The American Hospital Association was among the first to take the deal. In negotiations in late June and early July, the White House sought a $155 billion reduction in subsidies and payments to hospitals for Medicare, Medicaid, and uncompensated-care programs. The AHA agreed, but the sides soon began sniping at each other, and the AHA started separate negotiations on the same issues with the Senate Finance Committee. This caused Nancy-Ann DeParle to complain to Linda Fishman, one of the AHA’s top lobbyists. DeParle wrote: “We are taking all sorts of incoming from press about specific things you have sought in the [Senate Finance Committee] deal. . . . We are saying that we are not party to such an agreement — we agreed to a number, $155 billion. I know you understand that you are much more likely to end up where you want to be if you don’t box us in.” This veiled threat worked: The AHA suddenly insisted to the press that it wasn’t pushing for anything outside of the White House agreement and would continue to support the administration.
What the AHA wanted most was to preserve the flow of government money to its member hospitals, especially through Medicare and Medicaid. In exchange, the AHA agreed to the $155 billion in payment cuts, spent incredible sums of money on lobbying, and steered most of its campaign donations toward Democrats. Despite supporting the White House through the legislative process, the AHA never issued an official endorsement of the final Obamacare legislation, but two weeks after President Obama signed the bill, it unrolled an unusual million-dollar ad campaign in the districts of 16 Democratic House members, most of them in vulnerable seats in red states, thanking them for their “yes” votes.
The American Medical Association also walked a tightrope. Like the other groups, it was steadfastly against a public option, but otherwise it tried to cast itself as a partner of the administration. And there was a laundry list of items it wanted in the bill. As outlined in a memo from Richard Deem, its head lobbyist, to DeParle, its priorities included medical-liability reform and the so-called doc fix, a permanent repeal of the payment structure under which doctors are underpaid for services to Medicare and Medicaid patients.
The AMA was more trusting than other industry groups in the Obama administration’s willingness and ability to deliver what it promised. “It was a bit of naïvety on the part of the AMA,” Dr. Marcy Zwelling, an AMA member and former president of the Los Angeles County Medical Association, tells National Review. “They did not understand the politics. They did not understand that they were being used. And they were used.”
Negotiations got off to a rocky start. In early May 2009, AMA representatives met with Senate Finance Committee chairman Max Baucus but found him unhelpful. “[I] don’t think it went well from a health-sector-community perspective,” Deem wrote to DeParle. He also observed that “we are taking grief from our members because the perception is we are serving them up for payment cuts. . . . It seems like the goal posts are being moved.”
AMA members were becoming uncomfortable with the direction their board of trustees was taking. The AMA’s position on Obamacare “was not representative of the AMA as a whole,” Dr. Zwelling says. Doctors were worried that their organization was being politicized in the White House’s push for health-care reform.