Healthcare Is the Business of Summer 2009

Shortly after President Obama, Democrats and liberal interest groups let it be known that they would focus their fire—and ads—on the insurance industry in their fight for healthcare reform, those insurers sent a clear response: We are ready to use our checkbooks, too.

“A campaign has been launched to demonize health plans,” said Karen Ignagni, the president and CEO of America’s Health Insurance Plans, the insurance industry’s lobbying arm. “We will set the record straight about our community’s contribution to the reform effort.”

Ignagni’s statement came with reports about the group’s commitment to a seven-fi gure ad campaign. Politics asked AHIP about its planned media buys, but a spokesman for the group, Robert Zirkelbach, declined to comment on the group’s tactics. Zirkelbach would only say insurers want it to be known that the industry “strongly supports healthcare reform and we have stepped up and offered proposals.” Even without specifics, the insurance industry’s campaign represents yet another escalation in what could be the most expensive issue ad war in history.

“This is on a very fast trajectory,” says Evan Tracey of the Campaign Media Analysis Group, which tracks ad spending. Tracey cautions that how much is spent will depend on how quickly legislation moves but adds, “All of the elements are there for this to be one of the biggest issues from an advocacy standpoint that we’ve ever seen.”

Tracey says that by the end of July, about $53 million had already been spent on airing ads. Groups that support Obama’s reform plan had out-spent those that oppose various aspects of it by more than a two- to-one margin.

The size of some of the buys is staggering:

• AHIP is reportedly committing $100 million to its ad campaign.
• Health Care for America Now, a labor and liberal coalition, expects to spend $11 million total this year and spent $1.1 million on television through June.
• Conservatives for Patients’ Rights, a coalition that opposes major government intervention into the healthcare system, is planning to dole out $20 million on TV, radio and web ads.
• The U.S. Chamber of Commerce made a “multi-million dollar” national network ad buy in opposition to the plan in August.
• The RNC and DNC have also weighed in, each spending more than $1 million in August.
• Americans for Stable Quality Care, a group that includes the AMA, SEIU and PhRMA spent some $12 million in August on ads supporting the reform, and plans to spend plenty more.

Other groups—such as the liberal Americans United for Change and conservative Americans for Prosperity—will spend additional millions. “It just depends on who you are in the healthcare industry and how close of an impact the legislation is going to have on your bottom line,” says Ron Bonjean, a Republican consultant and partner at Singer Bonjean Strategies.

These multi-million dollar ad campaigns flooding the television and radio airwaves—not to mention the polling, message testing and media relations work which supports them—theoretically should be a boon to the political consulting world. Calls from Politics to consultants on both sides, however, uncovered questions about how much of that money is flowing into the consulting industry and whether these campaigns are creating much new business.

Most consultants were wary of publicly discussing how much money the healthcare debate is bringing in. But several say privately their business this year hasn’t been much different than previous years and they haven’t seen a major influx in funds going into the industry.

It looks like some liberal groups are being thrifty when it comes to using consultants. Some of these groups have found ways to avoid doling out significant funds on producing ads and, instead, are focusing their money on the ad buys. The Democratic National Committee, for example, says it produces all of its radio, TV and web ads in house.

Other members of the liberal coalition are turning to smaller shops that will make spots at a fraction of the price. Dan Manatt of PoliticsTV, which produces Americans United for Change’s ads, says he is charging the group significantly less than other “mainstream” shops because he keeps his production costs low. Manatt says he rarely charges more than $5,000  while some others may charge upwards of $20,000.

And that big insurance industry campaign? There may not be that much new business for consultants to gain from it. The groups that are anticipated to spend significantly, such as the insurance industry, are likely to stick with the consultants they have already been using.

Jeremy Jacobs is staff writer at Politics magazine. He can be reached at jjacobs@politicsmagazine.com