Minnesota health care firms crank up the heat on Congress last year

MINNEAPOLIS, Minnesota — The Big Three of Minnesota health care had lots to say to Uncle Sam last year — and spent big bucks doing so.

Amid a high stakes bid to fix the country’s health care system, UnitedHealth Group Inc., Medtronic Inc. and Mayo Clinic spent a combined $10.7 million to lobby Congress and Obama administration officials in 2009, a 12.2 percent jump from the previous year, according to recently filed federal lobbying reports.

From opposing a proposed medical device tax and public insurance option to supporting comparative effectiveness research and a major overhaul of Medicare’s reimbursement formulas, UnitedHealth, Medtronic and Mayo had plenty of skin in the game.

“If you’re a health care entity, this is it,” said Bruce Kelly, director of government relations  for Mayo. “This is the Super Bowl.”

As the nation’s largest private insurer, UnitedHealth  arguably had the most at stake. Over the past few years, the Minnetonka-based company has taken a ferocious public relations beating from politicians and consumers for its multibillion-dollar profits and lavish compensation, including backdated stock options it awarded to then-CEO Dr. William McGuire. Hoping to tap populist anger, President Obama has alluded to companies like UnitedHealth as the main reason why the United States needs health care reform.

So it’s not surprising that UnitedHealth cranked up its lobbying efforts. The company spent $5.45 million last year compared to $4.18 million in 2009, a 30 percent jump.

Defeating the public health option was a top priority for UnitedHealth. Supporters of the plan say the program would lower costs by providing much-needed competition to private insurers. The industry, led by UnitedHealth, vehemently opposed the idea, fearing a government-run insurance program, with its perceived pricing power, would ultimately put private insurers out of business.

“At its core, health reform must slow the growth of health care costs,” John Parker, UnitedHealth’s senior director for external affairs, wrote in an e-mail. “Legislation that increases taxes, cuts benefits and expands the role of government in health care will not result in a modernized health care system that is sustainable and affordable over time.”

Instead, UnitedHealth supports the continued dominance of employer-based health insurance. To help cover the uninsured, it suggested targeted expansion of Medicaid and federal subsidies and tax credits to small businesses.

It appears UnitedHealth’s lobbying has paid off: The Senate’s bill excludes a public option and many analysts predict it will not make the final package.

Medtronic actually spent less on lobbying in 2009 ($4.29 million) than the previous year ($4.88 million). But that doesn’t mean the Fridley-based company, one of the country’s largest medical device makers, wasn’t busy.

Top of the list was defeating a proposed $40 billion tax on medical device manufacturers to help pay for health care reform. Such a tax would hurt “one of the few sectors in the United States where we maintained strong competitiveness” versus the rest of the world, said Medtronic spokesman Steven Cragle.

“The excise tax would impact our ability to find the kind of innovations needed to bring therapies to market,” he said.

Medical device makers, though, concede that such a tax will likely pass though they managed to cut the amount down to $20 billion. What’s left is deciding when to the implement tax with Medtronic favoring 2013, though the House of Representatives bill calls for something sooner.

Though Medtronic generally supports extending coverage to more people, adding more people to insurance rolls doesn’t necessarily benefit the company, Cragle said. People who lack insurance tend to be younger, not the type of patients who need the company’s core products, including pacemakers, stents and cardiac defibrillators, he said.

Instead, Medtronic is more focused on controlling costs and making such devices more affordable. The company supports research into comparative effectiveness, the idea that payers like Medicare only cover treatments that are proven, through robust scientific evidence, to work.

However, Medtronic worries about the composition of whatever organization(s) vets the evidence, preferring a national, centralized panel of doctors  and experts instead of “50 micro markets, each with their own level of rigor,” Cragle said.

“We don’t think they are best suited to make decisions,” he said.

That’s a similar position to an issue that doesn’t directly relate to health care reform but is near and dear to Medtronic: preemption. The Supreme Court had ruled that patients can’t sue Medtronic and other device makers under state product liability laws if the Food and Drug Administration had already approved their devices, a doctrine known as preemption. The case stemmed from Medtronic’s recall of faulty Sprint Fidelis leads, which might have contributed to patients’ deaths.

In response, lawmakers proposed the Medical Device Safety Act, a law that would overturn preemption and allow patients to sue in state courts. Medtronic and other device makers hotly oppose the law, arguing the Food and Drug Administration is well equipped to oversee devices and that 50 different state bodies would pose a regulatory nightmare for the industry.

“We’ve been very concerned about overturning federal preemption,” Cragle said. “It’s our position that the FDA already is a very rigorous organization that requires us to demonstrate [safety] through multiple clinical trials.”

Compared to UnitedHealth and Medtronic, Mayo does not boast a large lobbying operation. Nevertheless, the Rochester-based hospital and research organization spent $950,000 on lobbying last year, more than double the amount in 2008.

Kelly, the government affairs director, said Mayo spent most of its time urging Congress to overhaul the Medicare payment system so that the agency pays for quality instead of volume.

“The best way to control costs is by emphasizing good quality, which is measured in outcomes, safety and service,” Kelly said.

Earlier this month, Mayo drew fire for its decision to stop seeing Medicare patients at one of its primary care facilities in Glendale, Ariz. The hospital defended itself, arguing it was losing “a substantial amount of money” every year because the cost of care far exceeded what Medicare payed Mayo.

“Decades of underfunding and paying for volume rather than value in Medicare have led us to this decision,” Mayo wrote in its blog. “Providers who do fewer unnecessary tests and services are paid the least, and they are the doctors and hospitals which will go out of business first if we don’t change the payment system.”

Mayo opposed the public insurance option because it thinks Congress should fix Medicare first, Kelly said.

The election of a Republican senator in Massachusetts, who has vowed to block the legislation, has made health care reform even more uncertain this year, the lobbyists say. Nevertheless, UnitedHealth, Medtronic and Mayo say they will continue to push their agendas, no matter what happens in Congress over the next few months.

“Health care reform is still very much an undone deal,” Cragle said.