Reporting from Washington - The American Medical Assn., after 60 years of opposing any government overhaul of healthcare, is now lobbying and advertising to win public support for President Obama's sweeping plan -- a proposal that promises hundreds of billions of dollars for America's doctors.

Of all the interest groups that have won favorable terms in closed-door negotiations this year, the association representing the nation's physicians may have taken home the biggest prizes, including an agreement to stop planned cuts in Medicare payments that are worth $228 billion to doctors over 10 years.

In addition, the proposal that would require all individuals to obtain medical insurance includes premium subsidies to ensure that their doctor bills would be paid.

The AMA, which many still regard as the country's premier lobbying force, is providing money and grass-roots backing for these and other reforms.

Critics charge that, although doctors will be among those with the most to gain financially, the AMA -- unlike the pharmaceutical and insurance industries -- made relatively few concessions in return. The drug industry, for example, pledged $80 billion in cost reductions. Health insurers agreed to give up restrictions on preexisting conditions.

"To our knowledge, this deal is better than those negotiated so far by drug companies, hospitals or health insurers," said Dr. Henry Simmons, founder of the National Coalition on Health Care, which represents labor, business and medical provider interests. "The question is why."

Health industry analyst Robert Laszewski, a former insurance company executive who tracks health policy for industry clients in Washington, thinks that all of the major interests that once opposed reform, including insurance and drug companies, have received sweetheart deals in exchange for their support.

AMA officials acknowledge the huge turnaround in the organization's position, but they say it reflects changes in the healthcare system and the way doctors feel about it.

In the past, the AMA saw the government as endangering doctors' incomes and independence. Now, with the advent of Medicare and other federal programs, which the organization originally opposed, the government has become a vital source of revenue and stability for doctors.

"Doctors are really, really discouraged now about people not getting access to medical care," said Dr. Nancy Nielsen, immediate past president of the AMA, who has been meeting with top congressional officials this summer on behalf of the association.

That's why the doctors' position has changed so dramatically since the early 1990s, when they played a lead role in helping to kill President Clinton's healthcare plan, she said.

"Back then everybody's second position was the status quo," she said. "Now there is very broad agreement that the status quo is unacceptable. That's why we see people who opposed a variety of reforms in the past now advocating for them."

Critics take a less benign view of the AMA's transformation.

Laszewski, the health policy expert, said the AMA's support was really explained by the deals the organization cut with the White House and congressional Democrats.

"They were bought off," he said. "And the price tag was $228 billion."

Laszewski is referring to what many consider the most costly single concession to any interest group made so far in the bargaining over healthcare.

In 1997, concerned about the soaring cost of Medicare, Congress and Clinton approved a plan to reduce reimbursements to doctors whenever Medicare's costs outpaced the growth of the U.S. economy.

The idea was to prod the medical community into holding down healthcare costs by cutting back payments if the industry failed to do so.

For the most part, the cuts were never imposed because doctors and other medical service providers persuaded Congress to override them. But for each year that Congress blocked the cutbacks, the next scheduled cuts were larger.

In 2010, the cumulative cut would be a whopping 21%.

Eliminating the cuts has been a top priority for the AMA, which spent $30 million on lobbying since the beginning of 2008. Over the last decade, no other interest group or trade association has had a bigger lobbying budget except the U.S. Chamber of Commerce.

"The AMA got freed from planned reductions in reimbursements but offered little in return," said Simmons, whose coalition is seeking to make cost control a central part of reform.

Rep. Henry A. Waxman (D-Beverly Hills) disagrees. "That's not fair," he said, arguing that the reimbursement system was so seriously flawed that it threatened the stability of Medicare.

Besides, he said, the legislation passed by the House Energy and Commerce Committee, which he chairs, provides other cost savings by encouraging more cost-effective models of care, electronic medical record-keeping and other efficiencies.

As proposed in the House bill and provided for in Obama's current budget blueprint, physician payments would not be cut at all in 2010. The House bill would then replace the current formula for trimming reimbursements with a more generous "target" ratio -- which Congress could ignore whenever Medicare spending outpaced economic growth.

The AMA's Nielsen said the change was necessary because the proposed cuts were so extreme they would undermine the stability of the Medicare program. The AMA is worried about costs in general, noting that it has also pushed for malpractice and other reforms included in the president's proposal.

"This is a big concession to doctors," said Lawrence Jacobs, a University of Minnesota health policy specialist. "Waxman, like any good reformer, is pushing costs into the future and emphasizing benefits in the near term. The magic of reform in America is to get prospective stakeholders to focus on wins in the present and delay the cost as much as you can."

Whatever the pros and cons of rescinding the cuts, their value to doctors is not in dispute.

Nor is the historic shift in doctors' views on the government overhaul of the healthcare system.

About 60 years ago, with charges of "socialized medicine," the nation's physicians led a devastatingly successful campaign against President Truman's effort to pass the first comprehensive healthcare overhaul of modern times.

In the years that followed, the AMA became a lobbying powerhouse that frustrated healthcare initiatives by Democrats and Republicans alike. Armed with deep pockets, a matchless grass-roots network and the unusual credibility that doctors have traditionally enjoyed with patients, the AMA turned back almost every plan to revamp healthcare.

After the House Energy and Commerce Committee passed its legislation, the organization offered an immediate statement of support. It issued a similar statement lauding the Obama administration's approach to health reform on the morning before the president’s speech to Congress last week.

Perhaps more important are the AMA's efforts to sway public opinion in favor of Obama's proposed reforms. Like the pharmaceutical industry, the AMA has underwritten an advertising campaign backing the president's plan.

For example, since Aug. 13, viewers in key markets have seen $8 million in ads sponsored by the Americans for Stable Quality Care, an organization that includes the AMA and a handful of other institutional backers of Obama's proposal.

Most of the ads have been focused on the states of key senators on the finance committee and on Louisiana and Arkansas, where conservative Democrats are thought to be wavering.

kim.geiger@latimes.com

tom.hamburger@latimes.com