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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 51, No. 3 March 1995


After Judge Lamberth dismissed the case of AAPS v. Clinton on grounds of mootness, a most remarkable complaint came from the White House: Magaziner had been denied a chance to ``clear his name'' in a civil trial.

The White House filed the motion for mootness after deciding to unveil thousands of pages of Health Care Task Force documents at the National Archives. At the time, Department of Justice attorneys were well aware of Judge Lamberth's opinion that granting their motion would also moot the AAPS motion for civil contempt against Magaziner. (In March, 1993, Magaziner had sworn that the Interdepartmental Working Group was made up wholly of federal employees. This assertion was plainly not correct; not even the Dept. of Justice was willing to defend its accuracy.)

The White House was apparently stunned when the Judge referred the matter for criminal investigation (see AAPS News, Feb 1995).

They were possibly even more astonished when the Judge immediately granted Magaziner's wish for civil proceedings. He also gave Magaziner a week to reconsider, while attorneys for both the White House and AAPS were gagged.

By the end of the week, during which he no doubt got intense legal counseling, Magaziner had changed his mind. His private criminal attorney, Charles Ruff, announced that his client would follow criminal procedures to dispute the ``wild allegations'' by AAPS.

Ruff apparently thought it unwise to risk full discovery by AAPS, which would have resulted in subpoenas to top officials, including Mrs. William J. Clinton. Also, by testifying Magaziner would have waived rights to remain silent in a criminal trial.

Magaziner's fate was thus placed in the hands of U.S. Attorney Eric Holder, who was at the time said to be under consideration for a Clinton appointment to the U.S. Circuit Court, a stepping stone to the U.S. Supreme Court. (White House Counsel Mikva subsequently denied this report.)

However, on February 2, all Republicans on the House Judiciary Committee demanded that Attorney General Reno appoint an independent counsel. Their letter cites a conflict of interest on the part of U.S. Attorney Holder because his department vigorously defended Magaziner in the lawsuit.

``Indeed, the court has already determined that government officials engaged in misconduct defending that suit,'' the letter stated. Magaziner surely had help in drafting his affidavit. And Department of Justice lawyers referred to it in oral arguments before the U.S. Circuit Court of Appeals, the day after attending a White House reception where Mrs. William J. Clinton thanked more than 1,000 regular ``participants'' (not just 340 as in Magaziner's affidavit). Top lawyers who were involved with the case-and might have helped to draft the unsigned memo on how to meet with the President without triggering open-meetings laws- included Bernard Nussbaum, Vince Foster, Webster Hubbell, and Mrs. Clinton.

Additionally, the Congressmen stated, there was a ``polit- ical conflict of interest in protecting the President's `Health Care Czar'...from further legal and political embarrassment.''

The letter was signed by Congressmen Henry J. Hyde, Bob Barr, Fred Heineman, Michael Flanagan, Bob Inglis, George Gekas, Bill McCollum, Ed Bryant, Steve Chabot, Lamar Smith, Steve Buyer, Sonny Bono, Elton Gallegly, Charles Canady, F. James Sensenbrenner, Carlos Moorhead, Bob Goodlatte, Martin Hoke, Steve Schiff, and Howard Coble.

Attorney General Reno was asked to respond in 30 days.

In the meantime, AAPS researchers are nearing the end of their review of boxes of documents at the Archives. The floppy disks promised since September have finally been produced. Of the 243 disks, 17 were found by the Archives to be blank or to have irretrievable read errors-an outstanding record for a Task Force bent on computerizing every patient record in America. Both disks provided by Lois Quam were useless. (Quam, who is Vice President of United Health Care Corporation and former Chairman of the Minnesota Health Care Access Commission, was leader of Working Group 2 of Cluster Group 1, on ``Managed Care'' and ``Special Issues in Purchasing Cooperatives.'') In addition to problems identified by Archives staff, AAPS has found numerous other defects, such as files that are truncated or saved in incompatible formats.

The most interesting materials are Department of Justice memoranda on how to forestall court challenges to the intended legislation and how to force state compliance without triggering Tenth Amendment problems.

AAPS also has reason to believe that materials of some Working Group participants were withheld from the Archives.

``A full-blown investigation of the Task Force would make Whitewater look like a speeding violation,'' stated Thomas Spencer, Counsel for AAPS. The Association will press for such an investigation by congressional committees.

Already, Task Force documents clearly reveal this Administration's intention to assume dictatorial control over all aspects of American medicine and to bulldoze any obstacles, including the legislative and judiciary branches of government.

Editorial: The Law and Private Contracts

There are some who take a very negative view of private contracting with Medicare beneficiaries and who believe that H.R. 5252 (text enclosed) vindicates their position.

However, there are certain things that Medicare still declines to say, despite various provocations: (1) To physicians: you must take government money (from our bankrupt and hemorrhaging Treasury). (2) To patients: you are forbidden to spend your own hard-earned money to buy a medical service without our involvement.

Treating Medicare beneficiaries outside the Medicare program may be a risky (and not very lucrative) business. But is it illegal?

The answer to that question depends on which lawyer you ask. There are certainly ambiguities.

AAPS takes H.R. 5252 very seriously. Some believe that it comes within one sentence of dictating every fee for every medical service in the United States (but it stops short).

The AAPS Board of Directors passed a motion stating that ``any member of the Board, when speaking or publishing about private contracting, is to make it clear that he is speaking for himself and not for the Association.''

Your editor speaks for herself also. Here are a few observations: (1) We now seem to be developing a government of men, not of laws. (2) The government may ruthlessly target ``troublemakers.'' (3) The government routinely violates its own laws. (4) If you take their money, you waive your rights. (5) Patients (or their families) may want to abrogate a contract to obtain government money. (6) To the best of our knowledge, no physician has yet been sanctioned for private treatment of a patient enrolled in Medicare Part B. (Private treatment means no Medicare payment for the service, none.) I have submitted no Medicare claims ever, and my patients have submitted none since September, 1990.

What are we going to do now, in the land of Patrick Henry? Will we all ask ``Mother, may I?'' every time we wish to take one baby step in the exercise of our inalienable rights as American citizens?

Or will some say, ``Here we are, Ms. Shalala, giving and receiving medical services, without asking you for money. We think this is perfectly within our rights and have a court decision to support us. What is your policy, in plain unvarnished English?''

AAPS is exploring legislative, legal, and public education avenues to reinforce the right to practice (and receive) private medical services.
Jane M. Orient, M.D., Private Physician


How to Disenroll from Medicare Part B

To disenroll requires a form, which may be requested from the Social Security Administration, 800-772-1213. In about one month, the government will stop deducting $46 per month from the Social Security check of the former beneficiary.

Persons may re-enroll only during the period between January 1 and March 31, and enrollment does not become effective until July. Upon re-enrollment, the beneficiary faces a financial penalty for the rest of his life: 10 percent times the number of years he was out of the program.

Is disenrollment affordable?

Patients should look at how much they spend for their ``supplemental'' policies, then ask what that policy really covers. One patient who had a coronary artery bypass found out that the total benefit she received in that catastrophic year was less than the annual premium! In a good year, a disciplined, healthy person could set aside as much as $552 plus the supplemental premium as self insurance. If a hospitalization were needed, the hospital bill-which is the truly catastrophic risk- would be covered by Part A. Should a chronic illness develop, re-enrollment in Part B is an option. And if enough people were to opt out, a market for a decent private alternative to Part B could develop.


How Much Should Your Copayment Be?

Many patients believe they need supplemental insurance because hospital copayments can be extremely burdensome. What if you spend a night in the hospital, and the bill comes to an astonishing $15,000?

Medicare is supposed to pay 80 percent of the amount it approves, and the patient is to pay the remaining 20 percent. Sounds simple, and for doctor bills it works that way. Medicare tells the patient exactly how much it has paid the doctor. Not so with hospitals, as journalist Phil Willon discovered.

Medicare sent his wife a statement saying that it had approved a hospital bill (that the patient had never seen) for $15,000 and had paid $12,000. The patient's share was $3,000. In reality, Medicare had only paid $1,600. The hospital, of course, knew this, although it didn't tell the patient. It ``keeps its arrangements with Medicare confidential.'' It expects to collect $4,600, more than half from the patient or the secondary insurer (Los Angeles Times 12/14/94).

Do we have a right to truth in government?


Are the Uninsured Freeloaders?

One argument for mandating insurance coverage is that the costs of caring for the uninsured are shifted onto others. The Congressional Budget Office (CBO) estimates that uninsured people pay only 30% of the cost of their medical care. They received about $15.2 billion in ``uncompensated'' hospital care in 1991, plus $10.2 billion in ``uncompensated'' physicians' services. After some adjustments, it appears that the uninsured caused $20.3 billion to be shifted to paying patients.

No one knows how much cost shifting occurs, and other estimates are lower than the CBO's. But even if we accept these estimates, uncompensated care for the uninsured is only 2.9 percent of the nation's annual medical bill. For comparison, bad debts are about 2.4 percent of sales in the economy as a whole.

On the other hand, the uninsured do not receive the tax subsidies that can equal as much as half the cost of employer- provided health insurance. On the average, an uninsured family pays about $1,018 more in federal tax each year. The uninsured pay $17.1 billion more in federal taxes, and an additional $1.9 billion in state and local taxes.

Thus, the uninsured are arguably paying their own way. But in any event, they are responsible for only 24.3 percent of uncompensated medical care. The biggest sources are Medicaid (42.6 percent) and Medicare (33.0 percent).

[Source: Brief analysis #120, August 10, 1994, National Center for Policy Analysis, 12655 N. Central Expressway, Suite 720, Dallas, TX 75243, (214)386-2672.]


Can Medicare Beneficiaries Be Private Patients?

AAPS members frequently ask about the current status of Medicare law regarding private contracting with patients who are enrolled in Medicare Part B-particularly after the midnight passage of the Medicare Technical Amendments in H.R. 5252 (see AAPS News, Dec. 1994). These extend limits on balance billing to all persons enrolled in Part B, rather than applying them to ``services paid for under this part.''

The question becomes increasingly urgent for patients also. Medicare beneficiaries, even wealthy persons willing to pay their own bills in full, are being denied certain treatments because Medicare reimbursement does not cover the costs and the physician is afraid to accept private payment.

AAPS asked four attorneys to review Judge Politan's opinion in the case of Stewart v. Sullivan, H.R. 5252, and instructions from Medicare carriers. Here is a brief summary of the salient points in their analyses:

Michael Jonson, Seattle:

The effects of Stewart v. Sullivan and H.R. 5252 appear to be as follows:

(1) Medicare (at the time of the judge's decision) had no policy regarding contracting; (2) Standing alone, the policies of Medicare's regional carriers that prohibit contracting are not enforceable. There must be, in addition, a policy of the Secretary [also see National Medical Enterprises v. Bowen 851 F.2d 291 (9th Cir. 1988), AAPS News, Aug 1993 -- Ed.]; (3) No ruling has yet been made on the question of whether the claims submission requirement prohibits contracting; (4) H.R. 5252 seems to contemplate that contracting will occur; (5) H.R. 5252 purports to make all contracting subject to Medicare's price controls.

Does language now present in the Carrier's Manual constitute a ``policy''? It will take a lawsuit to find out.

Even with a ruling that contracting is permitted, there is still the problem of the price controls imposed by H.R. 5252. Does the freedom to contract mean anything with price controls in place?

Are these price controls constitutional? This is a complicated constitutional question; and unless a lawsuit were won on constitutional grounds, its effect could quickly be reversed with legislation.

Although the law is far from clear, Medicare could begin an enforcement program at any time, with sanctions ranging from a slap on the hand to a criminal charge. Partners of targeted physicians could also be held responsible for sanction- able conduct.

Andrew L. Schlafly, New York:

It would be pointless to reopen Stewart v. Sullivan without being certain that the ripeness requirement has been met. It is not clear that H.R. 5252 makes the case ripe. It merely authorizes sanctions against physicians who use certain billing practices; it does not compel the Secretary to act. There continues to be ambiguity about how the Secretary would articulate and implement policies on private contracting. Correspondence from Medicare official Kathleen Buto discourages attempts to bypass Medicare guidelines but cleverly refrains from articulating a clear policy.

Provoking an actual sanction by HHS would satisfy the ripeness requirement. Such a sanction would probably be relatively mild. However, it is not clear that HHS would actually impose such a sanction. The agency is now quite sensitive to its vulnerability to litigation once the ripeness hurdle is overcome. It may prefer to tolerate a few trouble- makers in preference to jeopardizing its entire policy.

Thomas R. Spencer, Jr., Miami:

In Stewart v. Sullivan, lawyers representing the government could provide no basis upon which carriers could articulate a prohibition against private contracting.

However, H.R. 5252 has imposed government price controls upon all persons enrolled in Medicare Part B. It is now unfortunately well established that government price regulation does not constitute an unconstitutional taking of property where the regulated group is not required to participate. Physicians are not compelled to serve Part B enrollees. In contrast, because public utilities are under statutory duty to provide service on demand, regulators must provide reasonable compensation.

There are several reasons to undertake litigation. (1) The very fact that a group attacks the statute would provide a meaningful defense to the concept of a willful violation. (2) Well-publicized litigation would provide impetus to a legislative solution. (3) The Court may at some point be ready to effect a limitation on the power of Congress. Justice Scalia has an ``original intent'' concept of substantive due process, but he has yet to obtain a majority.

Robert E. Mack and Timothy M. Schellberg, Seattle:

H.R. 5252 exempts all persons from liability for payments in excess of the limiting charge for services provided to persons enrolled in Medicare Part B. Physicians who collect such an excess are required to refund it within 30 days, although they may probably be entitled to offset amounts owed by patients for copayments.

If a physician who is not in solo practice is sanctioned under Medicare, fines may be levied against his partnership as a whole. Based on general partnership law, all partners are liable on contracts made within the scope of the partnership business.

Our research indicates a reluctance on the part of the courts to favor individual rights over the express mandates of Congress. In Whitney v. Heckler, the physicians' challenge to Medicare fee freezes as an unconstitutional bill of attainder was rejected on the grounds that the Medicare Act did not fall within the historical meaning of a legislative punishment.

In Stewart v. Sullivan, the court ruled that ``[n]either the statutes nor the regulations expressly address the issue of whether disenrollment on a partial or service-by- service basis is acceptable under the Medicare program.'' However, there is a procedure for disenrollment, and it makes no provision for patients to disenroll on a case-by-case basis.

The time may be right for legislation that recognizes that patients know what is best for their individual needs and should be allowed to contract with physicians on mutually agreeable terms.


The Law of the Land

Article I, Section 10. No State shall...pass any...law impairing the obligations of contracts....

Amendment X. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, respectively, or to the people.

Members' Page

Blue Bungler Update. Letter to Mr. Preston Lowen, HCFA Representative, Medicare Part A:

Recently, we were told that Upstate Medicare was going to phase out their old electronic bulletin board system in favor of a new one with expanded capabilities -things like E-mail and online chat groups...as if we had nothing better to do than sit and swap war stories with other similarly abused providers....an idea from a reality-starved bureaucrat....The old bulletin board was fairly easy to use to transmit our claims, unlike the new one where one must wade through multiple questions about E-mail and whether or not we want to join an on-line social chat group...``abused solo, non-Par providers from the Southern Tier line.''

Today, we called up ``Bonnie'' at Upstate Medicare who told us that in order to use the new bulletin board system, we would have to be assigned a new password, and would therefore have to talk to Joanne, who wasn't working there today....It reminds me of the time they killed off one of my Medicare patients in their computer, and they could not simply give her her name and Medicare number back. Instead, Medicare had to sign her a new name and number (true story)....
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY


CLIA Prevents Another Lab Test. It is with deep regret that I have stopped doing microscopic examinations of stool for pus, as this has not been approved by the CLIA, even though it has been reportedly been recommended to be approved as a ``labile'' substance, and therefore possibly suitable to be looked at through the microscope by physicians....I cannot afford the draconian penalties if we are unable to pass the ``medium'' complexity laboratory requirements....I hope [that sometime] in the future...mere physicians will [be allowed to] look at what laboratory technicians are allowed to look at with much less education.
Frank F. Martin, M.D. (gastroenterologist), Charleston, SC


Physicians Should Stand Up. My heartfelt thanks [to AAPS] for such a fine effort on behalf of the American physician....

It would be interesting for the AAPS to next reveal what malice and illness of spirit lies behind the push to make us all ``executive physicians,'' to join the organizations with the obvious profit motive behind their doomsday bawlings....

I believe we must all become militant and aggressive about our Bill of Rights guarantees, and to point constantly to our shabby and illegitimate judiciary, which has put us in such a position as we are in America today.

Of course, what is happening in medicine is simply a microcosm of what is going on in the world and U.S. society; it is nice to have the reference point that one professional group will stand against such decadent behavior.
Albert D. MacDade, M.D., Fort Smith, AR


A Patient Advisory on Insurance and Managed Care

(1) Q: Why doesn't the insurance industry promote high-deductible ``choice'' (conventional) insurance policies, which are much less costly per dollar of coverage? A: It would mean fewer premium dollars for a profit- oriented industry. Medical savings accounts combined with high- deductible insurance allow unspent monies to be returned to individuals instead of insurance administrators like U.S. Healthcare's CEO, who is paid $10 million per year or the CEOs of Blue Cross with seven-figure salaries.

(2) Q: Why do people let their employers buy a type of insurance that they don't really want? A: Because of tax-law discrimination: When the employer spends $4,500 on insurance, he spends pre-tax dollars. If you buy $4,500 worth of insurance or medical care, you have to earn about $7,000 because you are spending after-tax dollars.

(3) Q: How does managed care lower costs? A: You can be sure that people are getting just as sick. Cost is lowered by decreasing quality and quantity of care. There is a worrisome trend of downsizing and layoffs in many hospitals. They replace nurses with less qualified personnel and buy cheaper materials. Primary care doctors are coerced into shortening stays and avoiding referrals to specialists. Some patients just give up and pay for service outside their HMO because of the bureaucracy; they end up paying twice for care while preserving corporate profits.

(4) Q: Why do doctors go along? A: Doctors are forced to go where the employers have forced patients to go. Most doctors still care about their patients and take the loss-and the heat. But at some point, they will either yield to corporate pressure or be forced out of the medical care system. We are in a deceptive honeymoon period with managed care. Doctors unwillingly tolerate this inferior and corrupt system.

Managed care is really managed cost and damaged care.
Dennis Gabos, M.D., Pittsburgh, PA
Society for the Education of Physicians and Patients


AAPS Calendar

May 6 Regional meeting, Boise, ID: A Free-Market Solution to Health Care Price Distortion and the Corporate Socialized Medicine Managed Care Malignancy. Call 800-635-1196 for information.

Oct 11 Board of directors meeting, Falls Church, VA

Oct 12-14 52nd Annual Meeting, Falls Church, VA

Legislative Alert

The State of The Union

The President's long speech to the Congress and the nation was more popular with the public than the pundits, who dismissed it as much too long and not thematic enough. He returned to the theme of health care reform, and reminded Congress what everybody knows: the problems with the system, including the problem of uninsurance, will not go away by themselves. But the President seems quite prepared to let Senator Robert Dole and Congressman Newt Gingrich take the initiative on this one.

By huge margins, according to initial surveys, the public approved of the President's speech. Not surprising. The President is a terrific communicator. And how about that snazzy ``New Democrat'' rhetoric? About three quarters of Clinton's speech could have easily been given by former President Ronald Reagan, complete with props, heros and heroines among ordinary Americans, seated prominently in the House gallery. But Americans have heard all of this stuff before. Clinton talks the talk, but can he walk the walk?

Here Comes Corrections Day!

Under a new procedure to be introduced by the new Speaker of the House, Congressman Newt Gingrich of Georgia, inspired by a suggestion of Governor John Engler of Michigan, the House of Representatives will put aside one day each month to fix its mistakes and abolish stupid government programs. Under the new Gingrich House rule, an expedited process like the ``suspension calendar'' will be used to get rid of dumb government programs or schemes. A bill can be brought to the floor for limited debate and be passed quickly with a two-thirds vote. Most of these are voice votes, not roll- call votes. Right now, under the House suspension calendar, bills are passed to establish or adjust government programs. Under this new arrangement, bills will only be passed that repeal government programs.

Gingrich told the American Hospital Association (see below) that he wants input from the medical profession on getting rid of dumb things, and indicated that he will make arrangements with his counterparts in the Senate to make sure that they clear the same language in advance so the repeal measures can be greased for the President's desk.

The Message from Speaker Gingrich:

Radical Rethinking and Overhauling Medicare

In our previous Legislative Alert, we reported that vouchers for the Medicare program, a radical restructuring of the system, had been picking up support in Congress; that Members are struck by the idea of literally creating a consumer choice system out of the old, bureaucratic Medicare system. So, you read it here first.

Gingrich wants to overhaul the Medicare program and dramatically reduce the regulatory power of the Health Care Financing Administration (HCFA). In his January 30th speech to the American Hospital Association (AHA) meeting here in Washington, interrupted continuously by enthusiastic applause, Gingrich outlined an ambitious program for reform. He also announced a new Congressional Task Force on Medicare to be headed by Congressman Bill Archer of Texas, Chairman of the House Ways and Means Committee and Congressman Bill Thomas of California, the new Chairman of the House Ways and Means Subcommittee on Health (formerly the ``Stark Subcommittee'').

Gingrich spoke of opportunities, not just problems. ``They now fill up a 747 every weekend to fly from Tokyo to Minneapolis to shop at the Mall of the Americas. People who go that far for sneakers will go an immense distance to get the best liver treatment.''

Gingrich advised the medical industry to junk established ways of thinking: ``I was astonished over the last few years to have the AHA take the following position: We are currently cheated by the federal government, we are cheated by the federal government on Medicare, we're cheated by the federal government on Medicaid. Therefore, in order to improve our situation, let us extend government control to the rest of the health care so that the federal government can equalize out its cheating.''

In Gingrich's view, the thinking that dominates much of the Washington lobbying establishment, claiming to represent doctors and hospitals, only leads to the collapse of a productive system: ``... They will steal from the producers. And you know that they will keep transferring power away from you towards the Health care Financing Administration, and you know that that kind of structure means more and more bureaucracy, more and more red tape, and that the people who know less and less make more and more decisions; so that the closer you are to a real patient the less influence you have, and the further away you are the more influence you'll have, that ultimately people who have never seen a patient will make all the decisions-and that's absolutely the system we currently have. I have never understood the short-term thinking that led the AHA to adopt a position which in the short run sounds good until you get honest about how it will work. And so I would literally ask you, suspend every proposal you currently have and rethink from the ground up along with us.''

What applies to the American Hospital Association (AHA) also applies to the American Medical Association (AMA): ``I went to the AMA a year ago. I told them I was against the Clinton Plan. They gave me a standing ovation. I then stopped them, and I said, `Wait a second. You have to understand....We're not going to have a half-government, half-private system rigged so that the producers can remain guilds. It's not going to happen. You're either going to go to a government-dominated, bureaucratic, centralized structure or you're truly going to re-establish marketplace environments and you're going to truly give information to individuals. You can't have it both ways. You've got to choose.''

While many prominent policy experts in Washington have seen medical technology as a ``problem,'' Gingrich sees it's enormous potential to ``collapse costs.'' We do not do very well ``controlling costs,'' he says, but we have done exceedingly well in ``collapsing'' them. ``Look at the cost of iron lungs prior to Jonas Salk. You saw the polio vaccine collapse the cost of treating polio because it collapsed polio.''

As for the Medicare program itself, Gingrich wants to overhaul the entire thing, and he set this challenge for the American Hospital Association: ``Think about a world without the Health Care Financing Administration.''

``It's actually harder than you think. If were going to rethink Medicare to improve the quality of medical care for our senior citizens, to give them a greater range of choices, then it's not just a question of saying what's wrong with the current structure; it's a question of thinking through at the vision and strategies level, what would be right about the replacement? How would it work? What would it do?... The goal of Medicare, which is to ensure that all of our parents and grandparents have medical care and do not have to live their later years in fear, is a powerful and legitimate goal. ``But the current highly centralized bureaucratic structure offering one menu for everybody in a monopolistic manner is the opposite of how America works.''

The First Mistake

The House rules have been changed for the better. The Balanced Budget Amendment has passed the House. Of all of the measures endorsed by Gingrich and Company, this is perhaps the most important and most symbolic component of change on Capitol Hill. Labor Secretary Robert Reich is, perhaps inadvertently, doing all he can to advance the case for a Balanced Budget Amendment by complaining that it would ``tie the hands of government.'' Say that again, Bob?

A bill to limit unfunded mandates has also passed the House of Representatives and is quickly working its way through the process over in the Senate, Senator Robert Byrd of West Virginia notwithstanding. Think about what this means for the Medicaid program.

Not surprisingly, public approval of Congress-an oxymoron normally-is reaching higher levels than anyone could have believed possible. Americans are feeling positive, for the first time in a long time, about the direction of the country.

Nonetheless, there is danger in the details of Congressional management, particularly personnel management. Most Americans are coming to realize the extraordinary power and influence of Congressional staff. Yet it appears that some Congressional leaders are bound and determined to repeat in the Legislative Branch the worst mistakes of the Carter, Bush, and Clinton regimes in the Executive Branch: Not getting the right people in the right jobs at the right time.

The first big mistake is the continuing paralysis over picking the Director of the Congressional Budget Office (CBO), a critical job for budget scoring, as well as for the econometric analysis of health care policy. Robert Reischauer, the current occupant of the position, has done a creditable job, especially in playing straight with Congress and the public on the true costs of various health care proposals. But Reischauer is still Reischauer, and he doesn't fit the high profile as the new scorekeeper of the conservative Republican Revolution.

Professor June O'Neill, a conservative economist at Baruch College of New York has been on the short list to succeed Reischauer, as is Marvin Kosters of the American Enterprise Institute, a prominent conservative think tank. The House leadership seemed to be favoring O'Neill, but certain senior Senate Republicans are balking. These Senate Republicans seem prepared to wait until the 1995 Congressional budget process is complete before making a change at CBO. These guys have thus created their own gridlock on perhaps the most important senior Congressional staff position. Not good.

Perhaps even more potentially damaging is the strange personnel management problem created by Congressman Robert Livingston of Louisiana, the new Chairman of the House Appropriations Committee. Livingston is retaining the experts of the ancien regime in senior staff positions, stating that he needs staff with the ``expertise'' or the institutional knowledge in the myriad of complex government programs overseen by the panel. The obvious problem is that the old, established staff have dedicated their entire careers to building up, preserving, and expanding federal government programs and spending. Now, entire bureaus and agencies are on the chopping block, and Livingston may find himself being savaged by leaks in the press, or besieged by the innumerable Establishment special interest groups who seem to have advanced warning. He may relearn a terrible lesson: Personnel is policy.

Senate Musings

The thinking in the upper house ranges from the cool and the cautious to the brassy and the bold. The new man at the cerebral center of Senate policymaking on health care is Senator Robert Bennett, the tall, lanky junior Senator from Utah. Bennett is the man to watch.

First, pay attention to the federal deficit. Whatever is to be done must occur within the broader context of deficit reduction. Many members (like Senator Nickles of Oklahoma and Senator Hatch of Utah) are committed to a comprehensive tax credit approach, and think it makes good sense in both economic theory and practice to remake the medical system into a consumer choice system. But the climate is problematic for anything too grand, especially if generous tax credits would be partially ``financed'' by cuts in Medicare and Medicaid.

It is not likely that we will see a single omnibus bill come out of the Senate. But rather a series of very specific measures, like expanded deductibility for the self-insured or medical savings accounts, very carefully crafted and fully debated.

Rewriting History-Again

You will recall that over the Christmas Holidays, the President returned to the theme, now a refrain by Administration officials building into a chorus whine, that his huge health care reform plan was defeated because it was ``mischaracterized'' as a government-run health care system. Blame the bumpkins, Yahoos and assorted malcontents in the medical profession, nimbly playing upon the public fears and working the Rubes along the Midway. In other words, the Clintons are the innocent victims of a vast national misunderstanding.

The latest twist on this theme is Hillary's recent reported confession: ``I was Dumb and Naive.'' This can't be Hillary's own line. This has got to be manufactured by some public relations dunce in the White House. Really. Hillary wowed the Blow Dry Brigades on Capitol Hill. And bowled over the Big Burley Guys (Rosty and Big John Dingell), who are not normally given to obsequiousness. Miss Hillary was mistress of The Details: Ira's gigantic socioeconometric jigsaw puzzle, tightly tied together section by section with the most terribly turgid prose and brainsplitting lawyerly logic imaginable, far beyond the mental exertions of us minor mortals.

Dumb? Nobody could believe that. Except Dummies.


``After all, we currently have a program of national health insurance that is mandatory, imposes community rating, establishes a standard benefit structure, provides guaranteed renewability, prohibits preexisting condition exclusions, and dictates price controls. It's called MEDICARE. Our `private' health care system cannot be sustained indefinitely in a half- free, half-socialized state.''

Tom Miller

CEI Update, January, 1995