Battle heats up between Stanford Health Care, union over hospital charge initiative

https://www.beckershospitalreview.com/human-capital-and-risk/battle-heats-up-between-stanford-health-care-union-over-care-cost-initiative.html?origin=bhre&utm_source=bhre

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Stanford (Calif.) Health Care and an employees union are disputing over a November ballot initiative to place a 15 percent cap on hospital charges in Palo Alto, Calif., The Stanford Daily reported.

Seven things to know:

1. The ballot initiative, initially filed in May, would place a 15 percent cap on the amount Palo Alto-based hospitals can charge in excess of direct patient care costs. Hospitals, medical clinics and other providers in Palo Alto would have to refund payers for charges exceeding the 15 percent cap within 180 days of each fiscal year.

2. The Service Employees International Union-United Healthcare Workers West sponsored the measure. It represents healthcare workers at Stanford Health Care — which has a main campus in Palo Alto.

3. Stanford University announced its opposition to the measure in a Sept. 28 statement.

The measure “would threaten Stanford Health Care’s ability to provide top-quality healthcare to patients from Palo Alto and across the region,” officials said.

“Such a policy is estimated to reduce Stanford Health Care’s budget by 25 percent, requiring significant cutbacks and the possible closure of many services and programs that are essential to high-quality healthcare in the local area.”

4. Union spokesperson Sean Wherley argued the measure will provide accountability for local healthcare providers and the city, according to the report.

“This is about transparency [and] letting people understand how much [they] are being charged, and why [they] are being charged so much more than the clinic down the street or in the neighboring community,” he told The Stanford Daily. “This is our chance as an organization to get healthcare costs under control.”

5. The union has also taken issue with Stanford Health Care’s profits, but the system said these are necessary resources to maintain its specialists, facilities and community benefit program, and that the system invests all its profit margin.

6. Palo Alto City Council members voted this summer to oppose the measure. According to the report, they attributed the decision to not having adequate bureaucratic infrastructure to regulate healthcare charges from local providers.

7. As of Oct. 3, the political action committee of the union and the opposition committee — Protect Our Local Hospitals and Health Care — had spent a combined $1.8 million on the measure.

 

Drug Trade Group Quietly Spends ‘Dark Money’ To Sway Policy And Voters

https://khn.org/news/drug-trade-group-quietly-spends-dark-money-to-sway-policy-and-voters/

 

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 campaignbacking passage of the law.

But last year, when Republicans mounted an aggressive effort to repeal and replace the law, the group made a point of staying outside the fray.

“We’ve not taken a position,” said Stephen Ubl, head of the organization, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, in a March 2017 interview.

That stance, however, was at odds with its financial support of another group, the American Action Network, which was heavily involved in that effort to put an end to the ACA, often referred to as Obamacare, spending 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 GOP-backed health bill would have eliminated a federal fee paid by pharmaceutical companies, 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 AAN or the identity of other deep-pocketed financiers behind the group.

Unlike groups receiving its funds, PhRMA and similar nonprofits must report the grants in their own filings to the Internal Revenue Service. 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 funneling “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 IRS.

(It’s impossible to know from public records whether PhRMA donated before or after President Donald Trump’s victory, which made repealing the health law a substantial possibility. In any case, most donations to dark-money groups are not earmarked for a particular program.)

Generally speaking, dark-money groups are politically active organizations, often nonprofits, that are not required to disclose identities of their donors. Under IRS regulations, donors may fund a nonprofit group such as AAN, which is allowed to engage in political activities and is not required to reveal its funding sources.

Dark-money groups are often chartered under Section 501(c)(4) of the tax law, which grants 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.

Against the backdrop of high drug prices and its heaviest political expenditures in years, the pharmaceutical industry is directing substantial resources through AAN and other such groups that hide the identity of their donors and have few if any limits on fundraising.

“PhRMA has always been very aggressive and very effective in their influence efforts,” said Michael Beckel, research manager at Issue One, a nonprofit devoted to campaign-finance transparency. “That includes using these new, dark-money vehicles to influence policy and elections.”

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 GOP 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.

PhRMA disputes the suggestion that it backs particular actions by the recipients of its donations. “PhRMA engages with groups and organizations that have a wide array of health care opinions and policy priorities,” said its spokesman, Robert Zirkelbach. “It is inaccurate and would be inappropriate for you to attribute those grants to a specific campaign.”

AAN declined several requests for comment.

Including AAN, PhRMA gave nearly $10 million in 2016 to politically active groups that don’t have to disclose donors, its most recent filing with the IRS shows. By contrast, PhRMA and its political action committee, or PAC, made only about $1 million in comparatively transparent 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 Donald Trump was going to be the presidential 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 IRS 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 Ubl, who took over as president and CEO in 2015 and has long-standing ties to Norm Coleman, a former U.S. senator from Minnesota who is now AAN’s chairman. Ubl once ran the lobby for makers of knee implants, heart stents and other medical devices, one of whose most powerful members, Medtronic, is based in Minneapolis.

Dues paid by member drug companies rose by 50 percent after he got there. PhRMA’s total revenue increased by nearly a fourth in 2016, according to IRS filings.

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

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

PhRMA and other trade associations donate to such groups “to avoid attracting attention” amid the political fray, said Bruce Freed, president of the Center for Political Accountability, which seeks to shed light on corporate political spending. Nevertheless “they’re achieving their goals by giving money to these folks and helping elect members that are going to be in support of them.”

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

Zirkelbach disputed the notion that PhRMA donations to AAN and other groups were intended to achieve specific goals, saying, “We seek to work with organizations we agree with as well as those where we have disagreements on public policy issues.”

Much of the work by PhRMA-linked, dark-money groups touches health policy and harmonizes with PhRMA’s positions.

During debates over the tax overhaul, 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.

AAN, which collected total contributions and grants of $14.6 million for fiscal 2016, launched a $2.6 million mass-mailing and ad campaign against letting Medicare lower drug prices through negotiations. PhRMA supported that stance, telling Healthline that such a measure could jeopardize seniors’ access to medicine and discourage companies from developing drugs.

Americans for Tax Reform ran similar ads in local markets opposing “price controls” on prescription drugs.

PhRMA’s dark-money allies push its agenda without disclosing its role, critics say.

PhRMA is “spending millions of dollars on politics every cycle, and they’re splitting it up between the state and federal level,” said Robert Maguire, political nonprofits investigator for the Center for Responsive Politics, which tracks political donations. “They’re just not running the political ads themselves,” which keeps their name off the product, he said.

A group called Caregiver Voices United, which got $720,000 from PhRMA in 2016, backed a secret effort to generate letters opposing a drug-transparency bill in Oregon. The campaign surfaced when an employee leaked phone-script documents to a lawmaker, as reported in February by The Register-Guard newspaper in Eugene.

Caregiver Voices United is “not influenced” by PhRMA or any other outside group, said John Schall, its president.

Dark-money groups received pharmaceutical industry money from individual companies as well, not just the PhRMA trade organization.

In 2016, Amgen gave $7,500 to Third Way, a center-left group that supports reimbursement for drugs and medical devices based on their results, according to the Center for Political Accountability. 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 CPA data show.

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

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 PAC management at George Washington University.

 

Right After Trump Blamed High Drug Prices On Campaign Cash, Drugmakers Gave More

Right After Trump Blamed High Drug Prices On Campaign Cash, Drugmakers Gave More

“The cost of medicine in this country is outrageous,” President Donald Trump said at a rally in Louisville, Ky., two months after his inauguration. He went on about how identical pills have vastly lower price tags in Europe.

“You know why?” the president asked, before spreading his hands wide. “Campaign contributions, who knows. But somebody is getting very rich.”

It was March 20, 2017.

The next day, drugmakers donated more money to political campaigns than they had on any other day in 2017 so far, according to a Kaiser Health News analysis of campaign spending in the first half of the year reported in Federal Election Commission filings.

Eight pharmaceutical political action committees made 134 contributions, spread over 77 politicians, on March 21. They spent $279,400 in all, showering Republicans and Democrats in both legislative bodies with campaign cash, according to FEC filings. The second-highest one-day contribution tally was $203,500, on June 20.

Brendan Fischer, who directs election reform programs at the Campaign Legal Center, said he found the timing of the contributions interesting: “I think it’s entirely possible that the drug companies sought to curry favor with members of Congress in order to head off any sort of potential attack on their industry by the press or by the federal government.”

During the Louisville rally, Trump also promised to lower drug prices, and pharmaceutical stocks tumbled afterward.

Although drug industry PACs have different structures and protocols, they are equipped to mobilize quickly to disperse funds to legislators.

“Writing a check doesn’t require much beyond putting pen to paper,” Fischer said.

FEC records show Merck’s PAC led the way that day, donating $148,000 to 60 candidates on March 21. House Speaker Paul Ryan (R-Wis.) received three maximum contributions to his various PACs from the drugmaker, totaling $15,000. Behind him with $7,500 was Sen. Tom Carper (D-Del.), who sits on the Senate Finance Committee.

Merck spokeswoman Claire Gillepsie said the contributions were “not tied to specific events.”

“Decisions on contributions are made at the beginning of a cycle and are approved by a contributions committee,” she said. A White House official referred requests for comment to the presidential campaign, which did not respond.

Companies may donate funds or lobby ahead of impending legislative issues and executive orders, or they may react to something a politician says.

“Presidents get a lot of attention to what they say,” said former congressman Lee Hamilton, who founded the Indiana University Center on Representative Government after three decades in the House of Representatives. “[Companies] have to react to that and defend the drug prices.”

Overall, FEC records show Merck spent $242,500 on campaign contributions and $3.7 million on lobbying in the first half of 2017.

The drugmaker, which makes diabetes pill Januvia, cancer drug Keytruda and shingles vaccine Zostavax, responded to outrage over drug prices earlier this year by revealing on its website that the average list prices of its drugs increased from 7.4 percent to 10.5 percent each year since 2010. Merck said discounts and rebates also increased, meaning it took home less money. But Thomson Reuters pointed out that the price increases outpaced inflation.

FEC records don’t indicate why a company donated to a politician or what that contribution led to, but when House Democrats accused Rep. Jason Chaffetz (R-Utah) of failing to schedule a hearing on prescription drug price hikes in 2015, The Intercept pointed out that the pharmaceutical industry had been among Chaffetz’s top campaign contributors.

Pharmaceutical lobbying dollars have also swelled in 2017, Kaiser Health News previously reported. In their disclosures, drug companies listed tax reform and drug pricing among issues on which they lobbied Congress.

March 21 was also the date of the National Republican Congressional Committee’s annual fundraising dinner, featuring Trump as keynote speaker. The event, which raises money for House Republicans, drew a record-breaking $30 million from a variety of industries, the NRCC reported.

But on that day, drugmakers also gave generously to Democrats and senators, according to FEC filings.

Pfizer and Novo Nordisk PACs donated $76,900 and $38,500 on March 21, respectively, to several dozen candidates on March 21, according to their filings. Five additional pharmaceutical PACs spent between $1,000 and $5,000 on contributions that day.

The companies say the timing was coincidental. A Novo Nordisk spokesman said the March 21 contributions from its PAC had been scheduled in advance “and in no way were tied to any specific statement.”

Pfizer spokeswoman Sharon Castillo said it takes three to four weeks to orchestrate and approve a PAC contribution.

“Pfizer’s political contributions to candidates and elected officials from both parties are led by two guiding principles — preserve and further the incentives for innovation, and protect and expand access to medicines and vaccines for the patients we serve,” Castillo said.

Pfizer’s PAC donated more than any pharmaceutical PAC in the first half of 2017, contributing $418,400 in all — nearly 70 percent more than the first six months of the 2015 election cycle, according to FEC records. In February of this year, the company’s CEO was among several executives from drugmaking firms and other global companies to pen a letter to Congress in support of tax reform. In December 2016, Pfizer received a letter from the Senate Special Committee on Aging, asking it to explain its price increases for the opioid overdose reversal drug, naloxone.

“Pfizer is committed to addressing the prevention, treatment and effective response to the growing opioid abuse in the United States,” Castillo said, adding that the company is donating up to 1 million naloxone doses and $1 million in grants toward opioid addiction awareness efforts.

Novo Nordisk has spent $178,000 on campaign contributions so far this year, or nearly four times more than it spent the first six months of 2015, according to its filings with the FEC. The company is one of the top three insulin makers, and in July, Sen. Amy Klobuchar (D-Minn.) sent the companies letters asking them to justify their price increases. In November, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) asked the Justice Department and the Federal Trade Commission to investigate the insulin makers for possible price collusion. The companies have denied the allegations.

“We’re certainly aware of policymakers’ concerns about the price of insulin, and we’re committed to collaborate with all those involved in the healthcare supply chain to ensure patient access,” said Novo Nordisk spokesman Ken Inchausti.

“From the public record, you can’t tell for sure” what prompted the spike in political contributions from pharmaceutical companies, said Tony Raymond, a former analyst at the Federal Election Commission who founded Political Money Line to track campaign finance. The PACs could have been “killing two birds with one stone” by donating to legislators across the board on the night of the NRCC fundraiser, or they could have been responding to what Trump said.

“We’re talking about a couple phone calls and then they could courier a check over to someone,” he said.