Politics. What is it about retirement that lobbyists loathe? Is it because the work just isn’t that difficult, and no one will notice if you cruise along at half speed while collecting fat fees from your members? Or is it because there is really no one to replace you? Or, more worrisome, do you not like those waiting in the wings?
Most union leaders like like Rhandi Weingarten of the American Federation of Teachers are over 60. Both Chip Kahn of the Federation of American Hospitals and Richard Pollack of the American Hospital Association cut their political teeth in the 1970s.
For a few years now, the most successful political operations have not been waged not by the traditional lobbying shops but by activist philanthropic organizations like the Arnold Foundation and West Health.
These organizations have operated outside the usual lobbying channels and, not surprisingly, offer a different approach than the traditional lobbyists’ response to complex problems like health care costs. It is their involvement that has driven a revival of the site-neutral payment policies of the Trump administration.
Health care is so complex, so rife with contradictions and inconsistencies and so interconnected via a series of cross subsidizations by the pharmaceutical industry, the government, and America’s employers, that a policy position other than “more money, please” offers a welcome shift in the paradigm for many on Capitol Hill.
For better or worse, the aging hospital lobby is playing defense to the youthful philanthropists in far-away Houston and La Jolla.
Policy. The American Hospital Association held its annual “Advocacy Day” on Capitol Hill last week. After a couple years of “health care heroes” and dancing nurse videos, the AHA had planned an offense designed to provide succor after years of higher labor and supply costs.
Before they could do so, a white paper authored by the Rand Corporation and funded in part by the Arnold Foundation began to circulate, suggesting portfolio losses are to blame for weakened financial performance of hospitals. The policy paper only looked at the change from 2021 to 2022 and does not seem to separate investments in liquid securities and the robust venture and private equity interests of major non-profits.
(Our review of 1Q 2023 suggests persistently higher labor and supply costs will drive systemic problems for months and perhaps years in the non-profit sector.)
Regardless of what is driving the poor financial performance, the hospital lobby has its work cut out for it. Policy makers, for better or worse, have another source of information on which to base decision making.
Let us not count the lobby out. They have been there a very long time with deep, albeit aging, connections on Capitol Hill. Let us agree then that the natural alignment between members of Congress and one of the largest employers in their districts will be under stress, particularly if that hospital gets purchased by a system NOT in their district.
Power. This small shift in power from the traditional lobby model (Stint on Capitol Hill - mid-level job at a trade association - CEO of powerful trade association) to activist philanthropic organizations is not necessarily benign. When it comes to complicated issues like health care, billionaires and the well born seem to share a penchant for being easily misled.
For example, the focus on ownership models in health care certainly gets the dopamine flowing at CMS but would a change – if one were even possible – make a difference in terms of care outcomes? Some research suggests yes, but controlling for variables like geographical location and demographics makes the picture muddy.
On the other hand, recent focus on site-neutral payments and price transparency has the benefit of simplicity and general common sense. More important is that these “evidence-based” approaches espoused by philanthropic interests make a significant contribution to at least challenging the status quo.
(Pro-tip: watch Arnold Foundation grants for areas of focus and change)
Have a great rest of your weekend.
Emily Evans
Managing Director – Health Policy
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