02 June 2004

Paying to Play:
Health Care Companies, Campaign Contributions and Medicare Drug Discount Cards

The Bush administration has promised the new Medicare drug discount card program will save all seniors money on their medicines. Yet, according to the Boston Globe, the White House allowed drug card industry CEO David Halbert (a longtime Bush campaign contributor) to be involved in the original crafting of the discount card program. The result is a program that enriches drug card companies at the expense of consumers. The cards do not guarantee any price savings for consumers, allowing drug card companies to change their "discounts" at any time in order to maximize profits.

Now, as the program is set to start, the White House has once again looked to its top campaign contributors in deciding which companies it approved to administer the cards. All told, the 73 companies selected gave President Bush and conservatives in Congress more than $5 million since 2000. Of those 73 companies approved by the administration, 20 (almost one third) have been involved in fraud charges. Those 20 companies made more than 60% of the total contributions to Bush and conservatives by drug card companies, calling into question whether the administration overlooked those companies' records because of their financial ties to the Bush Campaign.

Key Findings and Methodology

COMPANIES GAVE MORE THAN $5 MILLION TO BUSH/CONSERVATIVES: The 73 health care companies approved to administer the Medicare drug discount card programs gave President Bush and conservatives in Congress a total of more than $5 million in hard money, soft money, and PAC contributions.

TWENTY COMPANIES INVOLVED IN FRAUD APPROVED FOR DRUG CARD PROGRAM: Twenty health care companies approved by the Bush administration to administer the Medicare drug discount cards have been involved in fraud charges, with many being forced to pay fines to federal and local governments because of their behavior.

TWENTY COMPANIES INVOLVED IN FRAUD MADE OVER 60% OF CONTRIBUTIONS: The 20 companies involved in fraud charges represent less than a third of all the approved companies. Yet, they made more than 60% ($3.1 million) of the total campaign contributions from approved drug card companies to President Bush and conservatives in Congress.

SEVEN "PIONEERS" LINKED TO COMPANIES APPROVED FOR DRUG CARD PROGRAM: Seven executives/lobbyists whose companies were approved for the drug card program raised or pledged to raise $100,000 or more for the Bush Campaign They are Wellcare executives Todd S. Farha and David Hart; Blue Cross/Blue Shield of Florida executive Michael R. Hightower; United Health Group CEO William McGuire; Medco President Alan Lotvin; Express Scripts board member Samuel Skinner; and PacifiCare lobbyist Tom Loeffler.

THREE PIONEERS AT APPROVED COMPANIES THAT WERE INVOLVED IN FRAUD: Medco, Express Scripts and PacifiCare have all been involved in fraud charges, yet were approved by the Bush administration to participate in the Medicare discount drug card program. Medco is headed by Bush Pioneer Alan Lotvin, Express Scripts includes Bush Pioneer Samuel Skinner on its board, and PacifiCare's top lobbyist was Tom Loeffler.

METHODOLOGY OF STUDY: The analysis evaluated companies' campaign contributions to President Bush and conservatives in Congress since (and including) the 2000 election cycle. The analysis evaluated those companies' involvement in fraud charges during the same time period. For purposes of the study, companies "involved in fraud" were either found guilty of federal or state fraud, settled federal or state fraud charges or are currently under investigation for fraud at the state or federal level.

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