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Industry groups back health overhaul, but aim to protect profits


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POSTED: Saturday, September 12, 2009

WASHINGTON » The top lobbyists for every major sector of the health care industry publicly insist they are squarely behind the Obama administration's health care reform effort. But as the debate gets down to the details, the lines dividing friend from foe are getting blurry.

Each industry group is also working quietly to scuttle or reshape some element of the administration's proposals that might hurt profits—usually some measure aimed at cost control.

The drug industry, for example, struck a deal with the Obama administration and is now waging a major advertising campaign to help push the health care overhaul. But the drug makers also abhor one of its cost-cutting components: a government initiative to study the effectiveness of treatments that the companies fear could mean lower payments for certain drugs.

So lobbyists have enlisted the help of Tony Coelho, a former Democratic congressman with epilepsy who cites his battle with the disease to argue against that idea.

“;I don't want some government folks making a decision because of a cookie-cutter approach to health care saying, 'We will only approve the three most common drugs,' so then my drugs are not approved, and I am going to have seizures,”; said Coelho, the chairman of an industry-backed group called the Partnership to Improve Patient Care. “;And it is going to cost people a lot more money because I am going to be in an emergency room!”;

The American Medical Association, a pivotal player because of its credibility with patients and voters, has made the most sweeping endorsements of the administration's efforts, reiterating its support in a letter released Wednesday before Obama urged Congress to pass a bill this year.

But the AMA's lobbyists are also working to extinguish the idea of a government-run insurance program, which doctors fear could eventually push down their fees. The lobbyists are also using the AMA's support as leverage to persuade Democrats to roll back steep cuts in future Medicare payments to doctors (the House bills eliminate the cuts, and the AMA is still at work on the Senate.)

Meanwhile, the AMA has also raised no public objections to a dissident faction, led by a former AMA president, that is lobbying much more vocally against the proposed public option, among other issues.

“;Nobody from the AMA has sent me a nasty letter,”; said Dr. Donald Palmisano of New Orleans, the former association president who has become the public face of the dissidents, the Coalition to Protect Patients' Rights. “;What I am advocating is just AMA policy.”;

Palmisano said he was recruited by donors outside the industry, whom he would not name. But a collection of state medical associations and specialty groups have taken a similar stance, and Dr. J. James Rohack, the president of the AMA, said he appreciated their views.

“;They have legitimate concerns,”; he said, though he noted that the association's more subtle approach appeared successful so far. The doctors persuaded the House to modify its legislation, and in a surprise from a Democrat, heard Obama call this week for moves to curb malpractice claims.

Hospital lobbyists, like the drug makers, have a deal with the White House to limit their costs and are pushing hard to pass a bill. But the hospitals are haggling with the Senate Finance Committee over another proposal: a newly empowered Medicare oversight board that could impose payment reductions.

Two hospital lobbyists, speaking anonymously because the discussions are confidential, say their deal with the administration should protect them from further cuts the board might seek. White House officials dispute that, though when asked about the matter recently, Rahm Emanuel, the White House chief of staff, said the hospital deal included cuts it might have taken a decade to achieve.

Even the lobbyists for the insurers—the favorite villain of Democratic health care rhetoric—say they, too, strongly support reform, including new restrictions on their own underwriting. But that does not mean they have laid down their arms.

Many in the health care business were pleased that Obama sounded open to a compromise substituting weaker not-for-profit cooperatives for his proposed government-run insurer. Karen Ignagni, president of the insurers' trade group, said her industry was still lobbying hard against it. In the Senate draft of the compromise, the government would still support and oversee the nonprofits, thus threatening to take them over, she argued.

Some lawmakers say that such industry lobbying is the reason health care costs are so hard to cut.

“;The most fundamental equation in health care is: the $2.4 trillion in current spending exactly equals $2.4 trillion in providers' income,”; said Rep. Jim Cooper, D-Tenn. “;None of them will admit they are wasting a penny, and yet the cost increases are bankrupting America.”;

For his part, Coelho said he had decided to run the industry-backed coalition because of his own concerns, not those of the Pharmaceutical Research and Manufacturers of America. “;Just because PhRMA agrees with me, that means my views don't have any value? That belittles me,”; he said in an interview.

In addition to trade groups for drug makers, biotechnology firms and medical-device companies, his Partnership to Improve Patient Care also includes in its steering committee the Easter Seals, the National Alliance for Hispanic Health and the National Alliance on Mental Illness. Coelho says he recruited about 120 other groups to sign on in support of the cause.

Like the administration, the coalition supports comparing the effectiveness of treatments, Coelho said. But the coalition, he said, wants the research overseen led by an independent board with industry and patient representatives. Current House health care legislation would keep the research under government oversight, without specifying whether the federal government or other insurers might use its findings for payment decisions.

Coehlo, who is not a registered lobbyist, says he does not press policymakers directly about the issue but advises lobbyists for his coalition's members. He also speaks publicly about the subject in radio interviews and elsewhere.

In May, he joined a conference call with three Democratic lawmakers who were introducing legislation for the kind of independent review his group proposed. A similar amendment to the House's health care bills is now pending, and the Senate Finance Committee has incorporated the same model in its draft legislation as well.

Rep. Kurt Schrader, D-Ore., who was on the conference call, said Coelho's medical history lent a special credibility to the cause. “;It helps him say to patients and consumers that this is about them,”; Schrader said, “;and not about advocating the interest of any one provider or industry.”;