

Business groups with interests before the U.S. Supreme Court have orchestrated a multifaceted campaign to pressure the Senate to swiftly confirm Judge Brett Kavanaugh to the nation’s highest court. The advocacy reaches across the influence economy of Washington, D.C., with the largest corporate lobbying groups and billionaires working in concert with Republican operatives to elevate Kavanaugh to a lifetime posting atop the judiciary.

Few businesses, however, have stamped their names on the effort. Most major corporations and wealthy donors are instead using 501(c) nonprofit groups that do not require donor transparency to air upward of $15 million in reported advertising spending in order to convince the public to support Kavanaugh’s nomination. Other conservative groups contributing to the ad war have not disclosed how much they are spending, likely bringing the total much higher.

Among the groups publicly campaigning for Kavanaugh to be confirmed are the giants of pro-business lobbying — organizations like the U.S. Chamber of Commerce and the Koch brothers-funded Americans for Prosperity. Lesser-known, business-funded political groups, such as the Republican Attorneys General Association, are also spearheading campaigns.

The article also said this specifically about the US Chamber of Commerce

The powerful lobby announced in August that it would mobilize support for Kavanaugh, claiming it would score support for Kavanaugh as a 'key vote' in evaluating members of Congress. The Chamber spends tens of millions of dollars every election cycle against lawmakers who cross them on major votes.

One wonders whether patients or health care professionals who must deal with large health care corporations have any idea that these companies are promoting partisian causes, mostly right-wing/ Republican/ pro-Trump causes?  One wonders whether the employees and small stockholders of these corporations likewise have any idea about this?

Summary and Discussion

This is now the fourth time we have discussed the role of dark money in health care.  In 2012 we discussed a case of "dark money" being used to conceal sources of support for particular health policy and political positions.  Earlier this year,  we discussed the case of huge pharmacy chain CVS,which proclaims its "social responsibility," and its policy of only making charitable contributions to improve "health and healthcare nationwide."  Yet CVS was donating to America First Policies, a supposed non-profit group devoted to promoting the partisan agenda of President Trump, including "repealing and replacing Obamacare," and immigration policies such as building the "wall" and deporting  "illegal immigrants." (Note that these CVS dark money contributions were separate from those discussed above.)  Ten days ago we discussed how the pharmaceutical trade organization, PhRMA, and some large drug companies donated money to a dark money organization to combat a state initiative to limit pharmaceutical prices, but also to the American Action Network (see above) to "repeal and replace" the Affordable Care Act (ACA, "Obamacare") despite their previous support for and then current neutrality on the ACA.

Now it appears that health care corporations often donate large amounts to dark money organizations, and as best as we can tell now, nearly all the donations and all the money go to organizations that support right-wing/ Republican/ and now pro-Trump causes.  Many of these causes seem to openly conflict with the corporations' promises of social responsibility.  The slanting of these efforts towards one end of the political spectrum, one party, and now the current president suggest that these corporations may have partisan agendas.

Note that without the various ongoing investigative efforts mainly inspired by the actions of the Trump administration, we would have little idea that this was going on.

I hope that such investigations continue.

Furthermore, the increasing knowledge of these corporate actions raises a big question: cui bono? who benefits?

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

It is not obvious why it would want to consistenly support actions by one party, or by people at one end of the political spectrum.

The obvious hypothesis is that these donations, 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.

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.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the current administration 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. 

===

Musical interlude: "On the Dark Side," Eddie and the Cruisers

Pharma's Dark Money: Touting Corporate Responsibility and Non-Partisanship, But Using Dark Money to Promote Self-Serving Policies and Partisan Causes

Health Care Corporations Promote Their Social Responsibility

The US health care system's extreme dsyfnctionality is now a cliche.  So it's no wonder that everyone seems to want to make things better.  Big health care corporations in particular tout their socially responsible ideas for health care reform.

For example, PhRMA, the trade organization for drug and biotechnology firms, describes its mission thus:

PhRMA is committed to advancing public policies in the United States and around the world that support innovative medical research, yield progress for patients today and provide hope for the treatments and cures of tomorrow.

Amgen states simply its mission is "to serve patients."

Biogen published a "Corporate Citizenship Report" which included

our commitment [is] to positively impact our communities, to inspire the next generation of scientists, to solve social and environmental challenges and to create a diverse and inclusive workforce that thrives professionally and personally.

Giant pharmaceutical/ biotechnology/ device company Johnson & Johnson has its famous "credo" which starts with

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.

Furthermore,

We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens – support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education.

 
With all that positivity supporting better health care, one would think that health care dysfunction should be soon gone. But maybe under all this talk about corporate responsibility lies something darker.

An Early Case of Dark Money in Health Care

Back in 2012 we discussed a case of "dark money" being used to conceal sources of support for particular health policy and political positions.  The case was of the Center for Protection of Patient Rights, an obscure group whose mission was to "protect the rights of patients to choose and use medical care providers."  The CPPR financed the US Health Freedom Coalition, led by Dr Eric Novack, which received nearly its entire budget — $1.7 million — from the center to help pass a state ballot measure that aimed to block President Obama's healthcare overhaul.  The Center ultimately transferred $55 million to Republican candidates in the 2010 election.  Its money came from the equally obscure Americans for Job Security, and was conveyed by groups such as the American Future Fund. The people who gave the money to the Americans for Job Security remained unknown, save for one wealthy Alaskan "landowner."  

Do Health Care Corporations Put Their Money Where Their Mouths Are?


This year, we discussed the case of huge pharmacy chain CVS,which proclaims its "social responsibility," and its policy of only making charitable contributions to improve "health and healthcare nationwide."  Yet CVS was donating to America First Policies, a supposed non-profit group devoted to promoting the partisan agenda of President Trump, including "repealing and replacing Obamacare," and immigration policies such as building the "wall" and deporting  "illegal immigrants."  America First Policies appears to be yet another dark money organization.  CVS only decided to stop contributing when journalists revealed that America First Policies staffer had made flagrantly racist and pro-Nazi comments.

This suggested that it is possible that health care corporations which promote themselves as socially responsible and non-partisan may actually be secretly promoting political agendas that might shock some of their consumers and/or patients, employees, and health care professionals who must deal with them. 


We have  now found some more cases that reinforce this suspicion, showing how pharmaceutical and biotechnology companies have funneled funds through more "dark money" organizations to support policies that do not fit so well with the image they want to convey.

The PhRMA Backed Dark Money Campaign Against an Ohio Initiative to Control Drug Pricing

In August, 2017, the International Business Times revealed how the pharmaceutical/ biotchnology industry had set out to defeat a 2017 Ohio initiative meant to hold down drug prices without revealing who was funding it.

PhRMA had already succesfully defeated a similar initiative in California in 2016.  However, industry support for this campaign, while obscure, was not a secret. 

PhRMA set up ... Californians Against the Misleading Rx Ballot Measure, which raised over $111 million for its campaign against a California initiative that ... would have blocked that state from paying higher drug prices than those negotiated by the Veterans Affairs Department. The trade group set up a political action committee in California to which pharma companies donated directly — so PhRMA had to disclose these donors. Merck, Pfizer and Johnson & Johnson gave over $9 million each; Amgen gave $7.6 million; and 19 other drug companies gave $1 million or more. The PhRMA-run committee spent nearly all of the millions it raised, and the measure failed to pass, with 53 percent of voters shooting it down. All donors except for Genentech and Gilead Sciences are PhRMA members, and only a handful of companies out of more than 30 total corporate donors are headquartered in California.

Somehow, with all the news coming out about the 2016 US elections, this generated little interest.  However, in Ohio in 2017, PhRMA was able to do something similar while keeping the corporate sources of the money hidden.  Their target was:

Issue 2, the Ohio Drug Price Relief Act — a citizen-initiated ballot measure designed to prevent state agencies, including the state Department of Medicaid, from purchasing drugs at rates any higher than the lowest amount paid by the federal Department of Veterans Affairs, which negotiates with drug companies and saves between 20 and 24 percent on drug costs.

This time:

Pharmaceutical Research and Manufacturers of America (PhRMA), the biggest trade organization in the U.S. representing major drug companies, created a political action committee on May 1 called Ohioans Against the Deceptive Rx Ballot Issue. On the same day, PhRMA also founded a limited liability corporation of the same name and registered at the same address; under normal circumstances, it would not be required to disclose its donors. Campaign finance reports document only one donor to the ballot measure committee: the linked LLC.

So contributions from corporate donors to the LLC to financeed the political action committee were concealed.  So,

'Certainly, setting up an LLC to launder drug company money into fighting the ballot measure looks like an effort to evade Ohio's transparency and disclosure laws,' Brendan Fischer, director of federal and Federal Election Commission reform at the nonpartisan Campaign Legal Center, told International Business Times in an email.

Also,

The Campaign Legal Center contends that hiding donors this way at the federal level violates the Federal Elections Campaign Act, which prohibits 'straw donors.'

There were only two flies in the ointment.  Two companies did disclose donations to the LLC:

According to the Columbus Dispatch, California-based Amgen gave $6.3 million from 2016 through June 2017, and Biogen, headquartered in Massachusetts, gave $1.5 million last year. This accounts for roughly half of the $15.8 million total that PhRMA’s LLC raised in just May and June to fight Issue 2.

Who donated the rest, amounting to some $58 million, remains unknown.  And the effort to defeat Issue 2 was succesful, as reported by Cleveland.com in November, 2017.

Issue 2 also now holds the distinction of being the most expensive ballot issue in state history, with more than $74 million raised over the course of three years, topping the $64.4 million spent on Issue 6 in 2008, which sought permission for a casino in Wilmington, Ohio. Issue 6 also failed at the ballot.

Big Pharma accounted for more than $58 million of the total raised.

Furthermore,

Because the drug companies passed the money through a limited liability company created with the intention of funneling cash to the opposition campaign, it's currently impossible to tell which companies actively spent money combating the initiative in Ohio.

A proponent of Issue 2 charged:

'The onslaught, the bombardment of television advertising that was misleading, lying and negative led to tremendous confusion,' he said.

Uncertainty from the public about the effects of the bill coupled with the ugliness of the campaign likely led to Issue 2's defeat. Voters were often confused and felt both sides were of zero help in explaining the issue.

And by August 25, 2018, the Columbus Dispatch reported that all legal compaints against the PhRMA dark money campaign were dismissed.

Think of the campaign to defeat Issue 2 as a proof of the concept that health care corporations can finance campaigns against policy measures using dark money organizations to hide their support.

But no one would be surprised to find out that pharmaceutical companies were against a policy measure that would restrict the prices they charge.  Our next case shows how the dark money ruse can be used by corporations to support partisan policies that conflict with their proclaimed social responsibility and non-partisan nature.  

The PhRMA Backed Dark Money Campaign to "Repeal and Replace" the Affordable Care Act (ACA)

Investigative journalism from Kaiser Health News appeared in the New York Times and the Washington Post in late July, 2018 showing how PhRMA again used dark money, but this time to advocate for "repealing and replacing" the Affordable Care Act (known informally as "Obamacare"), which PhRMA had previously supported, and about which it was then ostensibly neutral.  The article began,

In 2010, before the Affordable Care Act was passed by Congress, the pharmaceutical industry’s top lobbying group was a very public supporter of the measure. It even helped fund a multimillion-dollar TV ad campaign backing passage of the law.

But last year, when Republicans mounted an aggressive effort to repeal the law, the group made a point of staying outside the fray. 'We’ve not taken a position,' Stephen Ubl, head of the organization, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, said in an interview in March 2017.

This was deceptive.

That stance, however, was at odds with its financial support of another group, the American Action Network, which was heavily involved in the effort to repeal the act, often referred to as Obamacare. The network spent an estimated $10 million on an ad campaign designed to build voter support for its elimination.

'Urge him to repeal and replace the Affordable Care Act now,' one ad running in early 2017 advised viewers to tell their congressman. That and similar material (including robocalls) paid for by the American Action Network ran numerous times last year in 75 congressional districts.

PhRMA was one of AAN’s biggest donors the previous year, giving it $6.1 million, federal regulatory filings show. And PhRMA had a substantial interest in the outcome of the repeal efforts. Among other actions, the Republican-backed health bill would have eliminated a fee the companies pay the federal government, one estimated at $28 billion over a decade.

But there was no way the public could have known at the time about PhRMA’s support of the network or the identity of other deep-pocketed financiers behind the group.

The KHN report went on to explain how this works

Unlike groups receiving its funds, PhRMA and similar nonprofits must report the grants in their own Internal Revenue Service filings. But the disclosures don’t occur until months or sometimes more than a year after the donation.

The conservative-leaning AAN has become one of the most prominent nonprofits for routing what is known as dark money — difficult-to-trace funds behind TV ads, phone calls, grass-roots organizing and other investments used to influence politics. Such groups have thrived since the Supreme Court’s Citizens United decision in 2010, which loosened rules for corporate political spending, and amid what critics say is nonexistent policing of remaining rules by the I.R.S.

Generally speaking, dark-money groups are politically active organizations, often nonprofit, that, under I.R.S. regulations, are not required to disclose the identities of their donors.

Such groups are often chartered under Section 501(c)(4) of the tax law, which grants a tax exemption to 'social welfare organizations.' For those seeking to influence politics but stay in the background, 501(c)(4) designations offer two big advantages: tax exemption and no requirement to disclose donors.

The AAN seems to be an obviously partisan, right-wing, pro-Republican group.

PhRMA’s $6.1 million, unrestricted donation to AAN was its single-biggest grant in 2016, dwarfing its $130,000 contribution to the same group the year before. Closely associated with House Republicans — AAN has a former Republican senator and two former Republican House members on its board — the group backed the failed G.O.P. health bill intended to replace the Affordable Care Act. It also supported the successful Tax Cuts and Jobs Act of 2017, which reduced corporate taxes by hundreds of billions of dollars over a decade.

So far in this election cycle, AAN has given more than $19 million to the Congressional Leadership Fund, a Republican super PAC with which it shares an address and staff, according to the Center for Responsive Politics. The fund recently ran ads opposing Democratic candidates in high-profile special congressional elections in Georgia and Pennsylvania.

In fact, PhRMA made a variety of contributions to dark money groups associated with right-wing and/or Republican party backed causes, while it presumably maintained a non-partisan public stance.

PhRMA gave nearly $10 million in 2016 to politically active groups, including AAN, that do not have to disclose donors, its most recent filing with the I.R.S. shows. By contrast, PhRMA and its political action committee made only about $1 million in political donations in 2015 and 2016 that were disclosed to regulators and reported by the Center for Responsive Politics.

PhRMA’s 2016 political activities included support for the Republican National Convention. Rather than directly support the Cleveland convention, which several companies pulled out of after it became clear that Mr. Trump was going to be the nominee, PhRMA routed $150,000 through limited liability companies with names like Convention Services 2016 and Friends of the House 2016.

Like 501(c)(4)s, LLCs do not have to disclose their donors. PhRMA’s support was revealed in I.R.S. filings more than a year later. (Donations by PhRMA and other groups to Friends of the House, which financed a luxury lounge for convention dignitaries, were first reported by the Center for Public Integrity last fall.)

PhRMA’s surge in donations to AAN coincides with the arrival of Mr. Ubl, who took over as president and chief executive in 2015 and has longstanding ties to Norm Coleman, a former United States senator from Minnesota who is now the network’s chairman. Mr. Ubl once ran the lobby for manufacturers of knee implants, heart stents and other medical devices, one of which, Medtronic, is based in Minneapolis.

Also,

PhRMA’s 2016 dark-money contributions included $150,000 to Americans for Prosperity, a conservative group associated with the billionaires Charles and David Koch. Their group has already signaled it will be active in November’s elections, running attack ads against Senator Jon Tester, a vulnerable Montana Democrat, for not supporting a repeal of the Affordable Care Act.

PhRMA also gave $50,000 to Americans for Tax Reform, run by the conservative anti-tax activist Grover Norquist.

In contrast, PhRMA gave lesser amounts to groups identified as centrist or left-leaning.

Mostly smaller amounts went to centrist and liberal groups. Center Forward, which claims to seek bipartisan, common ground on drug policy and other issues, received $300,000 directly from PhRMA and another $179,000 from a PhRMA-backed group called the Campaign for Medical Discovery, according to tax filings.

And the groups to which they donated were also pursuing narrower issues that supported the industry's economic interests, not broadly partisan (and in this case, prro-Democratic) issues. For example,

Center Forward worked to preserve a tax credit for researching rare-disease medicines known as orphan drugs. PhRMA took a similar stance, encouraging Congress “to maintain incentives” for rare-disease drugs.

The KHN article noted that there is evidence that individaul pharmaceutical companies hide their political advocacy, possibly mainly their advocacy of right-wing and/or Republican backed causes, in similar ways.

Johnson & Johnson gave $35,000 that year to the Republican Main Street Partnership, a 501(c)(4) that describes itself as a coalition of lawmakers committed to 'conservative, pragmatic government,' the C.P.A. data shows.

But the center’s research also shows that many pharmaceutical companies don’t disclose donations made to 501(c)(4) organizations, nor are they legally required to do so.

Corporations 'could dump millions into one of these (c)(4)s and nobody would ever know where it came from,' said Steven Billet, a former AT&T lobbyist who teaches political action committee management at George Washington University.

Summary and Discussion

So in three cases, health care corporations, and/or their trade associations, made significant financial contributions to dark money organizations, thus avoiding reporting of such fund transfers.  In two cases, these fund transfers went to organizations with clearly partisan, right-wing, pro-Republican and/or pro-Trump agendas.  Yet the corporations and their trade association had publicly committed themselves to social responsibility, putting patients and health care ahead of all other concerns, and had never advertised themselves as partisan, explicitly politically conservative, and/or Republican.

This is a new dimension of stealth health policy advocacy or stealth lobbying.  Most of the previous, at least pre-2016 campaign, examples we had found of these involved corporations promoting measures that would improve their revenue (and consequently their top managements' pay).  They did not involve explicitly siding with a single political party or political philosophy.

Patients, consumers, health care professionals, and the public at large might not be pleased but would probably not be too suprised that health care corporations and their management pursue financial self-interest, but prefer doing so without much publicity.  However, I suspect most people would be unpleanatly shocked to find out that well-known health care corporations have been actively siding with a single political party and that party's ostensible political philosophy, but keeping that support very quiet.

Since such dark money support is by definition secret, who knows how many health care organizations have been doing this?

As an aside, I wonder if this hidden support from large corporations has pushed one political party to more extreme actions despite such actions' popular disfavor?  But that is for more politically attuned people to ponder.

In any case, as we have said again and again,...

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.