WASHINGTON – Republican leaders brandished the endorsement of the National Business Group on Health recently as they tried unsuccessfully to pass the American Health Care Act (AHCA) to replace President Obama’s signature Affordable Care Act.
The reason was simple: In a letter to House Speaker Paul Ryan that offered support for the GOP bill because of tax cuts, the group’s CEO said his organization represented “412 primarily large employers” providing health benefits to 55 million Americans.
Suddenly, Washington politics turned a nod to a piece of an embattled legislation into a full-throated blessing of the whole thing.
Meanwhile, many of the business group’s members — including Minnesota-based UnitedHealth Group and Target Corp. — had taken no position, and one member, Hennepin County, had actually passed a resolution opposing it.
“Obviously, in this case there was a little misrepresentation,” said Steve Billet, a George Washington University business professor and former government affairs manager at AT&T.
So it goes in the nation’s capital, where trade associations and politicians can create a veneer of popular support for a volatile issue even where it may not exist. Meanwhile, corporations use surrogates to influence legislation so they don’t have to takes stands that could hurt business.
“I’ve seen situations like this on other legislation, where associations or groups were dragged into the limelight,” Billet said. “Their position was represented as one of support and they really weren’t all that unequivocal in their support.”
Having Hennepin County pushed into the debate on the side of the AHCA irked Commissioner Peter McLaughlin. The Affordable Care Act saved Hennepin County from having to use property taxes to pay for indigent care, McLaughlin told the Star Tribune.
The AHCA would have forced the county to dig back into property tax accounts by forcing people off Medicaid, government paid health insurance for the poor.
Asked by the Star Tribune if the National Business Group for Health intended to suggest to Republican leaders that all of its members supported the AHCA, a spokesman for the group replied, “It’s the NBGH that supports the bill. You would have to ask each of the 412 member companies individually where they stand.”
The business group on health lists 14 Minnesota companies and one municipality as members — U.S. Bank, UnitedHealth Group, Blue Cross/Blue Shield of Minnesota, HealthPartners, Andersen Corp., 3M, Medtronic, St. Jude Medical, Cargill, Best Buy, Target, Schwan Food Co., Mayo Clinic, Xcel Energy and Hennepin County. Most did not respond to requests for comment on being portrayed as AHCA supporters. Others declined to comment except to say they had taken no position on the bill.
The reticence is part of a common corporate strategy in the nation’s capital. Many of Minnesota’s major economic players belong to trade groups that buffer them from political controversy.
In some cases, positive spin campaigns aimed at the public now rival lobbying of elected officials. legislators. An investigation of 144 trade groups by the Center for Public Integrity showed that from 2008 through 2012 the groups spent more than $1.2 billion on “advertising, public relations and marketing services.”
That was roughly $500 million more than they spent on lobbying, government affairs and legal expenses.
At the same time they churn out narratives of popular support, trade associations often express opinions that might damage the image of individual businesses which expressed the same sentiments. For instance, the Advanced Medical Technology Association (AdvaMed), represents many Minnesota med-tech companies, including Medtronic and 3M. Despite Congressional Budget Office (CBO) estimates that the Republican replacement for Obamacare would cost 24 million Americans health insurance coverage over the next decade, AdvaMed supported passage of the AHCA because it eliminated the medical device tax that partly funded the Affordable Care Act.
In the case of the AHCA, no corporation “wanted to be on the wrong side of any politicians,” said Alfred Marcus, an expert in strategic management at the University of Minnesota. “They want to support the winners.”
That can lead to different interpretations of words. Before Ryan and President Donald Trump pulled the Obamacare replacement plan for lack of majority support, the president of the Healthcare Leadership Council, a group that includes the Mayo Clinic, issued a statement. In part, it said: “The proposed American Health Care Act offers promising ideas that, through the legislative and regulatory processes, can become a structure that provides improved health security for millions of Americans.”
A Mayo spokeswoman told the Star Tribune that her employer was not “reading this as an endorsement.”
There was no other way to read the position of the National Association of Manufacturers. NAM, one of the country’s most powerful trade groups, announced that it considered passage of the AHCA a “key vote” because of tax cuts. The term “key vote” was a signal to legislators that the association’s members might punish those who voted no. Since Republican leaders and Trump were forced to withdraw the bill for lack of support, a vote never took place.
Still, Thomas Handley, president and COO of St. Paul-based Ecolab, Inc., sits on NAM’s executive board. Elizabeth Winsor, national accounts CEO at UnitedHealthcare, based in Minnetonka, is an association director.
Asked if they supported the trade group’s position, an Ecolab spokesman said, “We support and expect our industry associations to act in the best interest of their membership as a whole.” A UnitedHealth spokesman said he had no “updates from the company directly.”
The AHCA was an especially high-profile bill because it was so divisive. But the public pronouncements of business surrogates accompanies most controversial legislation.
The Financial Services Roundtable, led by former Minnesota Gov. Tim Pawlenty, will say what banks cannot afford when it comes to dismantling consumer protections in Wall Street reform. The Business Roundtable, a group of CEOs that includes several from Minnesota, will advocate for lower corporate tax rates.
“Most companies regard it as smart politics to avoid alienating part of their clientele,” GW’s Billet explained. “You duck the issue and then quietly give instructions that your association should get out there and take an aggressive position. This happens a good bit in [Washington], and it makes these associations a pretty decent investment for the sponsoring companies.”
At the U, Marcus boiled it down to a simple concept.
Trade groups, he said, “provide cover.”