Balancing act

Running even a small trade association is a tough gig, but William Walters thinks he’s getting the hang of it.

It all starts at the board of directors. As the chief executive officer of his trade association, Walters has to corral the strong-willed corporate types who make up the board — people who essentially have a fiduciary responsibility to try to put each other out of business most of the time — and get them to play nice for the sake of their industry.

{mosads}“I like working with my CEOs, and I’m honored by that, but at the end of the day, they’re not really my friends, they are people who need results in Washington,” Walters told The Hill last week.

Walters has been the CEO of the Acute Long Term Hospital Association (ALTHA) since 2005. In that capacity, it’s his job to balance the needs of his member companies with the realities of the legislative process for a young, low-profile sub-sector of the healthcare system.

“I’ve got 23 people on my board of directors and we just had a board meeting this week. Yeah — these are very smart, very opinionated people and I really am just a referee in some ways,” he said. “That’s a good dynamic to know about trade associations: These are competitive companies. … Dealing with the board, I have to go and tell some people, ‘We have to get along with each other for the day.’”

Walters is an Army veteran and a former House Republican staffer who worked for then-Energy and Commerce Committee Chairman Tom Bliley (R-Va.) and then-Ways and Means Committee Chairman Bill Thomas (R-Calif.) in the 1990s (“Working for [Thomas] was like working for Gen. Patton,” he said admiringly). His first exposure to the Hill and to health policy was as a captain in the Judge Advocate General’s Corps, consulting with lawmakers about the fates of military hospitals during a round of base closures.

He cut his teeth on K Street at the Pharmaceutical Research and Manufacturers of America , which led to a position as director of public policy for the drug maker Pfizer in New York, where he lived and worked for three years before returning to Washington to lead ALTHA, which was founded in 1998. ALTHA represents more than 40 companies, 300 hospitals, 100,000 employees and $4 billion a year in revenue, and its members include Kindred Healthcare , Select Medical Corp. and HealthSouth .

The long-term acute care hospitals (LTACHs) that make up ALTHA’s membership are designed for patients who have undergone treatment at general hospitals and are undergoing recovery but are too sick for nursing homes. The industry has been under fire for the past several years as lawmakers and the Centers for Medicare and Medicaid Services (CMS) have seen spending at LTACHs skyrocket. This led the agency to take steps to clamp down on spending and prompted ALTHA to seek relief from Congress.

“CMS has concerns that some of these patients in some of these hospitals are not sick enough to warrant the higher reimbursement,” said Walters, who agreed those concerns were justifiable. “We think there’s a better way to address this than just reimbursement cuts. Yes, there should be federal standards, but they shouldn’t just try to put everyone out of business, because we think there’s a role to play for this type of facility.”

Last year, Walters got a reprieve when Congress moved to postpone CMS’s payment cuts. In exchange, ALTHA’s members are forbidden to open any new hospitals in the meantime. CMS also will develop standards for what patients and procedures the hospitals should focus on.

“We have about a two-year window to prove ourselves,” Walters said.

Walters thinks ALTHA, with its three-person staff and handful of hired-gun lobbyists, is well-positioned to do that. “We’re very small. I mean, my total budget is, I think, 2 and a half, 3 million dollars. We try to be very nimble and the CEOs on my board have given me a lot more discretion than I would have had at Pfizer, for instance, so I can make decisions on a daily basis that would’ve taken months at a large company. That’s very exciting,” he said.

“As long as we continue to get the job done with those resources, I don’t see any need to keep growing,” Walters added.

This is quite a contrast from working at Pfizer, a Fortune 50 company and one of the world’s largest pharmaceutical manufacturers. Walters sought the Pfizer job because he needed a change of scenery. “At that point, I was pretty close to being burned out on Washington,” he said.

The best thing about leaving was the perspective it provided. “I met a lot of successful people in New York who’d never heard of the Ways and Means Committee,” he said.

“New York was a great experience for me because it made me realize, after 10 years in Washington, that we Washingtonians, we’re kind of kidding ourselves about the extent to which we run the world. Living in New York is a kind of sobering and humbling experience, which is kind of what I needed after a couple of years of supposedly being important,” Walters joked.

“You go to the headquarters of a large company, and the Washington office is always just a ‘cost center,’ as the corporate management types refer to it.”

Though Walters greatly values his experience at Pfizer, the chance to return to Washington and run a smaller operation was too good to pass up, he said.

“From a personal level, what I found frustrating is that a big company like Pfizer has just so many good people, it was very hard for me to make a difference, so I really began to look for an opportunity to go someplace, a smaller shop where what I did made a difference and I could see that it was making a difference.”