In past 5 years, healthcare organizations have dominated spending on lobbying

Hartford Business Journal – Monday, December 9, 2024
By David Krechevsky

In the past five years, the number of healthcare-related organizations ranked in the top 10 for lobbying spending at the state Capitol has increased significantly.

According to data from the Office of State Ethics, which tracks and regulates lobbying activity, there were just two healthcare-related organizations among the top five lobbying spenders in the two-year period of 2019 and 2020, and just three among the top 10.

That changed dramatically in the next two-year cycle. For 2021-22, four of the top five and six of the top 10 lobbying spenders were healthcare-related organizations.

The numbers are similar for the 2023-24 cycle, which remains ongoing.

In fact, of the $12.5 million spent so far by the 12 largest lobbying spenders in 2023-24, 58% was doled out by healthcare-related entities, including the Connecticut Hospital Association (CHA) and Connecticut Association of Health Plans (CTAHP), which represents one regional and four national health insurers.

Both of those organizations are annually among the highest spenders, while Hartford HealthCare, which has been aggressively expanding its statewide footprint, in recent years has reported a significant increase in lobbying spending.

During the current 2023-24 reporting period, Hartford HealthCare is the third-largest spender ($1.02 million), behind only Eversource ($1.3 million) and the CHA ($3.2 million).

So, what prompted healthcare organizations to leap to the forefront of lobbying in Hartford?

Of course, 2020 saw the arrival of the COVID-19 pandemic, which created tremendous hardships for healthcare providers and their staffs. Yet those who lobby on behalf of hospitals and healthcare providers say the pandemic was not the only reason for the dramatic spike in spending.

And the trend is likely to continue in the years ahead, as the industry faces significant headwinds and lawmakers debate key issues, including how to manage the growing financial burden of Medicaid, and how to reform the often-criticized regulatory process for mergers, acquisitions and other business transactions among hospitals and providers.

Popular topic

Susan Halpin, co-principal for the government relations group at Hartford-based law firm Robinson + Cole and executive director of the CTAHP, says health care is always a popular topic in the General Assembly.

“I think the volume of healthcare legislation is the quick answer (for why so much is spent on lobbying), and also the significance of some of the proposals that have been advanced,” Halpin said. “The efforts at establishing a public option are at the forefront of that.”

Legislation to create a state-run health insurance option, which the health plans association has vehemently opposed, was proposed during the 2019 legislative session, and again during the 2021 and 2023 sessions. It has yet to pass.

“But that’s not the only issue,” Halpin said. “There are so many different and complex elements to the healthcare landscape that warrant significant resources and attention.”

For Karen Buckley, vice president of advocacy for the CHA, that includes the pandemic’s wider impact.

“COVID really changed a lot of things in Connecticut,” Buckley said. “But in particular, I think what happened as a result of the response to the emergency is that the role of healthcare institutions — hospitals, home care, nursing homes and others — really emphasized … how interconnected we all are.”

As a result, she said, the issues the CHA lobbies on involve almost every legislative committee.

“If one part of the healthcare delivery system is not working, or is impacted by a piece of legislation, it impacts all the others,” Buckley said.

Paul Mounds agrees. A former chief of staff for Gov. Ned Lamont, Mounds now serves as vice president of community and corporate alliances for Yale New Haven Health System (YNHHS). He says the legislature and executive branch have been “heavily focused” on health care.

“So, it’s important for organizations … like Yale New Haven Health — which is not only the largest non-governmental employer in the state, but also is extremely diverse in terms of the range of business structures — to make sure that our voice is heard,” he said.

One key issue for Yale New Haven Health has been its stalled acquisition of Prospect Medical Holdings’ Connecticut hospitals in Waterbury, Manchester and Vernon — a deal that is now tied up in a contentious court battle as both sides spar over the original $435 million purchase price.

Executives from both hospitals met with Lamont in September to discuss the deal, according to the CT Mirror.

Year-round work

Mounds also said it’s important to understand that lobbying occurs well beyond each legislative session, and that the spending figures represent more than just the money paid to lobbyists.

“This is year-round in terms of the work,” he said. “We really feel it’s important that we’re able to communicate, and also educate government officials about the various issues that are happening in the healthcare landscape.”

YNHHS’ lobbying spending was eighth-highest among all organizations in 2019-20 ($815,066) and seventh in 2021-22 ($856,989), but has fallen to 13th so far in 2023-24 ($584,986), according to state data.

The nearly 32% drop off in spending in the current reporting cycle is because YNHHS rebid its contract for an outside lobbying firm, which reduced costs, Mounds said.

“It’s not just about paying people directly. That’s usually for the lobbying firms,” he said of the spending amount. Internal health system staff must track the amount of time spent doing lobbying-related work, because that also applies.

“If we create documents or other resources, that counts towards the lobbying number,” Mounds said. “If we register additional senior-level leadership as lobbyists based upon issues that come up, that plays a part in the number.”

Indeed, some of the state’s top healthcare executives are registered as lobbyists. That includes Yale New Haven Health CEO Christopher O’Connor, Hartford HealthCare CEO Jeff Flaks, Bristol Health CEO Kurt Barwis and Nuvance Health CEO John Murphy, among others, ethics data shows.

Buckley said the spending figure also accounts for subject-matter experts who address legislative committees to educate policymakers on an issue.

“I think when people read (the numbers), they’re only thinking someone is getting in the hall and saying, ‘please vote this way.’ In Connecticut, lobbying entails so much more,” she said.

While YNHHS has reduced its lobbying spending, Hartford HealthCare went in the opposite direction. The organization’s spending jumped from outside the top 20 in 2019-20 to third overall in 2023-24.

While no one from Hartford HealthCare would agree to an interview about its lobbying efforts, the health system provided a statement via email.

“Over the last several years, Hartford HealthCare has been laser focused on transparency — reporting year-round, as opposed to only when the legislature is in session,” the statement said. “We follow ethics guidelines meticulously, which may explain the changes in reporting — though not a change in spending.”

HHC declined to expand further on that statement, but added: “We engage with lobbyists and lobbying firms to ensure that our lawmakers have the most current and accurate information on the issues impacting healthcare delivery and public health in our state.”
The issues

CHA’s Buckley said the issues that concern her members can vary with each legislative session, but there also are common threads.

In addition to representing 27 acute-care hospitals in the state, the CHA’s members also include psychiatric hospitals, rehabilitation centers, nursing homes, infirmaries and clinics, among other organizations.

“We may have different specifics for individual organizations, but we all have very common elements that transcend each individual organization — advocating for patient access, for health equity,” and on the state’s regulatory processes.

One key annual issue is the state’s Medicaid reimbursement rates, which hospitals and other providers have long complained are inadequate and contribute to financial strains and industry consolidation.

On the regulatory front, there were four major bills proposed last year to reform the state’s certificate of need process, which regulates certain healthcare mergers, acquisitions, equipment purchases and other business transactions.

All four proposals failed to pass, but the issue is expected to come up again next session. Hospitals have complained the business-transactions approval process is burdensome and takes too long.

Buckley also cited access to behavioral health and workforce issues, such as the shortage of nurses, respiratory therapists and medical technologists.

“We need to work with the state to make some kind of investment in that, because any changes to the workforce won’t happen overnight,” Buckley said.

Halpin said the health plans association also advocates on several general business issues, “everything from cybersecurity to the artificial intelligence bills.”

She added that much of the focus is on defending against legislation health insurers believe will do more harm than good.

“The vast majority of bills that we’re following or are engaged in, I would say, (involve) either playing defense or shaping them so that they take into account the practical impact of those pieces of legislation,” Halpin said.

Specifically, she said, CTAHP closely tracks bills that require new coverage benefits because while they may be well-intentioned, they can often result in “higher costs, higher premiums and higher expenses for the consumer.”

Halpin added that it can sometimes be hard to know what unexpected issue may arise during a legislative session.

“There’s always kind of surprise issues that emerge and, as such, we have to monitor and digest all kinds of different proposals,” she said. “So, we’re watching everything closely and we’ll continue to do that.”

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