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 private interests.

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:

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 motivated.

Oral arguments will be heard in the Circuit Court on April 30, 1993.

Foundations Targeted

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 Enthoven, are:

• 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 of appropriateness.'')

• 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 fees.'')

• Fee for service payment. (This ``allows physicians maximum control over their incomes by increasing services provided.'')

• 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 & Co.

New Members

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).

AAPS Calendar

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 reservation.

Oct. 5-9. 50th annual meeting, San Antonio, TX.

Legislative Alert

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- tion model.

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 Hill.

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 solve it.

• 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 unemployed;

• 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 Metzenbaum (D-OH).

Congressional Jockeying

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 1989.

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 nothing.

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 even notice?

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?