The 19-member panel that advises the Congressional Budget Office on health policy is flush with health insurance, pharmaceutical, and hospital interests.
By Donald Shaw for Sludge
One of the key steps in the federal legislative process occurs when
the Congressional Budget Office (CBO), an agency in the legislative
branch that studies the budgetary and economic impacts of proposed laws,
scores a bill.
The scores can provide ammunition for advocates on either side of an
issue—if the CBO’s cost estimate comes back lower than expected, for
example, it can be a boon for a bill’s supporters, while a
higher-than-expected score can be a major asset for opponents.
The CBO is supposed to be independent and nonpartisan
so it can be neutral on the merits of policies and focus exclusively on
the numbers. But on the issue of health care, the agency solicits
input from individuals with financial ties to companies and groups
fighting to stop the left’s most prominent health care proposal.
The CBO’s 19-member Panel of Health Advisers
is stacked with health care executives and directors, including several
who are on the payroll of pharmaceutical, health insurance, and
hospital companies that are members of the Partnership for America’s
Health Care Future (PAHCF), a dark money nonprofit created to fight
against Medicare for All. The advisers are appointed by CBO’s director
and do not require any formal confirmation (though congressional staff
can be consulted when the members are being selected).
Through annual meetings and occasional consultations, the CBO seeks
the views of its panel of health advisers on topics such as economic
impact modeling and emerging issues in the health care marketplace. The
CBO “benefit[s] from the advisers’ understanding of cutting-edge
research and the latest developments in health care delivery and
financing,” the agency writes on its website, also noting that while the advisers “provide considerable assistance, CBO is solely responsible for its work.”
PAHCF’s stated goal is to change the national conversation around Medicare for All by reducing support among Beltway elites and painting the plan as something only backed by a small group on the far left, according to internal documents published by The Intercept. The coalition laid out a “Beltway narrative” strategy in 2018 with a goal to “influence key thought leaders” through regular updates on health care issues, engagement with Beltway organizations, and digital ads targeted at a D.C. audience.
Hospital Corporation of America (HCA) is a member of PAHCF, and its
president of clinical services and chief medical officer Jonathan Perlin
serves on the CBO’s health advisory panel. HCA is the largest United
States-based health care system, with 185 hospitals in the U.S. and the
United Kingdom. The company spent $680,000 lobbying the government in 2018 and disclosed lobbying on the Medicare for All Act, which it opposes, in each quarterly report it filed that year.
The hospital industry is a key driver of health care costs under the current for-profit health system. Patients and insurance companies are often charged exorbitant amounts for basic treatments and services, and individuals who believe they have insurance coverage for the care they receive are hit with surprise medical bills when treated by out-of-network providers without their knowledge. Hospitals would likely have to charge less under Medicare for All because the government would have much more negotiating power. In addition to HCA, PAHCF counts among its members several other hospital groups, including the Federation of American Hospitals, American Hospital Association, Ascension Health, and Tenet Healthcare.
Health insurance companies, which would be virtually eliminated under
a single-payer health care system and oppose Medicare for All, have
representatives on the CBO panel.
Panel member Lewis Sandy is executive vice president of clinical
advancement at UnitedHealth Group, which offers health insurance and
information technology services and is the largest health care company
in the world by revenue. UnitedHealth Group is not a member of PAHCF,
but its CEO, David Wichmann, made the company’s opposition
to the proposal clear in April on a post-earnings call with investors.
Medicare for All would “jeopardize the relationship people have with
their doctors, destabilize the nation’s health system, and limit the
ability of clinicians to practice medicine at their best,” Wichmann
Blue Cross Blue Shield Association, a health insurance conglomerate
that includes subsidiaries like Anthem, CareFirst, and Health Care
Services Corporation, is a member of PAHCF. A senior vice president and
chief data and analytics officer of its subsidiary Blue Cross and Blue
Shield of North Carolina, Patrick Gezen, is a member of the CBO advisory
panel. Blue Cross Blue Shield Association and its subsidiaries spent
nearly $24 million
on federal lobbying last year. According to data tallied by the Center
for Responsive Politics, the company sharply increased its lobbying on
the Medicare for All Act in recent quarters. So far in 2019, it has
reported lobbying on the bill in 11 filings, while in 2018 it did not report lobbying on that session’s version of the bill at all.
Another industry that generally opposes Medicare for All is
pharmaceuticals, which, like hospitals, would likely see the prices they
can charge decrease because of the government’s strengthened
Eli Lilly and Company, which raised the price of its popular insulin drug, Humalog, by 700%
over a 20-year period, is a member of Pharmaceutical Researchers and
Manufacturers of America (PhRMA), a prominent drug industry trade group
and member of PAHCF. Elil Lilly Board of Directors member Katherine
Baicker is on the CBO health panel. Baicker is also a dean at Harris
School of Public Policy at the University of Chicago.
Washington University law professor and government ethics expert
Kathleen Clark told Sludge that the advisers’ ties to PAHCF members
don’t necessarily undermines the panel, but there may not be sufficient
disclosure of their positions.
“The ability to participate on such a panel no doubt is valuable, not
just to the individuals but to the organizations that they are a part
of,” Clark said. “Baicker is the dean of the public policy school, and
she’s on the board of Eli Lilly. Is it clear enough when she’s speaking?
Should there be an asterisk next to her so that it’s clear that Eli
Lilly or PhRMA has taken a position on Medicare for All? It may not be
obvious, particularly with her, because her primary affiliation may be
seen as the dean of the public policy school.”
PhRMA also provides substantial funding to one of the academics on
the CBO panel through its foundation. PhRMA Foundation made a three-year
grant worth $500,000
in February 2019 to establish a new Center for Enhanced Value
Assessment at the Tufts University Medical Center that will be led by
Professor Peter Neumann, a member of the CBO panel and PhRMA Foundation board member. The PhRMA funding of Neumann’s center and his position at the PhRMA foundation is not disclosed on the CBO webpage.
“With regard to the academics, I really do wonder whether the disclosures of affiliation are adequate,” Clark said. “[Neumann] may not get paid more money because of the grant, but nonetheless, he’s the director of it and arguably there should be additional disclosure. This raises questions about their personal conflicts of interest and the institutional conflicts of interest.”
Panel members do have to disclose
financial or political conflicts of interest to the agency, but the
disclosures are not made public and, because CBO is part of Congress,
they are likely exempt from the Freedom of Information Act.
In addition to their academic positions, several other CBO panel
members are affiliated with health care consultancies that work for
PAHCF members and other companies opposed to Medicare for All. Harvard
professor and CBO panel member Leemore Dafny is an academic affiliate at
economic consulting firm Bates White, which has worked for
Blue Cross Blue Shield Association subsidiaries Anthem and Highmark, as
well as UnitedHealth Group. Michael Chernew, a CBO panel member and
professor who holds a position at Harvard named after former Wellpoint
Health CEO Leonard Schaefer, is a partner at VBID Health, which has worked for
Blue Cross Blue Shield Association subsidiary Blue Shield of
California. Panel member David Lansky is president at Pacific Business
Group on Health, which has worked for the drug company McKesson, a
member of PAHCF member the Healthcare Leadership Council.
The CBO has not yet issued a complete score of Sanders’ Medicare for All Act, but in its recent scoring of a drug pricing bill, H.R. 3, it included language that closely echoes drug industry talking points. CBO wrote that the bill “would result in lower spending on research and development” and “lead to a reduction of 8 to 15 new drugs coming to market” over a 10-year period. PhRMA chief operating officer Lori Reilly told reporters a day earlier at a press conference, “We rely on capital investment to develop our R&D to produce new medicines. If you do diminish the return element, or the profitability element of that, you take away the incentive for many investors to put money in here.”