HMO-Overhaul Opponents Base Case on Voter Apathy

by Shailagh Murray
The Wall Street Journal, September 20, 1999

Here is a novel approach to lobbying: Try to convince lawmakers that your issue is no big deal.

That's the risky wager being placed by the managed-care industry, as it faces an uphill battle against tough health maintenance-organization overhaul measures in the House.

The thinking at the American Association of Health Plans goes like this: Despite all the HMO horror stories, the outcries of doctors and the relentless pounding by consumer groups, polls by the industry and outsiders show that most people like their own health-care plans. They also suggest voters don't pick political candidates for their stance on managed-care overhaul. So, lawmakers can safely oppose or stonewall the measures that the House is expected to consider this fall.

WSJ/NBC

"There is not the makings of a revolution out there, when you have 80% to 90% approval ratings," says Mark Merritt, chief strategist for the AAHP, which represents 1,000 health-maintenance organizations and preferred-provider groups. "It's like campaign-finance reform: Everyone likes it, but no one cares."

The HMOs' pitch seemed to work in the Senate, where Republicans passed a narrow overhaul bill this summer. But House members are proving a skeptical bunch, in part because of the intensity of HMO critics. Two tough bills have gained backing from rank-and-file lawmakers from both parties, including conservative Republicans. The GOP reformers have even vowed to buck opponents in the House leadership to produce legislation that includes the managed-care industry's nightmare: a liability clause allowing patients to sue their health plans.

Vote Early in October

To avoid an embarrassing fight with fellow Republicans, House Speaker Dennis Hastert of Illinois, who has remained publicly noncommittal, announced Friday that he will bring both bills to a vote during the week of Oct. 4.

"This is a bedrock conservative principle," says Rep. John Shadegg, an Arizona Republican who co-authored one of the House bills with his physician-colleague, GOP Rep. Tom Coburn of Oklahoma. "I teach my kids about taking responsibility for what they do wrong." Plus, he has his own polls. "Sixty-five percent of Republicans," the congressman notes, "think an HMO should be held negligent when they mess up."

That is strong medicine for Mr. Merritt's team. The AAHP is spending at least $5 million in advertising, polling and grass-roots activities, and conducted a public relations blitz in 60 House districts over the summer recess. But when lawmakers returned after Labor Day, they were as determined as ever to pass a tough bill.

What happened? Overhaul supporters don't dispute the AAHP's findings that managed-care overhaul isn't as pressing to voters as other issues. Indeed, in the latest Wall Street Journal/NBC News poll, the public ranked passage of a patients' bill of rights, as managed-care regulation is popularly known, as a lower priority than revamping Medicare, cutting taxes, restricting gun sales and increasing defense spending.

But a recent Journal/NBC poll also found that 56% of voters have a somewhat negative or very negative view of HMOs, up from 50% a year ago. To Rep. Shadegg and other reformers, this indicates a growing frustration among many people about medical care, and a sense that health plans are more concerned about bottom lines than patients.

Experience With Babies

Lawmakers' stands on managed care also can be powerfully influenced by their own experiences. Dr. Coburn has spent years delivering babies; Rep. Charlie Norwood, the Georgia Republican and co-author of the bipartisan bill, is a dentist. Rep. Shadegg talks of his fears for his sister, a breast-cancer survivor. His take on the industry's low-key stance is blunt: "Their argument is cynical, calculating and just wrong."

And then there are the political realities. Conservative GOP Rep. Lindsey Graham of South Carolina, a co-sponsor of both overhaul bills, put it bluntly in a recent news conference: "This is an issue that can hurt us because we're not taking it seriously." Says Rep. Shadegg, "I guarantee you, the members who talk to me are scared."

That is because House members are often elected on populist themes, such as term limits, that may resonate more in their districts than nationally. Even some insurance-industry officials say that if the GOP-led House fails to produce tough patient protections before next year's election, Democrats could have a powerful weapon to help regain the majority.

"What's important is not how the public feels at a given time, but how an issue can be shaped politically," says Charles "Chip" Kahn, president of the Health Insurance Association of America. "I don't argue with the polling data. My question is, what does it all mean?" Though an ally of Mr. Merritt in opposing the two House bills, Mr. Kahn has his own theory: that the polls mask a widespread public disappointment with where the health-care system is headed.

Even AAHP officials concede that the managed-care industry hasn't helped matters by failing to counter its attackers and their gripping stories. That is why, in addition to the lobbying, in recent weeks AAHP executives have been guests on more than 100 local talk-radio programs.

"Things Go Wrong"

Earlier this month, AAHP President Karen Ignagni spent a half-hour chatting live with the morning host at KVI, a large Seattle AM station. Ms. Ignagni was quick to deliver the industry line, that patients can't "sue their way to better health care." But she spent much of the session lamenting how her industry has become a villain. "Things go wrong," she told the sympathetic host, Kirby Wilbur. "That doesn't mean the whole system is wrong."

The industry still has strong prospects for beating back unwanted regulation. In the House, members of the GOP leadership strongly dislike both pending bills. One outspoken critic is Rep. John Boehner, an Ohio Republican who claims the two measures would expose employers to lawsuits. Rep. Boehner may yet produce a third patient-protection bill that bars such actions, though it wouldn't be likely to pass. Any bill that does ultimately pass in the House, however, is likely to be light years from the Senate legislation.

Meanwhile, even the AAHP's foes are intrigued by the group's gamble that voter passivity will ultimately trump the horror stories. "This is a test of whether money can change the message -- and whether polling is really legitimate," says Jamie Court, advocacy director for the Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif.

Mr. Court's organization is one of the harshest critics of HMOs in the country. Its "casualty of the day" faxes, sent to 1,000 Washington decision-makers for five months last year, helped to rally many on Capitol Hill to the overhaul cause. The group's most recent target was Gov. Gray Davis, who was feted by HMO industry leaders in July, as the California legislature debated statewide managed-care changes.

Liability Provision Approved

The Democratic governor began citing his own polls as he urged lawmakers not to go overboard. He might have taken a page from the AAHP briefing book: He argued Californians are generally happy with their health care. But two weeks ago, California lawmakers passed a series of new HMO regulations, including a liability provision that gives patients a right to sue. Gov. Davis is expected to sign them.

For their part, California managed-care lobbyists didn't follow the lead of their national counterparts. Rather than targeting their efforts on killing the liability provision, they won a comprehensive external-review process that must be exhausted before a lawsuit can be filed. (The House bills contain similar provisions.)

"We decided to say we knew there was a problem ... and to try to find a solution that would actually improve the system and reassure people that they'll get the care they need," says Walter Zelman, president of the California Association of Health Plans, the AAHP's Sacramento equivalent.