Friday, April 28, 2006

How Much Does a Congressional Hearing Cost?

Dear President Bush,

How much does it cost for Congress to hold a hearing on your pet issue? The Federation of American Hospitals has long been concerned about the tax burden of their member for-profit hospitals. They view non profit hospitals as having an unfair advantage as they are tax exempt. I have heard this point numerous times in my 25 year health care career. That you refer to tax money as “your money” likely adds to the FAH’s frustration.

After years of strategic donations to key leaders in both parties, last May both houses of Congress discussed this very topic, even to the extent of holding hearings. On May 25th Senate Finance Committee Chair Grassley issued a letter drilling in on the tax exempt status of 10 leading hospitals and health care systems. Senator Grassley asked them to provide detailed information on their provision of charity care, hospital costs and the methods they use to charge charity patients for care provided.

The very next day the House went into action. On May 26th House Ways and Means Committee Chairman Bill Thomas conducted a hearing on hospitals’ tax exempt status. In his opening remarks he questioned the difference between non profit and for profit hospitals. After the testimony the Chair indicated the hearings on the tax exempt sector would continue.

The Federation of American Hospitals’ Political Action Committee funnels donations to legislators of both parties on behalf of for profit hospitals. Over the last few election cycles about 1/3 of the donations went to Democrats and 2/3 to Republicans. The federation also lobbies legislators to pass bills favorable to their for profit hospital members. A past head of this organization went on to serve in a key role within your administration. Tom Scully led the Centers for Medicare and Medicaid during the development of the new prescription drug benefit. I recall your liking Tom a lot.

How have their donations impacted the two groups seemingly pushing the FAH position, the Senate Finance Committee or the House Ways and Means Committee? Only the members themselves can truly answer this question, however donation data can provide insights.

The for profit hospital PAC targeted its donations such that a majority of members of both influential committees received donations during one of the last two election cycles. With the current election cycle still open, the FAH has contributed near $400,000 in the 2004 and 2006 political campaigns.

Senate Finance Committee
2004 The Federation donated a total $38,381 to 10 of the 20 committee members.

2006 Donations to date have been made to 7 of the 20 members totaling $26,499

Combined 12 of the 20 representatives received contributions from FAH in the amount of $64,880

House Ways and Means Committee
2004 FAH gave donations to 17 of the 41 committee members that total $53,781

2006 Stepping up coverage FAH has given to 27 of the 41 committee members summing to $66,000.

Combined 31 of the 41 members received contributions totaling $119,781

Most donations were a minimum of $1,000 and ranged as high as $10,000 for selected members.

The Chair of the House Ways and Means Committee benefited from his relationship with the Federation over the years. Chairman Bill Thomas began speaking at the FAH Annual Meeting in 1999, when Tom Scully served that organization’s President. Bill spoke at 3 of the next 4 meetings between 2000 & 2003, missing only the 2002 gathering. Tom Scully left during this time as President Bush appointed him to head what would become the Centers for Medicare and Medicaid in summer 2001.

Mr. Scully worked with Congress and the drug industry in developing the new prescription drug benefit, not without controversy. In one article Tom Scully made sure to give credit for Medicare Part D’s passage to Senator Max Baucus, the senior Democrat on the Senate Finance Committee. House Ways and Means Chair Bill Thomas even led one hearing involving accusations his buddy Tom’s suppressed the sharing of Mr. Foster’s cost estimates with members of Congress.

Mr. Scully did leave the federal government for a big money lobbying position in December of 2003. He joined Senator Bob Dole at Alston & Bird, a legal and lobbying firm on K Street. Their most recent big name recruit is ex Senate Minority Leader Tom Daschle.

The two Tom’s have something else in common, serving as senior advisors for major investment houses. Tom Scully serves Welsh, Carson, Anderson, & Stowe while Tom Daschle recently joined the Apollo Investment Corp. Another investment house, the Carlyle Group has an A list of political insiders at the helm. They freely promote their insider access to the current administration in their press releases.

Should people be worried that government can be bought after the Jack Abramoff scandal? The answer is absolutely. Chairman Bill Thomas announced he would not run for re-election after the influence pedaling scandal broke. His donations from for-profit healthcare go much deeper than just the Federation’s PAC. Triad Healthcare, a for profit hospital company gave him $17,000 in the 2004 campaign. That same election cycle $450,000 in donations came from health related interests. Before stepping out of the 2006 race Kindred Healthcare, a long term acute care hospital company, donated $20,000 to his campaign.

This analysis is not suggesting that any legislators did anything illegal, but the author finds it odd that in our current health care crisis our elected leaders are taking aim at non profit hospitals. It made me wonder why and that search led me to here? Where our country goes next is our decision. I encourage anyone to speak up if you find anything amiss. What are your thoughts Mr. President? Do you find any dots unconnected?

P.S. Do you recall another long term acute care hospital company received preferential treatment in the White House Lessons Learned report? LifeCare Hospitals lost 24 patients in the post Katrina aftermath. Just weeks before the hurricane, the Carlyle Group closed its purchase of LifeCare. Is it odd that a nursing home with 6 or 7 deaths gets mentioned in your report but LifeCare’s 24 deaths are completely omitted? While money may not have changed hands, did undue influence keep out information that would help protect hospital and nursing home patients in future storms? Would a complete omission aid LifeCare defense attorneys in any upcoming wrongful death civil suits? Only you and your staff know for sure.


Unknown said...

The lovely and talented Billy bob Thomas represents the people of my county..Kern county..a primarily agri=business and oil dependant county. Billy is retiring..I am sure the fact that he has to give up his chairmanship of the ways and means committee has alot to do w/his retiring..he says its to spend more time w/the grandkids..BWAHAHAHAHAH..

sorry..I had to get that laugh out..
He will become a bigtime lobbyist for the pharmaceuticals or the for profit hospitals..of that I feel certain.
Billy bob has run unopposed for each term bar one..I am glad he is leaving,so glad I could dance..even with this bad back..Kevin McCarthy is his RNC picked replacement..there are NO democrats running for Billy bob's seat as per usual.

Kevie won't be heading up the Ways and Means Committee any time soon..but if he gets as many years in office as Billy bob..well, you can figure out the ending..
Doesn't BIlly Frist's family own a for profit line of hospitals? Its late and I can't remmber the name of them..but I would bet my last peso that they are for profit.

PEU Report/State of the Division said...

I figured Rep. Thomas was extrinsically motivated to leave. I leaned toward the get out of town before the stink pile got uncovered, but your comment suggests he may have a big honey pot waiting coutesy of his past co-poopers. It will be interesting to watch.

Will the powerful House Ways and Means Committee Chair end up indicted like Tom Delay or doing consulting/lobbying work like Tom Delay?