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

Volume 50, No. 5 May 1994


On March 12, 1994, the presidents of county medical societies called the second special session ever held in the nearly 160 years of Ohio State Medical Association (OSMA) history. They were concerned that the OSMA Health Care Task Force report was presumed to be the stand of Ohio physicians even though the report had never been officially approved by the House of Delegates. The report has four major flaws, according to physicians who called the meeting. Most of these physicians, led by Drs. Kenneth Christman, David Westbrock, Carl Wehri, and Nino Camardese, are members of AAPS, the Freedom in Medicine Coalition, or the Ohio Medical Action Committee for Education (MACE).

About ten minutes after the opening of the session, a member of the Task Force moved for adjournment.

``Thank God that our Founding Fathers and the signers of the Declaration of Independence had more interest in the future of our country than we seem to have here today,'' stated Nino Camardese, MD, Immediate Past President of AAPS, speaking against that motion.

The motion was defeated resoundingly.

Criticism of the OSMA Task Force report titled ``Shared Goals, Shared Responsibilities'' was summarized by Merrill Matthews, Ph.D., of the National Center for Policy Analysis:

[The Task Force report] does a tremendous disservice to Ohio's physicians and patients. The standard benefits package is an open invitation for government control, even more control than is now exercised under Medicare. The plan would also result in a surge in utilization, which would cause an explo- sion in spending (again, just as happened under Medicare). As a result, government-dictated price controls would be inevitable, which would, of course, lead to rationing.

In the quest for health care reform, we must be sure that we do not reform the system in the wrong direction. The Task Force's plan cries out for government control of the practice of medicine.

The Ohio MACE substitute resolution was approved almost unanimously. This was based on the resolutions authored by Dr. Kenneth Christman (see insert in AAPS News, April 1994):

RESOLVED: that the OSMA fully support legislative initiatives that promote individual liberty and responsibility and provide for:

a. Medical Savings Accounts

b. Medical IRAs

c. The elimination of underwriting requirements that create artificial barriers to small business insurance pools

d. Elimination or substantial reduction of pre-existing condition exclusions that permit insurers to skim off artificial ``communities'' of the healthy

e. Guaranteed portability of health insurance

f. Tax equity for insurance premiums

g. Insurance vouchers or tax credits for low-income families.

Some of these proposals had been mentioned in the Task Force report, but not as explicitly. In addition, other goals in the Task Force report are contradictory. Those contradictions will have to be addressed at the regular OSMA meeting.

The reason for calling a special session, stated Dr. Kenneth Christman, is that despite lip service ``organized medicine is not only maintaining a neutral stance towards Medical Savings Accounts and other free-market systems to preserve the integrity of our profession, but is actively working against us.''

Physicians from Florida, Pennsylvania, and Louisiana have already contacted Ohio physicians for advice on calling a special session in their own states. Dr. Christman states that it might be much easier than anyone imagines.

``One or two committed people can do it, and once it gets started it snowballs. Furthermore, the impact it has on organized medicine is quite considerable. It alerts leadership that grassroots physicians are not sleeping.''

A special session of the AMA may also be possible; Dr. Camardese is examining the bylaws.

``I am not even a member of the AMA, since I would rather contribute limited funds to the AAPS,'' writes Dr. Christman. ``However, I would consider joining the AMA simply for the purpose of organizing a special session of the House of Delegates.''

Ohio physicians are aware that last summer Hillary Rodham Clinton owned an interest in a mutual fund that was actively selling short pharmaceutical stocks while buying securities of United Health Care, the huge managed care bureaucracy. At the same time, Rodham Clinton was bashing the pharmaceutical industry and involving United Health Care in Task Force hearings.

Could members of local medical society task forces have conflicts of interest like those that probably predetermined conclusions reached by the Clinton Health Care Task Force?

Physicians are not even allowed to give a lecture for continuing medical education without signing a conflict-of- interest statement. Should they not have to divulge ownership of managed-care stocks, or income from consulting for managed-care interests, if they serve on a committee that will establish medical society policy?

This is another issue that might be addressed in special session by your medical society.

Tax-Exempts Explain Their Goals

Tax-exempt foundations are created for a charitable, scientific, or educational purpose. However, use of the funds for directly providing help to the needy is specifically eschewed by some foundations, for example, the Robert Wood Johnson Foundation (RWJF). Their goals are more far-reaching-and too ambitious to be achieved through grant-making alone.

The summer, 1992, issue of the influential journal Health Affairs helps to explain both purpose and methods.

From ``GrantWatch'' by Nancy Kane, Robert Blendon, and Susan Koch Madden, pp. 181-192 [emphasis added]:

``A foundation grant that represented only a small portion of an institution's budget could not overcome strong market forces or institutional self-interest to reshape a major health care institution.''

According to this article, cooperation occurred naturally only under certain conditions, as when managed care played a large role or the institution's survival was threatened.

``Otherwise, strong incentives-financial or political-were needed to `force' cooperation on what were otherwise competing and successful institutions.''

State political forces were considered the most important factor in assuring a project's success.

Projects designed to develop regionalized systems of patient care or medical education were impeded by institutional desires to maintain identity and independence: ``No participant was willing to give up autonomy to the consortium, particularly the right to withdraw if it did not like the consortium's suggestions.''

Usually, ``there must be governmental intervention and financial support'' to assure cooperation.

Also in the GrantWatch section, p. 200, RWJF President Steven Schroeder comments on the difficulty in getting the political support needed to achieve one of the foundation's goals, universal access. The problem, in his view, is that Americans don't trust their government.

``How to try to reconcile the need for universal coverage with a reluctance to have government in control of it is a real challenge for us as citizens.''

``The earlier method RWJF used in trying to influence public policy, which was `let's just put the data out there and assume that people will make the right choice,' may not be effective as health becomes more of a political issue,'' Schroeder noted.

Do some tax-exempts have the objective of remaking American medicine and even fundamental American values according to their own vision? And do they hope to do so by manipulating the political process from behind the scenes?

Individual issues of Health Affairs can be obtained for $20 from Project HOPE, Two Wisconsin Circle, Suite 500, Chevy Chase, MD 20815. Copies of the AAPS brief that documents the role of tax-exempts in ``health care reform'' may be obtained on floppy disk for $10 from AAPS, 1601 N. Tucson Blvd. Suite 9, Tucson, AZ 85716. (If you need a format other than WordPerfect 5 on a 3.5 inch disk, call to see if we can supply it, 1-800-635- 1196).


AAPS Members Run for Congress

Mildred Jefferson, MD, a surgeon from Boston, is running against Senator Ted Kennedy, in order to represent a different voice.

``Lawyers, businessmen, talk-show hosts and such are already in Congress....I see no medical doctors in the U.S. Senate even now at a time when a national health-care scam has been pushed to the top of the national agenda.''

Dr. Jefferson also stated that ``it is unconscionable that the destiny of `minorities and women' in this country should be perceived as dependent on the morally bankrupt leadership of the senior Senator of this Commonwealth.''

Mildred Jefferson went from the segregated public schools of East Texas to Harvard Medical School, and is on the faculty of the Boston University School of Medicine. We first met her last year when AAPS members testified at the public hearing she called in the basement of the Capitol after being refused the chance to speak in the Senate against the nomination of Joycelyn Elders as Surgeon General.

Dr. Jefferson favors reducing the size of the federal government and opposes ``using the profession to lure the whole country into the socialist net.''

Also running for Congress are Drs. David Westbrock of Dayton, OH; Eugene Fontenot of Houston, TX; and Ted Engel of Westminster, CO.

AAPS members will soon receive a fund-raising letter from AAPS-PAC. But physicians may wish to make a direct contribution to the candidate of their choice. The maximum individual contribution is $1,000. Corporate checks are not acceptable under FEC rules.


On the Private Information Highway...

The P.D.A. Link E-mail system, now operational, provides a dedicated forum for persons desiring to return to free-market principles in medicine and to reduce government intrusion. AAPS publications have been contributed to the data base. You may take a tour or subscribe on-line by modem at (404)386-7009. Simply make the call and follow the instructions on your screen.

The Heartland Institute has a ``Policy FAX'' service to provide instant information and intellectual ammunition on a variety of issues, including ``health care,'' education, environment, privatization, and taxes. A free up-to-date listing of publications available by FAX can be obtained by calling (510)208-8000. The cost is $5 per document. AAPS documents are available.

Americans for Free Choice in Medicine, headed by Dr. Arthur Astorino of Newport Beach, CA, offers suggestions by FAX on contacting key congressmen. For subscription information, call (714)645-2622, FAX (714)645-9864.


The Rule of Law

The internal effects of a mutable policy are still more calamitous. It poisons the blessings of liberty itself. It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant hanges that no man, who knows what the law is today, can guess what it will be tomorrow. Law is defined to be a rule of action; but how can that be a rule which is little known, and less fixed?

  The Federalist

quoted in The Freeman, March, 1994

Kentucky Supreme Court Upholds Provider Tax;

Federal Challenge to Be Filed

On March 24, 1994, the Supreme Court of Kentucky, with three contested special justices sitting, handed down its opinion in the constitutional challenge to the ``provider tax'' included in House Bill No. 1. A majority of five justices, including all three contested special justices, voted to reverse the trial court and uphold the constitutionality of the tax.

The three special justices were appointed by the governor who drafted and lobbied for the provider tax and called the legislature into special session to pass it. All three were asked to recuse themselves on the ground that their appointment by the governor, a party in interest, created an ``appearance of impropriety and unfairness,'' in violation of the due process clauses of the Fifth and Fourteenth Amendments.

Writing for the ``majority,'' Justice Reynolds concluded that ``the enacted legislation and federal criteria as to qualification for federal matching money forms a rational basis in the General Assembly's actions....''

``The Kentucky statute,'' he continued, ``is coextensive with the federal law. Thus, when a state elects to enact a provider tax, its discretion in classifying those who will be taxed appears circumscribed by federal law. Thus, defining the class in a coextensive manner with the federal law results in a rational basis for such classification without arbitrariness.''

What Justice Reynolds did not address is that the federal Medicaid provider-specific tax statute was not meant to be forced upon the States, and it cannot form a basis for rational classification simply because it is an Act of Congress. By upholding the classification, the Court has virtually written out of the Kentucky and Federal constitutions all provisions guaranteeing citizens equal protection of the laws.

Two regular sitting justices, Stumbo and Wintersheimer, filed dissents. Justice Wintersheimer concluded that the tax ``unfairly burdens physicians who do not participate in Medicaid,'' yet it is ``impossible to distinguish the benefit the nonparticipating physicians have in funding Medicaid from that of the general population.'' Furthermore, the principle can lead to taxing contractors, engineers, and architects for the construction of state highways; grocery stores for accepting food stamps; psychologists for working in public mental health centers; and policemen for victim compensation programs.

Justice Wintersheimer cited the dissent in the AAPS case of Coy v. Florida Birth-Related Neurological Injury Compensation Plan, stating that the tax is both too narrow and too broad. It does not include all persons who receive Medicaid payments and does include physicians who do not. It is inequitably applied, as it allows some health care entities to ``pass on'' the tax to consumers but does not allow physicians to do so.

``The public press,'' said Wintersheimer, ``reports that the Revenue Cabinet is now involved in eleven major lawsuits. It is not difficult to understand why the taxpayers are very concerned in a society in which ordinary working people will pay in excess of 40% of their gross income in taxation.''

``The power to tax involves the power to destroy, noted Chief Justice Marshall.''

``The duty of the judiciary is to distinguish between constitutional error and proper deference to the Legislature. Unequal treatment really should not be acceptable, although it is seemingly approved by the Majority Opinion,'' wrote Justice Wintersheimer.

Dr. Stuart Yeoman and other plaintiffs, all AAPS members, are now planning to challenge the composition of the Court as well as its decision in a direct action against the Court and the Governor in US District Court.


Challenge to Government Secrecy Continues

On March 23, AAPS attorneys filed a Motion for Summary Judgment in AAPS v. Clinton, the lawsuit challenging the secrecy of the Health Care Task Force, accompanied by nine volumes of exhibits.

Despite White House stonewalling and evasions, AAPS accumulated evidence that more than half of the members of some 63 working groups and cluster groups had a potential conflict of interest. Yet only 35 of about 1,000 participants filed the required financial disclosure forms, and many of these had irregularities suggesting they were filed late. (None of the members of the bioethics group filed an ethics form.)

Ira Magaziner declared under penalty of perjury that ``only federal government employees serve as members of the interdepartmental working group.'' Because more than half the participants had private employment at the time of their service, AAPS requested to take Magaziner's deposition. No response has been received from the Administration.

The AAPS brief documents the role played by grantees of tax- exempt foundations in many groups of the Task Force. Commenting on a column by Tony Snow, who attended our March 23 press conference in Washington, D.C., RWJF Vice President Frank Karel writes: ``The Robert Wood Johnson Foundation has always maintained absolute neutrality regarding the various proposals for national health-care reform'' while making grants totaling almost $1 billion over the past 23 years.

Karel also stated that RWJF Health Policy Fellows are ``neither agents of the foundation nor influenced by the foundation-they were on leave from academic institutions as participants in a yearlong career-development program conducted by the Institute of Medicine of the National Academy of Sciences.'' The purpose of the fellowship program is to ``increase understanding of the Washington policy process'' while ``increasing the level of health expertise available in congressional and executive branch offices.''

``And there's a simple explanation why these fellows do not appear on Congressional staff payrolls, as `charged' in [Snow's] column'' [and despite being called full-time government employees in a sworn statement by Ira Magaziner-ed.]. ``They aren't paid by the Congress. The fellows are paid by their home institutions, which receive grants from our foundation in support of their fellowship'' (Arizona Republic, 6/8/94).

According to the 1993-1994 RWJF Health Policy Fellowships brochure, RWJF Fellows ``develop legislative proposals, arrange hearings, brief legislators for committee sessions and floor debates, and participate with staff in House and Senate conferences. They take part in all areas of the policy process, not as onlookers, but as full-time working participants.'' (The role of congressional staffers is further explained in this month's legislative supplement.)

New Members

AAPS welcomes Colorectal Surgical Associates of Lexington, KY and Drs. Albert Ackil of Canton, MA; D.P. Alagia of Washington, DC; Charlotte A. Alspach of Avalon, NJ; Kerry Anders of Monroe, LA; Michael W. Anderson of Orlando, FL; Robert Anderson of Fort Worth, TX; Khawaja N. Anwar of Gainesville, TX; Joseph B. Aquilla of Chesterton, MD; Bruce and Barbara Baker of Grand Rapids, MI; Barry Bakst of Wilminton, DE; Theodore Barton of Soldotna, AK; David Bawden of Chicago, IL; John B. Baxley of Augusta, GA; Delfin J. Beltran of Andover, KS; Monica Vial Benson of Luling, LA.; Bruce M. Berkson of Riverwoods, IL; Kenneth A. Bisson of Angola, IN; James D. Blake of Birmingham, AL; Susan Kelly Blue of Fort Worth, TX; Viorel Boborodea of Ashland, KY; Byron Bohnn of Houston, TX; N. A. Bologna of Greenville, MS; Wayne P. Bones of Berryville, AR; Robert F. Bossard of Dallas, TX; William Bradway of Cape May Court House, NJ; Patrick J. Brandner of Las Vegas, NV; William H. Bray of Quincy, IL; Roderick B. Brown of Glenwood, MN; Joseph F. Bryan II of San Angelo, TX; John Bryant of Chattanooga, TN; Pat D. Bryant of Wausau, WI; Deborah K. Bublitz of Highlands Ranch, CO; James Buese of Pasadena, CA; James L. Bumgartner of Charleston, SC; G.L. Busenkell of Mesa, AZ; John A. Butler of Wausau, WI; James H. Butler of Winston Salem, NC; Carolyn M. Buttross of Ocean Springs, MS; R. B. Caldwell of Bellevue, WA; Fernando Campos of Phoenix, AZ; Robert Lee Caudill of Louisville, KY; Jeff Ceschi of Brookfield, WI; Todd H. Chaffin of Rockford, IL; James N. Childs of College Station, TX; T. Terry Chutinan of Altamonte Springs, FL; Frederick W. Clevenger of Albuquerque, NM; Daniel D. Coelho of Torrington, CT; Stephen L. Comite of New York, NY; T. M. Cone of Las Vegas, NV; Edgar C. Cordero of McKeesport, PA; John Crawford of Utica, NY; Keith H. Crawford of Paducah, KY; Bruce Crossman of Maitland, FL; W.G. Dalzell of Hemet, CA; Thomas C. Darrell of Fuquay-Varina, NC; Raymond P. Decorte of Metairie, LA; Nadine A. Degnan of Concord, CA; Jeffrey Dell of Fullerton, CA; Ronald C. Demas of Charlotte, NC; Donald D. Doussan, Jr. of Madisonville, LA; Jeffrey D. Downing of Zanesville, OH; Douglas P. Dozier of Macon, GA; Richard W. Dunlop of Kingston, MA; Dennis Charles Eckel of Scottsdale, AZ; David Edmonds of Birmingham, AL; Arthur Efros of Southfield, MI; Robert Egert of Chico, CA; Roger W. Evans of Wichita, KS; N. R. Evans, II of Burlington, NJ; Leomard S. Fagan of Park Ridge, IL; Lawrence A. Fagarason of Baytown, TX; Timothy J. Fallon of Columbus, OH; Morton Farber of Short Hills, NJ; Donald C. Faust of New Orleans, LA; E. Ronald Finger of Savannah, GA; Calvin H. Fischer of Hoffman Estates, IL; John J. Fitzgerald of Indianapolis, IN; Alexander S. Foltz of Wausau, WI; William C. Foote of El Paso, TX; Robert Foster of Roxboro, NC; James R. Fraser of Jupiter, FL; Paul S. Fricoman of Elkins Park, PA; Robert Frischor of Wichita Falls, TX; Angela M. Garcia of Boca Raton, FL; Richard Gasser of Fort Worth, TX; William A. Geary of Indianapolis, IN; Carolyn Gerster of Scottsdale, AZ; David A. Giordano of Sarasota, FL; Richard G. Glogau of San Francisco, CA; Robert Goiney of Seattle, WA; Justo Gonzalez of Washington, D.C.; Victor D. Gonzalez of Houma, LA; Robert L. Gordon of Warwick, RI; Richert E. Goyette of Rolla, MO; Mark A. Grathwohl of Brewster, NY; Robert F. Graves of Phoenix, AZ; William Robert Green of Jonesboro, AR; Donald H. Green of Clifton, NJ; Douglas Grier of Edmonds, WA; Don R. Guzzetta of Metairie, LA; Ken Hager of Selma, AL; Michael E. Hamilton of Englewood, OH; Irving L. Hammerschlag of Old Westbury, NY; G. Robert Hanson of Custer, SD; Robert W. Harding of Rutherfordton, NC; Monique Harize of Scottsdale, AZ; Leonard R. Harrison of New York, NY; Robert S. Hattner of Mill Valley, CA; Anne M. Hawkins of Tucson, AZ; Philip S. Henkle of Rice Lake, WI; Edward P. Herman of Phoenix, AZ; F. Michael Hindelang, Jr. of Lafayette, LA; David P. Holder of Carrollton, TX; Richard F. Honden of Skippack, PA; David L. Hoversten of Sioux Falls, SD; Nick Hrisomalos of Indianapolis, IN; Mary E. Hutchins of Abingdon, MD; James J. Hutchins of Somerville, NJ; Caryl H. Hyland of Pensacola, FL; Arnold Ison of St. Petersburg, FL; G. Jacknow of Austin, TX; Lisa M. Jamison of Kingston, PA; G. Arthur Janssen of Tucson, AZ; Ron Jenks of Bremerton, WA; Carl R. Jenson of Coos Bay, OR; Richard R. Jobe of Seattle, WA; Dale K. Johns of Fort Walton Beach, FL; Bruce D. Johnson of Springboro, OH; Sylvia P. Johnson of Guagas, PR; David M Jones of Hickory, NC; Suresh B. Katakkar of Tucson, AZ; Michael Jon Kell of Atlanta, GA; James E. Kelley of Easton, MD; Elton Kerr of Woodbridge, VA; Bhupinder S. Khaira of Gainesville, TX; Glen Kietzer of Seattle, WA; Dawn Knight of Monroe, LA; Rodney N. Kreider of Forest Park, GA; Dhanalal Krishnanaik of Warren, MN; Timothy Kross of Coraopolis, PA; Markus S. Kryger of Forsyth, MO; Joseph M. Kuhn of Payne, OH; Jane Lacey of Montgomery, AL; W. Pennock Laird of Dallas, TX; M. Wendell Lawson of Oak Ridge, TN; Stanton Lebouitz of York, PA; Michael M. Lee of San Diego, CA; Edward A. Lelonek of Fort Wayne, IN; Jose M. Ligarte of Kingsville, TX; James Loddenguard of Torrance, CA; Frederick T. Lohr of Chestertown, MD; George E. Long of Fairfax, VA; Robert F. Lorenzen of Phoenix, AZ; Judith K Lowe of Pasadena, CA; David R. Luetheke of Houston, TX; William Maguire of La Mesa, CA; Robert L Maiello of Fruitland Park, FL; John Marcus of Uniontown, PA; Nancy Marshall of Port Huron, MI; Bill Martin of Lawrenceville, GA; Randolph S. Martin of Springfield, IL; Neal A. Mask of Tulsa, OK; Ronald Mason of St. Louis Park,, MN; Seth L. Matarasso of San Francisco, CA; F. Matheu of Princeton, IL; Donald Mathews of Summit, NJ; Mary F. Maturi of Virginia Beach, VA; Marc Mauney of Seattle, WA; Chuck McCarver of Phoenix, AZ; Scott M. McCloskey of Hickory, NC; William McGeehin of Torrington, CT; Joe S. McIlhaney, Jr. of Austin, TX; Faber F. McMullen, Jr. of Houston, TX; Thomas M. McNorton of Kaneohe, HI; Daniel N. Mergens of Omaha, NE; Mark J. Mertens of Portland, OR; Andrew L. Messenger of Lansing, MI; A. E. Miller, Jr. of Blackfoot, ID; Philip L. Minor of Richmond, VA; Steven Mlodinow of Everett, WA; Robert A. Modic of Mesa, AZ; John F. Moffett of Lake Charles, LA; R. Anthony Moore of Dallas, TX; Thomas F. Moore of Phoenix, AZ; A. James Morgan of Santa Clara, UT; Richard Allen Morrison of Independence, MO; Albert R. Munn III of Raleigh, NC; Dick J. Newell of Mossyrock, WA; Douglas Newton of Kennewick, WA; S. Ross Noble of West Reading, PA; Chris Noonan of Kenosha, WI; F. R. Nusbickel of Thomasville, GA; Michael P. O'Mara of Chicago, IL; Michael J. O'Reilly of Marietta, GA; Joshua S. Obak of Fresno, CA; Richard C. Olney of Lincoln, NE; Reggie D. Osbon of Macon, GA; Raymond L. Osborne, Jr. of Hamden, CT; Anthony R. Palmer of Arlington, TX; Jerry Patt of Columbia, MD; Luzviminda K. Peredo of Boaz, AL; David Peterson of Auburn, WA; Ralph B. Piening III of Mt. Plesant, SC; Sherri Pinsley of Lake Worth, FL; Neal A. Pock of Tucson, AZ; Thomas D. Pope of Morganton, NC; Hugo C. Pribor of Nashville, TN; L. Purcell of Bluffton, IN; Pervaiz Rahman of Gainesville, TX; Philip Dale Ranheim of Snohomish, WA; John Reifsteck of Charleston, WV; E.J. Reineberg of Flagstaff, AZ; Robert Rewes of Hemet, CA; Jose R. Rivas of Carrollton, TX; Howard Robertson of Gilbert, AZ; Dennis J. Robinson of Farmington, NM; Timothy M. Roddy of Edmonds, WA; Peter J. Romano II of Ft. Lauderdale, FL; Samuel Ruby of Ridley Park, PA; George R. Ruiz of Homewood, IL; Fred H. Sabhar of Glendora, CA; Robert Saga of Sioux Falls, SD; Robert G. Saide of Phoenix, AZ; James E. Saltz, Jr. of Tucumcari, NM; Melchior F.R. Savarese of Washington, DC; Allan T. Sawyer of Glendale, AZ; Howard L Schreiber of Houston, TX; Paul Schwaegler of Seattle, WA; Peter G. Sellei of Longmeadow, MA; June Serravezza of Atlanta, GA; Robert S. Sexton of Tucson, AZ; Seth Brian Sherman of Florence, AZ; R.R. Shivpuri of Elgin, IL; Wright S. Skinner III of Georgetown, SC; N.D. Smith of Media, PA; David E. Smock of Naples, FL; Jerry Allison Snow of Washington, D.C.; Thomas Sonne of New Albany, IN; Franklin M. Soriano, Jr. of Chesapeake, VA; I. Page Sowers of Newport Beach, CA; Thomas J. Spallino of Wailuku, HI; Lenny Spivak of Reedley, CA; A. E. Stefanelli of Bloomfield, NJ; Joseph L. Steinem of Connersville, IN; Stanley Stern of Phoenix, AZ; J. Martin Stewart of Houston, TX; Ronald Gene Stockstill of Germantown, TN; Manfred A. Strott of Cedar Grove, NJ; Peter V. Sundwall of Murray, UT; Howard E. Sweeney of Chicago, IL; Paul Brenden Tartell of Boston, MA; John Paul Theo of Lubbock, TX; Gregory G. Theodore of Odessa, TX; John P. Thomas of Trinidad, CO; Norman L. Thompson of Phoenix, AZ; John Anthony Tirpak of Ebensburg, PA; Rafael Toledo-Ruiz of Arecibo, PR; David C. Tower of Berkley, CA; Robert L. True of Arlington, TX; Carol F. Truitt of Richland, WA; Nicholas Tsambassis of California, PA; Lynn Z. Tucker of Baton Rouge, LA; James H. Turk of Corpus Christi, TX; L. Eduardo Vega of Tucson, AZ; Michael C. Vidas of Peoria, IL; Lee Vliet of Tucson, AZ; Kenneth E. Wagner of Carpinteria, CA; Albert L. Waldman of Milford, PA; Tom Walsh of High Point, NC; W. Lorraine Watkins of Atlanta, GA; Stephen J. Weddel of Longmont, CO; Virginia L. Weimar of Moline, IL; Rita Weinstein of East Brunswick, NJ; Jeanne F. Weisenburger of Pemberville, OH; Thomas Weiss of Miami Beach, FL; Dan Whipple of Indianapolis, IN; Marilyn V. Whitney of Warsaw, IN; Clarence L. Wilson II of Wilmington, NC; Earl C. Wood of Owingsville, KY; Marilyn Wood of Vancouver, WA; Theodore E. Yaeger, IV of Daytona Beach, FL; Robert H. Young of Weston, MA; Mohammed K. Zahra of Carson Reg. Rad. Center, Norfolk; Michael Zammit of Seattle, WA; Daniel L. Zimmerman of Antioch, CA; and Anthony L. Zoprito of Cape Girardeau, MO.

Legislative Alert

The More They Know About the Clinton Plan,

the Less People Like It

At least, that is what Members of Congress continue to report back from their districts, where congressional town hall meetings and seminars and forums on health care reform are bringing back bad political news. Folks do not believe-and will not believe-that the Clinton Plan pays for itself. They fear they will be saddled with huge tax increases down the line to pay for yet another runaway entitlement program. Members are also perceiving hostility to Congress itself, making these town hall meetings even more unpleasant.

Distracted by the continuing ``Whitewater'' affair, the White House team thinks that the reason for their trouble is that they are not ``selling'' the plan properly. For example, they think they need to revamp the language. Instead of talking about ``employer mandates,'' which has an oppressive tone, the White House team will henceforth emphasize ``health benefits guaranteed at work.''

What Members are telling each other in the House and Senate Cloakroom is broadly reflected on recent national polling. The March 2 Time/CNN Poll shows that only 41% of Americans approve of the Clinton Plan and 45% disapprove. The March 4 Wall Street Journal/NBC Poll shows that only 37% favor the Clinton Plan, but 45% disapprove.

Beyond these general polls, the abortion issue continues to simmer. Members of Congress hate to debate this volatile issue. But it is inescapable. The Clinton Plan includes mandatory taxpayer payment for abortion coverage.

Members of Congress are worried about the potential impact of the abortion issue on the disposition of any health care bill. While the Cooper Plan (HR 3222) is silent, the managed competition proposal leaves the decision to include abortion coverage in the hands of a presidential commission charged with developing a standardized health benefit package. The language of the bill authorizes the commission to include procedures that are ``medically appropriate''-translated, that means abortion. Last year the Harris Poll (October 1993) revealed that 62% of all respondents opposed coverage for abortion in a government, standardized health benefits package, and 27% favored such an inclusion. Likewise, the CBS/New York Times Poll (June 1993) found 66% of respondents said that abortion should not be covered as part of a basic benefits package, while 25% favored inclusion in a basic benefits package. None of this daunts Planned Parenthood, the leading champion of abortion in Washington. The organization has pledged to run a $10 million media campaign to promote abortion as an elemental part of health care reform.

The Stark Alternative

Congressman Fortney ``Pete'' Stark of California, Chairman of the House Ways and Means Subcommittee on Health, has reported a bill out of his subcommittee by a vote of 6 to 5. In essence, the Stark Bill is an expansion of the Medicare program to cover the uninsured. The slim margin is an indication of the problems that Stark has been having: solid Republican opposition and defections from key Democrats fearful of employer mandates and future costs and the angry voters.

Before the final vote, congressional Republicans on the panel offered the Clinton Plan itself as a substitute to the Stark bill and the Clinton Plan ended up getting zero (0) votes. The Democrats complained that the move was nothing more than an attempt to embarrass the White House. The Republicans voted against it, and the seven Democrats on the panel voted ``present.'' The Democrats were right: It did embarrass the White House.

The 6-to-5 vote is a harbinger of the tough political battles to come. Members are finding the issues more complex than anything they have ever tackled. Reputable analysts on both sides of the issue are preparing charts and graphs, but the Democrats have resorted to role playing in their private sessions to help them understand how changing one provision would affect another. In one exercise, Levin played Stark's spouse, Cardin became Stark's boss, and they passed around a slip of paper in different directions to visualize the funding flow. This kind of decision-making on Capitol Hill is not a exactly a confidence builder for America's taxpayers.

Chairman Dan Rostenkowski, the old congressional warhorse of liberalism who pulled an upset by surviving a tough Chicago primary, said that the full Ways and Means panel will report out a ``more conservative'' bill, whatever that might mean coming out of Ways and Means.

The House Education and Labor Committee, chaired by Congressman William Ford (D-MI) will probably report out a bill that most closely matches the original Clinton Plan. The House Energy and Commerce Committee, chaired by Congressman John Dingell (D-MI) will also move legislation, but it might be far less like the Clinton original. In the Energy and Commerce Committee, and just about everywhere else on Capitol Hill, the Clinton ``regional alliance'' structure is gone, and there is no way the Administration can bring it back. Dingell was supposed to have his mark-up on March 4th, but that date came and went without any significant action.

The fun will start when the comprehensive and conflicting pieces of legislation, imperfectly understood by the Members, go to the House Rules Committee. There, a panel with no substantive expertise in health care policy will attempt to cut and paste the products of the three major House panels for a floor debate.

Senate Retreat in Annapolis

While the Democrats in the House of Representatives have been organizing their hearing and mark-up schedule, Senate Republicans retreated once again to colonial Annapolis, Maryland, to try once again to find common ground. Senator John Chafee (R- RI), who Chairs the Senate Republican Health Task Force and is author of the key managed-competition proposal in the Senate (S1770), tried to get his colleagues to rally around his bill or a version of it and present a united front. The meeting got off to a bad start when Chafee's agenda was criticized by conservatives for having Stan Jones, a former Kennedy staffer, as the introductory discussion leader. Chafee has been strongly encouraged by Dole, but Senate conservatives, notably Senator Don Nickles of Oklahoma, the Chairman of the Senate Republican Policy Committee, and Senator Phil Gramm of Texas want to restore market incentives in medicine. Nickles, with 24 cosponsors on his bill (S 1743), is pushing a ``consumer-choice'' health plan based on a national system of tax credits. Gramm wants to put medical savings accounts (S 1870) at the center of reform.

The result of the Annapolis Meeting: GOP Senators generally see no need to compromise with the White House on the terms of ``managed competition.'' They see the Clinton Plan as a sinking ship. Indirectly, this helps Senator Daniel Patrick Moynihan (D- NY), Chairman of the Senate Finance Committee. Moynihan is looking toward crafting his own bill, and Dole is expected to be Moynihan's chief collaborator.

In the meantime, Clinton, through Senator George Mitchell, met with top Senate Republicans, including Dole of Kansas, Packwood of Oregon, Chafee of Rhode Island, and Nickles of Oklahoma, for a dinner at the White House to discuss health care. While in principle, all of the participants agreed on the ideal of ``universal coverage,'' the breakdown came on the specifics of how to attain it. Nickles, for example, told Senate colleagues that ``universal coverage'' has become a mantra in the ongoing debate, like saying that everybody should have a good job and a nice house. But after consulting with his Senate colleagues, Nickles himself is backing off the enforcement of an individual mandate, in favor of letting tax incentives work to expand voluntary coverage of the uninsured.

Senate Finance Committee Chairman Pat Moynihan is trying to hammer out a consensus among his colleagues. But beyond the general desire to achieve ``universal coverage,'' there is little agreement on the details.

While Senators are trying to figure out the right mix of detailed recommendations, Sheila Burke, Senator Bob Dole's health policy analyst, is grabbing a larger share of the spotlight. The one major fact about Capitol Hill that the public generally does not understand is the enormous power and influence of congressional staff. The higher the degree of specialization and expertise required for the more complex questions of public policy, the greater that congressional staff influence becomes. Dole's top staffer is the acknowledged commander in chief of congressional staff on Capitol Hill when it comes to health care policy; it means that if there is a final compromise bill offered in Senate Finance, one can expect Sheila Burke to have a strong hand in crafting the technical details.

Senate Finance Testimony: How Workers Would Suffer

On March 15th, Senator Moynihan's committee heard more than two hours of expert testimony from Alain Enthoven of Stanford University, the intellectual godfather of managed competition, Stuart Butler of the Heritage Foundation, and John Holohan of the Urban Institute.

While Enthoven argued against an employer mandate, he added that adverse selection and gaming by insurance companies will be unavoidable without government standardization of benefits.

Butler outlined the results of an original and comprehensive analysis of the job and wage effects of the Clinton Plan. The study was conducted by Lewin/VHI, Washington's leading health care econometrics firm, under contract from the Heritage Foundation. Lewin found that under the Clinton Plan, in 1998, there would be an aggregate cut of about $20.6 billion in wages and the loss of 155,000 to 349,000 jobs. The average cut for workers in firms that did not offer insurance would be $1,243. Before taking the wage effects of the employer mandate into effect, Lewin had estimated that the Clinton Plan would reduce household medical spending by $26.5 billion. But after taking wages into effect, the net health care spending by households falls by just $7.7 billion.

According to Butler, 30.7% of working age households would see a spending increase of at least $1000, once the wage effects of the employer mandate are included. More than 53% of working households would experience a net decrease in income under the Clinton Plan.

Butler also stated that under the tax-credit approach outlined in the Nickles bill, 18.8% of working-age households would see cost increases greater than $1000, while 39.4% would experience a net reduction in costs (compared with 28% under the Clinton Plan).

CBO on Tax Credits

In a comprehensive March 1994 study, the Congressional Budget Office considered the market consequences of employer- based insurance and its tax treatment. The federal tax exclusion on employer- provided health insurance (which covers about 75% of working Americans) is calculated to be worth $74 billion in 1994 dollars. The CBO found that:

1. There is no free lunch after all. The employer share of the cost of insurance is ultimately passed on to workers in the form of lower wages.

2. The open-ended subsidy contributes to the nation's current high level of spending for health care.

3. Tax credits are efficient and equitable: ``By providing a larger subsidy for low income families, a credit would encourage more people to secure health insurance, reduce adverse selection, and discourage free riders. As a result, the credit would avoid some of the undesirable features of a tax cap.''

4. Tax credits would advance welfare reform by reducing the current disincentive for welfare recipients to enter the work force. (At present, welfare recipients can lose most of their benefits when they go to work.)

A Guided Tour of the Clinton Plan

Multinational Business Services, Inc., a Washington- based consulting firm, has just released a massive report, ``The Regulatory Requirements of The Health Security Act,'' conducted under the direction of Jim Tozzi, a former career official at the Office of Management and Budget (OMB). Using conservative estimates of the amount of staff that would be required, Tozzi concludes there would be employment opportunity for 98,146 new full-time bureaucrats at the federal, state, and regional alliance level.

The report identifies 818 new regulatory mandates, requiring an increase in the Code of Federal Regulations by 2,891 pages. This is equivalent to ten times the numbers of Medicaid regulations and 2.5 times the number of Medicare regulations. Beyond the actual regulations, an additional 3,849 pages of guidance would be required.

Universal Coverage Is Bad Medicine

While others argue over the details (the enforcement policy) needed to achieve ``universal coverage,'' William Kristol, Chairman of the Project for the Republican Future, states that Republicans should not be intimidated by the Presidential incantation.

``Universal coverage,'' he states, ``necessarily means the domination of our health care system by government and politics and a degradation of the quality of American medicine.''