Lobbying by corporate giants may have succeeded in swaying a powerful government agency from changing an outdated, expensive payment system that wastes taxpayer dollars on bloated corporate profits. And, while the industry did pay $8 million on its lobbying effort to prevent the changes, the annual future corporate return on the effort is projected to be as much as 100 times ($800 million) the lobbying cost.
The United States Government and Accountability Office found that Medicare overpaid dialysis treatment centers for services administered to seniors by between $650 and $800 million in 2011. Most of the overpayment went to two large corporations, DaVita HealthCare Partners Inc. and Fresenius Medical Care AG, which together control a majority of the dialysis center market.
To mitigate the gross overpayment to dialysis treatment centers, the Centers for Medicare and Medicaid Services (CMS) proposed to reduce future payment rates for expensive anemia drugs and other dialysis center services by a total of 9.4 percent for calendar year 2014. Reducing Medicare payments to dialysis centers Medicare would save an estimated $4.9 billion over the next ten years, according to the Congressional Budget Office. But the healthcare giants were able to convince more than 100 members of Congress to oppose the proposed CMS rule and suggest that the Obama administration either reverse the spending cuts or dramatically water down the spending cut proposal.
On Friday, November 22, CMS released a press statement acquiescing to the wishes and pressures of the health care corporate titans. In the end, CMS’ policies remain virtually unchanged. Rather than cutting reimbursement payments to dialysis centers by 9.4 percent, the payments will be kept essentially flat between the 2013 reimbursement rates and the 2104 reimbursement rates. Dialysis treatment centers will continue to be overpaid, and DaVita HealthCare Partners Inc. and Fresenius Medical Care AG will continue to reap hundreds of millions of excess taxpayer dollars.
The Federal Trade Commission (FTC) is hosting a workshop today on “native advertising” – the practice of blending ads with news and other content in such a way to make it difficult to distinguish paid and unpaid content. The agency will tackle issues concerning the popular marketing tool’s blurred lines between advertising and editorial content. Public Citizen’s President Robert Weissman, alongside industry representatives from Buzzfeed, The Wall Street Journal and others, will speak on the panel addressing best practices in transparency and disclosure.
Because marketers pay for, and often create, sponsored content, and the end goal is commercial, it should be clearly labeled as advertising, pursuant to FTC disclosure rules. (Marketing industry leaders claim that sponsored content is not always advertising, so it should not be labeled as such.)
Business efforts to stifle a simple, congressionally mandated rule requiring public companies to disclose the ratio of CEO pay to the median-paid employee provides an insightful lens on the perversion of cost-benefit analysis.
Approved as part of the 2010 Dodd-Frank Wall Street Reform Act, Section 953b counts as the simplest of the 400 statutes that regulatory agencies must translate into rules with which business must comply. The U.S. Securities and Exchange Commission (SEC) proposed a rule in October, setting December 2 as the deadline for submitting comments. Public Citizen filed a formal comment with the SEC. In addition, more than 40,000 Public Citizen members and activists filed comments in support of this rule. To date, more than 105,000 commenters have filed letters in support of this rule.
This support reflects investor anger that CEO and senior management pay has escalated beyond economic justification. Pay for top-level execs now drains 10 percent of corporate profits where in 1990 senior management pay took only 5 percent. When finalized, the new rule will allow investors to “unit-price” CEOs. An investor weighing, say, a purchase of Oracle stock versus Hewlett Packard can now look to one more variable: Is the CEO relatively inexpensive, or costly? In this case, the Oracle multiple for CEO Larry Ellison would be more than 1,200 (expensive!) while Hewlett Packard’s Margaret Whitman is about 350 (certainly cheaper).
But K Street attorney Eugene Scalia (son of the Supreme Court justice) pioneered a roadblock for all such rules: cost-benefit analysis. In the case of “Business Roundtable v. the Securities and Exchange Commission,” he convinced the court that the SEC’s cost-benefit analysis of another mandated rule regarding nominations for corporate boards didn’t fully appreciate all the costs. In that specific case, the Business Roundtable argued that unions would cause pension fund managers to violate their fiduciary duty, which let them use the nomination of candidates to corporate boards as a bargaining tactic. It wasn’t that the SEC failed to respond to this absurdity; the court agreed with Scalia that the SEC didn’t respond enough.
Last week, activists from across the nation tuned in to Public Citizen’s online presentation about writing a letter to the editor of your local newspaper. Writing a letter to the editor is a very important way to have your voice heard on issues since that section is one of the most widely read parts of a newspaper.
You can get valuable tips on writing a letter to the editor by watching a recording of the webinar here:
Every social movement has an anthem. Civil rights marchers sang “We Shall Overcome”, suffragettes sang “Shoulder to Shoulder”, and the labor movement has “Solidarity Forever”. Until now, the single payer movement has lacked a theme song to unite its members. Here at Public Citizen, I’d like you to help us choose one. I’ve listed my top 10 songs for single payer. Leave us your suggestions in the Comments section below.
Eighties music fans will probably remember these Australian political rockers. They made a poignant plea for separating healthcare from employment by asking, “If the Blue Sky Mining company won’t come to my rescue? And if the sugar refining company won’t save me? Then who’s going to save me?” If we had single payer, we wouldn’t rely on companies to “save us” from medical bankruptcies by providing health insurance. Everyone would be covered. No questions asked.
This anthem against the entrenched interests opposing positive change rings even more true today. Almost twenty-five years after its initial release, the song still explodes with energy from the get go. The anger expressed by those who have been left behind is palpable. When Chuck D says “Give us want we want/Give us what we need”. We know what he is referring to. The most basic of all human rights: health care.