Where the Art of Compromise Survives
Anyone who still doubts that patience is a virtue should talk to Scott Whitaker. The president and CEO of AdvaMed, Whitaker piloted the 400-plus-member trade association through much of a multiyear effort to repeal a medical device tax first enacted in 2013 as part of the Affordable Care Act.
After a series of pauses, suspensions and moratoriums, the 2.3% tax on the domestic sale of medical devices — devices developed and produced by AdvaMed member companies — was permanently repealed in early 2020, marking a successful end to a campaign that is seen today as a model of bipartisan advocacy.
“We knew we had the policy right and the facts on our side,” says Whitaker, who took over at AdvaMed in early 2016, about halfway through the campaign. “We accepted the progress we made along the way, with the temporary halts on the tax, but we never settled. Our members, which range from pre-revenue startups to the largest players in the industry, wanted a total repeal. We had full alignment among our members, with as many varied interests as they might have on other issues, and over time we succeeded.”
“We never made this about ‘Obamacare,’” Whitaker says, although there were plenty of Republicans on Capitol Hill already itching to bring down this flagship legislative accomplishment of Democrat Barack Obama’s administration. “We made it about bad tax policy, period,” he recalls, “and we stayed united as an industry as a result.”
Another secret of this success? “We used the government’s own data — not that of a partisan think tank — to make our case,” Whitaker explains. “We stressed the effects on jobs, on innovation and, ultimately, on patients’ lives. It is the patients, after all — people needing hip replacements, to offer just one example — who ended up paying that extra 2.3%.”
Finally, AdvaMed took its case not just to Republicans but to Democrats too — to members of Congress otherwise supportive of the Obama administration but with manufacturers of medical devices in their own districts and states. In the Senate, the legislation that ended the tax was introduced by Pat Toomey of Pennsylvania, a Republican, and Amy Klobuchar of Minnesota, a Democrat. In the end, the repeal was supported by a significant number of Democrats, including Sens. Chuck Schumer of New York and Tina Smith of Minnesota.
Experts at Consensus
Victories like this are hard to come by in such a polarized political environment. That is why trade associations like AdvaMed are one of the few places where the art of compromise, which is what is supposed to be practiced on Capitol Hill, is still operating. The best trade associations — representing diverse interests within a profession or industry — have emerged as experts at developing consensus that can then be presented to lawmakers and their staffs and, research shows, are taken more seriously than arguments made by companies on their own.
Hill Staff Time Is ‘Precious’
A 2022 study by APCO Worldwide, for example, found that congressional staff members see associations as “more trustworthy than individual companies,” viewing the information presented to them “around issues and economic impact” as credible in a way it otherwise might not be. And a 2019 Council survey found that 8 out of 10 congressional and federal staff consider trade associations to be trusted sources of political information.
“But that’s only one reason that associations carry an authority on Capitol Hill that seems to be increasing in recent years,” says Mary Kate Cunningham, senior vice president of public policy at ASAE: The Center for Association Leadership. “Administrations change, Hill staff come and go, so associations can bring a kind of institutional memory to the governing process that is invaluable in contentious times like these. Staff time is especially precious now, and it must be used wisely.”
And some factors have technological components. “I’ve been in this profession since 1997, and things have changed a lot over the last few years,” says Erin Streeter, executive vice president of the National Association of Manufacturers (NAM). “Not so long ago, you could deal directly with a committee chair and work out your issues directly with them, but that is not so realistic these days. A big change came, as I see it, when President Trump brought with him what I think of as a ‘rapid response’ way of doing things through his use of social media. Everything suddenly seemed to ramp up, and now there were so many platforms you needed to use to get your positions across, and you had to do it in a hurry.”
You need not only deal with elected officials, of course. “You also need public opinion on your side, and you need to reach key influencers,” Streeter says. “Here, too, there’s a force in numbers, and part of our value proposition at NAM is that we can be a broad-based spokesperson for an entire industry, as complex as ours is. Fortunately, we can make our appeals in a bipartisan way because everybody — Republican and Democrat — is ‘for’ manufacturing.”
Power in Numbers
Brian Wolff, the Edison Electric Institute’s chief strategy officer and executive vice president of public policy and external affairs, saw a big shift taking place after the pandemic lifted. “Since then, I’ve seen staff on Capitol Hill struggling to focus as they drown in requests. There are just so many meetings — in person and virtual — and so many platforms and channels that Hill staff can sometimes seem overwhelmed, and understandably so. There was a time when there might be 78 different companies going to the same congressional office with their cause, but that is not going to get you very far today.”
There’s power in numbers, and there is efficiency in working through your associations, which can be experts on forging consensus among their members. Wolff says, “Anytime you can get organizations with as varied interests as American Clean Power and the American Petroleum Institute on the same team — as we’ve been known to do — that’s powerful.”
The Edison Electric Institute assembled such a team in its successful work on the Inflation Reduction Act, signed into law by President Biden as part of his Build Back Better agenda in August 2022. The legislation resulted in $272 billion in tax credits for the electric companies it represents, helping make the clean energy transition more affordable for their customers. “We developed a workable consensus among our members, choosing collaboration over confrontation,” according to Wolff. “If you want to be effective in times like these, that is key.”
‘A Unified Voice’
John Jennings, director of government and political affairs at the Insured Retirement Institute, says the association used a similar approach in its campaign on behalf of the SECURE 2.0 Act, which was signed into law in December 2022 and helps encourage more participation in employee retirement plans.
“When the SECURE Act passed in December 2019, this was the most comprehensive legislation in this area of policy in about 15 years, since the passage of the Pension Protection Act in 2006,” Jennings says. “While that was significant, we were back on Capitol Hill in February 2020. We were there with new ideas and following up on unfinished business, much of which was accomplished with SECURE 2.0. And we could do that because we had 116 members speaking with a unified voice and had developed a consensus of that membership. And support on the Hill was bipartisan.”
“That kind of agreement is more important than ever,” says Jill Kozeny, executive vice president, public affairs, with the American Council of Life Insurers. “Trade associations have the opportunity and expertise to work out areas of agreement, build consensus, and manage compromises among members. This is essential for defining and representing the industry’s position to lawmakers, along with what’s at stake in terms of the public interest.”
Art — or Science?
Defining the public interest is an art — or science — in itself. So is making a persuasive case for your position, once you have determined what the public interest happens to be. AdvaMed’s Whitaker offers a few lessons learned along the way. “The advice I would offer is pretty straightforward. You have to recognize the political climate for what it is, and it is contentious these days,” he says. “You must stay united as an industry. You have to have the facts on your side, so anyone who might be skeptical of your position has to argue not with you, but with the data. When you have the data on your side, you can avoid partisanship and the hyperbole that so often goes with partisanship. Do that, and members of Congress will respect you and they will listen.”