Deborah Steelman Collected Nearly $3 Million from Health Industry Interests with Major Stake in Medicare Reform

Regardless of what final recommendations the Bipartisan Commission on the Future of Medicare makes, there are already two big winners: the pharmaceutical industry and managed care health plans. Another winner may have been the lobbying practice of Deborah Steelman. Appointed to the Medicare Commission by Senate Majority Leader Trent Lott, Steelman and her law firm have reported nearly $3 million in lobbying fees from some of the biggest health-related companies and interest groups. Drug and managed care interests led the way, paying Steelman's firm $2.26 million (or 77% of her firm's $2.94 million in total lobbying income) in 1997 and the first half of 1998.

The centerpiece of Commission Chairman Senator John Breaux's proposed restructuring is to move Medicare beneficiaries into HMOs. The pharmaceutical industry has vowed to block any plan for Medicare to cover outpatient prescription drugs in a manner that includes - or could lead to - government negotiated prices or other federally-imposed cost controls that would make the benefit affordable.

As a member of the Commission, Steelman has advocated for the position favored by these two industries:

"'The drug benefit is the carrot that will get people to join the private plans,' said Deborah Steelman, a commission member who is a well-known lobbyist representing major pharmaceutical companies and insurers. If the government's traditional plan offers drug coverage, then why would anyone join a managed care plan? Steelman said."

-- Los Angeles Times, A15, 1/27/99.

  • Deborah Steelman and her law firm were paid a total of $2.94 million by managed care, pharmaceutical and other health care organizations from January 1997 through mid-year 1998. 1998 year-end reports are not yet available, but if Steelman's firm continued to serve clients at the same pace in the second half of 1998, it would have earned $4 million from these interests. Furthermore, these amounts do not include fees to Steelman for work other than direct lobbying.
  • Pharmaceutical companies paid Steelman's firm $820,000 or 28% of the firm's $2.94 million in total lobbying income.
  • HMO and Managed Care companies paid $1.1 million or 37% of the firm's total lobbying income.
  • The Healthcare Leadership Council, an influential umbrella group representing both the pharmaceutical and managed care industries, paid Steelman's firm $320,000 or 11% of the firm's total lobbying income.
Pharmaceutical, Managed Care/HMO and Other
Health Interests' Payments to Steelman Law Firm
(1997 and the First Half of 1998)

Client
1997 Receipts 1998 Mid-Year Receipts Total Receipts
Healthcare Leadership Council $220,000 $100,000 $320,000
Pharmaceutical Companies
Cephalon, Inc. $140,000 $0 $140,000
Johnson & Johnson $140,000 $60,000 $200,000
Pfizer, Inc. $160,000 $80,000 $240,000
Pharmaceutical Research & Manufacturers of America $120,000 $80,000 $200,000
Wyeth-Ayerst $0 $40,000 $40,000
Managed Care/HMO Companies
Aetna Life & Casualty $220,000 $100,000 $320,000
Cigna Corporation $80,000 $40,000 $120,000
Humana, Inc. $160,000 $60,000 $220,000
Phoenix Healthcare Corporation $160,000 $60,000 $220,000
Prudential Insurance Company $80,000 $40,000 $120,000
United Healthcare $80,000 $40,000 $120,000
Other Health Industry Clients
National Assn of Psychiatric Health Systems $140,000 $60,000 $200,000
Northwestern Memorial Hospital $60,000 $0 $60,000
Society of Thoracic Surgeons $180,000 $100,000 $280,000
Vencor, Inc./TheraTX, Inc. * $80,000 $60,000 $140,000
Totals $2,020,000 $920,000 $2,940,000

* Vencor, Inc. acquired TheraTX in February 1997. Lobbying figures listed reflect lobbying on behalf of TheraTX prior to February 1997, and for Vencor after that point.


Pharmaceutical Clients 1997-98

Pharmaceutical Research and Manufacturers Association (PhRMA) The leading brand name pharmaceutical trade group, representing approximately 100 U.S. pharmaceutical companies.

Cephalon, Inc. A biotechnology company that develops drugs for treating neurological disorders and prostate cancer, including the controversial "myotrophin" (developed to treat amyotrophic lateral sclerosis -- Lou Gehrig's disease) rejected by the FDA in 1997.

Johnson & Johnson One of the world's largest and most diversified pharmaceutical and health care product firms.

Pfizer, Inc. A leading brand-name pharmaceutical company. Products include Viagra, a popular anti-impotence drug.

Wyeth-Ayerst (American Home Products Corporation) Wyeth-Ayerst is a subsidiary of the AHPC. Products include Premarin and other pharmaceuticals for women's health care.

Bristol-Meyers Squibb Company A leader in the brand-name pharmaceutical industry (new Steelman client registered after mid-year 1998 report).

Managed Health Care/HMO Clients 1997-98

Healthcare Leadership Council (HLC) "An exclusive forum for the leadership of the health care industry to jointly develop policies, plans and programs to accomplish their goals," HLC's board of trustees consists primarily of CEOs of managed care and drug companies (Steelman clients on the board include Cigna, Humana, Johnson & Johnson, Pfizer, and Prudential).

Aetna, Inc. After recent mergers with U.S. HealthCare, NYLife, and (pending) Prudential HealthCare, Aetna is the nation's largest HMO company and the provider of health benefits for one in ten Americans.

Cigna Corporation A major health care insurer with approximately six million HMO members.

Humana, Inc. One of the leading health care companies in the United States, Humana offers HMOs, preferred provider organizations (PPOs) and Medicare supplemental insurance (Medigap).

Phoenix Healthcare Corporation A privately held managed care organization that owns and operates HMOs throughout Tennessee and Mississippi.

Prudential Insurance Company of America Recently concluded sale of its managed health care business to Aetna.

United Healthcare Corporation Owns 16 HMOs and manages an additional nine through a network of HMOs and PPOs.

Other Steelman Health Industry Clients

National Association of Psychiatric Health Systems
Northwestern Memorial Hospital
Society of Thoracic Surgeons
Vencor Inc./TheraTX, Inc.
Beverly Enterprises, Inc. (new client registered after mid-year 1998 lobbying report)
Health Industry Manufacturers Association(new client registered after mid-year 1998 report)

Methodology

Lobbying figures were compiled from 1997 year-end and 1998 mid-year reports filed by the Law Offices of Deborah Steelman in accordance with the Lobbying Disclosure Act of 1995 and include total amounts paid to Ms. Steelman's office. Information about the specific health care and pharmaceutical corporations and associations profiled in this report was obtained from http://www.hoovers.com and/or the companies' own web sites.