Lobbyists may be the silver lining in health-care storm

WASHINGTON -- A strong force, perhaps as powerful in Congress as President Obama, is keeping the drive for health care going even as lawmakers seem hopelessly at odds.

Lobbyists.

The drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year. Television ads paid for by drug companies and insurers continued to emphasize the benefits of a health-care overhaul -- not the groups' objections to some of the proposals.

"My gut is telling me that something major can pass because all the people who could kill it are still at the table," said Ken Thorpe, chairman of health policy at Emory University in Atlanta. "Everybody has issues with bits and pieces of it, but all these groups want to get something done this year." As a senior official at the Health and Human Services department in the 1990s, Thorpe was deeply involved in the Clinton administration's failed effort.

President Obama on Saturday continued his full-court press to pass health-care reform legislation. In his weekly Internet and radio address, Obama cited a new White House study indicating that small businesses pay far more per employee for health insurance than big companies -- a disparity he says is "unsustainable -- it's unacceptable."

"And it's going to change when I sign health-insurance reform into law," Obama said, adding that he has "a sense of urgency about moving this process forward."

This time, the health-care industry groups see a strategic opportunity. As lawmakers squabble, the groups are focused on how to come out ahead in the end game.

"We're still optimistic that we can get health-care reform accomplished," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the main insurance-industry trade group. "There is strong support from policymakers and from across the health-care sector. "

It's all got to do with shifts in the economy. Even before the recession hit, employer-sponsored health coverage had been steadily shrinking, and many people couldn't afford the premiums for individual policies. Meanwhile, government programs have been expanding -- and they've gotten increasingly friendly to private insurance companies. Insurers now play major roles as middlemen in Medicare, Medicaid and the children's insurance program.

And if the government requires everybody to get coverage -- just what the overhaul legislation calls for -- it could guarantee a steady stream of customers subsidized by taxpayers not only for insurers, but for all medical providers.

"What I'm concerned about is the damage that's being done right now to the health of our families, the success of our businesses, and the long-term fiscal stability of our government," Obama said in his address.

Obama criticized what he said were tactics by opponents to block health-care overhaul "as a way to inflict political damage on my administration. I'll leave it to them to explain that to the American people."

"Today, after a lot of hard work in Congress, we are closer than ever before to finally passing reform that will reduce costs, expand coverage and provide more choices for our families and businesses," Obama said.

The industry groups have invested heavily to make sure their views get taken into account. The health-care sector gave $167 million in campaign contributions to congressional candidates in the 2008 election cycle, according to the watchdog group OpenSecrets.org. Health-care companies poured $484 million into lobbying efforts in 2008, and are on pace to exceed that this year.

Separately, the drug companies have offered up $80 billion over 10 years to reduce prescription costs of seniors if a deal goes through, while major hospital groups agreed to a $155-billion reduction in Medicare and Medicaid payments to free up funds that would help subsidize coverage for the uninsured.

The political infighting on Capitol Hill has strengthened the hand of the health-care groups, since liberals have been thwarted so far in their attempts to win speedy passage of the legislation through the House and Senate.

One of the liberals' main objectives is to include a strong government-sponsored insurance plan in the legislation, to compete against private insurance. Stopping or weakening the government plan is a top priority for the insurance industry. Other health-care interest groups are also leery because the public plan could put a dent in their budgets. The House version, modeled on Medicare, would pay doctors and hospitals less than private insurance.

All eyes are now on Senate Finance Committee chairman Max Baucus, D-Mont., who has never been friendly to the idea of a government-sponsored insurance plan. Baucus is trying to broker a bipartisan deal with a handful of Republican colleagues.

It's not clear if Baucus will succeed, but his group is looking at creating not-for-profit co-ops that would lack Medicare's power to dictate payment levels and tell providers to take it or leave it. Instead, the co-ops would have to negotiate payment rates with hospitals, doctors and drug makers -- just like private insurance plans do.

"We are hopeful at the end of the day a bipartisan plan will emerge that benefits both patients and the U.S. economy," said Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, the drug industry lobby.

Obama has endorsed the notion of a strong public plan, the kind liberals want to see. But if Baucus gets a bipartisan deal, the president may have to swallow hard and embrace it -- or accept defeat of his top domestic priority.

"There is a way out of it -- a bipartisan compromise-- but so far the liberals have found that to be anathema," said Robert Laszewski, a health care industry consultant.

Laszewski is pessimistic about the prospects for overhaul legislation this year. But he thinks insurers in particular look like they're in a win-win situation.

"The health-insurance industry is in a fantastic position," he said. Democratic liberals overreached and can't move a bill over the objections of their moderate and conservative colleagues.

"Democrats can't blame the industry if this goes down," Laszewski added. "So the health-insurance industry is happy to let this thing take its course."