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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 49, No. 6 June 1993
OPPOSITION TO ``STEALTH HEALTH''
A short time ago, the Soviet Union was the
most secretive organization in the world; it no longer
exists....This puts the United States in the uncomfort-
able position of holding the record in secrecy....
Long-term secrecy affecting great numbers of
people conflicts with the spirit of democracy....Our
keeping of secrets has often misled and confused our
own people but has been ineffective in denying infor-
mation to our enemies or competitors.
Edward Teller, Issues Sci Technol, Fall, 1992
In a statement for the Congressional Record May 4, 1993,
Rep. William Clinger (R-PA) observed that President Clinton was
elected by promising to open policymaking to the average
American. Vice President Gore went further, noted Clinger: ``No
longer will decisions that should be made in public be made in
private. In this Administration, everyone will play by the rules
and public decisions will be public information.''
Clinger deplored the secret operations of the Health Care
Task force and asked that the President ``begin playing by the
rules.'' He supported a motion by John Conyers (D-MI), asking the
House leadership to file an amicus brief in the case of AAPS v.
Clinton, defending the constitutionality of laws requiring public
access to certain actions of the Executive.
Participants in the brief included Speaker Thomas Foley (D-
WA) and the Bipartisan Leadership Group consisting of Richard
Gephardt (D-MO), Robert Michel (R-IL), David Bonior (D-MI), and
Newt Gingrich (R-GA).
For more than 20 years, Presidents have obeyed the Federal
Advisory Committee Act. President Nixon issued an Executive
Order to all agencies to comply with the Act.
Previous court precedents support the constitutionality of
legislation applied to Presidential advisory commissions. In
Nixon v. Administrator of General Services, the court ``upheld
the Presidential Recordings and Materials Preservation Act
against contentions it would impair future Presidential receipt
of candid documentary advice or candid (potentially recorded)
In a meeting with Judge Royce Lamberth on April 13, US
attorneys objected to a proposed court order forbidding the
Administration to destroy documents prepared by or for the Task
Force. However, Dept. of Justice attorneys did state that it
would be illegal to destroy such documents pending the outcome of
litigation and promised not to do so.
Stealth technology is used by the Air Force to protect
aircraft that are highly likely to be targeted by an enemy.
Decoys may also be used to protect such aircraft. The very use of
the protective technology raises questions about the mission of
the airplane and who might want to destroy it.
The most powerful source of expected opposition will be
small business (which has effectively delayed implementation of
an employer mandate in Massachusetts). Critics of employer
mandates say that thousands of small businesses will declare
bankruptcy if forced to shoulder an estimated additional burden
of $59 billion. And if small business resists successfully,
``the President will have a devilish time groping for other ways
to pay for his ambitious changes'' (NY Times 5/3/93).
Another heated battle will arise if the ``basic benefits
package'' mandated by the federal government includes abortion.
This would have the effect of forcing all insurers, providers,
and employers to ``collaborate in the practice of abortion on
demand,'' according to Douglas Johnson of the National Right to
Life Commission. Only 23% of Americans polled by CBS News and
the NY Times in March thought that mandated benefits should cover
abortions. Hospitals that refuse to perform abortions on ethical
grounds may face a serious dilemma.
One Congressman noted that his office would be constantly
besieged by special interests of all types if Congress is charged
with defining a uniform ``basic benefits'' package. AARP has
launched a letter-writing campaign to ensure the inclusion of
budget-destroying long-term care benefits.
Medical specialists might eventually be aroused to active
resistance, but perhaps too late. In an April 15 address to the
National Managed Health Care Congress, economist Uwe Reinhardt
stated that managed competition would virtually eliminate fee-
for-service medicine and result in ``massive unemployment'' among
[According to a report by the Marion Merrell Dow Managed
Care Digest, the ratio of specialists to ``primary care''
(``gatekeeper'') physicians in HMOs is just over 2 to 1. What is
the ratio in the Yellow Pages of your telephone directory?]
Documents leaked from the Task Force also show cause for
patients' concern. For example, the Task Force discussed
requiring HIPCs to ``prevent consumers from making choices they
might otherwise prefer (i.e. paying the extra money to enroll in
a high cost plan).'' Since ``forcing some of a high cost plan's
enrollees to switch would be difficult,'' a lottery might be
Because some patients might wish to obtain extra service by
paying more out of pocket, the Task Force considered what to do
about balance billing. Various ``options'' are under con-
sideration. The ``pros'' of a ``transition'' phase repeatedly
list the advantage of ``blunting opposition.''
Other terms favored by the writers of Task Force documents
are: penalties, civil prosecution, compliance (``voluntary'' and
other), enforcement tools, rules, etc.
The Stealth bomber can penetrate ground defenses. But it is
vulnerable to look-down, shoot-down radar.
Stealth Health in Washington State
The Washington State legislature passed radical reform
legislation at 3:30 one morning, rocketing Democratic Governor
Mike Lowry to national prominence as an expert on health care
reform. Gov. Lowry declared that he had won ``victory over the
special interests that fought to deny citizens the right to high-
quality, affordable health care.''
Victory was achieved by locking the public out of the
chamber, turning the jammed telephone lines over to an answering
service, and strong-arming legislators into voting for an
enormous and complicated bill after having limited time to
deliberate on the final draft.
The bill invests tremendous power in a politically appointed
Health Services Commission, which is to develop a uniform
benefits package by December, 1994. The Commission will place
caps on insurance premiums, establish standards for capital
expenditures by health care facilities and providers, set
standards for certified health plans, write guidelines for
providers dealing with treatment of terminal or static health
conditions, and establish uniform billing and claims processing.
Additionally, a data bank will be established to track all
medical encounters, leading a newspaper reporter to ask, ``Is
privacy a casualty of health care reform?''
Funding mechanisms in the face of state budget deficits were
glossed over in the rush toward passage.
Small businesses, which will be forced to foot a large
portion of the bill, and patients, who will find their insurance
policies radically altered, will be heard from soon.
Medical opposition to the legislation is spearheaded by the
rapidly growing Washington chapter of AAPS. President Michael
Schlitt, MD, vows that the battle isn't over.
``We are making an impact,'' Dr. Schlitt said. ``We have
nothing to apologize for-in contrast to the Washington State
Medical Association. We have not sought a `seat at the table.'
We believe that the `meal' currently being served is poisonous to
patient and doctor.''
Already, efforts are underway to craft an initiative that
would replace the bill with sensible, market-based reform.
Put It on Paper or Be Purged
Medicare is seducing physicians into filing claims electron-
ically (EMC), and the doctors' billing personnel generally love
it. That's too bad. EMCs are cost-effective for government in
more ways than one. The big picture is that the carriers purge
their files frequently, destroying all evidence of inaccurate
payment. This, of course, limits HCFA's liability for retro-
active adjustments on claims paid incorrectly....
For example, two years after doctors and patients received a
favorable determination in Cosgrove, and government
testified that some $400 million is due the plaintiff class, less
than $50 million has been paid out. HCFA alleges it can't locate
many underpaid claims. Presumably, the EMC files were purged.
EMC is robot processing and reduces patient care to assembly
line levels. It cannot acknowledge factors that enhance the
difficulty of cases for which payment should be increased....Put
it on paper!
League of Physicians and Surgeons
3 East 93rd St., New York, NY 10128, (212)876-4445
Before signing the ``Provider Agreement, Medicare Part B,
Electronic Media Claims System (EMC),'' please read it. Among
other things, the ``provider'' agrees that the Secretary of HHS
or her delegate shall have ``access to all source documents and
medical records related to any claim'' and that the carrier
shall review supporting documents in the provider office
periodically, but no less often than once a year.
Do You Dare See Government-Insured Patients?
The government has reportedly changed tactics in its war
against health care fraud. Physicians suspected of overcharging
Medicare, Medicaid, or worker's compensation programs are being
charged with money laundering for merely depositing the proceeds
of such payments into their bank accounts. Authorities typically
seize office and personal bank accounts, patient records,
equipment, and office furniture. The physicians' homes may also
be seized. And they are told that any effort to protect their
assets after they learn of the enforcement action represents
criminal racketeering. Citizens may litigate such actions; the
government strategy seems to be to appeal until the once
successful citizen litigant runs out of money (Low Profile, Apr,
Asset forfeiture has increased dramatically each year since
the program began as a tool in the war against drugs. The
Department of Justice publishes legal notice of properties seized
in USA Today every third Wednesday. The Feb 17, 1993 listing
covers an entire page in tiny print.
In enforcing anti-kickback legislation, the enforcement
climate is also ``not pretty,'' according to S. Craig Holden, an
attorney with Ober, Kaler, Grimes, & Shriver. There has been a
massive reallocation of resources to the prosecution of both real
and perceived health care fraud and abuse. All actions by
physicians may be viewed as inherently suspicious.
The stakes are so high that physicians generally cannot
afford to litigate a dispute but must settle. Holden calls the
policy one of ``regulation by indictment.'' (BNA's Medicare
``We're destroying our economy, but we're also killing our
Oral Argument in the Court Appeals:
Counsel's Thoughts on the Clinton Case
The case of AAPS v. Clinton was argued in the US Court of
Appeals for the District of Columbia Circuit on April 30, 1993.
On the bench were Judges James L. Buckley, Stephen Williams, and
Laurence H. Silberman, Judge Silberman presiding. The galleries
were jammed with the national media, representatives from
Congress, White House staff, and representatives of leading
Washington law firms. The atmosphere was electric.
Six news media associations, including the Associated Press,
had filed briefs amicus curiae because of concerns about secrecy
in government. On Thomas Jefferson's birthday, Speaker of the US
House of Representatives Tom Foley and the bipartisan leadership
of the House also joined the amici in support of AAPS.
The US Department of Justice argued first. Counsel had been
allotted 20 minutes for his oral arguments. By the time he sat
down, the Court had grilled him for over two hours.
The Court first inquired into Hillary Rodham Clinton's
status under the law. The Justice Department could identify no
statute making the First Lady an ``employee'' of the federal
government. Counsel then abandoned that idea and tried to assert
that she was an ``officer'' or ``quasi-officer''-an argument with
which the Court appeared to become impatient.
Judge Silberman then focused on Ira Magaziner's
``Interdepartmental Working Group,'' querying whether it should
be considered an advisory committee under the Federal Advisory
Committee Act (FACA). The Judge apparently didn't buy the
assertion in Ira Magaziner's declaration that all members of the
working group were ``in effect'' full-time employees of the
government, either as ``permanent'' employees, ``special''
employees, or ``consultants.'' In the Judge's view, many members
had been brought into the government just for this purpose and
had employment elsewhere. Attempts to classify them as
government workers appeared to be a subterfuge intended to skirt
The Justice Department then argued that if it were applied
to the Task Force and the Interdepartmental Working Group, FACA
might be unconstitutional in its entirety.
``This is stunning!'' Judge Silberman replied. ``Are you
telling me that after all these years, the Justice Department is
now taking the position that FACA is unconstitutional in
its entirety?'' [FACA was signed by President Nixon.]
After the questioning of the Dept. of Justice concluded, I
was at the podium for about one hour and 40 minutes. I argued
that the Interdepartmental Working Group was indeed a FACA
``What should we do?'' asked Judge Silberman.
``Remand the case,'' I replied.
With respect to the constitutional argument, I appealed to
the words of James Madison and Alexander Hamilton. In the
Federalist Papers, both extolled the office of President under
the Constitution as a ``unified'' chief executive. They warned
of the loss of liberty that could result when the President
shared his power with Congress.
``Here,'' I stated, ``was the signal problem with the
government's argument.'' When the President asserted his
constitutional prerogative to make recommendations to the
Congress, yet invited into the Interdepartmental Working Group
nearly 150 members of congressional staffs, he destroyed the
unity of his office. In fact, he diffused his duty under Article
II with individuals in the Article I branch. There is no
prerogative left for him to claim in asserting that application
of FACA in this case violates the Separation of Powers.
With respect to Hillary Rodham Clinton, Judge Silberman
asked, ``What if she were given a job as a special emissary to a
foreign country? Would she be an officer then?''
``No,'' I answered. ``Any such office would have to be
approved by Congress. Only then could she become an `officer,'
assuming she could circumvent the Kennedy Act.''
The Judges also wondered if the Cabinet would be subject to
FACA if the First Lady attended meetings.
``Quite possibly,'' I said. ``It would depend on the
authority with which she was clothed. For no matter how you look
at it, until Congress makes an `officer' of her, she is nothing
more than a private citizen.''
The Judges listened intently to our argument. We felt that
the White House staffers in the ``VIP'' seats had much to reflect
upon in the end. As the case is on an expedited schedule, the
opinion is expected any day.
Message from the President
In May, 1990, Ohio Supreme Court Justice Craig Wright
stated: ``Most of the Federal Register regulations
affecting the practice of private medicine are in violation of
the US Constitution.''
The US Constitution was established to protect our rights
against violations such as those practiced by the King of
England. One of the many grievances our Founding Fathers had
against the King was that ``he has erected a multitude of New
Offices, and sent hither swarms of Officers to harass our people,
and eat out their substance.''
Respect for rights is what distinguishes a civilized society
from a barbaric one. As Walter Williams, economics professor at
George Mason University, stated: ``In a civilized society,
people have respect for private property.''
Private property begins with man owning himself and his
natural rights. Life, liberty, and the pursuit of happiness are
inseparable and uncompromisable. These rights must not be
violated by situation ethics and political expediency through the
unconstitutional power of administrative law.
The most critical health care reform is freedom in medicine.
Physicians must not be fettered, intimidated, harassed,
oppressed, and threatened by senseless regulations or by
bureaucratic federal ``practice guidelines.'' Though still the
best in the world, the high costs and bureaucratic mess in
American medicine are the direct result of government meddling
since the mid 1960s.
It is long past time to redeclare independence.
Our Founding Fathers said: ``For the support of this
Declaration, with a firm reliance on the protection of Divine
Providence, we mutually pledge to each other our lives, our
fortunes, and our sacred Honor.''
It is our turn now. If we don't do it, who will? If not
Nino Camardese, MD
AAPS welcomes Cardiovascular and Thoracic Surgeons of
Spokane, WA; and Drs. Alan D. Alyea of Spokane, WA; J. Michael
Arnold of Marinette, WI; B. Athwal of Toms River, NJ; Frank
Battaglia of Houston, TX; Howard L. Bell of Cincinnati, OH;
Daniel S. Berman of White Plains, NY; Donald A. Boutry of Gig
Harbor, WA; J. Scott Bowen of Renton, WA; Barry Brooks of
Dallas, TX; Keith Bryson of Bowling Green, KY; Wayne F. Burnhead,
Jr. of Dallas, TX; Abdul Majid Butt of Gujranwala, Pakistan;
Melvyn Chase of Phoenix, AZ; Minhhang Chu of Baytown, TX; James
R. Conforto of Fairview Park, OH; Charles H. Cummings of
Tiverton, RI; John F. Delemba of Denton, TX; Richard J. Dobies of
Dayton, OH; Charles Dorfman of Apopka, FL; J. Michael Epps of
Jackson, TN; John A. Ferraro of Troy, NY; David F. Fowler of
Atlanta, GA; Arthur R. Gindin of Princeton, WV; Michael S. Golden
of Spokane, WA; Kimberlie J. Gonzalez of Baytown, TX; Lewis C.
Gordonson of Great Neck, NY; Gordon F. Greenman of Renton, WA;
Mark E. Healy of San Antonio, TX; John E. Hershey of Spokane, WA;
Bruce S. Hinkley of Arlington, TX; Micheal L. Hogan of Wausau,
WI; Timothy B. Icenogle of Spokane, WA; Arturo D. Imperial of
Lake Jackson, TX; Charles F. Irwin of Dallas, TX; Rachna Ayesha
Jafri of Houston, TX; Michael Jaquith of Venice, FL; A. Austin
Jones, III of Livingston, TN; Tony Kampner of Crete, IL; Eugene
Y. J. Kang of Baytown , TX; Kevin T. Kelly of Dothan, AL; Donald
Kilpatrick of Charleston, SC; Mark Koch of Baytown, TX; Larry
Kovachevich of Renton, WA; F.A. Krull of Nederland, TX; Kristine
Kunesh-Part of Dayton, OH; Michael T. Kunesh of Dayton, OH;
Charles T. Kunesh of Dayton, OH; Richard J. Lambert of Spokane,
WA; John P. Lenihan, Jr. of Tacoma, WA; Lawrence E. Lohman of
Kent, OH; C. Leslie Lovett, Jr. of Bowling Green, KY; Christopher
Lyon of Newport Beach, CA; Alexander R. MacKay of Spokane, WA;
Robert J. Masi of Portola Valley, CA; Weldon McReynolds of
Jasper, AL; William J. Mesibov of Syosset, NY; Florias Andreas
Morfesis of Harlan, KY; John J. Nanfro of Rome, GA; L. Nastro of
Summit, NJ; Dennis O'Connell of Aberdeen, WA; A.G. Patel of Cedar
Hill, TX; Robert C. Powell of Winnetka, IL; Eugenie M.J. Pugatch
of Montclair, NJ; Murray C. Quinn of White Plains, NY; Alexander
J. Ricci of Great Neck, NY; Richard H. Rolnick of Houston, TX;
Elliott H. Rose of New York, NY; Frank J. Rose of Laguna Beach,
CA; Larry Sears of Gainesville, TX; Glenn Sears of Gainesville,
TX; Lawrence A. Shafron of Denton, TX; Allen R. Sklerov of
Bradenton, FL; Henry T. Spector of White Plains, NY; Norman E.
Staley of Montesano, WA; Howard F. Stock of Scarsdale, NY;
Jeffrey Tobias of Englewood, NJ; Rodney D. Veitschegger, Jr. of
Bowling Green, KY; Marshall C. Wareham of Dayton, OH; Carl S.
Wehri of Delphos, OH; Elizabeth P. Wells of Baytown, TX;
Lawrence M. Wells of Hollis Hills, NY; Darrick Wells of Baytown,
TX; Barry D. Wenglin of White Plains, NY; Charles R. Wilson of
Baytown, TX; David Miller Wise of Seattle, WA; Estelle Yamaki of
Federal Way, WA; Richard W. Young of Arlington, VA; and Jan
Zemplenyi of Bellevue, WA.
The Cost of Reform in Oregon
The Oregon rationing experiment has received a federal
waiver of Medicaid requirements. The Casacade Policy Institute
(813 SW Alder, Suite 707, Portland, OR 97205) is now on record
predicting its results in a report by Peter J. Ferrara:
- Without the plan, Medicaid spending would have risen 25%
in two years; with the plan, it will rise 65%;
- The plan will increase further the cost of medical care
for insured, working people;
- The plan will institutionalize cost-shifting; and
- Many employers will lay off workers or go out of
Copies of the report, which also provides a proposal for
market-based reform, are available on request.
OSHA Penalties Increased
New fines to be levied by the Arizona Department of
Occupational Safety and Health have increased by a factor of five
to ten. Failure to post OSHA notice will be penalized by a fine
of $1000 rather than $100. The minimum penalty for a (single)
``willful'' violation has increased from none to $5,000 and the
maximum penalty from $10,000 to $70,000.
Previously, the ADOSH office would answer, in writing,
questions submitted by the county medical society, in case
physicians did not wish to call attention to themselves by
telephoning. (The answers were published in the monthly
bulletin.) The new official will no longer respond in this way.
Instead, the physician must call so that ADOSH can acquire more
information about the physician's particular situation.
Please inform AAPS of enforcement actions in your area.
May 22. Board of Directors meeting and medicolegal seminar,
Bradenton/Sarasota, FL, Hyatt Hotel and Sarasota Garden Club.
Call 1-800-635-1196 to register (or request audiotapes) and 813-
366-9000 to make a hotel reservation.
June 18-19. Medical Action Committee for Education, East
Hyatt Regency Hotel, Dallas/Ft. Worth Airport (see enclosure).
Oct. 5-9. 50th annual meeting, San Antonio, TX.
Legislative AlertDomestic Policy Disarray?
OMB Chief Leon Panetta said it: Clinton's domestic
agenda is in such deep trouble that he should delay sending any
kind of health care reform to Congress until after the debate on
budget and taxes is over later this summer. Panetta fears that
the debate over higher taxes and spending generally is bound to
affect the consideration of any kind of expensive proposal in a
decidedly negative fashion. Translation: It is all too much, too
fast, and the Administration risks losing the entire Capitol Hill
ball game. A whole series of difficulties have been plaguing
the Clinton team during its first 100 days. The ``economic stimu-
lus'' package was blocked in the Senate by Senator Bob Dole's
disciplined Republican filibuster. The President's first major
legislative defeat in Congress came the same week that his
treatment of the Branch Davidians in Waco was being second-
guessed by Congressional critics, including liberal Democrats
like John Conyers (D-MI). Democratic Congressional backers are
frustrated by a growing record of broken and unfulfilled
promises, including the middle class tax cut; unpleasantly high
Presidential visibility in divisive social issues like
homosexuals in the military and ``gay rights''; record high
disapproval ratings in the public opinion surveys for the
President so early in his Administration; and a seeming inability
on the part of the Clinton team to manage the government
effectively, particularly the failure to expeditiously fill the
3000 key management and policy positions in the Executive Branch.
In the latter case, the testily conservative Washington
Times revealed that 25,000 resumes of 1992's Democratic
faithful sent to the White House personnel office had been
inadvertently put in storage rather than being processed to fill
slots in the new Administration. And even the normally pro-
Administration Washington Post has conceded that the
personnel management problems have gone on far too long, and the
time is running out even for the Post's editorialists to
maintain any excuses.
What stuns official Washington is not the Panetta message -a
truth just about everybody realizes-but the messenger. Immediate
speculation centered on whether Panetta was speaking on cue in
order to dampen overblown public expectations, or whether his
statement signalled the outbreak of an internal firestorm from
the smoldering resentment between Democratic moderates, the ``New
Democrats,'' and Hillary's Sixties liberals. But the truth is
simple: at the end of a long, tough week, Leon Panetta just
blurted out what was on his mind.
Ditto the Health Care Task Force?
The general management and policy problems of the young
Clinton Administration are evidently mirrored in the Presidential
Task Force on Health Care Reform, aggravated by Clinton's very
specific campaign promises and public pledges, including a self-
imposed deadline of 100 days. Its recommendations were to be
released on May 3rd. Then other dates were floated. May 17th? May
25th? Sometime in June?
The deadline was a strategic mistake from the outset-ditto,
the secrecy. After all, this is important, but it's not the
The timing of the reform plan is obviously less important
than the substance. But, incredibly, there is still wrangling-at
this late date-over the substance of the proposal. For example,
the basic struggle between advocates of managed competition and
an even more heavily regulated approach continues.
Doubtless, the Clinton minions will defensively reply that
it is not supposed to be a smooth process. This is a tough, no-
nonsense, head-banging job, dealing with the biggest issues in
domestic policy. So what did or could we expect, anyway? But the
political problem is that such a defensive response underscores
one brutal and unmistakable fact: That the President never really
had a coherent plan in the first place.
Instead of just putting The Plan together, Hillary and her
team seem to have been forced to make The Plan up as they go
along, borrowing bits and pieces from often incompatible
proposals offered by different interest groups and liberal policy
wonks. These groups, the ``good'' special interests groups as
opposed to he ``bad'' special interest groups (e.g. doctors and
pharmaceutical firms), seem to have had some genuine success in
undermining the coherence of the original ``managed competition''
A good example of interest group pressure has surfaced over
the question of coverage. Will the universal rules for insurance
be universal? Apparently not. According to the April 26th edition
of the New York Times, Big Business-defined as any firm
with 1000 or more workers-will be exempted from the new
government-established health care purchasing cooperatives, the
``Health Alliances,'' envisioned by the Administration. Why?
Because, according to Administration officials, the big employer-
based health insurance systems are doing just fine in providing
health care to millions of Americans (about 33 million to be
exact), thank you very much. In other words, the inflationary,
employer-based insurance system in its largest and most
concentrated form is to be left intact-the very framework which
more and more economists, be they left, right, or center, agree
is the very reason for the cost explosion in the first place.
Some reform. In effect, for Big Business, it's Big Business as
Big Business, in the form of the big insurance companies, is
also the biggest supporter of ``managed competition.'' The
``Alliance for Managed Competition,'' said to be ``providing
health care coverage for 60 million Americans,'' includes Aetna,
Cigna, Metlife, The Prudential, and Travelers. Guess who would
likely dominate the geographically based, highly regulated,
managed-competition market? Thus, the new rules, the employer
mandates, and the accompanying regulations of the forthcoming
reform are to be imposed on small and mid-size businesses. Small
business-once again- will take it on the chin. Interestingly
enough, for different reasons organized labor is outraged-at
least in public-over this concession to the big boys and is
claiming that Big Business lobbies won the exemption from the
firm of Clinton and Clinton because of their cooperation with the
President on his big budget and spending package.
The more important question is how all this will affect
medicine. Senator Paul Wellstone (D-MN), the leading Congres-
sional champion of the Canadian-style single payer system, got it
just right: the ``Health Alliances,'' the new managed care
networks covering small business, will become the ``dumping
ground'' for low income people with high medical risks. We are
talking about new and unprecedented levels of adverse selection.
Offsetting this will be what? New taxes, probably.
Beyond the cross pressures of interest group politics,
Hillary Rodham Clinton's policy process has been dogged with
unnecessary controversy-the entire secrecy silliness and the
self-defeating exclusion of physicians and other medical
professionals from the process early on. So now the Task Force
has announced that it will have 47 health care professionals,
doctors and nurses and hospital types, review the work of the
Task Force. As with the 500-odd members of the Task Force
itself, mostly liberal Congressional staffers and HHS bureau-
crats, the Washington guessing game is: Who do you know? Needless
to say, the 47 health care ``providers''-a wonk word for doctors-
were not selected to cast doubt on the Task Force product.
Are the leaks in the press just leaks, or are they really
``trial balloons'' deliberately sent up to catch flak or praise,
giving Hillary and the wonks on the ground the sensors necessary
to gauge the likely public and Congressional reaction?
A good example is the dramatic proposal for a value added
tax (VAT) as a way to pay for expanded ``health care access.''
It is a sharply regressive tax. It raises big bucks, and its
major attraction to policy wonks is that it is a ``hidden tax''
designed to extract revenues from an already overtaxed public in
such a way that they won't realize it. (It does have the
advantage that those who can't afford to pay the tax can simply
do without new purchases. In contrast, a property tax would
confiscate the assets of those who couldn't raise the money to
pay it, thus further eroding our capital base.)
The VAT was off the table last February; it's now on; and
may be off-again. Who knows? The big tax trial balloon, if it is
that, is supposed to prepare the public for another huge round of
taxation. House Republicans have been quick to seize on the VAT
issue. Congressman Dick Armey (R-TX) and Congressman Tom DeLay
(R-TX) have started an Anti-VAT Caucus in the House of
As to the substance of the ``reform'' package itself, Con-
gressman Dan Rostenkowski (D-IL), the Chairman of the powerful
House Committee on Ways and Means, told members of the American
Group Practice Association that ``some of the proposals I've seen
include elaborate linkages between several different
institutions, none of which exist here or anywhere else at the
moment,'' adding that ``these plans are the domestic equivalent
of Star Wars where the plan was that a series of nonexistent
technologies would be developed and linked to one another so that
they would work flawlessly.''
While Rostenkowski expressed his intention to support the
Clinton plan if it controls costs, ``pays for itself,''
and assures ``universal access,'' his remarks revealed a
skepticism about the work of the Task Force that is unusual for a
leading Member of Congress expected to carry water for the
Administration. Rostenkowski will have more direct say over the
shape of any future health care reform than any other member of
Congress (assuming he survives a possible criminal indictment-
subpoenas were served shortly after his ``Star Wars'' remarks).
The message of Senator Robert Dole's (R-KS) successful
showdown with Clinton on the so-called Economic Stimulus Package
has not been lost on the Clinton Administration. And the
Administration's relations with Congress have generally been
handled without much aplomb. Witness the clumsy White House
threats against Democratic Senator Richard Shelby of Alabama, who
defected on the Clinton budget package. Shelby was threatened-LBJ
style-with retaliation against Alabama projects; Shelby balked
and resisted, and since has become a political hero in Alabama,
not a political victim. In Texas, Sen. Bob Krueger (D-TX), facing
a special election in May, is running away from Clinton with
lightning speed. Clinton's approval rating in Texas is in the
basement. Bill Clinton is not only no JFK, he's no LBJ either.
Carter Redux? Maybe. Don't count on it. Bill Clinton knows
how to take a hard political punch. Bloodied badly, he has hit
the canvas before, only to confound his opponents by getting up
and taking the fight-once again-to them.
Congressional Republicans: Reforming Their Ranks?
While Senate Republicans are still basking in their first
major legislative victory over the Clinton Administration they
still have not realigned around a common alternative to Hillary
Rodham Clinton's emerging ``managed competition'' proposal. Like
Union General George McClellan at Antietam, Senate Republicans
have only stopped an advance. Politically, Congressional
Republicans are not yet on offense. The initiative still rests
with the Clinton Administration.
The strategic question for Republicans is whether they
should pursue the same strategy on health care that they did with
the so-called stimulus package, setting out to oppose the measure
with the sole objective of defeating it, or also offer a viable
and politically attractive alternative.
Congressional leaders realize that the two issues are
radically different, and that the political fallout is likely to
be different. The ``stimulus package'' was portrayed as a
``budget-busting, pork-barrel spending bill.'' Make-work stuff.
However, the public, at least according to all reputable surveys,
wants some kind of reform of the ``health-care system.'' Simple
opposition-without an alternative that addresses genuine popular
concerns-courts immense political danger. A Clinton Ad-
ministration counter attack, coordinated by Jimmy Carville,
painting his Congressional opposition as out of touch with the
concerns of ordinary Americans, could prove disastrous to Dole,
Michel and Co.
While Senator John Chafee (R-RI) and his 25-member Senate
Republican Task Force (including Finance Committee heavies like
Durenberger and Packwood) want to push their own version of
managed competition (see May Legislative Alert), Congressional
conservatives are getting their back up at the prospect.
Reportedly, Senator Phil Gramm of Texas, and a group of
conservative Senators (Nickles of Oklahoma, McCain
of Arizona, and Coats of Indiana) are working on a comprehen-
sive bill that would reform the financing of medical care through
a combination of tax credits and medical savings accounts.
Meanwhile, in the House of Representatives, Republican
freshmen, led by Congressmen Cliff Stearns of Florida and Buck
McKeon of California, are aligning their colleagues around a
``consumer choice'' option, building upon tax credits, vouchers,
and medical savings accounts as the preferred financing
mechanisms. Meanwhile, Congressman Richard Armey, Chairman of the
House Republican Conference, is not waiting for the Clinton Plan
to be sent to Capitol Hill. Based on the press reports, Armey is
initiating pre-emptive strikes (in the form of policy papers)
against certain provisions that have leaked out of the Task
Force, such as price controls and employer mandates. Armey argues
that price controls have never worked before and will not work
now. They will only result in rationing.
``We can expect doctors to play more golf, wear their
beepers less, and push patients out of the door as quickly as
possible-to name just three forms of rationing.'' Armey is
calling employer mandates a ``stimulus plan for unemployment
officers'' and a ``Kevorkian Prescription for Jobs.''