On June 22, 1993, the US Court of Appeals for the District of Columbia Circuit (the ``D.C. Circuit'') handed down its decision in AAPS v. Clinton, remanding the case for further proceedings on the issue of whether the ``interdepartmental working group'' (IWG), or any or all of its ``cluster groups'' or ``subgroups'' constitute federal advisory committees as defined in the Federal Advisory Committee Act, 5 U.S.C. App. Sections 1-14 (``FACA'').

In the lower court, AAPS had sought to take discovery on this issue, but the district court initially refused this request and held that the IWG was not covered by FACA. On appeal, the D.C. Circuit reversed this aspect of the district court's decision, writing that ``we believe further proceedings, including expedited discovery, are necessary before the district court can confidently decide whether the working groups is a FACA committee.''

The D.C. Circuit also set forth what it believed to be the relevant characteristics of a ``federal advisory committee'':

Thus, an important factor in determining the presence of an advisory committee becomes the formality and structure of the group...

The D.C. Circuit noted that ``[T]he record does not reflect where [the persons participating in the IWG] came from nor does it show how many hours they work.'' While the government argued on appeal that the IWG was composed only of ``special government employees'' and ``consultants,'' the D.C. Circuit believed that such terms are alone irrelevant to determining whether a person is not a ``full-time officer or employee of the federal government'' whose presence on the IWG would trigger the application of FACA.

On July 9, 1993, AAPS filed and served its First Set of Interrogatories and Second Set of Request for Production of Documents seeking specific information on the structure, personnel, and purpose of the IWG. Specifically, these discovery requests sought the names and addresses of all persons participating in the IWG and any cluster group or subgroup thereof, their private or outside affiliations, their time records, travel reimbursement records, payroll records, and conflict-of-interest forms.

Although the Defendants have provided lists of persons participating on the IWG, the response to the discovery requests are replete with evasiveness and lack of candor. The Defendants have refused to provide the time records, travel reimbursement records, and payroll records of all but 47 of the participants whom they have identified, claiming such information to be irrelevant. Such information is, of course, relevant to show a fixed membership and the formal structure of the group. The Defendants have also refused to provide relevant documentation showing the number of meetings attended by individual participants and the purpose of each meeting. Additionally, the Defendants have totally failed to produced completed ethics forms required by the Ethics in Government Act.

Under Rule 37 of the Federal Rules of Civil Procedure, any party who is refused or denied an answer to a relevant request for information may file a motion with the district court to obtain an order compelling the party to answer the request. AAPS recently filed such a motion; oral argument will be held in the weeks ahead. If AAPS prevails on the motion, it will be one step closer to proving that the IWG must disclose its minutes and working papers to the public.

With the Clinton Administration planning to unveil its ``health-care reform'' agenda in the coming weeks, exposure of the inner workings of the IWG will assist in the debate over the merits or fallacies of the plan.

Draft Revived

Although the appropriations necessary to keep the Selective Service alive and functioning were deleted from the budget bill, Senator Barbara Mikulski's (D-MD) subcommittee of the Senate Appropriations Committee has revived a proposal that would allocate $25 million to the Selective Service System beginning October 1.

The proposal must be approved by the Senate Appropriations Committee, the full Senate, and a House conference. The process will probably move swiftly.

Pete Stark (D-CA), a member of House Ways and Means, called the Selective Service a ``phenomenal waste of money.''

For a copy of the comments that AAPS submitted on this legislation, send a 9x12 self-addressed envelope to 1601 N. Tucson Blvd. Suite 9, Tucson, AZ 85716 ($2.90 postage for return by priority mail, $0.75 by first-class mail).

Control Through Medical Education: an Update

The AMA's view of its role in physician workforce ``planning'' is expounded in the Sept. 1, 1993 issue of JAMA:

``The AMA, with the largest and most accurate repository of information on GME [graduate medical education]...stands ready to provide...policy makers with the policy-relevant analyses required...[for] physician workforce planning'' (p. 1060). ``Goals could be subverted if residencies not approved for funding from the payer pool are financed from other revenue sources....One approach would be to accredit only positions funded from the payer pool. Students would accept unaccredited positions at their own risk because they would be ineligible for...board certification'' (p. 1082).

``Licensure has been used successfully in other countries to limit the number of practicing physicians'' (p. 1103).

``Convincing the medical education community that they must support workforce planning recommendations that may negatively impact some sectors of the medical community will require skillful consensus building....''(p. 1104).

``We need to teach [comprehensive, age-appropriate] health education like we teach math, every day in our classrooms.''
Joycelyn Elders, MD, responses to Senators' questions Tucson, AZ

New Members

AAPS welcomes Ocala Eye Surgeons of Ocala, FL and Drs. James Abbenhaus of Yakima, WA; Mark E. Anderson of Irvine, CA; John Bargren of Tacoma, WA; W. Ben Blackett of Tacoma, WA; Max W. Brachvogel of Tacoma, WA; Todd M. Chapman of Charlotte, NC; Patricia A. Charochak of Puyallup, WA; Peter M. Daloni of Sharon, PA; Devanand Anthony Dominique of Grand Forks, ND; Lee R. Dorey of Tacoma, WA; Jay H. Ehly of Tacoma, WA; Judith T. Feigon of Houston, TX; Enrique J. Fernandez of Bradenton, FL; Gloria W. Freundlich of Atlanta, GA; Albert F. Garib of Newport Beach, CA; Ronald E. Harbut of Page, AZ; G. Gilbert Johnston of Tacoma, WA; Nathan Kaufman of Farmington Hills, MI; John Kindzierski of Livingston, NJ; Robert W. Kuakle of Tacoma, WA; Bob Q. Lanier of Fort Worth, TX; Aaron M. Levine of Houston, TX; Neville A. Lewis of Tacoma, WA; Ralph Litton of Reno, NV; Juvis Maes of Aberdeen, WA; Leslie S. Malo of Tacoma, WA; George E. Maloof of San Francisco, CA; David T. Petty of Chicago, IL; Joe Phipps of DeSoto, TX; Edward Rensimer of Houston, TX; Jeffrey Rutgard of La Jolla, CA; Guadalupe Sanchez of St. Peters, MO; Elizabeth G. Sanford of Tacoma, WA; Joseph S. Schwartz of Clearwater, FL; Bryan L. Smith of Venice, FL; Michael Steiner of Seattle, WA; Stanley Terman of Encinitas, CA; and Dennis A. Wight of Tacoma, WA.

CLIA�The Inspections Begin

On August 1, the Georgia Dept. of Human Resources, acting as agent for HCFA, began inspecting the office laboratories of dermatologists who had registered last year under the CLIA regulations. This first inspection was touted as being ``educational,'' rather than punitive; presumably, subsequent inspections will be the latter.

The most frequently cited deficiencies mentioned by the inspectors were: the failure of dermatologists to document to temperatures of their refrigerators where the culture media for dermatophytes is stored and the temperature of the room where the cultures are incubated (although these temperatures are of no importance); failure to note the exact time to the nearest minute when a fungal culture was inoculated (though it takes more than a week to grow); failure to perform a Gram-positive and Gram-negative control for each and every Gram stain; failure to perform quality control testing (inoculation with a known pathogen and contaminant) on every lot of culture medium, even though the manufacturer is required to do this; failure to have a protocol for quality assurance (telling what action is to be taken if the medium fails the test); failure to have a job description for all the ``positions'' in the laboratory even if all of them are filled by the dermatologist personally; and failure to have proper laboratory requisition forms for ordering the tests.

Dermatologists were informed that the results of the inspection were a matter of public record, accessible to ``any interested person'' on demand. Physicians were assured that the names of our patients would not be made public. (Inspectors insisted on seeing actual lab records and patient charts if the laboratory results were recorded directly on the chart.)

An informal poll of the Atlanta Dermatological Association last spring showed that 40% of the membership had stopped all laboratory testing because of CLIA. The poll was taken before the onset of inspections.

Dermatologists were also informed that they would have to participate in at least four proficiency testing ``events'' annually, beginning in 1994, for every individual test that they perform. Most programs require the payment of $150 to $300 per test per year.

The major impetus for the promulgation of these regulations was inaccurate Pap smears, which are virtually never read in a physician's office. HCFA has yet to develop a program for inspecting cytologic laboratories.

It was particularly worrisome that the inspector wanted to record the names or Social Security numbers of ``typical'' patients who had had laboratory testing. We refused to let this information leave our offices, allowing only initials to be recorded.

The chilling effect of these inspections, along with the costs of the required licenses and proficiency testing, will undoubtedly discourage any further development of in-office procedures with their advantages of patient convenience, instantaneous reporting, and cost savings. (The screening culture for pathogenic fungi costs $15 in the office and $42 in the commercial laboratory.)
Don Printz, MD Lilburn, GA

[The newsletter of the Missouri State Medical Association, June, 1993, reports that HHS has spent $100 million to get CLIA off the ground, but thus far has collected only $20 million in ``user fees.'']

AAPS Calendar

Oct. 5. Board of Directors meeting

Oct. 6-9. 50th annual meeting, Menger Hotel, San Antonio, TX. For hotel reservations, call (800)345- 9285. To register, call AAPS at (800)635-1196.

Nov. 6-7. Medical Action Committee for Education, Philadelphia (see enclosure). Oct. 12-15, 1994, 51st annual meeting, Atlanta.

Legislative Alert

Trimming His Sails?

Going into the final (?) stretch, the latest word is that President Clinton will reveal his Health Care Plan on September 22. The most likely forum will be a special Joint Session of Congress. A comprehensive bill is not likely to be sent up to the Hill at that time. Look for serious legislative action in the spring of 1994.

While the outlines of the emerging plan look substantially the same as reported here last month (see AAPS News Legislative Supplement, Sept. 1993), Clinton's August 16 speech to the nation's governors suggests that the White House is cutting back a bit. (The Gergen influence?) The Plan will still have phased- in universal coverage, a standard benefits package, employer mandates and financing, and a system of geographically based health alliances (purchasing cooperatives) managed by the several states. But there are both subtle and important differences.

First, the subtle differences: 1. The phrase ``global budgets'' has been dropped for the nicer sounding ``spending caps.'' Call them ``expenditure targets.'' The plan is to cap spending in the Medicare and Medicaid program, then extend the caps to private insurance premiums. The savings�expected to be in the billions�are to help cover the currently uninsured. 2. A straight employer-based payroll tax is apparently ``out'' because it would be a tough sell. Instead, there is to be an ``employer-based premium contribution,'' ranging from 3.5% of payroll for small firms up to 7.5% for large firms for the ``standard'' benefits package. The maximum health insurance premium for the self-employed would be 9.5% of their earnings. Subsidies of some sort are expected for small firms.

The important differences: 1. Instead of the states, the federal government will have the responsibility to enforce the ``spending caps.'' 2. The exemption for big business is no longer on Hillary's kitchen table due to the obvious political problem of trying to sell a double standard (and the high-pitched objections of organized labor).

On the standard benefits package, the outlines are becoming clearer. Actually, two packages are expected: a fee-for-service family package, with a $400 family deductible and a $200 deductible for individual coverage, plus a 20% copayment for physician services. There will also be an HMO package with no deductible and a 10% copayment on physician services. Employers will be expected to pay 80% of the standard benefits package, and employees 20%. (Of course, as economists realize, health benefits are a one-to- one trade-off with wages.)

To limit his vulnerability on the tax-and-spend issue, the President is now offering only a set of new ``sin'' taxes on alcohol and tobacco, with an annual yield of $15 billion.

Marching Off to the Gettysburg of Domestic Policy

With the start of the Fall Offensive, expect an all-out public relations blitz. The Democratic National Committee and the National Health Care Campaign are sponsoring training sessions. Look for concentrated grassroots efforts using phone banks, the mail, and even neighborhood street canvassing. Former Ohio Governor Richard Celeste has been given field command.

In every congressional district in the country where it counts, congressional Democrats are being organized by Congressman Vic Fazio (D-CA) who is preparing his colleagues for dealing with the media. Members are advised to stress the ``drastic need for reform.'' Key allies are expected to be the AARP, the National Council of Senior Citizens, local mental health associations, nurses organizations, members of the Red Cross, the American Cancer Society, the ACP, and the AAFP.

The Clinton forces' lines of attack are crystal clear. If congressional Republicans are shocked by the vigor of the White House offensive or thrown into confusion or find themselves on the defensive in the coming public-relations blitz, they have no excuses. They will not be fighting on the comfortable turf of tax- and-spend politics but on an issue where the congressional Democrats can and will make a powerful and voter-friendly political appeal: ``security.'' The second major theme will be ``savings.'' The campaign will promise to stop the skyrocketing costs that are allegedly ``crippling'' business and ``exploding our deficit.'' The third major theme will be ``simplicity''�the Clinton Plan promises to reduce the complexity of insurance forms and claims processing and close the loopholes that effectively deny people coverage.

Capitol Hill insiders think that the Clinton team will capture the high ground of the national health- care debate during the initial stages of the Blitz. The big question is whether he can maintain his momentum. Arguing for his success are a few formidable advantages. 1. Whatever Clinton's weaknesses in governing, he displays awesome skills campaigning outside of Washington. On this issue, he will be switching into campaign mode. 2. The ``security'' issue (``we care, they don't'') has the potential to become the ``wedge'' issue that brings blue-collar Democrats back into the fold.

However, there is a chance that the debate will ultimately turn on taxpayer cost rather than taxpayer ``security,'' and the cost issue is getting an early airing.

Early Skirmishes on Cost

In early skirmishing, the Clinton Administration is finding itself on defense. In a study for the Health Care Leadership Council, a group of providers and insurers opposed to employer mandates, Lewin- VHI, Washington's top number-crunchers, estimated that the net cost of the Clinton health-care proposal would be $42.7 billion in the first year. The total cost of subsidizing insurance premiums for the uninsured would be $75.4 billion, of which only $32.7 billion would be offset by ``savings'' (price caps and such) in government programs such as Medicare and Medicaid. Lewin also estimated that the extra annual costs to employers for covering their workers would be $24 billion�more if additional Administration proposals are included.

The Clinton Administration's response to the Lewin study has been to shoot at the messenger and to attack the folks funding the study. According to a report in the August 20th Washington Post, White House spokesman Robert Boorstin said that ``Lewin-VHI is an extremely reputable company that is trafficking in ridiculous assumptions and drawing conclusions about a program that hasn't been announced.'' The Administration's cost estimates are said to be lower, but none of the math has been released. In the meantime, attacking Lewin-VHI, whose cost estimates are routinely used by congressional committees and major corporations, is not the best way for the White House to enhance its credibility on Capitol Hill.

Playing defense again, the Administration is trying to put out another fire: the projected labor costs of employer mandates. Like a witness being pressed by Perry Mason, the Administration is strongly denying that the job loss due to employer mandates will be as high as claimed. But there is a dispute about what their own estimates really show. Is it ``only'' a couple hundred thousand jobs? Or is it more?

Drs. June and David O'Neill, two professors from Baruch College in New York, have just completed a comprehensive study for the Employment Policies Institute. The employer mandate, subject of an August 20 story in the Wall Street Journal by Carlos Bonilla, translates directly into the loss of 3.1 million jobs, of which 75% will be in the low-paying service industries. The most significant increase in labor costs would be in restaurants and taverns, where an increase of 19.% would result in an estimated loss of 828,000 jobs. In retailing, a 7.9% increase would destroy 726,000 jobs; in agriculture, a 15.6% increase would kill 194,000.

In addition, mandatory health care costs cut wages or at minimum reduce wage increases. As Bonilla comments: ''A Blue Cross card won't pay the rent.''

Attacks by the Allies

In an August 10 article in the Wall Street Journal, Paul Ellwood, MD, complained that Clinton forgets his health-care allies. The Clinton policy wonks ``never embraced'' the managed- competition model that the President promoted during the campaign.

Ellwood described the White House Task Force and its working groups as ``exclusive, secretive, compartmentalized, and unduly complex.'' To start with, the Task Force was given contradictory instructions: employ the marketplace, while imposing government controls that weaken market forces. Then participants were asked to consider only disconnected parts of the problem, with ``no mechanism for assuring that the policy ideas were consistent with others or with experience.'' The New York Times, the national arbiter of what's politically fashionable and what's not, published an August 18 editorial that is hardly good news for the White House. Describing the President's remarks as ``maddeningly vague,'' the Times went on to lament the absence of genuine competition and incentives in the Clinton scheme and ended on this remarkable note: ``Once providers are forced to compete to survive, and consumers encouraged to make cost-conscious choices, Washington can let the states figure out their own solutions.''

Senate Republicans: Inching Toward Surrender?

While Congressman Richard Armey (R-TX), the unofficial leader of seriously combative Republicans, is regularly unleashing preemptive salvos against the emerging Clinton health-care plan, Senate Minority Leader Robert Dole of Kansas stunned Capitol Hill conservatives by saying he could go for ``sin taxes'' as a way to help finance health-care reform. While drawing a line in the sand against new payroll taxes, Dole's early signals to the Clinton Administration are troubling to Senate and House conservatives who want to go on the offense with a comprehensive and politically attractive plan of their own. Not only that, Capitol Hill conservatives view Clinton in a seriously weakened political condition with progressively lower reserves of political capital. (Popular support for the Budget Plan actually dropped after Clinton's nationally televised speech. Phone calls to House and Senate offices were often running ten to one against the plan.)

In the meantime, Dole has been encouraging Senator John Chafee (R-RI), the Chairman of the Senate Republic Task Force on Health Care Reform, who is in favor of ``managed competition,'' whatever that happens to mean at the moment. Like President Clinton, Chafee still doesn't have a bill.

In response to Clinton's August 16th speech to the National Governors Association, Chafee quickly circulated a statement of ``consensus principles'' signed by 24 Senate colleagues. This outlines three major goals: the maintenance of quality health care; the need for universality of ``coverage,'' and the need to restrain medical costs. Beyond that, the chief recommendation is that health care purchasing cooperatives be set up to promote bargaining between providers and consumers and employers.

This statement itself is evidence of the rift in Republican ranks. Leading Senate conservatives�such as Phil Gramm of Texas, Connie Mack of Florida, John McCain of Arizona, Dan Coats of Indiana, and Don Nickles of Oklahoma�are all missing from the line-up. While Chafee's staff keeps denying that there is a serious feud, it is well know that very basic policy divisions are emerging among Senate Republicans. The key issue: How much personal freedom should consumers have in making medical decisions?

On two issues, there does seem to be almost universal agreement. Senate Republicans, as indicated in a letter to President Clinton signed by 41 Senators, will oppose any employer mandate. Likewise, there will be strong GOP opposition to any global budget or expenditure targets.

`` Health Care Security Plan'': a Lexicon

A 47-page briefing paper called ``Health Care Update,'' dated August, 1993, is being distributed to congressional Democrats by the White House. The theme is: ``Health care that's always there.'' This piece helps to clarify the Plan, if you read between the lines. Here are a few important definitions (some based on the presentations at citizen forums now being held throughout the nation):