In lobbying, as in all pursuits, it's almost always a bad idea to bite the hand that feeds you. That's why the healthcare industry's Beltway crowd was somewhat baffled last month when reports surfaced that the American Hospital Association had done just that.
Starting at about the same time as the U.S.-led invasion of Iraq, Congress engaged in heated debate over the 2004 federal budget. Having spent weeks developing their proposals for next year, lawmakers in the House and Senate were still at odds. The House wanted to adopt President Bush's 10-year, $725 billion tax cut; senators favored a smaller cut and insisted they wouldn't approve more than $350 billion.
To get their tax cut, House leaders knew they'd have to pay an opportunity cost, so they advised committee heads to engineer a 1% cut among the government programs they oversee, with the exceptions of defense and homeland security. The spending reduction necessary to fund the tax cut meant Medicaid would lose $93 billion in the next 10 years at a time when state deficits are choking the program and its beneficiaries.
The House proposal, according to a statement issued by the AHA on March 21, "would hurt hospitals' ability to care for our most vulnerable citizens." The AHA was not alone in condemning the House action, but what came next surprised even the most seasoned Washington insiders.
On April 8, a Capitol Hill newspaper reported that the AHA had suspended political contributions to all 214 Republicans who voted for the anti-Medicaid House budget resolution. In The Hill newspaper story and conversations with Modern Healthcare, healthcare lobbyists called the AHA's reported move ill-advised and shortsighted. Some expressed disbelief that the industry's largest and most influential trade association would jeopardize relationships with lawmakers whose help it needs on a raft of issues.
The Hill story quoted a spokesman for Rep. Billy Tauzin (R-La.) as saying that the alleged AHA decision "will not change anything. ... Maybe (the AHA) will spend the money that they would have contributed to help some struggling hospital they are always crying about."
A senior aide to one prominent Democratic lawmaker told Modern Healthcare that freezing contributions represented a "bold move" for the AHA given the "devastating effects" Medicaid cuts would have on hospitals and patients. Still, the aide said, she didn't believe the report was accurate based on her experience with the AHA.
When first contacted by Modern Healthcare about the story, an AHA spokeswoman would not confirm or deny its accuracy, saying only that the AHA considers political donations in light of many factors and is not a single-issue group.
But the maelstrom had already begun. Other Beltway publications picked up the story, and the AHA began moving to redirect it. While congressional aides and lawmakers were hesitant to comment on the record, some said that if the AHA decision to halt contributions was real, it wasn't real wise.
In a letter to The Hill dated April 11, AHA Executive Vice President Richard Pollack said the AHA had not imposed a moratorium on political donations and the AHA's political action committee, which handed out $2 million from 2000 to 2002, "undergoes a thorough process that involves all hospital stakeholders, including our members and our state hospital association partners."
Pollack told Modern Healthcare the AHA officials discussed several potential responses to the House budget resolution in a March conference call, but no final decisions were made.
The option of punishing lawmakers with donation cutoffs "was brought up" during the call, says John Callender, senior vice president of the Ohio Hospital Association. "I don't think it was ever adopted. ... If the AHA arrived at that decision, they haven't advised us of it," he says.
Kenneth Raske, president of the Greater New York Hospital Association, was not on the call but said the AHA's reported strategy would have been counterproductive. "I give the AHA more than the benefit of the doubt, and I don't believe they'd do that," he says.
In the end, the hand that feeds the AHA's members decided not to deprive them of $93 million in Medicaid meals. Under pressure from the Senate, the House passed a new budget blueprint on April 11 that did not include explicit cuts to Medicare or Medicaid. And although some cautioned that the budgetary language leaves room for new cuts, the AHA and other groups celebrated an apparent victory.
As the most visible healthcare lobbying group, the AHA often dominates the spotlight after such major wins. But when it comes to healthcare lobbying punch, it may be far from alone atop the heap.
In its annual tally of the best Washington lobbyists (the paper did not rank those on the list), The Hill named seven from the healthcare industry, including: Federation of American Hospitals President Chip Kahn; American Association of Health Plans President Karen Ignagni; the AHA's Melinda Hatton; Dan Boston of the lobbying and legal firm Baker, Donelson, Bearman & Caldwell; Herb Kuhn, vice president of advocacy for the Premier hospital alliance; Frederick Graefe of the law firm Hunton & Williams; and Michael Bromberg, chairman of the Capitol Health Group.
While The Hill did not consider public officials in its tally, lobbyist Boston thinks the single most effective healthcare advocate in Washington is CMS Administrator Tom Scully. Scully is a "super-level lobbyist who not only runs the nation's largest insurance program but is also its principal cheerleader," Boston says.
Proving that lobbying is also a very small world, Boston left a post as chief lobbyist at the Federation of American Hospitals last year to start a healthcare practice at Baker, Donelson. Boston's former boss at the federation had been Scully.