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Health Policy Advisory Center HEALTH HEALTH HEALTH HEALTH HEALTH HEALTH HEALTH HEALTH HEALTH Volume 16, Number 5 PAC BULLETIN FIGHTING BACK AGAINST THE EMPIRES Hospital Construction g Yy in New York City if # 4 MOD Bill Plymyota INSIDE South Carolina's New Assistance Program.15 Lead Poisoning and Public Policy * 21 Great American Health Fortunes " .29.29 Journalist seeks interviews on experiences with for profit - hospitals. Dave Lindorff, a New York jour- nalist, is currently working on a book for Bantam Books on the for profit - hospital industry. He is interested in hearing from any health professionals with concrete experience working in (or competing against) hospitals owned by any of the big corporate chains particularly - particularly HCA, Humana, AMI or NME. Particular areas of interest are such issues as quality of care, access for the poor, relative efficiency and cost, attitude towards labor unions, treat- ment of physicians and political activities. All interviews will be confidential if requested. Write Dave Lindorff at 235 West 102 Street, # 11 - I, New York, NY 10025 or call (212) 865-0697. - Health / PAC Bulletin Volume 16, Number 5/1985 Board of Editors Tony Bale Howard Berliner Carl Blumenthal Robert Brand Robb Burlage Robert Cohen Michael Michael E. Clark Tina Tina Dobsevage Peg Gallagher SallSyally Guttmacher Dana Hughes David Kotelchuck Ronda Kotelchuck Arthur Levin Steven Meister Cheryl Cheryl Merzel Patricia Moccia Regina Regina Neal Virginia Virginia Reath Hila Richardson Richardson Herbert Semmel Hal Strelnick Louanne Kennedy On Leave: Pamela Brier, David Rosner . Editors: Jon Steinberg, Kathryn K. Wheeler Staff: Nancy Bourque - Scholl, Roxanne Cruiz, Debra De Palma, David Steinhardt, Loretta Wavra Associates: Des Callan, Mardge Cohen, Barry Ensminger, Kathleen Gavin, Marsha Hurst, Mark Kleiman, Sylvia Law, Alan Levine, Judy Lipschutz, Joanne Lukomnik, Kate Pfordresher, Susan Reverby, Alex Rosen, Judy Sackoff, Diane St. Clair, Gel Stevenson, Ann Umemoto, Rick Zall. MANUSCRIPTS, COMMENTS, LETTERS TO THE EDITOR, AND SUBSCRIPTION ORDERS should be addressed to Health / PAC, 17 Murray St., New York, N.Y. 10007. Subscription rates are $ 22.50 for individuals, $ 45 for institutions. ISSN 0017-9051 1985 Health / PAC. The Health / PAC Bulletin is published bimonthly. Second class postage paid at New York, N.Y. Postmaster: Send address changes to Health / PAC Bulletin, 17 Murray St., New York, NY 10007. The Health / PAC Bulletin is distributed to bookstores by Carrier Pigeon, 75 Kneeland St., Room 309, Boston, MA 02111. * Design: Three to Make Ready Graphics / 1985 Cover by Bill Plympton Typeset by Kells Typography, Inc. Articles in the Bulletin are indexed in the Health Planning and Administration data base of the National Library of Medicine and the Alternative Press Index. Microforms of the Bulletin are available from University Microfilms International, 300 Zeeb Rd., Dept. T.R., Ann Arbor, MI 48106. Contents Vital Signs. 2.0.2.0. 000085. ae 5 Fighting Back Against the Empires Hospital Construction in New York City (A four - part series complete in this issue.) Back to the Drawing Boards.. eee 7 Redefining Some Grand Designs The Presbyterian Story... hance" 9 The People Pull the Strings for a Change The Mount Sinai Story ........... 12 Down From the Mountain and Into the Streets South Carolina's Medically Indigent Assistance..... 15 Program; Acute Care More Available, but Primary Care Neglected Bulletin Bo 0.0a 000r 0 ed ee e. ee ee 20 Saving Money, Losing Lives.. 21 Lead Poisoning and Public Policy The Great American Health Fortunes 29 Know N 00e 000w 2 cs ece. ee ns 35 Media Scan ...............0 00000 eee ee ee eee 36 Challenging the CON Game. Lect eee eas 13 Body English. 37 0003 0s cece7 eee e e e 2 Health / PAC Bulletin Notes & Comment HEALTH Health Policy Advisory Center Volume 16, Number 5 PAC BULLETIN FIGHTING BACK ; AGAINST THE EMPIRES Hospital Construction gf" in New York City Bill Pympt INSIDE South Carolina's New Assistance Program. 15 Lead Poisoning and Public Policy.......- 21 Great American Health Fortunes --....-. 29 In In n the past, " access " has meant the ability of the poor, minor- and other groups to gain entry into the health care system. Increasingly, however, the term can also refer to the ability of health care institutions to gain entry into the capital market. Capital financing, now a major health policy issue, is a major element in the " corporatization " of health care, as the dominant voluntary sector of the hospital system becomes integrally linked with the general economic system. There are two sides to the capital story: () 1 Getting the ap- proval of the regulatory agencies for major capital outlays, and (2) Obtaining the money itself through various financing mechanisms. Two years ago, the Bulletin described how a major struggle for capital was shaping up in New York State, as four of New York City's " medical empires, " the teaching and research centers, were seeking approvals for an exceptionally large total capital expenditure (Volume 14, Number 4). In this issue, we tell you what happened - and though many of the outcomes were predictable, there are a few surprises here! The articles on hospital modernization and construction are case studies of the politics of the Certificate of Need process, in a modern climate of competitiveness. They illustrate how the shrewdest medical empires can win the support of both the financiers and regulators in today's health care system, where the battle is for bonds rather than beds. We see, however, that some " good old fashioned - " ideas still work. Organizing and advocacy were behind some " surprise attacks " by community residents that gained for underserved communities some important concessions from both public planning agencies and medical centers. Although the New York State Health Department is relatively concerned about com- munity access, these concerns were initially subject to behind- the scenes - negotiations with the hospitals, rather than open discussion with the public. It was up to the communities, then, to make clear that the planning agencies'and health care insti- tutions'definitions of needs and how to meet them were not shared by the affected residents. An upcoming issue of the Bulletin will focus on some of the forces underlying the other side of the capital finance issue. We will discuss why Wall Street has become a major decision- maker in health planning; how competition for capital can af- fect the future configuration of the health care system, and also access to care; why all the attention given to capital may be a diversion from more fundamental policy issues. A changing economic environment is inducing new forms of adaptive behavior within health care. As the expensive nucleus of the system, the hospital sector is particularly vulnerable to cost containment efforts, new insurance mecha- nisms and the growth of less expensive alternatives to hospital care. More important, for the first time, public and private health policy reflect the view that health care organizations should be judged by the standards of the marketplace. Hospital modernization efforts are one facet of the corporatization of the industry, reflecting internal struggles to beat the competi- tion in the race for patient and financial markets. O Cheryl Merzel Cheryl Merzel is a member of the Health / PAC Board. Health / PAC Bulletin 3 Newly F& ully Revised ... Illustrated Know Your Body for Women Series GynecCohloegcickaulp T he E Breast Cancer Cancer Surgery Breast the 15 E Halsted radical Mastectoremmyov al of form the. surgical The oldest mastectomy breast the radical radical) breast. re-. (Halsted the entire fat and Lumpectomy moves the axil ary nodes, both the pec- af- lymph muscles on all over. toral fected side and skin In ex PRIMARY TUMOR lving fat and radical mastec mam- ttemonadmerydy , thel ymipnht ebrrenaastlb one nodes) AREA (under sometimes the a portion be in- CUT AWAY andc olfu tdhee rdi bctaghe eM odsifuierdg miayc raadli cbalr erea- st and sopmee cort omorsta lmu smclie naoxirl - iiss involves entire moval of the nodes The major the pectoralis com Modified radical lary lymph. but sometimes called simple Some or axil- presTeortvale dm arsteemcotovmeyd th(ea lrsemoo vtalh eo fb bree aresmto voedn lcyon.s ervative pro- pl lete)a noder s is y may e xtens( ive at lso oh f sege menta l mtahset)e crtemoomvya lo f. The most is the partial quadrantectomy surrounding normal muscle cedures sometimes called a wedge of and part of the for the re- the tumor plus overlying skin excision calls of adjacent nor tissue, some (lining) A wide and a margin is a term meaning biopsy is Simple mastectomy fascia moval of the tumor Lumpectomy An excisional E meaxlc iussisoune eoqfu iovnalleyn tt hteo tau mporro cleudmusproeescm teoorm ya loln loyf atrhee roafpty etnh leay cmcpho ma nd. These conservative by removal of by radiation wel panied nodes and chemotherapy followed as perhaps Each pamphlet gives detailed information Quadrantectomy on common health problems and concerns- Y' self care - techniques Y' when to contact a health - care provider Y' your rights as a health - care consumer Y' knowing what's normal for you. " The Know Your Body series is a valuable self help - tool for women. Written in clear, everyday language, these pamphlets are a must for every woman's bookshelf. " - Barbara Ehrenreich author & women's health activist What Can One Woman Do? (a review of patients rights) The Gynecological Checkup Infections of the Vagina HealthStory (your personal health record) First Trimester Abortion Second Trimester Abortion Menopause Breast Cancer Facts A Woman Needs to Know Complete Set of 8 Booklets ADD Postage & Handling " TOTAL AMOUNT Quantity Price - $ 50 Total $ 100 -- ____ $ 1.00 --- -___ 1.00 $ - ss $ 1.00 $ 1.00 100 $ $ 100 $ 6.00 _ $GA * For 1 booklet send self addressed - stamped envelope for 2 add 50 . orders over $ 2 to $ 5 add 75 . orders over $ 5 add $ 1 Please send orders to Health / PAC 17 Murray Street New York, New York 10007 Bulk rates available available upon request. Name Address City State Zip 4 Health / PAC Bulletin Vital Signs Ron J. Lambert Director, Customer Relations and Sales Services Pharmaceutical Division Telephone: 800-247-7220 No Comment William E. Lipscomb, Jr. Vice President, Customer Relations and Sales Services Consumer Products Division Telephone: 800-446-2613 In August 1985, the A.H. Robins Company, maker of the Dalkon Shield, followed the lead of the Manville Cor- poration by filing for bankruptcy to pro- tect itself from growing losses in product liability suits, brought by women injured by the Dalkon Shield intrauterine con- traceptive device. The following letter was sent to pharmacists who do business with Robins: Dear Customer: On August 21, 1985, A.H. Robins filed for reorganization under Chapter 11 of the United States bankruptcy code. We feel that it is important that you, as a good customer of A.H. Robins, * know precisely what this action means to your operation and your relationship to our company. The filing for reorganization was made necessary by the continuing and growing burden of litigation related to the Dalkon Shield. As I stated in announcing the ac- tion, it is essential that we move to pro- tect the company's economic vitality against those who would destroy it for the benefit of a few. It is our view that the reorganization will benefit all concerned -the company, its employees and stock- holders, creditors and customers, as well as those wishing to assert Dalkon Shield claims. Please be assured that in no way will this action affect the quality or availabil- ity of any product marketed by A.H. Robins or its subsidiaries, nor will it af- fect the service you have come to expect. In short, A. H. H. Robins will continue to do business as usual and, obviously, we will need your cooperation and support more than ever before, and we will strive to be even more attentive to your needs. If you have any questions, we hope that you will address them to the appropriate person whose name and telephone num- ber follows: We appreciate your business and your understanding and, again, we wish to stress that our main concern is to con- tinue to provide the products and ser- vices which will assure our continued mutual growth and success. E. Claiborne Robins, Jr. * Emphasis added, in all italicized material. Learning to Kiss the Blarney Stone Blarney is skillful flattery, and accord- ing to legend, those who kiss the stone in Blarney Castle near Cork, Ireland, ac- quire a talent for it. And with his Irish blarney showing, Ronald Reagan an- nounced this past fall that his Secretary for Health and Human Services for two short years, Margaret M. Heckler, was to become Ambassador to Ireland. In the weeks before the announce- ment, the mainstream press was filled with " malicious gossip, " as the President himself once described the allegations leaked by White House staff, and Heck- ler's efforts to fight to retain her position. Heckler's departure was portrayed as the assertion of power of the new chief of staff, Donald T. Regan, within the White House. Regan, who has disliked Heckler since he was Secretary of the Treasury and they were equals in the Cabinet, ap- parently had her resignation on the top of his list since becoming chief of staff shortly after Reagan's re election - . He sent her " signals of nuclear proportions " that he wanted her to leave. However, she not only refused to hear the signals, but went to Republican supporters in Con- gress such as Utah Senator Orren Hatch, Wyoming Senator Alan K. Simpson, and Mississippi Congressman Trent Lott, and had an aide tell the press that " the chief of staff didn't hire her, and he doesn't fire her. " Before her appointment as Secretary, Heckler had served 16 years in Congress and earned a reputation as a liberal on social issues and women's rights. She voted against the Reagan Administration 43 percent of the time in 1981 and 56 per- cent in 1982. Although she maintained. that she " faithfully carried the President's portfolio, " ongoing conflict with the White House and Office of Management and Budget led to many key vacancies in her department and confusion over where domestic policy was to be made. Compared to the ideological conserva- tives that dominate the Reagan Adminis- tration, Heckler supported increased research on AIDS, more effective legis- lation on child support by absent fathers, and compromise with Congress on So- cial Security disability. She was accused of being " very individualistic " and a poor administrator. Actually, she had just outstayed her usefulness. Heckler was appointed " in 1983, over the objections of conserva- tives, to blunt the growing charges of un- fairness and insensitivity of the Reagan Administration to the poor. Her job was to create an appearance of compassion, and to reverse the Administration's im- age on the " fairness " issue. Once Reagan was re elected - , this was no longer neces- sary. She would have left Washington sooner, had she and the President not undergone surgery at about the same time. She had also gone through a diffi- cult, highly publicized divorce that hurt her standing with the President's closest advisor, Nancy Reagan. Perhaps the last nail in the coffin was Heckler's insistence that a damning Re- port of the Secretary's Task Force on Black and Minority Health be given ex- tensive press coverage. While she and the Report maintained that the improve- ments necessary to eliminate inequities in minority health could be achieved without one extra federal dollar, the details and statistics of the Report belied this posturing. While only the first volume of the seven projected has been published, many believe that even this one is a minor (and minority) miracle for this Administration. Of course, since Heckler's departure, it has almost been Health / PAC Bulletin 150 impossible to get a copy of the Report. (See Bulletin Board for details.) So, Margaret Heckler, whose blond wig had become as much a symbol as Jack Kemp's coiffure around Washing- ton, will now have to learn to kiss the Blarney stone and carry the President's portfolio back to Ireland. A'Country Doctor'for HHS Before Margaret Heckler could pack her new shoes for Ireland, a long line had formed to fill the old ones. Health and Human Services, the largest federal agency with more than 120,000 employ- ees and a $ 330 million budget is quite a plum. Public speculation included: Michael Novak, a conservative Catholic Demo- crat who holds a chair in religion and public policy at the American Enterprise Institute; Dr. Tirso del Junco, an His- panic Los Angeles surgeon and long- time Reagan supporter; Anne L. Arm- strong, former Republican National Committee co chair - and Ambassador to Britain; Anne Dore McLaughlin, the Under Secretary of the Interior; Karl D. Bays, chairman and CEO of the Ameri- can Hospital Supply Corporation, who jilted Hospital Corporation of America for Baxter Travenol in a recent merger; James K. Cavanaugh, a recycled health specialist from the Nixon and Ford Ad- ministrations; John A. Svahn, former Under Secretary of HHS who clashed with Heckler there and left for the White House to become domestic policy chief; and David B. Swoap, California's current Health and Welfare secretary. Washington handicappers had their equivalent of Superbowl Sunday with the speculation. Novak would have played to Catholic ethnics, del Junco to Hispanics, Armstrong and McLaughlin to women, Bays to business, Svahn or Swoap to con- servatives. When both Svahn and Swoap removed themselves from consideration, all bets were off. In the end, Dr. Otis R. Bowen, the country doctor from Bremen, Indiana, walked away with the nod. Dr. Bowen is a family physician who practiced all dur- ing his 15 years in the state legislature before becoming Indiana's Governor for two terms in 1973. Bowen chaired the Social Security Advisory Council in 1983, which was charged with making proposals to prevent the Medicare trust fund from bankruptcy. Most oppostion came from anti abortion - organizations, who claimed he supported both abortion and euthanasia. Bowen, in fact, opposes abortion on demand, like all members of the Reagan Administration, but supports abortion to save the life of the mother or in cases of rape or incest. He has also supported " living wills, " in which an in- dividual may direct that " heroic meas- ures " not be taken if he or she is hope- lessly ill. In 1986, being a moderate in Washington is a radical act. New York State Wavers On its Waiver New York State has given up its Medi- care waiver and is joining the national Prospective Payment System. New York State hospitals will now be reimbursed by DRG's (Diagnosis Related Groups) for their Medicare inpatients. The current progressive system to compensate hospitals for bad debt and charity care and to help financially distressed hospitals will continue for the present, supported as before by a sur- charge on hospital revenues. Private, Blue Cross and Medicaid reimburse- ment will stay under this system, known previously as NYPHRM (New York Prospective Hospital Reimbursement System) and now renamed NYPHRM - II. The New York State Hospital Associa- tion (HANYS) lobbied hard for dropping the DRG waiver. HANYS conducted a computer simulation of what Medicare revenues would have been under the na- tional DRG's and found that New York State hospitals were losing $ 250 million under the NYPHRM system. Moreover, the hospital industry was unhappy with the power that the State Department of Health could exert through its control of most of their revenues. And since these were federal dollars not coming into New York State, the state legislature was happy to return Medicare cost control back to Washington. Now, New York hospitals are working under conflicting incentives: The per diem system for private, Blue Cross and Medicaid patients encourages longer lengths of stay, while Medicare's DRG system encourages shorter stays but more frequent admissions. Confusing? The DRG system remains a serious threat to public hospitals, since the Reagan Administration has been unwav- ering in its refusal to act on the feature that Congress enacted to protect hospi- tals caring for a " disproportionate share " of poor patients. New York City, with its 11 acute care public hospitals, will be particularly hard hit. Meanwhile, across the Hudson River, New Jersey has been arguing for months with the Health Care Finance Adminis- tration (which runs the federal Medicare program) for a waiver renewal that would take some of New Jersey's savings from inpatient care and apply them toward ambulatory and primary care. Could this be the reason all New York's professional football teams have moved across the river to the Meadowlands? Stay tuned. C] 6 Health / PAC Bulletin Back to the Drawing Board Redefining Some Grand Designs by Peggy Gallagher Ear arly in 1983, the New York State Hospital Review and Planning Council found itself facing a record $ 5 billion worth of hospital construction plans, despite the fact that the state was considered seriously overbedded. Of that amount, almost $ 2 billion could be attributed to just four hospitals, major academic centers and " medical empires " in New York City. At the urging of the Governor's special Health Care Capital Policy Advisory Committee, the state review council imposed a one year - moratorium on approvals, to provide time to eval- uate the plans. Concurrently, the advisory committee set forth the following recommendations for making the health care system more responsive to the needs of the entire community: 1. Establish institutional, regional and statewide five year - plans that project capital needs. 2. Develop criteria to rank the " relative need and affordability " of the plans. 3. Broaden the representativeness of public health planning bodies. Of the medical empires, the State Commissioner of Health, Dr. David Axelrod, would later say: They " have not always dealt with the interests of society, but rather with the interests of the institutions.... " ' Plan for the Poor ' During the moratorium, Governor Cuomo and Commis- sioner Axelrod declared that plans addressing the needs of the poor would be given the most favorable reviews. State regula- tors announced they would require the major institutions to serve the needy, in return for approving construction. Since three of the New York City hospitals with expansion plans were near the medically underserved areas of Washing- ton Heights / Inwood and Harlem, health advocates watched hopefully as the state seemed to insist that the tertiary institu- tions would be accountable to their surrounding communities. At the same time, advocates were well aware of the weaknesses in the regulatory process. Health / PAC's New York City Work- ing Group warned that the moratorium might be " no more than a delay " and limits on capital spending " an idea whose time has not come. " Hospitals Revise, State Buys The moratorium put on hold the plans of four major Manhat- tan teaching and research centers. Peggy Gallagher is a member of the Health / PAC Board. Mount Sinai Hospital, on Manhattan's upper East Side, had a $ 450 million plan to consolidate its 1212 beds, which were spread throughout nine buildings, into three new buildings. New York Hospital - Cornell Medical Center, also on the upper East Side, had a $ 500 million plan that included con- struction of an 11 story - atrium. Presbyterian Hospital hoped to spend almost $ 500 million to renovate its current site in northern Manhattan, and to build a new community hospital. St. Luke's Roosevelt / Hospital, located on two sites in the quickly gentrifying upper West Side, wanted to spend $ 400 million reconstructing facilities for 800 beds and renovating space for another 400 beds. During the moratorium, New York Hospital and St. Luke's / Roosevelt, which had not yet filed, remained relatively quiet about their own expansion plans, but were told off the record to scale them down. Presbyterian pressed its case, arguing that it was, indeed, addressing the needs of its community. Shortly after filing a plan to renovate its main site only, the hospital had modified the proposal, at the urging of state and city planners. Presbyterian re presented - its Certificate of Need (CON) in a new package - as a " regional plan " for northern Manhattan. The main site would continue as the tertiary institution and a new community hospital would serve as a secondary care center. In addition, Presbyterian would establish an ambulatory care network that would locate additional primary care physi- cians throughout the community. Presbyterian officials said this three - tier plan would meet the health care needs of the Washington Heights / Inwood community, which had lost a number of health services over the past 10 to 15 years, including four community hospitals. Apparently convinced, the state overlooked substantial ques- tions raised by the community about access to the new com- munity hospital and the adequacy of the ambulatory care net- work. Despite protests from segments of the community, Com- missioner Axelrod pointed to the new proposal as proof that state and city agencies could, in fact, shape the development plans of tertiary care institutions. The moratorium ended on December 31, 1983, and within four months, Presbyterian's plans had been praised and ap- proved by both the New York City Health Systems Agency (HSA) and the State Office of Health Systems Management. It would later be up to the North Manhattan Health Action Health / PAC Bulletin 7 FIGHTING BACK AGAINST THE EMPIRES Y- Y- kK kK KKK KKK KK KK KKK KKK KK kk Group (NMHAG), a group of eight local residents who had organized to analyze Presbyterian's proposal, to persuade the state to require some changes see (separate story). Although Mount Sinai also repackaged its plan, the proposal was initially rejected by the HSA, which cited lack of com- munity access as a major problem. Many health advocates believe the rejection resulted in part from the concerns being expressed about Presbyterian by NMHAG, and from a com- plaint filed by Community Action for Legal Services and the New York Lawyers for the Public Interest (see separate story). The charge: That " New York's health planning agencies have failed to consider, review, analyze or even collect data on ac- cess to medical care for low income persons, racial and ethnic minorities, the handicapped, women, the elderly and other underserved groups. " Nonetheless, in January 1985, the Project Review Subcom- mittee of the HSA approved a revised Mount Sinai plan on the condition that the hospital promote primary care in East Harlem and also affiliate with that community's financially troubled North General Hospital. But The Poor Are Still Missing The state's recommendations that Presbyterian build a com- munity hospital and that Mount Sinai serve some of its East Harlem community were worthy attempts to make the system more responsive to community needs. Unfortunately, however, both the Presbyterian and Mount Sinai plans were approved without addressing the needs of the community as seen by the community members themselves. The resulting actions were considerably off target - ; despite the apparent attention to com- munity, the most needy were still not being served. The community of Harlem is one sad example of a consti- tuency overlooked through health planning that is more institution - based than community - based. It is a community surrounded by three of the four New York City hospitals who wanted to spend almost $ 2 billion for facility construction; yet, none of that spending was aimed at addressing the needs of Harlem residents. The St. Luke's Roosevelt / catchment area excluded most of Harlem, and Mount Sinai excluded it altogether. In addition, despite the fact that between one fourth - and half one - of Presbyterian's emergency room and clinic patients come from the Harlem community, Presbyterian plan- ners defined their service area as stopping right at the Harlem border. Harlem residents are desperately in need of primary care. In 1982, for example, 35.9 percent of the women having babies in Central Harlem received late prenatal care or none at all, compared with 20 percent citywide; and the low birthweight - rate in Central Harlem was 16.3 percent compared with 8.7 per- cent citywide. To lower these rates, the residents need accessi- ble primary care that they are not now getting. The Harlem community has two public hospitals, but both are in need of extensive capital construction. Metropolitan Hospital, threatened with closure just a few years ago, needs $ 9.5 million for construction to correct code violations. Harlem Hospital, which is affiliated with Columbia Univer- sity's medical school, needs 26 $ million to correct code viola- tions and to make some improvements. Since New York City's public and small voluntary hospitals serve substantial numbers of the poor, it is their capital con- 8 Health / PAC Bulletin struction that should be a state priority. But it could take a 21st Century Robin Hood to snatch even a small portion of the diminishing construction dollars still going to the giant medical empires. The moratorium itself failed to live up to its promise. No systematic means of assuring community access were devel- oped during that period. Further, the multimillion - dollar modernization proposals were approved by the state after the hospitals repackaged them, partially, to include what appeared to be community - oriented provisions. Only persistent com- munity action forced the state to recognize, finally, that most community needs were not being met. There were some positive outcomes, however. The com- munity eventually won some changes in the proposals that, while not monumental relative to the hospitals'overall plans, were significant to community residents. Even more impor- tant: Although the empires still dominate New York City's health care system, they no longer rule unchallenged. Howels Mead John kok kw kkk kkk ok kk Kw kk kw & we ke Y- FIGHTING BACK AGAINST THE EMPIRES The Presbyterian Story The People Pull the Strings for a Change by Peggy Gallagher I In 1984, at a time when the supply of hospital beds throughout the country was being carefully monitored, Presbyterian Hospital, a 1291 - bed teaching and research center in northern Manhattan, received approval to spend about $ 500 million to renovate its current site and to build a new 300 - bed community hospital. Its first bond issue to provide funds for the construction was, at $ 427 million, the largest hospital bond issue in history. Presbyterian's proposal was approved, only months after New York State had lifted its one year - moratorium on hospital construction, because the hospital had said it would serve the surrounding community of Washington Heights / Inwood. However, the members of that community raised serious ques- tions concerning the hospital's abilities to meet their needs. Access to comprehensive quality health care has long been a concern of the residents of this community. Four out of five community hospitals have gone bankrupt and closed in the last 15 years. These closings have meant a loss of access to emer- gency and clinic services, hospital beds, and more than 1000 jobs. In addition, family practitioners were becoming increas- ingly scarce in the community and the average age of those re- maining was 62 years. Consequently, residents were becom- ing more and more dependent on Presbyterian Hospital, the only major health care provider in the area. Community Spells Out Needs When Presbyterian announced its expansion plans - and they went essentially unchallenged - a skeptical group of Washing- ton Heights / Inwood residents decided to conduct their own health needs assessment to determine whether the plans were really relevant and appropriate. In September 1983, they started the North Manhattan Health Action Group (NMHAG), whose eight original members conducted a survey of the community, with technical assistance from the Community Service Society of New York City. The group describes Washington Heights / Inwood as a diverse community - geographically, ethnically and econom- ically- of about 200,000 people, with six distinct neighbor- hoods. In general, the neighborhoods to the west have an older population with higher incomes and relatively good medical coverage; by contrast, those to the east are young, poor and medically indigent. All but seven of the community's 32 cen- sus tracts are identified as Medically Underserved Areas, and Peggy Gallagher is a member of the Health / PAC Board. a majority are also designated as Health Manpower Shortage Areas. According to William Alicea, a NMHAG founder and co- chairman, with Hildamar Ortiz: " Health was not an issue until recently -- we had five hospitals - but we have lost all but one of our hospitals and we have seen a tremendous change in demographics in the last 15 years. " In 1970, 20 percent of the community were from minority groups. In 1984, however, the figure was 72 percent, more than half Hispanic, predominantly Dominican. In 1970, 10 percent of our community lived below the poverty level. Today it is 27 percent, and the number of residents living on public assistance is 60 percent higher than the New York City average. Consistent with this change, there has been an increase in the number of people who do not have health insurance, and who cannot afford to pay the high costs of health care. " For three months, the eight NMHAG members conducted interviews, in Spanish and English, of some 600 Washington Heights / Inwood residents, to determine their health care ex- periences and needs. Using a 10 page - questionnaire, they found that 25 percent of the community's residents use hospital clinics as their primary source of care, compared with 9 percent citywide. Further, 12 percent of the respondents use an emergency room as their major source of care, compared with only 3 percent citywide. Not surprisingly, residents living in the insured, higher income neighborhoods reported having ac- cess to private physicians, while their poorer neighbors tend- ed to rely on the emergency room or clinics for their primary care. The group also conducted a physician survey in which they identified only 54 full equivalent - time - primary care physicians in the area. According to Alicea, this is fewer than one physi- cian per 3500 residents, at least 25 percent below the state average. Forty percent of the physicians practicing in the area reported having no admitting privileges, and those who did were admitting mostly to hospitals outside the community. After reviewing all sources of care in the community, including the City Department of Health physicians and the Presbyterian Outpatient Department, NMHAG determined that at least 55 additional primary care physicians were needed in the com- munity to meet the needs of its residents. Health statistics for the area indicated that the most press- ing health care concerns in northern Manhattan were distinct from those of the city overall. The average death rate is lower in this community than in the rest of the city for the usual Health / PAC Bulletin 9 FIGHTING BACK AGAINST THE EMPIRES Y- k kK kk KKK Kk KKK KKK KKK KKK* Kk Map of Upper Manhattan Showing Sites of Proposed, Existing and Closed Hospitals Legend wa Washington Heights / Inwood mms East, Central and West Harlem Site of proposed new community hospital to be built by Presbyterian Hospital. || Hospitals closed since 1969. Hospitals currently open. 1. Pres byterian, voluntary, 1291 beds. 2. Harlem Hospital Center, city, 781 beds. 3. St. Luke's Division (St. Luke's / Roosevelt), voluntary, 774 beds. 4. North General, voluntary, 200 beds. 5.6 .5 .M eMtoruonpto lSiitnaani ,H ovsopliutnatla rCye,n 1t2e1r2, bceidtsy., 621 beds. 7. Roosevelt Division (St. Luke's / Roosevelt), voluntary, 563 beds. 155th Street N ' Outline of Manhattan, with Upper Manhattan in grey. Sources: Community Service Society; New York City Health Systems Agency Medical Facilities Plan, August 31, 1983. 10 Health / PAC Bulletin 2 4 125th Street 3 Avenue Avenue Avenue 5 Avenue Avenue Fifth Fifth Fifth 7 59th Street and Ninth Avenue 110th Street 100th Street 6 96th Street KO Ok Ok kok ok ook ok ook kok Y-Y- Y-Y- FIGHTING BACK AGAINST THE EMPIRES leading causes of death: heart disease, cancer and stroke. However, disease rates for Washington Heights / Inwood are higher than those citywide for hepatitis, gonorrhea and lead poisoning; in addition, the birth rate, the percentage of women receiving late or no prenatal care, and the teenage fertility rate are all higher than those citywide. Hospital Plan Bars Access The North Manhattan Health Action Group issued a report entitled Washington Heights / Inwood Neighborhoods: Assess- ment of Health Care Needs. The report reviewed the communi- ty's health care resources, socioeconomic and other data, and concluded that community residents needed better access to inexpensive primary and secondary health services. It looked to NMHAG as though Presbyterian's plan was not addressing these needs, and, in fact, would be excluding the community from such services. Admission to a hospital is generally through one of three avenues: entrance through the emergency room, a referral from a hospital clinic, or admission by an affiliated physician. Plans for the proposed community hospital not only placed it in an area of least need, according to Alicea, but specified an under- sized emergency room that could handle only 27 visits a day. Further, there were no clinics planned, thus barring access via that avenue. The proposed community hospital was to receive most of its patients from private practitioners having admitting privileges. However, this method of entry would also effec- tively exclude community residents, as only three community physicians reported having admitting privileges at Presby- terian. Moreover, because hospital officials planned to use the same strict requirements for privileges at the new hospital that they use at the teaching institution, it was unlikely that many local physicians would qualify. Thus, local residents who would receive care from community physicians could not be admitted by them to the new community hospital. According to Presbyterian's plan, the necessary link between local physicians and the new community hospital would be pro- vided by the hospital's proposed Ambulatory Care Network Corporation (ACNC). The ACNC plan had been one of the things that helped to convince state and city planners of the suitability of Presbyterian's proposal overall. Presbyterian's planners had said that, based on a 1981 demonstration project of need, they would homestead " " 50 physicians in the com- munity; that is, loan them capital to start their own practices. However, since the ACNC's inception in 1981, it had not yet produced a single primary care site. Community Pressure Pays Off Presbyterian's expansion plans were approved by the state on the basis of proposed service to the surrounding community. The NMHAG investigation showed, however, that the hospi- tal's plans were more focused on the interests of the institu- tion than those of the community. The group determined to make Presbyterian more responsive to community needs and to make state regulators more vigilant in their surveillance of the hospital's contributions to community service. They conducted an intensive, highly organized " bottom up " campaign that included the following: * They decided to focus on the issue of primary care rather than the location or services of the community hospital, which they viewed as " after the fact. " They wanted to em- phasize prevention. i At first, they met extensively with Presbyterian officials, whose strategy, Alicea says, was " to meet us to death. In response, we not only met with them, but requested more meetings, more documents. " * They also talked with residents wherever they could find them - in community groups and at schools. " We went to all community meetings, " Alicea recalls. " We spoke to the in- terests of each group, and we made the strength and syner- gism of eight touch hundreds. " When they felt they were not getting an appropriate response from the hospital, they decided to bypass Presbyterian and went to the State Commissioner of Health, Dr. David Axel- rod. " We were encouraged by his response, at first, " Alicea says, " but later, when he praised Presbyterian's plans, we felt he still did not understand how little those plans would actu- ally do for Washington Heights / Inwood. " They wrote a let- ter restating their position, but nothing much happened, and they wrote again. On May 25, 1985, with a grant from the state they had re- ceived after their first meeting with Dr. Axelrod, NMHAG held a public hearing in their poorest neighborhood under a banner that read " Let's Keep Them Honest. " The hearing was attended by 300 people including three representatives from the State Department of Health and three from Presbyterian, led by its new president. A report of major aims and demographic statistics was issued, and 62 in- dividuals and community - group representatives testified, over a seven - hour period, to their specific needs for improv- ed health care services. As was true at all major meetings, discussions were bilingual, and day care services were provided. The proceeds were transcribed and distributed, to repeat the messages again. " We had really'organized out - ' our- selves, " Alicea says proudly. * The hearing helped to get the action they needed. The group met for a second time with Dr. Axelrod, who subsequently directed Presbyterian to work with NMHAG to resolve the issues and to produce a model for primary health care in the community. " In effect, " says Alicea, " Presbyterian wanted to cover the world to consider its catchment area as global - but the state said'If you want to use government money, you have to accept responsibility for the community in which you reside. They even had to revise their mission statement to acknowledge that responsibility. " * A signed agreement was reached early in the fall. Agreement is a Major Achievement " After all our research, we had decided to focus on the issue of primary care, and we had two major objectives, " Alicea re- counts: " To get primary care services consistent with the needs of the neighborhoods, and to get those services placed in areas of greatest need. As basic as those two principles are, they were hard to achieve. " The major points of the document provide for the following: Agreement on the general location, size and scope of ser- vices for four ACNC sites to be established in 1986. Health / PAC Bulletin 11 Cary yt ee FIGHTING BACK AGAINST THE EMPIRES Y- oeoeoe oeoeoe KKK KKK KKK KKK xf kak KK KKK ' * Agreement on a special - focus geriatric program in a hous- ing development containing a large number of elderly. Agreement on the general nature and extent of the shortage of physicians and on collaboration to develop ways to redress that shortage. * Agreement on the makeup of a steering committee to assure continuing community input into the Ambulatory Care Net- work Corporation overall; also, agreement to establish a con- sumer advisory group at each site, and to hold public meetings to obtain additional input. Additional agreements addressed the composition of the primary care team, access to physicians, admitting privileges, the importance of health education and disease prevention, fee schedules, transportation- transportation- and one of the most important pro- visions, according to Alicea- adequate bilingual staff. And what now? " We will continue to serve as a research, planning and ad- vocacy group for the Washington Heights / Inwood communi- ty, " Alicea reports. " We have now grown to a membership of 300 individuals and organizations, we have just incorporated, and we are already working on our next projects - a birthing center and a comprehensive school health program. " If more than four or five people are interested in some health issue, we'll listen, " Alicea says. " We're not politicians, we're health advocates, and we're about work. We'll lend sup- port, and we'll make it happen. " C] Pee walxxxiv. The Mount Sinai Story Down From the Mountain and Into the Streets by Judy Wessler In 1981, New that ' n November 1981, The New York Times announced that November November 1981 The York Times Times announced announced of construction and renovation. When the 1983 moratorium on approvals of large hospital construction projects delayed the program, Mount Sinai was undeterred. It pushed forward with its proposal and ultimately gained approval for it, at a new pro- jected cost of $ 488 million, in March 1985. But it was not the original proposal that was approved. Dur- ing the intervening years, this prestigious medical center had to make several changes in its plans, and agree to assume a cer- tain amount of responsibility for the health status of the poor East Harlem community in which it is located. Judy Wessler is Health Advocacy Coordinator at Community Action for Legal Services, New York City. Three events influenced the ultimate decision on Mount Sinai's application. * The first was the moratorium. During that year, the State Health Commissioner, Dr. David Axelrod, and the federally funded Health Systems Agency (HSA) developed regional- ized plans that called for major medical centers such as Mount Sinai to take responsibility for the continuing viability of smaller, financially troubled community hospitals. Thus, Mount Sinai was to become the " big brother " for North General Hospital, the only black - run voluntary hospital in Harlem. * Second, a coalition of community groups and individuals filed a civil rights complaint against the State Department of Health and the HSA in May 1984 (see separate story). The complaint alleged that, during the Certificate of Need review 12 Health / PAC Bulletin process, these two agencies - contrary to federal laws and regulations - were ignoring the issue of access to medical care for low income - persons, racial and ethnic minorities, the handicapped, women, the elderly, and other underserved groups. The agencies'gradual acceptance of this review responsibility affected the outcome of Mount Sinai's application. * Third, in 1983, the East Harlem Community Health Com- mittee (EHCHC) - a coalition of community - based primary health care providers and human service organizations - - had organized to help fight a city proposal to impose a man- datory case management - system for East Harlem's Medicaid recipients. After the proposal was defeated, the EHCHC continued to monitor public policy and legislation affecting the health services in the community, and got involved in the review of Mount Sinai's application. Contrary to their usual accommodating behavior when reviewing an application from a politically well connected - hospital, the HSA staff expressed concern and raised some questions about Mount Sinai's proposal. Approval was delayed ostensibly - ostensibly to get more information, but more than likely to work out a more favorable deal for North General Hospital, which needed financial and other assistance from Mount Sinai. Mount Sinai was never pressed very hard on its not terribly- - good record of caring for the medically indigent. However, ap- proval of Mount Sinai's application became contingent on its agreement to be more responsive to the needs of the East Harlem community, to reduce its size by 100 beds, and to develop a stronger affiliation agreement with North General. Mount Sinai agreed to work in a consortium with other East Harlem health providers in developing a prenatal care pro- gram, an organized health education and promotion program, a plan to increase the availability of ambulatory care, and a proposal to regionalize ambulatory care services for East Harlem. The consortium was to be developed by the Health Systems Agency, but because the staff was busy with other tasks, it accepted an EHCHC proposal that the community group serve as the consortium. In effect, the HSA allowed Mount Sinai to retain some in- fluence and control over the consortium's planning process when the agency recommended the School of Medicine's Department of Community Medicine as the technical resource in collecting and analyzing data, and making recommenda- tions. It is unclear how committed either the State Health Department or the Health Systems Agency is to guaranteeing that the East Harlem community will benefit from this plan- ning process, and it will be up to the EHCHC to assure that the process is more related to the community's health needs. than to Mount Sinai's institutional priorities. In one sense, then, it may be " business as usual. " On the other hand, it was, until recently, highly unusual for the agencies. to tell any medical empire what to do. In that respect, the Mount Sinai application stands as a breakthrough in the grant- ing of Certificates of Need in New York City. Oo Challenging the CON Game by Cheryl Merzel A of encouraging coalition of health advocacy groups in New York City has dosdition the way of encouraging public planning agen- cies to take their legal obligations to the underserved more seriously. In May 1984, two groups - Community Action for Legal Ser- vices and the New York Lawyers for the Public Interest - filed a complaint with the regional Health and Human Services Of- fice of Civil Rights (OCR), on behalf of a number of local organizations and individuals. The complaint charged that New York's Certificate of Need process (CON) was failing to comply with federal anti discrimination - and access regula- tions. These regulations include rules which state that a federally funded planning agency's Certificate of Need review must include written findings on the accessibility of a health. Cheryl Merzel is a member of the Health / PAC Board. care facility to low income persons, racial and ethnic minorities, the handicapped, women, the elderly, and other underserved groups. After a year and a half of negotiations and some foot drag- ging by the OCR, the New York City Health Systems Agency (HSA) and State Department of Health finally settled with the complainants in order to avoid an official investigation by the Office of Civil Rights. That settlement represents a first - step victory in making New York's planning process systematically address access issues. The Complaint Encouraged by a successful OCR complaint against the health planning agencies in Tennessee, the New York advocacy organizations decided to challenge the CON process in New York City. In their complaint, they cited violations of Title VI Health / PAC Bulletin 13 FIGHTING BACK AGAINST THE EMPIRES Y- k kK kK KKK* KKK KKK KKK KK * of the 1964 Civil Rights Act, which prohibits private institu- tions that receive federal funds (as most hospitals do, through Medicare, Medicaid and Burton Hill - grants) from discriminat- ing in the provision of services to racial and ethnic minorities. They also cited violations of Title XV of the 1974 Public Health Service Act and Section 504 of the Handicapped Persons Act, which require federally funded state and local planning agen- cies to consider access issues when approving Certificates of Need. New York's CON application did not require any informa- tion on an institution's past performance regarding access to underserved populations, or on how a proposed project affects future access. Furthermore, the HSA's annual Medical Facilities Plan (the citywide blueprint for capital construction) had not included discussion of accessibility to the underserved even though required to do so by law. Access criteria were framed mainly in terms of general bed population - to - ratios rather than obtainability of care by populations experiencing barriers. The State Department of Health was charged with failing to require the local HSA to correct these deficiencies and for not making state access guidelines conform with federal regulations. According to Judy Wessler of New York City's Community Action for Legal Services and to Herb Semmel of the New York Lawyers for the Public Interest and a HealthPAC board member, some hospitals'records for serving the poor and minorities are abysmal. For example, in 1984, only 9 percent of New York University Medical Center's inpatients were minorities i- n a city with a population that is almost 50 per- cent minority. NYU's record of service to the poor is even worse. In the two year - period between 1983 and 1985, NYU had only 1.6 percent Medicaid inpatients and one half - of 1 per- cent Medicaid outpatients. The number of Medicaid patients seen in its emergency room is unknown, due to NYU's prac- tice of billing the patient rather than Medicaid, a practice that can have the effect of discouraging use by people insured through Medicaid. The Settlement The main terms of the settlement involve agreement by the state and the HSA to collect more appropriate access data from CON applicants and to consider this information in the review process. Access will be one focus of the HSA's next Medical Facilities Plan. The state is revising its CON form for certain applications to include questions such as percentage of minorities and Medicaid patients served, the number of community - based physicians with staff privileges (an important route for enabling community residents to gain admission to voluntary hospitals), and percent of Medicaid patients admitted by each staff physician. The form will ask for the ethnic composition of the facility's physicians; the institution's patient transfer - policy and prac- tices; the availability of foreign language - translators and capacity to communicate with deaf and visually impaired pa- tients. Compliance with Hill Burton - will also be a focus, as well as any requirements for pre admission - deposits. The HSA is revising its project review manual to incorporate questions about most of these access issues. In addition, the state is conducting a survey on foreign language - and sign- 14 Health / PAC Bulletin Kamp XXII Glinten H. language interpreting needs in New York City health facilities. Although the settlement applies only to CON proposals of at least $ 15 million, or applications covering three or more functional areas of the facility, negotiations are continuing for an abbreviated form to cover applications involving lesser sums. The complainants retain the right to refile at any time against the planning agencies or individual health facilities. The biggest question remaining is how the planning agen- cies will evaluate the new data and implement the access guidelines. Health care advocates will still need to monitor the process; however, now that there will be more critical infor- mation in the public domain, the job of prodding the hospitals and public planners will be easier. Results Some early returns are already in. Advocacy groups believe that the complaint helped induce the HSA to require Mount Sinai Hospital to include some specific provisions for com- munity health care in its CON proposal (see separate story). New York University Medical Center has agreed to meet with an advocacy organization for the disabled regarding its emergency room modernization plans. The civil rights approach has proven to be an effective strategy for intervention at the stage where resource alloca- tion decisions are made. Although such efforts don't transform the health care system dramatically, they are meaningful in- crements in the process of making the system more respon- sive to the needs of people rather than institutions. 0 Editor's note: Other cases of using the Certificate of Need process to improve access have been collected by the National Health Law Program, 2639 South La Cienega Boulevard, Los Angeles, CA 90034. South Carolina's Medically Indigent Assistance Program Acute Care Available to More, but Primary Care Neglected by Samuel L. Baker and E. Greer Gay Richla ichland Memorial Hospital is a 611 bed - county hospital located in Columbia, the state capital, and affiliated with the University of South Carolina School of Medicine. The hospital accepts all indigents from its own county of Richland, including patients diverted from the two private hospitals in the county. On July 19, 1984, however, it refused to accept a child suffering from meningitis, despite the fact that she had a 104 degree - fever and was in a coma, because the child was from another county and no one there would underwrite her care. The child's physician eventually placed her at a hospital in North Carolina. This widely publicized story is just one of many that illus- trate the difficulties indigent people have been facing in get- ting hospital care, not just in Richland County, but throughout the state. Hospital administrators have been pushing the state legisla- ture for some time to provide financial relief for unreimbursed hospital care. This pressure paid off in June 1985, when the legislature enacted a Medically Indigent Assistance Program (MIAP), a major expansion of public funding worth $ 95 million on an annual basis. The program will add an estimated $ 55 million to the $ 300 million currently spent on hospital care for the poor under Medicaid, and $ 40 million to finance a 25 percent expansion of Aid to Families with Dependent Children (AFDC). ' Hospitals a- nd indigent patients in need of acute care - will clearly benefit, as the public funding for such care increases about 20 percent. The added AFDC families will also benefit, with improved nutrition contributing to better health. However, the AFDC expansion will strain an already understaffed social service system and proportionately increase the acute shortage of physicians and clinics willing to treat the poor. Moreover, the program will scarcely begin to close the gap that still exists between the need for and delivery of primary medical services. Poverty, and Paucity of Care South Carolina is one of the poorest states in the nation, ranking 48th in personal income per capita.? The 1980 cen- sus found that one sixth - of the population was living at less than the federal poverty level. And for the poor, access to Samuel E. Baker, PhD, and E. Greer Gay, RN, MPH, are both Assistant Professors in the School of Public Health, Univer- sity of South Carolina, Columbia. medical care, especially primary care, can be exceptionally difficult or impossible. Often the poor simply have no place to go. For example, in 21 of the state's 45 counties, the County Health Department serves less than one third - of the indigent pregnant women. And in nine additional counties, including Horry County, with its booming Myrtle Beach resorts, there is no free prenatal care at all. As for private physicians, a 1983 report of the Governor's Council of Perinatal Health stated flatly that " Availability of prenatal care in South Carolina almost always is related to an individual's ability to pay. Generally, a pregnant woman must have private funds or third party - reimbursement in order to receive prenatal care on demand. " South Carolina's 1983 infant mortality rate, at 15 per thou- sand for the total population, and 20 per thousand for blacks alone, was the highest of any state. South Carolina also led the nation that year in low birthweight - babies, at 8.7 percent. * In Columbia, a new charity supported - free clinic, open just two evenings a week, is overcrowded with patients. The clinic is within two miles of three hospitals, and there are 500 prac- ticing physicians in the metropolitan area. Yet, according to the clinic's nurses, all of whom are volunteers, many patients have long neglected - conditions that need treatment beyond that which the clinic can provide. For example, advanced untreated hypertension and diabetes are common, and the patients'needs for prescription drugs far outstrip the clinic's donated supply. Still, as one nurse put it, " If it weren't for this clinic, some of these people wouldn't be walking around next week. " When the poor do become inpatients, they pose serious financial problems for the hospitals treating them, since so many are not covered. Medicaid is the main reimburser for medical care for the poor. To be eligible for Medicaid, one must first qualify for either AFDC (for single parents with children) or the Medical- ly Needy Program, enacted in 1984 for children and pregnant women in two parent - families. To qualify for these programs, before MIAP, a family's annual income could be no more than $ 1728 for a family of two or $ 2748 for four - the lowest income ceiling of any state, at barely one fourth - the poverty level.5 Thus, in 1980, according to the U.S. Department of Health and Human Services, only 37 percent of poor children in South Carolina were covered by Medicaid. County funds for indigent medical care have been severely Health / PAC Bulletin 15 limited, most county hospitals receiving only token subsidies. Fifteen of the 46 counties spend nothing on indigent hospital 6 care; 17 others spend less than $ 100,000 annually. More than 85 percent of medically indigent hospital care is given in the metropolitan areas of Charleston, Columbia, Florence, Green- ville and Spartanburg; yet, even there, county funding has typically been about half what the hospitals say they lose on indigents.7 As county hospitals began defending their balance sheets by turning away nonresidents of their counties, the acute shortages of medical personnel in the rural areas left the poor there with nowhere to turn. In 16 counties, there is no obstetrician at all. In Darlington County, the one obstetrician who was treating indigent women - about 130 no pay - deliveries a year - quit abruptly early in 1984 under the tensions he experi- enced. The " regional " medical center in adjoining Florence competed aggressively for Darlington's paying patients, but resisted taking no pays -. So for several months, indigent women continued to deliver at Darlington with only nurses attending, backed by on call - physicians who were not obstetricians. 1981 Funding Cuts Reduced Programs The seriousness of today's problems can be traced in part to the 1981 Federal Omnibus Budget Reconciliation Act (OBRA), which sharply reduced federal support for social ser- vices. In response, the state reduced social service and health care programs rather than make up the lost federal funds. Among the many cutbacks affecting the poor were changes in AFDC eligibility, which reduced the rolls by one sixth -, to 50,000. Since that time, the income eligibility ceiling has been stuck at $ 2748 for a family of four, despite the inflation that has raised the poverty level to $ 10,850. Medical care providers also took cuts. The state changed physician fees from " usual and customary " to a schedule that paid the same office fees to all physicians and lowered specialty fees such as surgery relative to the office visit. Since this change, the general Medicaid physician fee level in South Carolina has been the lowest in the Southeast. Whether due to fee cuts or other factors, the number of physicians willing to see Medicaid patients has been dropping. Physician practices treating Medicaid patients, including Schreibr Georges 16 Health / PAC Bulletin hospital residency programs, fell from 5159 in Fiscal Year 1981-82 to 3382 in 1983-84, and welfare caseworkers are reporting increasing difficulty in placing clients with private physicians. In 1983-84, Medicaid paid for 2 percent fewer family practice and general practice visits, 26 percent fewer internal medicine visits, and 9 percent fewer pediatric visits than the previous year. 10 One hopeful sign is that obstetric and gynecological visits were up 7 percent, perhaps contributing to the drop in the infant mortality rate from more than 16 per thousand in 1981 to about 15 per thousand in 1983 and 1984. " In response to the financial restrictions imposed by OBRA, the state decreed that Medicaid would pay for only 12 inpa- tient hospital days per person per year. Outpatient, emergency room and physician office visits were limited to 18 per year; prescriptions for drugs, to 3 per month. The reimbursement for drugs was so low that at least one public hospital's phar- macy would not fill prescriptions for Medicaid clients; these people had to find a pharmacy on their own, with the help of their welfare caseworkers. Overall, after OBRA, the state revised its 1982-83 Medicaid budget downward by $ 23 million, cutting an originally projected increase in half. For the follow- ing fiscal year, the Medicaid budget was actually decreased by 2.6 percent. 12 The 12 day - limit on inpatient stays gave hospitals a strong reason to avoid Medicaid patients with complex conditions, or, according to some staff members, to discharge them prematurely when they had used up their 12 days. The limit particularly affected elderly patients from nursing homes. Medicaid would pay to reserve the patient's nursing home bed for 12 days only; therefore, if the hospital had not discharged the patient back to the nursing home by the 12th day, it risked being stuck with the patient indefinitely. Governor Seeks to Raise Standards It was to be expected that hospitals would be a predominant influence in the development of the Medically Indigent Assistance Program, but as a result, the program emphasizes matters of hospital finance over consumer access. In 1982, the state funded a study of the medically indigent problem, awarding the contract to a consulting firm headed by Robert Toomey, founder of the Greenville Hospital system, one of the nation's first multihospital systems. The study centered around a four week - survey of selected South Carolina hospitals to find out what the hospitals said they were losing on indigent care. The study also gathered data on income, family size and other characteristics of indigent patients in those hospitals; however, no attempt was made to assess unmet medical needs or difficulty of access to care. In 1984, following Toomey's report, the legislature set up an ad hoc committee to develop the bill that became the Medically Indigent Assistant Program. The chairman was Peter Reibold, vice president for finance of Providence Reibold had been publicly proposing the joint funding of in- digent care by counties and hospitals for two years. His con- cern for the poor was genuine, but he also argued from enlightened self interest - : If the county hospitals were to go broke, the burden of indigent care would be thrown directly on the private hospitals. Reibold conducted a difficult but suc- cessful campaign to persuade other private hospital adminis- trators to support the funding of public hospitals with contribu- tions, in part, from their own institutions. The tertiary care centers were not in imminent danger of go- ing broke, but they were concerned about the future. Health maintenance organizations were just beginning to enter this most conservative of health care markets. In addition, major employers were showing interest in preferred provider ar- rangements, under which deductibles and coinsurance would be used to steer employees to less expensive hospitals. If price competition were to break out among the hospitals, those treating no pays - would be at a disadvantage, since they would no longer be able to charge the costs of the no pays - to the pay- ing patients. Aid was needed, said Reibold, to " level the play- ing field " for hospital competition. Along with the hospitals, the other major participant in the indigent care funding effort was the state's Democratic gover- nor, Richard W. Riley. A careful and effective politician, Riley is South Carolina's first two term - governor since Reconstruc- tion, thanks to a constitutional amendment passed during his first term. Riley has a strong desire to raise South Carolina above its low ranking, relative to other states, in numerous social indi- cators. In 1984, he pushed a bill through the legislature to raise the sales tax to expand state funding of education. He also won the Medically Needy Program that extended Medicaid benefits to poor children and pregnant women in two parent - families. For 1985, he made medically indigent assistance a top priority, mounting an impressive legislative and staff effort. Even Republican opponents were afraid to get in the way of what they called " Riley's train " on this issue. His success impressed Reibold, who said, " It's surprising how close the legislation mirrors the recommendations of the ad hoc committee. " New Program's Provisions The Medically Indigent Assistance Program expands fund- Hirsch Joseph ing for hospital care three ways: 13 1. It makes more people eligible for Medicaid, by making more people eligible for AFDC. The income ceiling for AFDC has almost doubled, to $ 5100 annual income for a family of four (although still only half the federal poverty level). Families with both parents present are now eligible for welfare payments under an Unemployed Parent Program (AFDC - UP). The state's Department of Social Services estimates that, altogether, up to 42,600 persons will be added to the 119,000 currently on AFDC. Medicaid spending based on the increased enrollment is projected to increase by $ 22 million per year. 2. It introduces a prospective payment system for Medicaid. As with Medicare's DRG system, some scheme will be devised under which a hospital's reimbursement for Medicaid patients will become somewhat independent of how much the hospital actually spends on the patient. The system is now under development. Usually, prospective payment is intended to save money. Here, however, it is projected to add $ 18 million to costs annu- ally, because the system eliminates the 12 day - limit on hospital stays. The Toomey report estimated that 18.5 percent of Medicaid patient days were not covered during the period of the study due to the 12 day - limit. Getting rid of this limit was a high priority for the hospitals. 3. It establishes a fund of $ 15 million per year to pay for hospital care for the medically indigent who are not eligible for Medicaid. Half of this money will come from the hospitals, the other half from the counties, both being assessed according to complex formulas intended to produce pro rated - shares for all contributors. For the first time, hospitals that do not take Health / PAC Bulletin 17 Governor Riley is said to have insisted on this provision. It was intended to appeal to the business community, whose panic about escalating health insurance costs for the work force outweighed its aversion to state regulation. Setting a target rate of increase was supposed to force the hospitals to use the new indigent care funds to increase their charges to other patients less than they otherwise would, a sort of " backward cost shifting. " As a cost containment measure, however, the regulation is remarkably weak. The only sanction for exceeding the target growth rate is that the money from the hospital - county indigent care fund will be cut off. Hospitals avoiding indigents cannot be touched. Furthermore, no matter how flagrantly an indivi- dual hospital raises charges, no action will be taken if the total growth of the state's hospitals is less than the target. The target rate of growth will be the same as the growth rate for the federal index of hospital input prices (the national average of prices hospitals pay for labor, materials and so on) adjusted for " the South Carolina - specific experience. " During the final days before the program passed the legisla- ture, the state hospital association concentrated special atten- tion on this provision, with considerable success. The wording of the law seems to assure that any South Carolina adjustment will only add to the target rate of growth, not subtract. Moreover, the law specifies that, in the first year, the state ad- justment shall be the same as the average annual difference over the past 10 years between the growth of South Carolina hospi- tals and that of the federal index (an addition of 6.6 percent). Thus, the target rate of increase will be 6.6 percent plus the projected increase in the hospital input price index, for a pro- jected total of 11.45 percent for Fiscal Year 1986-87. Since South Carolina hospitals have just moved from a period of rapid inpatient service expansion to one of declining inpatient + ~ Prohask oe, * census, this generous target rate of increase should guarantee that the regulatory commission will not be established. indigents will be forced to help support the hospitals that do. and counties that have previously contributed little or nothing at all will have to provide something. Some may see the Medically Indigent Assistance Program as an example of Reagan's new Federalism in action - a state taking over as the federal government cuts back. Ironically, though, the federal government will be the major contributor to this program. Under a long standing - formula for aid to states, the U.S. Treasury pays 73.5% of Medicaid and AFDC benefits in South Carolina. Overall, the federal government will provide $ 58 million of the MIAP's annual $ 95 million expenditure. The MIAP signals more than increased spending on health care. It also has the potential to establish rate regulation in South Carolina for the first time. The annual growth of total hospital inpatient charges across the state not (including unreimbursed care to indigents and education expenditures) will be compared with a target rate of increase. If the charges for the hospital as a group increase less than the target rate, no action will be taken. However, if total charges grow faster than the target rate, a regulatory commission will be estab- lished. The individual hospitals whose charges exceeded the target rate will have to justify themselves before the commis- sion or face financial sanctions. Staff Shortages a Problem As the Medically Indigent Assistant program begins to get under way, it is likely to encounter a major bottleneck in the expansion of AFDC enrollment. It is questionable just how smoothly the welfare offices will be able to handle the influx of new clients with the present shortage of staff. Back in 1981, before the Omnibus Budget Reconciliation Act, Governor Riley fulfilled a first term - campaign promise to reduce the number of state employees by cutting 174 economic service workers. Waits lengthened at welfare offices, despite the subsequent OBRA inspired - caseload reduction of 10,000 families. Visits through the Early Periodic Screening, Detection and Treatment Programs decreased by almost one- third, partly because economic service workers who used to make home visits were now kept in their offices to help han- dle the workload. Although the new budget is putting back about 100 positions, total strength will not be up to the 1981 level. The Commis- sioner of the Department of Social Services had requested 700 positions to handle the 42,600 42,600 new cases projected. However, while some officials in some counties are already complain- ing, they will have to make do with what they have. All day - waits at the welfare office will be likely to discourage people from signing up. And those that do sign up will face the shortage of physicians who are willing to treat Medicaid patients. Although the state has raised the office visit fee from $ 9 to $ 12, it is still less than half the market rate, and may or may not encourage physicians to overcome their aversion to 18 Health / PAC Bulletin Medicaid patients. One hope is that the hospitals, who will have a strong financial interest in getting eligible families signed up for AFDC, will bring pressure for continued im- provements in the system overall. Because of the welfare office bottleneck and the physician shortage, it is possible that the Medicaid expenditures for the Medically Indigent Assistance Program will not reach the figure the state projects. (This would not be the first time that a public aid program had spent less than its budget. Last year's new Medically Needy Program budgeted $ 19 million for children and pregnant women in 1985-86, but spent only $ 4 million. While the Department of Social Services had estimated that 5400 preg- nant women and 18,500 children would qualify, only 800 women and 3200 children actually did. 14) The hospital - county indigent care fund for the uninsured will go quickly, however. Asked whether the fund was large enough, Reibold answered, " I doubt it, really. I think we'll find that we've got work to do in future years. " 15 And hospitals have not promised to treat all comers after the money runs out; they've made no promises at all. Primary Care Still a Primary Need South Carolina's Medically Indigent Assistance Program has some important progressive elements. Those hospitals, mostly public, who treat indigents will get substantial new financial support. Treating the indigent will still not be profitable, but the loss will be less, and the public hospitals'cost disadvan- tage, relative to private hospitals, will be reduced. Removing the 12 day - limit on Medicaid - paid hospital days will mean fewer abrupt discharges, though prospective reimbursement will encourage hospitals to discharge all patients quickly. Welfare rolls will expand, subject to what the overburdened welfare office employees can handle, bringing what has been one of the nation's stingiest AFDC programs more into the mainstream. The disadvantage of the program is in what it omits - direct measures to expand access to primary care. Those newly eligi- ble for Medicaid will be entitled to a paid office visit, but it is not clear where to find physicians who will accept them and their meager reimbursements. At best, the Medicaid recipients will crowd into hospital outpatient departments, and have longer inpatient stays at the hospitals willing to take them. For the working poor who do not qualify for AFDC, the hospital - county fund will help to pay for hospital care until the money runs out, but they will still be on their own for physi- cian visits and pharmaceuticals. Many indigent expectant mothers will still have difficulty finding prenatal care or a qualified professional to assist with the delivery. The Medically Indigent Assistance Program will then be called on to support the state's neonatal intensive care units, helping them to deal with some of the casualties of the state's neglect of primary care. Expansion of primary care services, with a greater role for nurse practitioners, would be much more humane and cost- effective than throwing so much of the available money at hos- pitals. But achieving that will require another campaign and additional legislation. Y' 1. " Indigent Care Program, " South Carolina Department of Health and Human Services, January 1985. 2. Statistical Abstract of the United States (1985), p. 439. 3. " South Carolina's Infant Mortality Problem, " South Carolina Department of Health and Environmental Control, Division of Maternal and Child Health, 1983. 4. Data courtesy of South Carolina Department of Health and Environmental Control, Office of Vital Records and Public Health Statistics. 5. " Indigent Care Program, " South Carolina Department of Health and Human Services, January 1985. 6. " County Expenditures for Indigent Medical Care, " South Carolina Statewide Health Coordinating Council, 1983 Special Supplement to the 1982 State Health Plan, pp. 17-20. 7. " Medically Needy Study, " South Carolina Department of Health and Human Services, 1982, pp. 17-18. 8. " South Carolina's Infant Mortality Problem, " South Carolina Department of Health and Environmental Control, Division of Maternal and Child Health, 1983. 9. South Carolina Department of Social Services, annual reports for the years ended June 30, 1979-1983. 10. Data courtesy of South Carolina Health and Human Services Finance Commission.. 11. Data courtesy of South Carolina Department of Health and Environmental Control, Office of Vital Records and Public Health Statistics. . 12. South Carolina Department of Social Services, annual reports for the years ended June 30, 1979-1983. 13. What follows comes directly from the law, which was passed as Section 20, South Carolina Appropriations, Fiscal Year 1985-86. Budget numbers come from South Carolina Senate, Medical Affairs Subcommittee Pro- posal, " South Carolina Medically Indigent Assistance Act, " September 30, 1984, and " Update on Medically Indigent Assistance Program. " Office of the Governor, State of South Carolina, May 17, 1985. 14. Columbia State, July 22, 1985, p. 1 C -. 15. Interview with Peter Reibold, Carolina Journal, South Carolina Educa- tional Television, July 17, 1985. - Health / PAC Bulletin 19 Bulletin Board Black and Minority Health In Washington, DC, friends must pledge on their lives that they will return it in 24 hours in order to borrow one. After a full press conference, and media hype, by the former Secretary of Health and Human Services, Margaret Heckler, copies of the Report of the Secretary's Task Force on Black and Minority Health are rarer than Gutenberg Bibles. (This is the first of seven planned volumes, called the executive summary.) Copies may be obtained through the U.S. Government Printing Office (No. 017-090-00078-0) by writing the National Health Information Clearinghouse, Suite 700, 1555 Wilson Boulevard, Rosslyn, VI 22209, or by calling (800) 336-4797 or (202) 522-2590. Enough demand will keep the Report in print. Boston at Risk On October 1, 1985, the Boston Foundation released a two year - study of primary health care delivery in Boston. The study examined which groups and commu- nities are at such economic risk that their health is af- fected, the problems of the uninsured across all income groups, and the limitations of the current primary health care delivery system. The report was a product of the Primary Health Care Seminar Working Group and was authored primarily by Friends of Health / PAC member and Tufts University professor Alonzo Plough. The report found a growing disparity between the health of the disadvantaged and the affluent in Boston, including a dramatic 33 percent rise in infant mortality in 1982. The Boston Foundation will be using the report as a guide in making decisions on its health care grants. The report is entitled Boston at Risk and may be secured through the Boston Foundation, One Boston Place, Room 3005, Boston, MA 02108 (617) 723-7415. Critical Health and Apartheid The most recent issue of Critical Health, a journal on health and politics in South Africa, focuses on unrest in the black townships, police violence, unemployment, housing, and child care (childminding "") . The journal is produced by an editorial collective and is published about twice a year. Critical Health aims to " present a critique of health in South Africa, provide ideas for the roles that health workers can play in promoting a healthy society, show that good health is a basic right, and pro- vide insight into the political nature of health. " Subscrip- tions are $ 8 per year for individuals, $ 15 for institutions, from Critical Health, P.O. Box 16250, Doornfontein, Union of South Africa 2028. Defense Measures The President certainly does not eat kids for breakfast, but he doesn't seem to care if many kids eat nothing for breakfast. The sad details and a lot of other useful in- formation are available from the Children's Defense Fund. Its new list of publications has pamphlets on everything from " Paying Children's Health Bills: Some Dos and Don'ts in Tight Fiscal Times " to an " Adolescent Pregnancy Watch Manual " to help local communities learn more about preventing teenage pregnancy. For a copy of the list, write Children's Defense Fund, 122 C St., N.W., Washington, DC 20001. Exposure Exposure The White Lung Association has prepared an excellent four - fold leaflet explaining what to do if you suspect that asbestos fibers are circulating through your office. For copies, write the White Lung Association, P.O. Box 1061, Brooklyn, NY 11202. The WLA has also begun a con- fidential Registry of Exposed Workers. This will aid in future court cases and provide a list of buildings with asbestos exposure to permit more vigorous pressure on building owners to eliminate asbestos hazards. No Child's Play Kidsrights, a privately - run clearinghouse on child abuse, abduction, molestation, teen rape, and suicide, has just published a comprehensive catalogue listing over 500 books, pamphlets, cassettes, games, and visual materials for sale. Producers of the materials include the National Education Association, the National Council for the Prevention of Child Abuse, and many other groups as well as companies. The catalogues are avail- able free of charge from Kidsrights, 120 - A West Fifth Ave., PO. Box 851, Mount Dora, FL 32757. Mythstakes Beyond the Myths is concise, well designed - 25 page - pamphlet detailing who actually receives Aid to Families with Dependent Children (AFDC), what they get, why, and for how long. This booklet will be a welcome source of information for anyone who has ever had to deal with Reaganesque anecdotes of welfare Cadillacs. It has a wealth of statistics, easy to read text, and clear graphs. Single copies are $ 2.50 from the Center on Social Welfare Policy and Law, 95 Madison Ave., New York, NY 10016. The Center also publishes an annotated bib- liography of reference and statistical sources for legal research on public assistance programs. 2200 Health / PAC Bulletin Saving Money, Losing Lives Lead Poisoning and Public Policy by Maxine Golub Let's Let's et's call them Michael and Ivette. Brother and sister, four three years old, they were referred to a New York hospital in August 1983 with a diagnosis of lead poisoning. Michael was admitted for treatment. Three weeks later, the landlord still hadn't made the necessary repairs in their apart- ment; the case was referred to the Emergency Repair Program. After Michael's discharge, he was sent to a relative's home because his apartment still was not clear of lead violations. He stayed there two weeks and then returned to the unsafe home because his mother could no longer care for the family in two locations. The other children had remained home; in late September Ivette also required hospitalization due to her in- creased lead level. The Emergency Repair Program crew began work in late November, 66 days after the initial inspection. Three days later the cleanup came to a halt when the landlord refused to allow the ERP contractor into the building. This delayed work for several more days. In January 1984 the Health Department's inspector returned to the apartment and found peeling paint in the living room. This violation had not been reported the previous September, so the ERP could not repair it. A new citation was issued, but it was not until July that the violations were corrected. ' In May 1985 four families like Michael and Ivette's joined four public health organizations (including Health / PAC) in a class action suit charging the city's Department of Health and Department of Housing Preservation and Development and the state's Department of Social Services with failure to enforce laws designed to prevent lead poisoning. New Wine in Old Bottles Michael and Ivette's tragedy is similar to many others far beyond New York City, and far from the 1980's. Historians say that lead was a known source of sickness as far back as ancient Rome, when the ruling class fell ill from wine stored in leaden vessels. Some go so far as to blame lead for the fall of the Roman Empire, asserting that lead water pipes caused wide- spread dementia and sterility. During the mid 1700's - , the children of lead workers were reported to suffer " retarded growth and development. " In 1904 the Australian Medical Gazette documented the first case of Maxine Golub is Chairperson of the New York City Coalition to End Lead Poisoning. For more information about lead poisoning call (212) 920-5016. The author wishes to thank Paul DeBrul, Nicholas Freudenberg, and John F. Rosen for their help with this article. lead poisoning caused by " toxicity of habitation. " Workers and public health officials were well aware of the toxic effects of lead in the United States in the 1920's, when one chemical plant was known as the " House of Butterflies " in recognition of the fate of many intoxicated workers.5 The first cases of lead poisoning in children in the United States were reported in the 1930's, but it was not until the 1950's and'60's that systematic early detection efforts were begun in several large cities. 6 These studies found a great deal - at one Baltimore hospital 90 percent of the children seen at the outpatient clinic had elevated lead levels in their blood - - but the breadth of this scourge remained unperceived. Prior to the 1970's the usual case identified in the United States was symptomatic and dramatic, so called - frank " " lead poisoning. In these cases the child was usually brought to a hospital emergency room, severely ill. Common symptoms in- cluded vomiting, convulsions, and seizures, sometimes leading to encephalopathy and coma. The consequences were invari- ably serious: severe mental retardation, blindness, and / or cerebral palsy - - if not death; 28 percent of the children diag- nosed with lead poisoning at Chicago's Cook County Hospital between 1959 and 1963 died.8 The widespread incidence of low level lead poisoning has become apparent only since the initiation of mass screening efforts provided for in the 1972 Lead Based Paint Poisoning Prevention Act. The National Health and Nutrition Examina- tion Survey (1976-1980) concluded that undetected lead toxicity afflicts 4 percent of all children between the ages of one and six, including 11.6 percent of low income, inner city children and 18.6 percent of all low income black children. Lead poisoning is now considered to be the most widespread pre- ventable pediatric disorder in the United States. Sometimes referred to as the " silent epidemic " due to its asymptomatic nature, this low level toxicity is far from harmless. Pioneering research by Dr. Herbert Needleman has shown that children who have it suffer a range of developmental delays and learning disorders, including intellectual problems such as delayed speech development and verbal processing, poor attention span, and decreased IQ scores - all essential for effective classroom performance and the development of skills necessary for academic success. Needleman's study of den- tine lead and neuropsychological deficit in Massachusetts school children inspired the frequently repeated phrase, " No lead is good lead " 10 (see Figure 1). Although there has been some controversy over Needleman's analysis of his data, his conclusions have been confirmed by Health / PAC Bulletin 21 22 HPeaAltCh / Buletin Buletin Courtesy of U.S. Environmental Protection Agency Gas Lead Blood Lead DENTINE LEAD CLASS 40 (ppm) 11 23456 < 5.1 TEACHERS 2123 456 5.1 - 8.1 TEACHERS 123456 8.2 -11.8 TEACHERS 123456 11.9 -17.1 TEACHERS 51234 56 17.2 -27.0 TEACHERS | 30 TEACHERS 6 > 27.0 BY BY REPORTED 2200 REPORTED REPORTED REPORTED REPORTED 10 % CLASS 123456 123456 123456 123456 DISTRACTIBLE DISTRACTIBLE PERSISTENT NOT DEPENDEONRTG NAONTI ZED 123456 123456 123456 123456 HYPER- IMPULSIVE FRUSTRATED DAY ACTIVE DREAMER 123456 123456 123456 SIMPLE SEQUENCES DIRECTIONS FUNCLTOWI OOVENRALIL NG LUNABLE TO FOLLOW- OVERALL OVERALL Figure 1. Distribution of Negative Ratings by Teachers on 11 Classroom Behaviors in Relation to Dentine Lead Concentration. The group boundaries were chosen to obtain symmetrical cell sizes for the median (classes 1 and 6 = 6.8%, classes 2 and 5 - 17.6%, and classes 3 and 4 - 25.6%). Reprinted ( with permission from Needleman et al., reference 10; courtesy of The New England Journal of Medicine.) other researchers. " In fact, more recent medical research has found that even levels currently considered normal are associated with serious health problems, including impairment of Vitamin D metabolism and neurophysiological functioning. Children who have iron deficiency anemia another - another common pediatric problem - face still greater risks because iron defi- ciency enhances the toxic effects of lead. 12 Children who require treatment for lead poisoning are often hospitalized for several courses of therapy, each of which may involve five to seven days of painful injections or intravenous medication. Most need regular follow - up visits for two to five years to monitor their blood lead levels, which may change due to redistribution of body lead stores or re exposure - . Sources of Toxicity The National Academy of Science estimates that American industry consumes about 1.3 million metric tons of lead annu- ally, and in the process exposes all of us to elevated lead levels in our air, drinking water, and foods. " The two major sources are exhaust from cars which burn leaded gasoline, and lead based paint in housing constructed prior to 1960. Although the popular myth is that low income urban children get lead poisoning by eating paint chips, which they do because they are unsupervised or understimulated, the unfortunate truth is that lead is everywhere. Children may ingest particles which their parents have brought home on work clothes, or from the dirt in urban parks, playgrounds, and backyards, particularly if there is heavy traffic nearby. We are all exposed to lead in our food in the form of vegetables grown in lead laden - soil or canned juices sealed with lead solder (see Figure 2). The apple casually purchased from a street corner vendor may be covered with invisible lead particles, and drinking water may contain lead leached from plumbing. Recent testimony to the Environmental Protection Agency indicates that as much as 40 percent of the urban dweller's background body lead can be traced to airborne gasoline. It takes only a small quantity from a concentrated source such as paint chips or leaded dust from deteriorating housing to push a child over the threshold into the toxic category (see Figure 3). Mobilizing the Community By the late 1950's lead based paint was a well known - hazard to children. Several cities had outlawed its use on interior sur- faces, and paint manufacturers had voluntarily reduced the lead content of paint used for toys, furniture, and interior sur- 14 faces. Activist efforts to prevent childhood lead poisoning began in the 1960's in the context of the larger social move- ments of that era civil - rights, community organization, and the decentralization and demystification of health care. The major battles have taken place on the local level, spurred by concerned scientists, physicians, activists, and community. groups. Most have focused on one of three arenas - health, housing, and the environment - generally reflecting the area of expertise or primary concern of those involved. The New York City experience is a prime example of what has and has not been accomplished. In 1967 four members of the New York Scientists Committee for Public Information learned of the high incidence of lead poisoning in cities around the country when they attended a conference in St. Louis. They came home determined to find out how New York City was affected. Their research led them to the distressing conclusion that lead affected between 9,000 and 18,000 New York City children. Convinced that aggressive prevention measures were in order, they began meeting with health and housing officials, and one sympathetic health offi- cial cautiously admitted that their estimates might be too low. In 1968 they organized Citizens to End Lead Poisoning (CELP), convinced, as Paul Dubrul wrote on behalf of the group, that " No progress will be gained in the battle against lead poisoning without massive mobilization of the ghetto community. " We have already been told by the Health Department that Health / PAC Bulletin 23 # no money can be found for a testing program until the black community begins yelling'Murder, " he went on. " Previous ex- perience has shown that existing agencies only respond in the face of crisis. The crisis exists; we have to draw attention to it. " " 15 This marked the beginning of a two year - struggle. The black and Hispanic communities were mobilized on the issue, and Mayor John Lindsay was forced to respond by establishing the Bureau of Lead Poisoning Control in the New York Depart- ment of Health in 1970 to oversee community education and screening efforts, medical follow - up and treatment, and to pro- vide housing abatement for identified cases. The Department of Housing Preservation and Development was assigned the task of making repairs in apartments where the landlords failed to comply. From the outset, housing officials considered the problem virtually insoluble. Disputes flared over resources - and their inadequacy. In one dramatic early 1970's episode the radical Puerto Rican organization the Young Lords focused media at- tention on the problem by " liberating " a owned city - screening van and bringing it to East Harlem and the South Bronx to test children. 16 New Legislation Representative William Fitts Ryan, then representing Man- hattan's West Side in Congress and actively involved in the local debates over lead poisoning prevention, pushed for a national effort. With the help of Senator Edward Kennedy, he won passage of the Lead Paint Poisoning Prevention Act, which pro- vided funds for much needed - health education and community awareness campaigns, screening, medical follow - up, and treat- ment in 60 major cities. Most of the programs also included housing abatement efforts. The act also directed the Depart- ment of Housing and Urban Development to establish technical guidelines for the elimination of lead hazards in housing, which had not been mandated by the previous lead paint regulations. At roughly the same time, environmental groups were gathering strength. Air pollution was becoming a household phrase, and car exhaust was receiving a large share of the blame. This public concern spurred legislation requiring all new cars to have catalytic converters, which can use only unleaded gasoline. In 1971, Environmental Protection Agen- cy administrator William Ruckelshaus announced the govern- ment's intention to ban lead in gasoline. 24 Health / PAC Bulletin WATCH THOSE CANS! The Failure of Public Policy Despite these auspicious legislative measures, efforts to combat lead poisoning soon stalled. " History, " commented Paul Dubrul recently, " will probably judge America very harshly for the way we've handled lead poisoning. It is disgracefully clear that our policymakers have never been committed to eliminating lead poisoning. They have chosen to sacrifice the intellectual potential of some 780,000 American children rather than pay the price of controlling the environment, providing decent housing and adequate primary care for all. " In 1972, the housing abatement program of the New York City Department of Health averaged 58.56 days from the day a case was reported until the day it was repaired, and only 60 percent of the apartments repaired met the required stan- dards. 17 Ten years later the average was 57 days, with 53 per- , cent considered completely repaired. 18 * The U.S. District Court ruled in 1981 that HUD regulations were not consistent with the goals of the Lead Poisoning Pro- gram Prevention Act, but new rules and procedures required for the elimination of lead paint hazards have yet to be established. (Coincidentally, one of the plaintiffs in the cur- rent New York City class action suit lives in an apartment sub- sidized by HUD's Section 8 program.) This year, the Centers for Disease Control estimated that there are still 30 million households which contain lead based paint. 19 Yet only 10 percent of the federal funds expended on lead research from 1977 to 1979 were used to examine control measures, and HUD's prevention research was terminated in 1981.20 The failure to reckon with environmental, economic, and political aspects of the lead poisoning problem, particularly regarding housing, has ensured that the problem will not be solved. This literally fatal flaw was present on both the national and the local level. " From the very beginning, the housing abatement program was inadequate... a band - aid solution, " a New York City health official involved from the early period commented confiden- tially. In New York the support of housing officials, or even of housing advocates, was never enlisted. The Reagan Years The robust never - lead poisoning programs were hit with a series of devastating blows by Reagan Administration policies. In 1981 the catgegorical funds which had supported preven- tion programs all over the country for ten years were merged with a host of other preventive care programs into the Mater- nal and Child Health Block Grant. The states were told they could divide the grant - 25 percent less money than the total given its individual components the year before- as they wished. Lead poisoning, asymptomatic, affecting primarily low income, urban children, has not been a strong competitor in the scramble for funding. The future looks even bleaker. Those local programs which have survived the cutbacks are no longer required to report an- nual statistics to the Centers for Disease Control. This means, explained one health official, that " we have no way of know- ing how many children are screened, or how many are positive. This eliminates our ability to document the problem, and thereby command resources. " General Motors'Long Battle More happily, at long last the opposition appears to be run- ning out of gas in one important area. Leaded gasoline was invented in the 1920's to power the larger cars that General Motors wanted to build so it could outsell Ford's smaller, cheaper models, Gerald Markowitz and David Rosner have recently related in a fascinating study. " The controversy over the effects of leaded gasoline on public health was so great that the Ethyl Corporation was forced to take it off the market for nine months in 1925, but an alliance between the automobile and gasoline industries and the federal government soon overrode the public clamor. From the late twenties on, say Markowitz and Rosner, " most research into the dangers of leaded gasoline was conducted under the auspices of the oil and auto industries themselves " - much the same way the EPA's Ann Gorsuch inappropriately involved herself with the gasoline industry in 1982.23 As a result, the dangers of leaded gasoline had to be rediscovered a half cen- tury later after - " unknown numbers of neurologically dam- aged children, " in the words of Markowitz and Rosner. 24 The International Lead - Zinc Research Organization still funds self serving - research, and last year the Lead Industries Association tried to enjoin publication of the Centers for Disease Control's new guidelines on childhood lead poison- ing, but so far even this group has not challenged the announce- ment by Lee Thomas, Administrator of the Environmental Pro- tection Agency, that leaded gasoline can no longer be sold after 1987. The EPA has documented the dramatic correlation between the drop in leaded gasoline sold and the reduction in blood levels from 1976 to 1980 (see Figure 4). The total ban will not remove the lead paint from 30 million households, but it will cut the background lead levels of children living in them by 25 to 45 percent, significantly reducing vulnerability. 25 The EPA's 1985 study Costs and Benefits of Reducing Lead in Gasoline estimates that " In 1986 alone, the reduction will pre- vent 172,000 children from developing blood lead levels in ex- cess of 25 micrograms per deciliter. " " 26 The New York Times praised the EPA for the ban, noting " 14 years of delay and obfuscation " since William Ruckelshaus first announced his intention to comply with the relevant provision of the Clean Air Act, " but the real praise should go to the committed individuals and groups who kept the pressure on. The Natural Resources Defense Council played a critical role; in 1982 it successfully sued the EPA for failing to enforce the Clean Air Act. Where Do We Go From Here? Still, the leaded gasoline ban is not the only progress of re- cent years. The Centers for Disease Control have cut the level at which a child is considered toxic from 30 to 25 micrograms per deciliter, and now urges that all children be screened. The CDC estimates that this will increase the number of children referred for early treatment between three and ten times. A variety of local groups have remained active around the country, and some have achieved significant reforms. Chicago's Coalition to Ban the Sale of Leaded Gasoline, a broad based - amalgam of environmental and health groups, helped win City Council passage of legislation prohibiting the sale of leaded gas from September 1984. A similar bill was passed in Cook County last November, and these bans were incorporated into the Illinois Clean Air Act implementation plan, currently being reviewed by the EPA.28 In the ten years since a group calling itself LEAD Action initiated a massive public education and awareness campaign in Washington DC, involving people in every walk of life, the case finding - rate there has plummeted from 32 percent to 0.8 Sometimes you can see some of the smeared lead solder. Folded side seam No fold No side seam No smeared lead solder Narrow seam Body and = bottom are all i i | one piece. Most lead sealed - cans have dents along the seam. Blue black - paint line Rounded bottom bottom edge Figure 2. From left: a lead sealed - can, a welded can, and a two piece - can, the last two being lead - free. (Courtesy of The Consumers Union Foundation.) Health / PAC Bulletin 25 - Industrial Sources Mobile Sources (cars, etc.) Airborne 7 TLer ad Jag. a GE Household Sources * Inhalation Deposition Household Dust & Soil Lead Pipes Lead based - Paint Paint Diet Water 48 48 Processing & Canning aie) > -> Ingestion Other Nonfood Items * * * * Production of bullets or fishing sinkers Soldering and stained - glass work Gasoline sniffing Pottery glazing Burning of batteries, colored newsprint, lead painted - objects, and waste oil ** Toys and figures containing lead Folk remedies Cosmetics (especially Oriental cosmetics, e.g., Surma, a black eyeliner) Jewelry (painted with lead to simulate pearl) Lead containing - dust transmitted on clothing from workplace D HOST CHILD Figure 3. Sources of lead in a child's environment. (Courtesy of The Centers for Disease Control, 1985 statement on " Preventing Lead Poisoning in Children, " reference 19.) 26 Health / PAC Bulletin 110 > " LEAD USED IN TOTAL - / 100 TOTAL, GASOLINE LE3 AD y, Coen , USED AVERAGE PER 6PE R 8 BLOOD LEAD LEVELS MONTH 70 AVERAGE 16 AVERAGE AVERAGE 15 BLOOD BLO D = LEAD ' LEVLS 13 LEVELS (micrograms T1 2 micrograms PERIOD (PERIOD g micrograms 1 1 / deciliter 1000 tons g ) tons decilter T. 10 decilter ) Figure 4. Lead used in gasoline production and average NHANES II blood lead levels, February 1976 February - 1980. (Courtesy of L 47 the U.S. Environmental Protection 1 1 1 1 1 YY 1976 1977 1978 1979 1980 Agency, reference 26.) YEAR percent. 29 The Governor of New Jersey has just signed a mandatory lead screening bill which requires annual testing of all children under six. A group called NYS Take / Lead Out of Children is actively lobbying for the passage of similar legislation in New York. In New York City, the New York City Coalition to End Lead Poisoning has taken up where CELP left off. A report NYC- CELP issued last year, coupled with political pressure, won an additional $ 300,000 for the City's Lead Poisoning Control Program. More recently, NYC CELP - has become one of the more vocal co plaintiffs - in New York's class action suit, and some members hope to keep lead poisoning an issue in city politics. Health and environmental professionals, often under the aegis of government agencies such as the CDC and the EPA, have produced invaluable documents filled with carefully researched information. These are important tools, but it re- mains the task of community groups and activists to transform recommendations into policy on the local, state, and federal levels. There is a tremendous amount to be done: community awareness campaigns, professional education, screening, treat- ment, home repairs, and the reduction of dietary and environ- mental lead exposure. Few comprehensive programs address both the health and environmental aspects of the problem. Serious collaborative efforts among the various governmen- tal departments responsible are even rarer. Activists - health professionals, environmentalists, housing organizations, and educators - must take the lead in demanding the resources to continue and expand this work while insisting on enforcement of existing legislation and challenging our- selves and our legislators to find creative solutions. Y' 1. New York City Coalition to End Lead Poisoning, " The Problem That Hasn't Gone Away: Childhood Lead Poisoning in NYC, " March 1984. 2. Lin - Fu, Jane, M.D., " Lead Poisoning and Undue Lead Exposure in Children: History and Current Status, " in Needleman, Herbert L., Low Level Lead Exposure, New York: Raven Press, 1980. 3. Needleman, Herbert L., " Lead Exposure and Human Health: Recent Data on an Ancient Problem, " Technology Review, March / April, 1980. 4. Lin - Fu, op cit. 5. Rosner, David, and Markowitz, Gerald, " A Gift of God?: The Public Health Controversy over Leaded Gasoline During the 1920's, " Amer. Jl. of Public Health, April 1985. 6. Lin - Fu, op cit. 7. Bradley, J.E., Powell, A.E., et al., " The Incidence of Abnormal Blood Lead Levels in a Metropolitan Pediatric Clinic, " Journal of Pediatrics, 49 1-6:, 1956. 8. Lin - Fu, op cit. 9. Annest, Joseph L., Mahaffey, Kathryn R., et al., Blood Lead Levels for Persons 6 Months - 74 Years of Age: U.S., 1976-80, from Vital and Health Statistics of the National Center for Health Statistics, No. 79, May 12, 1982. 10. Needleman, Herbert L., " Lead and Neuropsychological Deficit: Finding a Threshold, " in Needleman, H.L., Low Level Lead Exposure, op. cit. 11. 11. Winneke, G., Kramer, U., Brockhaus, A., Eivers, U., Kajanek, C., Lechner, H., and Janke, W., " Neuropsychological Studies in Children With Elevated Tooth Lead Concentrations: Extended Study, " Int. Arch Occup. & Environ. Health, 51 232:, 1983. Also: Yule, W., Lansdown, R., Millar, I.B., and Urbanowicz, M.A., " The Relationship Between Blood Lead Concentration, Intelligence and Attainment in a School Age Popula- tion: A Pilot Study, " Div. Med. Child. Neurol.,, 23 567-576: , 1981. 12. Rosen, John F., Lecture, " Low Level Lead Poisoning, Current Research and Treatment, " April 2, 1985. 13. National Academy of Science, Lead in the Human Environment, Washington, D.C. 14. Farfel, Mark, Reducing Lead Exposure in Children, Institute of Medicine, Division of Health Promotion and Disease Prevention, Sept. 1984. 15. Gordon, Diana, City Limits: Barriers to Change in Urban Government, New York: Charterhouse, 1973. 16. ibid. 17. ibid. 18. New York City Department of Health, Lead Poisoning Control Program, Annual Report, 1982. 19. U.S. DHHS, Centers for Disease Control, statement on " Preventing Lead Poisoning in Young Children, " January 1985. 20. Farfel, op cit. 21. Rosner and Markowitz, op cit. 22. Rosner, David, and Markowitz, Gerald, Letter to the Editor, New York Times, March 26, 1985. 23. Marshall, Elliot, " The Politics of Lead, " Science, Vol. 216, April, 1982. 24. Rosner and Markowitz, Letter to Editor, op cit. 25. " Preventing Lead Poisoning in Children, " " op cit. 26. Costs and Benefits of Reducing Lead in Gasoline U.S. EPA, Office of Policy Analysis, Washington, DC 20460, 230-05-85-006 EPA - , February 1985. 27. Editorial, New York Times, " Last Gasp for Leaded Gas, " March 8, 1985. 28. Katz, Marilyn, " Banning Leaded Gas: A Rare Victory, " Health and Medicine, Winter, 1985. 29. Ehrman, Karen, (LEAD Action), Presentation, December 6, 1984, New York, NY. Health / PAC Bulletin 27 The Health / PAC Bulletin isn't Playboy or Time You might have noticed this. One of the consequences is that you can't buy it at most local newsstands. This could mean that if you don't have a subscription you may miss that key article on medicare or the pharmaceutical industry or nursing homes you really wanted to read. WHY? Because when the Bulletin covers a subject you get a perspective on it available nowhere else. WHY? Because in health and medicine publishing virtually every magazine depends on glossy industry advertising and / or the medical establishment for financing. If you read a dozen health care publications, you know what we're talking about. If you only have time for one, check out the competition. If you agree we offer unique, incisive, well written - , and informative health care coverage, why not fill out the form below. Or, if you're already a subscriber, why not take this opportunity to enlighten a friend. Health care is this country's biggest business. Make it your business too. Please enter subscription (s) for the Health / PAC Bulletin Check: (Individuals $ 22.50 Y' 2 years $ 42 Y' Institutions $ 45 Y' 2 years $ 70 (Foreign subscribers add $ 8 per year) Name Address City State Zip Y' Bill me (plus postage and handling) Charge: Y' Visa Master - Expiration date No. Signature Send your check or money order to Health / PAC Bulletin. 17 Murray St., New York, N.Y. 10007 28 Health / PAC Bulletin The Great American Health Fortunes, 1984 by Tony Bale I In 1984 the health care rich and super - rich were still mak- Ling money the old fashioned - way: having others do most of the work while they reaped large rewards in financial markets. Massive increases in spending, business and financial activity, and new technologies have accelerated the pace of accumula- tion of personal wealth among those best situated. The vast wealth made in older pharmaceutical and medical supply ventures and newer entrepreneurial ones inspires the hordes of new fortune seekers hoping to turn fledgling com- panies into the big money. Financially ambitious but less adventurous souls who like a regular paycheck can aspire to the salaries of the top executives in the industry, which pro- vide a yearly ticket to the rapidly growing Reagan Era million- aire club. The big winners in the health care game constantly turn up on the numerous business press lists devoted to various aspects of corporate prowess. This second annual survey (see Bulletin, May June - 1984, for the first) looks at their stories to create a narrow window into the vast array of interlocking and interacting businesses that make up much of the health care system - and threaten to engulf the rest of it. Knowing something of who these prin- cipal beneficiaries are and how they got so rich enables us to trace some of the process by which a corporate health care system transforms the human need to attempt to alleviate suf- fering into great personal wealth for a fortunate few. The Largest Fortunes Starting at the top, the Searle siblings, Daniel, William, and Suzanne, the wealthiest family in the pharmaceutical industry, made a concerted effort to push their net worth, estimated by Forbes at over 700 $ million, beyond the $ 1 billion mark. Last September the three heirs to the family fortune announced that G.D. Searle, the Chicago - based pharmaceutical giant, was for sale because they wished to diversify their holdings. At that point, together with their trusts, they owned about 34 percent of the stock. Searle stock immediately began to climb, reaching a peak of nearly $ 65 by January as speculators bet a company riding high from sales of the highly successful, patent - pro- tected artificial sweetener aspartame sold (under the brand name Nutrasweet) would find many suitors. At this price, the Searles were worth over $ 1 billion, but they had hoped to receive a bid for the company of at least $ 75 a share, which would have given them $ 1.25 billion, and the highest offer they actually received was reported around $ 62. In April, after this offer was rejected, several Searle family trusts began the diver- Tony Bale is a sociologist and a member of the Health / PAC Board. sification process by selling 7.5 million shares back to the com- pany at $ 51.75 a share, which brought them only $ 388.1 million but kept control in the family. In mid July - the chemical giant Monsanto, which has wanted to broaden its drug and health care business, agreed to pur- chase Searle for $ 2.7 billion, $ 65 a share. At this price the Searle family's remaining stock in the company was worth. $ 540 million. In May Daniel Searle had resigned as chairman of the board. His replacement was the first non family - Searle - chairman, Donald Rumsfeld, Secretary of Defense under Gerald Ford. Rumsfeld, who was previously Searle's President and chief executive officer, is expected to leave before Monsanto's management team moves in. In the words of his replacement as Searle's president, " There is only room for one president, and they have one. " There are other presidencies, however, and Rumsfeld is thought to harbor ambitions to be President of the United States. If he were elected, it would mean a tremendous cut in income. In 1983 his combined salary, bonus, and stock income of $ 1,485,000 had placed him at the top of the pharmaceutical chief executive list. Last year wasn't quite so good, but his total compensation of $ 1,062,000 still left him fourth in the industry behind Bristol - Myers'Richard Gelb (2,205,000 $) , Warner- Lambert's Ward Hagan 1,535,000 ($) , and Eli Lilly's Richard Wood (1,327,000 $) . Each of the Searles, of course, collects many times as much simply by staying alive. So do scions of the other old phar- maceutical fortunes, including the Upjohn family (worth $ 500 million) the Lilly family (400 $ million), and the Richardsons of Richardson - Vicks (250 $ million). Even the largest fortunes may suffer unanticipated disasters, however. The $ 150 million Robins family stake in the A.H. Robins Company became a bit shakier when the company posted a $ 462 million loss in 1984, the largest among the Fortune 500 corporations. Most of the red ink came from a $ 615 million reserve Robins set up to handle future Dalkon Shield claims. Even this huge fund and profits from Robitussin and other drugs may not be large enough to cover future losses and restore the financial com- munity's confidence; Robins has already paid out more than $ 300 million in claims resulting from injuries caused by its intrauterine device., Kansas City's Ewing Kauffman has built the largest new for- tune in the pharmaceutical industry. His Marion Laboratories specializes in marketing foreign drugs and doing research necessary to obtain Food and Drug Administration approval. Sales of Cardizem, a Japanese - invented drug for angina, helped triple the value of Kauffman's 24 percent interest in Marion Labs between early 1983 and mid 1985 -. Cardizem may Health / PAC Bulletin 29 BOARD OF DIRECTORS B. Plympton Pympton Bill PROFITS IN HEALTH CARE soon win FDA approval for treatment of hypertension, open- ing up an even larger market. Forbes estimated that Kauffman's fortune, worth $ 160 million in 1983, had grown to at least $ 200 million in 1984. The generic drug industry is also generating new fortunes, aided by widespread efforts to cut health care costs through the substitution of generics for brand - name drugs and the Waxman - Hatch bill, which makes it easier to get FDA approval for generic versions of drugs whose patents have expired. Pitts- burgh's Mylan Laboratories, the industry leader, also gets a big boost from its own blood pressure - drug. Between 1979 and 1985 its stock split six times; in mid 1985 - it was selling at 40 times earnings, and the holdings of company president Roy McKnight were worth $ 34 million. Like many new companies, Mylan has rewarded many of its employees with stock options, and 20 of them are now millionaires. William A. Fickling Jr. of Macon, GA has made the most money in the for profit - hospital business. He owns over 80 per- cent of Charter Medical Corporation, a firm specializing in the most lucrative end of that industry's psychiatric hospitals. Fickling began Charter Medical in 1969; in 1984 he increased his net worth $ 35 million to $ 175 million. Patrick Ryan is the biggest recent success story in the health insurance industry. In 1982 he merged his auto insurance com- pany with prominent Nixon - friend and financial backer W. Clement Stone's Combined International Corporation and became its head. The recently revitalized company, special- izing in low cost - health insurance, has raised Ryan's net worth to at least $ 140 million. Surgeon Laszlo Tauber, the wealthiest physician on the Forbes 400 list, didn't accumulate his $ 250 million removing polyps. Such fortunes can only be made in business. Tauber is a Hungarian Jew who spent time in Nazi labor camps and emigrated to the United States after World War II. His building business sideline grew to the point where he became the U.S. Government's largest landlord. Ironically, Tauber's major breakthrough came in the late 1960's when he won the contract to build and lease the 1.2 million square foot Parklawn office building of the Department of Health, Education and Welfare in Rockville, MD. Thus this physician started on his way to the world of the super - rich by building a structure where some of the vast bureaucracy con- cerned with studying and regulating the health care system would be housed. Tauber still does surgery at an Alexandria, VA hospital he built. Among other philanthropies, he tracks down and helps people who aided him during the Holocaust. Gifts of Fortunes Once amassed, great wealth has been used for widely di- vergent purposes, and the Johnson & Johnson fortune illus- trates some of the extremes. Much of it is the subject of a bitter dispute pitting the third wife of J. Seward Johnson Sr. against his six children. When J. Seward, son and younger brother of the better known Robert Wood Johnson Sr. and Jr., died in May 1983 at the age of 87, he left his wife Barbara the bulk of his estate, valued at between $ 400 million and $ 1 billion. Only one of his children received anything- $ 1 million plus a house although - although each had previously been endowed with a trust fund worth $ 110 million in today's market. " A cold fish in the face, " is how J. Seward Johnson Jr. described the will. He and his siblings have decided a billion dollars is worth fighting for, and Barbara thinks the same. Each side in the dispute has amassed huge amounts of documentation in its at- tempt to discredit the other. Lawyers for Barbara Johnson described the exhibits as " more on the scale of a large antitrust case than of a probate proceeding. " If and when the trial begins as scheduled in New York City this November, the sensational material exposed is likely to tarnish the carefully cultivated 30 Health / PAC Bulletin familial image of a company virtually synonymous with baby powder. When they married in 1971, Johnson and the Polish - born chambermaid, a former art student 42 years his junior, em- barked on a spending spree of the sort that may never be equalled by the new health rich. It took four years and $ 30 million to build their house in Princeton, NJ, which " reportedly came with a $ 78,000 orchid house, bathrooms with heated mar- ble floors, gold plated - towel racks and an air conditioned - dog house, " according to the New York Times. Since her husband's death, Barbara Johnson has continued to spend lavishly. She recently set records for the most ever paid for a single piece of furniture, $ 1.5 million for a cabinet from Versailles, and for a drawing, $ 4.8 million for a Raphael. The Johnsons had been particularly fond of Raphael: one of his murals was to have been the ceiling of the as yet unfinished $ 5 million mausoleum for them and their two dogs. Certainly the Johnson & Johnson Company would prefer to be associated with the Robert Wood Johnson Foundation, whose assets of some $ 1.2 billion also originated in the med- ical supply fortune. Until this year RWJ was the dominant philanthropic presence in health care, and it derives the bulk of its income from a 13 percent share of Johnson & Johnson stock. This giant has now been dwarfed by the June sale of Hughes Aircraft to General Motors for more than $ 5 billion, all of which goes to the Howard Hughes Medical Institute. At a stroke the Institute has become the largest of all private philan- thropies, over $ 1 billion wealthier than the Ford Foundation. It is expected to support at least $ 200 million worth of medical research a year, most of it at teaching hospitals and medical schools. This sum is twice what all private foundations put together spent on such research in 1980. Medical research is not the full beneficiary of the world's richest paranoid hypochondriac. In the eight years since How- ard Hughes died, courts attempting to establish the legitimate heirs of another 1.1 $ billion have been wading through 40 phony wills, the claims of numerous women who say they were secretly married to him, and a vast litigation logjam. Those who want to dispense their millions while they're still alive can also run into problems. " It's easier to make $ 100 million than to give it away, " declared Edwin Whitehead, who has done both. The giving was difficult because the gift came with strings attached. Students and faculty at MIT undid some of them before the university was able to conclude an agree- ment to establish his $ million 135 - Whitehead Institute for Bio- medical Research, opened in 1984. Briefly a paper billionaire from his company Technicon, specializing in automated blood analyzers, Whitehead sold out to Revlon in 1979 and became an " enlightened philanthropist. " He hopes that as private funding replaces government financ- ing (at least in non military - areas) his MIT model of a privately endowed research center operating in the midst of a univer- sity will spread. Still worth over $ 150 million, Whitehead recently donated a million dollars to the Hastings Center, an institute in Westchester County, NY devoted to biomedical ethics, and has expressed a wish to make the center " a house- hold word. " Going Public Many of the new multimillionaires of Reagan's Age of the Entrepreneur have realized their wealth by taking a company public. Initial stock offerings raised 10.7 $ billion in 1983, although plummeting values of new offerings have since made investors wary - at the end of 1984 over half of the companies that have gone public since 1978 were selling at less than their initial offering price. A raft of new high - tech companies were among those which sank after riding high waves of investor enthusiasm. New offerings in 1984 raised only $ 3.5 billion; the founding entrepreneurs and their financial backers had to settle for prices considerably below what they would have ob- tained a year earlier. Among those hard hit was Silicon Valley venture capitalist Arthur Rock. He was worth $ 160 million at the end of 1983, according to last year's Forbes 400 list, but he didn't even make this year's list because the value of his stock in Diasonics, a troubled maker of diagnostic imaging equipment, plunged $ 50 million. Health care has certainly lost some of its glow on Wall Street. The day in 1983 when Diasonics went public Rock's holdings were worth $ 84 million, and three other stockholders shared another $ 190 million worth. In 1984 the top single - day moneymaker in the industry was LeRoy Pesch, chairman of the Houston - based Health Resources Corporation of America; his stock was worth only $ 32.1 million the day his company came on the market. Last year the instant wealth was much greater elsewhere: the stock of toymaker Russell Berrie was valued at $ 165 million the first day shares were sold, a firm investor vote of confidence in the low tech - stuffed teddy bear industry. Investor enthusiasm for health maintenance organizations is the one consistently upward trend among health care stocks. Enrollment in HMO's is growing explosively - up a record 22.4 percent in 1984 to 16.7 million members - and since 1980 they have raised over $ 1 billion in capital by going public. Leonard Abramson, founder of Philadelphia's U.S. Health Care Sys- tems, had stock in his HMO worth $ 31 million when it went public in early 1983 (see last year's Bulletin article). The price of the company's stock had multiplied six times by mid April - 1985. In the same month, the value of a share in Nashville- based Health America Corporation was triple the initial offer- ing price of July 1983. Shares in several other investor - owned HMO's that went public in 1983 and 1984 had also doubled or tripled by this spring. Richard Burke, head of the Minnesota health maintenance organization United Health Care Corporation was the 1984 single - day fortune champion for HMO's, with paper worth $ 18 million. Here is a list of 1984 single - day recordholders in other branches of health care: * Austin Darragh (23.2 $ million). His Institute for Clinical Pharmacology is an Irish outpost of the American health care system, for which it does drug testing. ICP's scandalous treatment of its human guinea pigs in unregulated and econ- omically depressed Ireland was the subject of a recent Bulletin article (February January - 1985). * Andrew Miller (12.5 $ million). Miller is head of Nashville- based Surgical Care Affiliates, a small chain of freestanding surgery centers. * Joseph Meringola (8.3 $ million). His Medical Action In- dustries, Inc. of Farmingdale, NY is a dispensary of the new disposable society, manufacturing disposable sponges, sur- gical masks, and Sure Snip -- suture kits, and distributing surgical apparel and related equipment. Other disposable items in the works include non sterile - surgical apparel, ex- amination gloves, and surgical towels. According to Medical Action's stock prospectus, the company is considering pro- duction of pre packaged - sterile surgical kits containing all Health / PAC Bulletin 31 the instruments and bandaging for a specified operation, which " would eliminate the handling and assembly of sur- gical equipment by hospital personnel. " Ronald Berman (8.6 $ million). His New York City based - Cosmopolitan Care Corporation has staked claims in three related growth sectors: temporary office personnel, private contracting of government services, and home health care. It contracts with governmental agencies in the New York- New Jersey area to provide personnel and management for services such as revenue collection and has a rapidly grow- ing Home Care America division. * John Bradley (27.1 $ million) and David Huff (20.3 $ mil- lion). Bradley is founder and president and Huff is executive vice president - of American Health Care Management, a Dallas - based hospital company. * Dr. LeRoy Pesch (32.1 $ million) and Donna Stone Pesch (11.3 $ million). LeRoy is founder and board chairman of Health Resources Corporation of America and married to Donna, who is a director of the company. Their story il- lustrates some of the interlocks and opportunities which are creating the new rich of health care. Dr. Pesch founded HRCA in 1981 after holding numerous administrative jobs in voluntary and governmental health, among them President of Michael Reese Hospital in Chi- cago, Dean of the SUNY Buffalo / School of Medicine, and Assistant Secretary for Health and Scientific Affairs for the U.S. Department of Health, Education, and Welfare. Donna Stone Pesch is the daughter of W. Clement Stone, the wealthy insurance magnate (see the story of Patrick Ryan above). Stone built his original fortune by having legions of door - to - door salesmen get up in the morning, whip them- selves into a positive mental attitude by chanting " I feel happy, I feel healthy, I feel terrific, " and then rush out the door to sell low cost accident insurance policies paying ap- proximately ten cents in benefits for each premium dollar. Later his company sold low cost health insurance. It's certainly possible that Stone gave his son law - in - copies of The Success System That Never Fails and his other inspira- tional books, but his help was more than spiritual. In 1982, while a director of HRCA, he gave his personal guarantee as collateral for all the company's bank borrowings: in ex- change he received 25,000 shares of stock. When HRCA went public in 1984 LeRoy and Donna Stone Pesch owned over half the stock between them, W. Clement Stone and his wife owned another eight percent, and the most famous member of the board, the eminent surgeon Michael DeBakey, owned 1.2 percent. LeRoy Pesch continued as chief executive officer at a salary of $ 207,000 a year, subse- quently raised to $ 300,000. In addition he was reimbursed $ 16,000 a month for expenses connected to his Houston home and automobile. In late 1984 HRCA merged with the rapidly expanding Republic Health Corporation of Dallas, the fifth largest for- profit hospital chain. The deal gave the Pesch family 22.3 per- cent of Republic's stock, worth approximately $ 75 million in June 1985. LeRoy Pesch continued in his job of president of HRCA, and had other income from the merger as well: the agreement stipulated that Republic will obtain business air- craft from Avro, Inc., a company he half owns, and HRCA leases a Lake Forest, IL office building in which the Pesches have a 35 percent interest. Donna Stone Pesch has devoted her major energies to philan- thropy. Since 1969 she has served as president of her parents ' foundation, overseeing over $ 100 million in gifts. It is certainly possible that she will find this experience useful if she and her husband start their own foundation some day. LeRoy Pesch not only joined a successful management team when he merged his company with Republic, he also linked up with the industry's largest investor - owned hospital chain, Hospital Corporation of America. When HCA sold 18 hospitals to Republic it got 7.5 percent of its stock in partial payment. The purchase agreement also included a proviso that if Republic lost $ 5 million in a quarter or defaulted in its payments to HCA before July 1985, it would cede control of its board to HCA nominees until its financial condition im- proved. This clause was never activated. Republic was able to turn the money - losing low occupancy rate HCA hospitals it bought into money makers by revamping them to specialize in a limited number of procedures they could perform at a pro- fit. Despite this success, Republic has decided that buying money - losing hospitals and turning them around is less lucra- tive than building local networks of physicians, primary care settings, and elective and acute hospitals. So far this strategy has proven phenomenally successful. In 1984 Republic's net revenues jumped 48 percent and its net income nearly quadrupled over the previous year's. This spring rumors were circulating on Wall Street that McDonnell- Douglas, already heavily involved in health care, was enter- ing negotiations to acquire 13 percent of Republic. If Republic does join the military industrial - medical - com- plex it will be like old times for Mitchell Rogovin. A Wash- ington lawyer, Rogovin's long list of political appointments include the positions of Special Counsel to the CIA and direc- tor of the Nuclear Regulatory Commission's investigation of the Three Mile Island accident. As part of the HRCA Republic - merger he is receiving $ 100,000 on a one year - legal consulting contract. This is considerably less that the $ 189,000 he earned a year before from HRCA. Rogovin is now a small cog in the wheel of the continual deal making, mergers and acquisitions, network building and elite shuffling that go into making health fortunes. When deals can be worth so much, some corporations have apparently been willing to step beyond legal bounds to over- come regulatory obstacles, and have found government offi- cials willing to help, in exchange for sufficient compensation. The New Orleans U.S. Attorney claims that while in private legal practice between his second and third terms, Louisiana Governor Edwin Edwards made $ 3- $ 4 million as part of a health racketeering scheme that netted the conspirators a total of $ 10 million. The alleged conspiracy centers around Health Services Development Corporation, a company which obtain- ed certificates of need from the state and resold them to for- profit hospital and nursing home developers. The certificates. allowed the new projects to receive Medicare and Medicaid reimbursement. The indictment charges that Edwards appointed people friendly to the company to supervise the state's certificate of need review process. HSDC has obtained 15 certificates of need, including five which Governor Edwards exempted in August 1984 from a moratorium on new projects. Prospective clients were told that the company enjoyed Edwards'favor, but according to the indictment " the true involvement of Edwin W. Edwards was concealed in order to utilize the power and influence of his position as Governor of the State of Louisiana. " Edwards has admitted receiving $ 2 million in fees from HSDC while out of office for relatively little work. " I just waltzed things back and forth, " he says. Also named in the indictment are his brother, accused of 32 Health / PAC Bulletin has committed itself to spending on heart transplant experimentation. Last December Time magazine reconstructed the key recruiting conversation on the porch of the Louisville home of Alan Lansing, director of the Humana Heart Institute, be- tween Jones and the heart transplant surgeon, William DeVries: Jones asked DeVries: " How many hearts do you need to find out if it works? Would ten be enough? " As a flabbergasted DeVries indicated that ten would be good, Jones added, " If ten's enough, we'll give you 100. " That sealed the deal. Humana and De Vries readily surrendered their $ 1.4 million worth of stock in Symbion, the maker of the artificial heart used in the transplants, to avoid any appearance of financial impropriety. receiving a million dollar fee intended for the Governor after Edwin Edwards took office; HSDC executives; Ronald Fal- gout, a former Louisiana Health and Human Resources offi- cial; and James Wyllie Jr., a lawyer and professor at the Tulane School of Public Health and Tropical Medicine. Both Falgout and Wyllie allegedly became health millionaires, receiving $ 2.6 million each for their parts in the conspiracy. Golden Salaries When money flows from health care providers to political dealmakers, it remains largely outside the public's view. By contrast, the million - dollar salaries of the top executives in the for profit - hospital industry are highly visible symbols of their companies'emergence as one of the great business success stories of the past 20 years. And nobody has been more visibly successful than David Jones, co founder - and chairman of Humana, Inc., of Louisville, KY. Jones emerged from 1984 as the unquestioned superstar of the health care elite. Evidence of his abilities was everywhere. On the corporate financial side, he could boast that his hospital company was the second largest in the country and had given its investors the second highest return of all the Fortune 500 service companies between 1974 and 1984. A share of Humana stock bought in 1974 for $ 4 was worth $ 403 in the spring of 1985. Humana's net income was 9.9 percent of sales in 1984, when its larger rival, Hospital Corporation of America, could only manage 8.5 percent. Jones'personal finances were even more spectacular last year. His total compensation of $ 18,116,000, $ 17 million of it coming from exercising stock options, put him second on the Business Week list of the highest paid executives, behind only T. Boone Pickens of Mesa Petroleum. Last year his corporation became one of the most famous in the country. The daily news reports on its artificial heart transplants went a long way toward Jones'goal of making Humana a household word. This free publicity was pro- bably worth considerably more than the millions the company Beyond this success in the health care arena, Jones has made Humana a major presence in Louisville. It subsidizes the Louisville Playhouse's reknowned annual festival of new American plays, now called the Humana Festival. It has also helped bail out a large local hardware distributor that was on the verge of closing down. The local power and national visi- bility of Humana and Jones is now symbolized and enhanced by the new Humana Building, which opened last year. De- signed by noted architect Michael Graves, it was described by New York Times architecture critic Paul Goldberger as " a strik- ing example of a large, prosperous corporation seeking to build a headquarters structure that would stand as a statement against conventional, modernist corporate architecture. " Goldberger went on to describe it as " perhaps the first skyscraper of our time to be both serious and visually alive... it is at once a building of great diversity and a building of great energy and passion. ": Humana's goal in its recent image making - is the creation of a nationally recognized - marketable name signifying medical benevolence and business. This positive name identification enhances its efforts to build the corporate structure described in its 1984 annual report: " An integrated system of health care services that include hospital care, prepaid health plans, and medical care centers where independent physicians deliver primary care. " It is not surprising that the 53 year old Jones was one of 11 runners - up to General Motors'Roger Smith as Financial World's top chief executive of 1984. Even more significantly, he was the only representative of the health care industry on Business Week's list of the 50 leaders of the new corporate elite. Jones was lauded as one of the " service gurus " who, along with high - tech entrepreneurs, corporate rejuvenators, and financial wizards, are creating a new style of business and financial organization. This new corporate elite, declared Business Week, is beginning to translate its wealth and superior form of business organization into political power, and challenging the older elites. Other top executives in the investor - owned hospital industry did not do nearly as well as Jones financially, but many were rewarded with sizable increases in total compensation last year, at a time when the government was boasting of a significant drop in health care cost inflation. Among them were Dr. Thomas Frist Jr., founder co - and head of Hospital Corpora- tion of America (up from $ 1.4 million to $ 2 million), Richard Eamer of National Medical Enterprises (up from $ 1.1 million to $ 6.4 million), and Robert Van Tuyle, head of Beverly Enter- prises, the largest nursing home chain (up to $ 1.9 million). Chief executives in the pharmaceutical industry on Forbes ' executive compensation list averaged $ 982,000 in 1984, a jump Health / PAC Bulletin 33 of 28 percent from 1983. By contrast, the average chief execu- tive of a large American company got a 22 percent increase last year. In contrast, the average annual pay hike for workers in 1984 was four percent; this was lower than the six percent raise in 1982 at the height of the last severe recession. Wage increases in contracts signed last year were at record low levels. Hospital workers won wage gains of 11 percent in 1982 and only 4.9 per- cent in 1984. " This relatively low rate of wage inflation was purchased at considerable price in terms of labor unrest and, in some cases, strikes, " commented the industry magazine Hospitals. The disparity between the growing incomes of those at the top of the hospital and other industries and the stagnating incomes of their workers could intensify class conflict, as Sylvia Nasar warned in Fortune this April: Though wage moderation now appears to have become part of the economic landscape, risks remain. Lavish executive pay in- creases haven't yet aroused much antagonism from workers, who are still off balance from the shocks of recent years. But the grow- ing spread between management and labor goes against history and could eventually produce a backlash if workers conclude that the burden of adjusting to tougher competition isn't being shared fairly. Driving the growing creation of health fortunes is a health system that through various organizational and financial mech- anisms transforms personal misfortune into profitable services and personal wealth. At the same time that million dollar a year salaries are becoming commonplace, medical bills in that range are beginning to appear more regularly. Virtually every day the news media proclaim a medical miracle or other grip- ping episode that involves a massive commitment of medical resources - and a commensurately massive financial outlay. When Patricia Frustaci gave birth to septuplets this year, she and her husband were very glad they had paid their $ 111.57 a month half share - for dependent coverage under his New York Life Insurance Co. group policy. After paying the $ 500 deduc- tible and 20 percent co payment - on the first $ 2,500 exceeding the deductible, the Frustacis could leave the rest of their an- ticipated $ 700,000 bill to New York Life. At the other end of the life cycle, the day her husband Claus was acquitted of attempting to murder her, Martha " Sunny " von Bulow, a member of the Mellon family, was in the 1631st day of an irreversible coma. Her estate was paying for a $ 725 - a- day room at the Harkness Pavilion of New York's Presbyterian Hospital and another $ 350 a day for 24 hour - nursing care. Up to that day, the cost had come to $ 1.7 million, not including 34 Health / PAC Bulletin Maykovsy Vladimr doctor bills and other expenses such as the permanent private guard outside her suite. During the next 20 years she is ex- pected to live, even more of her fortune will be transformed into small parts of other fortunes, in the health care industry. As in these two famous cases, the need for help in coping with bodily suffering is often compelling. The health care system, in its expanding domain, manages this suffering through the financing and provision of health services. This system is becoming more thoroughly penetrated by the finan- cial community and, consequently, is an ever more fertile ground for the pursuit of personal wealth. As the for profit - medical technology, medical supply, and pharmaceutical industries become more tightly integrated with a delivery system that is increasingly organized on a profit- making basis, the search for profits and for the favor of the financial community increasingly has come to characterize the health care system. Stock prices, not services, have become the bottom line. Mergers, takeovers, deal making - , and stock manipulation are becoming as pervasive here as they are in other sectors of the economy. Big money political fixers are helping to grease the wheels. Health care has become a breed- ing ground for rising elites of the new service economy. The top executives make huge salaries and have their own lavish stock deals. Although the near future may bring even more vigorous ef- forts to cut costs, the prospects for creating and expanding health fortunes are likely to remain bright. O This article has been reprinted from Health / PAC Bulletin Volume 16, Number 3, in order to correct a printing error. Know News Promoting Disease and Preventing Health: What Role for Health Educators? by Nick Freudenberg In their zest to join corporate health promotion campaigns, health educators often ignore the far more significant role many corporations play in disease pro- motion. Long before quit smoking - , stress reduction or exercise programs were even a gleam in some corporate manager's eye, manufacturers were spending hundreds of millions of dollars annually to oppose public policies that would protect health and to persuade people to engage in habits that would contribute to premature death. In this column, I will describe some disease promotion campaigns and then discuss how health educators and other health professionals can counter their effects. Disease Promotion Campaigns In 1984, the beverage alcohol industry spent more than $ 900 million persuading people to drink. Recent changes in our population's demographic profile, com- bined with modest declines in per capita consumption of alcohol, has led to small reductions in the total volume of bever- ages sold. However, 10 percent of the drinking population accounts for 50 to 70 percent of the sales of wine, beer and spirits. These problem drinkers provide the margin of profitability for the industry. To ensure continued sales and profits, the alcohol industry now seeks to capture the youth market. New products such as wine coolers - mixes of fruit juice and wine - are now on sale in supermarkets and grocery stores. Alcohol advertising seeks to associate drinking with sports, romance, and having a good time. Its goal is to convince young people to start drinking earlier, to drink more and to become lifetime drinkers. Meanwhile, alcohol - related traffic fatalities are the main cause of death among young people between the ages of 18 and 21. The next two leading causes, homicide and suicide, also have substan- tial alcohol involvement. In a 1984 survey of New York State high school students, I percent reported they were hooked on alcohol; in a national survey, 40 percent of high school seniors claimed they had had five or more drinks on one occasion in the previous two weeks. In response to the alarming results of the alcohol industry's marketing strategy, organizations such as the Center for Science in the Public Interest, the Na- tional Council on Alcoholism, and the National Parent Teacher Association have begun a campaign to counter the message that alcohol is where it's at. A bill currently pending in the House of Representatives (HR 2526), the Fairness in Alcohol Advertising Act, would pro- vide for equal time for health and safety messages when alcohol ads are broad- cast. Other activists have called for a total ban on advertising alcohol. (Simi- larly, the American Public Health Asso- ciation has initiated a campaign to ban the promotion of tobacco products.) Both these efforts provide a refreshing contrast to most alcohol and tobacco health education campaigns, which tar- get only the victims of the legal drug pushers. Another example of a disease promo- tion campaign is the automobile in- dustry's successful efforts to block mandatory installation of air bags in passenger cars. According to a 1977 study by the Na- tional Highway Safety Transportation Board, the installation of passive restraints in all cars would prevent up to 12,000 deaths and 100,000 serious in- juries each year. Yet, since the Depart- ment of Transportation first proposed mandatory air bags in 1969, the automo- bile industry has successfully opposed such a standard. Its tactics have ranged from sabotaging a trial of air bags that one manufacturer had agreed to carry out to mounting a public " disinforma- tion " campaign minimizing the benefits of air bags and warning that they could accidently explode. In early 1985, in response to a court order, Secretary of Transportation Elizabeth Dole issued a ruling that air bags would become mandatory in 1987 unless states with more than two thirds - of the U.S. population passed compulsory seat belt laws. This new ruling spurred the auto industry to begin an unprece- dented multimillion - dollar lobbying campaign to persuade state legislatures to pass the seat belt laws that would keep air bags out of American cars. A coalition of groups including Public Citizen, the American Public Health Association and the insurance industry are now using a variety of tactics to con- vince the automobile manufacturers that installing air bags may be cheaper than stalling regulations. One of the most promising tactics is a product liability suit charging that failure to install a proven lifesaving technology constitutes negligence. Lessons for Educators What can health educators learn from these and other efforts to counter the disease promoters? The first lesson is " don't avoid con- troversy. " Too often in our effort to win over as many converts as possible we develop a lowest denomina- - common - tor approach. As a result, no one is antagonized, but neither are any pas- sions aroused. Health is political, and solving health problems requires en- tering the political fray. The cam- paigns described above and the new anti tobacco - initiative now being discussed within the APHA illustrate that people can be aroused and mobil- ized when they get angry and when they feel they can support the " right side " in a moral conflict. The history of public health is one of willingness to take on new challenges. Health edu- cators should embrace this history, not renounce it. Second, and as part of this willingness to take on the disease promoters, we must combat the disinformation cam- paigns that industry sponsors to mar- ket its policies. The General Motors campaigns against air bags, Reynolds's full page - ads on politeness as a solu- tion to smoking problems, the petro- chemical industry's multimillion- dollar lobby against right know - to - laws all demonstrate that disease educators have far more resources than we do. We need to find creative ways to discredit such messages, and to help people analyze critically what they hear. * A third lesson is that coalitions are critical to success. Consumer groups, continued on page 39 Health / PAC Bulletin 35 Media Scan Our Jobs, Our Health: A Woman's Guide to Occupational Health and Safety by the MassCOSH Women's Committee. Bos- ton: Massachusetts Coalition for Occu- pational Safety and Health and Boston. Women's Collective, 1983. Office Work Is Hazardous to Your Health by Jeanne Stellman and Mary Sue Henifin. New York: Pantheon Books, 1983. Double Exposure: Women's Health Hazards on the Job and at Home edited by Wendy Chavkin. New York: Monthly Review Press, 1984. by Peggy Clarke The work of the women's movement is never done. For years, it struggled to ex- pand employment opportunities for women and to increase the number of women who work outside the home. Now it is beginning to deal with the serious health risks associated with that work. At the same time, the occupational health movement has been forced to recognize that the home and the office as well as the factory and the mine are work sites fraught with hazards. The intersection of these two move- ments has recently produced three books of major interest: Double Exposure: Women's Health Hazards on the Job and at Home, edited by Wendy Chavkin; Office Work Is Hazardous to Your Health, by Jeanne Stellman and Mary Sue Henifin; and Our Jobs, Our Health: A Woman's Guide to Occupational Health and Safety, a joint effort of MassCOSH and the Boston Women's Health Collective. A major focus of all three books is the health hazards associated with the com- puterization of office work, especially the frequent exposure of women to doses of low level radiation from video display terminals (VDT's). As earlier with chemicals and other forms of radiation, there is growing concern over the long- term dangers for all those exposed, coupled with specific worries about the effects on pregnant women and their fetuses. As the use of this equipment in- creases and the associated hazards become better known, it is likely that of- fice workers will become more eager for union organization. The need for this protection is certainly the message in all three books. Our Jobs, Our Health is a simple and straightforward primer for women be- ginning to consider the potential ill con- sequences of their work. It is particularly strong in its discussion of reproductive hazards, covering issues ranging from infertility, impotence and loss of sexual desire to the effect of work on a pregnant woman's health and that of her develop- ing fetus. The authors'goal is not just to inform readers, but to motivate them to collective advocacy of workplace improvements. Although it doesn't discuss house- work, this 90 page - volume is relatively comprehensive for a book its size in discussing both office and factory work problems. The book concludes with a useful resource list of agencies and organizations involved in workplace issues and a list of books and articles providing greater detail on specific topics. Jeanne Stellman is the doyenne of the woman's occupational health movement. Her Work Is Dangerous to Your Health and Women's Work, Women's Health are seminal volumes that remain essential reading for all concerned with occupa- tional health. Her new book, co au- - thored with Mary Sue Henifin, focuses exclusively on office work, with par- ticular emphasis on physical and envi- ronmental hazards. Issues the authors cover include VDT's, indoor air pollu- tion, lighting and the potential for fires in high - rise buildings. They write pri- marily for those with knowledge of occupational health and the academic training necessary to understand fairly technical discussions of noise and air pollution and VDT radiation levels. One innovative chapter systematically exam- ines the tools " of the office trade ": the angle, size and material of desk chairs; the physical layout of work areas; several office machines, including photocopiers; and chemicals and cleaners commonly used in offices. The authors suggest very specific and carefully researched safe- guards and improvements to maximize the efficiency of these tools while reduc- ing any negative effects. They include a thorough discussion of the current con- troversy over fluorescent lighting, used in most office spaces, and list specific remedies for lighting problems. This book should prove to be a useful corrective to those who assume that oc- cupational health dangers exist only in mines and industrial factories. The modern office may be more aesthetically pleasing (although some are not), but it can certainly be as dangerous as any other work site if particular hazards are not addressed. The appendix is extremely useful, especially the checklist survey for office safety. This is a step step - by - guide for concerned workers attempting to docu- ment safety deficiencies. Double Exposure: Women's Health Hazards on the Job and at Home is a very different book. It is a carefully edited series of papers that is much less a " how - to " and much more a general overview of the issues and concerns that revolve around women's work and women's health. The first section examines the role of women in different work forces, the health hazards to which they are fre- quently exposed, and the complexities of those work environments that generally act against their abilities to make swift changes. The second section of the book deals with reproductive risks at work and, since it covers the spectrum of workplace and job types, it may be extremely valu- able for women contemplating having . children or those who are already preg- nant. Increasing its value in this regard is the chapter by Maureen Hatch that discusses the reproductive hazards of the workplace for both men and women. While each of the essays offers rich in- sights into a specific aspect of occupa- tional health issues for women, a few in particular stand out. Chavkin's own chapter on " Walking the Tightrope: Pregnancy, Parenting and Work " is a fascinating discussion of medical and social barriers that confront American working women who become pregnant. The United States is the only industrial- continued on page 38 36 Health / PAC Bulletin Body English What's In A Name? Generic vs. Brand Name Drugs by Arthur A. Levin Controversies over medical practices do not die. Unfortunately, unlike old soldiers, they don't even seem to fade away. It may be pure coincidence, but the latest furor over the safety, efficacy, ef- fectiveness and bioequivalence of ge- neric drugs comes at a time when many brand name bestseller drugs are coming off patent. Examples include such heavyweights as Valium (generic name diazepam) and Inderal (generic name propranolol). Physicians, manufacturers and others embracing the " keep government off the backs of those toiling in the private sec- tor " view of life have always argued that the FDA's approval process was unneces- sary. Their argument was based on two hypotheses of the marketplace: first, that no producer would knowingly make an unsafe product because of the liability exposure; and second, that no one would make a product that didn't work because who would buy it? Yet, there is ample evidence that unsafe, ineffective drugs have been knowingly marketed by manu- facturers, even with regulatory oversight by the FDA. The mind boggles in imag- ining what might have occurred without such oversight. Any questions about the scientific abilities of the FDA have always been focused on the denial or delay in approv- ing a new drug. Now, some professionals are questioning the FDA's scientific in- tegrity in moving too quickly to approve generic drugs. This new interest comes a year after Congress enacted legislation extending patent protection to brand name products from 17 to 22 years. The bill served also to " facilitate " the approval process for generic versions of previously marketed brand name drugs. This is accomplished by allowing Abbreviated New Drug Ap- plications (ANDA's) to be used by appli- cants wanting to market generics of branded products approved after 1962. These products previously required a full new drug application (NDA), which manufacturers claimed was unnecessary, time consuming - and expensive. Use of ANDA's was limited to " grandfathering " generic substitutes for drugs approved prior to 1962. The hope of the bill's spon- sors was that it would produce enough benefits for consumers, by making more generics available, to outweigh the costs incurred by granting brand name firms longer periods of exclusivity and higher profits. The final version of the Drug Price Competition and Patent Term Restora- tion Act (signed into law in September 1984) was the result of long negotiations between the American Pharmaceutical Association, which represents the big manufacturers of branded products, and the Generic Pharmaceutical Industry Association and the Pharmaceutical Manufacturers Association, both of which represent generic producers. Some observers wondered how long these strange bedfellows would refrain from their usual sparring. The answer seems to be " not very long at all. " The fight for consumer access to safe, effective and less expensive prescription drugs has resulted in some of consumer- ism's few victories in the health field. Consumers have been advised to insist on the generic equivalent when available. In addition, the willingness of a practi- tioner to volunteer the generic version when prescribing has become one of the benchmarks for judging the quality of prescribing practice. Many of the at- tempts both in this country and abroad to rationalize pharmaceutical thera- peutics have placed great reliance on the use of generics where available and appropriate. Years ago, arguments about the lack of safety and inferior performance of generics were used to combat the efforts to change state laws so that consumer ac- cess to less expensive generic products was assured. Legislation was necessary because consumers were (and still are) dependent on the physicians as keepers of the keys to the national medicine cabinet. Today, many states do have laws that allow substitution, although the designation of who decides substitution, and to what degree, varies. The proponents of generic availability claim to be supported by the clinical experiences of large users such as hos- pitals, whose formularies have long specified the least expensive, compari- ble version of a drug. The literature has, from time to time, contained discussion of concerns about the effectiveness of some generic products, particularly digoxin (brand name Lanoxin) because of problems with bioavailability (rate and extent of absorption). However, there has also been indication that some generic forms of phentoin are more reliably ab- sorbed than the brand name product Dilantin Kapseal (Medical Letter, May 1980). Is the advice to insist on generic pre- scription, where available, good or bad? There is little evidence from clinical trials available to show whether or not particular generics are equivalent to the brand name product. On the other hand, the bioequivalence test being used to speed approval of new generic drugs is the same used to moni- tor reformulations of brand name drugs: This test requires that the tested drug perform within 20 percent of the refer- ence standard drug's rate and extent of absorbtion (maximum plasma concen- trations). Brand name products are often reformulated; that is, they are not the same as when the clinical trials to meet NDA requirements were conducted. Both generics and branded drugs also vary in bioequivalence from production lot to production lot. The same FDA test is used to monitor and assure that lot variations in absorbtion characteristics are kept within the 20 percent limits. There is little other clinical study data available that can be said to prove or disprove the claims that significant prob- lems of bioavailability exist between. branded drugs and FDA approved - ge- neric substitutes. Therefore, there is no reason not to continue to encourage con- sumers to avail themselves of less expen- sive generic drugs once patent protection expires. Clinical experience seems to in- dicate that generic products are most likely to be as beneficial as branded ones. One more fact might help put minds at ease. Brand name manufacturers often imply that they are more competent than generic producers in making safe and ef- continued on page 39 Health / PAC Bulletin 37 Media Scan continued from page 36 ized country that does not assure any compensation to working women at childbirth, and Chavkin makes a con- vincing argument for parental benefits during and after pregnancy so that men and women can care for themselves and their children. The chapters by Leith Mullings on minority women and by Sonia Jasso and Maria Mazorra on migrant and seasonal workers are both extremely valuable, and cover topics all too often overlooked in discussions of occupational health issues. Health and safety hazards of housework - as well as the stress and isolation of domestic labor - are com- prehensively and sensitively reviewed in an essay by Harriet G. Rosenberg. The closing chapter is by Nick Freu- denberg and Ellen Zaltsberg, entitled " From Grassroot Activism to Political Power. " Five case studies present ways in which women have organized to fight against various environmental threats in- cluding chemical dumps, pesticide ex- posure, and asbestos exposure in schools. The authors provide both the ra- tionale and motivation for taking collec- tive action to address health issues. These examples of the successful linkage among the women's movement and the environmental and labor coalitions serve as models of community or grassroot health advocacy. All three books are useful addenda to the growing body of knowledge about workplace safety and health. It is a pleasure to read books that reflect in their content, philosophy and readability the growing sophistication of this still relatively young movement. C Peggy Clarke is Assistant Commissioner for Health Promotion, New York City Department of Health. Alternative Medicines: Popular and Policy Perspectives edited by Warren Salmon, PhD. New York: Tavistock Publications, 1984. by Susan Luck We face a crisis in health care; at no time in history has there been a greater need for re evaluation - of the delivery of health care in the United States. Medical care has become America's leading growth industry, comprising 11 percent of the Gross National Product, nearly $ 450 billion a year. Spiraling costs - along with a growing dissatisfaction in medical interventions that offer an im- personal, technological approach - have led many consumers, health practi- tioners and health care analysts to ex- plore alternative therapies that remain outside mainstream medicine. In Chinese, the word crisis means both " danger " and " opportunity. " In a com- prehensive overview of issues, Alter- native Medicines addresses both the dangers and opportunities in the current medical model and the emerging alter- native health movement. The book ex- amines scientific medicine as well as alternative health systems such as homeopathy, chiropractic, traditional Chinese medicine and indigenous heal- ing systems through historical, cultural, socioeconomic and political perspec- tives. The contributing authors explain the principles and beliefs underlying each system and discuss each in the con- text of health care planning and policy- making. Alternative Medicines enables health worker and layperson alike to gain a deeper insight into the limitations of the current medical model and the reasons for the popular discontent that has given rise to a growing " holistic " health movement. The World Health Organization de- fines health as a state of mental, physical and social well being - , not merely the absence of disease. Analysts of contem- porary medicine acknowledge the cur- rent medical model as a valuable but in- complete approach to health. Disease- focused, it's search for the biological determinants of illness ignores the numerous components of health, offer- ing little to enhance health and prevent disease. The alternative health movement has philosophically set itself in direct oppo- sition to some of the basic beliefs of scientific Western thought. Holistic ther- apies assume a unity of body, mind and spirit in which illness is seen not as limited to biological causes that occur only in the physical body. Unfortunately, this challenge to modern medicine and its reductionist thinking has prevented many new options and choices in health care from being taken seriously by those in mainstream medicine. Alternative Medicines draws on the empirical and scientific knowledge of other cultural systems for health and practices of healing. The chapter on " Traditional Chinese Medicine " by Effie Chow, PhD, presents clearly the theoret- ical and philosophical world view that forms the base of Chinese medicine and helps the reader to understand the diffi- culties in evaluating its efficacy by " sci- entific " standards. Dr. Chow explains the Chinese holistic view of the universe, concepts of balance (yin, yang), and energy (chi) systems that are integral to diagnosis and treatment in the practice of acupuncture and other therapies. She also defines the legal issues and difficulties of integrating Chinese medi- cine into the current Western model. A critical ingredient in all the alterna- tive modalities in this book is the rela- tionship between the practitioner- whether physician or shaman - and the patient. All cultures appear to acknowl- edge a dynamic invoked through faith in the practitioner and the influence this has on the healing process itself. One of the failings of our specialized, impersonal technological approach is in this rela- tionship that is believed to be at the heart of healing. In Western medicine, patients often feel neither respected nor listened to. They often feel angry, frustrated, frightened and uninformed, and there- fore unable to assume as much responsi- bility for their health as they otherwise might. Alternative therapies encourage patient participation, respecting the uniqueness of each person. In his chapter on homeopathy, Harris Coulter explores the uniqueness of the individual and the organism's own heal- ing powers. Although a Western system of medicine, its theory and practice dif- fer from the medical model. Homeop- athy's gentle approach is based on diag- nosis and treatment with minute doses of substances found in nature that are given to stimulate the body's own defenses. It's origins, which are pre industrial - , are still recognized throughout the world and practiced today by a majority of physi- cians in Europe, India, Asia and Latin America. As Dr. Chow does with her discussion of Chinese medicine, this author describes the difficulties in evaluating the efficacy of this alternative system. He also mentions the threat it poses to its pharmaceutical and medical competitors. Chiropractic is an American system of health care, but has its roots in the writings of Hippocrates, as Ronald Caplan points out in his chapter on this topic. Hippocrates wrote, " Look well to the Spine, for many diseases have their origins in dislocations of the vertebrae column. " Caplan gives a detailed account OE 38 Health / PAC Bulletin of the legislative battles that chiropractics have fought with the AMA and, finally, their acceptance by licensing boards and health insurance plans. The popularity of chiropractic has posed a threat to the medical profession since the early 20th century. An analysis of both its current status and future prospects is made, with a note of hope for further cooperation within the medical community. A chapter entitled " Psychic Healing " by Daniel Benor, MD, continues to ex- plore the variety of human experiences and therapies that have influenced and aided the health process within indivi- dual and cultural contexts. Today, scien- tific research has been able to document many claims for psychic healing, there- fore offering new possibilities in the realm of health. As anthropologist- psychologist Arthur Klienman empha- sizes in his chapter on " Indigenous Systems of Healing, " many of these occurrences are inextricably intertwined with beliefs, attitudes and the expecta- tions of the individual and the commu- nity. This implies increased possibilities for healing within our culture, as a new consciousness emerges and the medical model begins to change. A critical analysis of the rise of modern medicine and the alternative health movement is made by authors Howard Berliner, James Gordon and Rosemary Taylor. Each contributes im- portant perspectives on the implications of health care planning and policymak- ing for the reformulation of the delivery of health care. In " Holistic Health Centers in the United States, " James Gor- don suggests that it is time to create a Statement of Ownership, Management and Circulation (required by 39 S.S.C. 3685) The Health / PAC Bulletin, publication number 179051, is published bimonthly, six times a year. Subscriptions are $ 22.50 per year for individuals, $ 45 for institutions. Mail- ing address: 17 Murray Street, New York, NY 10007. Owner and Publisher: Health Policy Advisory Center at the same address. Editors: Jon Steinberg. Kathryn Wheeler; Managing Editor, Nancy Bourque - Scholl; all at the same address. CIRCULATION Average no. copies Actual no. of each issue copies of single during preceding -_ issue nearest 12 months filing date Total no. copies Paid circulation 1. sales through dealers 2. mail subscription Total paid circulation Free distribution Copies not distributed Return from news agents Total 2700 110 2050 2160 200 250 90 2700 2600 130 2180 2310 200 90 0 2600 model of holistic programs in a variety of communities, to assess whether a combination of health promotion and public education about Western and alternative medicine can meet people's needs more effectively and less expen- sively than is now the case. In " Scientific Medicine Since Flexner, " Howard Ber- liner evaluates the shift he sees taking place as mainstream medicine begins to integrate various cultural models and therapies into practice. His concern is that the alternative methods maintain their integrity and not get opted co - by the present system. In the concluding chapter, " Defining Health and Reorganizing Medicine, " editor Warren Salmon discusses the need to redefine health in order to reorganize medicine and reformulate medical con- ceptions and theories. He analyzes the political and economic developments in the delivery of health care and the shift in the consciousness of society, and con- cludes that they will, in time, make the scientific, biological base of Western medicine obsolete. This book contributes to new ways of understanding health and presents excit- ing challenges for both consumers and health workers. The issues raised here have no easy answers. However, the authors conclude that the current popular interest in alternative medicines will ultimately provide new health care sys- tems and lead to the reorganization of " scientific " medicine in the decades to come. O Susan Luck, RN, is a community health educator in New York City and Latin America who specializes in prevention, self help - and alternative health care systems. Know News continued from page 35 professional organizations, commu- nity groups and others must join together to advance a common agenda. Coalitions are, to my mind, the key political development of the 1980's, and effective health educators will have to learn the delicate art of weav- ing together disparate groups with overlapping interests. A corollary of this is that we need to use our professional organizations in new and different ways; too often their sole agenda has been to advance the profession. APHA, for one, is moving toward a broader definition of its goals, in which a primary aim is to advance the health of the public. Fre- quently, we cannot tackle the political and social dimensions of health prob- lems in our roles as practitioners. But by bringing in our professional organ- izations, we can add an important dimension to our practice. * Finally, we need to define our desired outcomes appropriately. In the auto safety issue, the behavior we want to encourage involves not only buckling your seat belt but also writing to your Senators and Representatives urging them to make air bags truly manda- tory. Good health education programs change the behavior of individuals and institutions. We need to plan both these aspects equally carefully. Corporate practices that promote disease are a major influence on the health of the American public. By giv- ing people the skills and knowledge they need to thwart disease promotion cam- paigns, health educators can make an im- portant contribution to well being - . Y' [Thanks to Christine Lubinski, Washing- ton representative of the National Coun- cil on Alcoholism and Joan Claybrook of Public Citizen for the information presented in this column.] Nick Freudenberg is Director of the Pro- gram in Community Health Education at the Hunter College School of Health Sciences, City University of New York. Body English continued from page 37 fective drug products. However, a num- ber of these companies (Smith, Kline & French and Glaxo are two examples) sell generics with their own label, which they have purchased from small generic manufacturers. The current debate appears to be more about market share than medical care. Y' Arthur A. Levin is a member of the Health / PAC Board and Director of the Center for Medical Consumers, pub- lishers of the newsletter HealthFacts. The Center maintains a free medical library for the public at 237 Thompson Street (between West 3rd and West 4th) in New York City. For further information, call (212) 674-7105. Health / PAC Bulletin 39 CALL FOR PAPERS Rethinking a National Health Care Program Health Care in the Post Reagan Era A national conference being planned for February 1987 sponsored by Health / PAC and other organizations. With multiple financial, organizational and medical crises facing our current health care system, it is time to re examine - the possibilities for a national health care program. A number of such concepts particularly - plans for national health insurance and a national health service - were developed and debated in the 1970's. The purposes of this conference are (1) to examine re - those plans from the perspective of the 1980's, 2 () to propose new alternatives that might be more appropriate to the coming period in U.S. health care, and (3) to consider the political lessons to be learned from the earlier organizing experiences. Conference papers will be considered for publication in the Health / PAC_Bulletin and in a book to be published after the conference. Individuals are invited to propose papers for presentation at the conference by sending abstracts or summaries to Herb Semmel, Room 316, 36 West 44th Street, New York, NY 10036. Deadline for submission of abstracts: June 15, 1986 Health / PAC Health Policy Advisory Center 17 Murray Street New York, New York 10007 Paid at 2nd New Clas Postage York, N.Y. Postage NOTE TO SUBSCRIBERS: If your mailing label says 8509, your subscription expires with this issue. 1