Faux Capitalism Fueled by Political Contributions: “The Mother’s Milk of Politics”

Due to his aphorism that “money is the mother’s milk of politics,” most of us involved in California politics in the 1960s and 70s will never forget Jesse Unruh – the powerful leader of the California Assembly at the time. Little could we know to what extent that brutally honest insight would come to dominate American political processes.  Nor could we know that Eisenhower’s warning about the military-industrial complex would eventually be relevant to the medical care industry.

The so-called nursing home system is an exemplar of industry patronage dispensed to legislators for the purpose of cash extraction at the expense of quality care – care that all Americans deserve for the taxes they pay.  Unfortunately, this reality is not a factor in public political discourse. And it will not be a factor unless advocates and activists do more to press the issue.

The public is fed several myths about the fundamental nature of government funded long-term care in the United States.  The myth that providers are operating in a competitive, free market, system drives the propaganda disseminated by trade associations such as the American Health Care Association/National Center for Assisted Living (AHCA/NCAL).

The truth is that licensed providers – both privately held and publicly listed – are entities in a faux-capitalistic system in which prices are guaranteed by federal and state governments while wages and working conditions remain weakly regulated.  Price controls are advantageous to the industry.  Conversely, the lack of wage controls and employment protections are a disadvantage for workers.  Weak federal and state regulation of care is harmful to patients.

At Congressional Hearings, Advocates are Testifying to Legislators Who Receive Money from the Industry:  Both Democrats & Republicans

The toxic and perverse form of capitalism represented by the industrial medical system is maintained through a political juggernaut in the form of finance, real estate, hospital, nursing home, and other industrial lobbying groups often mistakenly called the medical-industrial complex.  Actually, those of us who advocate for enlightened skilled nursing care, are up against the Finance, Insurance, Real Estate (FIRE)-Industrial Complex.

Wall Street and its affiliated trade associations (e.g., AHCA/NCAL) distribute immense amounts of money to legislators to maintain the highest prices for the least amount of care in skilled nursing facilities.  Evidence to support this situation can be found through several sources.  For example, the website OpenSecrets (https://www.opensecrets.org/) does an outstanding job of exposing the flow of money through Washington, D.C.

Democrats are Favored by the AHCA/NCAL

In 2018 cycle, the AHCA/NCAL PAC distributed $610,616 to federal candidates (American Health Care Assn PAC Contributions to Federal Candidates • OpenSecrets).  Democrats received $401.616 (65.77%) and Republicans received $209,000 (34.23%). 

The top recipients of the industry’s patronage are some powerful legislators.  The top 10 contributions were dispensed to the following legislators:

Vernon Buchanan (R-Fla)	$10,000
James E Clyburn (D-SC)	$10,000
Ben R Lujan (D-NM)	$10,000
Frank Pallone Jr. (D-NJ)	$10,000
Nancy Pelosi (D-Calif)	$10,000
Peter Roskam (R-Ill)	$10,000
Steve Stivers (R-Ohio)	$10,000
David Young (R-Iowa)	$10,000
Carlos Curbelo (R-Fla)	$8,500
Cathy McMorris Rodgers (R-Wash)	$8,500

A $10,000 contribution swings a lot of weight.  Both Democrats and Republicans receiving these contributions are among the most powerful members of the U.S. Congress.  If you go through the entire list, your idealism regarding some of the more liberal members of the House and Senate might be shaken somewhat.

In the next few posts, I will be sharing more data regarding AHCA/NCAL distribution of money to lobbyists and how the revolving door advantages providers over patients.  Staffers and former legislators make much better money on K Street than they can make serving the public.

Professional Conflicts of Interests

As I perused the list of donors to the PAC, I recognized some of the contributors.  For instance, I noticed that Medicalodges, a mid-size, closely held, chain in the Midwest, made repeated contributions.  I’m familiar with Medicalodges for several reasons.  Some of their facilities are located in Kansas – a state in which I have done a considerable amount of LTC ownership research.

The Medicalodges board of directors includes Professor Gayle Doll – head of the Kansas State University Gerontology Program.  This inappropriate paid service on a provider board of directors is not the only conflict of interest in which professor Doll is engaged.  She is also managing a State of Kansas Grant known as the PEAK program, which dispenses Medicaid bonuses for facilities that can demonstrate development of a “home-like culture.”

She should have no role in evaluating providers for the purpose of Medicaid uplifts.  The last time I checked the Kansas Department of Aging & Disability Services (KDADS) website (https://www.kdads.ks.gov/), no adequate evaluation of the PEAK program was available to the public.  I called professor Doll about this and was told to speak KDADS.  KDADS told me to speak to professor Doll’s office.  Nursing home employees I know tell me that the program is a sham.  Providers do a little window dressing, make no substantive changes, and still receive rather hefty uplifts on Medicaid reimbursements.

Corruption is Pervasive and Deeply Ingrained in the Faux-Capitalistic Long-Term Care system

I have only scratched the surface in connecting some dots related to the corruption rife in the “nursing home” system.  With collapse of the medical-moral-ethical underpinnings of our healthcare system, legislators have become corrupted by money and professional conflicts abound due to a developing weltanschauung of self-interest over the public interest. 

Many more dots can be connected. We will do that as we “follow the money” in future posts. People who need long-term care are not consumers and the industry will not bother to market to them. The industry’s customers are legislators in federal and state legislatures. That is who they need to sell.