Four years ago, as a Republican-led Congress was proposing a $270 billion cut in Medicare over seven years, GOP leaders viewed the American Hospital Association as an enemy of the cause because it sponsored advertisements that criticized the proposal.
Today lawmakers from both parties are falling all over themselves trying to give billions of dollars back to hospitals and other providers as Congress assesses the effects of the Balanced Budget Act of 1997.
Hospitals' success in working their way back into the good graces of the GOP Congress reflects the way Medicare politics has been transformed by the expectation of budget surpluses and the maturing of the GOP majority that swept into power in 1994 on a wave of anti-Washington sentiment.
Supporting that success have been strong relationships between local hospital executives and GOP lawmakers, many of whom are now in their third terms.
A seismic shift in campaign contributions by the AHA, the industry's leading lobbying group, has helped pave the road to reconciliation. In the current election cycle, 56% of AHA contributions has gone to Republicans, while in 1994 nearly two-thirds of its campaign gifts went to Democrats (See chart).
By comparison, the Federation of American Health Systems, which traditionally has sympathized more with Republican causes, now gives 61% of its political contributions to the GOP, the same share it gave to Democrats in 1994.
Now listening to the complaints of hospitals and other providers, Congress is on the verge of passing legislation that would put more than $10 billion back into the Medicare program by modifying payment reductions imposed by the budget law.
The legislation diverts money from expected budget surpluses, projected to be $161 billion in 2000 and increasing to $413 billion in 2009.
In declaring support for the Medicare-relief bill, lawmakers frequently invoke the hardships of hospitals in their states and districts. The providers have said the budget law's payment policies have forced them to lay off workers and trim services while still losing money.
"It is interesting to me that you don't see many members, even its framers, defending (the budget law)," says Chip Kahn, president of the Health Insurance Association of America, who as a top House staffer helped draft the law. "But the budget wouldn't have been balanced without it."
Kahn said he's not too surprised the tables have turned. "It's an election year, and you've got a surplus, and relative reductions in the growth of Medicare aren't necessary from a budgetary standpoint," he says.
That's a far cry from the political environment just four years ago, when Medicare was seen as a major source of revenue for balancing the federal budget in seven years.
When President Clinton signed the budget law, with its $112 billion in projected Medicare savings, it was the denouement of a hard-fought three-year battle between Capitol Hill and the White House. The initial push in 1995 was for a $270 billion cut over seven years, which Clinton vetoed partly because it took too much from Medicare.
As the GOP made its initial push, it triggered a reaction from the AHA, which ran national and local advertisements opposing the cuts. That, in turn, triggered a reaction from the House Republican caucus, which characterized the AHA as a bunch of liberal Democrats hostile to the GOP agenda.
But local hospital executives have aided the continuing campaign for Medicare payment increases by personally appealing to their senators and representatives about how the budget law has directly affected their organizations.
Part of the campaign has involved bringing those executives to Washington to tell their stories.
"Instead of mouthing off, they're mouthing off with statistics," says one former House GOP aide who is now a healthcare lobbyist.
"I think what's made us effective over the past year is that there really is, as we call it, 'real pain for real people in the real world,' " says Richard Pollack, the AHA's executive vice president and director of government affairs.
Many of the congressional class of 1994, who may not have known a single hospital executive when they first ran for office, now see the health of local hospitals as key to staying in office. Hospitals' lobbying has led lawmakers to recognize the role of hospitals as big employers as well as providers of lifesaving healthcare services.
Proving former House Speaker Thomas O'Neill's motto, "all politics is local," members who once disparaged hospital officials now fear that the loss of a local hospital could cost them politically.