Scorecard: How Health Industry PACs Placed Their Election Bets

Bruce Yarwood, president and CEO of the American Health Care Association, faced a difficult decision during this volatile election cycle: Should the nursing home group’s PAC give more contributions to incumbent congressional Democrats in competitive races, or to Republicans as polls started showing their party might regain power in November?

The group stuck with its tradition of giving more money to the incumbent party in power. With the sweeping health care overhaul at stake, maintaining access to key lawmakers during debate on the bill “was pretty important,” said Yarwood, explaining why 66 percent of the group’s $984,770 in contributions to individual federal candidates went to Democrats this cycle. “We try to maintain our relationships with those who have the gavel, it’s pretty simple.”

Health-sector PACs – ranging from doctors to hospitals to drug companies – generally favored Democrats. Of the $42 million that 122 health sector PACs gave to congressional candidates this cycle, 58 percent went to Democrats and 41 percent to Republicans, according to the nonprofit Center for Responsive Politics.

Each of these groups has a lot at stake in the new Congress, not only because the GOP plans an assault on the new health law. Lawmakers’ decisions routinely affect the fortunes of the sector. Physicians, for instance, are pushing Congress to block a nearly 30 percent cut to their Medicare payments by Jan. 1. That issue, which is sure to carry over into the new Congress, is worth at least $15.4 billion to doctors over the next year, according to the Congressional Budget Office.

Kaiser Health News analyzed contributions by the 20 top health-sector PACs in the 94 most competitive House and Senate races to gauge the PACs’ success in the general election. The results (see an accompanying chart) show half of these PACs had a losing record – success rates under 50 percent. The analysis doesn’t reflect total PAC giving, only direct contributions to candidates in the tightest races as defined by CQ Politics. Nor does it reflect sums given to candidates or spent on campaigns by individual donors, political parties and outside groups.

Supporting incumbents wasn’t in itself a bad idea, said David Levinthal, communications director for the Center for Responsive Politics.  “Business PACs historically have targeted the lion’s share of their money to incumbents because they win re-election,” he said. “Even in an anti-incumbent year, as it was this election, 85 percent of incumbents won re-election. If you were going to Vegas, you’d want your winning odds to be 85 percent.”

The two groups with the best winning percentages in the analysis — the American Association of Orthopaedic Surgeons and the American Society of Anesthesiologists –  backed more Republicans than Democrats and took a chance on some GOP challengers. By contrast, the American Hospital Association PAC, which heavily supported Democratic incumbents, wound up with a 40 percent success rate.

Two winners that the surgeons and anesthesiologists supported were doctors running in tough races: Andy Harris, a Maryland anesthesiologist who beat incumbent Democratic Rep. Frank Kratovil, and Joe Heck, a Nevada emergency physician who defeated incumbent Democratic Rep. Dina Titus. The anesthesiologists’ PAC contributed $5,000 to Harris and the group’s independent expenditure arm pumped another $261,980 into supporting Harris, according to the Sunlight Foundation, a nonprofit focused on transparency in government.

The anesthesiologists’ PAC also gave $5,000 to Heck. The orthopedists gave Harris $5,000 and $10,000 to Heck. (Campaign finance law permits PACs to give a maximum of $5,000 per election, with the primary counting as one election and the general counting as a second election. Groups that create independent expenditure entities can raise and spend unlimited amounts of money on electing specific candidates as long as they don’t coordinate with the candidates’ campaign.)

Both groups attributed their election success to the grassroots efforts of members as well as giving money. The anesthesiologists helped with get-out-the-vote efforts, for example, and advised campaigns on policy. They also sent local members to interview congressional candidates before contributing. If the candidate understood “the issues facing physicians and patients” he or she could get a check, said Dr. Jeff Mueller, chairman of the American Society of Anesthesiologists’ PAC executive board.

Mueller said his organization expects candidates it successfully backed to “be effective, knowledgeable voices for physicians and our patients.” Among other things, the anesthesiologists will be lobbying lawmakers to permanently fix the vexing issue of Medicare reimbursement rates for doctors and to resolve a long simmering conflict between doctors and nurses over the scope of nurses’ authority to provide care. (Nurse anesthetists gave Harris’ opponent, Kratovil, $10,000.)

Orthopedists say they will use their clout to pursue new, doctor-friendly federal malpractice laws, a pet issue for physician specialties of all types and for Harris and Heck.

PAC officials say contributions help keep doors open. “It’s not a tit-for-tat,” said Dr. Stuart Weinstein, chairman of the orthopedists’ PAC. “But it helps us to have access.”

There are still ways for PACs that invested in losing races to curry favor with winners — early contributions to their next campaigns or helping to retire their campaign debt.

The American Hospital Association, which backed the health law partly because it would reduce the number of people going to hospitals who can’t pay for care, has much to lose if Republicans disrupt implementation of the law. Mark Seklecki, vice president of political affairs at AHA, said it is likely the PAC will be contributing to the retirement of campaign debt of new members, and is already reevaluating its PAC giving for 2012. The association gave 71 percent of its $1.35 million in contributions to Democrats this cycle.

“I suspect in the coming cycle, as we develop relationships with many new people, I wouldn’t doubt that things would flip back in the other direction,” he said.  

Switches in PAC allegiance could be widespread. During the 2006 election cycle, when Democrats swept the House and Senate, 65 percent of health care sector contributions went to Republicans. By the 2008 elections, Democrats were getting 55 percent of the money, according to the Center for Responsive Politics.

American Health Care’s Yarwood says his group has already set aside $100,000 to contribute to debt retirement, mostly for Republicans. “We did look at the tea leaves and said we need to catch up some,” he said, noting the organization had given money to many Republicans that weren’t in competitive races.

Kim Ross, a Texas-based policy adviser to health interests, including doctors’ groups and drugmakers, said it’s typical that when power shifts, political contributors find themselves struggling to make relationships with Washington’s new leaders.

“Not the sort of pain they want to talk about but it’s one of the time-honored ritual hazings every lobby endures each time a chamber or administration changes hands,” Ross said in an e-mail.

 

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UPDATED: Letters to the editor (11/23): 

To the Editor:

The AMA’s political action committee, AMPAC, contributed $1.141 million in direct campaign contributions to candidates in the last election cycle. Using the Cook Report list of 135 competitive races, AMPAC contributed to 101 competitive races with a success rate of 70 percent. These numbers are significantly higher than cited in the Kaiser/Politico chart, and contributions are reported to the Federal Election Commission. AMPAC is proud to be the nation’s leading physician PAC, and our campaign contributions are made to candidates of both political parties who work to improve the nation’s health.

Sheldon G. Gross, M.D.
AMPAC Board Chair

To the Editor:

Kaiser Health News’ “Scorecard: How Health Industry PACs Placed Their Election Bets” tells an important story about PAC contributions in some of the most competitive races this year, but it’s incomplete and does not reflect the overriding philosophy of many PACs that look at more than just race ratings and “picking a winner” when deciding whom to support.

The article is based on information and statistics provided by the Center for Responsive Politics that analyzes Federal Election Commission data. We found many inconsistencies in the expenditures reported for our own political action committee, the National Emergency Medicine Political Action Committee (NEMPAC). For example, the spending numbers reported on the summary of Health Professionals page don’t match up to the expenditures reported on the individual health profession’s PAC page on the site, making analysis difficult and confusing.

More than $300,000 in contributions to candidates in the 2010 elections were not included in our statistics, and nearly $60,000 in PAC to PAC contributions were omitted including $30,000 to the NRCC. These omissions alone not only misrepresented our total giving cited in the Kaiser article, but also the percentages given to each party.

In addition, the article looks at PAC spending only through October 13, which does not take into consideration donations in the last few weeks of a pivotal and volatile election cycle. If the entire cycle had been included in the calculations and the data referenced had been correct, the results for NEMPAC would have been quite different. NEMPAC spent more than $1.5 million in 2010 elections, supporting 220 candidates for the House (199) and Senate (21) with an overall 83-percent win rate. Not to mention another win – the election of one of our own members to Congress for the first time, Dr. Joe Heck. ACEP supported Dr. Heck’s campaign with the maximum allowable contribution of $10,000 and our PAC Board approved an independent expenditure for Dr. Heck’s race totaling nearly $100,000 for radio and direct mail.

Thanks for setting the record straight!

Sincerely,

Sandra Schneider, MD, FACEP
President