Governor HMO


Not since Kevin Costner made Waterworld has a performance been so universally panned as Governor Perry’s effort in the last legislative session. Indecisive and absent for much of the session, Perry was boldly ill-advised when he finally did act. The governor’s record 82 vetoes–including bills to ban the execution of the mentally retarded, improve access to Medicaid, promote living wages on the border, and force HMOs to pay their bills promptly–have provoked a chorus of outrage from a broad spectrum of interests, ranging from the Texas Medical Association to Valley Interfaith. Most of the state’s dailies have echoed the Dallas Morning News editorial headline: “Perry’s Mistake.”

Virtually all of the vetoes came as a complete surprise to the bills’ advocates, none more so than Perry’s veto of HB 1862, which would have closed loopholes which the insurance industry has long abused in order to withhold payment from doctors and hospitals. Just two weeks before his veto, Perry had addressed the Texas Medical Association, the powerful doctors’ organization, where he said it was time to hold HMOs accountable. The TMA responded with an early endorsement for Perry’s gubernatorial campaign. Imagine the doctors’ surprise when Perry vetoed the centerpiece of their legislative agenda on June 17. The group is meeting to reconsider its endorsement, and a prominent member has rescinded his acceptance of a gubernatorial appointment to the board of the Texas Department of Health.

But maybe this particular veto shouldn’t have been so surprising. To say that insurance interests have good access to the governor’s office is an understatement. His legislative director, Patricia Shipton, is a former HMO lobbyist, whose past clients include the Health Insurance Association of America and the National Association of Independent Insurers. Shipton also represented the Texas Civil Justice League, one of the state’s two tort reform outfits. Equally close to Perry, and by some accounts even more influential, are two other insurance industry mouthpieces, Mike Toomey and David Carney. Toomey is a former House colleague and personal friend of Perry. He is a lobbyist for Texans for Lawsuit Reform, the group that has collected and dispensed lavish amounts of campaign cash in pursuit of its efforts to cut off citizen access to the courts. House Bill 1862 would have prevented health insurers from imposing mandatory arbitration on clients and doctors, a tactic used to forestall lawsuits. Mandatory binding arbitration has long been high on the insurance industry’s wish list.

David Carney, the former political director of the first Bush White House, now heads Americans for Job Security. Robert Vagley, president of the Washington-based American Insurance Association, formed the group in 1998, to counter the influence of increased labor spending in Congressional elections. The group specializes in issue ads, spending $10-12 million in 2000 to take issues like “regulatory reform” straight to the public. Benjamin Ginsberg, an attorney with George W. Bush’s presidential campaign, is also affiliated with the group. Also killed in the so-called “Father’s Day Massacre” veto bash was another insurance reform, HB 2430, which would have funded an ombudsman position to help Texans navigate the complex health care system and protect their rights. Bill sponsor Elliott Naishtat summed up the fate of the bill, which had broad bi-partisan support, in one line: “The insurance industry didn’t like it.” –NB