The honeymoon is over for George W. Bush. Three weeks after the end of a legislative session in which he made good on his campaign promises and earned nothing but praise, the governor made his first big political mistake. He vetoed the Patient Protection Act, a measure backed by medical and consumer groups to curb the worst practices of HMOs and other managed-care organizations and to protect the right of ordinary people to choose their doctors.
The veto robbed managed-care critics of a victory that they had hoped would set a precedent for other states and even Congress to follow. Texas was to be the bellwether for cracking down on HMOs that refuse to pay for emergency-room care; routinely reject the use of new technology or treatments; fire doctors without notice or explanation; pay doctors their full stipends only if they deny expensive treatment to patients; and employ bait-and-switch marketing tactics that offer potential customers long lists of doctors to choose from, many of whom turn out to be unavailable. At issue in the brief but fierce lobbying battle over the Patient Protection Act was how, when, where, and by whom a patient should be treated—and, above all, who should decide. By blocking the act, the governor sided with insurance companies over doctors, employers over employees, and concerns about the cost of care over concerns about the quality of care.
Bush understood the political risk he was taking (“It was the easy thing politically to sign the bill,” he says, “and the headline of your story ought to read, ‘Governor shows political courage’”), and he began practicing damage control as soon as he had made up his mind. His veto message included a directive to his new insurance commissioner, Elton Bomer, to adopt rules that protect patients and assure quality care. “This is not a ruse,” says Bush. “This is ‘fix the problem.’” Indeed, Bomer is a straight-arrow Democrat and a former legislator from East Texas who is not the sort to regard his mission as making the world safe for insurance companies. Two weeks after the veto, his working list of problems to fix covered virtually every abuse addressed in the vetoed bill.
But Bomer’s active role only makes Bush’s veto more puzzling. If the rules are so important, why didn’t Bush just sign the law? Inside the Capitol, where politics is always viewed in personal terms, there was talk that Bush wanted to punish the Texas Medical Association for using Democratic consultants (“unequivocally untrue,” says Bush) and that he was paying back the insurance industry for its political support in the 1994 election. But insurers didn’t have the political muscle to kill the law outright. Instead, they helped stir up a far more influential group of opponents: employers, who buy health benefits and prefer managed care because it’s cheaper than traditional reimbursement plans. A frenzied and hyperbolic lobbying campaign against the law gave Bush three excuses to veto it.
(1) Higher Cost. “Attention Texas Taxpayers,” began one newspaper ad. “The Texas Senate is now debating H.B. 2766, the Texas Health Care Tax.” The ad went on to say, “This is a true tax bill.” No, it was a false tax bill: The Patient Protection Act imposed no taxes. It did have requirements—such as paying for emergency care—that would have cost HMOs money. The ad was paid for by a little-known group called Texas Citizens for a Sound Economy (the New York Times has reported that the national Citizens for a Sound Economy counts the Cigna insurance company among its major donors). The same ad charged that over the next five years, the law would result in “over $1 billion in new health care costs and taxes.” This tactic was quickly embraced by other opponents of the law; the Texas Association of Business and Chambers of Commerce, for example, sent a fax alert to its members, headlined, “Needed: Action Opposing Health Care Tax,” that repeated the $1 billion figure. After the veto, however, Elton Bomer examined the formula used to justify the figure and told the Texas Citizens for a Sound Economy, “I think the real number is no more than $528 million and probably a lot less.” In any case, since most of the patient and doctor protections in the vetoed law will be reborn in Bomer’s proposed rules, some additional costs will occur despite the veto.
(2) Employer opposition. Bomer’s rules won’t resurrect the section of the law that Bush most objected to, which required employers to guarantee their workers a choice between managed care and a reimbursement plan. Even if a company offered only HMO coverage, the law would have allowed employees to switch to a reimbursement plan by paying the extra cost themselves. What’s wrong with that? Employers said the Legislature was meddling with their right to make contracts and that the option would make all health insurance, including HMO plans, more expensive. They missed the point that the whole rationale for the Patient Protection Act was concern that HMOs are achieving huge savings at the expense of choice and quality of care.
(3) Interference with the market. Bush’s policy advisers were unanimously against the bill as a matter of principle. “We had long discussions about the future of medicine,” Bush says. “It’s an evolving world. Should government’s role be to stop the marketplace? That’s not my philosophy.” But obviously Bomer’s rules will be an intrusion into the marketplace, and the preservation of the reimbursement option would have provided HMOs with more competition.
In the end, Bush decided the law was an attempt to turn back the clock. He has come to see himself as a politician who thinks about the future—a man self-made by