Insurers, doctors and nurses are spending millions on lobbying and donations to lawmakers’ campaigns in the current legislative session, battling over costly large-scale changes as they await Gov. Jerry Brown’s successor.
Major health industry groups have spent more than $18 million on lobbying, according to an analysis by The Sacramento Bee, in an effort to kill or water down bills proposed to rein in rising health care costs and impose new regulatory requirements for insurers and health plans.
The spending, similar to levels in the prior legislative session, foreshadows a costly and thorny political debate in the years ahead. Democrats are seeking to protect coverage gains made under Obamacare, expand access to care for the low-income and undocumented, lower premium costs and blunt broader changes to the health care landscape pushed by the Trump administration that they see as a threat to their long-term goal of universal coverage.
Brown has resisted spending the money it would take to implement the changes. Assembly Democrats proposed 16 major health care bills after the leader of the Assembly shelved a bill out of the Senate that sought to create the nation’s first single-payer health care system, leading to a bruising political fight among lawmakers and health care groups. The budget Brown signed this month doesn’t include funding for the most far-reaching, high-dollar ideas.
But their agenda sets the stage for another push under a new governor, one aimed at undertaking major reductions in the overall cost of health care, imposing industry price controls, creating new government subsidies, improving the affordability of coverage and expanding access to those currently uninsured.
Lt. Gov. Gavin Newsom, the frontrunner in the governor’s race, has teed up his own prescription for what he sees as today’s most pressing problem in health care: rising costs. He has called for a new system that covers everyone regardless of immigration status or ability to pay, and for the state to begin analyzing whether a single-payer system would work to lower costs in the nation’s largest state.
“These are the makings of a big health care debate in Sacramento next year, with groups lined up on all sides of these issues, and a likely new governor who has taken a very public position,” said Larry Levitt, senior vice president of the Kaiser Family Foundation, a nonprofit health research organization not affiliated with Kaiser Permanente.
Should Newsom win, as polling suggests is likely in the heavily Democratic state, he will also contend with these forces. He has endorsements from the California Nurses Association and the California Medical Association, often on warring sides of the health care debate.
“In the last couple years, there’s been a lot of talk about dramatically remaking the health care system in California, so it certainly won’t be a surprise to see industry groups ramping up their advocacy and lobbying efforts,” Levitt said. “These are very big and powerful industries, including hospitals and providers and drug manufacturers and insurance companies.”
The six Democrats who this year put forward major proposals out of the Assembly have accepted sizable, and in some cases maxed-out, campaign contributions from health care industry groups opposed to major changes, according to a campaign finance analysis by The Bee and MapLight, a nonprofit research organization that tracks money in politics.
Assemblyman Joaquin Arambula, D-Fresno, and Assemblyman Jim Wood, D-Healdsburg, who led efforts in the Assembly to craft an alternative to the single-payer bill, accepted the largest amount in campaign contributions from health insurers, doctor and hospital groups and the pharmaceutical industry.
Arambula has taken more than $48,000 into his 2018 campaign account through the end of June, and Wood has accepted $45,000, according to the analysis.
The four other lawmakers — Assemblywoman Autumn Burke, D-Marina Del Rey, Assemblyman Ash Kalra, D-San Jose, Assemblyman David Chiu, D-San Francisco, and Assemblywoman Laura Friedman, D-Glendale — accepted $32,900, $18,800, $18,500 and $9,600, respectively.
The practice is common, and is one measure of the industry’s effort to influence California politicians. Health care activists complained that their proposals were too conservative and piecemeal. The lawmakers said they weren’t swayed by the money.
In fact, all six lawmakers also accepted campaign contributions from the California Nurses Association, which has denounced anything short of a government-run, taxpayer-financed single-payer system as an ineffective, incremental approach.
The nurses association, the chief sponsor of the single-payer bill, also ratcheted up its lobbying spending this session, funneling $2.5 million into efforts to shape the debate, compared to roughly $485,000 in the last legislative session.
Most of the proposals are still moving through committees, but supporters question whether there is the political appetite to advance them to the governor’s desk this year — especially those that would incur ongoing costs to the state. Many are expected to be held in appropriations committees due to cost concerns. Assembly Democrats sought $1 billion to pay for their highest priorities as part of this year’s budget.
“We recognize that this is more about having policies ready for a new governor rather than the current governor,” said Anthony Wright, executive director of Health Access California, a Sacramento-based health consumer advocacy group that backed the proposals. “Anything that costs money that wasn’t included in the budget is not likely to happen this year.”
Brown did agree to spend $65 million on two measures. One requires by 2020 the state to maintain a database tracking payments to health care providers for patient treatments and procedures. Another will develop a “road-map” to a future single-payer-type system in California. It calls for a plan giving the Legislature and governor options by October 2021 for moving California toward a “unified financing system for all Californians.”
The most influential and well-funded health industry groups, among 20 that spent money lobbying on the 16 bills, are the California Medical Association and the California Hospital Association. They spent $5.7 million, according to the latest filings.
Much of their energy was aimed at fighting Assembly Bill 3087, by Kalra, which sought to control rising health care costs by giving the state more power to regulate prices. It drew out in full force the lobbying muscle of the industry, which stands to gain from higher prices.
“There is incredible resistance among those in the health care industry to give government more control over their prices…They will fight government price controls tooth-and-nail,” Levitt said. “They’re looking to protect their profits.”
In an interview at the Capitol last month, Kalra said he proposed the bill because he didn’t think the other measures put forward after Assembly Speaker Anthony Rendon shelved the single-payer bill went far enough.
“It’s critically important that we do something about cost containment,” Kalra said. “This issue is not going anywhere. Costs aren’t going down, and those that have benefited from the rise in health care costs have to come to the table to be part of the conversation, so we can achieve a sustainable system.”
Janus Norman, chief lobbyist for the California Medical Association, said killing the bill was the association’s main objective this year. He said the bill would have done little to lower overall health care costs and posed a threat to the ability of California to attract medical professionals in a state already experiencing a physician shortage.
“It would have been devastating,” Norman said. “It was our No. 1 priority this year.”
Kalra said he’ll push forward and won’t be affected by campaign money he gets from groups opposed to cost controls. He called the industry groups’ opposition a “badge of honor.”
But he also acknowledged their ability to influence decision-making in Sacramento, calling them “very powerful and very influential.”
“If they don’t want to see something happen, it’s unlikely to happen,” Kalra said. “My message to them is if we don’t create a sustainable system, it’s not going to be good for them or for Californians.”