Gingrich’s health center was power player in a host of Washington policy debates

Introduction

Newt Gingrich’s Washington-based advocacy on behalf of a broad array of health care interests has been far more extensive than the Republican presidential candidate has acknowledged, a review by the Center for Public Integrity has found.

Since 2003, the former House speaker’s Center for Health Transformation has taken an active role in circulating policy papers, testifying at congressional hearings and using other forums to build support for dozens of pieces of legislation and federal policy initiatives that would financially benefit clients who paid as much as $200,000 a year for his services, records show. The center’s advocacy has ranged from promoting costly high- technology medicine to pressing for tax breaks benefiting purchasers of controversial high-deductible insurance plans. Gingrich severed ties with the center last year.

Gingrich’s health center markets itself as a think tank focused on health care innovation. It does not release its membership roster, but the Center for Public Integrity obtained a partial list from 2009. Among the members at that time: Microsoft, drug maker AstraZeneca, insurance giant WellPoint, management consultant firm Booz Allen Hamilton, GE Healthcare, Siemens, Allscripts, UPS, GlaxoSmithKline, Merck and the BlueCross Blue Shield Association. (See the 2009 list here)

In one display of his influence on Capitol Hill, Gingrich appeared at a December 2007 Russell Senate Office Building press conference to promote a bill requiring that Medicare accept prescriptions electronically — a bill in which at least 20 center members had a financial stake or other interest.

“We are committed to the idea that electronic prescribing saves lives and saves money,” Gingrich said that day, sharing the stage with Sen. John Kerry, D-Mass., and three other senators who were sponsors of the legislation.

Lobbying or not?

Whether these sorts of activities are lobbying — or “influence peddling,” as rival Mitt Romney has claimed — is in dispute. Prodded by Romney, Gingrich has released a contract that paid $25,000 a month for services to troubled mortgage holder Freddie Mac, and has insisted nothing he did there constituted lobbying. But Romney has argued that the contract and Gingrich’s other work in Washington belie his claim to be running as an outsider.

Federal law defines lobbying narrowly, so many powerful former politicians are able to influence policy matters without having to actually register as a lobbyist. The law defines a lobbyist as someone employed or retained by a client for compensation whose services include more than one lobbying contact and whose lobbying activities constitute 20 percent or more of his or her services’ time on behalf of that client during any three-month period.

Neither Gingrich nor center officials responded to requests for comment. But Gingrich’s Newt2012 website states: “Newt has never engaged in lobbying, period. Newt made a decision after resigning that he would never be a lobbyist so that nobody would ever question the genuine nature of his advice and perspectives.”

The center also has denied lobbying. A statement on the center’s website from chairwoman and CEO Nancy Desmond reads: “We do no lobbying for clients and always make that very clear from the outset. We clearly stipulated that fact in our contracts.”

But Julian Zelizer, a professor of history and public affairs at Princeton University, said Gingrich’s testimony on behalf of clients makes him “susceptible to the charge that he was lobbying, even though he was not a lobbyist.”

James Thurber, director of the Center for Congressional and Presidential Studies at American University, said the law lacks teeth, especially in regard to former members of Congress. “Gingrich was in the advocacy business,” Thurber said. “It gets around the letter of the law, but he’s a lobbyist, in my opinion.”

While much of the controversy has swirled around Gingrich’s work for Freddie Mac, the for-profit Center for Health Transformation signed up hundreds of health care businesses, from giant insurance companies and drug manufacturers to technology startups. And there’s no question some of these clients believe Gingrich got results.

For instance, Gingrich client ZixCorp, which sells email encryption systems, said in a Sept. 16, 2008, news release that Gingrich was “instrumental in orchestrating the support required” to make electronic prescribing a reality.

The center has signed up some 300 clients since 2003 and grossed more than $55 million, according to its website. Members pay from $20,000 to $200,000 a year. The center has refused to disclose the names of its clients, citing confidentiality provisions in its contracts. But a 2009 list obtained by the Center for Public Integrity shows 91 companies that were then paying a total of about $7 million in annual memberships.

The 2009 list shows 17 of the 91 companies were “charter members,” which center officials said cost them $200,000 a year. AstraZeneca, WellPoint, Microsoft and Booz Allen Hamilton were among those charter members.

A range of benefits

Many clients have helped write “white papers” and other position statements that are presented under the center’s brand, sometimes to government panels and other times through webcasts or other live events and trade shows that featured Gingrich as a draw. Topics can range from new approaches to treating Alzheimer’s disease to support for legislation pushing Medicare funding for drug packaging that helps elderly people remember to take their medicine.

For instance, MeadWestvaco joined the center in supporting the “Medication Therapy Management Expanded Benefits Act of 2010.” The bill sought Medicare payments for new packaging of medicines, a specialty of the Richmond, Va., company.

In a white paper published in February of last year, the center and the company said that failure to take medicine as directed was estimated to cost 125,000 lives annually and result in more than “$100 billion spent each year on avoidable hospitalizations.”

The legislation was introduced by Sen. Al Franken, a liberal Minnesota Democrat and fellow Democrat Kay Hagan of North Carolina. It and a similar House bill each died in committee in 2010. A new version has been filed.

A February 2011 MeadWestvaco press release quotes Gingrich calling the packaging concept a “smart, proven way to realize cost savings, create efficiencies for doctors and pharmacists and provide tangible health benefits to patients.”

Gingrich and the center also touted its clients to state lawmakers wrestling with soaring costs for Medicaid, the health care program targeting low income people, which is administered jointly by the states and the federal government.

In January 2004, Gingrich met with Georgia House Republicans and claimed that nine of his clients could save the state close to $1billion annually in health care costs and improve services, according to the center’s website. Gingrich indicated, however, that the numbers were “submitted from the companies and have not been validated by an outside party.”

One of the money-saving firms Gingrich cited was PKC Corporation, a small Vermont-based company that sells software designed to help doctors and patients make health care decisions. PKC wasn’t a member for long, said Howard Pierce, the company’s CEO. Pierce said he traveled to Washington in 2003, met with Gingrich, and paid a few thousand dollars to join the Center for Health Transformation in hopes that Gingrich would help his company win support from state governments, the Centers for Medicare and Medicaid Services and Congress.

“In order to get that audience you have to do whatever you can do, and that can mean leveraging someone else’s influence,” Pierce said. “Sometimes there is a quid-pro-quo for doing that. Sometimes that is money.”

But as the Gingrich organization grew and larger health care interests joined, Pierce said, he began to feel that PKC was getting little for its investment. “It felt like in order to get the real attention, you had to up your financial participation in Newt’s world,” Pierce said.

Pierce said he believes Gingrich has good ideas for how to transform health care, but doubts the candidate is being straight about his role at the health center. “When I hear him saying he is an historian and not an influence peddler, that sort of stops me in my tracks,” Pierce said.

But Ritch Haynes, executive vice president of HealthTrio, a health information technology company that Gingrich also pitched in Georgia, said center membership simply gives access to “industry thought leaders.” Haynes said he didn’t think Gingrich was trying to promote his company in Georgia. “He was trying to promote a concept,” Haynes said.

Marketing on the Hill

A review of Gingrich’s congressional testimony shows that he often boasted of accomplishments by his clients.

At a March 15, 2006, hearing before the House Subcommittee on the Federal Workforce and Agency Organization, Gingrich laid out his vision for using health information technology to achieve what he termed “a 21st century intelligent health system that saves lives and saves money for all Americans.” He cited member companies favorably eight times.

In one instance, Gingrich sang the praises of a hospital system in the Pacific Northwest that created personal health records for patients with the help of GE Healthcare. GE Healthcare, a subsidiary of General Electric, is a “platinum member” of the health transformation center. Gingrich also has served on the board of GE’s healthymagination, which promotes the company’s computerized medical records systems.

In his 2006 testimony, Gingrich also cited a Utah medical clinic that had saved $1 million through an electronic medical records systems built by Allscripts, also a center member. He also mentioned HealthTrio, crediting the company with a system called SnoMed that he said can measure health outcomes and detect fraud.

Gingrich went on to state that companies developing electronic records systems “should take the lead” in developing standards for their use. He cited three such companies, Siemens, GE Healthcare and Allscripts, all center clients.

David Merritt, then the center’s project director, testified in Sept. 2006 before a Department of Labor advisory council on the benefits of health information technology. He urged the secretary of labor to require that doctors and hospitals upgrade to electronic recordkeeping systems. President Obama’s health reform measure, the Affordable Health Care Act, eventually included billions in funding to encourage adaptation of electronic health records.

In February 2007, the center released a “Health Action Agenda for the 110th Congress” that advocated a series of plans, from health saving accounts to initiatives pushing screening for early cancer detection.

“We can transform health and healthcare to deliver more choices of greater quality at lower cost to every American. It will take innovative ideas, the right priorities and bold leadership — and we must act now,” the report states.

The report spells out more than five dozen policy prescriptions it says would create a “next generation of healthcare consumerism.”

Key to reaching that goal, according to the report, is new legislation to spread “health savings accounts,” or HSAs, in which people are allowed to manage their health care spending. The report calls for enactment of several pieces of legislation, concluding: “Current law stands in the way of progress.”

The center also has advocated for health savings accounts at the state level since at least 2005. In 2007, it released a policy document, “A Guide for State Legislators: Creating an HSA State,” which advocated tax credits for businesses that offer them to employees.

In May of 2008, it scored a victory in Georgia. With Gingrich standing nearby, then- Georgia Gov. Sonny Perdue signed a law exempting HSA-linked health plans from state premium taxes and gave employers a $250 tax credit for each employee it enrolled in a plan with an HSA.

In September 2008, Ronald E. Bachman, a senior fellow at the center, praised the Georgia law at a House Energy and Commerce Health Subcommittee hearing on health reform. In his testimony, Bachman pushed for a variety of federal reforms, including a requirement that allows health savings accounts to be used with any health insurance plan, and removal of federal income and employment taxes from premiums.

Public interest groups are skeptical when former lawmakers push proposals linked to paying clients. Gingrich is just the latest to attract that sort of scrutiny. Former Sen. Tom Daschle, a prominent Obama supporter, received the same sort of attention when he was hired by a hefty roster of health care clients. Like Gingrich, Daschle was a staunch proponent of electronic medical records systems.

Princeton professor Zelizer noted that Gingrich’s well known propensity to embrace new ideas makes it difficult to challenge his motives.

“Gingrich is trickier than some because he does have ideas and he does support these causes,” Zelizer said. “At the same time, when you have connections with people who can make money off this, it’s hard to disentangle promoting an idea from promoting an interest.”