SPECIAL INTERESTS : Health Reform Sprouts Intense Grass-Roots Lobbying Outside Beltway : Big medical firms are being outmaneuvered by independent providers willing to confront lawmakers at home.

When Rep. Mike Kopetski (D-Ore.) came out against a drug-pricing provision inserted into health care reform legislation at the behest of the nation’s independent pharmacists, lobbyist John Rector quickly “got in his face.”

Rector, who represents the druggists’ trade group, issued a “fax alert” to thousands of pharmacists across Oregon, urging them to inundate Kopetski with mail and telephone calls and to show up at town meetings and pepper the congressman with carefully rehearsed questions.

Meanwhile, an activist cadre of pharmacists in other states--what Rector calls his “legislative defense force”--was asked on short notice to call and write key lawmakers to make sure that they would fight Kopetski.

Many of the nation’s small-town pharmacies are locked in a fight for survival against health maintenance organizations and direct-mail drug distribution firms, which receive steep volume discounts from drug manufacturers. After providing early support for President Clinton’s health reform plan, the pharmacists won the Administration’s support for a provision that would prohibit such discounting.

Kopetski supported discounting. So did the nation’s major pharmaceutical companies, which lobbied hard on Capitol Hill. But they could not field a comparable grass-roots army to counter the pharmacists. “I don’t think it’s possible for the drug companies to do the kinds of things we do here,” says Ken Epley, a leading pharmacist in Salem, Ore., in the heart of Kopetski’s district.

The result: Kopetski quickly found that he had little support in his fight with the pharmacists and gave up. The drug-pricing provision is still in the health care legislation as it winds its way through the congressional maze--much to the dismay of the big drug makers.

“I have to give the pharmacists a lot of credit,” Kopetski says.

The fight over drug pricing is just one example of how grass-roots lobbying is playing an increasingly significant role in influencing politics and policy in Washington.

Money and power contacts still matter. But there is so much of both arrayed on all sides of an issue as big as this one that the victory often goes to those groups that leapfrog the Beltway and mobilize their members around the country.

And in the sometimes upside-down world of health care lobbying, rich and powerful corporations are finding themselves at a distinct disadvantage against organizations representing large numbers of individual doctors, pharmacists, chiropractors and other care providers who can be called on to confront key lawmakers at critical points in the process.

“Lobbyists know that there is a public stigma attached to what they do, and so they know that the way to be effective is to go get Mom and Pop from back home to do their work,” notes Charles Lewis, executive director of the Center for Public Integrity, a Washington research group that is monitoring the health care battle. “There are some groups in this fight that can get 10,000 members mobilized in 48 hours, and that is very effective.”

Nowhere is the contrast between grass-roots and inside-the-Beltway lobbying sharper than in the bitter war being waged along the health care industry’s emerging economic fault lines. On one side are the forces of “managed care,” such as HMOs and preferred-provider networks. On the other are the physicians, pharmacists and other independent providers whose livelihoods are threatened by the economic pressures driving the cost-containment movement.

This bare-knuckled free-for-all, waged by special interests deep in the trenches of Congress and largely outside the view of the White House, is dramatically altering the shape and scope of Clinton’s original vision of health reform.

The emerging landscape of managed care has been the subject of more infighting than almost any other issue in recent years, pitting large group insurers, drug companies, HMOs and other advocates of industrywide consolidation and cost containment against independent providers.

So far, it hasn’t been much of a contest. The doctors and druggists are winning, hands down, thanks to their grass-roots advantage.

“Our ability to do grass-roots is spotty,” acknowledges Janet Newport, a lobbyist for FHP Health Care, a large West Coast HMO that is participating in an industrywide lobbying coalition in Washington.

The use of grass-roots activists by doctors and pharmacists has been effective, observes Kopetski, “because it brings the issue home” to lawmakers. “You can have a lobbyist say the same thing, but it means more to you to hear it from your local pediatrician or your local hospital administrator, who have come to see you on their own time.”

As a result, the HMOs, which tend to be viewed as large, faceless corporate entities, have been losing one legislative fight after another in recent weeks. They now warn that their legislative reversals could cause a rapid erosion of their ability to control costs. That in turn would raise serious questions about Clinton’s ability to live up to his pledge to provide a credible reform plan that does not rely on broad tax increases.

Individual doctors, represented by the 300,000-member American Medical Assn. and various medical specialty groups, have been particularly successful. They have used their local political influence to win legislative concessions designed to reduce the authority and power that HMOs and insurers can exert over physicians.

The influential House Ways and Means Committee included most of what the AMA wanted in the health care bill it approved in June. For example, one controversial provision endorsed by the committee, called the “any willing provider” clause, would make it difficult for HMOs to reject any physician who wanted to join their networks.

Currently, HMOs and other cost-conscious health networks try to limit the number of doctors in their system. Doing so enables the HMOs to negotiate lower fees in return for promising the physicians exclusive rights to a large volume of business.

The Ways and Means panel also approved many elements of the AMA’s “patient protection act.” Its proposals are designed in part to give doctors the power to overrule insurance company guidelines for care. The committee endorsed another clause aimed at requiring HMOs to offer patients the right to see doctors who are not in their networks at any time.

Such changes, the AMA argues, will prevent “merger-mania in the health care industry” from taking medical decisions out of the hands of patients and their doctors.

But representatives of the managed care industry say that the provisions will simply increase the costs borne by HMO members by as much as 15%. The provisions’ primary purpose, the industry charges, is to protect the incomes of doctors.

At the same time the HMOs were losing to the physicians, they were being trumped by the pharmacists, who charged that the drug makers refuse to grant them the same discounts they offer HMOs, even for large orders, and insist that the industry is engaged in anti-competitive pricing practices.

With a coalition representing 112,000 druggists nationwide, Rector and other lobbyists had enough clout to get what they wanted. When Kopetski offered his amendment to strike the anti-discounting provision from the Ways and Means bill, neither the committee’s Democratic leadership nor its Republican minority wanted to vote against the pharmacists.

If the anti-discounting measure is approved by Congress, drug makers no longer would be able to offer discounts to fast-growing managed care networks. As a result, HMO members, as well as patients at nursing homes and large hospitals, could see prescription price increases of 5% to 10%, industry lobbyists warn.

But the macroeconomics of the issue has been more than offset by the anecdotal tales of hardship told by local pharmacists.

“There is a pharmacist in every single congressional district and a pharmacist in every district who sees the family of a member of Congress, and they have been using those people,” says Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers Assn., the drug industry’s lobbying group.