Time passed. Things changed. Things stayed the same. The number of transistors in a typical pacemaker grew from only two to more than four million. U.S. health care costs kept rising, to nearly double those in some European countries, without a corresponding gain in health. In 2003, the year my father got his device, when health care was consuming 15.9 percent of GDP and the average American life span had risen to seventy-seven, a Medicare study found that medical device companies were enjoying average net profit margins of nearly 20 percent. It was, the New York Times pointed out, more than twice the average for all other companies in the S&P 500. Cardiac surgery was so profitable that many hospitals relied on it to subsidize their emergency rooms and other money-losing departments and ran full-page ads in major newspapers to attract new customers. Cardiologists published a flurry of journal articles about successful surgeries in patients over eighty and over ninety. Device-related heart surgeries alone in 2003 cost Medicare nearly $15 billion.
By then, there were all kinds of devices: stents, little cage-like tubes to prop open clogged arteries; drug-coated stents, less prone to clogging than bare metal ones; external heart pumps like the one that would later be attached to former Vice President Dick Cheney, each one costing Medicare more than $500,000. There were chemically pickled and sterilized heart valves taken from human cadavers and from pigs, and delicate bionic valves hand sewn in Southern California factories by Vietnamese-American and Cambodian-American women working with the sterilized heart tissue of cows.
In May 2003, Michael N. Weinstein, a senior analyst at J.P. Morgan, called the cardiac device business “an area of tremendous interest.” Medical devices of all sorts had become a $170 billion global industry, and cardiac devices alone generated $14 billion in worldwide sales. Weinstein’s “top pick,” he told an interviewer for the New York Times’s Market Insight column, “is St. Jude Medical. They are a play on the cardiac rhythm market.”
The market was not pleased, however, in the spring of 2006 when Medicare proposed yet another change in the formulas under which it reimbursed hospitals, in hopes of reducing payments for implanted devices and raising payments for under- compensated services like stroke care. Payments for pacemaker surgeries were expected to drop by about 13 percent, defibrillators by 25 percent, and stents by 33 percent. AdvaMed, the device industry’s primary voice in Washington, pushed back. In April, AdvaMed hired two former health care staffers from the House Ways and Means Committee and another who’d once worked in health policy for Senator Ted Kennedy.
Over the next few months, AdvaMed spent $1 million on what its chief called “inside the Beltway advertising and extensive media outreach, ‘grass tops’ advocacy efforts, and intense lobbying of key House and Senate Members.” It created a photo exhibit on Capitol Hill featuring enthusiastic patients such as Reagan administration official Michael Deaver, who had an artificial knee; former Olympic skater Bonnie Blair, who’d benefited from an implanted anti-incontinence surgical device; and a former NBA basketball player who had a pacemaker. It held a press conference featuring the heads of two nonprofit, apparently grassroots, groups—the Sudden Cardiac Arrest Association, a defibrillator-promoting group funded mainly by the cardiac device industry; and the Society for Women’s Health Research, which got most of its grants from big medical players, including the Medtronic Foundation and Boston Scientific.
What went unremarked was the eternal background music of Washington. The makers of pharmaceuticals and medical supplies constitute one of the capital’s three biggest lobbies, rivaling the defense industry and Wall Street. In 2006, AdvaMed, the Big Three pacemaker companies, and other medical technology and supply companies spent at least $27 million on lobbying Medicare, the Food and Drug Administration, Congress, and other parts of the federal government. They contributed another $1.5 million to federal political campaigns.