AAPS Cross-Appeals in Case Against the Task
On April 5, 1993, AAPS filed a cross-appeal in the US Court
of Appeals for the District of Columbia Circuit in the case of
Association of American Physicians and Surgeons, et al. v.
Hillary Rodham Clinton, et al., responding to the Department of
Justice's appeal filed March 22, 1993 (see p. 1).
AAPS argues that Judge Lamberth erred in dismissing the
claim that the interdepartmental working group should also be
subject to FACA, without allowing expedited discovery of the
facts about its operation. The court simply accepted a
declaration by Ira Magaziner, which is riddled with
inconsistencies, without benefit of cross-examination.
According to recent press accounts, the group led by Ira
Magaziner has held more than 400 meetings with selected interest
groups. The Washington Post reported that the President has
already been briefed for 12 hours regarding reform policies,
although the Task Force has just held its first public meeting!
The evidence suggests that the Health Care Task Force is a
``rubber stamp,'' a political facade for the real meetings with
In Nat. Anti-Hunger Coalition, appellants argued that the
District Court's conclusions were called into question by
new evidence suggesting both that task force reports
are transmitted directly to federal decisionmakers
before they are made publicly available and that the
subcommittee of the Executive Committee is merely
``rubber stamping'' the task force's recommendations
....Either of these facts, if true, might well have led
the District Court to conclude that the task forces
themselves were subject to the requirements of FACA.
AAPS reiterates its contention that Hillary Rodham Clinton
is not and cannot be a federal employee. But if she is held to
be such, she then falls under the provisions of the Hatch Act and
is barred from participating in political campaigns.
Furthermore, if she claims an exemption from the Anti-Nepotism
Act based on the fact that she receives no compensation, this
establishes a violation of the Anti-Deficiency Act (U.S.C.1342),
which prohibits an officer or employee of the US government from
accepting voluntary services unless there is an emergency
involving the safety of human life or the protection of property.
In any event, Ms. Rodham Clinton is not the only non-federal
employee on the Task Force, as the recently disclosed list of
working group participants attests.
The government's argument that FACA is an unreasonable
encroachment by Congress upon the powers of the Executive Branch,
hindering its ability to meet a self-imposed deadline, simply
strains credulity-especially since more than 150 congressional
staffers have been invited to participate in the Task Force. In
fact, it is the operation of the Task Force itself that violates
the Separation of Powers.
In his amicus brief, J. Gregory Sidack explains that
Separation of Powers can be violated if the executive and the
legislature agree to ``exchange or commingle their duties or
prerogatives so as mutually to diminish their accountability to
the electorate.'' Hamilton's warnings in The Federalist, Sidack
points out, could have appeared as easily in a 1993 newspaper
report on the Health Care Task Force:
It often becomes impossible, amidst mutual
accusations, to determine on whom the blame
or the punishment of a pernicious
measure...ought really to fall. It is
shifted from one to another with so much
dexterity...that the public opinion is left
in suspense about the real author....
AAPS concludes that the reason for the government's broad
and vague constitutional attack on FACA is patent: any claimed
need for secrecy is fictitious, illusory, and purely politically
Oral arguments will be heard in the Circuit Court on April
Alain Enthoven outlined the principles of what he called the
``Guild Free Choice,'' ``non-competitive'' system that dominated
American medicine into the 1980s, in a talk presented at a
January workshop sponsored by the Robert Wood Johnson Foundation.
The principles, targeted for correction under ``managed
competition,'' and their economic consequences according to
- Free choice of doctor by the patient. (This means
that ``the insurer has no bargaining power with the doctor.'')
- Free choice of prescription by the doctor. (This
``prevents the insurer from applying quality assurance or review
- Direct negotiation between doctor and patient regarding
fees, without outside interference. (This ``excludes the
third-party payor who would be likely to have information,
bargaining power, and an incentive to negotiate to hold down
- Fee for service payment. (This ``allows physicians
maximum control over their incomes by increasing services
- Solo practice. (In contrast, ``multispecialty
group practice constitutes a break in the seamless web of mutual
coercion through control of referrals that the medical profession
used to enforce the guild system.'' In other words, it is the
solo practitioner, not the group, who makes a ``seamless web,''
in Enthoven's view.)
Enthoven observes that commercial insurers ``remain
financial intermediaries with expertise in underwriting risks,
not in organizing, managing or purchasing medical care.''
Enthoven's address makes it clear: The purpose of ``managed
competition'' is to turn insurers into ``health-care delivery
systems'' and physicians into the undertakers of risk.
``Health-care delivery systems'' are designed for the
benefit of the healthy, who are served by ``health-care
providers''-not for the benefit of patients (the sick and the
injured), who are attended by physicians.
Hillary Rodham Clinton explained the situation in a recent
speech: ``What we currently have is a system for taking care of
sickness. We do not have a system for enhancing and promoting
health.'' The Chairperson of the Task Force for ``Health Care''
Reform has a vision for fixing that system.
President Clinton likes to use the word ``contribute''
instead of ``sacrifice'' for more taxes....Sort of like in the
old days when virgins were ``contributed'' to volcanoes.Toback &
AAPS welcomes Upper Cumberland Orthopedic Surgery of
Cookeville, TN; Northwest Eye Surgery of Columbus, OH; and Drs.
Stanley L. Alexander of Centerville, OH; W. Carl Allen of
Seattle, WA; Haley Barbour of Washington, D.C.; Susan Barkell of
Farmington, NM; Lydia Bartholomew of Renton, WA; Brent Bauer of
Scottsdale, AZ; James Beattie of Bowling Green, KY; Roland
Beaudry of Port Arthur, TX; Paul W. Becker of Spokane, WA;
Gregory Bergman of Minster, OH; Stanley D. Berliner of Lake
Success, NY; Bruce H. Bern of San Mateo, CA; R. W. Blanco of
Tampa, FL; Daryl K. Boffard of Union, NJ; Glenn Bonacum of
Spokane, WA; Marc R. Brown of Dallas, TX; Frank L. Buomo of
Bowling Green, KY; Curtis Burnett of Seattle, WA; Susan H.
Carlyle of Houston, TX; D. T. Cassidy of Reno, NV; Barry H. Cohen
of Plandome, NY; E. Scott Conner of Santa Barbara, CA; Marshall
L. Cook of Tucson, AZ; Robert L. Cooper of Mt. Pleasant, TX;
Robert E. Cox of Edmonds, WA; Charles H. Cozean, Jr. of Cape
Girardeau, MO; John D. Credico of Lawrenceburg, TN; Peter A.
Curka of Houston, TX; Donald P. Dallas of New York, NY; Venancio
DeCastro of Arlington Heights, IL; Michael DeHaan of Seattle, WA;
Robert S. Emmons of Burlington, VT; A. Erickson of Grass Valley,
CA; Jim Esther of Pasadena, CA; Dennis W. Fera of Fayetteville,
NC; Morton H. Field of Beverly Hills, CA; V. L. Fisher of Bowling
Green, KY; John F. Floyd of Spokane, WA; Mark Fox of Crossville,
TN; Alan M. Freedman of Great Neck, NY; C.B. George of Tampa, FL;
Gary Gillespie of Williamston, MI; Ralph Giorno of Denver, CO; W.
Lloyd Glover, Jr. of Fairfax, VA; David Goldstein of Westwood,
NJ; Terry Greene of Mt. Airy, GA; Eugene E. Gregush of Port
Charlotte, FL; Rosemarie Guistillo of Hagerstown, MD; Harry T.
Haramis of Dayton, OH; Ed Hartzler of Seattle, WA; Philip D.
Hellreich of Kailua, HI; Edward Hoffman of Olympia, WA; Tim
Hulsey of Bowling Green, KY; William E. Hummel of Everett, WA;
Judith Ing-Higushi of Renton, WA; John T. Joseph of Renton, WA;
Harry M. Katz of Cedar Hill, MO; Hose Kim of Whittier, CA; Bert O
Kjos of Mercer Island, WA; Robert Klein of Mercer Island, WA;
Harvey Klein of New York, NY; Eric Kohler of Seattle, WA; Deepak
Kumar of Dayton, OH; J. Lautersztain of Tampa, FL; Stephen Ley of
Bozeman, MT; L. Gie Liem of Oakland, CA; R. H. Lofton of Port
Arthur, TX; J. Patrick Lynch of Everett, WA; Robert E. Maloney of
Spencer, MA; Donald Lee McCabe of Freeland, WA; Lyles Mindlin of
Bowling Green, KY; Richard W. Most of Mt. Kisco, NY; Alan Muraki
of Bellevue, WA; Roy Naturman of Morristown, NJ; John Okun of
Brandon, FL; Robin Oshman of Westport, CT; Samuel Packer of Great
Neck, NY; Jeff Pearce of Bellevue, WA; Michael D. Perkins of
Oneida, TN; Jose L. Pino y Torres of Maitland, FL; Dale R.
Pokorney of Hermitage, PA; James E. Preston of Sandusky, OH;
Lewis A. Raney of Dallas, TX; Holly Reid of Stamford, CT; Elaine
Remmers of Tucson, AZ; Pierre Rioux of Minot, ND; Victor M.
Rodriguez of Port Charlotte, FL; Mort Shahmir of Bowling Green,
KY; Paul Sicuro of Seattle, WA; Lee J. Skandalakis of Atlanta,
GA; Ronald Skufca of Dallas, TX; Joann Somers of Livingston, NJ;
Firth Spiegel of Livingston, TN; David Stewart of Hillsdale, NJ;
Robert A. Sylvester of Lewiston, ME; E. Terry Tatum of Bowling
Green, KY; Joe Thomas of Seattle, WA; Edward R. Thomas of Dayton,
OH; John Thompson of Seattle, WA; Paul M. Tuffers of Renton, WA;
Sui M. Twe of Kent, WA; William Unis of Bronxville, NY; Peter
Utrata of Columbus, OH; Phil Vogelzang of Seattle, WA; Allan R.
Warren of Port Jefferson, NY; J.D. Wasnick of Dallas, TX; Richard
J. Wiesemann of Bowling Green, KY; Joseph M Worth of Clearwater,
FL; John A. Young of La Jolla, CA; and Alan Zend of Edmonds, WA.
Nancy Tsai of Seattle, WA, is a new student member.
Meetings to Focus on Private Contracts, Reform
At the May 22 AAPS meeting in Sarasota, FL, Drs. Michael
Schlitt of WA and Lois Copeland of NJ (physician plaintiff in
Stewart v. Sullivan) will report on their experiences in
contracting with patients privately outside of Medicare. AAPS
Counsel Kent Masterson Brown will provide an update on litigation
concerning private contracts, including the prospects for
challenging state legislation.
John Thrasher, attorney for the Florida Medical Association,
will explain the ``managed competition'' legislation recently
passed by the Florida state legislature. This could be a preview
of the Clinton Plan.
The meeting is scheduled for 7:30 a.m. until noon (see
calendar). The charge is $35.
A grassroots effort to promote free-market solutions to the
medical insurance crisis will be the theme of a national meeting
in Dallas June 18-19. A number of physicians' organizations,
including AAPS and Dallas-based Physicians for Patient Power,
will participate. If you wish to attend, let Dr. Francis Davis
(publisher of Private Practice) know immediately (405-273-6124).
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 and 813-366-9000 to make a hotel
Oct. 5-9. 50th annual meeting, San Antonio, TX.
Legislative AlertPresidential Task Force
While Hillary Rodham Clinton's task force, over 500 strong,
is struggling with leaks and lawsuits, its internal debates are
focusing on two critical areas: the workability of global budgets
and price controls and the revision of the tax treatment of
health care benefits.
The President has repeatedly stated that he wants a health
care plan loosely based on the concept of ``managed competi-
tion,'' i.e. ``price competition'' among geographically based
managed-care plans, offering the same or at least similar
benefits packages, within a new regulatory framework for
employer-based insurance. Managed-competition advocates want
competition to be focused on quality and price, not benefits;
thus their heavy regulatory restrictions on the insurance
markets. Managed competition, it should be recalled, was largely
developed by Professor Alain Enthoven of Stanford University and
Dr. Paul Ellwood, the leader of a group of intellectuals called
the Jackson Hole Group. The biggest financial supporters of the
Jackson Hole Group are, not surprisingly, big insurance
companies, the very group that is likely to benefit from the
limited and restrictive market envisioned in a managed competi-
But the original managed-competition model is precise,
intricate in detail, and dependent upon very specific changes in
both the tax and the regulatory regime governing health in-
surance. If you take away key nuts and bolts, or turn them in
the wrong direction, the ``managed competition'' machinery simply
will not work as intended. Enthoven's plan is inherently
unsuitable for being fed into the sausage factory on Capitol
Among the ideas that are being shredded in the meat-grinder:
- Taxing health benefits or the value of benefits
above a specified amount to encourage prudent purchasing: En-
thoven has repeatedly stressed that managed competition simply
will not work without the tax changes. But Hillary Rodham
Clinton, according to a February report by staff writer Edwin
Chen of the Los Angeles Times, told an unnamed health advisor
that ``there's something more important than having prudent
purchasers, and that's called getting re-elected in four years.''
- Price competition: If the absence of price
competition is what is wrong with the system, then price fixing
(as by extending the huge and cumbersome DRG and RBRVS regulatory
machinery to the private sector) is obviously not the way to
- Incentives: As Enthoven, Ellwood, and conservative
House Democrats have pointed out, even a ``managed'' market is
incompatible with global budgets. A global budget calls not for
incentives but for enforcement. Who will do the enforcement, and
how? What do you count in the global budget? How do you gather
the necessary data?
At the same time, the Task Force is charged with keeping the
campaign promises out of the shredder:
- Guaranteed access to a basic system of health benefits
for all Americans, including pregnant women, children, and the
- Enforcement of an employer mandate;
- Eliminating tax breaks for pharmaceutical companies that
raise prices faster than increases in family income;
- Eliminating restrictions on the purchase of medical
insurance for pre-existing condition;
- Reforming claims processing.
What seems to be emerging is a catch-all expansion of the
current employment-based system, an unsound, inflationary market
which is already riddled with regulatory-driven inefficiencies.
This will be require another big tax increase to finance expanded
access for the uninsured, which will of course drive costs up,
combined with the imposition of global budgets and price
controls, which are designed of course to drive costs back down
again, at least partially. This will be sold as ``cost
containment.'' In other words: we are likely to see a policy
mess that will be ``managed competition'' in name only.
Who Are the Players?
Now that Congressman Jerry Solomon (R-NY), the Wall Street
Journal, the Washington Post, the Washington Times, the New York
Times, and others have all published the names of the 500-odd
members of Hillary Clinton's heretofore top secret task force,
the key question around Washington is: How many do you know?
Beyond the Washington Beltway, the names are mostly a mystery.
Inside the Beltway, the names are all too familiar, and about the
best indication we have gotten yet about where the Task Force is
going to come down on some key issues.
There are not very many ``New Democrats.'' A total of 81%
are full-time federal employees, disproportionately coming from
two groups, Congressional staff and bureaucrats from OMB and HHS,
HCFA in particular. HHS careerists include Kathy Buto, Director
of HCFA's Bureau of Policy Development; Ross Arnett, HCFA's
Director of the Office of National Health Statistics; and Barbara
Gagel, Director of HCFA's Health Standards and Quality Bureau.
The HHS political appointees include Judy Feder, formerly
director of Clinton's health transition team; Ken Thorpe, also an
early transition team member; and Brookings Institution scholar
Josh Weiner. The rest, 19%, are part time feds and consultants.
The whole secrecy business has been a big public relations
mistake for the Administration. The attempt to cover up such a
huge domestic policy effort only makes even the liberal pressies,
who likely voted for Clinton and the Democrats, even more curious
and potentially hostile. What's the point of all the somber
secrecy anyway? To protect these 500 or so delicate flowers from
the intrusion of ``bad'' special interests (like (physicians'
groups) rather than the ``good'' special interest groups like the
Children's Defense Fund?
Hillary's Task Force is packed with liberal, often young,
Democratic Congressional staff. But there are also some senior
Hill staffers who are likely to have a big role when the Hillary
Health Plan hits Capitol Hill: Ed Gleiman, who works for Sen.
John Glenn (D-OH) as top staff aide on the Senate Government
Relations Committee; Karen Nelson, a top staff aide from Rep.
Henry Waxman's House Subcommittee on Health and the Environment;
David Nexon, who works for Sen. Ted Kennedy (D-MA) as Staff
Director for the Senate Committee on Labor and Human Resources;
and Gail Weiss, staff director of the House Post Office and Civil
Service Committee. Other legislative staff members include aides
from the offices of Sen. Patrick Leahy (D-VT), Sen. Jay
Rockefeller (D-WV), Sen. Bob Kerrey (D-NE), Sen. Jeff Bingaman
(D-NM), Sen. Harris Wofford (D-PA), Sen. Bob Graham (D-FL), Sen.
Max Baucus (D-MT), Sen. Daniel Patrick Moynihan (D-NY), Sen.
David Pryor (D-AR), Sen. Herb Kohl (D-WI), Sen. Donald Riegle (D-
MI), Sen. Barbara Mikulski (D-MD), Sen. David Boren (D-OK), Sen.
Tom Harkin (D-IA), Sen. Bill Bradley (D-NJ), and Sen. Howard
Although Senate Majority Leader George Mitchell, a once and
future advocate of employer mandate, advocated packaging the
Hillary Health Plan together with the gigantic tax and budget
proposal for a straight up-or-down vote, others have cautioned
against taking a plunge over domestic policy's Niagara Falls. S-
en. John Chafee (R-RI), for example, is calling for a slower pace
on the legislative front. Translation: Remember the painful
Medicare Catastrophic Coverage Act of 1988, repealed again in
Well before the Administration has put its plan on the
table, liberal Democrats are trying to shift the ground of the
coming debate, pressuring the firm of Clinton and Clinton from
the left. While the Administration asked Congressional Democrats
to refrain from introducing any health care policy bills until it
had laid its own plan on the table, Congressman Pete Stark (D-
CA), Chairman of the House Ways and Means Subcommittee on Health,
flatly ignored the White House plea and put his own bill on the
table, basically an expansion of Medicare for everybody. In
another interesting twist, Congressman Gary Ackerman (D-NY) has
introduced a bill (HR 45) that would abolish the broad and
``bewildering'' consumer choice and competition in the Federal
Employees Health Benefits Program (FEHBP), and replace it with a
single plan, with a high option and a low option, plus some
geographically based HMOs, price controls, a new federal
employees health benefits board, and a tax-free ``flexible
spending account'' thrown as a bone to Congressional
conservatives. While obviously not a comprehensive reform
proposal, Ackerman is careful to note that his bill is compatible
with the Administration's proposed ``managed competition''- which
should tell us something.
Likewise, Congressman Jim McDermott (D-WA) and 58 House
Democrats have introduced the ``American Health Security Act,''
basically a rerun of the Canadian-style single payer bill
authored by former Congressman Marty Russo, the Chicago Democrat
defeated in the 1992 primaries. Just like last time, the chief
proponent of the single payer system to emerge in the Senate is
Sen. Paul Wellstone (D-MN). This leaves the conservative
Democrats, the Congressional champions of managed competition,
led by Charles Stenholm (D-TX) and Rep. Jim Cooper (D-TN), in an
increasingly awkward spot. They are behaving themselves as loyal
Democrats, as politely requested by the White House, while their
own intellectual allies on Hillary's Task Force, backers of the
ideas of Enthoven and the Jackson Hole Group, are getting savaged
and sidelined by the price controllers and the global budgeteers.
If liberal Democrats in Congress, who really want a Canad-
ian-style system, are easy to understand, Congressional Republi-
cans remain a genuine political mystery, the Case of the
Meandering Mainstream. In the House of Representatives, after
months and months of deliberations by a special health care task
force, House Republicans still have not surfaced a comprehensive
health care reform bill, at least nothing that will seriously
compete with the massive legislative vehicle that Bill and
Hillary, with the full backing of the Democratic National
Committee, is likely to throw at them in a matter of weeks. In
spite of over two centuries of American legislative experience,
some Republicans still think that you can fight something with
Republicans will either have to fight or fold. For
moderates and liberals, the ideal scenario seems to be friendly
bipartisan negotiations over technical differences in their
respective ``managed competition'' proposals: the Washington
``process'' of wonk work into the wee hours, with a ``a seat at
the table'' far more important than the substance of the outcome.
The basic idea: Senate Republicans will get some of the political
credit for ``doing something'' about health care reform. No real
debate of opposing principles. No real shots fired.
Senate GOP leaders look as if they are headed for preemptive
surrender. Sen. Chafee has been explicit on the point, saying
that he wants a proposal that can ``jibe'' with what the Clinton
Administration is likely to come up with in May. Even going so
far as to use Clinton's rhetoric, Chafee is now saying that the
American people have got to be prepared to ``sacrifice'' in order
to make health care reform successful. What do they have to
sacrifice? On March 11th, the Rhode Island Senator told his
colleagues on the Senate floor: ``..in summary, Mr. President, we
should and indeed will have health care reform in our country.
But at the same time, it behooves all of us to be very, very
candid with our constituents....There will indeed be coverage for
everyone after a while, but...some regulation is going to have
to come into the lives of our constituents who are enjoying fee-
for-service type of medical care where they can go to any doctor
they want to, any hospital they want to. That, to a great extent,
will no longer be possible.''
Organized Medicine Marches
Like the proverbial frogs in a long simmering pot, a lot of
doctors are now dimly aware of the heat. Snubbed by Hillary and
Co., the American Medical Association (AMA) is now busing the
doctors up to Capitol Hill to argue against price controls and
fee caps in the private sector and other intrusions.
But, there's a political rub. Virtually every representative
group of organized medicine (except AAPS) has issued position
papers calling for even more, not less, government control over
American medicine. Furthermore, members of Congress, many of
whom are sympathetic to the plight of small businesses, are
hearing from too many doctors that it is perfectly legitimate to
regulate other private businessmen or other sectors of the
medical economy, as long as doctors are exempted from further
burdens. The AMA, the American Society of Internal Medicine (-
ASIM) and the American College of Physicians (ACP) have all
backed proposals to force small employers to purchase medical
insurance for their employees.
If physicians are so indifferent to the struggles of
businessmen who are trying to recover from a long recession, why
should they expect sympathy for themselves?
As the heat is turned up further, will organized medicine
Will physician leaders win smiles and photo-ops in the Rose
Garden as the President signs into law the most massive ``health-
care reform'' in the nation's history? Or will they sacrifice
their patients' (and all Americans') long-term best interests,
only to become road-kill as the Clinton public-relations buses
roll into action?