The Golden Leash Award
The Golden Leash is a symbol of the ties between special interest money and elected officials. It is awarded to Members of Congress who demonstrate egregious conduct in the quid pro quo practice of dollar democracy.
Take A Half-Million and Call Me In The Morning
Rep. Bill Thomas (R-CA) and the Health Care Industry
Who's on the Leash?
Representative Bill Thomas (R-CA)
WHO'S ON THE LEASH?
Many members of Congress get large political contributions from health care interests. But not many take as much money -- or are as well situated to do something in exchange -- as Rep. Bill Thomas (R-CA).
When the Republicans took over the House of Representatives in the 1994 elections, Thomas rose to the chairmanship of the House Ways and Means Health Subcommittee. Since then he has taken on other leadership positions in Congress dealing with health care. He is administrative chairman of the National Bipartisan Commission on the Future of Medicare, and he is also on the GOP task force that is attempting to develop a Republican consensus on health care reform.
Between 1991 and 1998, Thomas collected more than half a million dollars -- $535,648 -- from hospitals, HMOs, physicians, health insurance companies and other health care interests.1 In the 1996 elections, Thomas ranked third in the House for contributions from the health care industry, excluding contributions from the insurance industry.2
Today, Thomas remains a faithful champion of the interests of his health care contributors over the interests of the public at large. In Congress, Thomas is:
- fighting proposals to give patients more rights and hold managed care companies more accountable for their actions;
- promoting the interests of doctors who want higher fees from elderly patients, caps on medical malpractice awards, and freedom from anti-trust laws, and;
- pushing plans to increase federal incentives for Medical Savings Accounts (MSAs), which consumer groups warn could increase health care costs for those who can afford it least and provide disincentives for appropriate preventive care.
Despite predictions that the rise of managed care would reduce spiraling health care costs and therefore make health care more widely accessible, the nation's health care woes are as bad as they ever were. In particular, costs are rising, the percentage of people with insurance is dropping, patients' rights are eroding, and choices are more limited.
Costs continue to rise. In 1996, the average amount spent per person for health care in the U.S., after adjustment for inflation, was about $3,800, more than double what was paid twenty years ago.3 This amount includes what is spent by all sources -- employers, consumers, and taxpayers. As a percentage of household income, the amount that people spend out-of-pocket has been increasing. In 1996, such expenses accounted for 14 percent of the median household income in the country.4
Forty-one million Americans lack any kind of insurance, a number expected to rise to 50 million by the 21st century.5 According to the U.S. General Accounting Office, between 1980 and 1995, the population covered by private health insurance actually decreased from 79.5 percent to 70.5 percent. Private health insurance coverage for children, people who retire early, and low-income families has declined more rapidly than for the rest of the population.6
What's more, 31 million Americans who do have private insurance are underinsured -- at risk of facing "ruinous out-of-pocket expenses if they get seriously ill," according to a recent report by Consumers Union, publisher of Consumer Reports. There are several ways that families may find themselves on the verge of financial disaster because of health care expenses. They may have a plan that doesn't cover prescription drugs which could mean catastrophe if, for example, a family member needs expensive chemotherapy for cancer treatment, or medication for chronic problems such as heart disease or diabetes. Families may also find themselves in trouble if their plan includes a lifetime limit on benefits, or if it lacks a cap on how much they must pay out-of-pocket.7
Legal loopholes also prevent consumers from holding managed care plans accountable when they make irresponsible decisions. A 1974 law known as the Employee Retirement Income Security Act (ERISA) granted substantial immunity to employers and insurance plans and preempted state regulation of HMOs. The idea was to encourage employers to offer health insurance nationwide, bestowing a benefit on consumers. With the rise of managed care, however, the law is now hurting consumers, according to groups such as the Center for Patient Advocacy, because it prevents patients from recovering damages when harmed by an HMO.8
Piecemeal attempts at health care reform in recent years are not living up to either politicians' predictions or consumers' needs. Despite the $24 billion Congress made available to states to expand children's health care coverage as part of the Balanced Budget Act of 1997, as many as nine million children may remain uninsured.9
When Congress passed and President Bill Clinton signed the Kennedy-Kassebaum Health Portability and Accountability Act of 1996, its champions said the legislation could extend health care coverage to 25 million people, by making it easier to take insurance coverage from job to job and cracking down on denial of coverage because of "preexisting conditions." Less than two years later, health care experts are saying that the law merely may have expanded coverage for just a few hundred thousand people.10
A study by GAO found that insurers are discouraging people from applying for coverage under the new law or charging them exorbitant rates -- as much as 600 percent of the standard premium. Some insurers refused at first to pay commissions to insurance agents who referred people for benefits under the law. The GAO also concluded that lack of adequate funding is straining state-level offices of the U.S. Department of Health and Human Services that have enforcement responsibility for the new law.11
Whenever Washington starts talking about reforming the system, the wealthy health care industry rallies, flooding the airwaves with advertisements and filling political campaigns with cash. Insurance companies, HMOs, doctors, hospitals, large employers -- there is a long and lucrative list of interests with a stake in health care. The only group that doesn't have a voice amplified by cash in these policy debates are the people with the most to lose -- consumers.
REPRESENTATIVE BILL THOMAS (R-CA)
California Representative Bill Thomas' campaign war chest has benefited greatly from his leadership position on a myriad of health care policies. Between 1991 and 1994, before he became chairman of the House Ways and Means Health Subcommittee, Thomas collected $171,550 from the entire health industry -- hospitals, HMOs, physicians, other health care companies, and health insurance companies.12 Between 1995 and 1998, he collected $364,098, more than twice as much, with the 1998 election cycle not yet complete.
Thomas raises far more than he needs. He outraised his 1996 general election opponent by 32 to 1,13 and ended that year with a surplus of more than $570,000.14
Health & Health Insurance Industry Contributions PAC & Indivs. ($200+) to Rep. Bill Thomas (R-Calif.)* 1991-1998
Election Cycle Total 92 $45,550 94 $126,000 96 $259,048 98** 105,050 TOTAL $535,648
*All health industry contributions as coded by the Center for Responsive Politics, plus insurance companies coded as "accident and health" companies or that earn a substantial amount of revenue from accident and health divisions. Excludes pharmaceutical companies and other health care product manufacturers.
** 1998 totals based on data released by the FEC by May 1, 1998. Source: Center for Responsive Politics
Thomas consistently has taken positions that place the interests of his wealthy contributors above the interests of patients:
- Managed Care Rights Over Patients' Rights. "The message we are getting from House and Senate Leadership is that we are in a war and need to start fighting like we're in a war," begins a fall 1997 memo written by a lobbyist working for the Health Insurance Association of America, a national trade association representing health insurers.15 "Sen. Lott ... said that Senate Republicans need a lot of help from their friends on the outside, 'Get off your butts, get off your wallets.'" Afterwards, a group of managed care, insurance, and large employers known as Health Benefits Coalition launched a $1 million advertising campaign against legislative proposals that would grant consumers more rights and force managed care companies to become more accountable for their actions.16
The campaign is primarily aimed at a bill, H.R. 1415, the Patient Access to Responsible Care Act of 1997, sponsored by Rep. Charlie Norwood (R-GA.) -- a former dentist17 -- and a companion bill in the Senate, S. 644, sponsored by Sen. Alfonse D'Amato (R-NY). There are also several Democratic proposals with similar provisions, based on President Bill Clinton's executive order issued earlier this year proclaiming a "patients' bill of rights" for people enrolled in federal health plans. Clinton also recently released a report saying that federal legislation is necessary to fix what ails managed care.18 In the House, Rep. John Dingell (D-MI) is sponsor of H.R. 3605, and in the Senate, Sen. Ted Kennedy (D-MA) has introduced S. 1890.
Between 1991 and 1998, Thomas collected $98,173 from HMOs and members of the Health Benefits Coalition, which include organizations representing large employers, such as the National Restaurant Association and the National Federation of Independent Business.19 Between 1996 and 1998, he ranked second in the House for contributions from the managed care industry.20
In March, Washington Health Week reported that Thomas participated in a meeting, along with House Speaker Newt Gingrich and Rep. Dennis Hastert, where they discussed taking Norwood off the GOP task force working on health care.21 Thomas is also on record opposing Clinton's executive order on a patients' bill of rights. He told USA Today that the President was trying to "blackmail" Congress to pass legislation that would extend the same requirements to everyone.22
In addition to defending the managed care companies from regulations meant to protect consumers, Thomas has been a long-time advocate of sending the industry more business. In 1995, he cosponsored a bill that expanded the federal Medicare Select program, from pilot status to all 50 states. The program brings more senior citizens under managed care plans. It became law in July 1995.23 At the time the legislation was considered, Consumers Union stated that analysis of the pilot program showed that it had not been successful in reducing costs. In addition, many of the plans offered under Medicare Select charged seniors more the older they got. "By age 75, 80, or 85, a policyholder may find that coverage has become unaffordable -- just when the onset of poor health could make it impossible to buy a new, less expensive policy," testified Gail Shearer before the House Ways and Means Committee.24
In his new role as administrative chairman of the National Bipartisan Commission on the Future of Medicare, Thomas has already indicated that he wants to increase HMO involvement even more. The commission is charged with examining how to save the program, which is expected to go bankrupt in the next century from the strain of accommodating retiring baby boomers. Thomas has said that he supports putting more senior citizens into managed care plans,25 even though critics say they may face lifetime limits, restricted choice, and no legal recourse if they encounter problems. Meanwhile, he has also bluntly stated his opposition to a Clinton proposal to lower the age of eligibility for Medicare to 55, even if these seniors pay the cost of extending the program. "It isn't going to happen," Thomas told the Christian Science Monitor last March. Some three million people aged 55 to 65 have no health insurance, according to the Employee Benefit Research Institute. 26
HMOs & Members of Health Benefits Coalition PACs & Indivs ($200+) 1991-1998, By Amount, to Rep. Bill Thomas (R-Calif.)
Company/Organization Total Blue Cross/Blue Shield* $21,500 Cigna Corp $9,500 Health Insurance Assn of America $8,689 Food Marketing Institute $6,500 FHP Inc $6,000 Prudential Insurance $5,750 New York Life $5,500 American Assn of Health Plans $4,871 Aetna, Inc* $4,500 Assn of Private Pension & Welfare Plans $3,613 National Restaurant Assn $3,500 United HealthCare Corp $3,500 Mid Atlantic Medical Services, Inc. $2,500 National Fedn of Independent Business $2,500 PacifiCare Health Systems $2,000 American Insurance Assn $1,500 Comprehensive Health Services $1,000 Health Partners Inc $1,000 Humana Inc $1,000 National Assn of Health Underwriters $1,000 Scan Health Plan $1,000 Group Health Assn of America $500 Health Net $500 Kaiser Permanente $250 TOTAL $98,173
- Doing for Docs. Doctors have also been generous to Thomas, giving him $186,834 between 1991 and 1998. Over the years, Thomas has advocated on behalf of a number of issues near to doctors' hearts -- and worth plenty for their pocket books.
Thomas has repeatedly voiced his support for medical malpractice reform, a longtime priority on doctors' legislative wish list. In 1995, he proposed legislation, H.R. 1234, which would have capped the amount of non-economic damages in medical malpractice lawsuits at $250,000.27 In 1994, he sponsored a similar amendment, which passed the House Ways and Means Subcommittee but did not become law.28
Thomas has also stuck up for doctors unhappy with Medicare rates for their services. Doctors were upset with a Clinton proposal to cut their fees floated in 1997 as part of debate over the balanced budget bill. Thomas apparently felt their pain, telling USA Today April 1997 that "a 40 percent shift in someone's income structure in one year is just too radical."29 In the final bill, which became law in August 1997, doctors won the right to contract privately with patients and set their own rates for services covered by Medicare, as long as they agreed not to take any Medicare beneficiaries for two years.30
Still unhappy, doctors are lobbying for new legislation, H.R. 2497, that would allow them to set up private contracts without conditions attached. Thomas is a cosponsor.31 The American Medical Association (AMA) approves: "Elimination of the penalty for private contracting is a top AMA priority for 1998," reads a statement posted on the AMA's web page.32 The American Association of Retired Persons (AARP), however, says that the proposed legislation would "eliminate some of the financial integrity and consumer protection" that was in the balanced budget act and would make Medicare beneficiaries more vulnerable to fraud and abuse.33
Thomas has also backed legislation that would relax anti-trust standards, a change long sought by doctors, who had been hit hard by a series of prosecutions by the Justice Department against doctors and dentists who had set up networks to compete with hospitals, HMOs, and other health care providers.34 He cosponsored bills proposed by Rep. Henry Hyde (R-Ill.), chairman of the House Judiciary Committee, in the 104th and 105th Congresses, which would have weakened antitrust standards related to doctors.35 In hearings before the Judiciary Committee in 1996, Robert Pitofsky, chairman of the Federal Trade Commission, warned that such changes, if enacted, could allow doctors' groups to fix prices and dominate the market by excluding other health care providers.36
- Medical Savings Accounts. MSAs are supported by the doctors and the insurance industry, particularly Republican donor Patrick Rooney, whose company, Golden Rule, through its PAC and executives, has given Thomas $2,000 since 1991. MSAs work as a kind of medical IRA, giving people a tax break for saving their own money for medical expenses. Conservative think tanks have hailed MSAs as a way to make consumers more directly responsible for their health care spending. But critics argue that they would simply make things worse, by skimming healthy people out of the insurance pool and making health care most expensive to those who can least afford it.
Over and over, Thomas has voiced his support for converting from a health care system that relies on employers providing insurance for employees to one where consumers finance their own health care through Medical Savings Accounts (MSAs). "We had medical savings accounts in the balanced budget and we are going to have medical savings in the current proposal to reform Medicare," Thomas told the Heritage Foundation in May 1997. "That's a fairly absolute statement."37
Congress included a pilot program on MSAs as part of The Health Portability and Accountability Act of 1996 and expanded it in the balanced budget bill in 1997. "We fear that MSAs, which are touted as an increased choice for consumers, will actually result in less choice for consumers, who will have no affordable option for health insurance other than an MSA and a high deductible health insurance policy," Consumers Union wrote Congress in 1997.38
(1) All health industry contributions as coded by the Center for Responsive Poltics, plus insurance companies coded as "accident and health" companies or that earn a substantial amount of revenue from accident and health divisions. Excludes pharmaceutical companies and other health care product manufacturers. Data downloaded from Federal Election Commission on May 1, 1998. Data reflect the latest figures reported by candidates, so there may be inconsistency in periods covered.
(2) Makinson, Larry, The Big Picture: Money Follows Power Shift on Capitol Hill. Center for Responsive Politics, November 1997, P. 57. Does not include contributions from health insurance companies. Includes pharmaceutical and other health product contributions.
(3) Shearer, Gail, Hidden From View: The Growing Burden of Health Care Costs, Consumers Union, January 22, 1998, P. 57.
(5) ibid, P. 11.
(6) "Private Health Insurance: Continued Erosion of Coverage Linked to Cost Pressures," GAO Chapter Report, August 24, 1997 (GAO/HEHS-97-122).
(7) "Hidden From View," Consumers Union, pp. 11-12.
(8) Statement of Terre McFillen-Hall, Executive Director of the Center for Patient Advocacy, on the Patient Access to Responsible Care Act, October 22, 1997.
(9) "Hidden from View," Consumers Union, pp. 14-15.
(11) "Health Insurance Standards – New Federal Law Creates Challenges for Consumers, Insurers, Regulators," GAO Chapter Report, February 25, 1998 (GAO/HEHS-98-67).
(12) See footnote 1.
(13) Duncan, Phillip and Christine Lawrence, Politics in America: 1998, Congressional Quarterly Press, 1997, P. 149.
(14) Center for Responsive Politics Web Site (www.crp.org).
(15) Transcript of memo found at www.his.com/~pico/hiaamem.htm.
(16) "White House Maps Out Healthcare Agenda for '98," by Jill Wechsler, Managed Healthcare, vol. 8, no. 2, pp. 14-15.
(17) "Managed Care Causes Groups to Spend and Arm and a Leg," by Mary Agnes Carey, Congressional Quarterly, April 11, 1998, P. 942.
(18) "Clinton Calls Managed Care Reform 'Urgent,'" Congress Daily, May 28, 1998.
(19) Membership list found on Web Site of the Health Benefits Coalition (www.hbc.com).
(20) Contributions coded as HMOs and select health insurance companies only as found by the Center for Responsive Politics.
(21) "GOP Leaders Tried to Put the Kibosh," Washington Health Week, March 2, 1998.
(22) "Patient Bill of Rights Ordered for All Federal Health Plans," by Susan Page, USA Today, February 20, 1998.
(23) H.R. 483 summary found on THOMAS Web Site (thomas.loc.gov).
(24) Prepared testimony of Gail Shearer, Director, Health Policy Analysis, Washington Office, Consumers Union, before the Subcommittee On Health And Environment Committee On Commerce, United States House of Representatives, Re: Medicare Select Program, February 15, 1995.
(25) "Necessity of Medicare Reforms Gives Congress Queasy Feeling," by William Neikirk, Chicago Tribune, March 5, 1998, p. 3.
(26) "Snags in Plan to Lower Age Limit for Medicare," by Lawrence J. Goodrich, The Christian Science Monitor, March 11, 1998, p. 5.
(27) H.R. 1234 (104th Congress) summary, found on THOMAS Web Site (thomas.loc.gov).
(28) "House Panel Votes To Cap Medical Malpractice Damages," Liability Week, No. 13, Vol.9, March 28, 1994.
(29) "Specialists Face Fee Cuts in Medicare," by Judi Hasson, USA Today, April 23, 1997, p. 1A.
(30) Statement of J. Edward Hill, MD to the Senate Committee on Finance, on behalf of the American Medical Association, Re: Private Contracting In Medicare, February 26, 1998.
(31) H.R. 2497 summary, downloaded from thomas.loc.gov.
(32) "AMA Supports Private Contracting for Medicare Patients," Statement Attributable to D. Ted Lewers, MD, AMA Board of Trustees, Found on AMA Web Site, (www.ama- assn.org/advocacy/statemnt/1219.htm).
(33) Prepared testimony of Beatrice Braun, M.D., American Association Of Retired Persons, Board Member, before the Senate Finance Committee, February 26, 1998; "AARP Decries Misinformation About Medicare 'Private Contracting;", AARP news release, April 1, 1998.
(34) "Political PAC-analia," by Jennifer Shecter, Nancy Watzman, and James Youngclaus, Center for Responsive Politics, October 1996.
(35) H.R. 415 summary (105th Congress); H.R. 2925 summary (104th Congress); found on THOMAS Web Site (thomas.loc.gov).
(36) "Health Care Reform Issues: Antitrust, Medical Malpractice Liability, And Volunteer Liability," Jennifer Wehner, FDCH Congressional Hearings Summaries, February 27, 1996.
(37) "MSA's Expected to Continue, Senate OKs Budget Plan," Medical Industry Today, May 27, 1997.
(38) "MSAs: Bill Would Expand Kassebaum/Kennedy Demonstration," Health Line, April 1, 1997.
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