Reaping Profit After Assisting on Health Law

WASHINGTON — Washington’s health care revolving door is spinning fast as the new online health insurance marketplaces, a central provision of President Obama’s health care law, are set to open Oct. 1. Those who had a hand in the law’s passage are now finding lucrative work in the private sector, as businesses try to understand the complex measure, reshape it by pressing for regulatory changes — or profit from it.That means boom times for what might be called an Obamacare cottage industry, providing work for dozens of former administration and mostly Democratic Congressional officials whose immersion in health policy minutiae, and friendships, make them invaluable to private business.

Dr. Dora Hughes, for example, has a medical degree from Vanderbilt and a master’s in public health from Harvard and never envisioned joining a law firm. But Dr. Hughes, a former Obama administration official, has something Washington lawyers and lobbying shops covet: an insider’s understanding of the new health care law.

After nearly four years as counselor to Health and Human Services Secretary Kathleen Sebelius, she left government last year to work for Sidley Austin, which represents insurers, pharmaceutical companies, device makers and others affected by the law. She is not a registered lobbyist, but rather a “strategic adviser,” although some call that a distinction without a difference.

“Health policy is what I do,” Dr. Hughes said in a recent interview. “It’s what I’ve always done, so I’m not doing anything differently. My work is not based only on relationships or trying to curry favor.”

The health care industry now spends more money on lobbying in Washington than any sector of the economy — more than $243 million last year alone, slightly higher than the $242 million spent by financial, insurance and real estate companies, according to the Center for Responsive Politics here.

Of the “revolving door lobbyists” profiled by the center, those specializing in health care account for 12 percent, more than any other economic sector.

Critics say these former officials are cashing in, trading on the relationships and expertise they acquired while working for the taxpayers, and cite such career moves as proof that Mr. Obama has not lived up to his promise to change the culture of influence peddling in the capital.

Liz Fowler, a onetime executive with WellPoint, the insurer, helped draft the legislation as the chief health counsel for the Senate Finance Committee and later joined the administration. Now she runs global health policy for Johnson & Johnson, the medical equipment and pharmaceutical giant, which strongly backed the health bill and stands to benefit from it.

Ms. Fowler is not a registered lobbyist, but she does provide in-house advice on the bill — work that has drawn criticism from publications like the British newspaper The Guardian and the Web sites Salon and The Huffington Post, where the journalist Bill Moyers singled out Ms. Fowler, asserting that “when push comes to shove, corporate interests will have the upper hand.”

Yet the progression from government to the private sector is also predictable, a window into the peculiar rhythms of life in the capital. Young aides, often fresh out of college or graduate school, acquire highly specialized knowledge but eventually settle down, build lives and long for jobs that pay more and let them see their children at night.

Those were considerations for Dr. Hughes, who has a 3-year-old, and Yvette Fontenot, a mother of three who began her Washington career in 1997, analyzing Medicare for the Office of Management and Budget. Ms. Fontenot worked on the health bill as a Finance Committee aide and later moved to the White House. Four months ago she joined Avenue Solutions, a boutique lobbying shop.

“Every client out there is interested in the Affordable Care Act and what it means,” said Ms. Fontenot, who like Dr. Hughes concentrates on strategic advice. With exchanges soon to go live, she said, companies “want to know whether there is a potential to build on this, to make changes.”

Many of the former health care officials are lawyers or lobbyists, though not all. Nancy-Ann DeParle, Mr. Obama’s former “health czar” and later his deputy chief of staff, now guides health care investments as a partner in a new private equity firm, Consonance Capital, with colleagues from her pre-White House days. Bob Kocher, a doctor, management consultant and former member of Mr. Obama’s economics team, is a California venture capitalist, helping finance health start-ups.“The tentacles of Obamacare touch everybody — health insurance companies, doctors, the payers,” said Ivan Adler, an executive recruiter with the McCormick Group who specializes in K Street, Washington’s lobbying corridor. “This law is so complicated that you really have to have somebody playing sherpa in order to follow it, because it is fluid and changing. And the supply of people who understand it is way smaller than the demand.”Since 2011, Mr. Adler said, he has counseled dozens of job-hunting former officials with health care experience, including some lawmakers.

Dr. Hughes has advised employers on how to comply with the law, and has at least one client interested in operating an insurance exchange. The daughter of a former Army doctor and a patient herself (she was given a diagnosis of multiple sclerosis while in her 20s), she sees her job as an extension of work she began a decade ago, first as a health policy adviser to Senator Edward M. Kennedy, and later to Mr. Obama, then a senator.

Under federal law, lobbyists must register if they meet certain conditions, like spending 20 percent or more of their time contacting officials on behalf of clients. Mr. Obama, who came into office vowing to change the culture of Washington, requires his appointees to sign an ethics pledge barring them from lobbying administration colleagues for the duration of his presidency.

Dr. Hughes, who is subject to the ban, could still lobby members of Congress if she wanted. “I don’t have any philosophical objection,” she said. But her real value to Sidley Austin, said Rick Boucher, a Democrat and former congressman who is her supervisor there, is that she understands the underpinnings of the health law, and can anticipate how regulations governing it might be written. “She’s sharing her understanding, based on experience,” he said.

Other officials who have gone to work in the health care industry include Earl Pomeroy, a Democrat and former congressman from North Dakota. He voted for the health care bill, lost his seat and now represents health care clients as a lawyer for Alston & Bird. Elizabeth Engel, who oversaw health legislation and served as a liaison to Congress when she was a deputy assistant health secretary under Ms. Sebelius, is now advising health care clients for the Glover Park Group.

James Thurber, director of the Center for Congressional and Presidential Studies at American University here, called all the activity “a natural phenomenon,” and one that is hardly limited to Democrats. After Republicans passed Medicare prescription drug legislation in 2003, Billy Tauzin, one of the bill’s major Republican supporters, resigned from Congress to head the pharmaceutical industry trade group.

The revolving door also spins in the other direction.

Chris Jennings, who advised President Bill Clinton on health policy, including the ill-fated reform effort in the early 1990s, closed his firm, Jennings Policy Strategies, in July when Mr. Obama asked him to join the White House to oversee implementation of the health bill. He has told friends that after two decades of advocating universal coverage, and with Republicans trying to undo the landmark legislation, he could not refuse to help.

At Sidley Austin, Dr. Hughes said she found her new work “meaningful and productive,” but has drawn one red line: she will not advise clients who opposed the health bill.


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