AHIP starts smoking astroturf

Let’s say you ran a lobbying organization that may (or may not) be staring into a political storm. And say that you’d just lost a battle with opponents within the health care industry that you thought you’d won in 2003.

Now, say you “believe” that the 47 million people — who are uninsured in part (but to be fair, only in part) due to your members’ greed, political choices and incompetence over the years — represent a market for your members.

Say your organization had some members who could possibly adapt to a new world, where tightly regulated organizations were contracted under strict terms to provide care to the whole population in a social insurance scheme — with appropriate risk-adjustment and other mechanisms in place to promote the care management you say your members do so well.

And say then it had other members, who are mere sharks and who would go out of business the minute they were banned from cherry-picking only the best customers and selling them quasi-fraudulent products.

Say then, that even those members whose CEOs may have claimed they could adapt to a different kind of world, are being exposed as behaving very, very badly in the current environment. In fact they’re being sued by the second biggest City in the nation and are in violation of what the state insurance commissioner (who is an elected Republican) flat out states is the law, even while they fight in court for the right to behave badly.

Say that eventually, as in today, Thursday, Congress is noticing
enough of the bad behavior of those members, even though it’s mostly
been in far off California, that it’s holding hearings about it for the first time.

Given all that’s going on you probably have two choices:

1. You could get all your members to sign a code of conduct in which
they promise to never, ever do the really bad things they’ve been doing
again, stop fighting the current regulators in their respective states about it,
and promise to use their lobbying power to promote a social insurance
system that looks like the one in the Netherlands. Bear in mind that according to the leading commentator on health care in the country Uwe Reinhardt that in the Netherlands:

"The system is so tightly regulated and so many transfers are
made among people to make sure everyone can afford the insurance and
everyone has access to the same care that it’s really just a social
insurance system in disguise. It’s not even vaguely close to the U.S.


2. You create an astroturf campaign
to go out and talk to the great unwashed which will come back and
generate political “support” for the plan you’ve already created which
essentially means that you get to do what you’re already doing, but you
get paid more by the taxpayer to do it.

Bear in mind, that you get paid $1.3 million a year to make this decision (as well as to be beaten up in public by Oprah & Michael Moore).

Bear in mind Choice 1 involves your members who could survive in a scenario of real reform
tossing the low-lifes under the bus. This is something they just refused to do
in the recent battle you lost, when they had chance to make a
compromise and keep more money in Medicare Advantage by doing so. And of course that may mean that their
super-profits of the last few years are over. (And judging by some of
their stock prices, Wall Street thinks that’s already happening.)

So what would you do?

OK, you don’t need to guess.

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Gregg MastersjdJames EssexDavid Welchmaggie mahar Recent comment authors
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Gregg Masters

Once upon a time, the fledgling Group Health Association (GHAA aka AHIP’s predessor) huddled together in their modestly attended annual meetings to listen to medical directors, MGMA forged clinic administrators, and their prescient consultants, tell tales about the soon to be won respect for their members place in the healthcare delivery and financing space, and the leadership roles they’d play as the inevitable movement towards integration would unfold. SuperMed-like empires would soon rise, Mulliken, Bristol Park, Harriman Jones, Burbank Medical Clinic, Reese Stealy, Scripps, just to drop a few southern California names, with or without their hospital partners. It was… Read more »


James, You say we might have to pay 20% of our income in taxes just for healthcare in a UHC system. That’s only true if we continue to fail to control costs. In the short term, that is almost certainly what will happen. However, two points in response: 1. We already effectively pay that money (16% of GDP) in the form of premiums, out-of-pocket payments and lost income due to employer benefit expenses. Even in reasonable worst-case projections, UHC will not be much more expensive than the system we have now. But it will make the total costs more visible… Read more »


Matt, As you know (if you’ve been keeping track, and no reason you should be), I think that a model in which well-regulated non-profit insurers compete in a risk-adjusted universal health care system–such as the Netherlands or Germany–is fully workable in the US and is in fact the best we’re going to get. As you say, such a system would be a major disruption for a large majority of health insurers in the US. For the for-profits, it would be a fundamental change. They would expect big payouts to turn into non-profits (buy all the stock at a 20% premium)… Read more »

James Essex
James Essex

Yes, the German and other European health care systems are, in many respects, very good systems. However, there are drawbacks also. Are you willing to pay up to 20% of your income in taxes for health care alone. Are our doctors willing to be told how much they can earn, etc. Attacking the insurance industry is tremendously entertaining but it also springs from political expediences. No one wants to attack the real cause of high insurance prices: the cost of medical care. Yes, there are some insurers who abuse the system. Insurance companies have stockholders, investors and policyholders who expect… Read more »

David Welch
David Welch

I have a feeling this effort is doomed. The revulsion for the for-profit insurance industry is so deep that the chance anyone will listen to what they have to say is pretty slim, no matter how they try to disguise it. I’m really more worried about what we face from groups like HCAN, who start by saying all the right things about the insurers, but then tell us that the solution is to get more people insured. I would wholeheartedly agree that we have a lot to learn from the European systems, in several of which highly regulated, often non-profit… Read more »

maggie mahar

Wonderful post. And a reminder that we should all be wary of “reformers” who believe that it’s best to tell people what they want to hear–rather than what they need to know. What Americans need to know is that a)health care reform won’t be cheap; it will be expensive. b)a major way to cover that expense is to acknowledge that, today, a third of our health care dollars are wasted on unnecessary, ineffective treatments. We can, and must, cut back on the waste. c)This will make some people very unhappy– athis includes the lobbyists represnting those who are making a… Read more »




Great post and fantastic analysis! I just blogged about the California case. No matter what AHIP is lobbying for, I think we need some sort of counter lobby to suggest that what the American people truly want (and need) is Option #1!
PS – Germany’s social insurance system is another good model we should be looking at!