August 23rd, 2019

The Junk Food President Aims to Ruin American Nutrition

Susan Walsh/Associated Press

President Trump welcomed the college football national champion Clemson Tigers to the White House in January with a fast-food feast served buffet style in the State Dining Room.

Presidents do not directly write the nation’s dietary guidelines for Americans, which are updated every five years by federal law. Still, you wonder what the 2020 version will advise, given how President Trump serves lunch dripping in saturated fat, grease, and salt to top athletes.

When Trump hosted Clemson University’s national collegiate football title team in January, the government was in partial shutdown, so a meal could not be catered by White House staff. Trump feigned to the team that perhaps first lady Melania Trump and second lady Karen Pence could have made them “some little, quick salads.” Trump then joked, “I said you guys aren’t into salads.”

Instead, Trump ordered from the four food groups that were the staples on his 2016 election campaign: McDonald’s, Kentucky Fried Chicken (KFC), pizza, and Diet Coke. He boasted to the Clemson players that he ordered 1,000 hamburgers. “All-American companies,” he said. “Burger King, Wendy’s, and McDonald’s. We have Big Macs. We have Quarter Pounders with cheese. We have everything that I like, that you like. And I know no matter what we did, there’s nothing you can have that’s better than that, right?”

There was plenty of laughter from the football players, perhaps to be polite and perhaps because they actually eat much better than that on campus. The team receives far more nutrition education than the average American, from culinary coaches and an “executive performance chef.”

In a nation where two-thirds of adults and a third of children are overweight or obese, Trump’s banquet really wasn’t funny. According to the 2015 guidelines that are currently in force, poor diet and lack of exercise are likely related to preventable chronic disease in nearly 120 million American adults, including Type 2 diabetes, heart disease, high blood pressure, and cancer. The direct and indirect costs, in medical care and lost work time, not to mention sheer suffering, run hundreds of billions of dollars.

Ordinary Americans, especially the disadvantaged, live in a separate universe from Clemson’s performance chefs. Most parents want to be good quarterbacks for their children, but too often they are sacked by an all-out marketing blitz of junk food, processed food, and sugary drink companies. With a fast-food president as dietitian-in-chief, those special interests surely see their best opportunity in recent memory to undermine the healthiest of science-based recommendations. If they have it their way, the symbol of the all-American diet will remain a Big Mac, Coke, and fries.


EVEN UNDER THE PUBLIC-MINDED Obama administration, the political food fight over the 2015 guidelines is instructive. With first lady Michelle Obama promoting healthy eating and exercise, many public-health experts hoped for the strongest guidelines science could support. There was significant progress on child nutrition with the bipartisan Healthy, Hunger-Free Kids Act of 2010. That act required school lunch nutrition to be consistent with the dietary guidelines issued by the Departments of Agriculture and Health and Human Services.

Most studies found that students took to the healthier offerings, increasing consumption of entrees, fruits, and vegetables and reducing food waste. The Obama-era USDA said that between 2008 and 2014, three million more students ate school breakfast.

The 2015 Dietary Guidelines Advisory Committee (DGAC) appointed by Health and Human Services Secretary Kathleen Sebelius and Agriculture Secretary Tom Vilsack also offered hope. The committee clearly said Americans “should be encouraged and guided to consume dietary patterns that are rich in vegetables, fruit, whole grains, seafood, legumes, and nuts; moderate in low- and non-fat dairy products and alcohol (among adults); lower in red and processed meat; and low in sugar-sweetened foods and beverages and refined grains.”

The DGAC broke new ground by specifically saying that added sugars should be no more than 10 percent of daily intake. For emphasis, the committee said, “Added sugars should be reduced in the diet and not replaced with low-calorie sweeteners, but rather with healthy options, such as water in place of sugar-sweetened beverages.”

Just as groundbreaking, the DGAC directly connected diet to environmental sustainability, noting that the global production of food accounts for 80 percent of deforestation, more than 70 percent of freshwater use, and up to 30 percent of human-generated greenhouse gas emissions. “Creative, evidence-based strategies are needed to reverse these alarming trends,” the committee said.

After reviewing studies around the world, the committee found that “a diet higher in plant-based foods, such as vegetables, fruits, whole grains, legumes, nuts, and seeds, and lower in calories and animal-based foods is more health promoting and is associated with less environmental impact than is the current U.S. diet.” But at the end of the day, the advisory committee is only that: advisory.

Once the DGAC report was submitted to USDA and HHS, lobbyists ate away at it like carpenter ants to downplay the relationships between meat and sustainability as well as soda and obesity.

Karen Perry Stillerman of the Union of Concerned Scientists (UCS), wrote that during the two-year process that produced the 2015 guidelines, food and beverage companies and trade associations spent more than $77 million lobbying Congress. Of that, the meat industry spent $4.5 million and the soda industry spent nearly $24 million.


SCORES OF CONGRESSIONAL REPUBLICANS wrote to Vilsack and HHS Secretary Sylvia Burwell to say the committee wrongly vilified red meat and ignored the alleged benefits of lean meat. They also said the committee had no business injecting sustainability into the guidelines. The signatories collectively received $3.1 million in contributions from agribusiness, from 2013 through 2014, according to the Center for Science in the Public Interest.

Republicans responded with an appropriations act that banned sustainability from the guidelines and limited the scope of funding to “nutritional and dietary information.” In a press release even before the act was passed, Vilsack and Burwell capitulated on environment and sustainability.

When the final guidelines were issued, there was nothing specific about cutting consumption of red meat and processed meat, which are linked to cancer, cardiovascular disease, and diabetes. In 2015, the World Health Organization classified processed meat as carcinogenic and red meat as “probably carcinogenic to humans.”

The final guidelines did keep the committee’s recommendation for Americans to reduce added-sugar intake to 10 percent of daily calories. But there were no concrete, top-line examples or explanations in the executive summary.

Buried in the guidelines was this data point: Sugary beverages account for nearly half of added sugars, and added sugars account for 270 calories, or more than 13 percent, of calories per day. The too-few details on soda disappointed 2015 DGAC members such as Frank Hu of Harvard’s School of Public Health. Studies overwhelmingly linked sugar-sweetened beverages to obesity, while Centers for Disease Control and Prevention mapping showed a clear correlation between soda consumption and obesity.

Hu also lamented that the deep-sixing of environmental sustainability was “a hugely missed opportunity to educate the public about the environmental impact of their food choices, and to create a food system that is more sustainable and conducive to the health of both humans and the planet.” Hu directly blamed “political pressure from Congress and the meat industry.” (Disclosure: My wife is a researcher at the school and has co-authored a paper with Hu.)

Sarah Reinhardt, UCS’s lead analyst of food systems and health, estimated that if the USDA and HHS published guidelines on processed meat and added sugar alone, it would save 3,900 lives a year and $1.5 billion in medical costs from colorectal cancer, and 19,000 lives and $16 billion in health care costs from Type 2 diabetes. Helping people eat enough fruit and vegetables could have saved 110,000 more lives and $32 billion in health costs.

Other estimates detail the current toll of our politically manipulated malnourishment. A 2017 study by an economist at the federal Agency for Healthcare Research and Quality and researchers from Cornell and Lehigh Universities found that the nation’s share of health care costs spent on treating obese adults rose from 20.6 percent in 2005 to 28.2 percent in 2013. The total costs to treat adults for obesity-related illnesses rose from $212.4 billion in 2005 to $342.2 billion in 2013.

Amid the spiraling overall cost of health care, a 2018 Milken Institute report updated the direct chronic-disease costs of obesity and overweight to $480.7 billion in 2016. With further indirect costs of $1.24 trillion because of lost economic productivity, the total chronic-disease cost of $1.72 trillion equals 9.3 percent of the U.S. gross domestic product. The report said combating those trends requires “a societal consensus in favor of healthful eating and exercise.”

A 2017 study by Tufts University, the University of Cambridge, and Montefiore Medical Center in New York City estimated that poor diet was associated with nearly 320,000 deaths from heart disease, stroke, or Type 2 diabetes in 2012. The highest proportions of those deaths were related to “excess sodium intake, insufficient intake of nuts/seeds, high intake of processed meats, and low intake of seafood omega-3 fats.”

Put another way, the number of American lives lost in just one year involving poor diets exceeds the 291,000 American combat deaths in World War II. A Lancet-commissioned study published earlier this year said, “Unhealthy diets pose a greater risk to morbidity and mortality than does unsafe sex, and alcohol, drug, and tobacco use combined.”

The Republican Party is literally supported by red meat. The meat-processing industry has given 79 percent of its nearly $17 million in contributions since 1990 to Republican congressional candidates, according to the Center for Responsive Politics.

In the 2018 election cycle, the top eight contributors to congressional candidates from the food and beverage industry included the National Restaurant Association, Coca-Cola, McDonald’s, Wendy’s, the National Confectioners Association (the candy lobby), and Bloomin’ Brands, the parent company of Outback Steakhouse and several other restaurants. Nearly 72 percent of the $5 million they gave went to Republican campaigns.

Republicans receive 100 percent of contributions from the parent companies of Pizza Hut, Wendy’s, and Taco Bell; 97 percent from Waffle House; 93 percent from the Burger King franchisee association; 92 percent from the KFC franchisee association; and 66 percent from the American Beverage Association.

We will soon see if this lopsided support bears fruit (even if fresh fruit is appallingly scarce at most of the above entities) under Agriculture Secretary Sonny Perdue, who is trying to roll back nutritional requirements for school meals. In a bizarre crusade against whole-grain and lower-sodium foods, he has claimed, “Kids aren’t eating the food, and it’s ending up in the trash.” But his own USDA researchers produced a report this year that in effect debunked his tirades. The report found the opposite: The more nutritious the meal, the more popular those meals were with students.


THE PROCESS OF ISSUING the 2020 Dietary Guidelines starts with the 20-member 2020 Dietary Guidelines Advisory Committee (DGAC) picked by Perdue and HHS Secretary Alex Azar. The committee was announced in February. The administration kept the full list of nominees and nominators secret until June when Politico was given a copy obtained under the Freedom of Information Act by the Physicians Committee for Responsible Medicine, which advocates for plant-based diets.

On paper, the committee looks balanced, with nine of the 20 members having been nominated by the American Society for Nutrition: Barbara Schneeman, a former U.S. Food and Drug Administration director of nutrition and labeling; Jamy Ard of Wake Forest University; Regan Bailey and Richard Mattes of Purdue University; Heather Leidy of the University of Texas; Carol Boushey of the University of Hawaii; Teresa Davis of Baylor College of Medicine; Kathryn Dewey of the University of California, Davis; and Sharon Donovan of the University of Illinois.

The mission of the nutrition society is to “improve health around the world through high quality science based nutrition knowledge, engagement and influence.” But financial influence within the organization has been highly controversial in recent years, with 32 corporations listed as “sustaining partners,” contributing at least $10,000 to the group. The sponsors include Pepsi, Kellogg, General Mills, Mars, Nestle, Mondelez, Monsanto, Cargill, DuPont, Pfizer, the National Cattlemen’s Beef Association, the Sugar Association, and the National Dairy Council.

Tied for second place in getting nominees onto the panel were the Grocery Manufacturers Association, consumer goods and food giant Unilever, the International Life Sciences Institute (ILSI), and the International Food Information Council (IFIC) Foundation. Each claimed three spots (most nominees had multiple nominations). The American Beverage Association, the Academy of Nutrition and Dietetics, and SNAC International (the global trade association for the snack food industry) each placed two nominees on the committee.

In all, 15 of the 20 advisory committee members have direct industry ties or nominations from industry-supported groups or glowing public praise from industry-backed groups. It is normal to have this level of industry presence on the nation’s most important food panel, whether the administration is Democratic or Republican, since it has become increasingly harder to be a food scientist without industry funding.

According to 2019 USDA data, after the early 2000s, public funding for agricultural research and development was put on a starvation diet. Meanwhile, private funding mushroomed to about $12 billon in 2014. The private-to-public funding disparity had former U.S. Secretary of Agriculture Dan Glickman and former Food and Drug Administration Commissioner David Kessler calling for a new federal nutrition institute in a February New York Times op-ed.

Noting that obesity has become the top disqualifier for military service, they pointed out that a nation that spends $40 billion a year on candy and hundreds of billions of dollars on health care related to obesity must spend more than the $1.5 billion currently spent on studying nutrition. “Establishing a place to research nutrition is also crucial to retain American competitiveness,” they wrote.

Despite Perdue’s pledge “to have professionals on either end of the spectrum, both from the plant-based and the meat-based side of the equation—making recommendations,” academics and public-health groups without industry connections are in the minority. Purdue and Azar send an ominous message when SNAC can snag two spots on the committee, while the American Public Health Association is shut out.

While the interests of SNAC, the Grocery Manufacturers, Unilever, or the American Beverage Association are fairly predictable—to protect the profits of many of their unhealthy or marginally healthy products—the best understanding of industry’s web around scientists comes through the innocuously named International Life Sciences Institute and the International Food Information Council Foundation.

ILSI claims a quarter of the new DGAC. It nominated the chair of the committee, Barbara Schneeman, the former FDA official, and the vice chair, Ronald E. Kleinman, the physician-in-chief at Massachusetts General Hospital for Children. Kleinman is also on the board of trustees of ILSI’s Research Foundation, while Schneeman is a government liaison. ILSI also nominated Davis, and Donovan and Bailey are ILSI North America scientific advisers.

ILSI North America says it “advances food safety and nutrition science for the benefit of public health.” But that claim is gutted by the fact that it was created in 1978 by a Coca-Cola executive “to unite the food industry” in what proved to be manipulation of science and government health recommendations for its now more than three dozen corporate members. Most of the above-named sustaining partners of the American Society for Nutrition are also members of ILSI—plus Hershey, Archer Daniels Midland, Campbell Soup, Kraft Heinz, Red Bull, Keurig Dr Pepper, Ocean Spray, and Welch’s.

Another example of the industry’s manipulation of research is an ILSI-funded study that made its way into the Annals of Internal Medicine in 2017. It said sugar intake guidelines are based on “low-quality evidence” and are thus “untrustworthy.” And an investigation this year for the British Medical Journal and the Journal of Public Health Policy by Susan Greenhalgh of Harvard found that ILSI helped redirect China’s chronic-disease science from a paradigm that focused on diet to Coke’s narrative—debunked by most public-health experts—that blames lack of exercise instead of sugary drinks for obesity. Overweight and obesity in China doubled from 20.5 percent of adults in 1991 to 42.3 percent in 2011.

Meanwhile, the journal Globalization and Health has just published a report on ILSI’s resistance to any public-health measures to reduce sugar consumption and efforts to downplay the dangers of glyphosate-based pesticides such as Monsanto’s Roundup. Cancer-stricken plaintiffs who used Roundup have begun winning multimillion-dollar judgments in the United States.

The report concluded that “ILSI should be regarded as a lobby group and that academics and researchers, policy makers, the media, and the public should view ILSI’s research as promoting the interests of the food, beverage, supplement and agrichemical industries, while its actions promote its members’ interests and counter healthy public policies.”

Potential industry influence will also permeate a new area in the 2020 guidelines—recommendations for pregnant woman and children from birth to 24 months. One major recommendation in these new guidelines should mirror the guidance by the American Academy of Pediatrics and the World Health Organization, namely that babies ideally should be breastfed their first six months for maximum nutrition.

But the Trump administration shocked the pediatric world last year by at first refusing to sign what should have been a perfunctory United Nations resolution encouraging breastfeeding and urging countries to end “inappropriate promotion of foods for infants and young children.” The U.S. signed on after the language to end inappropriate marketing was removed.

This move raises the legitimate concern that either the Dietary Guidelines Advisory Committee or the administration will shape the final guidelines to somehow extol the virtues of corporate infant formulas. DGAC member Sharon Donovan has been a consultant to infant formula makers Mead Johnson, Abbott Nutrition, and Pfizer. She has conducted Mead Johnson–funded research and edited informational materials for that company.

Also on the committee is Steven Heymsfield of Louisiana State University, who has served on the scientific advisory board of weight-loss product Medifast. It is interesting that USDA and HHS essentially gave two spots to food-replacement specialists when a 2015 study by Johns Hopkins University researchers found that very few commercial weight-loss programs, with the exception of Weight Watchers and Jenny Craig, demonstrate long-term benefits. The study found that any short-term benefits of Optifast and Medifast attenuated after six months.

And in another twist, Heymsfield is also the 2018–2019 president of the Obesity Society. That society boasts five members on the DGAC: Heymsfield, Ard, Mattes, Elizabeth Mayer-Davis of the University of North Carolina, and Elsie Taveras of Massachusetts General Hospital.

The Obesity Society is already under fire from critics for accepting corporate funding from Coca-Cola and PepsiCo, and having once staged “engagement councils” with members representing PepsiCo, Monsanto, Nestle, Dr Pepper, Atkins, Mars, and Campbell’s Soup. Last year, Pepsi underwrote a special issue of the society’s research journal titled “Low-Calorie Sweeteners and Weight Management.” The society vigorously denies that industry support is connected to its casting doubt on the efficacy of taxing sugar-sweetened beverages. Taxation has clearly cut tobacco consumption, and a federally funded study last year said soda taxes looked “promising in combating obesity.” The effectiveness would likely depend on the level of taxation.

And that brings us back to meat, that source of intense debate in 2015. The 2020 panel has several members with meat-industry connections. DGAC members Davis and Leidy have advised or spoken at “Protein Summits” meant “to explore the misperception that Americans over-consume protein.” The summits have been sponsored by the National Pork Board, the Beef Checkoff, the Egg Nutrition Center, Hillshire Brands, the Dairy Research Institute, and the Global Dairy Platform.

Another DGAC member, Lydia Bazzano of Tulane, was nominated by Atkins Nutritionals, known for its low-carbohydrate, meat-focused diet.

In another study funded by the National Pork Board, Leidy found long-term health benefits of pork-based breakfasts in adolescents. The comparison group was low-hanging fruit for improvement—adolescents who skip breakfast. Unabashedly, the Pork Board—which is hardly rushing to compare pork with fruit-based breakfasts—proclaimed “high-quality lean pork” to be a “key component of daily healthy eating.”

Trumping up the health benefits of “the other white meat” is a Trojan horse for the pork industry to pig out on sales of bacon. While the average American family buys fresh pork, such as tenderloin, shoulder roast, or ribs, just six times a year, the number of Americans who consume at least three pounds of bacon a year rose by nearly 50 percent from 2011 to 2018, from 44 million to 63 million. The Wall Street Journal noted in 2017: “With the rise of low-carb high-protein diets, fatty bacon made a comeback.”

If the Trump administration lays a heavy hand on either the committee or the final recommendations, there seems little chance for proponents of healthy diets to stage a comeback. UCS has reported on how Perdue has stacked the USDA with executives and lobbyists from the world of pesticides, corn syrup, and junk food and sided with Big Pork over small farmers and Big Dairy and others over children in the relaxing of rules on school lunches.

Perdue’s creation of an industry echo chamber has been so discouraging that employees at the top research arms of the USDA, the Economic Research Service, and the National Institute of Food and Agriculture have quit in massive numbers. Under the Obama administration, the two agencies together employed 700 people. That number is reportedly down to 450 amid attempts by Trump to slash ERS funding by half and Perdue’s plan to move the ERS and NIFA out of Washington and to USDA’s Kansas City region. That is on top of a move in 2017 to eliminate the USDA’s Center for Nutrition Policy and Promotion as a stand-alone scientific division and merge it with the Food and Nutrition Service. Critics say the move renders CNPP more vulnerable to industry-influenced politics.

Perdue’s claim that he is making the move to save money and move scientists closer to agribusiness “stakeholders” has been assailed by critics who see this move as divorcing USDA scientists and economists from collaboration with those from other cabinet agencies. In a Washington Post op-ed in June, two former chief scientists at the USDA, one under Obama (Catherine Woteki) and the other under George W. Bush (Gale Buchanan), wrote:

Food and agriculture in the United States face perennial challenges from a multitude of sources: pests, diseases, droughts, flooding, brutally competitive markets and trade disputes. It is disheartening to think that the science underpinning these vital contributors to the U.S. economy, and to the health and well-being of every American, is under threat from the very government department overseeing them.

When chief scientists, particularly one who served under Bush, are this concerned about a deck stacked against their colleagues, one can only hope that the scientists that Perdue and Azar have picked for the 2020 Dietary Guidelines Advisory Committee can be objective. The 2015 committee, with major backing behind the scenes by many career researchers in USDA and HHS who were on teams for data analysis and nutrition evidence, certainly displayed such independence. Regardless of their industry connections, that committee knew that the health and well-being of every American was at stake.

In a nation that loses more people every year to unhealthy diets than the total of American combat deaths during World War II, the 2015 committee delivered findings that industry did not want to hear. A diligent 2020 committee will almost assuredly deliver findings that this particular administration probably does not want to hear. While serving junk food to Clemson’s football team might have been a joke, destroying the nation’s health is not.

Derrick Jackson is a Prospect board member.

The Dialysis Duopoly Spends Big to Protect Profits in California

Kristoffer Tripplaar/Sipa USA/Associated Press

Outpatient clinics owned by DaVita and Fresenius serve the majority of U.S. dialysis patients, and the two companies have a lot to lose if states pass legislation limiting reimbursements from private insurance plans.

Two companies dominate the American outpatient kidney dialysis market: Denver-based DaVita and German-owned Fresenius. But their stranglehold on this sector is currently being challenged by an obscure bill in the California legislature, one they’ve poured a whopping $100 million into lobbying operations to oppose. The bill would crack down on a scam the dialysis duopoly has routinely engaged in, using a shadow charity called the American Kidney Fund to significantly juice their reimbursement rates from private insurance plans.

The situation could well presage how medical providers might react to a Medicare for All single-payer system, finding loopholes and work-arounds to profit outside the established market. In fact, dialysis is a great test case for this, because, thanks to a federal law nearly 50 years old, kidneys are the one American body part already governed under single-payer.

Dialysis, which involves the filtering of blood through an external machine to balance minerals and extract toxins when the kidneys are unable, is an extremely expensive medical procedure, in terms of time, energy, and especially cost. Often, it runs as high as $90,000 a year. In the days before the Affordable Care Act, that would have precluded most of the nearly 500,000 dialysis patients in the U.S. from obtaining insurance, cutting off their access to this lifesaving procedure.

That’s why, in 1972, the federal government passed a law extending Medicare coverage for all dialysis patients, regardless of age. That arrangement is great for dialysis patients, who are more likely to be from minority backgrounds and often unable to work due to the frequent, time-intensive nature of the treatment. It’s not, however, such a coup for outpatient dialysis clinics. Because Medicare has such a broad user base and can negotiate rates, Medicare-covered dialysis patients are much less lucrative customers for clinics than those with private insurance.

This is a particular problem for DaVita and Fresenius, which serve over 70 percent of all dialysis patients at their 4,000 outpatient clinics. Yet somehow, despite claiming to lose money on Medicare patients, the dialysis duopoly is quite lucrative, netting some $4 billion in combined annual profits. Here’s how.

DaVita’s own presentation at the 2018 J.P. Morgan Healthcare Conference tells the story. While 90 percent of treatments come from patients on government plans, accounting for 60 to 70 percent of revenue, a startling 115 percent of its profits come from patients with private insurance, which companies like DaVita and Fresenius can bill for four times as much. DaVita even claims to lose 10 to 15 percent on Medicare patients, though that assessment is hotly contested.

It should come as no surprise, then, that these providers are desperate to migrate their patients over to private insurance plans, which underwrite the entire operation of these hugely profitable, billion-dollar companies. And they’ve come to rely on one of the country’s largest philanthropic entities—the American Kidney Fund—to do it.

When patients consider their options for kidney dialysis, the American Kidney Fund offers financial assistance to those in need. Sometimes that can include covering the individual contributions still necessary under Medicare. But often, the AKF encourages patients not to stay on public health coverage, but to instead sign up for private insurance plans. The patients will receive the same treatments, often at the same clinics, and at no added cost to them: The AKF generously pays their insurance premiums.

While nothing changes financially for the patient, who may even be convinced that private coverage could be better than Medicare down the road, the financial picture for the dialysis companies changes drastically.

This arrangement, detailed in a 2017 report by the Southern Investigative Reporting Foundation, allows DaVita, Fresenius, and others to bill insurance providers for over $1,000 per treatment, while Medicare only pays $250 for the same procedure. And while there may be little sympathy for the bottom line of insurance companies, those elevated costs get passed down to other patients, in the form of higher premiums, co-pays, etc., as the insurers seek to recoup that money.

Where does the American Kidney Fund, with its annual budget of $250 million, get the money to generously subsidize dialysis treatments for patients? The largest individual contributors to the American Kidney Fund are DaVita and Fresenius, both of which make tax-deductible charitable contributions to the tune of some quarter billion dollars per year ($247 million in 2018). This funding accounts for roughly 80 percent of the AKF’s total donor base, according to an independent audit. It’s a symbiotic relationship: The AKF couldn’t exist without the dialysis companies, and the dialysis companies couldn’t be profitable without the assistance of the AKF.

There’s currently a bill in the California legislature, AB-290, that would curtail this arrangement. Under AB-290, companies like DaVita and Fresenius would be able to continue their charitable impulses by donating to the American Kidney Fund, but the amount of money they’d be able to bill private insurers would be capped at the Medicare reimbursement level. The bill also mandates that third-party providers like the AKF “shall agree not to steer, direct, or advise the patient into or away from a specific coverage program option or health care service plan contract,” while mandating that third-party providers commit to a patient’s coverage for the entire year, unconditionally.

Predictably, this proposal has the outpatient dialysis industry up in arms. With private insurance billing rates the sole source of their profits, AB-290 threatens to shut off the fire hose of cash that the industry bloats itself on. (Though according to Jim Wood, the California assemblyman who wrote the bill, that may not be entirely true. “I had the CEO for DaVita in my office, and he said they make money on Medicare, he said yes we do make money on Medicare,” Wood told me.)

The American Kidney Fund has responded by threatening to depart the state of California entirely, leaving its current recipients on both private insurance and Medicare behind. Meanwhile, the dialysis providers have ginned up an astroturf campaign called Dialysis is Life Support to do public outreach and put pressure on the state’s politicians.

This isn’t the first foray into California politics for dialysis providers, the state where an estimated 20 percent of the duopoly’s profits come from. In 2018, DaVita and Fresenius made Proposition 8, a ballot measure which would have capped dialysis revenue at 15 percent above the cost of care, the most expensive ballot measure in American history. That battle cost a mind-boggling $130 million all-in: $20 million from supporters, and over $111 million from the dialysis industry—$101 million of that ponied up by those same two companies, DaVita and Fresenius, in opposition. The ballot measure failed by nearly 20 percent.

Now, DaVita and Fresenius have trained their considerable financial resources on the state legislative process. Over the course of the past two years, they’ve been funneling money into a lobbying group called Patients & Caregivers to Protect Dialysis Patients, sponsored by the California Dialysis Council, expressly formed to “provide state-wide representation for end-state renal dialysis providers.” That group furnished the $100 million in funding for the ballot measure, and more for the anti–AB-290 coalition Dialysis is Life Support. In the first two quarters of 2019, the California Dialysis Council spent $110,000 in lobbying, according to the Secretary of State's office.

Dialysis is Life Support has waged a multi-tiered campaign, compiling a list of dozens of health, community, business, and veterans groups across the state that purport to oppose AB-290. Nestled at the bottom of that list, beneath the Yuba-Sutter-Colusa Medical Association and the Los Angeles Wellness Station, are DaVita and Fresenius. The American Kidney Fund also appears.

But according to a report put out by Hindenburg Research, an investor group (they do not currently have any position in the stocks of the dialysis companies, long or short), some of those organizations weren’t even aware they’d formally opposed the bill, while others professed no knowledge of the fact that the coalition had been funded by DaVita and others. When I called a handful of listed groups to inquire about their stance, I was met with mostly hang-ups, wrong numbers, and unreturned messages.

Meanwhile, Dialysis is Life Support has used its endowment to run TV ads on CNN and roll out a patient-directed pressure campaign. The American Kidney Fund has simultaneously claimed that a reporting requirement within AB-290 would be in breach of a federally mandated firewall, threatening their charter and ability to exist in all other states. “We will have to withdraw, we’ve been very public about that,” Holly Bode, vice president of government affairs for the American Kidney Fund, told me.

But according to Jim Wood, the California assemblyman who wrote the bill, that’s a scare tactic, rather than a legal imperative. “We got two independent legal opinions that said, ‘No, that’s really not the case,’” he told me. “But the AKF is standing on their own legal opinion saying they’ll pull out of California completely if this bill passes.”

When I asked the American Kidney Fund if they had a statewide withdrawal contingency plan for their patients, some of whom are now on private insurance plans they’d been encouraged to join with the expectation their premiums would be paid, Bode responded that they only “have small grants for that, they’re $100, and we don’t have enough to give everyone.”

Meanwhile, the website for Dialysis is Life Support no longer bears a formal affiliation to the California Dialysis Council—it now says the site is paid for by itself. According to Kathy Fairbanks, a spokesperson for the group, the California Dialysis Council was just sponsoring the first stage of their campaign, an education-based outreach initiative. When the group began its media blitz and television advertising on August 12, they changed the website to its current form (Hindenburg published its report on August 13). Now, said Fairbanks, “the funding is coming from dialysis providers. But that’s not all the support we’re getting, it’s also from the coalition groups. They may not be contributing resources in terms of financial resources, but they’re helping us in terms of lobbying legislators.”

The fate of AB-290 remains uncertain. Already, one California legislative attempt to rein in dialysis pricing, SB 1156, died via veto by then-Governor Jerry Brown despite passing both houses, on the grounds that it was overly vague. But the California legislature will conclude its session on September 13, which means a decision should come soon.

With Medicare for All being discussed in national circles, the situation with the dialysis providers is instructive. Faced with a single-payer system with lower reimbursement rates for their service, the dialysis industry bankrolled a charity to shift people into private insurance and jack up the cost. We don’t know what loopholes might enter the picture under Medicare for All, but the dialysis duopoly scam bears watching as a potential tactic. It speaks to how resourceful medical providers might be in their vigorous opposition to single-payer, and why politicians need to be mindful of their power.

“I feel like it’s an unfair business practice all of us are paying for,” said Wood, who’s hopeful the bill will pass. “For me the bigger part of this is that, we’re trying to make sure we get access to care for as many people as possible, you can’t do that if you can’t contain costs.”

CORRECTION: An earlier version of this article may have led readers to the conclusion that DaVita and Fresenius spent $100 million on lobbying against AB-290. In actuality, the same organization that funded $100 million opposing the Prop 8 ballot measure in 2018 also funded the lobbying effort with leftover or additional funds. We are sorry for any confusion this may have given readers.

As It Cultivates a Socially Responsible Image, Juul Sends Lobbyist to ALEC’s Annual Meeting

Seth Wenig/Associated Press

Vape manufacturer Juul and the company’s part-owner Altria sent lobbyists and government affairs employees to ALEC’s annual meeting. Their attendance coincides with a federal effort to undermine anti-tobacco regulation in the states.

Sludge produces investigative journalism on lobbying and money in politics. The American Prospect is re-publishing this article.

Juul, the Silicon Valley vape start-up that is popular among millennials, is participating in a secretive right-wing group that helps corporations and interest groups push their agendas in the states.

The company sent lobbyist Mark Bordas to the American Legislative Exchange Council’s (ALEC) annual meeting that was held last week in Austin, Texas, according to a list of attendees obtained and published by investigative news site Documented. At the meeting, lobbyists like Bordas drafted and voted on model bills that they will ask state legislators who are members of ALEC to introduce as legislation in upcoming legislative sessions.

Juul says its mission is to improve people’s lives by eliminating cigarettes and that making “a meaningful, positive impact on our communities” is one of its core values. Yet by participating in ALEC’s annual meeting, it is working with a group that has promoted the tobacco industry for decades and helped corporate interests influence state legislatures and win policies in their favor, often against public interest group opposition.

In recent years, more than a hundred corporations have cut ties with ALEC following outrage over the group’s support for “Stand Your Ground” gun laws, denial of climate science, and affiliation with figures like David Horowitz, an anti-Muslim activist who the Southern Poverty Law Center describes as “a driving force of the anti-Muslim, anti-immigrant and anti-black movements.”

Several of ALEC’s leaders and members have espoused racist and extremist views without rebuke from the organization. Washington State Chair Rep. Matt Shea was referred to the FBI in 2018 for circulating a manifesto calling for the killing of all males who do not obey Biblical law or agree to end all abortions and same-sex marriages. Member David Stringer, a former Arizona representative, last year said that “there aren’t enough white kids to go around,” adding that “immigration today represents an existential threat to the United States.”

Juul’s participation in ALEC’s annual meeting comes as the company is building relationships with communities of color and minority groups. According to a report from the Daily Beast, Juul has recently donated to the Congressional Black Caucus and the Congressional Hispanic Caucus, hired lobbyists and consultants with deep ties to lawmakers of color, lobbied civil rights leaders on health and criminal justice issues, and worked to promote its products in the LGBTQ community.

In addition to Bordas, Juul’s part owner, Altria, sent seven lobbyists and government affairs employees to the meeting. Their attendance coincides with a federal effort that critics say would help the company undermine anti-tobacco regulation in the states, including bans on flavored products that appeal to children and teens.

In March, Juul confirmed to the New York Times that it had donated to ALEC Action, ALEC’s 501(c)(4) advocacy partner.

Sludge asked Juul about its participation in the ALEC meeting, but did not hear back as of this writing.

Juul is supporting a bill in the U.S. Congress from Mitch McConnell (R-Ky.) that pairs an increase in the tobacco age from 18 to 21 and requires states to update their tobacco laws in order to continue receiving Substance Abuse Prevention and Treatment Block Grant funds.

Sens. Brian Schatz (D-Hawaii) and Dick Durbin (D-Ill.) see the Juul-backed McConnell bill as a way for tobacco lobbyists to influence state laws.

“Forcing state action creates a dangerous loophole that gives the tobacco industry an opening to intensify their efforts at the state level to undermine strong anti-tobacco proposals, such as regulations on flavored tobacco products,” Schatz and Durbin said in a statement. “Big Tobacco’s fingerprints should be nowhere near this effort.”

Several state legislative bodies have recently passed industry-backed tobacco legislation. In Arizona, for example, a bill written in part by a vape-industry lobbyist that would raise the tobacco age to 21 while pre-empting tougher local laws on smoking and vaping has advanced, while a “clean” bill to raise the tobacco age to 21 stalled. The lawmaker who sponsored the industry-backed bill, Republican Rep. John Allen, attended the ALEC meeting last week. In Arkansas, a bill pre-empting localities from passing laws regulating tobacco sales, passed in April, was co-sponsored by ALEC meeting attendee Republican Sen. Missy Irvin.

ALEC has a long history of working with the tobacco industry. Since the 1980s, ALEC has helped tobacco companies including Philip Morris and R.J. Reynolds draft legislation and lobby lawmakers and other public officials. ALEC has helped the tobacco industry oppose the Food and Drug Administration’s regulation of tobacco in the 1990s, promote “youth smoking prevention” programs designed to defuse public anger, and pass state legislation that preempts cities and towns from passing tougher laws.

More recently, ALEC has helped the tobacco industry oppose tobacco taxes and push back against research showing that vaping products pose health risks. In 2015, ALEC published an article criticizing a study by the Harvard T.H. Chan School of Public Health that found that chemicals in vape flavoring liquids pose respiratory health risks, saying that the authors did not study a wide enough variety of the flavors available on the market.