Revolving Doors, Regulatory Capture and Healthcare Reform
Do you ever wonder how it is that entire industries can act against the public interest but the government agencies established to regulate them go along with it? There are countless examples of this, like BP drilling in the Gulf of Mexico without being held to the legal requirement to provide environmental impact statements.
Or, as in the 2009 healthcare reform debate, when options like single payer healthcare suddenly disappeared from official consideration. After all, study after study had consistently shown that single payer systems are the most efficient way to manage healthcare costs. At the very least, single payer should have remained on the table as a viable option.
Instead, our options narrowed. Discussions revolved around protecting existing healthcare industry interests, establishing government-funded marketplaces for private health insurance and government subsidies to health insurance companies.
In other words, reform became centered on the corporate concerns of the medical-industrial complex, most particularly, the private health insurance industry.
What happened? Well, this can occur when a regulatory agency, created to act in the public interest, ends up instead advancing the commercial concerns of the industry they were established to oversee. It’s called “regulatory capture.” Regulatory capture can occur on two levels – financial and cognitive. Financial capture obviously relates to money, donations, political contributions, bribery, etc.
But cognitive capture is actually much more harmful. It occurs when the regulator is so immersed in the industry they regulate that they take on the perspectives and values of that industry. It’s even been compared to Stockholm Syndrome.
In many cases, the regulators have worked within the very industry they are now expected to regulate, or they anticipate working within that industry in the future. In fact, this often occurs in a serial manner, as lobbyists move back and forth between government and industry jobs. It’s called “Revolving Door” politics.
Revolving door politics and regulatory capture (both financial and cognitive) played a pivotal role in the development of the Affordable Care Act (ACA).
Here’s how: In July 2015, the top Obama administration official who was in charge of the rollout of the Affordable Care Act, Marilyn Tavenner, accepted a position as President and CEO of America’s Health Insurance Plans (AHIP). AHIP is a trade and industry lobbying group representing health insurance companies, including Kaiser Permanente, Humana, Anthem, Aetna and others.
AHIP spent $86 million on lobbyists in 2009 alone, when the ACA was being debated, to protect the interests of their clients.
During the ACA rollout, Tavenner served as the administrator of the Centers for Medicare and Medicaid Services, and as such, she oversaw the launch of Healthcare.gov (the federal, multi-state version of Covered California).
Now she’s joining the very firm that lobbied her government agency! The New York Times headline announcing her career move tells the story: “Head of Obama’s Health Care Rollout to Lobby for Insurers.”
But there’s more! Tavenner succeeded Karen Ignagni, who served for 20 years as the top health insurance lobbyist in the country.
Ignagni, like Tavenner, exerted tremendous influence on the Affordable Care Act. She started her career in politics, as an aide to Senator Claiborne Pell, and later served as Director of Employee Benefits at the AFL-CIO. Ignagni left AHIP in June to step up as CEO of a major New York health insurance company, EmblemHealth.
So there’s no mystery about how our healthcare reform centered on supporting the existing “medical industrial” complex. The voices of corporate lobbyists were the loudest in the room! And our government administrators were immersed in corporate healthcare’s “universe of reform options” which did not include options popular with everyday Americans, like single payer.
Ring around the Rosie – from government agency to lobbying group to private industry – we all fall down!
Learn more:
http://www.pnhp.org/facts/single-payer-system-cost
http://www.investopedia.com/terms/r/regulatory-capture.asp
http://www.politico.com/story/2015/05/karen-ignagni-leaving-ahip-118182.html
http://www.publicintegrity.org/2010/02/24/2725/lobbyists-swarm-capitol-influence-health-reform
