Hospitals’ staunchest ally in Congress could take control of the Senate

Senate Minority Leader Chuck Schumer has been hospitals’ fiercest advocate in Congress and may soon rise to one of the most powerful perches in Washington, which could have important implications for healthcare policy.

“If I were a hospital leader right now, I would be dancing for joy at the prospect of Schumer becoming the majority leader,” a healthcare lobbyist said.

Polls ahead of the November election show Democrats have a fighting chance to take control of the upper chamber. Schumer’s strong ties to hospitals in his home state are well-known in the Capitol, and New York hospitals have spent big to flip the Senate. Schumer’s role in brokering deals on healthcare policy from the Affordable Care Act to COVID-19 stimulus bills illustrate the path he could take as majority leader.

Schumer has made clear he felt taking up healthcare reform early in President Barack Obama’s first term while the economy was still in crisis was a grave political mistake.

“Unfortunately, Democrats blew the opportunity the American people gave them,” Schumer said in November 2014. “We took their mandate and put all of our focus on the wrong problem — healthcare reform.”

If Democrats take the Senate, it’s likely former Vice President Joe Biden would win the presidency and help decide when healthcare policy would be considered. But if the Supreme Court strikes down all or part of the ACA, the decision could force lawmakers into another explosive healthcare fight. The battle would be a minefield for Schumer, who would have to balance New York’s powerful healthcare industry interests with the potential of a progressive primary challenge in 2022.

“I know he’s ready for this moment,” a former Schumer aide said. “He’s a chess player and a brilliant strategist.”

This portrait of Schumer’s health policy perspective is informed by more than 15 interviews with current and former Senate aides, lobbyists and experts, many of whom requested not to be named to speak candidly. Schumer’s office declined to speak on the record.

Empire State hospitals’ political influence

New York is home to some of the most famous health systems in the country, and hospitals in the Empire State have wielded their political influence effectively. The Greater New York Hospital Association represents one of Schumer’s most important constituencies.

“It’s sort of the rule in politics that you dance with the ones who brought you,” said Bill Hammond, director of health policy at the Empire Center for Public Policy, an Albany-based think tank.

Health systems in New York are major employers, and New York also produces the most medical school graduates of any state, according to 2018 data analyzed by the Kaiser Family Foundation.

“If Texas produces oil, New York produces doctors,” a former Schumer aide said.

GNYHA has invested heavily in flipping the Senate and funneled $9 million in the 2020 election cycle to a super PAC aligned with Senate Democratic leaders, according to data compiled by the Center for Responsive Politics.

GNYHA’s influence is amplified in Washington by its consistent leadership. Kenneth Raske, who has been president of the association since 1984, has become an institution in the state. Raske has known Schumer since he was a “budding young legislator,” Raske said.

“We’ve been in foxholes and on the parade field,” Raske said.

Role in the ACA health reform debate

Schumer played an important role in Senate dynamics on the ACA as the third-highest ranking Democrat and a member of the Finance Committee. He pushed some policies hospitals advocated for, but his agenda wasn’t completely in line with hospitals’ interests.

Schumer was a leading proponent of adding a public insurance option to the ACA, and he offered an amendment in committee to create one. Schumer’s public option would have required the public plan to negotiate rates instead of basing them on Medicare rates. Schumer’s amendment failed, but he brokered a deal to get the provision included in the Senate’s legislation with an option for states to opt out. Democrats ultimately abandoned the proposal after failing to get moderates’ support.

Recently, Democrats’ push for a public option has divided hospitals. National hospital lobbies and some health systems have allied with insurers and drugmakers to form a dark-money group to fight public option proposals.

However, New York hospitals seem open to the idea. Raske said he believes a public option could earn GNYHA’s support because it would further the group’s fundamental goal of expanding coverage.

“On the public option there are wrinkles that can be worked out within the membership that could make it palatable,” Raske said.

The most notable way Schumer successfully changed the ACA was by softening the individual mandate penalty in the Finance Committee. A former Democratic leadership aide said Schumer was worried about negative political ramifications of the penalty. The move broke with hospitals’ interests, as they wanted more people to gain coverage under the ACA to minimize health systems’ uncompensated care costs and the mandate helped achieve that goal.

Schumer fought for hospitals on other issues. Though Schumer didn’t stop the ACA’s cuts to Medicaid disproportionate-share hospital payments, he has since has advocated to stop them from going into effect. Schumer also pushed to maintain New York hospitals’ graduate medical education slots.

Because Schumer was intimately involved in dealmaking on the ACA, the debate could inform a future healthcare fight.

“He sits in a position that he knows where the bodies are buried, which is a great background to have,” a former Democratic leadership aide said.

Recent healthcare policy battles

This Congress, Schumer has been a player in directing a massive amount of COVID-19 relief funds and guiding Senate Democrats’ political strategy on healthcare.

Schumer stepped into the spotlight during Congress’ third and largest coronavirus relief bill, the Coronavirus Aid, Relief, and Economic Security Act. The first draft presented by Senate Republicans included some perks for healthcare providers. But the GOP ignored a request for a massive infusion of cash for hospitals struggling from a sudden drop in revenue due to mandatory shutdowns.

Senate Democrats blocked the GOP’s bill, and final negotiations came down to Schumer and Treasury Secretary Steven Mnuchin huddled in the Capitol for late-night bargaining sessions. The final deal included $100 billion in grants for healthcare providers and a Medicare loan program that sent providers another $100 billion.

A healthcare lobbyist familiar with the negotiations said although many parties wanted relief grants for healthcare providers, Schumer was “instrumental” in securing the funds. GNYHA told members the group “fiercely advocated for direct funding to hospitals and healthcare providers.”

But healthcare policy action outside of coronavirus relief has been minimal, and some have accused Schumer of instructing Democrats to walk away from bipartisan negotiations on packages to ban surprise medical bills and lower prescription drug costs. Senate Majority Leader Mitch McConnell (R-Ky.) showed little interest in advancing either package. The issues were also top healthcare priorities for the Trump administration.

In December 2019, leaders of two key House and Senate committees were preparing to announce a bipartisan deal on legislation to ban surprise medical bills with a blend between the approaches hospitals and insurers prefer. Hospitals opposed the compromise.

Two days before the deal’s announcement, Schumer called Senate health committee ranking member Patty Murray (D-Wash.) to express concerns about the legislation, the Washington Post first reported, though a Schumer spokesman said at the time that Schumer made clear he would not stand in the way of a deal.

A Democratic Senate aide said other members of the caucus also had concerns about the legislation. Murray did not publicly endorse the deal, and inter-committee clashes in the House led to its demise.

Despite Schumer’s public statements, some proponents of surprise billing reform doubt his commitment to change.

“For Schumer, the prevailing concern is that he is doing lip service and saying, ‘Of course I care about this,’ but there is more of an entrenched problem with New York hospitals,” a healthcare lobbyist said.

On prescription drug pricing, Senate Finance Chair Chuck Grassley (R-Iowa) accused Schumer of instructing Democrats not to back a compromise that Grassley and ranking member Ron Wyden (D-Ore.) had crafted.

Several GOP senators who had signed on were in competitive reelection races, but McConnell had not shown he was willing to bring the bill to a floor vote because it divided the Republican caucus.

“Senate Democrats are not interested in aiding Republicans as they play political games and pretend to support lowering prescription drug prices,” Wyden said.

Some aides and lobbyists said Democratic leadership’s future healthcare priorities are unclear because they have been on the defensive for the past four years. In Schumer’s speech at the Democratic National Convention, he said a Democratic Senate would “make healthcare affordable for all.”

“We don’t know what they are for,” an Senate Democratic aide said about the leadership’s healthcare priorities. “It’s a black box for so many.”

Regardless of the precise healthcare agenda that lies ahead if Democrats win big, hospitals hope to have a productive partner in a potential majority leader Schumer.

“He cares about the same things hospital people care about: the well-being of those who are sick or injured, and making sure they have resources to care for themselves,” Raske said.


Tags: covid-19, pandemic

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