Tommy Boggs and the death of health care reform.

Bill Clinton should have known his health reform plan was in trouble the day he introduced it in September 1992 at the New Jersey headquarters of the Merck pharmaceutical company. As the candidate made his trademark post-speech plunge into the crowd, a mother handed her infant son to him. The baby vomited on Clinton's lapel. "That's what babies do," Clinton said.

Clinton's speech was one of the most important moments of his campaign. Health care reform had become a vital issue for voters, second only to the economy. Bush had already drafted a health reform plan, and although Clinton had alluded to his own package, he had never before laid out in detail what it might look like. Now, the line in the sand was drawn. After Clinton's speech, two things seemed clear regardless of who won the election: The nation's trillion-dollar health care industry was in for drastic changes, and the Capitol would see its most profound legislative battle since the tax reform fight of the mid-eighties.

It's hard to remember the hope and optimism with which the Clinton health care plan was greeted. Democrat and Republican alike agreed that the nation's health care system was in crisis and needed some kind of reform. Clinton's victory gave the sense that the moment for health reform had finally arrived. Only four days after his inauguration, Clinton appointed his wife and Ira Magaziner to lead the task force charged with designing the President's health care plan. The details would be left to the task force, but the broad principles had been known since Clinton's Merck speech: All Americans would be insured by large, regional purchasing cooperatives run by insurance companies. The costs would be picked up by the nation's employers. Also, the nation's malpractice system would be reformed to limit the possibility of frivolous lawsuits. In the end, the plan would achieve universal coverage and help stem the persistent growth of health care costs. In the first few months of the Clinton presidency, his health program enjoyed the support of over 60 percent of the country.

But then Washington's lobbyists began doing what they do, to much the same effect as that prophetic little boy in New Jersey. Along Washington's K Street, which is to lobbying what Times Square is to prostitution, the capital's biggest law firms geared up for the coming fight. Health-care experts were wooed and staffs were bolstered, all in hopes of landing the industry's major players who, seeing their very existence at stake, promised to devote as many resources as possible to ensure that the debate fell their way.

By any estimation, it was a seller's market. At the time, there were more than 800 different registered associations in the field of medicine, and nearly 300 representing businesses, each needing its own lobbyist to guide it through the jungle of Washington. Everyone had a stake in health care reform, and no one wanted to take chances.

Few firms were better positioned than Patton, Boggs & Blow, home to Thomas Hale "Tommy" Boggs, Jr. Over the years, no other Washington firm had linked itself so closely to the Democratic party. The biggest Democratic policy initiative since the days of Roosevelt was sure to be a windfall for the city's most prestigious Democratic firm. Shortly after the election, Boggs was pictured on the cover of the National Journal above the headline: "Ready to Cash in on Clinton."

It couldn't have been more correct. Patton Boggs did very well in the grab for clients. In addition to its longtime client the Association of Trial Lawyers of America, the firm landed some of the biggest players in the health reform debate, including the National Association of Life Underwriters (NALU) and the National Association of Health Underwriters (NAHU).

Patton Boggs found itself in the middle of two crucial aspects of the health reform debate. NALU and NAHU loathed the idea of mandatory alliances. "Underwriter" is actually a misnomer - the organizations represent agents and brokers who recruit clients and find an insurance company's policy that meets their clients' needs. Under Clinton's plan, consumers would negotiate directly with the purchasing alliances, removing the need for the go-between function the agents serve and, as a result, eliminating many of their jobs. For the Association of Trial Lawyers of America, the health care debate meant renewing its 20-year fight against any and all attempts to reform the malpractice system by putting limits on the amount a victim could collect from a lawsuit.

Malpractice reform had been a long time coming, but now die pressure for change seemed irresistible. A 1991 Harvard study estimated that malpractice insurance added about $9 billion to health care costs each year. Worse still, the study found, was the ever-present threat of lawsuits, which prompted doctors to protect themselves by prescribing unnecessary tests, or referring to a specialist patients whom they could just as well treat themselves. The cost of defensive medicine, though difficult to pinpoint, is estimated at approximately $25 billion per year. Reforms such as capping the size of awards for pain and suffering" have proven effective. In California, which passed reforms 20 years ago, malpractice premiums are 33 percent less than those of other large states. With polls showing Americans squarely in favor of reform, it came as no surprise when Clinton said he would include malpractice in his health package.

But the Trial Lawyers had traveled this road before with unblemished success, in no small part thanks to Boggs. In his 20-year association with the Trial Lawyers, not one attempt at malpractice reform has succeeded. Boggs, says Fred Graefe, a lobbyist for malpractice reform, "has singlehandedly stopped malpractice reform for 20 years."

Son of former House Majority Leader Hale Boggs and Congresswoman Lindy Boggs - and brother to ABC political correspondent Cokie Roberts - the 54-year-old Boggs is widely considered to be the most effective lobbyist in Washington. His network of powerful friends and his stable of influential clients have elevated him in some eyes beyond the status of a mere lobbyist. William Fay, former director of the Product Liability Coordinating Committee, remembers seeing Boggs in the Senate cloakroom after a vote on a product liability bill. "Senators were nodding and waving to him, coming up and chatting with him," Fay told Vicki Kemper of Common Cause magazine. "Senators consider him a peer."

It's a natural enough impression. Boggs has been at the center of Washington's circles of power virtually since birth, and he has studied the game of politics at the feet of Washington's giants. "[T]hey grew up with politics in their blood"' his mother wrote of the young Tommy and Cokie in her memoir. "That's what they knew, and it was served at the dinner table with the likes of Mr. Sam [Rayburn], Lyndon Johnson, and John Kennedy."

In his professional life as well, Boggs has had a knack for finding friends in the highest echelons of the Washington power circuit. Former House Judiciary Committee Chairman Jack Brooks and former Education and Labor Committee Chairman William D. Ford are both longtime friends who frequently visit Boggs' hunting cabin on the Eastern shore of Maryland. Back when Boggs was lobbying heavily on behalf of banking interests, he held a surprise birthday party for his friend and Senate Banking Committee Chairman William Proxmire.

Many consider Boggs' effectiveness to be a function solely of his contacts, but this view vastly underestimates what makes Boggs unique among lobbyists. Boggs is a listener; he uses meetings with congressmen and senators more as an opportunity to obtain information than to give it. "Members like to talk," says Tom Korologos, who for 17 years worked alongside Boggs representing the Association of Trial Lawyers of America. "Don't stop the presses on that, but they do have a tendency to talk and a good listener will always succeed in this town."

Boggs' listening is strategic. Regardless of the cause he is pushing, Boggs always knows the reasons behind his opponent's position. From there, he can calculate the point beyond which he can't push. But above all else, Boggs tries to determine what can be done. When he was a boy, he remembers, Sam Rayburn told him that "Politics is the art of the possible." He considers it the best political advice he ever received.

Boggs says he knew from the beginning that the current debate would be more difficult to win than his past victories, but that it would not be impossible. The sweeping nature of the Clinton bill, in which malpractice reform was but one small part, posed a problem for Boggs and the Trial Lawyers. Malpractice was always so simple: doctors versus lawyers. The omnibus bill brought more contestants into the ring. Who knew what coalitions could form to gang up on the Trial Lawyers? "Malpractice reform as part of a major health bill is different"' says Boggs. "Few people aren't going to vote for a health care bill because of malpractice reform."

In the first months of the debate, Boggs' strategy was to try to get the White House to remove malpractice reform from the omnibus bill. Boggs met with Ira Magaziner several times and argued that the malpractice issue would hurt the bill's overall chances. Malpractice isn't a health issue, Boggs said, and it doesn't belong on a health care bill. This is a fight the administration doesn't need, he argued. It would be better to get the Trial Lawyers - who have advocated universal coverage for years - and their formidable legislative muscle on board, or at least out of the opposition to the administration's plan. Then, if you must, take care of malpractice reform when the big battle has been won.

It was sound advice, but Magaziner didn't budge. The substance of the proposals could be negotiated, Magaziner said, but Clinton needed the malpractice provisions in the bill to placate terrified doctors and insurance companies. Still, the White House avoided a full frontal assault on the Trial Lawyers. Acceding to the lawyers' requests, the administration did not limit "pain and suffering" damages, but it would keep a 33 1/3 percent cap on lawyers' fees, and would allow states to adopt even lower limits. Still more alarming to the lawyers, Clinton's bill required an affidavit from a medical specialist stating that the accused doctor had departed from standard practices before a suit could proceed.

On September 22, 1993, Clinton outlined his health reform plan before a joint session of Congress. "Tonight," he said, "we come together to write a new chapter in the American story. This health care system is badly broken and we need to fix it." It seemed to some as though the bill would race through. Public support for the bill had bounced above 70 percent in some polls. Even Senate Minority Leader Bob Dole offered an outstretched hand of bipartisanship.

But Boggs was confident. Yes, malpractice was still in the omnibus bill, but now the bill was in Congress, where he and the Trial Lawyers had yet to lose a single battle. Perhaps the most crucial element in Boggs' string of successes with Congress is money. Boggs himself gave over $100,000 to candidates between 1987 and 1992, and his wife, Barbara, gave another $35,000. But the real root of his influence is his ability to get others to pony up. It is said that he has raised more money for Democratic Congressmen than any other lobbyist. "He has the ability to convince clients and his friends of their need to contribute," said Robert McCandless, a former member of the Democratic National Committee's finance council. "You've got to be able to tell your clients that if they are going to do business in this town, they'd better make certain contributions to the party in power and to key people on the Hill."

The Trial Lawyers have heeded this advice well. Between 1989 and 1994, ATLA's political action committee contributed more than $5.5 million to candidates for Congress. Democratic members of the House Judiciary Committee received an average of $7,000 per election cycle from ATLA's political action committee. But even this figure understates the amount of money the group and their constituency can shepherd. According to the Product Liability Coordinating Committee, the group's 60,000 members made individual contributions totaling nearly $72 million during that time. Lawyers overall contributed nearly $120 million, making them the biggest givers of any single occupational group, both overall and per capita, in the country. The depth of their financial power and the fact that the Trial Lawyers are politically active in every congressional district in the country, have made them an almost unstoppable force.

The Trial Lawyers have also benefited from an alliance with various consumer protection groups, most notably, Ralph Nader's Public Citizen. Public Citizen argues that malpractice reforms are aimed solely at making it more difficult for injured patients to sue their doctors. They have a point. Doctors, like lawyers, are just trying to protect their practices. And they have never shown any great concern for the rising costs of health care before. But it doesn't take a doctor to see that many malpractice suits are frivolous, and that the threat of lawsuits does contribute to the cost of health care.

Still, Boggs was troubled by the sweeping nature of the Clinton bill - and by the number of committees with jurisdiction over it. Could he be as certain of his influence on the House Ways and Means Committee as with Judiciary? Not likely. If he could isolate the issue, get sole jurisdiction for the malpractice provisions transferred to Judiciary, the ball would be back in his home court, under the watchful eye of his close friend and duck-hunting buddy, Jack Brooks.

Dan Rostenkowski, chairman of Ways and Means, was famously territorial, but also a longtime friend of the Trial Lawyers. With an indictment on fraud charges imminent, he knew he might lose his chair, and with it the chance to guide the malpractice provisions through his committee. After prodding from Brooks and Boggs, he agreed to hand malpractice over to Judiciary, under Brooks' watchful eye.

For four months, Brooks sat on the bill, refusing to assign it to a subcommittee for discussion in hopes that it would die of neglect. Only at the urging of eight of the Committee's Republicans, led by Congressman Hamilton Fish, Jr., did Brooks start moving in late May. Committee hearings were held on June 22, and an open markup session on August 2 - a full six months after Rostenkowski transferred jurisdiction.

Nowhere was Boggs' influence more apparent than at the markup session. Amid the bustling Judiciary hearing room, crowded with lobbyists from both sides of the malpractice debate, Tommy Boggs walked in, and took a front-row seat reserved for him. "A nice catbird seat," says lobbyist Elizabeth Richardson. Lobbyists for reform just shook their heads. It was clear where the session was headed.

Early in the hearing, Democratic Representative Mike Synar, along with colleagues Jerrold Nadler and Robert Scott, introduced an amendment. It dropped the specialist affidavit requirement, but kept the cap on compensation at 33 1/3 percent for awards below $150,000, and at 25 percent for above.

One surprise, seemingly innocuous, was tucked into the amendment. It would make this provision supersede all other malpractice laws - nullifying states' existing reforms, many of which, such as those in California, placed strong limits on lawyers' compensation and damage awards. "It was a little time bomb," Richardson says, "designed to detonate later and destroy all state tort reform." Only one committee member, George Sensenbrenner of Wisconsin, recognized the implications of the line, but by that point the Trial Lawyers' position was too strong and it was too late. The line stayed. For the Trial Lawyers, says Fred Graefe, "it was a straightforward slam dunk."

Unholy Alliances

Boggs had sunk a popular initiative with classic influence-peddling. John Jonas and Tom Scully, the partners at Patton Boggs charged with the task of tackling Clinton's health purchasing cooperatives, faced quite a different battle, and fought it in a different way. But it was no easier. "This may sound crazy now," Scully says, "but if two years ago someone asked me are we gonna get mandatory alliances, I would have said, `Of course.'"

Large mandatory health alliances were the brainchild of Princeton sociologist Paul Starr, who detailed his plan in the 1992 book, The Logic of Health Care Reform. To be sure, the plan was not perfect, but within a managed competition system, the alliances would be crucial. The government would create regional health insurance alliances run by large insurance companies. Everyone would be required to buy their insurance through these alliances, choosing the plan that best suited their needs. Competition between the insurance companies would produce the free market benefits of lower health care costs, while the cooperatives' size would enhance consumer buying leverage, bringing the costs down even further. Making participation mandatory would prevent insurance companies from "skimming" - seeking out the healthy and shunning the sick. The plan seemed a sensible marriage of public and private sectors. Yes, it was complicated, but as James Fallows wrote recently in The Atlantic Monthly, that's "like saying the blueprints to an airplane are complicated."

It wasn't the complications, though, that bothered two Patton Boggs clients. The National Association of Health Underwriters and the National Association of Life Underwriters saw their very existences at stake. With all Americans buying their insurance directly through the alliances, the role of the so-called underwriters would be eliminated and many would lose their jobs. Early on, Scully and Jonas agreed that the mandatory alliances would be number one on their clients' hit list.

Scully and Jonas belong to a newer breed o lobbyist - specialists and policy experts - that are gaining influence. Jonas came to Patton Boggs from the staff of the House Ways and Means committee, where he engineered efforts toward insurance reform for California Democrat Pete Stark. Since he left in 1986, he has been one of the leading insurance lobbyists in Washington. There is nothing flashy about Jonas. Unlike Boggs, who is given to episodes of self-promotion, Jonas plays his cards close to the vest. Even his office is a portrait of utility: The only decoration in his small and impeccably neat office are three model sailing ships and his diploma from Cornell Law School.

Scully is among the top health care authorities in Washington and a fast-rising star in the Republican party. As a top aide in OMB, Scully was the driving force behind the Bush health care plan. Fast-talking with a whirlwind's energy, Scully's knowledge of his chosen subject can be dazzling. "Tom is without question the most technically expert lobbyist-consultant you would find in Washington," says Barbara Daye of Blue Cross of California. "I've seen a lot of lobbyists, I've yet to meet someone with his breadth and scope of the technical delivery of health care systems."

Jonas and Scully's command of their field is their chief commodity. "You can't get access without knowledge," says Jonas. "I can go in to see John Dingell, but if I have nothing to offer or nothing to say, he's not going to want to see me." When Jonas and Scully served in government, congressmen grew accustomed to tapping them for information, and the relationship stuck. "I always looked upon Scully as someone who was a good mind on health care, not necessarily a well-heeled lobbyist for a special interest " says former Iowa Congressman Fred Grandy. "Of course, maybe that's just good lobbying."

It is good lobbying, but only if done carefully. "If you wandered in on a member who's trying to write a bill, and they want you to help them technically, and you go in there and act like you don't have an agenda . . . and tried to sneak in your clients' stuff," Scully says, "I think you should be shot." There may be no better way to lose the member's trust, he says. Still, the line between a lobbyist's opinions and those of his client is murky, if it exists at all. "You certainly tend to take on to some extent your client's views," Jonas says, "like you would take on your boss' views."

And expertise will only get you so far. Congressmen care about two things: votes and money. The money was there. The insurance industry had given nearly $15 million to congressional candidates in the 1991-1992 election cycle. Together, Scully and Jonas represented four of the top ten donors from the industry, including the most generous, NALU, which shelled out nearly $1.4 million. And with members in virtually every district - many knew their Congressmen or their staff; some had even sold them insurance - the insurance underwriters had wide influence. What's more, they were impeccably organized. The National Association of Health Underwriters, which represented 13,000 agents, had arranged fax trees so they could get the word out to their members. "We could talk to our membership one evening," says Jay Grant, the group's president, "and have 2,000 people faxing Congress by the next morning."

"Scully and Jonas decided in the spring of 1993 that to be as effective as possible, they would have to expand their base of support by building a coalition of associations in opposition to the mandatory alliances. The rise of coalition lobbying is one of the most compelling new developments in lobbying in the last 10 years. As legislation has become more complex and interest groups more dispersed, lobbyists have sought to combine their resources to enhance their influence. This practice reached its apex in the health care reform debate. Small businesses united with the American Medical Association to oppose the employer mandate. Medical specialist organizations teamed up against general practitioners. And a broad coalition of groups in support of the President's program, called the Health Care Reform Project, included groups like the AFL-CIO, the American Academy of Pediatrics, the Catholic Health Association, and the American Association of Retired Persons.

For their own coalition, reasoned Scully and Jonas, the broader the better, and they soon began contacting small business groups, who felt that the administration's plan would limit their choice of health care plans. Before long, 200 groups signed on, including the National Association of Wholesale Distributors, the National Wholesale Grocers Association, and the National Lumber and Building Material Dealers Association.

The coalition's motto, Jonas says, was focused like a laser." Limiting its focus to the mandatory alliance issue - and avoiding more controversial topics like the employer mandate - took great care and effort to maintain. The group's statement of purpose, only a single typed page, took nearly two months to produce.

It wasn't enough to be merely opposed to the mandatory alliances, Jonas and Scully thought; they must have an alternative. And so Scully crafted a system of purchasing coalitions in which participation was voluntary. Employers and individuals, he argued, ought to be able to choose to buy insurance from one of the cooperatives, or from an individual insurer. The free market force of competition between insurers would be the key to keeping health care costs down, not government involvement. Clinton's mandatory alliances, was big government run amok, they said, and would undermine the forces of the free market.

To be sure, voluntary alliances sound a whole lot nicer than mandatory ones. But these voluntary alliances failed to solve the very problems that started the health debate: cost and the growing number of uninsured. Without the government's mandate, insurers could choose to cover only good health risks. The people who most needed insurance, the poor and those with pre-existing conditions, would be left out in the cold. What's more without the purchasing leverage of the large mandatory alliances, the voluntary alliances would be less able to keep health care prices down.

But as with most aspects of the health care debate, the coalition's assertions went uncorrected by the press, which, much to its advantage, focused more on the politics rather than the substance of health care. The Washington Post was one of the worst offenders. Not surprisingly, Scully thinks it did an excellent job.

As early as February it was clear that mandatory alliances wouldn't make it out of Ways and Means. Pete Stark, the Health Subcommittee chairman and Jonas' old boss, said he couldn't count a single vote for the alliances in his committee.

With that, the focus shifted to John Dingell's Energy and Commerce Committee. If any committee could get a bill to the House floor, many thought, it was Dingell's. The Michigan Democrat shared Clinton's zeal for universal coverage; fifty years earlier, Dingell's father had introduced the first national health insurance bill in Congress. And Dingell, among the Hill's shrewdest horse-traders, had plenty of chips to play.

But his task was still formidable. Every one of the 44-member committee's 17 Republicans was opposed. To get the bill to the floor, Dingell needed 23 of the 27 Democrats. About one-third of these Democrats came from rural sections of the country, where support for Clinton's bill was weak and the small business lobby strong.

Except for the employer mandate, which he thought to be the only politically feasible way to finance such a broad program, Dingell was prepared to offer just about anything. In late spring, Michael Weisskopf wrote in The Washington Post, the chairman began going door to door. Congresswomen Lynn Schenk and Marjorie Margolies-Mezvinsky objected to price controls on new drugs - it would stymie research, they said - so the chairman dropped the idea. Virginian Rick Boucher couldn't countenance the cigarette taxes, so Dingell offered tax credits to tobacco farmers for alternate crops.

Dingell was one vote short, and the last one on the fence was Kansas Democrat Jim Slattery. It could not have worked out better for Jonas, Scully, and the coalition. The previous February, Jonas had accompanied several members of NALU and NAHU to a meeting with Slattery at which they Presented the coalition's voluntary purchasing option. The Congressman was a natural ally. NALU was Slattery's single biggest contributor, giving him $10,000, the legal limit, between 1991 and 1992. Perhaps more importantly, one of Slattery's oldest and dearest friends is an agent for Aetna Life Insurance, and through him, the Congressman knew a number of other insurance agents. So Slattery was acutely aware of the underwriters' fear that purchasing alliances would throw them out of work.

Nonetheless, the meeting was tense. A few weeks earlier, Jonas had come to Slattery representing New York Life. Jonas' positions, according to Karen Hallows, Slattery's aide in charge of health care, were not directly contradictory, but the quickness with which Jonas switched from one client to another startled the Congressman. Slattery began the meeting by asking Jonas, "Who are you representing today?"

After the initial discomfort, the meeting got under way, and Slattery and Hallows agreed to watch the issue carefully. Knowing how much it meant to the insurance agents, Slattery soon agreed to support the voluntary cooperatives plan.

So when Dingell came to Slattery asking for support, the Kansan gave a tentative yes, so long as the mandatory alliances were dropped and the voluntary alliances were instituted. Dingell agreed - anything but the employer mandates - and amended the bill.

But the underwriters weren't the only lobby working on Slattery. The National Federation of Independent Businesses, fierce opponents of the employer mandate, had sent a barrage of members to hammer away on Slattery and, in the end, they won. Slattery broke with the majority, and opposed the bill. On June 28, Dingell announced that his committee would not report a bill.

The coalition had held. Lacking the strong, unified leadership that the Democrats had presented in the tax fight - and with wilting public support - the administration never even got to deal-making, and health reform died a slow death. Several bills were drawn up in the frenetic summer months, but none stuck. Emboldened by their victories in Energy and Commerce and Ways and Means, interest groups, which by this had time spent over $100 million on the issue, became more insistent, and die Republican leadership reflexively rejected any reform bill that came down the pike. In the end, of course, not a single reform bill was passed, and on September 26, Senate Majority Leader George Mitchell announced that health care reform was officially dead.

That suited the clients of Patton Boggs just fine. The Trial Lawyers had beaten the odds, emerging from another malpractice battle unscathed. And the insurance agents had smashed the centerpiece of Clinton's reform plan.

It also suits Patton Boggs. Not only did their victory confirm their reputation, but the total defeat of all health reform also means that the issue will come around again, and with it, another rush of clients paying top prices to have Patton Boggs on their side. Health care reform took good care of Patton Boggs. The firm's total revenue shot up 25 percent in two years, from $49 million to $61 million. The next round could be even more fiercely fought, and more profitable for the firm. Tommy Boggs will be ready.