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The Marketplace. . . . Care . . . . Fraud . . . .Elkins
The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes.

Integrated Health Services and Political Influence

Disclaimer:- The material is selective and not all inclusive. The extracts do not necessarily reflect the perspective of the original. Corporate denials and explanations have not been included. No claim is made that all of the matters referred to are true. The intention is to give the flavour of the material and an idea of the extent of the allegations. Can there be so much smoke without a large fire? This is a matter of public welfare and the interests of the pubic must be placed before those of the corporations.  


Political contacts, political donations, marketing of desired policies, and professional lobbying are all essential to doing business successfully in the corporate marketplace. These practices are pursued energetically at both state and federal levels. Vast quantities of the money paid by citizens for their care and by government for the care of the needy are diverted to these purposes.

Much of this support is channeled through industry groups representing corporate chains but individual chains and their senior staff also contribute. Some of the money is channeled through front organisations which claim to represent ordinary citizens and patients but are wholly funded by corporations and promote corporate points of view.

Ordinary citizens are unable to match this influence which is all too frequently directed to frustrate legislation which protects citizen's rights, which gives them legal remedies, or which holds corporations accountable. Citizens groups believe that this factor more than any other is responsible for politician's failure to address critical issues and for the impotence of state regulators who serve these politicians. Available data suggests that voting in congress closely follows the money donated to political coffers. (see

IHS and its chairman Dr. Robert Elkins have been among the most aggressive in seeking political influence. Vast sums have been spent, and the evidence suggesting money in return for political favours is disturbing.

Extracts from Selected References

COMMENT:- The first article describes Elkin's presidential donations followed by his unsuccessful attempt to secure relief from the terms of the new Medicare funding system. The second describes a massive lobbying exercise in which two groups of chains went head to head in a battle to persuade politicians to adopt proposals which were in their economic interests. IHS lost.

Modern Healthcare Aug. 10, 1998 Page 6 News
Eric Weissenstein

Integrated's chairman is Robert Elkins, M.D, a politically connected businessman who has lavished money on both Republicans and Democrats. He gave nearly $600,000 to the Democratic Party during the 1996 presidential election.
Elkins argues that Integrated deserves the break because it rescued the scandal-plagued First American Health Care, then the nation's largest privately held home health company, in October 1996. The company, previously known as ABC Home Health Services, and its founders had been convicted of Medicare fraud.

The corporation had fallen into Chapter 11 bankruptcy proceedings when Integrated agreed to buy it from the federal government in a transaction valued at $313 million. The purchase contract contained provisions protecting Integrated from losses, Elkins told Wall Street analysts during a conference call late last month. He said Integrated should be shielded - - - -
Wall Street is also discounting the possibility. "They (Integrated) view themselves as white knights, bailing out the government and helping to provide access," said one of the analysts who was part of the Elkins conference call. "I would be surprised if they got this. I mean, how do you cut a deal for one guy?"
Elkins was one of the biggest contributors to the Democratic National Committee during the last presidential election. He also attended several of the White House "coffees" at which big donors met with President Clinton.

COMMENT:- Maryland was a state where there was a close relationship between politicians and big business. It is clear that large amounts of money changed hands. This was IHS home state and it struck a number of deals with government, when it moved there.

Glendening Aids Firms, Gets Funds; Beneficiaries Give Money To Md. Governor's Race
The Washington Post October 21, 1998

But the magnitude of the giving shows how the governor of Maryland, whose constitution creates one of the nation's most powerful chief executives, is well-positioned to benefit politically from the array of companies that compete for state grants or vie for favorable regulatory treatment. Even if donations don't buy government decisions, corporate representatives say, they sometimes make it easier to get phone calls returned, and it's possible they can help in more subtle ways.
Glendening has unapologetically sought donations from firms doing business, or hoping to do business, with the state. He said companies and executives give to his campaign because they "are very happy with how strong the economy is. Obviously some of the support comes from companies that we work with on the Sunny Day fund. Good public policy is good politics."
What went largely unnoticed, however, is that Glendening routinely solicits and accepts campaign money from firms holding or seeking state contracts. In fact, he accepted $ 2,250 from the chief executive of the company that eventually won the 1996 contract, Green Spring Health Services Inc.: $ 1,750 for his 1994 campaign, and $ 500 for this year's race. The only practice that Glendening ruled out was accepting donations during the relatively short period that a contractor's specific bid is pending.
* Integrated Health Services of Owings Mills received a $ 2.5 million Sunny Day grant in December 1996. Chairman Robert N. Elkins subsequently gave the campaign $ 5,000, and IHS gave $ 4,000. Elkins also has given $ 45,000 through IHS to the Democratic National Committee. That money can be used for state party efforts.

Modern Healthcare October 26, 1998

As the smoke cleared from last week's passage of the massive federal spending package, nursing home chains were licking their wounds from an internal fight over a proposal that would have redistributed billions of dollars in Medicare skilled-nursing payments from one segment of the long-term-care industry to another.
The proposal was backed by Owings Mills, Md.-based Integrated Health Services, the nation's third-largest nursing home chain, and two major long-term-care groups, the American Health Care Association and the American Association of Homes and Services for the Aging.
And each side enlisted giants of inside-the-Beltway healthcare lobbying to aid them. Integrated's chairman, Robert Elkins, M.D., a major Democratic contributor, along with nursing home executive Alan Solomont, a Democratic contributor and a 1996 presidential campaign fund-raiser, persuaded the White House to support Integrated's position.

But Beverly countered with the lobbying clout of Michael Bromberg, the one-time head of the Federation of American Health Systems and a well-connected Republican lobbyist.

In the end, Bromberg, Beverly and HRC ManorCare won. The proposal failed because it could not generate enough support to be included in the omnibus budget bill passed early last week, despite the support of the Clinton administration and such top Democrats as Senate Minority Leader Thomas Daschle of South Dakota.

Integrated, AHCA and AAHSA were pushing to overhaul the Medicare prospective payment system for skilled-nursing facilities. Their objective was a return to cost-based reimbursement for such nontherapeutic ancillary items as drugs, laboratory tests and respiratory therapy.

The PPS for SNFs went into effect July 1.
Nursing home chains such as Integrated-which have specialized in post-acute care-claimed the PPS did not fully account for the high drug and laboratory costs accrued by complicated cases.


American Hospital Assn $9,340,000
Federation of American Health Systems $1,060,000
Integrated Health Services $50,000

* Lobbying data was compiled using 1998 lobby disclosure reports and amendments filed under the Lobbying Disclosure Act of 1995. Feel free to distribute or cite this material, but please credit the Center for Responsive Politics.

(Note that American Hospital Assn and the Federation of American Health Systems are corporate trade organisations which act for corporate groups.)

Health chain turns pale; IHS has suffered 82% stock plunge, cut 1,000 jobs; Medical services
THE BALTIMORE SUN February 21, 1999
M. William Salganik

As IHS grew and developed a business dependent on federal reimbursement, Elkins became one of the country's largest political contributors.

In the 1996 election cycle, Elkins and IHS gave $572,500 to the Clinton-Gore campaign and the Democratic Party, winning him invitations to three White House coffees for donors

COMMENT:- One of the most interesting insights come from the trial of a Florida politician for tax evasion. He was in a position to exert a profound influence and was paid a large sum by Dr. Elkins at a time when important decisions were made which favoured IHS. The politician was prosecuted for tax fraud and not for accepting bribes. It appears that this was legal and is a common practice in US politics.

Trial provides behind-the-scenes look at political influence
The Associated Press State & Local Wire May 10, 1999

When a Maryland-based national health care company wanted to expand in Florida and possibly move its headquarters to the state in 1994, it hired then-state House Speaker Bolley "Bo" Johnson to help.

Johnson arranged for officials of Integrated Health Services, based in Owings Mills, Md., to meet with Gov. Lawton Chiles, Lt. Gov. Buddy MacKay and other state officials. IHS paid Johnson $ 137,500 over the next two years, according to testimony at his tax evasion trial last week.

Regardless of whether Johnson and his wife, Judi, are convicted, the trial that resumes Monday has provided a rare, behind-the-scenes look at how political access, if not influence, can be bought and sold.

Alexandria, Va., lobbyist Eric Hanson said his firm paid Johnson $ 339,425 over four years, partly as a real estate consultant, starting in 1992. Hanson, however, said he mainly wanted Johnson, as incoming president of the National Speakers Association, to introduce him to important people from across the country.

Capitol Offenses;
New Times Broward-Palm Beach May 13, 1999

The trial of former Florida House Speaker Bo Johnson reveals the unseemly roles of Broward's taxi mogul Jesse Gaddis and lobbyist Tom Panza.

Former Florida House Speaker Bolley "Bo" Johnson was portrayed by prosecutors in federal court last week as a crooked Florida politician profiting off his influence and the public trust. Prosecutors claim Johnson took more than $1 million from special interests in a four-year period, much of it while he was in office.
Connecting clients to state officials is a large part of what Panza, who counts Nova Southeastern University and the North Broward Hospital District among his clients, does for a living. And Panza is also no stranger to combining money and politics to gain power.

In addition to giving thousands of dollars each year to local politicians' campaigns, election records show Panza is responsible for nearly $200,000 in political contributions to state politicians during the past three years alone.

Another Panza client is nursing home giant Integrated Health Services (IHS). Since 1996 IHS has contributed $182,428 to the campaigns of state politicians, state records show. But what went unreported by both IHS and Johnson was $137,500 the company paid Johnson between 1994 and 1997, $25,000 of it in "consulting fees" while Johnson was still the Speaker.
Testimony last week at the Johnson trial contradicts Panza's assertion that he wasn't at all involved. Former IHS executive Linda Chichester painted Panza as the middleman who hooked the company up with Johnson in the first place. She testified last week that she was introduced to Johnson on Panza's pleasure boat in 1994. After that initial meeting, Panza asked her to come to Tallahassee and meet with Johnson again, this time while he was leading a special legislative session on health care. " Johnson said, 'If you will pay me $25,000, I will help you,'" Chichester testified.

When told of Chichester's testimony, Panza replied, again in writing, that Chichester "may" have met Johnson through his law firm, but he reiterated that he never knew that Johnson was put on the IHS payroll.

When Johnson began getting IHS checks, key doors in the capitol began opening for IHS executives. Vice President Marshall Elkins testified that Johnson introduced him to Chiles, Lt. Gov. Buddy MacKay, and other state officials. At the time IHS, considering a move of its headquarters to Florida, was seeking tax exemptions and other perks from state officials. Johnson also assisted in getting individual nursing homes licensed with the state and helped IHS obtain various tax credits, Elkins testified.

Johnson's questionable dealings with Panza's client and Gaddis' companies seem to be more a rule in the statehouse than an exception, says Ernest Bach, a lobbyist himself who sits on the board of Common Cause Florida, which scrutinizes campaign finance and political ethics. "Anybody who works in Tallahassee on a daily basis and has their eyes open sees the egregiousness and sleaziness of big money there," Bach says. "It just smacks you in the face. The people's voice is not heard -- it's only the corporate interests."
Gaddis, for one, says as long as the system works the way it does, he'll keep doling out the big checks to get his point across.

"I'm 67 and I've been doing this since I was 28," he says. "It's the same as it ever was. Politics in Florida is almost like a blood sport. The sad part is that if you want to deal with your own government to get a fair shake, you have to pay for it."

Contact Bob Norman at his e-mail address:

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