By Chris Parker
By Jesse Marx
By John Baichtal
By Olivia LaVecchia
By Jesse Marx
By Olivia LaVecchia
By Tatiana Craine
By Judy Keen
The worst were the nights before a court hearing. As Mike Hatch lay in bed, eyes wide open, his mind would churn over details, struggling to banish the knowledge that in the morning he would be fighting for somebody's life. Unless he could convince a judge to rule against a health-insurance company, his client would die in a matter of months. Failure would be permanent.
When the desperate people first came through his office door, Hatch would exude a calm confidence purposely designed to inspire hope. Still boyish in his 40s, with a slight physique and delicate hands, he had always worked hard to be taken seriously. During his career in politics--as chair of the DFL Party, state commerce commissioner, and gubernatorial candidate--he had developed a reputation for overweening arrogance and ambition; now his agile intellect and caustic tongue were earning him large fees as a lawyer on complex corporate cases.
On the days and nights immediately preceding a health-insurance hearing, however, Hatch was flooded with self-doubt of a kind neither his friends nor foes would have considered possible. "The two or three days before the argument are just awful," he says now, softly, sitting in the plush, spacious confines of his new office at the state Capitol. "It is not even like adrenaline is carrying you--it is fear. It is absolute fear." His voice thickens and he stares at the floor.
"It is fear that you are going to lose the case. You've got somebody's life in your hands and you don't know if you are the one who ought to be doing this. It is fear that I'm not good enough, not smart enough, that somebody else should be here. But nobody does it--nobody does it." Hatch repeats the phrase with a gust of emotion that is equal parts fury and bewilderment.
"You get bitter. You hear lawyers talk about going down South to do these death-row cases, and what a moving emotional experience it is. But you try walking into a courtroom with a dying woman who should be in the hospital getting treatment. She didn't murder anybody. Her crime was that she bought an insurance policy that turned out to be a lottery ticket. That's not fair.
"You get to the point where you don't even celebrate winning. I remember one, the family was ecstatic, and I walked out of the courtroom and got in the car just dreading it, knowing that we had two more cases in the file. Because sooner or later,"--Minnesota's attorney general labors to hold back tears--"you know you are going to lose."
Suddenly, Hatch releases a big sigh and raises his head again. "But that's why I'm here. The people didn't elect me because they thought I was going to fix potholes. This is my issue. And I can't tell you how much I look forward to following through with it."
Minnesota's election night 1998 will forever be remembered for Jesse Ventura, the grappler/grunt who "shocked the world" with his triumphant campaign for the state's highest office. Since the election, Ventura has served up colorful bits of unorthodoxy (the book deal, the rock inaugural, the gun permit) while charting a middling political course that would draw yawns coming from a more traditional public servant. Meanwhile, Hatch, an erstwhile party insider whom Ventura might call a "career politician," is preparing to do battle with some of the
state's most politically powerful institutions--managed-care companies like Allina, HealthPartners, Blue Cross and Blue Shield, and Preferred One.
According to a study by the advocacy group Minnesota COACT, those "Big Four" covered 80 percent of Minnesotans with health insurance in 1994; at the time, only California had a greater share of its population in managed-care plans than Minnesota. The concept of managed care itself is considered by many to have originated here; its godfather was Paul Ellwood, a neurologist who coined the term after practicing at the Sister Kenny Institute in Minneapolis.
Unlike traditional "fee-for-service" insurers, managed-care companies tightly control the fees paid to doctors and the services provided by them. Once hailed as the best hope for the nation's health-care system, those practices have come under increasing scrutiny in recent years, with newspapers and politicians routinely citing horror stories of sick people denied coverage.
While campaigning for AG, Hatch tapped into that discontent, announcing that reining in managed care companies would be his top priority if he were elected. Specifically, he claimed that managed-care insurers were exercising undue influence over the doctor-patient relationship by rewarding physicians for saving money and issuing vague, blanket definitions about which treatments are "experimental" and which are "medically necessary." Running almost exclusively on the health-care issue, Hatch defeated DFL endorsee Ember Reichgott Junge and former U.S. Attorney David Lillehaug in the primary, amassing more statewide votes than any other DFLer running last year.
The day after the primary, Republican AG candidate Charlie Weaver--who in the previous months had received some $40,000 in campaign contributions from lobbyists and PACs associated with HMOs, according to reports filed with the state Campaign Finance and Public Disclosure Board--declared that the race was "between someone who thinks [managed-care plans] are the most dangerous things facing Minnesotans and someone who thinks a kid with a gun is the most dangerous thing facing Minnesotans." Hatch, for his part, went into the general election with TV commercials devoted exclusively to testimonials from people he had represented in fights with health insurers. On Election Day, with his vote total running about 20 points higher than that of gubernatorial candidate and fellow DFLer Skip Humphrey's, Hatch became the only DFLer elected to statewide office.
Like his activist predecessors Skip Humphrey and Warren Spannaus, Hatch is shaping the AG's office into an aggressive advocate on his pet issues. Already he has beefed up the agency's consumer hotline and recruited trusted colleagues Lori Swanson and Kris Eiden--former Commerce Department employees who were also members of his private law firm--as deputy attorneys general. Chuck Ferguson, a Commerce veteran who, in Hatch's words, "can pick apart an insurance contract better than anyone I've ever met," has also come aboard as a legal assistant.
Barely a month after taking office, Hatch presented his first major policy initiative, a "Fairness in Health Care" bill that would curtail insurers' power in determining which treatments doctors prescribe. After the measure makes its way through the Legislature, Hatch says he would like to take the battle from the Capitol to the courtroom. "I've been real public about that," he says. "In fact, if there is a time to get sick in Minnesota, it is right now, because the HMOs know that I'm shopping and making it very loud that I want a case. I want to express my feelings. I want to express a little old-fashioned moral outrage."
Earlier in Hatch's career, it would have been easy to dismiss such heated rhetoric as glib grandstanding from an ambitious pol. But according to many of those who know him, he has been profoundly affected by his experience in private practice. Enduring the crucible of his own self-doubts to defend people desperate for care has both "mellowed" him (the word most commonly used by friends to describe how he has changed) and deepened his populist instincts. "This is the end of the road," he insists. "I am never running for another job. My role is to make sure that as the great people pontificate, real people don't get hurt."
Emblematic of Hatch's new focus is a pair of scuffed boxing gloves hanging in his office at the Capitol, a stark contrast to the ornate oil paintings and august furniture. "I think those belonged to my brother when we lived in Duluth," the AG says. "Everybody who comes in here comments on them, so I guess we'll keep them there. They must fit in with what I'm about."
Hatch would much rather display the grit of a fighter than talk about how he acquired it--starting with a boyhood he describes as near-idyllic. His family was a classic '50s nuclear unit, albeit with the four children spaced wide apart in age. Dad was a salesman, and mom stayed home with the kids in a majestic old house near the University of Minnesota-Duluth, a place that had three floors, a big yard, dogs, and vegetable and flower gardens. The third child and second son, Hatch was closest to his younger sister, who adored him and followed him on gambols along a nearby creek and to neighborhood baseball games. During the summer they would sneak into the empty school buildings two blocks away to play with the props from past theater productions.
Among his peers, Hatch tried hard to fit in. "Until he got into high school, Mike was pretty small," his younger sister Kathy remembers. "Because his birthday was in November, he was also younger than a lot of his classmates. He struggled with his social status, trying to be big and tough like the other boys, and that interfered with some of his school work, even though he was really smart."
The fabric of the family began to unravel during the 60s, as alcoholism exerted a greater hold over both of Hatch's parents. Hatch is tight-lipped on the subject, acknowledging only that "sometimes it was tough." Asked who held the family together, he replies, "My older sister, but my parents did, too."
His siblings tell a somewhat different story. Hatch's older brother Tom says their elder sister Sue moved out of the house when Mike was just 10 or 11. "And then I pretty much ran out on the family when I was 19. It was kind of an inexcusable act, because Mike was just 14. There was a lot of tension and denial. Sometimes just reading the newspaper could be a cause for attack. I think Mike and Kathy must have gotten the worst of it, and I think it has a lot to do with the way he turned out.
"Mike is very much a person who is into duty. I think the family made him a fighter. It made me a fighter: If someone gets in my face, I'm not going to back down, because I've been there, and there is nothing to lose."
Hatch's sister Kathy, who is four years younger that him, recalls that "after a while, my parents had a difficult time maintaining a real nurturing home environment. My father had a heart attack, my mother had kidney problems, and the drinking just made things worse. Mike just took on whatever responsibility needed to be taken on. He always looked after me, checking to approve of my friends and knowing that I was where I was supposed to be. He did things like grocery shopping and cooking and cleaning house."
When Kathy was almost 15, she went to live with her sister in New Hampshire. Not long afterward Hatch joined the merchant marine, working on ships around the Great Lakes. The experience, he says, forced him to mature. "In high school I didn't even think about what I was doing. In college, I had no clue: I dropped out several times. It was good to get out on the boats and see what the world is like a little bit, to see that people have more difficult times in other places."
Traveling the Great Lakes, Hatch had a ringside seat for many of the signal events of the '60s. He remembers being "stunned" by the plumes of smoke emanating from Detroit during the 1967 riots; sitting in a predominantly African-American bar in Chicago watching parts of the city go up in flames the night Martin Luther King was assassinated; going into downtown Chicago to watch the confrontations between police and protesters during the infamous Democratic National Convention of 1968. In the wake of Bobby Kennedy's assassination, he got into a fight with a superior who called Kennedy a "nigger lover," was thrown off the boat without pay, and begged his way to Cleveland on a Greyhound bus.
By the time he left the lakes, he was ready to become an attorney. After graduating from the University of Minnesota Law School in 1974, he went to work as a securities lawyer for a law firm that did mostly corporate work. He also often rose at three a.m. and solicited business from the drunks at the jail to gain courtroom experience. His entrée into politics occurred that same year, when he worked on the campaign of a DFL candidate for the state House of Representatives.
By 1980, having established himself as a savvy insider and a tireless worker, Hatch had risen to the chairmanship of the DFL, restored the party to financial health, and--after initially supporting Spannaus in the 1982 gubernatorial primary--assisted Rudy Perpich's successful return to the governor's office. A grateful Perpich made Hatch his surprise choice to head the Department of Commerce, the agency charged with overseeing the banking, insurance, real estate, and securities industries in the state.
Combining pugnacious investigations of prominent corporations with a knack for consumer-oriented public relations, Hatch became a star of the Perpich administration through his six years at Commerce. In one noteworthy case in 1987, he conducted a study revealing that insurance firms, including the St. Paul Companies, were jacking up the cost of malpractice insurance at a time when the frequency and the amount of malpractice claims were going down. The issue attracted the attention of ABC News; Hatch's appearance on Nightline helped generate nationwide publicity and compelled the companies to cut their insurance rates.
In 1988 and '89, Perpich's fabled impulsiveness and eccentricity began sparking concerns about his political viability within the DFL. During this period, Perpich himself seemed unsure of his plans, appearing torn between running for President and seeking reelection as governor. (In the interest of full disclosure, let it be known that I was Perpich's speechwriter from November 1987 to August 1989.) After Newsweek created the nickname "Governor Goofy" in 1989, the anti-Perpich forces began openly recruiting alternative candidates. Hatch and Senate Majority Leader Roger Moe were the names most often mentioned.
Hatch, who had never made any secret of his desire to one day become governor, was coy about whether he would challenge his political patron. In August 1989 he said he would "under no circumstances" run against Perpich. Just four months later, he resigned his Commerce post; in a January 1990 speech, he announced his candidacy for governor, declaring that "nothing is more futile than blind loyalty."
The strategy backfired. Not only did Hatch lose to Perpich both at the DFL endorsing convention and in the primary, but his move generated hard feelings among many Perpich voters on the Iron Range, a constituency that otherwise would have been attracted by his populist politics and Duluth roots. Hatch compounded his political woes with another unsuccessful campaign for governor in 1994: Having run as a pro-choicer against the pro-life Perpich in 1990, he now subtly positioned himself as a pro-life alternative to DFL endorsee John Marty.
After a narrow loss in the primary, Hatch's once-promising political career was in a shambles. Despite his service as DFL chair and commerce commissioner, he had, at age 45, never been elected to public office and had managed at different times to alienate almost each faction of the party. Had it not been for Eva Claire Washburn, he might have spent the rest of his days practicing contract and securities law in St. Paul.
Get your affairs in order. You've got about six months to live. That's what doctors in St. Cloud told Washburn after diagnosing her with multiple myeloma, a cancer of the bone marrow, in the late fall of 1991. But at age 52, Washburn wasn't convinced it was her time to die. Taking solace from the children's book The Little Engine That Could and her Christian faith, she sought a second opinion at the Mayo Clinic, which confirmed the diagnosis and largely agreed with the prognosis. The Mayo doctors alerted Washburn to a research center in Little Rock, Arkansas, where doctors seemed to be successfully treating her kind of cancer with bone marrow transplants. After a thorough examination, the specialists in Little Rock scheduled Washburn for two transplants.
It was after the first surgery that Washburn learned her insurer, Blue Cross and Blue Shield (BCBS) of Minnesota, wasn't willing to pay for the procedure, which it called "experimental." Her husband, a pharmacist in Long Prairie, contacted his attorney, who referred him to Hatch. The pharmacist remembered how, as commerce commissioner, Hatch had prevented a local monopoly by working to get a second bank open in Long Prairie, and figured he was the kind of lawyer who didn't mind taking on the big guys.
The first time the Washburns met with Hatch at his office in Minneapolis, Eva Claire was bloated from the steroids she had been taking, and her hemoglobin was so low that she was having difficulty getting oxygen to her brain. She felt overwhelmed by the challenges ahead--not only the medical ordeal, but the need to come up with tens of thousands of dollars to pay for it. But from that very first meeting, she says she knew her connection with Hatch was "a blessing."
In researching the case, Hatch learned that the procedure Washburn sought was covered by a number of other insurers, including BCBS plans in other states. He filed a motion in Stearns County District Court, asking for a temporary injunction ordering BCBS to pay for the treatment; after a 30-minute hearing, the judge agreed. Seven years later, with her myeloma still in remission, Washburn works out three times a week at her local health club.
In news reports at the time, Blue Cross and Blue Shield representatives expressed "empathy" for Washburn and said the case was simply a contract dispute. The company also pointed to its funding of research on bone marrow transplants as a treatment for breast cancer. Representatives of Blue Cross and Blue Shield and several other managed-care organizations declined to comment for this story.
Following the Washburn case, other patients in similar straits began contacting Hatch's office. Hatch, who had charged the couple nearly $10,000 for his services, decided to cap his fees for such cases at $4,000--just enough, he says, to cover expenses--and to forgo charges if a client with a legitimate claim against her insurer was unable to pay. (The costs could be absorbed because Hatch was doing a lucrative business handling complex corporate trials.)
Slowly, steadily, a crusade began to take shape. Every so often, the normal operation of Hatch's firm would be disrupted by a phone call or a visit from someone with a deadly disease and a recalcitrant insurer. Four out of five were women, and many suffered from breast cancer and needed a bone marrow transplant. Others had more exotic illnesses: Kathleen Barlage, whose case Hatch took to court in 1997, was afflicted with scleroderma, a rare autoimmune disease that causes the skin to harden and vital organs to fail. Her extremities began to curl and become rigid and her kidneys required dialysis. Her insurer, HealthPartners, claimed the only known treatment was morphine to ease Barlage's pain until she died. A doctor recommended a stem-cell transplant, an experimental procedure that had been used in Europe, but HealthPartners said the treatment was untested and thus not covered. Ruling in Barlage's favor, a Hennepin County District Court judge said that under HealthPartners' standard, none of the plan's enrollees would ever "be the first person saved" by a new treatment. Barlage has since received the transplants and says she is leading an active, if still painful, life.
"Most often, when we first met with a patient, it would be very emotional, with a lot of crying and anguish," says Lori Swanson, the member of Hatch's firm who most often worked with him on health-insurance cases. "The patient brings a copy of her health-care policy. Most of the time, she has been told she will be dead within a year if she doesn't get treatment, but the insurer has denied coverage. Many just want to live long enough to see their children graduate from high school--not getting to do that is the single biggest fear among parents.
"The patient usually needs help in a hurry, because there is a two-or-three-week window when she can qualify as a candidate for treatment. After our meeting, the first thing we do is talk to the doc and find out about treatment, look at the life expectancy, and then look at the policy to see what coverage they have. Sometimes the insurer has simply denied legitimate coverage. Other times we see that no notice of a change in the policy has been given, which is required by state law.
"After that, as much as possible, we drop every other case we have pending and research the medical condition day and night so we can put together a brief and go into court as soon as possible. The pressure is enormous. A very emotional patient has extremely high expectations of you; it is all riding on whether you can be good enough to get what the patient needs. The day you first meet the patient to the day you go to court, you are probably talking to the patient a minimum of six times a day; sometimes a lot more, like every hour. Often the family is desperate to help, and Mike and I will have them running around getting an affidavit delivered to a doctor or something.
"Somewhere between ten days and two-and-a-half weeks later, you go to a temporary-injunction hearing. Sometimes the hearing is just like a trial, with evidence and witnesses; sometimes the judge just wants written documents. When the hearing is over, the judge doesn't rule for a period of hours, or maybe even a few days. That is torture for everyone. Then, when the judge finally gives the injunction, the patient is whisked into the hospital for treatment and the case is over. Only a few times has the insurer ever taken the injunction hearing to trial."
Often, recalls Hatch, he and his staff would negotiate with an insurer even as they were preparing for the hearing--especially when their opponent was a smaller firm that paid its own health-care bills through what is known as self-insurance. "Say it was a breast cancer patient. We'd talk to the CEO and tell him that he's going to spend about $40,000 on chemotherapy, which has a 28 percent survival rate when the patient is at a stage-two risk. That's not much bang for the buck. On the other hand, for $70,000 we can get the bone marrow transplant, the hospitalization, all the pharmaceuticals, everything, and have an 80-percent chance of his employee's long-term survival.
"We also tell him that his employees will really respect the fact that he did this. So he's not going to blow 40 grand on chemotherapy that probably won't work. He's not going to blow another 30 grand in lawyers' fees and 50 grand in bad press after we sue him. Finally, we tell him that if he denies this coverage and his wife gets sick under the same policy, he can't cover her with experimental treatments. Often, at the end of the day, he decides it isn't worth trying to save a little money to deprive somebody of their life."
But, adds Hatch, with the big managed-care companies, such personal appeals rarely worked. He would negotiate with administrators who had little or no connection to the patient. And because people enrolled in HMOs tend to change plans frequently, Hatch says, "there is more incentive to realize short-term savings" by paying for some portion of a long chemotherapy treatment rather than a quicker, more expensive bone marrow transplant.
Between the injunction hearings and the negotiated settlements, Hatch says, his firm secured coverage for all of the more than 100 patients who sought his assistance. Ultimately, however, he was struck by the realization that for every patient who walked through his door, many others were left behind. "After a while, you think, 'My God, what is going on here?' Because nobody was doing a goddamn thing about it. The Health Department didn't do a goddamn thing. The Commerce Department didn't do a goddamn thing. The attorney general's office didn't do a goddamn thing. Washington didn't do it, either. And it just makes me sick. We shouldn't write letters saying, 'Well, gee, this looks like a contractual dispute between you and your [insurer] and there is nothing we can do.' And believe me, that was the party line coming out of every government agency."
Two years ago, with Hatch and Swanson leading the lobbying effort, the Legislature required insurers to include coverage of bone marrow transplants for women with breast cancer." But by then, Hatch says, "They'd made me so goddamn mad that I decided I was going to run."
The difference between Hatch's race for attorney general and his previous campaigns for governor was palpable. As his sister Kathy puts it, "I was not ever sure what his politics were in the beginning when he was running for governor. I think he is much more focused now. It was like this time he was running for an issue instead of an office."
Hatch says his years away from the Capitol had him taught a key lesson about public service: "I had been involved in health issues quite a bit when I was in Commerce, but not from the human side," he says. "I mean, it is real easy; you get over into government and start thinking on this great macro level--it is an ivory tower. You sit there and think you are doing great things, and you are dealing with a flurry of paper and statistics and figures, and you worry great thoughts about what is going to happen 20 years from now.
"Then you leave government and open an office, and one day somebody walks in the door, a human being who needs you right now, where the rubber hits the road, and you realize there is a personal impact. It is an experience you don't forget."
Indeed, Hatch's "Fairness in Health Care" bill is almost a blow-by-blow response to his experience representing patients. The measure would make it easier to file malpractice lawsuits against insurers who deny or circumscribe the treatment a doctor recommends. It would give doctors more latitude in determining "medically necessary" care: Before a health plan could refuse to pay for a drug or procedure prescribed by a physician, it would have to demonstrate that the treatment is unsafe or ineffective. Another provision in the bill would prohibit insurers from financially rewarding physicians based on which treatments they prescribe or how often they refer patients to outside specialists.
Critics of the measure, including Minnesota Business Partnership executive director Duane Benson, claim it will add more than 20 percent to the medical costs of people covered by managed-care plans--as much as $600 million in all--and compel smaller companies either to self-insure or to drop medical coverage for their employees. Hatch counters that a similar bill passed two years ago in Texas resulted in just a one percent increase in health-care costs, according to a Congressional Budget Office study.
"Duane Benson knows as much about health insurance as I know about nuclear science," Hatch scoffs. "Six hundred million is la-la land. If the HMOs are saying this will result in that much more coverage, that means they are denying a significant percentage of what doctors want."
Michael Scandrett, executive director of the Minnesota Council on Health Plans and the man to whom managed-care organizations referred all questions for this story, says insurers are not opposed to trying new treatment methods--in fact, he says, they constantly collect data and compare results. Coverage for "experimental" treatments is denied, he says, when a drug or procedure has not been adequately tested and might be harmful to the patient. "Minnesota enjoys higher quality and better outcomes in medical treatment than any other state, and one reason for that is that we rely on research," Scandrett says. "I am really concerned that there are some things in this bill that may take us away from that."
Advocates on both sides of the issue say the Fairness in Health Care Act--sponsored by Minnetonka Republican state representative Jim Abrams and Brainerd DFL senator Don Samuelson--will be one of the most hotly contested bills in the Legislature this year, and that its fate probably won't be determined until the final days of the session. To lobby for the measure, Hatch says he will stage a rally at the Capitol and bring forward an "HMO patient of the day"--culled from the more than 200 calls he has received on his newly instituted consumer hotline--through late March and April.
If passed, the bill is sure to have far-reaching implications. It would directly impact health coverage for one million Minnesotans and change the way medicine is practiced throughout the state. Observers say it could also help galvanize the burgeoning backlash against managed care and add impetus to calls for a federal Patient Bill of Rights. "It would be big," says Kip Sullivan, research director at COACT and the author of several studies on managed care. "Texas is the only other state that has done this. And of course, to do this in Minnesota--the cradle of managed competition--is quite significant. This is the state that, until recently, everyone was looking to to determine the future of health care."
Hatch, meanwhile, claims that the measure represents merely a first step. "Our health-care system is changing, but it isn't one big change," he says. "It is lots and lots of baby-step changes that make up a big change. I think 20 years from now we are going to have a substantially different system, and there are huge ethical and moral issues afoot along the way. If people think the abortion issue is difficult, cube it and you get some idea of the complexity of issues we'll be facing in health care over the next 20 years. I believe the function of the attorney general is to protect people as much as possible from abuse as we go through those changes."
There is one person who, more than any other, may have been responsible for Hatch becoming Minnesota's attorney general. Hatch will refer to her only as Rita--"I don't want to tell you her last name, because I haven't ever been back in contact with the family," he says. She is the only patient who died while Hatch represented her.
"The doctor thought she should have a certain treatment, and the insurance company sent her in for an independent examination and then said, 'We don't think she qualifies.' 'Fine,' I said. 'Let's go to court.' And they called back and said, 'Well, let's get her a second exam.' And they kept calling her back, holding out hope. She went through four exams. And I told her, 'You know they are going to do this until it is too late.' She said, 'Can you guarantee me we'll win?' And I had to tell her there are never any guarantees. She kept going back until it was too late."
After a long ten seconds of silence, he adds, "I kind of wonder if maybe I screwed up there. I should have just told her we were marching into court. She had kids.
"You want to know why I'm here? That's why I'm here."