By Jessica Mulligan
Kindred Healthcare, Inc., a for-profit healthcare company based in Louisville, Kentucky, lists “government regulations” as one of its greatest risks in ensuring future financial prosperity. In 2011, the company spent over three million dollars lobbying in the hospital and nursing home industry.
Senate Minority Leader Mitch McConnell (R-KY) received the largest amount of campaign contributions from Kindred in the years 2011 to 2012, a sum of $57,950. Senator Bill Nelson (D-FL) and Senator Robert Menendez (D-NJ) were just behind, with contributions of $48,400 each. Both Senators Nelson and Menendez serve on the Senate Finance Committee, which has jurisdiction over Medicare and Medicaid. Kindred is reliant upon Medicare and Medicaid payments, but hopes to increase profits by turning to private insurers in the future. Senator McConnell represents Kindred’s home state.
In May 2009, Senator McConnell appointed Richard Chapman, a chief executive at Kindred, to serve on the Health Information Technology Policy Committee at the U.S. Department of Health and Human Services. Kindred Healthcare was Senator McConnell’s top source of campaign funds during the 2008 election cycle. This 20-member committee was charged with making a recommendation to the Center for Medicare & Medicaid Services (CMS) regarding a program to incentivize hospitals to adopt an electronic health record system. Hospitals would receive additional Medicare and Medicaid payouts if they had the information technology infrastructure to set up this electronic system.
Placements on rule-making committees, such as this one, are highly sought-after in the industry, because they allow executives to gain insight into the regulatory process and adjust their business practices accordingly. Kindred would benefit from having a seat on the committee, and would be able to influence major Medicare and Medicaid policy, pertaining to their best interests.
Kindred has lobbied both Democratic and Republican lawmakers over the years with two main goals: to reduce government regulations on long-term health care providers, and to increase Medicare and Medicaid reimbursements to hospitals such as itself. Traditionally, Democrats support increased spending on healthcare, and Republicans support reducing regulations in order to bolster business. Therefore, Kindred’s practice of lobbying members of both sides of the aisle is most effective.
Rising healthcare costs and Medicare reform are both major topics in current political discourse. For-profit hospitals generally lobby against Medicare reform, which—if done right—could have the potential to make our broken healthcare system run much more efficiently.
Kindred Healthcare lobbies, operates, and compensates its workers like a business, unlike most nonprofit hospitals. Kindred’s executive officers make from $1 million to $6 million in compensation per year, yet none have a degree as a Medical Doctor. Few executives at even the most prestigious and successful nonprofit hospitals even come close to being compensated at the same level as executives at Kindred.
Kindred’s business practices raise the question of whether it is appropriate for hospitals to make a large profit when their main income source comes from Medicaid and Medicare reimbursements, which come from taxpayers’ dollars. In any case, Kindred’s lobbying practices and campaign donations in the past few years seem to have been well spent. Don’t forget to look out for the role of special-interest politics in the debate over Medicare and Medicaid spending in the coming months.