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US: Once an Enemy, Health Industry Warms to Clinton

by Raymond Hernandez and Robert PearThe New York Times
July 12th, 2006

When she tried to overhaul the nation’s health care system as first lady, Hillary Rodham Clinton alienated some people and institutions in the health care industry by championing a huge expansion of the federal role. She provoked a fierce reaction from the industry, which mocked her proposal in television advertisements and dispatched lobbyists who ultimately helped kill the plan.

But times change. As she runs for re-election to the Senate from New York this year and lays the groundwork for a possible presidential bid in 2008, Mrs. Clinton is receiving hundreds of thousands of dollars in campaign contributions from doctors, hospitals, drug manufacturers and insurers. Nationwide, she is the No. 2 recipient of donations from the industry, trailing only Senator Rick Santorum of Pennsylvania, a member of the Republican leadership.

Some of the same interests that tried to derail Mrs. Clinton’s health care overhaul are providing support for her Senate re-election bid. The Health Insurance Association of America ran the famous “Harry and Louise” commercials mocking the Clinton health care plan as impenetrably complex. Some companies that were members of that group are now donating to Mrs. Clinton.

Charles N. Kahn III, a Republican who was executive vice president of the Health Insurance Association in 1993 and 1994, now works with the senator on some issues as president of the Federation of American Hospitals, a lobby for hospital companies like HCA and Tenet. He describes his battles with the first lady as “ancient history,” and he said health care executives were contributing to her now because “she is extremely knowledgeable about health care and has become a Congressional leader on the issue.”

Senator Clinton has received $150,600 in contributions from insurance and pharmaceutical companies, which she accused in 1993 of “price gouging” and “unconscionable profiteering.”

The financial support is an intriguing turn of events for a political figure who became a pariah for many in the health care industry after President Bill Clinton appointed her to head the Task Force on National Health Care Reform. The recommendations spawned by that panel — calling for universal health care, minimum coverage requirements and potential limits on health care spending increases — were derided as “Hillarycare” by opponents and arguably cost Democrats control of the House of Representatives in the 1994 midterm elections.

The rapprochement partly reflects how Mrs. Clinton has moderated her positions from more than a decade ago, proposing legislation to increase Medicare payments or stave off cuts in payments to doctors, hospitals, nursing homes, managed care companies and home health agencies.

She has introduced a bill to lower the cost of malpractice insurance for doctors who disclose medical errors to patients. With strong support from the industry, she has pushed legislation to promote the adoption of health information technology. Providers and consumers praise her efforts to expand insurance coverage for mental health care and to finance long-term care for older Americans living at home.

Mrs. Clinton often disarms health care groups by saying she learned from her past wars. “We tried to do too much too fast 12 years ago, and I still have the scars to show for it,” she said in an address in March before the annual conference of the Federation of American Hospitals.

While some people in the health care industry are still wary of Senator Clinton, many say they see her as the likely next Democratic presidential nominee and are moving to influence her agenda on an issue that polls indicate is of growing concern to voters.

Frederick H. Graefe, a health care lawyer and lobbyist in Washington for more than 20 years, said, “People in many industries, including health care, are contributing to Senator Clinton today because they fully expect she will be the Democratic presidential nominee in 2008.”

“If the usual rules apply,” Mr. Graefe said, early donors will “get a seat at the table when health care and other issues are discussed.”

Tellingly, one of her fund-raisers in the industry is a Republican, William R. Abrams, executive vice president of the Medical Society of the State of New York.

Some Republicans accuse Senator Clinton of political opportunism in courting old foes. Tracey Schmitt, a spokeswoman for the Republican National Committee, questioned the sincerity of Senator Clinton’s new, more pragmatic approach on health care.

“This reveals that Hillary Clinton is a politician more concerned with campaign contributions than policies she claims to support,” Ms. Schmitt said of the senator’s efforts to court the health care industry. In fact, during her 2000 Senate campaign, she sharply criticized her opponent, Rick A. Lazio, as being beholden to the pharmaceutical industry for taking donations from drugmakers.

Kenneth E. Raske, the president of the Greater New York Hospital Association and a Clinton fund-raiser, said the relationship between Mrs. Clinton and some industry leaders got off to a “rocky start” in the early 1990’s. But, he said, many now believe that she was right in what she said about problems plaguing the industry, and think she is in a strong position to take a lead on the issue once again.

“I think right now the issue of health insurance and the worries of the American public about losing insurance are a political gold vein waiting to be tapped,” Mr. Raske said. “You have to think health care is going to be a major issue in ’08.”

Separate analyses by the Center for Responsive Politics, an independent group that tracks campaign finance, and by The New York Times show that Senator Clinton has received $854,462 from the health care industry in 2005-6, a larger amount than any candidate except Senator Santorum, with $977,354. Other industries have opened their wallets to Senator Clinton, a formidable fund-raiser. But none warred with her as the health care industry did.

Contributions to Senator Clinton over the last 18 months include more than $431,000 from doctors and other health care professionals and more than $142,000 from hospitals and nursing homes.

For example, she has received $1,000 from America’s Health Insurance Plans, the main lobby for insurers; $1,000 from the Blue Cross and Blue Shield Association; $7,770 from Pfizer and its employees; $10,500 from Roche Group and its workers; and a total of $16,000 from three big companies that manage prescription drug benefits under Medicare and private health plans: Caremark Rx, Express Scripts and Medco Health Solutions.

While the health care industry was among her top supporters in her 2000 Senate race, the trend has accelerated in 2006 as her political prominence has grown and as she has become an important legislative player on health care issues. With about four months left before Election Day, Senator Clinton has already raised more money in this campaign from the health care industry than she did in her 2000 run.

Senator Clinton has received more money from health care providers than from insurers, in part because she has been more outspoken in support of the providers, while criticizing insurers from time to time. But the fact that she has received tens of thousands of dollars from insurance companies and their employees underscores the shift in their view of her. Beyond that, Mrs. Clinton, a member of the Senate Committee on Health, Education, Labor and Pensions, has been helpful to insurers in New York, responding to their concern that they were not being adequately paid for their participation in Medicare.

State Senator Kemp Hannon, a Long Island Republican who is chairman of the Health Committee in Albany, expressed surprise at the amount of money that the industry, particularly insurers, had pumped into Senator Clinton’s campaign coffers.

But upon reflection, he said, it makes sense, given that many in the industry regard her as an authority on health care who can help advance the industry’s agenda. “She’s already paid the intellectual dues of struggling to learn the system,” he said.

Some health care providers are giving more money to Republican candidates over all, but they are hedging their bets by donating to Senator Clinton as well.

“Regardless of any future office she may seek, she will be a player on the national scene for as long as she wants to be,” said Mr. Abrams, the executive at the New York medical society.

Last year Mr. Abrams and Mr. Raske, the head of the hospital association in New York, held an event in New York City that raised tens of thousands of dollars for Senator Clinton from dozens of prominent doctors and hospital executives.

Mrs. Clinton has changed her style and toned down criticism of the industry in speeches about health care. But her audiences still see flashes of the old populism.

Speaking to a conference of the American Medical Association in Washington this year, she said, “Money is leaking or even escaping out of the health care system in record profits for pharmaceutical and insurance companies.”

Also, hospital executives now say they welcome Senator Clinton’s attention to the plight of the uninsured — a problem that has severely strained the finances of many hospitals.

Carol A. McDaid, a health care lobbyist in Washington, said she recommended that clients consider making contributions to Mrs. Clinton because the senator had been a champion for health care providers and the people they served.

In the early 1990’s, many health care executives said her proposals would strangle them with red tape and endanger the quality of care.

Mr. Abrams said that Senator Clinton now “understands that change is incremental,” compared with her stance in the 1990’s, when she proposed immediate and sweeping changes.

Of Senator Clinton’s image within the health care industry, Mr. Abrams said, “To the degree skeptics were there, I think she has dispelled any of the skepticism.”

Aron Pilhofer contributed reporting for this article.





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