Cardinal Health (NYSE: CAH), Ohio’s largest company by revenues, led the state’s health organizations in federal lobbying spending last year at nearly $1.3 million.
Cardinal, a pharmaceuticals distributor and medical products supplier, upped its federal lobbying spending by 39 percent over the prior year, publicly filed lobbying reports revealed. Cardinal’s total spending pales in comparison to what some leading medical trade groups spent, however. The American Medical Association, a physicians’ group, and PhRMA, a drugmakers’ group, each spent about $22 million on lobbying last year. Most big companies belong to trade groups that lobby on their behalf.
Like last year, federal health reform spurred much of Ohio health organizations’ spending on lobbying, and issues surrounding Medicare and Medicaid reimbursement always draw lobbying dollars, too.
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When asked to mention a few top lobbying priorities for Cardinal Health in 2010, Connie Woodburn, senior vice president of government relations, replied, “Health reform, health reform, health reform.” Woodburn said Cardinal looked at health reform through four “prisms”: its effect on the healthcare industry as a whole, its impact on Cardinal’s customers, its impact on Cardinal’s own business units and its implications for Cardinal as an employer of more than 20,000 people worldwide.
“There’s a lot in health reform to like and a lot not to like,” she said.
One provision that Cardinal doesn’t like and has lobbied against is a tax on medical device manufacturers. Like many other big companies affected by the tax, Cardinal must perform the delicate balance of being generally supportive of health reform while speaking out against one of the law’s funding mechanisms. The 2.3 percent tax on revenues is designed to raise $20 billion over 10 years.
One aspect of the tax that Cardinal objects to is that it treats simple medical devices such as surgical gloves and masks the same as complex ones like defibrillators. That means the tax has a “disproportionate impact” on generic or low-cost suppliers, Woodburn said. A number of Republicans in the House and Senate are working to repeal the device tax, plus it could be an attractive political target for Democrats in swing states that are home to major device firms, so we’ll likely hear plenty more about it in 2011.
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“Certainly, we’ll continue to work on that issue going forward,” Woodburn said.
Last year’s leading spender among Ohio health organizations, Elyria-based home health products manufacturer Invacare (NYSE: IVC), spent $970,000 on federal lobbying in 2010, down 19 percent. For Invacare, in particular, lobbying on Medicare reimbursement issues is hugely important because the company’s products are used largely by the elderly. Like Cardinal, the medical device tax was a big concern for Invacare, and has drawn a sharp public rebuke from Chairman Mal Mixon.
One big Medicare issue last year for Invacare revolved around competitive bidding for durable medical equipment (DME), such as walkers, oxygen and power wheelchairs. The idea behind the competitive bidding program, which took effect on Jan. 1 in nine cities, is to implement a market-based pricing system, which resulted in reimbursement cuts to DME that averaged 32 percent. The home healthcare industry didn’t take kindly to that, arguing that the lower prices would put some companies out of business and threaten seniors’ access to the products they need. Opponents of the program also argue that it’d actually lead to higher Medicare spending, by pushing patients deprived of the supplies they need into hospital beds and emergency rooms.
Cleveland Clinic is top hospital lobbying spender
Among Ohio hospitals, the Cleveland Clinic was the biggest spender on lobbying at $740,000, an exact match of its total from the prior year. The Clinic listed a wide variety of broad issues it lobbied on, including health reform, childhood obesity, nonprofit tax policy, health information technology and graduate medical education.
The tax-exempt status of nonprofit hospitals is a perennial issue for the Clinic and other such hospitals, with Congress occasionally making noise about whether to require hospitals to provide a minimum level of charity care to justify their tax exemptions. The Clinic’s ability to “remain financially viable” hinges in large part on its ability to “understand and shape” legislation surrounding hospitals’ tax exemptions, Oliver “Pudge” Henkel, the Clinic’s chief of government relations, said last year.
The Clinic also discussed with legislators plans surrounding the “Dartmouth Collaborative,” a data-sharing group that’s aimed at improving quality and reducing cost. In addition to the Clinic, six health organizations joined the Dartmouth Institute for Health Policy and Clinical Practice with the goal of establishing best practices for treating eight common health conditions and treatments, including knee replacement, diabetes, heart failure and asthma.
In health information technology, the Clinic lobbied the U.S. Department of Health and Human Services on final rules surrounding the definition of “meaningful use” of electronic medical records. The definition is important, because hospitals and doctors must prove “meaningful use” of EMRs in order to qualify for federal subsidies that would help defray the costs of the software.
Other leading lobbying spenders among Ohio hospitals include: Nationwide Children’s Hospital in Columbus ($405,989), University Hospitals Case Medical Center in Cleveland ($296,400) and Cincinnati Children’s Hospital Medical Center ($170,485). Issues Nationwide Children’s included on its lobbying disclosure forms include: Medicaid reimbursement, telemedicine and research funding from the National Institutes of Health.
