House Democrats march up the steps to the Senate to protest its action to kill a "patients' rights" bill that was aimed at reforming HMOs. (Ray Lustig, The Washington Post)

By Amy Goldstein and Helen Dewar
Washington Post Staff Writers
Saturday, October 10, 1998; Page A1

He'd been waiting for the right moment for days, and at 10:20 a.m. yesterday, Senate Minority Leader Thomas A. Daschle made his move, trying a swift, last-ditch maneuver to bring a bill that would clamp down on managed-care companies to a vote. Daschle knew he would fail, and he was right.

Weeks before the Senate killed HMO reform yesterday on a procedural vote, it had been a forgone conclusion that creating a "patients' bill of rights" was destined to land on the stack of legislation that the 105th Congress would not pass.

Remarkably, the issue collapsed even though Democrats and Republicans in both chambers had declared that they would like nothing more than a new law this year to grant patients in health plans more clout -- and even though polls showed that no other action by Congress would be as welcomed by the American people.

In its final days, the issue -- like much of what lingered in Congress -- simply was washed away by a presidential scandal that drowned out most other political discourse. But from the beginning, there had been hints that a law was unlikely to materialize. As with many other issues, there were real philosophical differences over it between the parties and well-funded lobbyists who opposed the initiative.

But in a deeper sense, political analysts say, the main goal of each party was to squeeze from the popular topic of managed care as much political ammunition as it could. The White House wanted a bill that could be served up as a trophy for constituents, but many lawmakers seemed ambivalent. Democrats wanted an issue they could use in campaigns to show that their opponents are thwarting the popular will. Republicans wanted to protect themselves from such attacks and -- if possible -- to pry credit on health care issues away from the Democrats. Given the political stakes, compromise proved impossible.

"It's been a victim of political maneuvering by both sides," said Sen. Arlen Specter (R-Pa.), who was part of a small bipartisan group that sought a middle ground but attracted little notice.

The demise of the "patients' rights" effort can be seen as part of an overall sharpening of Congress's partisan contours this year. With the approach of next month's midterm congressional elections, the parties moved apart, rather than together, on most of the highly charged issues they considered, including tobacco reform, education, and efforts to curb juvenile crime and improve child care. "Everything became totally politicized," said Sen. Dan Coats (R-Ind.).

The debate over managed care provides a particularly vivid example. Both Democrats and Republicans staked out their ground and held it.

Capitalizing on Americans' dislike of health maintenance organizations, congressional Democrats clung to their position that patients should be able to sue their health plans, even after that particular issue had emerged as the main point of contention with Republicans. For their part, House Republicans tucked into their bill many items that were tangential to managed care and had proven irksome to Democrats in the past.

And yesterday, after the issue died in the Senate's 50 to 47 procedural vote, members of both parties appeared to relish cranking up the rhetoric as they traded jabs over who was at fault.

Majority Whip Don Nickles (R-Okla.) accused Democrats of "just trying to stage an event. . . . They're not interested in passing legislation."

Moments later, Sen. Edward M. Kennedy (D-Mass.) said the GOP had "denied us the opportunity to debate the issue. . . . Today, the Republicans paid off the special interests that are opposed to the patients' bill of rights," a reference to the insurance and employer groups that lobbied mightily to stop the legislation.

The White House joined in. "The president is extremely disappointed that the Republican leadership chose partisanship over progress," said Rahm Emanuel, a senior advisor to President Clinton.

Congress's inaction comes in the face of evidence that the public is increasingly eager for the government to create more safeguards for patients in HMOs and other types of managed care -- the kind of arrangements that now dominate the U.S. health care system. Mistrust of managed care has increased in the past year, and the proportion of people who favor stronger federal regulations has climbed from 52 percent to 65 percent, according to surveys by the Henry J. Kaiser Family Foundation and Harvard University.

Despite such strong sentiment, an irony has emerged. Even in the absence of a new law, managed care appears to be fading as a campaign issue as voters' attention is perceived to have gravitated toward Clinton's possible impeachment and toward more traditional issues, such as education and crime, according to GOP and Democratic pollsters.

To be sure, the issue is dominant in a handful of congressional races, including that of Sen. Lauch Faircloth (N.C.), one of four GOP senators running for reelection who sided with Daschle yesterday in trying to push the legislation forward. But for the most part, it remains in the background.

The managed-care debate is the latest phase of a partisan tug-of-war over what one analyst called the battle for "the high ground on health care" that has persisted since the beginning of Clinton's first term, when the president proposed a fundamental overhaul of the health care system. Ever since, each side has been trying to get on the right side of the issue in the eyes of the public.

When the subject of managed care came around, congressional GOP leaders believed at first that they could gain the high ground by opposing all HMO bills, portraying them as a revival of the first Clinton health plan that had ultimately proven so unpopular.

Last November, House Majority Leader Richard K. Armey (R-Tex.) dispatched a memo, warning that "ClintonCare 2 will include all the essential regulatory features of ClintonCare 1, only repackaged. . . . If ClintonCare 2 becomes law, we will see . . . the president's political vindication completed, and a good industry ruined."

The memo appeared two weeks before a White House health care commission turned in what it called a "consumers' bill of rights." The commission called for health plans that would make it easier for patients to obtain information from their insurance companies, get emergency room bills paid, visit the doctors they want and lodge a grievance if they think their HMO has improperly denied them care or refused to pay a bill.

The panel's work represented a real compromise, born of intense haggling by members who represented the conflicting interests of consumers, the insurance industry and health care providers. The group omitted some of the most contentious subjects that later appeared in various bills. It did not even go so far as to say whether its ideas should be cemented into law.

Recognizing the issue's popularity, Clinton moved immediately. The day he received the group's advice, he announced that its recommendations would be put into effect in all federal insurance programs -- and he raised the political stakes, calling on Congress to adopt them for all Americans who have private insurance.

The opposition emerged before Congress began to focus on the issue. In January, insurance and business organizations coalesced into a powerful bloc that was determined to short-circuit any new legislation. Similar to the coalition that had worked to defeat Clinton's plan in 1993 and 1994, it had broadened its base to include a wider array of business groups that are a mainstay of the GOP's support.

This Health Benefits Coalition spent $2 million, organized 500 meetings with members of Congress and generated about 30,000 telephone calls to Capitol Hill. By spring, just as Republicans were discovering that "patients' rights" had too much popularity for them to oppose it outright, the coalition began to target advertising to the legislative districts of members who were drafting the GOP's patients' rights bills.

The biggest evil, the coalition argued, was a Democratic proposal to open health plans to malpractice suits.

The lobbyists failed to dissuade GOP lawmakers from introducing their bills. And trying to claim the issue as their own, the Republicans gave their legislation names nearly identical to Clinton's "bill of rights." Yet they took a cue from the lobbyists: The GOP's loudest criticism of the Democratic bills was reserved for the idea of opening HMOs to lawsuits.

For his part, Clinton was in no conciliatory mood.

While praising the Republicans for acknowledging the issue's importance, he repeatedly seized opportunities to criticize their legislation. The day in late July that the House passed its GOP bill, he vowed to veto it. By early August, he was announcing to a crowd in Louisville that he would veto the Senate Republicans' bill, too.

By then, Congress had gone home for a month. The Senate's Democratic and Republican leaders were already locked in a dispute -- which they never resolved -- over the rules for bringing managed-care legislation to a floor vote. And with the Clinton scandal deepening, Sen. Bill Frist (R-Tenn.) said he and his colleagues didn't feel "much heat at all" from constituents to pass HMO reforms.

In the year that has elapsed, a split within the health care industry has widened. Several large nonprofit HMOs are asking for the government to step in. The American Association of Health Plans argues that their members are moving voluntarily to offer patients the protections they want.

And in the aftermath, the White House and both parties vowed yesterday, as they have vowed for months, to strive for a managed-care law -- next year.