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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 49, No. 7 July 1993
``HEALTH CARE REFORM'': FORCE AND
The methods for proposing and implementing ``health care
reform'' do not involve second opinions or informed consent.
There may be an element of hard sell. The Democratic National
Committee set up a tax-exempt foundation to solicit money from
corporations, unions, and others for a public relations blitz to
promote President's Clinton's health plan (whatever the as-yet-
undisclosed plan turns out to be). The goal was to raise $7 to
$37 million. Spokesman James Whitney was quoted as saying, ``At
this point we intend to comply with the law,'' when asked whether
the campaign would reveal the names of the donors (Washington
Post 6/3/93). Section 501(C)4 of the IRS code permits unlimited
fundraising without public disclosure of the donors. However,
the arrangement, which has never before been tried by the
executive branch, was nixed by David Gergen (the President's new
message manager) soon after it was announced.
The primary method of persuasion is apparently to be naked
Coercion will be needed to destroy existing insurance
arrangements. Already, groups are lobbying for exemptions.
Ken Parmelee, of the National Rural Letter Carriers
Association said that the federal program shouldn't be ``torn
apart'' to fix it. ``It makes sense for members of Congress and
political appointees, but not regular workers and retirees, to be
part of a national plan,'' he said (Washington Post 6/3/93).
(AAPS Director Joseph Scherzer, MD, of Scottsdale, AZ,
suggested willingness of federal workers to be included in the
national plan as a ``litmus test.'')
Coercion will be essential for financing the reform meas-
ures, despite all the rhetoric about cost control, as state
reform plans are demonstrating.
``Many Washingtonians will be forced to spend more rather
than less both directly in the purchase of insurance and
indirectly through increased taxes. This is forced spending, not
spending control,'' explained AAPS member Robert Cihak, MD, of
Other states have increased taxes to support their ``health-
care'' programs, including Kentucky, which has placed a 2% tax on
the gross collections of ``providers,'' along with the proviso
that the tax must not be passed on to the patients.
The price tag for national reform has recently been es-
timated at $100 billion per year (New York Times 4/38/93), but
any estimate will be well below the actual figure, as with every
previous government program.
Various trial balloons have ascended (and descended),
including a value-added tax and sin taxes. According to the most
recent leak, sin taxes are likely to be placed on cigarettes but
not alcohol (at least not on beer). The latest proposed
financing mechanism is an additional payroll tax of 9% (a so-
called ``wage-based premium'').
The vision of ``managed competition'' as a marketplace in
which consumers made voluntary choices has been transformed. In
the words of Congressman Pete Stark (D-CA), ``King HIPC is going
to make the decisions.'' The architect of the Health Insurance
Purchasing Cooperatives, Paul Ellwood of the Jackson Hole Group,
said that ``the trend is absolutely the opposite of what we
intended.'' Consumer cooperatives were supposed to be a ``happy
idea,'' not ``some guy who beats you over the head.''
One way of forcing physicians to cooperate is by limiting or
destroying the options. Congressman Stark has commented that
Medicare must be all right because physicians continue to
participate. But if this situation changes, the government may
have a more draconian mechanism at its disposal.
The Selective Service has prepared plans to order up to
73,000 medical workers in the event of war or other national
``If we had to conduct a medical draft now, we could,'' said
Lewis Brodsky, assistant director of the Selective Service (Ariz
Daily Star 6/5/93). The proposed draft goes far beyond the
``doctor's draft,'' which inducted 23,000 physicians between 1950
and 1973. It could be implemented without a general draft. To
assure adequate personnel, both men and women between the ages of
20 and 44 would have to register. The plan could summon workers
in 59 specialties, including nurses, x-ray technicians, and
The rationale for the move was today's lethal battlefield
scenarios (including chemical warfare agents).
To gauge the potential reaction to the expansion of govern-
mental force, the place to watch is Washington State. Recently
passed legislation (see AAPS News June 1993) is the
flagship for reform; Hillary Rodham Clinton was beamed in
electronically to be present at the signing of the Act by
Consumers are awakening to the implications of what Dr.
Cihak called ``health care deform,'' and a coalition of small
business, consumer groups, physicians and other medical workers,
and insurers is building rapidly.
According to Washington State AAPS President Michael
Schlitt, MD, the legislature took care to tangle up the ability
to pursue a referendum to repeal the Act, by inserting an ``Emer-
gency Clause.'' An initiative to replace the Act with true
market reform will probably be delayed for a year. Meanwhile,
the coalition is supporting a tax-revolt initiative, which could
gut the Act by cutting off its funds. Initiative 602 would index
state spending and tax collections to economic growth. Taxes
enacted in 1993 would be repealed, and the tax collection limit
would be decreased if personal income fell. In addition,
increased taxes and fees would ``sunset'' in two years.
Hillary Rodham Clinton's Task Force may have been dissolved,
but the war has just begun.
Fraud and Abuse Update
Unlike defendants in drug cases, physicians are not likely
to be given immunity in exchange for incriminating others.
According to Thomas A. Temmerman, director of California's
Bureau of MediCal Fraud, providers are likely to work out a deal
with his unit only if they come forward early in an investigation
with evidence not otherwise uncovered.
As with drug cases, prosecutors are moving increasingly
toward the ``seizing and freezing'' of assets of providers
accused of fraud (BNA's Medicare Report 5/10/93).
A recent decision by the US Court of Appeals for the Sixth
Circuit in US v. Clyde D Brown, et al., found that the government
could freeze real estate as well as bank accounts in health-care
fraud cases, up to the percentage of the physician's assets that
may have been gained through fraud. There is also a Medicare
statute allowing government access to funds which could be
forfeited in a civil monetary penalty (Medicare Compliance Alert
Over the past two to three years, ``there has been a
tremendous increase in civil enforcement activity'' by HHS,
according to Washington, DC, attorney Alan Reider. Cases
traditionally treated as overpayments due to mistaken billing or
coding errors are now being worked up as civil penalty cases.
The new ``abuse'' definition explicitly covers cases in which the
``physician has not knowingly and intentionally misrepresented
the facts in order to obtain payment'' (Part B News 5/31/93).
Besides relying on complaints from patients or partners (the
latter nearly always mean fraud, according to Joy Grinstead of
Colorado Blue Cross/Blue Shield), a shift in claims processing
from carriers to a national ``Medicare Transaction System'' will
make it easier to profile services and spot fraud-and-abuse cases
(Part B News 5/10/93).
Defense attorneys have been advised not to paint the accused
as innocent victims of complex regulations. Instead, Karen A.
Morrissette of the Fraud Section of the Department of Justice
recommended making a case for why a provider should not be put
out of business, say due to the needs of his community (BNA's
Medicare Report 5/10/93).
Sometimes providers might be permitted to plead guilty to
related tax-code violations to avoid imprisonment and loss of
medical license. But the percentage of first-time offenders sent
to prison is substantially higher than for other criminal offense
categories, according to Thomas Temmerman (ibid.)
News from Canada
Ontario Improves Offer. Health Minister Ruth Grier has
softened cost-control measures by offering new physicians 75% of
the fee allowed for physicians already in practice. This was a
large increase from the 25% formerly proposed. New doctors would
also be allowed to bill 100% of the fee-schedule amount for all
their services if they spend a quarter of their time serving an
Other cost-control measures include a cap on expenditures.
If the cap is exceeded, physicians would be subject to a
``clawback'' of a certain percentage of their income (Globe and
Unionization Considered in British Columbia. Members
of the BCMA will be asked to vote on unionization in a referendum
An alternative to unionization is opting out. A physician
who has done so stated that the BCMA wants to form a union ``to
protect its own backside'' by drawing more members and making
dues compulsory. (Opted-out doctors cannot join the union.)
One physician who has opted out called it the ``one of the
most professional moves of my life.'' Nanaimo internist Dr. Paul
Mitenko said that opting out could be the answer to the
province's financial woes. In addition, there are medical
``I have to sell what I am doing to my patients. My argument
is I work for you. The government runs your insurance company and
I don't want your insurance company telling me what to do''
Data on Rationing Updated. The Fraser Institute has
just released an updated study on waiting times for surgical
treatment in all provinces in Canada. Including the time between
a visit to a GP and a specialist, patients wait an average of
11.5 weeks for relief of an ailment in Ontario and 31.2 weeks in
Prince Edward Island. Compared with 1991, there was an increase
in the number of patients waiting in all provinces except Mani-
toba and Nova Scotia. Data were collected by surveying
specialists; the response rate was 31%.
Governments and their agencies do not usually collect data
on waiting lists. An exception was a survey done in 1967 in
British Columbia. Comparing those results with the present survey
showed that a higher percentage of the population is on a waiting
list (1.1% now vs. 0.6 in 1967) and that the waiting patients are
For a copy of ``Waiting Your Turn: Hospital Waiting Lists in
Canada,'' Fraser Forum 1993, write or call Bev Horan, The Fraser
Institute, 626 Bute St., Vancouver, BC V6E 3M1, telephone
According to a report by Citizens for a Sound Economy
Foundation, payroll taxes will have to be tripled to keep the
Medicare program from going bankrupt by 2040.
Medicare Part A and Part B spending increased over 900
percent in inflation-adjusted 1987 dollars, from $10.9 billion in
1976 to $97.2 billion in 1990 (BNA's Medicare Report 3/26/93).
One reason is the inefficiency of government insurance.
Persons covered under Medicare or Medicaid spent twice as much
per person on medical care in 1992 compared with privately
insured persons and more than four times as much as uninsured
persons. For Medicaid persons under 65 years of age, the cost
was $3,313 on the average compared with $711 for those who
purchased their own insurance, according to the Council for
Affordable Health Insurance (BNA's Medicare Report 4/23/93).
The Law of the Land
Article I, Section 8. The Congress shall have the Power to
lay and collect Taxes, Duties, Imposts, and Excises, to pay the
Debts and provide for the common Defense and general Welfare of
the United States....
[Note: this clause does not say that Congress shall have the
power to levy Taxes to pay the debts of John Smith or of the
State of New York, to provide a bodyguard for the defense of Mary
Jones, or to provide for the general welfare of the Adams
Recent Developments Under the Federal
In 1986, the federal government enacted the Emergency
Medical Treatment and Active Labor Act of 1986 (EMTALA) as part
of the Consolidated Omnibus Budget Reconciliation Act of 1986
(COBRA). This statute, better known as the ``patient dumping''
statute, prohibits all hospitals receiving federal funds such as
Medicare or Medicaid from refusing to treat or stabilize an
emergency medical condition for nonmedical reasons. The statute
authorizes civil suits against hospitals by patients alleging
violation of the statute and harm due to the alleged violation.
It also authorizes the Health Care Financing Administration
(HCFA) and the HHS Office of the Inspector General to terminate
hospitals' participation in Medicare and to assess civil monetary
penalties against physicians and hospitals who violate the
Shortly after its enactment, many commentators believed that
the EMTALA would lead to a flood of federal court litigation by
malpractice attorneys attempting to federalize the state common
law of medical malpractice. The Legal Service's review of some
of the recent cases handed down by the courts reveals that
numerous opinions construing the EMTALA continue to be delivered
by the federal courts.
One of the most notable recent decisions interpreting the
EMTALA is Johnson v. University of Chicago Hospital, decided by
the US Court of Appeals for the Seventh Circuit on December 28,
1992. In Johnson, paramedics radioed a hospital which was
responsible for directly paramedics transporting emergency
patients to the appropriate facilities. The patient was an
infant in full cardiac arrest. The hospital receiving the radio
call was close, but the hospital instructed the paramedics to
take the infant to another facility because the hospital had no
room in its pediatric intensive care unit. The paramedics took
the patient to the hospital to which they were directed, but that
hospital did not have a pediatric intensive care unit. The
patient was transferred to a third hospital but later died.
The patient's parents sued the first hospital, alleging
violation of the EMTALA. A three-judge panel of the US Circuit
Court of Appeals for the Seventh Circuit initially held that the
statute applied even though the patient never actually presented
to the emergency department at the first hospital. Upon
reconsideration, the Seventh Circuit ruled that the statute only
applies to patients who come to the emergency room and concluded
that the hospital-operated radio system is distinct from the
hospital's emergency room.
Before the Seventh Circuit reconsidered its decision, many
in the hospital industry expressed serious concern over the
consequences of the court's initial ruling. Many urban hospitals
believed that the initial ruling would prevent urban facilities
from engaging in the common practice of ``radio triage,'' which
is necessary to prevent already overcrowded emergency rooms from
becoming completely unmanageable. ``Radio triage'' permits
patients in transit by ambulance to be directed to hospitals
where treatment will be available in the shortest possible time.
In other developments, Public Citizen is pressuring HCFA to
issue final regulations implementing EMTALA. In June, 1988, HCFA
issued proposed regulations which would require hospitals
receiving improperly transferred patients to report each such
incident to HHS. Because they were never finalized, these
regulations are of no legal effect. Public Citizen, which
supports a Canadian-style socialized medical system, is
requesting HCFA to finalize the regulations and to add even more
paperwork requirements to those of the already burdensome
statute. Public Citizen is considering litigation against HCFA
if the regulations are not forthcoming (BNA's Medicare Report 4,
The Legal Service will submit comments on any proposed
rulemaking by HCFA purporting to implement the provisions of the
EMTALA by increasing the paperwork burdens on physicians and
Why Not Private Hospitals?
From a letter by Bruce Schlafly, MD, St. Louis, MO, to J.
Patrick Rooney of Golden Rule Insurance Company:
I am an enthusiastic supporter of your proposal for the
Medical Savings Account. I think it would go a long way towards
restoring a private market to the health insurance industry. It
puts money and choice back into the hands of the patient.
One of our problems is that we really don't have private
hospitals in this country any longer. The situation with most
hospitals is analogous to higher education. Like most colleges,
hospitals take large amounts of government money, and as a
consequence they are subject to all of the rules and regulations
of federal and state governments. We therefore have witnessed
extensive bureaucracies develop in our hospitals. This of course
drives up the cost of medical care.
According to Milton Friedman, between 1946 and 1989 hospital
personnel per occupied bed multiplied nearly seven-fold and cost
per patient day, adjusted for inflation, increased an
Let me give you a specific example....I recently attended a
hospital committee meeting at which the administrators told us
that our hospital needs to replace the forms filled out by the
nurses for each new patient with a much more complicated form
containing probing psychological questions. The administrators
claim that the new form is now required by state and federal
government regulations in order to meet their mandates for
adequate nursing assessment of patients....
Another major problem is that hospitals cut deals with HMOs,
giving them discounts at the expense of private
patients....Patients seek to join HMOs to protect themselves
against inflated hospital bills.
In addition to medical savings accounts, we need a few
private hospitals-the equivalent of Hillsdale College. A private
hospital would not concern itself with government rules and
regulations but would simply concentrate on healing the sick.
Patients at private hospitals could carry health insurance, but
the patient would have the responsibility for collecting the
insurance. Thus, the hospital would not have to hire an army of
clerks to fill out forms....
P.S. If a pro-abortion ``Freedom of Choice Act'' passes,
requiring hospital that receive government money to perform
abortions, we may see the return of private hospitals sooner than
AAPS welcomes Drs J. Austin Ball of Charleston, SC; John C.
Bettinger of Greenbrae, CA; Eric Blacher of Houston, TX; Leroy B.
Bloomberg of Newark, OH; Robert T. Brodell of Warren, OH; Paul C.
Brown of Renton, WA; Albert J. Camma of Zanesville, OH; H. R.
Capps of Idalou, TX; Joseph A. Castillo of Houston, TX; H. Chaim
of Ormond Beach, FL; David F. Charles of Las Vegas, NV; Marvin A.
Childers III of Loveland , CO; Larry B. Coleman of Pikeville, KY;
William H. Conner of Rome, GA; Denton Sayer Cox of New York, NY;
Michel Damiani of Houston, TX; W.H. Davidson of Laurinburg, NC;
Eddie Davis of Huntington Beach, CA; Thatcher Dilley of Reno, NV;
M.J. Dragan of Stamford, CT; J. Antonio Garcia of Tacoma, WA;
Alan H. Greenspan of New York, NY; Lloyd C. Haggard of Plano, TX;
Ben F. House of Jackson, TN; William J. Hyde of Scottsdale, AZ;
Christopher M. Johns of Pittsburgh, PA; Murray A. Johnstone of
Seattle, WA; Ellen B. Koerber of Dallas, TX; Steven J. Levy of
Houston, TX; Howard F. Long of Pleasanton, CA; Lela C. Maynard of
Pikeville, KY; Jeanne Murphy of Little Rock, AR; Irene Nasaduke
of Stamford, CT; T.D. Newsom of Plano, TX; Charles Nichols of
Pikeville, KY; Margaret Nordell of Danville, CA; Richard A.
Norden of Englewood, NJ; Earl H. Parrish of Medford, OR; Henry
Payson of Norwich, VT; Nancy F. Phipps of Nassau Bay, TX; Albert
Poet of Mamahawkin, NJ; Randall R. Ralston of Dayton, OH;
Florencio L. Reyes of Sidney, OH; Francisco Rodriguez of Phoenix,
AZ; Mike Schweitzer of Billings, MT; A.D. or Ouida Sears of
Dallas, TX; Shelly S. Sekula of Houston, TX; David I. Shadowen of
Bowling Green, KY; Ronald Sherman of New York, NY; Kevin P. Short
of Muncie, IN; Harold Shulman of Renton, WA; Diane S. Silver of
Napa, CA; Rosemary A. Slogre of League City, TX; Charles L. Smith
of Perrysburg, OH; Jack C. Smith of Jamestown, TN; Susan
Stickevers of Staten Island, NY; Fouad Surur of New York, NY;
Howard Sussman of Houston, TX; Sharon F. Tiefenbrunn of St.
Louis, MO; Robert E. Turner of Cordova, TN; K. Wagner of
Carpenteria, CA; and Hen Val Wu of Somerset, NJ.
Catherine Diane Boomus of Haslett, MI, is a new student
Letters to the Editor
The surgery that needs to be done is to cut the government
out of the doctor-patient relationship. Third parties only want
all the money they can extract from the system...
Regulation in this republic has increased the cost of health
care and medical care astronomically (doctors practice medicine;
everybody else does health care). Doctors get less, patients get
less, and the government employees and third parties are reaping
untold wages and profits.
Let us go forward by freeing the patients and doctors to
settle between themselves what the fees will be. Let the patient
be responsible directly to the doctor for payment of medical
bills. Reimbursement from the third party is strictly and only
between the insured and that party.
Robert M. Webster, MD, Fairburn, GA
[A solution to the problem of insurance companies calling to
pressure physicians to discharge patients, in the guise of asking
I have recently started to refuse to speak with any
representative of an insurance company unless the patient or a
patient surrogate (e.g. a family member) is simultaneously on the
line....Insurance companies should not be afraid of talking to
their own insured. Physicians should not be caught in the middle
of what is an ethical no-win situation....
C. Keith Whittaker, MD, Kansas City, MO
excerpted from JAMA 268:3434
The reason Canadian physicians love their system is best
summarized by the word security.
There is an unlimited demand for physician services and a
limited supply....Doctors can earn as much by concentrating on
treating patients with very minor ailments as in treating the
truly sick, whom they can ``dump'' into the lap of residents at
university hospitals. Having patients return for their super
quick office calls (when one visit is all that is required) is
welcomed by patients and doctors alike.
Specialists enjoy the system because they have fief-
doms....They control hospital privileges and choose residents who
``fit in'' with their ideas on how ``conservative'' medicine is
to be practiced.
Robert Gervais, MD, Mesa, AZ
AAPS Members to Speak in Oakland
Two AAPS members are featured speakers at the Eleventh
Annual Meeting of Doctors for Disaster Preparedness, to be held
in Oakland, CA, Aug. 13-15. Radiation-oncologist Howard
Maccabee, Ph.D., M.D., will speak on the flaws in Vice President
Gore's book on the environment, and Jane Orient, M.D., will
discuss impending disaster in American medicine. For further
information, call 602-325-2680.
Oct. 5. Board of Directors meeting
Oct. 6-9. 50th annual meeting, San Antonio, TX.
Legislative AlertUnveiling the Clinton Plan:
Capitol Hill observers, who have been waiting for the great
unveiling since May 3rd (Day 100) are not holding their breath.
Indeed, The Plan still might not make it out of White House
honcho Ira Magaziner's Bottom Desk Drawer by the end of June. The
reason: Growing uncertainty over the impact of the huge Clinton
Tax-and-Budget Package and its collateral damage to the Clinton
Narrowly passing the House of Representatives by 219 to 213,
the White House budget package is hardly a smash success on
Capitol Hill. White House operatives are putting a bold and happy
face on the fact that they passed the measure by six votes (in a
body where they hold a huge Democratic majority of 81 votes).
During the last week of May, the House Democratic leadership
was struggling to get enough votes to pass the huge Clinton
budget package, the biggest tax increase in American history.
Included is a new Medicare tax, which will subject all wages to
the 1.45 percent tax; wages above $135,000 are not currently
subject to this tax.
Late-night negotiations between Congressional liberals,
backed up by White House operatives, and Congressman Charles
Stenholm of Texas, leader of the Conservative Democratic Forum,
resulted in a makeshift compromise of spending limits as a
condition for Stenholm and company to support the President's
package. The deal was to set annual ``spending targets'' for
entitlement programs. If the spending is more than 0.5 percent
greater than ``expected'' in any given year, then the President
must propose a tax increase, additional spending cuts, or
additional deficit financing to pay the difference. Then,
Congress must vote for one of these, or an alternative of its
own. For most Congressional conservatives, this doesn't sound
like much to write home about.
Medicare will ``save'' an ``additional'' $50 billion over
the next few years by freezing the inflation adjustment for
payments to doctors and hospitals.
Freshman Democrats, who promised voters The Change, are
deeply worried. Having voted for More of the Same, they will
have to face a sullen and angry electorate, who will not see The
Change in the economy or a reduction in the deficit. The Gross
Domestic Product has grown this quarter by less than one percent,
compared with the 4.7 percent growth in the last quarter of 1992.
And Americans are beginning to realize the size of the tax
increases required by the budget package.
The President's political situation-with his approval rating
currently at 46 percent-has been described as ``meltdown'' or
``free fall.'' The hiring of ex-Reagan aide David Gergen to help
Clinton with his ``message'' has the look of a desperation
measure. (Gergen previously described the Clinton Transition as
``the sloppiest in memory.'')
Although the Republicans appear to be marching in lockstep
under the discipline of Minority Leader Robert Dole (R-KS), the
President's problem is with the Democrats. If Charles Stenholm
of Texas can't deliver a strong moderate and conservative bloc,
Early on in the Administration, Stenholm publicly warned
Clinton ``to dance with the ones who brung him'' to Washington-
that key slice of the electorate who believed that Clinton was a
``New Democrat,'' as distinguished from an old fashioned, liberal
``tax-and-spend'' Democrat. So far, the Congressional arm-
twisting seems to be reserved for moderate or conservative
Democrats, such as Senator Shelby of Alabama. When united,
Conservative Democrats in the House can garner anywhere from 50
to 70 votes in a tough floor fight. On the key health-care reform
issue, they are still Keepers of the Managed Competition Faith,
probably the only group left in Washington, with the exception of
a few liberal Senate Republicans, who still firmly believe in the
elusive ``managed competition'' model as a legislative proposal.
Obviously, from the steady drippings out of the White House Task
Force on Health Care Reform, the Firm of Clinton and Clinton no
longer do, if they ever really did. Ira Magaziner spilled it when
he publicly admitted that folks in Washington don't much
``believe'' in market competition, anyway. How Conservative
Democrats in the House and Senate respond to the unveiling will
be critical in the national health-care debate.
On the Republican side of the aisle, Congressman Robert K.
Dornan (R-CA) has spiced up the health-care discussion by asking
House Speaker Tom Foley (D-WA) why it is that professional staff
of the House Legislative Counsel's Office, who are employees of
the U.S. House of Representatives, are working on Hillary's
Health Care Task Force, an agency of the Executive Branch of the
Government. Good question. It seems that Republican Members of
Congress are having a difficult time getting the Legislative
Counsel's Office to draft health-care legislation in anticipation
of Hillary Rodham Clinton's report.
Dornan is raising some intriguing housekeeping inquiries,
mostly involving little details like the Separation of Powers.
Specifically: How many staff have been working for the executive
branch? Who authorized House staff to work for the executive
branch? How many hours a week are they working for the executive
branch? Why have Legislative Counsel staff with less expertise
been delegated health-care legislation drafting duties? Are staff
being paid from House accounts while they are working for the
executive branch? Have any staff of the Office of Legislative
Counsel worked for the executive branch during the years 1980
through 1992? Is there a policy governing the employment of House
staff working for the executive branch? Interesting stuff; the
sort of questions James Madison might ask. In the Senate, David
Boren (D-OK), joined by Bennett Johnson (D-LA), is saying to
``no'' to the Clinton energy tax, and is calling for serious cuts
in domestic spending. A Boren defection means the energy tax is
dead. The powerful Senate Finance Committee, which has direct
jurisdiction over health- care reform, has a narrow majority of
11 Democrats to nine Republicans. One Democratic defection means
a tie vote, and a tie means any legislative initiative is
automatically defeated in Committee. That's why the debate on the
Clinton Budget is significant for the upcoming debate on the
future of American medicine. It is the prelude.
The Shape of Things to Come
Maybe David Gergen can start out by helping Hillary Rodham
Clinton toughen up her health-care reform message. In an
emotional May 26th speech to the Legislative Conference of the
Service Employees International Union, a group formally committed
to a Canadian-style health model, Hillary assailed ``price
gouging, cost shifting and unconscionable profiteering.''
Lamenting that the system has no ``real discipline, no budget,
and no controls,'' Hillary was throwing lots of rhetorical red
meat to her hungry audience. Good Machiavellians know that one
sure way to get control of a complicated public policy debate is
to demonize potential opposition. Look for villains and
scapegoats (such as insurance companies, pharmaceutical
companies, and doctors). If this is an early indication of what
can be expected when Hillary gets going after The Plan is finally
unveiled, fasten your seatbelts.
In the meantime, there are so many health policy trial
balloons floating over Washington, D.C., that your plane would be
lucky to get into National Airport. In the White House, Bill,
Hillary, Ira, and the gang are burning the midnight oil as the
last minute political calculations are being made on the largest
domestic policy initiative since the Great Society.
Or are they ? Are the balloons really trial balloons? Is The
Plan really being ``put to bed'' up to the last minute,
reflecting some genuine policy debate or internal confusion
within the Administration? Or are the trial balloons just good
old political gamesmanship, a sideshow to befuddle the rubes
along the Midway. Maybe, just maybe, for all of the hullabaloo
about dozens of study groups, and the 500-odd staff members from
the bureaucracy and the Hill, the photo ops, Hillary's highly
publicized meetings with ``just plain folks,'' and ``serious''
give-and-take the Capitol Hill meetings, The Plan has been in Ira
Magaziner's bottom drawer for months. Maybe, just maybe. Wait
till some White House prima donna deigns to write his or her
While details are not likely to be revealed until the very
last moment, the shape of the Clinton program is as follows:
Universal access to health insurance regardless of
employment, status of employment, or any pre-existing
An unprecedented level of federal regulation over
private insurance, including the federal establishment of
new underwriting rules and rather detailed rules governing
the level of deductibles and copayments.
Community rating-in effect, a price control regime
for insurance. Like most price control proposals, this is a
popular idea. In practice, it means that older, sicker
persons with high medical risks will be deliberately
undercharged for insurance, and that younger, healthier, low
risk individuals will be deliberately overcharged for
insurance. Overall, insurance premiums increase. For
example, in New York, community rating has led to an overall
premium increase of 18 percent (NY Times 4/1/93).
Global budgets and price controls, which may at first
be called ``voluntary.''
Employer mandates. An unresolved question is whether
large firms, with 1000 or more employees, which are
generally self insured and thus free of state mandated
benefits regulations, will be treated the same as small
Regional ``health alliances,'' which will negotiate
fees, collect payments, and assure that federal requirements
(such as the ``standard benefit package'' are met).
A standard benefits package. The Administration is
apparently settled on the proposition that any competition
that does take place will take place at the level of price
competition, and not a competition on the level of benefits
or specialized services. The ``standard'' benefits are
likely to be to ``comprehensive package,'' including
prescription drugs, mental health care, preventive care
services, childhood immunizations and some longterm health
care, and possibly services and eyeglasses.
New Debate on Abortion
It is expected that the standard benefit requirement will
include coverage for elective abortion. Recall that Vice Presi-
dent Gore raised the prospect during the 1992 Presidential
campaign. The President has again made it clear that abortion
will be covered. This virtually guarantees a white-hot national
debate, potentially more divisive than anything in memory. If the
national Congressional debate on health-care reform was to be the
political equivalent of the Battle of Gettysburg, the injection
of the abortion issue makes it Gettysburg Plus Verdun. Once
again, the President risks defection from moderate and
conservative Democrats, and large constituencies that often vote
Democratic in federal elections. The popular Pennsylvania
Governor Robert Casey, who was denied a the podium at the 1992
Democratic National Convention for his pro-life views, declared a
health plan with such a requirement ``dead on arrival'' on
Folding In Other Programs
Hillary Rodham Clinton's Task Force has considered folding
Medicaid, CHAMPUS, and even the Federal Employee Health Benefits
Program into its new health-care reform system. Later on, the
idea is to start phasing Medicare and the Indian Health Service
and possibly even the Veterans Administration program into the
new reform infrastructure.
The political problem for the Clinton Administration is that
all of these long-established government health programs have
their own fierce constituencies and vested interests. Getting
them to give up these programs for something as yet unknown is
going to take some tough political selling. The abolition of the
FEHBP has civil-service unions worried that they will be paying
more for benefits and getting less than they do now. The idea
violates on of the cardinal political rules in Washington: Never,
ever mess with the huge and geographically omnipresent Postal
Workers Unions, who also sell insurance through their own private
health care plans.
Do They Respect You in the Morning?
While the debate is raging around health-care reform on
Capitol Hill, doctors might be interested in how and where the
lobbyists for the health-care industry, including organized
medicine, spend their millions of bucks. On May 19th, the
Washington Post listed the 20 top health care political action
committee (PAC) contributions for 1991-92, with the American
Medical Association weighing in at the top with a heavy
$2,936,086, up 24 percent from the 1989-90 political season. The
top ten recipients of health care PAC money in the House of
Representatives, in order of amount, are: Rep. Henry Waxman (D-
CA); Fortney (``Pete'') Stark (D-CA): Richard Gephardt (D-MO);
Rep. Gerry Sikorski (D-MN); Rep. Dan Rostenkowski (D-IL); Rep.
Sander Levin (D-MI); Rep. Vic Fazio (D-CA); Rep. Steny Hoyer (D-
MD); Rep. Bill Richardson (D-NM); Rep. Thomas Bliley (R-VA).
In the Senate, the ``top ten'' PAC line up is as follows:
Sen. Bob Packwood (R-OR); Sen. Tom Daschle (D-SD); Sen. John
McCain (R-AZ); Sen. Charles Grassley (R-IA); Sen. Rod Chandler
(R-WA); Sen. Christopher Dodd (D-CN); Sen. Dan Coats (R-IN); Sen.
Diane Feinstein (D-CA); Sen. Arlen Specter (R-PA); and Sen.
Christopher Bond (R-MO).