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Copyright 1999 The New York Times Company  
The New York Times

July 12, 1999, Monday, Late Edition - Final

SECTION: Section A; Page 12; Column 1; National Desk 

LENGTH: 1468 words

HEADLINE: Unlikely Lobbyist Will Lead H.M.O.'s Into Battle



When the Senate takes up legislation on Monday to define patients' rights, Democrats will argue that hundreds of people have been injured or even died because they were denied necessary care by cost-conscious health maintenance organizations.

So it is rather surprising to find that the chief lobbyist for the managed care industry is herself a Democrat, a veteran of the trade union movement and a longtime advocate of universal health insurance.

The lobbyist, Karen M. Ignagni, has deflected much of the anger that threatened to overwhelm H.M.O.'s just a year ago. She will lead the industry into battle this week, as the Senate holds four days of impassioned debate on proposals to set comprehensive Federal standards for health insurance plans.

It will be the most extensive debate on any health care issue since President Clinton's plan for universal health insurance died on the Senate floor in the summer of 1994.

As president of the American Association of Health Plans, Ms. Ignagni leads a nimble, quick-witted campaign to outmaneuver the Clinton Administration and Democrats in Congress who want to enact a so-called patients' bill of rights, enforceable by lawsuits against health plans that injure patients by denying them care.

In a city teeming with health care lobbyists, Ms. Ignagni is widely considered one of the most effective. She blends a detailed knowledge of health policy with an intuitive feel for politics.

Since taking charge of the association nearly six years ago, she has built up a large stable of health policy analysts and has retained pollsters and political consultants from both parties to repair the tattered image of H.M.O.'s. She has persuaded members of the association to adopt a voluntary code of conduct, which they use to argue that new laws are unneeded.

Ms. Ignagni (pronounced ig-NAH-nee) puts a humane face on an industry reviled by many consumers. Old friends say they are puzzled by the transition she has made from champion of the working class to defender of big business. She now denounces proposals by Democratic members of Congress who were her allies for more than a decade, when she worked at the A.F.L.-C.I.O.

One Democrat on Capitol Hill said, "Karen went from God's right hand to Satan's left hand." A labor union leader said, "She jumped to the other side." Former allies on the left say she has sold out, abandoned principles, become a turncoat.

"She has become part of the enemy, as far as I'm concerned," said Dr. Sidney M. Wolfe, director of Ralph Nader's Health Research Group.

Representative Greg Ganske, an Iowa Republican who supports many of President Clinton's proposals to regulate H.M.O.'s, said: "Karen has one of the more difficult jobs in Washington, defending an industry that has a public relations record similar to that of the tobacco industry. In private conversations, I sense that she is uncomfortable defending the totally irresponsible behavior of some H.M.O.'s."

Ms. Ignagni sees no contradiction. Even as she works to head off legislation defining patients' rights, she insists that she is motivated by concern for low-income workers. Proposed new Federal standards and requirements, she says, would increase the cost of health insurance and make it unaffordable for many workers and small employers.

Ms. Ignagni's adversaries express grudging respect for her. "I just wish she were on our side," said Gail E. Shearer, a health policy expert at Consumers Union. David H. Nexon, the senior health policy adviser to Senator Edward M. Kennedy, Democrat of Massachusetts, said, "Karen has revitalized an organization that was somewhat moribund and made it a real player on the Washington scene."

Lobbyists for the association have penetrated the innermost chambers of the Health Care Financing Administration, the unit of the Department of Health and Human Services that runs Medicare. The lobbyists often seem to know more about what is happening at the agency than do senior officials of the department.

The association and its business allies have flooded the airwaves and newspapers with advertisements opposing legislation to regulate H.M.O.'s. Through an umbrella group known as the Health Benefits Coalition, they spent $2 million on advertising last year and have already spent more than that this year, with a new burst of advertising planned for this week.

The advertisements attack the main Democratic bill by name, but provide justification -- and political cover -- for senators to vote against any patients' rights legislation.

At 45, Ms. Ignagni is younger, more informal and more direct than most lobbyists who run big trade associations. Her talk is breezy, but it serves a purpose, frequently disarming her opponents.

Most H.M.O.'s are operated by profit-making companies like Aetna, Cigna and Pacificare, but Ms. Ignagni rarely talks about their profits or losses. She prefers to talk about the quality of health care, the concerns of consumers, the work that H.M.O.'s are doing to detect breast cancer and treat asthma.

As consumer groups, labor unions and doctors press Congress for legislation to define patients' rights, the position of the managed-care industry has been continually evolving.

Two years ago Ms. Ignagni said her members saw no need for legislation. Now, she said, they strenuously oppose the main Democratic bill and have not endorsed the Republican bill, although they see it as "less undesirable."

Explaining why she was now willing to consider legislation, Ms. Ignagni said, "If we want to influence the discussion in Congress, we can't oppose everything."

Provisions of the Republican bill allowing patients to appeal the denial of care are "a good starting point for bipartisan discussion," she said. But, she added, "We dislike provisions of the Republican bill that micromanage our activities and dictate the design of health plans."

Ms. Ignagni's presence is a reminder of the history of H.M.O.'s. They have their roots in labor union health plans and in the idealism of the health cooperatives that were formed in the 1940's and 50's to obtain better health care at the lowest possible cost.

For years, the United Automobile Workers, the United Mine Workers and other labor unions had seats on the board of the Group Health Association of America, established in 1959. In 1996, the organization changed its name to the American Association of Health Plans.

Ms. Ignagni has combined policy and politics throughout her career. After graduating from Providence College in Rhode Island in 1975, she worked as a research analyst at the Social Security Administration, analyzing data on health spending.

She moved to the Committee for National Health Insurance, formed by Walter Reuther of the auto workers' union, and then worked for Senate Democrats before taking a job at the A.F.L.-C.I.O., where she held senior staff positions from 1982 to 1993.

Ms. Ignagni did not seek her current job; she was recruited by an executive search firm. She received a salary of $300,000 last year, plus a $100,000 bonus for her performance.

When the House passed a Republican bill to regulate H.M.O.'s last summer, Ms. Ignagni complained that "the debate has been defined by politicians, pollsters and Hollywood producers." But she herself has used the techniques of a political campaign in trying to fend off Government regulation of managed care.

For example, the association says it has developed a database with the names of millions of patients, H.M.O. employees and allies who can be dispatched at a moment's notice to answer critics of managed care. The group boasts that it "helped generate thousands of letters to the editor" last year.

"We've made a real effort to take our message, our campaign, to voters, physicians, Medicare beneficiaries and opinion leaders around the country," Ms. Ignagni said.

The association is running advertisements in Iowa and New Hampshire to persuade Presidential candidates that they cannot win many votes by "bashing H.M.O.'s."

Ms. Ignagni hired an economic consulting firm, the Barents Group, a unit of KPMG, to estimate the local costs of Federal mandates, and she has publicized the results in news conferences around the country.

Even as Federal auditors contend that H.M.O.'s are overpaid by the Medicare program, Ms. Ignagni is asking Congress to increase those payments. She commissioned a study by the accounting firm PricewaterhouseCoopers to support her case. And she has recruited elderly people as lobbyists, urging Congress to increase reimbursement so health plans will not drop out of Medicare.

In all of this, Ms. Ignagni seems untroubled by the apparent contradictions between her old and new roles. "I've never had a sense that I was advocating something I didn't believe in," she said.

GRAPHIC: Photo: Karen M. Ignagni, president of the American Association of Health Plans, in her office in Washington. (Shana Raab for The New York Times)      

LOAD-DATE: July 12, 1999

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