How Hillary Won Over the Health-Care Industry

They were an army of two: Harry and Louise, those middle-aged, middle-class icons, frustrated that the government was limiting their health-care coverage. There they sat at their kitchen table, bills strewn before them, an adding machine at hand, despair in their souls. Bureaucrats were taking away their freedom—especially one named Hillary Clinton.

Cooked up in 1993 by the health-care-insurance lobby, Harry and Louise starred in a series of ads critical of the then-first lady's dramatic plan to overhaul the U.S. health-care system. Her proposal for universal coverage actually kept private insurers in place, but she favored strict regulation—including price caps on insurance premiums. And she wasn't going to compromise, not with the insurance companies, not with Congress, not with doctors. So Harry and Louise fired back, spooking Americans with their veiled references to socialized medicine. The fictional pair triumphed in 1994, helping to sink the 1,342-page bill—a centerpiece of her husband Bill Clinton's first term.

Fast-forward 13 years. Hillary has announced a new plan for universal health-care coverage—a plan she hopes will help propel her to the Democratic presidential nomination in 2008. Surprisingly, her past health-care flop has become a significant political asset. Sixty-five percent of all voters—and 91 percent of Democrats—are confident that she would do the right thing for the health-care system, according to a Gallup poll released in July. And the captains of the health-care industry who once viewed her as the root of all evil are now filling the coffers of her campaign. (Her proposal calls for mandatory participation, which the industry tends to favor. But insurance companies will also be required not to turn anyone away for pre-existing conditions under Clinton's new plan.) As of the first quarter of 2007 she was the recipient of more health-care-industry donations than any presidential candidate—Democrat or Republican—according to a recent study by the Institute for Health and Socio-Economic Policy. Even Charles Kahn, who, as executive vice president of the Health Insurance Association of America, orchestrated the Harry and Louise ad campaign, is hopeful that a President Hillary Clinton would tackle health-care reform again. "She knows a lot about health care, she's interested, she can speak the language. It's a natural constituency," says Kahn, who is now president of the Federation of American Hospitals and says he met with her just a few months ago to talk about the issue.

How did the woman once demonized by the industry—whose plan was derided as "Hillary-care"—become so popular in these parts?

For starters, it's a matter of realpolitik. As the leading Democratic contender running at a time of sagging GOP popularity, she's a good bet to win the White House. Health-care companies naturally want a seat at the winner's table, regardless of who it is. "These kinds of contributions in general follow power and influence, and these groups recognize that Sen. Clinton is a serious candidate to be the next president," says Fred Wertheimer, president of Democracy 21, a campaign-finance watchdog group. "They are interested in gaining access to people in power of all ideologies in both parties."

But Clinton has worked to change her unyielding ways. Her effort in the early 1990s was doomed in part by her rigid, aggressive approach; she now says she's learned from that experience. She frequently talks about how she now understands that change must be incremental and that cooperation is the only way to get anything done. People in the industry have noticed the difference. "In 1993 we had meetings with [Hillary's health-care task force leader] Ira Magaziner, but he turned his hearing aid off. There was no negotiation, no give and take," says Kahn. But she has a more open approach now. She's doing all the right things. She's talking to people, listening to people. She says, 'I've learned a lot.' All one can do is take her at her word."