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Association
of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto |
Volume 49, No. 12 December 1993
TO DOCUMENT, OR NOT TO DOCUMENT?
For months, over 500 members of the working groups of the
President's Task Force on Health Care Reform occupied two floors
of the Old Executive Office Building. They held thousands of
meetings and passed through numerous ``tollgates.'' Ira Magaziner
reportedly arose at 4:30 a.m. to receive reports. Physicians who
took their time to journey to the White House to participate in
an ``outreach group'' were informed in writing that their
thoughts were being preserved in minutes and ``bullets'' for
First Lady Hillary Rodham Clinton. Congress and the public
thought that the President was collecting the best and most
authoritative advice from all who had something to contribute, in
order to prepare his Health Security Act.
Where are the minutes now?
``Based on my knowledge of Mr. Magaziner, I don't think
there are any records,'' stated an official who prepared an
affidavit presented to the US District Court in the case of AAPS
v. Clinton.
AAPS is engaged in discovery, attempting to obtain documents
relevant to the question of whether the working groups of the
Health Care Task Force constituted a Federal Advisory Committee
that is required by law to open its minutes to public scrutiny.
The answer depends on the structure and composition of the
groups. Who were the members, who paid them, and how many hours
did they work? Did they complete the conflict-of-interest
disclosure forms required under the Ethics in Government Act?
The government has provided very little information in
response to AAPS interrogatories-only some lists of names and
incomplete time records that appeared to have been prepared after
the fact. No organizational chart, no payroll records, no ethics
forms, and no travel vouchers have been produced.
At first, the government objected to AAPS requests on the
grounds that the documents were irrelevant and that producing
them would be ``unduly burdensome.'' On reviewing the response
of the US Department of Justice, Judge Royce Lamberth stated,
``there's so much government gobbledygook that I can't say I
understand it at all.''
In an October 20 hearing on a Motion to Compel, US Attorney
Jeffrey Gutman seemed to take a different tack, suggesting either
that the desired documents do not exist or have not been located:
``The nature of the interdepartmental working group was such
that there was no direction by Mr. Magaziner's office to produce
minutes, agendas, and sign-in lists....''
On the other hand, Mr. Gutman stated: ``I'm not saying that
we -- they don't exist. What I -- what I -- what I have done ...
is that a colleague and I have reviewed a large volume of the
interdepartmental working group documents, and the results of
that investigation have revealed to us ... that a very, very few
of the meetings ... produced these agendas....''
The Court noted that the Secret Service keeps records of
persons cleared in for meetings in the Old Executive Office
Building. However, Mr. Gutman did not know how long the Secret
Service keeps the records.
The applicability of the FACA hinges on whether or not all
the consultants worked full time. Lacking complete time records
(which were not requested in any event) or meeting attendance
records, Mr. Gutman asserted that it was ``preposterous'' to
think that payroll records (which were requested but not
produced) could serve as a proxy for the amount of time worked.
Furthermore, he said that ``the date on which somebody filled in
their conflict of interest form is not probative of whether
they're a special government employee.''
Mr. Gutman summarized: ``If there isn't any more
information available, there isn't any more information avail-
able.''
Reports of this hearing in The Washington Times on October
21 caused concern in the House Government Operations Committee,
chaired by John Conyers (D-MI). Responding to Congressman
Conyers, White House Counsel Bernand Nussbaum wrote a carefully
worded seven-page letter. He declared that neither Judge
Lamberth nor any other court has ``made any findings suggesting
that the government has failed to fulfill any legal obligation to
maintain [Task Force] records'' and that the plaintiffs had not
made a second motion to the Court for an order to compel the
preservation of any materials in conformity with federal law
(after the first such order was rescinded). Additionally,
Nussbaum stated that ``the government has never suggested ...
that any records that were created are now `lacking'....The
question of whether records exist is not even presently pending
before the District Court.''
The FBI is now conducting a criminal investigation to
determine whether the administration misused taxpayer funds in
the procedures for hiring members of task force working groups
(US News & World Report Nov. 1, 1993).
President Clinton and Hillary Rodham Clinton have launched
blistering attacks on ``special interest groups'' such as
insurers, physicians, and pharmaceutical companies. The public
can easily find out who is opposed to the Plan. The urgent
question remains: who drafted the Plan?
Were the drafters employed by entities that stand to profit
from the new system? Were they a disorganized horde, as implied
in government testimony before the Court? Was the plan really
written by an unidentified elite, who used a sham Task Force as
window dressing?
The White House has apparently learned some lessons about
documentation from Senator Packwood and former President Richard
Nixon.
On November 8, Judge Royce Lamberth handed down an order on
an AAPS Motion to Compel. The text is enclosed.
Documenting for Doctors
Physicians and insurers must not assume that asserted
irrelevancy, undue burdens, inability to find documents, or
nonexistence of documents will protect them in the event that a
government agency wishes to investigate them. Physicians are,
after all, caring for patients, not merely trying to restructure
one seventh of the nation's economy.
Data are required for various purposes, notably for
investigating allegations of fraud or abuse, or for determining
the need to reimburse the Treasury for erroneous payments.
Confusion sometimes arises concerning responsibility for
payment when a person is covered under both Medicare and an ERISA
plan. The Health Care Financing Administration is now trying to
recover money from employer-funded plans for claims submitted in
the early 1980s. Under ERISA, plans are required to keep data
for seven years, and many do not have the records that HCFA has
requested.
In order to defend themselves in a Medicare audit or to
answer allegations of fraud or abuse, physicians are advised to
keep records for seven years. Medicare civil penalties have a
six-year statute of limitations, beginning at the time a claim is
filed. The federal false-claims law has a five year statute of
limitations, as do the criminal false claims law and the criminal
Medicare fraud law. Various Medicare provisions require
different record keeping times. None is longer than seven years;
however, some local organizations require ten years (Part B News
10/18/93).
Currently proposed legislation (S 1494; HR 3137) would lay
the groundwork for a national health information ``super-
highway,'' establishing the ``infrastructure'' for national
health care reform, bringing American medicine out of the
``information dark ages.'' The bill could be ``folded into''
health care reform legislation at a later date. The legislation
would establish a federal Health Care Data Panel to develop data
standards and set penalties for failing to implement uniform data
requirements within the timeframe set by the bill (BNA's Medicare
Report 10/1/93).
The importance of documentation is highlighted by the
penalties proposed for fraud or abuse in text of the ``Health
Security Act'' released Oct. 27, 1993. A prison term of up to 10
years is the penalty for any scheme ``to obtain, by means of
false or fraudulent pretenses, representations, or promises, any
of the money or property owned by...any health alliance, health
plan, or person in connection with the delivery or payment for
health care benefits, items, or services.
``If the violation results in serious bodily
injury...such persons shall be imprisoned for life or
any term of years.''
The draft document leaked in early September named some
federal health care offenses: ``Failing substantially to provide
medically necessary services'' and ``engaging in any practice
that reasonably could be expected to have the effect of denying
or discouraging enrollment...'' All physicians need to be
certain they understand the rules and the penalties, especially
if they plan to participate in the establishment of a health plan
that can profit only by discouraging the enrollment of the sick.
The Keystone
Vladimir Ilich Ulianov (a.k.a. Nicolayi Lenin) said that
``medicine is the keystone in the arch of the socialist state.''
The Gothic arch is obviously very unstable during con-
struction and must be propped up with braces. At this stage, any
minor disturbance will make it collapse. But when the keystone
is set, the supporting timbers can be removed and not even an
earthquake will cause the arch to crumble.
All facets of an economy except medicine can be collec-
tivized, and that nation may still be rescued from slavery. Not
everyone is a government farmer. Some folks grow their own food.
Not everyone rides the government bus. Some walk. Not everyone
uses government Federal Reserve Notes. Some barter. But
universal compulsory government medical care shackles all
patients and all doctors, and that is everyone. When medicine
(``health care'') is made a ``system,'' an entitlement, the
keystone is jammed into place. Emancipation from that bondage
would be slow, costly, laborious, bloody-requiring a civil
earthquake-as current unfolding history confirms.
That is why doctors must NOT cooperate, must NOT
participate, must NOT be particeps criminis. Far more is at
stake than socialism's inferior care for sick patients and
unbearable working conditions for automaton ``health care
providers.'' Freedom for this entire nation hangs on
our action.
The imposition of the ``universal compulsory health care
system'' now being fashioned for America has nothing to do with
professional, compassionate, conscientious medical care for ill
human souls. It has everything to do with power and control of
all of us (``beneficiaries'' and ``providers'') on the intended
animal farm.
The ``system'' being built is veterinary medicine. The
owner [is] the state....The animal (each of us) is to be the
property of and exist at the sufferance of the all-powerful
state.
If and when we allow These States in Union to become a
socialist slave state, freedom for Americans will be only a
forbidden dream. And remember that Lenin predicted that when
this ``last bastion of freedom'' falls prey to socialism, freedom
in the whole world will become entombed.
Curtis Caine, MD, Jackson, MS
``Universal'' Means Compulsory
Hillary Rodham Clinton announced that she was willing to
negotiate the future of American medicine, but that one principle
was non-negotiable: universal coverage with comprehensive
benefits. Only the liberal Democrats and moderate Republicans
have offered such plans, she stated, specifically criticizing the
``managed competition'' proposal advanced by former allies such
as Congressman Jim Cooper (D-TN).
Ms. Clinton warned her opponents: ``If the forces arrayed
against reform want a real battle in which their self-interest is
exposed and their real agenda is made public, they will get it''
(NY Times 11/9/93). (She did not allude to the AAPS battle to
bring to light the agenda of the supporters of
``reform.'')
Ms. Clinton also stated that all physicians believe in
``universal coverage'' (USA Today 11/9/93). At a Nov. 9
meeting of the Fairfield County Medical Association in Norwalk,
CT, Daniel H. Johnson, Jr., MD, Speaker of the AMA House of
Delegates, agreed that the AMA supported that concept. When
asked whether the Clinton Plan would mean the end of private
practice, he replied, ``Yes.''
``We are on the verge of making our dream a reality once and
for all....We will roll over anyone who tries to stop us.''
Senator Jay Rockefeller (D-WV)
Oral Arguments Heard Before Trial Court in
Challenge to Kentucky ``Provider Tax'' Statute
On November 1, oral arguments were heard in the case of AAPS
member Stuart G. Yeoman, MD versus Kentucky House Bill No. 1, a
statute imposing a 2% provider tax on the gross revenues of all
Kentucky physicians and establishing the Kentucky Health Care
Data Commission to gather information and audit the records of
Kentucky physicians. The case, styled Stuart G. Yeoman, MD, et
al. v. Kentucky Revenue Cabinet, et al., and the companion case
with which it was consolidated, Charles Smith, MD, et al. v.
Kentucky Revenue Cabinet, et al., are currently pending before
the Franklin Circuit Court (see AAPS News Sept and Oct,
1993). (The Smith case was brought by three physician members of
the Kentucky Medical Association.) A third case, filed by twelve
(12) Kentucky Health Maintenance Organizations shortly after
Smith and Yeoman were brought, was heard at the same time
although not consolidated.
The first part of the oral argument was devoted to the Due
Process and Equal Protection Clauses of the US and Kentucky
Constitutions. Both provisions protect the individual from the
state's exercise of arbitrary power over the lives, liberty, and
property of individuals. The plaintiffs argued that Kentucky
House Bill No. 1 was rife with constitutional error. They
pointed out that because the tax is applied to gross revenues, a
physician would be subject to it even if he realized no net
profit after paying overhead costs. Essentially, physicians are
singled out for double taxation to fund the Medicaid program,
whether or not they receive revenues from the program.
The plaintiffs also argued that the statute violates the
separation of powers. Among other reasons, House Bill No. 1
unlawfully delegates the power to set the rates and incidents of
taxation to the US Dept. of Health and Human Services by tying
the rate of taxation, and the items or services that may be
taxed, to any and all future regulations on the subject issued by
that federal agency. The plaintiffs maintained that such a
delegation amounted to an outright abdication of the Kentucky
General Assembly's responsibility and accountability for taxing
decisions.
House Bill No. 1 originated in the state house as a revenue
bill and was then sent to the senate, which added provisions
creating the Kentucky Health Care Data Commission. This
amendment, being unrelated to raising revenue, is a blatant
violation of Section 47 of the Kentucky Constitution, plaintiffs
maintained. Additionally, they argued that the unlimited power
to conduct searches and seizures without a search warrant or
subpoena violates both the Fourth Amendment to the US
Constitution and Section 10 of the Kentucky Constitution.
The plaintiffs hope to have a ruling before Christmas.
Balance Billing Limits Upheld
The US Supreme Court declined to review a decision by the
Second Circuit, which determined that balance billing limits did
not involve an unconstitutional taking of property requiring
government compensation (Garelick v. Shalala, CA 2, No.
92-6100, 3/5/93; 4 MCR 741). The court conceded that
physicians did not create the social problem the law was intended
to alleviate and that the plaintiffs (anesthesiologists) did not
have the option to refuse Medicare patients by practicing on an
outpatient basis (BNA's Medicare Report 10/8/93).
Letters to the Editor
According to an information directive from the Ministry of
Health Ontario, the government and the Ontario Medical
Association agreed to a 4.8% ``holdback'' of payments for
physicians' services because of increased utilization. The goal
is to reduce expenditures in the 1993-1994 fiscal year by $100
million compared with 1992-93.
Our tax rate will be a minimum of 54.8%. Actually, I am
paying 58% because of other health-plan related taxes.
What is the cause of the increased utilization? Immigrants
of all ages are pouring into this country like the St. Lawrence
River. With a health card, they and all their friends can see a
doctor any time at no cost. Also the general population is urged
to see a doctor at any time....
P.A. Charlebois, MD, Scarborough, Ontario
...[T]he President's proposal would create a totalitarian
system of health care imposed by force legally upon patient and
physician, destroying the free enterprise system of medicine
forever....
Frank F. Martin, MD Charleston, SC
The Clinton administration's emphasis on universal, one-tier
medical coverage, rather than medical care, assumes that all
physicians will be reimbursed through insurance mechanism....That
assumption combines the worst of both worlds: the bureaucracy
involved in any third-party payment system...and the endlessly
mounting costs which third-party fee-for-service care has
produced all over the world....
Nathaniel S. Lehrman, MD, Roslyn, NY
Being of Polish extraction, I have tried to keep abreast of
my heritage. Please note an article in the Polish
Falcons about a Polish government health ministry delegation
which recently visited Chicago. The objective of its mission was
``to improve the quality of health care in Poland while moving it
from the existing state-operated to a private practice model.
Isn't it ironic that a backward country like Poland is
taking a forward step away from its socialistic state-operated
medical care system, while the United States is hellbent to take
a backward step into a socialist system?
Stanley Olesky, MD
  Taylors, SC
Asset Forfeitures Exceed Losses from Burglary
Since new forfeiture laws went into effect, federal law
enforcement officials alone have seized $4.1 billion in private
property-more than the $3.8 billion that burglars carried away in
1992. Before the government can cut off the check of a public
welfare cheat or evict a deadbeat tenant, it must give notice and
conduct a hearing. No such niceties are required in forfeiture
cases (Paul Craig Roberts, Scripps Howard News Service, 11/1/93).
New Members
AAPS welcomes Drs. Jeffery Amer of Syosset, NY; Robert
Anderson of Marysville, OH; Azzam Baker of Secaucus, NJ; Roderick
Baltzer of Cherboygan, MD; Robert B. Belk of Anderson, SC; Burt
Bottjen of Algona, IA; Lisa Callahan of San Jose, CA; Merrill J.
Cohen of Greenbelt, MD; Stanley I. Cullen of Gainesville, FL; Dan
Dahlinghaus of Chicago, IL; Chester A. Danehower of Peoria, IL;
Nicholas De Gregorio of Pittsburgh, PA; John Demetree of
Bradenton, FL; Dale Doerr of St. Louis, MO; Anthony J. Dorto of
Miami, FL; B.R. Drexinger of Roswell, GA; Robert Fath of
Scarsdale, NY; Frank Fazio of Boise, ID; Chester G. Golightly of
Lubbock, TX; Robert D. Gross of Fort Worth, TX; Raymond Handler
of North Brook, IL; John Hanigsberg of Tempe, AZ; Robert Hastings
of Tucson, AZ; Fredrick C. Hendrickson of Paulding, OH; Richard
S. Herdener of Spokane, WA; Jim K. Herdson of Ocean Springs, MS;
James F. Hesse of Wichita, KS; Rick Honer of Winter Haven, FL;
T.M. Hughes of Houston, TX; Brian Hull of Wichita Falls, TX;
Kilgore and Strom of Paris, TX; James King of Galax, VA; Yolanda
Moyer Koth of Potomac, MD; Robert Kurtis of Clearwater, FL;
Maurice L'Ecuyer of Houston, TX; John Lettieri of Spartanburg,
SC; Thomas Levy of Colorado Springs, CO; Douglas Liva of Paramus,
NJ; Stephen E. Mahoney of Houston, TX; Willis E. Martin of Rocky
Mount, NC; Robert McDowell of Newport, VT; Andrew W. McRoberts of
Pocatello, ID; W. Terrence Meyer of Las Cruces, NM; John Miethke
of Vista, CA; James W. Neisler of Toledo, OH; Leonard J. Newton
of Ithaca, NY; Jackie Nixon-Fulton of Cedar Hill, TX; Arthur
O'Brien of Hayward, CA; Swati Pande of Midland, TX; Mangubui
Patel of Queens, NY; Mark Peterson of Lewiston, ID; William
Phillips of Augusta, GA; Martin R. Post of New York, NY; Morley
Rosenfield of Phoenix, AZ; Peggy Russell of Austin, TX; Richard
E. Scheetz, Jr. of Columbus, OH; Mark A. Schwartz of Long Branch,
NJ; Michael Stephens of Dallas, TX; Ron Stevens of Evergreen, CO;
Marvin Tiesenga of Oak Park, IL; Randall K. Tozer of Scottsdale,
AZ; Joseph T. Tretta of Mt. Pleasant, TX; Louis Tribulato of
Omaha, NE; David Udehn of Moline, IL; Ronald H. Ullman of Great
Falls, MT; Sivachandra Vallury of Amityville, NY; Fred Wagshul of
Dayton, OH; John Wang of New York, NY; Scott Wattenhofer of
Omaha, NE; Shirley Wilson of Hawkinsville, GA; Scott Yun of
Whittier, CA; Roberto A. Duran of Houston, TX; George and Stacey
Ibrahim of Durham, NC; Geoffrey A. Jahan-Tigh of Baytown, TX;
Alan C. Rodgers of Baytown, TX; Tracie Updike of Baytown, TX;
Joseph P. Aiello of Spring Valley, CA; David Aiken of Metairie,
LA; Walter C. Ashcraft of Crystal City, MO; Joseph Aziz of
Houston, TX; Thomas A. Cadenhead of Denton, TX; S. W. Casner of
San Marcos, TX; Michael Coverman of Austin, TX; Gary F. Cox of
Victoria, TX; Albert D. Cuellar of Houston, TX; Austin R. Cushman
of Boise, ID; Chester C. Danehower of Peoria, IL; Robert W. Davis
of Boise, ID; Robert C. Erickson II of Massillon, OH; Robert K.
Fell of Lafayette, LA; David Fields of New York, NY; Ray M.
Fitzgerald of Houston, TX; Michael D. Foreman of Lafayette, LA;
Anthony J. Forte of Tacoma, WA; James W. Geiselmann of Poplar
Bluff, MO; William P. Griggs of Bellingham, WA; Neil Haddock of
San Antonio, TX; Ross A. Hauser of Oak Park, IL; John C. Hawk,
Jr. of Charleston, SC; C. Andrew Heiskell of Morgantown, WV;
William A. Hewson of Stuart, FL; Loren G. Hinger of Boise, ID;
Duane F. Hopp of Puyallup, WA; Chester R. Hoyt of Grand Rapids,
MI; Stewart Hults of Indeanapolis, IN; Reldon R. Jones of Ceres,
CA; Lenore S. Kakita of Glendale, CA; Michael E. Klein of
Glendale, CA; Richard A. Kowalsky of Shorewood, MN; Rodney D.
Lentz of Jefferson City, MO; Richard D. Long of Carson City, NV;
Hayden E. Mayeaux of Abbeville, LA; J. Patrick Moulds of Houston,
TX; Lan Thi Hoang Nguyen of Westminster, CA; L. William D.
Nowierski of Boixe, ID; Jonathan M. Raines of Gladwyne, PA; Gil
Robinson of Abilene, TX; Frank S. Segreto of Holbrook, NY; Avery
L. Seifert of Boise, ID; Arnold B. Skor of Houston, TX; Donald H.
Song of Tacoma, WA; M. Joyce Starling of Henderson, TX; Jon K.
Stern of Houston, TX; Mark A. S. Stuart of Houston, TX; Gary
Tennebaum of Dallas , TX; Thomas M. Van Eaton of Eatonville, WA;
James H. Watts of Spokane, WA; and D. W. Williamson of Tacoma,
WA.
New student members include Anh Hoang of California; Mirza
A. R. Beg, Mirza A. R. Beg of Florida; and Ashley S. Adams,
Douglas K. Burke, Joe D. Callens, Melissa Canham, Daniel
Carrasco, Audrey Chang, Mimi Cho, Joel Ciarochi, Kristin Coleman,
Raquel Collins, Mark Dalton, Edwin Diaz, Kathryn Eubank,
Cassandra Fallaw, John Faringer, Sanford Fung, Jonathon B.
Gentry, Alfredo Gonzalez, Jeff Gunter, Terry Higgins, Thuy Ho,
Son Huynh, Zainab Ilahi, Terry Irwin, Claudie H. Jimenez, Raime
B. Kalish, Partow Kebriaei, Faraz A. Khan, Faraz A. Khan, Lowell
T. Ku, Donna Kundert, Anita Kushwaha, Amanda LaComb, Dawn
Laremore, Michelle LeBlanc, Anna Lichorad, Jeffrey D. Linder,
Clinton Long, Brenda Luna, Daniel Meritt, Jr., Melissa Moss,
Allan B. Ohman, Jr., Shannon Orsak, William A. Paruolo, Hank
Prost, Marie T. Quintos, Matthew Roberts, Karen Salo, Sumeet
Sharma, Lance M. Silverman, Lloyd Stegemann, Cynthia M. E. Taber,
Kuloeep Talwar, Jeff Taylor, Jessica Vandrovec, Lan Phuong Vu,
Chau M. Vu, Heidi Walden, Jamie Williamson, Jody Wilson, Jay
Wright, and Daren P. Yeager of Texas.
AAPS Calendar
Dec. 11. Americans for Free Choice in Medicine and the Medical
Action Committee for Education will host a meeting in Orange
County, CA. For details, call Bryan Williams at (714)645-2622 or
Dr. Arthur Astorino at (714)645-2250.
Oct. 12-15, 1994, 51st annual meeting, Atlanta.
Legislative AlertSupport for Clinton Plan
Declines
Now that the President and First Lady Hillary Rodham Clinton
have delivered the final 1,342 page legislative language to
Capitol Hill in an unusual bipartisan ceremony, the Clinton White
House is trying desperately to recapture lost political momentum.
Since the President's passionate address to Congress and the
nation on September 22nd, the political pros on Capitol Hill have
noticed a steady decline in popular support for the President's
health plan.
The President's first problem was that the initial September
hype was not followed up immediately with legislative details for
ravenous congressional members and staff. As one Democratic aide
remarked, it was as if the Clinton Administration launched a
military blitz without bothering to make sure that the supply
lines were in order. They weren't.
While the First Lady's historic Congressional testimony was
greeted with the expected decorum and fawning, the cheering
quickly stopped after Hillary left the Hill. When HHS Secretary
Donna Shalala testified before the House Ways and Means Committee
and the House Energy and Commerce on October 5th, she got, in the
words of the Washington Post's headlines, a ``bruising
reception.'' Shalala didn't show much mastery of the details, so
members from both sides of the aisle lit into the lack of
specifics with bare knuckles. Chairman Fortney ``Pete'' Stark
(D-CA) told Shalala that it appeared to him that she had no more
hand in writing the Clinton Health Plan than he did. Likewise,
Jim McDermott (D-WA), another advocate of the single-payer
system, told Shalala that if she couldn't clearly explain the
impact of the Plan on costs to businesses and individuals, he
wouldn't be able to explain it to his constituents and thus could
not support it.
The Clinton Plan also has to share the Capitol Hill
spotlight with more than a half dozen other major reform ideas,
which have already been introduced or are in the final drafting
stages. Leading proposals include the Dole-Chafee managed
competition proposal; the Cooper-Grandy managed competition bill;
the Gramm-Armey Medisave proposal; the Michel-House Republican
Leadership Proposal (HR 3080), which also includes a Medisave
option, and the McDermott-Wellstone single-payer option. Also,
Republican Senators Don Nickles of Oklahoma, Orrin Hatch of Utah
and Connie Mack of Florida are fashioning a comprehensive
consumer choice option, including tax credits and a Medisave
accounts. And while bill language of the Clinton Plan is now
available, there is yet no bill language for the proposals
offered by Senators Chafee, Gramm, and Nickles.
Without decisive offensive action on the
Administration's part to define the terms of the debate, the
Clintons' opponents started to define it for them. With the
precious ammunition of the leaked September 7th working draft,
where the details could be quoted in chapter and verse, the
President has found himself on the defensive in three areas.
First, the Clinton claim to ``simplify'' the bureaucratic
health care system was belied by the plan for even bigger
bureaucracy on a scale never before attempted.
Second, the financing of the Clinton Plan became a sitting
target for every economist who could add and subtract. Martin
Feldstein of Harvard University, a Republican and former member
of the President Council of Economic Advisors, estimated that it
would add $120 billion more to the federal deficit. But the list
of critics was a wide ranging group: Dr. Henry Aaron, the
respected economist of the liberal Brookings institution; Rudolph
Penner, former Director of the Congressional Budget Office; and
Senator Daniel Patrick Moynihan, who called the Clinton financing
provisions ``a fantasy.''
The third problem is the effect on taxes, employment and
productivity. The Washington-based Employment Policies Institute
projected a 3.1 million job loss concentrated in low-wage service
industries,
The Clinton team's handling of these objections has been at
the very least creative. Not to be outdone for sheer chutzpah,
Alice Rivlin, second in command at the Office of Management and
Budget (OMB), entitled her October 20th Wall Street
Journal defense of the Clinton Plan: ``Clinton's
Conservative Plan.'' Among the items in the menu in Alice's new
restaurant of ``conservatism'' are that it builds upon the New
Deal's tax-supported employer based insurance system and that the
Clinton team rejected the ``radical surgery'' of a single-payer
system.
While the Clinton Administration has been beating off the
higher estimates of the Employment Policies Institute, the
prestigious Employee Benefits Research Institute (EBRI) is also
jumping into the job loss fray, with the claim that employer
mandates could cause the loss of 200,000 to 1.2 million jobs,
unless workers' wages were lowered to compensate. Laura Tyson,
Chair of the President's Council of Economic Advisors, thinks
that any general job loss would be very small, tiny really, only
600,000, on the order of a rounding error to monthly employment
statistics. Ira Magaziner asserts that the Plan will actually
create jobs.
The medical industry provided 16% of all new jobs between
1980 and 1990 and now accounts 9.7% of all private jobs in the
nonagricultural sector of the American economy. Tyson sees the
Clinton plan as adding 400,000 new jobs to care for the millions
of newly insured. She argues that by holding down costs and
allowing businesses to increase wages, hire more workers, and
make even bigger investments, the long run positive impact of
Clinton's health care reform would be $10 billion in savings for
business. However, she calculates a $13 billion increase in
business spending for ``covered services'' in 1996, before
savings from health plans kick in around 1999 (BNA's Health
Care Policy Report 10/11/93).
Actually, the economic impact of the Clinton health plan in
the outyears is impossible to predict. How each piece will
interact with the others is unknown. And no existing econometric
model can project far enough into the future to verify claims of
big future savings. If the Clinton Plan follows all previous
experience, it will result in an explosion of medical costs.
Public Response
According to a CNN/USA Today Gallup Poll,
conducted two days after the President's September 22 speech, 23%
of the public thought that Congress should pass the Clinton Plan
as he has proposed it, while 54% favored passage only after
making ``major changes,'' 15% favored outright rejection, and 8%
had no opinion. Even more interesting, only 42% thought the
Clinton Plan would solve the country's health-care problems, 40%
said it would not, and 8% had no opinion. This survey shows a
sharp decline from a similar survey conducted on February 26th,
when 61% said the Clinton Health Plan, then only vaguely
outlined, would work to solve the country's problems and 33% said
that it would not.
Other surveys have also shown little public enthusiasm. An
October NBC News Poll showed that only 21% of those surveyed
thought the Clinton Plan would help them, and 34% thought it
would hurt them. This is not the kind of public support that
members of Congress like to have behind them as they overhaul one
seventh of the national economy. It is substantially less than
the initial popular support for the President's budget and tax
package.
Congressional Assignments
Look for Senate Majority Leader George Mitchell of Maine and
Congressman Richard Gephardt (D-MO) to be the chief sponsors of
the Clinton Health Plan in Congress. Although the President and
Hillary Rodham Clinton presented the legislative language on
October 27th, the introduction is being delayed while the
Democratic leadership works out the details for the assignment of
the massive 1342 page bill to the various committees of
jurisdiction and the Congressional Budget Office looks over
Clinton's ``numbers'' again.
In the House, the bill will be assigned to the House Ways
and Means Committee chaired by Dan Rostenkowski (D-IL), the House
Energy and Commerce Committee chaired by John Dingell (D-MI), and
the House Education and Labor Committee chaired by William Ford
(D-MI). It is expected that Ford, one of the most liberal members
of the House and a stalwart champion of organized labor, will
also be the most cooperative with the White House. In the Senate,
the bill will be assigned to the Senate Committee on Finance
chaired by Daniel Patrick Moynihan (D-NY) and the Committee on
Labor and Human Resources chaired by Edward Kennedy (D-MA).
There are two key issues here. First is the timing of
consideration. If there is sequential referral to these various
committees, a great deal of time will be consumed in staff work,
and the committees are likely to go over much of the same ground
twice. If the bills are assigned concurrently, then each
committee starts work simultaneously on the provisions of law
over which it has legislative jurisdiction. This approach
obviously speeds up the legislative process. But it also has
certain risks. The Energy and Commerce Committees and the Ways
and Means Committees both have a disproportionate number of
influential advocates of a Canadian-style single-payer system or
of Medicare expansion, including Fortney Stark of California and
Sam Gibbons of Florida. Likewise, Energy and Commerce Chairman
John Dingell of Michigan and Congressman Henry Waxman of
California are on record as favoring a single-payer approach. But
given the final evolution of the Clinton Plan, many Capitol Hill
critics of the proposal are certain that, for all the rhetorical
flourishes on managed competition, a ``single payer'' (government
monopsony) has been the goal from the outset. (Senator Wellstone
has been busily engaged in last minute discussion with Ira
Magaziner, making it easier for individual states to opt out of
the Clinton plan if and only if they adopt a single-
payer, Canadian style system, and not if they set up a consumer-
choice option.)
There are also jurisdictional issues depending on the
precise way in which the bill is drafted. If ``premiums'' are to
be collected by the IRS, a large part of the bill would be under
Ways and Means. Otherwise, more of the bill will be referred to
Education and Labor. (The first approach has the disadvantage of
making the premiums bear a stronger resemblance to a tax, which
of course they are.)
Respecting You in the Morning Department
Given this picture (Dorian Gray, perhaps?), the medical
industry's huge expenditure of political action committee funds
looks like a massive exercise in pathetic groveling and profes-
sional self-abasement. Medical industry PACs contributed $5.9
million to members of the Ways and Means Committee from January
to June 1993. The biggest winners: Pete Stark (D-CA), $646,150;
Charles Rangel (D-NY), $416,082; and Dan Rostenkowski (D-IL),
$384,777.
Early Democratic Defections
Senator Daniel Patrick Moynihan, who has enormous influence
over the course of the legislation, elicited from Secretary
Shalala the significant fact that 40% of all Americans would pay
more under the Clinton Plan than they do now. (The
Administration had previously made lower estimates.)
Senator Bob Kerrey, the Nebraska Democrat who achieved some
notoriety early on as a health care policy specialist and offered
a comprehensive reform proposal as a 1992 contender for the
Democratic Presidential nomination, is not going to be a sponsor
of the Clinton Plan. Kerrey sees the Clinton Plan as another
federal entitlement, and since federal entitlements are already
out of control, he is opposed to creating another one until
Medicare and Medicaid are fixed. Moreover, Kerrey is not
receptive to employer mandates, a global budget for health care
spending, the Congressional setting of benefits, or the creation
of a powerful National Health Board.
Sen. John Breaux (D-LA) is joining with Sen. David
Durenberger (R-MN) to sponsor a Senate version of the managed-
competition bill (HR 3222) introduced on October 6th by
Congressmen Jim Cooper (D-TN) and Fred Grandy (R-IA). The Cooper-
Grandy bill is modelled on the original Jackson Hole Group
proposal, and is more attractive to moderate and conservative
Senate Republicans and Democrats than either the Administration
bill, the Dole-Chafee proposal, or the Medisave proposal being
offered by Senator Phil Gramm (R-TX). Joining Breaux are Senators
Joseph Lieberman (D-CT) and Sam Nunn (D-GA). Lieberman wants a
purer version of managed competition. Cooper and Durenberger are
clearly looking to build a critical mass of House and Senate
members to control the debate, isolating the Congressional left
(Sen. Wellstone and Congressmen McDermott and Stark) and
Congressional conservatives (Sen. Gramm and Congressman Dick
Armey of Texas), and using this bloc to fashion an alternative to
the Clinton Plan. Sen. Chafee likewise is looking toward renew-
ing extended discussions with the Administration and striking a
deal. Chafee has already struck a strong professional relation-
ship with the First Lady. Naturally, Congressional conservatives
are worried that the Senate Republican leadership could end up
compromising with the Clinton team, resulting in vastly greater
government control over an already highly overregulated health
care system.
Mass Confusion
In a national survey jointly sponsored by the Kaiser Family
Foundation and Harvard University, the general public has serious
misunderstandings about medical insurance issues. For example,
44% of Americans think that the uninsured are poor, and 25% think
they are elderly, despite the fact that the uninsured are mostly
above the official poverty line, generally working, and most
often young. Only 25% of all Americans know what a single payer
means; 20% think they know what managed competition is (although
most policy wonks can't figure it out); and 31% know what managed
care is. Only 26% of Americans think that federal spending on
health care is an important contributor to the deficit. While
40% think we spend too much on health care, 41% think we do not
spend enough.
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