Economy

Dems Criticize Healthcare Industry; Industry Showers Dems with Cash

Big Business watches the Republican coalition crack up; shops for Dems.
In a reversal from past election cycles, Democratic candidates for president are outpacing Republicans in donations from the health care industry, even as the leading Democrats in the field offer proposals that have caused deep anxiety in some sectors of the industry, according to campaign finance records.

Hospitals, drug makers, doctors and insurers gave candidates in both parties more than $11 million in the first nine months of this year, according to an analysis done for The New York Times by the Center for Responsive Politics, an independent group that tracks campaign finance.

In all, the Democratic presidential candidates have raised about $6.5 million from the industry, compared with nearly $4.8 million for the Republican candidates. Senator Hillary Rodham Clinton of New York has amassed the most of any candidate, despite her calls for broad changes to the health care system that could pose serious financial challenges to private insurers, drug companies and other sectors.

Mrs. Clinton received $2.7 million through the end of September, far more than Mitt Romney, the Republican who raised the most from the health care industry, with $1.6 million. The industry’s drift in contributions toward Democratic candidates mirrors wider trends among donors, but the donations from this sector are particularly notable because of the party’s focus on overhauling the health care system.

People in the health care industry say the giving reflects a growing sense that the Democrats are in a strong position to win the White House next year. It also underscores the industry’s frantic effort to influence the candidates, as Democrats push their proposals to address what many polls show is a top concern among voters.

“Everybody in the industry knows that health care reform is on its way, and you have only two decisions: sit on the sidelines or get on the field,” said Kenneth E. Raske, president of the Greater New York Hospital Association and involved in a national coalition seeking a health-care overhaul.

But the donations could expose the candidates, particularly Mrs. Clinton, to accusations of being captive to special interests, a charge that one of Mrs. Clinton’s rivals, John Edwards, has leveled against her on the campaign trail, telling her during one debate that she would “negotiate and compromise your way to universal health care” with the insurance and drug industries.

The donations have nevertheless come as the health care industry has been in the cross hairs of the Democratic candidates. Mrs. Clinton, for instance, has proposed barring insurance companies from “cherry picking” only healthy customers and also wants to have Medicare negotiate lower drug prices with the pharmaceutical industry. And Senator Barack Obama has called for actually limiting the profits of the insurance industry.

Phillip J. Blando, a political strategist who advises insurance and biotechnology companies, said the health care contributions to Democratic candidates were “smart politics.”

“For many people in the industry,” Mr. Blando said, “these contributions are a defensive measure. Health care is the No. 1 domestic policy issue, and they want access, a seat at the table.”

The major Democratic candidates have issued detailed proposals to expand coverage, rein in health costs and hold down insurance premiums and drug prices. Contributions from the health care industry have grown as the candidates talk more and more about these ideas.

Some people donate because they like a candidate’s platform. Others donate because they are terrified of what the candidate wants to do and hope to mitigate the damage. But the Democratic presidential candidates are collecting more than Republicans from virtually every sector of the industry — pharmaceuticals, insurers and health maintenance organizations, doctors, hospitals and nursing homes, according to the analysis.

The imbalance in contributions from the health care industry is yet another sign of how drastically the political climate has changed for Republicans. At this point in the 2004 presidential race, President Bush had $4.4 million in donations from the industry, or about $1 million more than the Democratic candidates seeking their party’s nomination to challenge him. And in the first nine months of the 2000 presidential campaign — when there was no incumbent in the White House running for re-election — the Republican presidential candidates took in $3.9 million from the health care industry, compared with $1.7 million raised by the Democrats, campaign finance records show.

Among all the candidates in both political parties, Senator Barack Obama of Illinois is the No. 2 recipient of donations from the health care industry, having raised about $2.2 million, according to campaign finance records.

Two Republicans trail him in third and fourth place, Mr. Romney, the former governor of Massachusetts, and Rudolph W. Giuliani, the former mayor of New York City, with $1.4 million.

Senator McCain has taken in nearly $880,000 from the industry this year, while John Edwards, the former Democratic senator from North Carolina, has collected nearly $600,000, the records show.

One of Mr. Obama’s fund-raisers, Kirk Dornbush, president of Iconic Therapeutics, a biotech company in Atlanta, said, “The contributions reflect the simple calculus of the health care industry, making a bet that Democrats will control the White House and both houses of Congress after the next election.”

Drug and device makers have donated about $275,000 to Mrs. Clinton’s campaign, making her the top recipient of money from that sector, followed by Mr. Obama, with $261,400, and Mr. Romney, with nearly $259,000.

The health care industry has not been monolithic in its support of candidates, and is spreading its money around the field.

Campaign finance records show that Jeffrey B. Kindler, the chief executive of Pfizer, has contributed $2,300 — the maximum for an individual — to Mrs. Clinton. His predecessor, Henry A. McKinnell Jr., was a major fund-raiser for President Bush.

Kevin W. Sharer, the chief executive of Amgen, the world’s largest biotechnology company, appears to be hedging his bets. He has made contributions to Mrs. Clinton, Mr. Romney and Senator John McCain, Republican of Arizona.

Health care providers disagree with many of the Democrats’ specific proposals. But many endorse the goal of universal coverage, and they appreciate the fact that the Democrats are giving a high priority to health care as a campaign issue.

“For Democrats, health care is a much more central issue,” said David L. Friedman, an Obama fund-raiser who created a chain of nursing homes in Maine.

Mrs. Clinton regularly assails insurance companies, saying they make money by denying coverage or charging exorbitant premiums to sick people. She says she would eliminate such discrimination by requiring insurers to offer coverage at reasonable rates to “anyone who applies.”

Insurers have grave doubts about such proposals. A major purpose of their campaign contributions to her and her rivals is to make sure their concerns will be heard.

Mary Nell Lehnhard, senior vice president of the Blue Cross and Blue Shield Association, said, “As long as the candidates are willing to talk to us, we can educate them.”

Drug makers detest two ideas favored by Mrs. Clinton, Mr. Edwards and Mr. Obama: allowing imports of lower-cost prescription drugs from Canada and authorizing Medicare to negotiate directly with drug companies to secure lower prices.

But drug makers are themselves divided on some issues. Democrats have often sided with generic drug companies, against the makers of brand-name medications.

Jake Hansen, a vice president of Barr Pharmaceuticals, a generic drug company, said that Senator Clinton had been “amazingly supportive” of legislation to give consumers access to less expensive copies of biotechnology drugs that cost tens of thousands of dollars a year. “Mrs. Clinton’s position on this issue would make a brand-name company a little uncomfortable,” Mr. Hansen said.

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