Top health information technology firms prefer ‘revolving door’ lobbyists

Introduction

It has long been a tradition for executive and legislative branch officials to take their Beltway know-how and Rolodexes to the private sector. But even by Washington standards, health information technology companies seem exceptional; fully 70 percent of registered lobbyists who worked for such firms on health IT issues in the past two quarters have passed through Washington’s infamous “revolving door”, an iWatch News analysis reveals.

The stakes are unusually high. The American Recovery and Reinvestment Act (ARRA) of 2009 — President Obama’s economic stimulus bill — contained more than $27 billion to promote the transfer of medical records from paper to digital form. The health IT funding in the bill is known as HITECH: the Health Information Technology for Economic and Clinical Health Act. That cash will go to health providers as an incentive to make the switch from paper to digital, and the money began flowing this past January. Those providers will be making high-stakes decisions on what sorts of electronic records systems to buy — and who to buy them from.

Though the stimulus law was enacted more than two years ago, the executive branch is still devising standards to ensure that the electronic health records are put to “meaningful use,” as the act requires. Rather than wait to see what rules the Department of Health and Human Services created, some large health IT companies decided to put their lobbyists on the case, pushing for rules that would favor their products and services — and give them the best shot at securing purchases from that multibillion-dollar pie. Some are also lobbying against moves in Congress to reduce the overall pot of HITECH money.

Many health IT firms don’t lobby at all (see sidebar) but those that do choose their lobbyists carefully. Healthcare Informatics magazine publishes an annual ranking of the 100 largest health IT companies by annual revenue. According to the Senate Office of Public Records, 15 of the companies in the 2010 ranking — most of them ranked in the top third by revenue — reported health IT-related lobbying activity in the first quarter of 2011 or the last quarter of 2010. Of the 90 lobbyists listed as having done health IT lobbying for those firms, at least 63 were former Congressional and/or executive branch staffers, many of whom worked for health-related agencies or committees.

Sarah Dufendach, vice president for legislative affairs at Common Cause, called the 70 percent revolving door number “very high” but not surprising given the money involved and the pace of recent regulatory action. Former staffers, she said, are attractive to those hoping to influencing governmental decision-making, because “they know how the system works, they have their buddies there, they know a lot of the information.”

Julian E. Zelizer, a professor of history and public affairs at Princeton University, told iWatch News that revolving doors are “in the interest of industry, not the public.” The danger, he notes, is that regulatory decisions could simply lead to more profit for the industry. And “while the close connections between Congress, the executive branch, and industry can bring some expertise to the table in putting programs together, it also results in conflicts of interest as programs are being implemented.”

While some companies disclosed only that they generally lobbied on “health IT,” others openly acknowledged the specific nature of their efforts. For example, Health Policy Source, a D.C.-based firm, reported lobbying for Emdeon, a top electronic medical records company with more than $900 million in 2009 health IT revenue. Health Policy Source said its lobbying focused on “seeking ways to — either directly or indirectly — obtain funding as established in the American Recovery and Reinvestment Act of 2009 for health information technology and quality [improvement] initiatives.” Similarly, Alston & Bird disclosed lobbying on “HHS/CMS rule on ‘meaningful use’ of electronic health records and certification standards for same,” for CareFusion, a San Diego-based medical device manufacturer with $2.4 billion in 2009 health IT revenue.

Who better to make the case before HHS than former staffers? For the $140,000 that Emdeon paid to Health Policy Source over the past two quarters, it got the lobbying services of, among others, Katie Pahner, a former legislative analyst in the Centers for Medicare & Medicaid Services Office of Legislation. In a November 12, 2010 email to an employee at the health IT national coordinator’s office, Pahner wrote, “Thanks again for all of your help and for always keeping Emdeon in mind when it comes to potential collaborative opportunities with ONC – we really appreciate it.” She also told the employee she was eager to introduce him “if only electronically” to a colleague at her lobbying firm who she said “is also a former HHS employee (CMS) like myself.”

CareFusion paid at least $20,000 to Alston & Bird for a team that includes former CMS administrator Thomas Scully, and Timothy Trysla, a former senior policy adviser at CMS. Scully told iWatch News that contrary to statements on his firm’s quarterly filings dating back to 2009, he had “never done any lobbying for CareFusion” and does no work on HITECH for anyone. But even if his repeated inclusion on the forms was indeed in error, veteran lobby-watchers say, his mere presence at the firm could help pay dividends for the firm’s clients.

Four lobbyists listed as having worked on behalf of top health IT companies previously held staff positions with the Senate’s Health, Education, Labor, and Pensions Committee, which claims “a broad jurisdiction over our country’s health care.” These included Marsha Simon of Simon & Company (representing CSC), Bill Kamela of Microsoft’s in-house lobbying team, and Stephen Northrup and Thomas Sparkman of the Podesta Group (representing Elsevier). Like Scully, Kamela said he did not do any actual health information technology lobbying, adding that the company includes anyone who might possibly lobby on their disclosure forms, to protect themselves.

Also among the “revolving door lobbyists” representing HCI 100 health IT companies were five former staffers for the Senate Finance Committee, one former House Committee on Ways & Means aide, and two ex-employees of the House Energy & Commerce committee. Those panels each have jurisdiction over parts of the nation’s health care system.

Ethan Rome, executive director of Health Care for America Now, a coalition that advocates for affordable health care, observed that in Washington, the “whole town is based on corporate influence and inside relationships.” He said there exist “important rules that try to limit the speed of the revolving door, but it still moves in ways that help special interests even when good people are involved.”

Beyond just lobbying, many companies rely on corporate PAC contributions to elect lawmakers friendly to their interests or to increase their access to Capitol Hill decision-makers. Of the HCI 100, 15 companies operated active PACs in the 2010 cycle (see sidebar). Seven of the ten largest health IT companies do operate active PACs. McKesson, the largest company, by revenue, distributed more than $840,000 in corporate PAC money to candidates in the 2010 campaign cycle and the second largest company, Dell, distributed at least $125,000. Between them, the fifteen PACs reported more than $5.5 million in donations to candidates in the 2009-2010 election cycle.

A CareFusion spokeswoman reaffirmed the accuracy of her company’s disclosures but offered no comment on them. Emdeon, CSC, and Elsevier did not respond to a request for comment.

Earlier this summer, the 2011 HCI 100 was released. Of the 17 companies newly on the list, eight lobbyists were listed on health IT issues — and at least half of them were “revolving door” lobbyists.