An analysis of Senate Majority Leader Bill Frist’s voting record shows he regularly supported bills benefiting HCA, the Nashville-based hospital company that’s been the foundation of the Frist family’s wealth.
Frist’s office has said in the past that his connections to HCA have not influenced his actions in the Senate, but the research shows that over nearly 11 years in the Senate, Frist (R-TN) has regularly supported bills friendly to HCA and to hospitals in general.
Some of that can be attributed to following a Republican party line that favors big business. But some critics suggest that Frist, currently under investigation regarding the sale of his HCA stock, should be prohibited from voting on bills that could affect the fortunes of his family.
“Because he owned so much stock in HCA … there is the appearance that any legislation that could help the company would have helped him financially,” Mike Surrusco, ethics director for Common Cause, a nonpartisan watchdog group, told the Washington Post.
The Senate Ethics Committee, in 1997 and 1999, said that Frist’s financial interest in HCA didn’t present a conflict of interest when it came to voting on health-care issues. But in light of current investigations from the Securities and Exchange Commission and the New York Attorney General’s office, the Senate committee may ultimately be asked to take a fresh look at the issue.
The analysis of Frist’s Senate career found multiple times when the Tennessee Republican introduced legislation friendly to HCA’s interests.
For example, in July, Frist introduced a bill to help insure the uninsured and limit jury awards. HCA set aside a whopping $2.7 billion in 2004 to cover expected lost revenue d uue to ninsured patients not paying their bills. And an HCA subsidiary, Health Care Indemnity, is one of the country’s largest providers of medical-malpractice insurance, and as a result would benefit from limits on hefty jury awards.
Other bills supported by Frist have given hospitals more money for treating seniors and have curbed development of physician-owned specialty hospitals that compete with HCA.
Several years ago, the Tennessee Republican fought a Democratic-sponsored version of a “patients’ bill of rights” that would have allowed patients to sue their HMOs and collect unlimited damages. Physician groups such as the American Medical Association supported the bill, but Frist argued that it would do more to help trial lawyers than it would to help patients.
Had the bill become law, the added cost of the jury awards could have put financial pressure on health plans to reduce their payments to hospital companies like HCA. HMOs and other insurance plans accounted for 42 percent of HCA’s revenue in 2001, the year the patients’ bill of rights came up for a vote.
The analysis, first reported Dec. 4, is the latest angle on the Frist-HCA story, which has been making headlines since it was disclosed that Frist had sold his HCA shares in July – supposedly to end conflict-of-interest questions as he prepares for a 2008 presidential run.
But the order to sell caused its own problems. After trading at near-record prices, the company issued an earnings warning a month after Frist’s order to sell, and the stock dropped 9 percent, raising questions of whether Frist was tipped off. Company insiders also exercised their options and sold large amounts of HCA stock in the months and weeks before the profit warning.
In October, Frist was subpoenaed to turn over personal records and documents. The subpoena for documents related to the July stock sales was written carefully to avoid asking for documents related directly to Frist’s legislative actions. Frist is expected to testify under oath about what he knew about the company’s health in the weeks before he sold his stock.
The HCA stock was accumulated by a family investment partnership started by the senator’s late parents and later overseen by his brother, Thomas Frist. Sen. Frist holds no position with the company.
The senator’s share of the partnership was placed in a Tennessee blind trust between 1998 and 2002 that was separate from those governed by Senate ethics rules. Frist reported the trust earned him $265,495 in dividends and other income over the four years.
Kathleen Clark, a government ethics expert at the Washington University in St. Louis School of Law, told the Associated Press that she doesn’t believe the Tennessee trust insulated Frist from a conflict because the senator or his brother were advised of transactions and could influence decisions.
“What I find most appalling is the Senate calls it a qualified blind trust when it’s not blind,” Clark said. “Since the Senate says it’s OK, the Senate has made it a political question. It’s up to the voter. But there’s no doubt it’s a conflict of interest.”
This item first appeared at Journalists Against Bush’s B.S.