The GOP can’t quit Obamacare repeal because of their donors

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Graham-Cassidy has gained steam because many Republican senators care primarily about pleasing their donors.

Senate Republicans are trying yet again to repeal Obamacare, despite seemingly having all the political and substantive reasons in the world not to.

Like all the other bills, the newest one, sponsored by Sens. Lindsey Graham and Bill Cassidy, is horrendously unpopular, with only 24 percent support. The rushed and slipshod process around the bill means its consequences still aren’t well understood, but it’s clear enough that tens of millions of people would likely lose coverage if it passes, that several statesrepresented by Republican senators would lose billions of dollars in federal funding, and that the bill badly violates President Trump’s campaign promise not to cut Medicaid.

Instead of putting repeal to the side after its failure in the Senate in July, though, Republicans just keep coming back to it, and are pushing toward a Senate vote on Graham-Cassidy this week. They’re doing so in part because they feel obligated to fulfill a longtime campaign promise, and because they fear electoral consequences for being viewed as failures.

But one more crucial motivator explains a whole lot: Republican Party donors want it.

The evidence that the GOP is trying to please donors here is adding up. An anonymous Republican senator told Politico that McConnell might be returning to health care to show donors “that the Senate GOP tried again.” Senate Republicans were warned at a private meeting that fundraising was slow because donors were disappointed at their lack of accomplishments, per the New York Times. And in recent months, senators “faced an unrelenting barrage of confrontations with some of their closest supporters, donors and friends” over Obamacare repeal’s failure, according to the Washington Post.

This pressure seems to be able to move votes. One moderate senator, Dean Heller (R-NV), conspicuously switched from being a public critic of repeal efforts to a strong supporter of Graham-Cassidy. That came after he reportedly got an earful from Sheldon Adelson and Steve Wynn, two billionaire GOP donors in his state.

Steve Schmidt, who ran John McCain’s presidential campaign in 2008, told Vox recently that donor concerns seem to be dictating the GOP’s legislative strategy. “There’s not an actual human constituency for any aspect of the Republican Congressional agenda,” Schmidt says. “Instead it’s an inside game that is judged, win or lose, on the basis of which entrenched permanent interests gain advantage or disadvantage, and how that affects the endless fundraising process.”

“You’re voting to reorganize one-sixth of the economy without any sense of how much it costs, or who it’s gonna affect, and with 13 percent approval of it at a national level,” Schmidt continues. “The drivers of it are something other than the voters.”

And if you assume the goal of passing repeal is primarily to please donors and goose fundraising, a whole lot about congressional Republicans’ bizarre approach to repeal — particularly, their disinterest in policy details or in how restructuring the health system will impact their constituents — makes a lot more sense.

What, exactly, do these donors want?

One interesting feature about this donor pressure Republicans are facing is that it does not appear to be coming from insurance companies or other health care industry stakeholders hoping to profit greatly from changes to the Affordable Care Act. (Health industry lobbyists in fact have been caught by surprise by the Graham-Cassidy boomlet.)

Instead, it appears to be a sentiment broadly shared among much of the GOP donor class. Paul Kane, who wrote a Washington Post report on pressure Republican senators faced after their initial failure on repeal, tweets that he’s heard “local Chamber types” or “longtime supporters” who’ve donated to them for years were particularly influential.

But super-wealthy donors are making their voices heard too. Doug Deason of Texas, who is part of the Koch brothers’ donor network, said earlier this year that his “piggy bank” would be closed until congressional Republicans “get some things done,” according to the Associated Press.

In trying to understand why these donors want Obamacare repeal so badly, I think it’s helpful to think of two somewhat overlapping sets of motivations.

The first is, essentially, a desire for their political “team” to win. These donors have been funding GOP candidates for years, and those candidates have been campaigning on repealing Obamacare. And while they may not care all that much about health policy, they care about broader matters like whether the Republican Party can get things done, or whether they feel their team is fighting for its principles.

Ken Vogel, who’s covered megadonors for years at Politico and now the New York Times, has said that he thinks a lot of them “treat this almost like a hobby” or game that they’re trying to win. “These folks have all this money, and they’re doing something they believe in. If they win, great; if they don’t win, they had fun doing it.”

In this case, the donors spent on the 2016 election, won, and now feel they’re owed a prize. If they don’t get a prize, then, well, they might not be so eager to open their wallets again. However, they don’t have particularly strong views or interests in the details of Obamacare repeal or how it should be replaced — so it makes sense that many Republican senators channeling their views would be similarly indifferent to what their bill actually does.

The ideological motivation: Obamacare repeal is the best chance to slash government spending

But a second set of donor motivations — that do help explain one major feature of nearly all the repeal bills we’ve seen — are ideological.

Across nearly every major version of Obamacare repeal that the House and Senate considered this year, there’s been one constant: hundreds of millions of dollars on cuts to government spending on health insurance. (Even the massive tax cuts for the wealthy in earlier versions of the bill were eventually scaled back to protect these spending cuts.)

The persistence of these cuts has been odd. If the GOP’s goal was simply to pass something, scaling back the cuts could have helped improve coverage numbers and win over wavering moderates. Furthermore, the bills’ deep cuts to traditional Medicaid go beyond merely rolling back Obamacare, as well as violating President Trump’s campaign promises not to cut that program.

These cuts make a whole lot more sense, though, when you view them as part of a long-term ideological project.

In addition to more traditional business and corporate donors, the GOP gets a great deal of its financial backing from megadonors with ideological motivations, like Charles and David Koch. These donors just don’t want to feel good by winning — they want to dramatically shrink the size of the federal government. And the way that’s done is by cutting spending.

In recent years, they’ve had little success. President George W. Bush found it to his political benefit to hike spending, and Donald Trump promised to protect entitlement programs. While an appealing slogan in the abstract, cutting spending usually proves to be difficult and unpopular in practice.

But Obamacare repeal is different, politically. It’s tied to the despised (on the right) figure of Barack Obama, it can be sold as a fix for the health system’s woes more generally, and the entire Republican Party (including the president) have campaigned on it for years. And it can be done through the budget reconciliation process.

As such, it’s clearly the Republican majority’s best chance for enacting deep spending cuts — and a fantastic Trojan horse if that is the true goal of some of their donors.

Dean Heller looked like he’d stop repeal in his tracks. Then he changed his mind.

Now, as Republicans are facing a tough fight to hold onto Congress in 2018, they’re reportedly finding that fundraising is more difficult than they’d expected.

Sen. Cory Gardner (R-CO), who runs the Senate GOP’s fundraising arm, warned his colleagues at a lunch two weeks ago that their legislative failures, including on Obamacare repeal, were badly hurting fundraising. That’s according to a fascinating report by the New York Times’ Carl Hulse, who writes:

[Gardner] warned that donors of all stripes were refusing to contribute another penny until the struggling majority produced some concrete results.

“Donors are furious,” one person knowledgeable about the private meeting quoted Mr. Gardner as saying. “We haven’t kept our promise.”

Donor influence has been the most obvious in the case of Sen. Dean Heller.

Heller is facing a tough reelection fight in 2018. Hillary Clinton won his state, which also happens to have benefited greatly from Obamacare’s Medicaid expansion. Naturally, then, Heller was hesitant to support an Obamacare repeal bill that would gut Medicaid. So in June, he publicly announced his opposition to one version of the Senate health bill alongside Nevada’s popular moderate Republican Gov. Brian Sandoval.

What happened right afterward, according to a report by the New York Times’ Jonathan Martin and Kenneth Vogel, was that two Nevada billionaires and leading GOP donors let him know that they were very unhappy with him:

Mr. Adelson and Mr. Wynn, two of Las Vegas’s leading gambling titans, each contacted Mr. Heller at the request of the White House last week to complain about his opposition to the Republican-written health overhaul, according to multiple Republican officials.

One ally of Mr. Heller’s acknowledged that Mr. Adelson and Mr. Wynn were unhappy with the senator at the moment and that their relationship needed some repair work.

Soon after this, Heller’s approach to the issue changed dramatically. He stopped sticking his neck out with public opposition. And though he did vote no on two versions of the Senate’s bill in July, he was willing to vote yes when it really counted, on the “skinny repeal” bill. Then, to rebuild his conservative cred further, he added his name to the Graham-Cassidy repeal proposal.

Now, with Graham-Cassidy becoming essentially the Senate GOP’s main repeal plan, Heller doesn’t even seem to be considering a no vote — even though, like the version of the bill he opposed back in June, this bill would make deep cuts to Medicaid and is opposed by Gov. Sandoval.

Heller likely didn’t change his mind only because of annoyed billionaires. After all, in August, Nevada business executive Danny Tarkanian announced he would challenge Heller in the Republican primary, presenting a threat to his right. Since President Trump is still quite popular among GOP primary voters, defying him may have seemed increasingly dangerous after that.

But as Heller runs for reelection in what’s expected to be a hugely expensive race, it would certainly be nice if he had the backing of a pair of deep-pocketed billionaires who can donate unlimited amounts to outside groups who will run ads supporting his candidacy, both in the primary and the general. And his political logic seems to be shared by most of the Senate GOP.


Conflicts of interest in health care journalism: VIDEO with our publisher about “an unhealthy state of things” (Part 3 of 3)

In the past two days, we’ve outlined a number of concerns about news organizations, professional journalism organizations and academic institutions that are involved in health care journalism reporting or training while accepting sponsorship or funding from health care industry entities that are often subjects of what the journalists or trainees do or will write about. (Part one of series. Part two.) These practices may be good for corporate, organizational or academic institution coffers, but the sponsorship comes at a price – of potential damage to journalism’s integrity and to the public trust in journalism, news reports and news organizations.

We have touched on examples of our concerns involving:

  • The World Conference of Science Journalists
  • The Association of Health Care Journalists
  • The University of Colorado
  • The University of Kansas
  • The National Press Foundation
  • NPR, STAT,

Ben Bagdikian, journalist/educator/media critic, wrote to and about journalists:

“Never forget that your obligation is to the people. It is not, at heart, to those who pay you, or to your editor, or to your sources, or to your friends, or to the advancement of your career. It is to the public.”

In this final part of our three-part series, I talk about some of these issues in more depth, and from the perspective of my growing concerns over a 44-year career in health care journalism.

Conflicts of interest: Time for world’s top health journalism organization to reconsider fundraising practices. Part 2 of 3

Perhaps few journalism organizations have tried harder to minimize conflicts of interest than the Association of Health Care Journalists (AHCJ), the leading professional organization for journalists who report on health care.

The two of us know AHCJ well, having been members almost since its launch 20 years ago. We’ve both served on AHCJ’s board, attended most of its 18 annual conferences, and served on many panels as speakers or moderators over the years. Gary wrote the AHCJ’s Statement of Principles, which was adopted by the Board in 2004.

AHCJ states that its educational arm, the Center for Excellence in Health Care Journalism, won’t take money from pharmaceutical companies, device makers, insurers or even most advocacy groups such as the American Cancer Society. That strict standard distinguishes AHCJ from some other journalism training organizations, which have no qualms about accepting money from companies that journalists routinely report on.

In fact, when AHCJ agreed to collaborate with the World Conference of Science Journalists (WCSJ), which meets in San Francisco this fall, it raised its own money for a health care track “because the broader funding of the conference includes funders that we would not take money from,” AHCJ Executive Director Len Bruzzese told us. As noted in part one of this series, WCSJ accepted $400,000 in support from drug company Johnson & Johnson and another $50,000 from drug company Bayer. Each of the funders that AHCJ lists for its track at WCSJ is a philanthropic foundation. Bruzzese added: “There is easier money out there if you’re willing to take it from other organizations that may want to have more influence than we believe they should have on journalists.”

Conflicts of interest in health care journalism. Who’s watching the watchdogs? We are. Part 1 of 3

Ben Harder, a journalist with US News & World Report, recently tweeted, “Pharma ads subsidize many health reporters’ salaries.”

Elisabeth Rosenthal, who now heads Kaiser Health News after a long career with the New York Times, tweeted in that same discussion, “Many of my articles in the NYT carried pop-up ads for pharma. Infuriating.”

Many journalists are aware of the drug industry’s attempts to gain positive attention by buying placement within the nation’s health care news.  A few occasionally write or talk about it, as Harder and Rosenthal did publicly.

But I don’t think we talk often enough about why it matters if health care industry entities are allowed to advertise within, or sponsor, health care journalism content.  Americans spend more than $3 trillion on health care. Conflicts of interest in health care and research are rampant. The Journal of the American Medical Association (JAMA) last month published a special edition all about health care conflicts of interest.  JAMA included a Viewpoint article entitled, “Conflict of Interest:  Why Does it Matter?”  The first line:  “Preservation of trust is the essential purpose of policies about conflict of interest.”

But who talks about conflicts of interest in health care journalism? In a Gallup poll, “Honesty/Ethics in Professions,” respondents rated journalists’ honesty and ethical standards below psychiatrists, chiropractors and bankers….and just above lawyers.

There is great potential harm in a further erosion of trust in journalism and in health care.  There is a great potential harm in journalists – and the audience they serve – becoming numb to the presence of and influence of drug companies and other industry entities in the news and information disseminated to the public.  There is, as we have begun to point out repeatedly in our review of news stories and PR news releases, advertising and marketing messages, often a polluted stream of contaminated information reaching the public.  Often vested interests pollute that stream.  (We will discuss these potential harms in more detail in part 3 of this series.)

That’s why I think that this issue demands and deserves a deeper dive. Why now?  Because, as outlined in this series, there are a growing number of questionable alliances between a growing number of news organizations and health care industry sponsors. Money is exchanging hands and I ask “Why? Why do news organizations enter into these arrangements?  Why do they feel they need to?  Have they exhausted all other options?”  I want to shine a light on a collection of news organization practices.  I’m raising the same types of questions that journalists often raise as they report on various issues.  But I’m asking them because I don’t see enough journalists talking about it when their own organizations accept industry money.

Economists propose paying physicians salary over fee-for-service method to avoid conflicts of interest

In a Journal of the American Medical Association Viewpoint article, a pair of behavioral economists contend that doctors should be paid by salary, rather than the fee-for-service arrangements under which most of them now operate.

While most conflict of interest research and debate in medicine tends to focus on physicians interacting with pharmaceutical and device companies, how doctors are paid is one important source of conflict that’s largely ignored in medical literature, they said.

Fee-for-service compensation arrangements, they propose, create incentives for physicians to order more, and different, services than are best for patients.

“Paying doctors to do more leads to over-provision of tests and procedures, which cause harms that go beyond the monetary and time costs of getting them,” said George Loewenstein, the Herbert A. Simon University professor of economics and psychology at Carnegie Mellon University, in a statement. “Many if not most tests and procedures cause pain and discomfort, especially when they go wrong.”

He and Ian Larkin, an assistant professor of strategy at UCLA’s Anderson School of Management, said that a commonly proposed solution to the problem involves requiring physicians to disclose their financial interest for a given procedure. But disclosure of conflicts has been found to have limited, or even negative, effects on patients.

Loewenstein and Larkin argue that the simplest and most effective way to deal with conflicts caused by fee-for-service arrangements is to pay physicians on a straight salary basis. Several health systems well-known for high quality of care, such as the Mayo Clinic, the Cleveland Clinic and the Kaiser group in California, pay physicians salaries without incentives for volume of services performed.

Moving more physicians to straight salary-based compensation might have benefits not only for patients, but also for physicians themselves, they said.

“The high levels of job dissatisfaction reported by many physicians may result, in part, from the need to navigate the complexities of the fee-for-service arrangements,” said Larkin. “Instead of focusing on providing patients with the best possible medical care, physicians are forced to consider the ramifications of their decisions for their own paychecks.”

Counsel’s Corner: President Trump, Potential Conflicts and Health System Boards

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Political biases aside, the transition process for the new administration—both as to President Donald Trump and his Cabinet nominees and White House advisers—does a great service for nonprofit health systems by highlighting critical conflict-of-interest concerns. The last several weeks’ headlines provide health system general counsel with a rare opportunity to offer practical board education based on current events.

The president’s personal asset divestiture plan, announced on Jan. 11, along with the broader public scrutiny of key administration members’ business interests, present an important teaching moment on identifying, resolving and managing conflict-of-interest issues. And that’s a subject on which many health system boards could use continuing guidance, given the strictures of the duty of loyalty.

Neither the particulars of the administration’s potential conflict issues nor the details or adequacy of the president’s divestiture plan needs to be addressed here. Instead, the issues themselves provide something of a checklist that can help health system boards ensure their internal conflict-of-interest policies and processes are as fulsome as possible. Strong conflict-of-interest inquiries are critical to protect the reputation of the organization and its board members, and to sustain key business arrangements.

It is important to note that the rapid growth of health systems, the equally rapid diversification of their businesses and investment portfolios, and the expanding diversity of board members’ backgrounds in board membership significantly complicate the conflict-of-interest review process.

The “Trump Transition” conflicts checklist logically could include the following:


The landscape that encompasses the totality of the president’s family business interests and those of his Cabinet appointees—and their relationship to the ethics of government—is many layered. It nevertheless offers certain valuable analogies for the health system board—for which the duty of loyalty is sacrosanct. It isn’t all that great a leap to go from Trump’s transition issues to the conflict-of-interest policies of a nonprofit health system board. And it should be noted that the breadth of scrutiny of transition-related conflicts of interest likely hasn’t gone unnoticed by health-care industry regulators, including but not limited to state charity officials. Regulators may be far more likely than before to apply greater sensitivity to issues and relationships that may present conflict issues and their broader legal implications.