HEALTH PAC

1 RN's Strike:
BETWEEN THE LINES. Bay Area RN's take militant action.

No. 60 September /October 1974

Health Policy Advisory Center

7 Dear Dr. Pomrinse:

NEXT TIME, I'LL GO TO BELLEVUE. The experiences of a nurse as patient at Mt. Sinai Hospital.

15 Media Scan:
Blue Cross: What Went Wrong? Sylvia Law.

2 2 Vital Signs

RN's Strike
BETEEN lune 7, 1974, 4,400 registered nurses THE LINES struck 41 hospitals and clinics in the San Fran-

cisco Bay area. The RN's, all members of the California Nurses' Association (CNA), remained on the picket lines for 21 days. With the American Nurses' Association holding its annual national convention in San Francisco during the strike, the issues were discussed and brought back to every state in the nation. On one level the RN strike differed from typical management-labor disputes. The central demands were not for increased wages and other bread-and-butter gains. Rather, RN's posed their fight in terms of control over

working conditions and the quality of patient care. In addition, RN's and their professional association, the CNA, displayed a new level of militancy in their willingness to confront the administration on the picket line. On the other hand, the strike poses many problems and contradictions with far-reaching relevance for future struggles by hospital wokers. Given the existing hierarchical division of labor within the hospital, will bargaining along narrow skill lines by a relatively privileged group of professional nurses serve to create even more tension and divisions? And what is the meaning of the demand for workers' control when that demand is made for the sole benefit of a narrowly defined group? On a more pragmatic level, can any single classification of hospital workers win its demands without uniting with othersthat is, can any one group muster enough clout to shut the hospital down and force the administration to capitulate? No Ordinary Demands In 1970 the CNA won a clause in its contract with Bay Area hospitals giving RN's the right to help determine how wards are staffed. The clause called for "participation of Staff Nurses in the assessment of patients' daily needs for nursing care and the basis upon which nursing personnel are assigned . . . " By the time the contract expired on December 31, 1873, neither the hospitals nor the CNA had moved in a significant way to implement this clause. When negotiations for the 1974 contract opened, management's position on the staffing issue became unequivocaldelete the clause and deny RN's any participation in staffing matters. The staffing clause became the core of the strike: Who decides how many and what type of personnel should work on each unit? This issue is central to both hospital workers and patients. Understaffing makes workers unable to perform all necessary tasks. Patients find that their needs are ignored for hours, and even then are met in a brusque and hurried manner. Administration, through the director of nursing, distributes RN's, LVN's (licensed vocational nurses, also called licensed practical nurses in some states) and aides around the hospital according to the number of patients on each floor. Some hospitals use the more sophisticated "acuity" method of staffing, which takes into account that some patients

are sicker than others and need more staff time. But in all cases, the number of workers is determined by administration, and if the fiscal picture looks bad, staff can be cut back no matter how full or how busy the wards become. One RN, for example, tells of working a night on a floor with 30 patients, many acutely ill, staffed with one RN, one LVN and one aide. Thirteen patients had intravenous solution bottles running. Each bottle had to be changed at different times, requiring close watching to prevent bottles from running dry. In addition one patient needed irrigation of the bladder with multiple bottles of fluid. After continued pleas from the beleaguered RN, the nursing office offered only one extra LVN this despite the fact that hospital regulations do not .allow LVN's to perform these tasks. Management was steadfast in its refusal to allow an RN voice in staffing. Hpspital negotiator Arthur Mendelson warned physicians: "If we accede to the demands of the registered staff nurses and the California Nurses' Association in this connection i't is only one step away for the registered staff nurses to demand a voice in the way you treat your patients with respect to admissions, discharge, treatment and length of stay." The American Hospital Association, in an alarmist statement, took up the cudgels: "An issue with national implications is at stake here. Under the banner of an interest in the quality of care, the striking nurses are attempting to gain control over the number of nurses employed by each hospital. . . ." In truth, the staffing demand was not nearly as threatening as all that. The CNA was merely asking for participation in deciding staffing levels, not control over staffing. But the rhetoric of control was taken up by some RN's who defined the strike as a worker control struggle, which in fact it was not. The staffing issue did, however, have implications for other hospital workers. Why shouldn't all personnel on a unitincluding LVN's, orderlies and aidesbe involved in staffing decisions? The strike could not deal with this question since the CNA is a professional association separate from the union of other hospital workers, and as such can bargain only on behalf of RN's. Thus the demand for some control over staffing by RN's missed the mark of what real worker control might meanteams composed of all workers on a floor deciding staffing patterns, division

of labor between workers, and patient diagnosis and treatment. A second strike demand was that administration not assign RN's without appropriate training to specialty units. The technological explosion in health care has brought with it increased specialization. Doctors carve out an organ or two as their exclusive area of concern. Technicians are increasingly split up into narrow functions. And with RN's operating complex devices in intensive care units, coronary care units, renal dialysis, emergency rooms and other specialized areas of the hospital, nursing is following suit. RN's at Bay Area hospitals flatly stated that administrators were staffing specialty units with unqualified "floating" nursesnurses who spend different days on different floors. At Mt. Zion Hospital in San Francisco, administration first denied the charge of improper staffing, but later reluctantly admitted to such staffing in case of "emergency." An intensive care unit nurse responded, "If Mt. Zion does indeed assign untrained nurses to specialty care areas only in emergency situations, then these areas are in a constant state of emergency." Not only is this practice dangerous to patients, but it is intolerable to hospital workers. One RN told of an orderly sent to a pediatric unit where he had never been trained to work. The orderly accidentally disconnected a life-supporting device. After some tense moments, the child's condition was restored, but the orderly was distraught by what he had nearly done. Nevertheless, the specialty staffing demand would do nothing for this situation since it applies only to RN's. Bread-and-butter demands were not altogether ignored. These included demands for every other weekend off for all RN's, a 5.5 percent pay increase and a cost-of-living escalator clause. The CNA also asked for a pension plan separate from other workers and

portable from one hospital to another. Pensions were an issue because RN's frequently change jobs and do not benefit from the money they place into hospital-wide pension plans. The demand reflects the high degree of job mobility of RN's vis-a-vis other less mobile and less privileged hospital workers. Why u Strike? The precipitating cause of the strike was the hospitals' complete intransigence on the staffing issue. Hospital management had refused to negotiate until a few days before the contract expired at the end of 1973, and had failed to budge during the five months of talks in 1974. Administration not only wanted to delete the gains won by the CNA regarding participation in staffing in the 1971-73 contract, but pushed to include a management's rights clause. According to Burton White, CNA Director of Economic and .General Welfare, "Management was trying to turn back the clock. That was too much." The CNA had no choice but to give in or strike. Woven into the strike decision were several underlying threads. Staffing conditions in hospitals have tightened due to the excess of hospital beds and the federal wage-price controls, both of which have hurt the hospitals' economic position. From management's point of view, there is a critical need to limit staffing after all, each additional worker costs money. For management it would be unthinkable to allow hospital workerswho have no responsibility for keeping the hospital in the blackto control levels of expenditure. From the workers' point of view, the economic pinch means speed-upmore work for each person to doand wages that fail to keep up with the rising cost of living. Two other Bay Area hospital strikes in the past yearat Kaiser and San Francisco General hospitalsreflect the workers' refusal to bear the brunt of the economic situation.

Published by the Health Policy Advisory Center, 17 Murray Street, New York, N.Y. 10007. Telephone (212) 267-8890. The Health/ PAC BULLETIN is published 6 times per year: Jan./Feb., Mar./Apr., May/June, July/Aug., Sept./Oct. and Nov./Dec. Special reports are issued during the year. Yearly subscriptions: $5 students, $7 other individuals, $15 institutions. Second-class postage paid at New York, N.Y. Subscriptions, changes of address and other correspondence should be mailed to the above address. New York staff: Barbara Caress, Oliver Fein, David Kotelchuck, Ronda Kotelchuck, Louise Lander and Howard Levy. San Francisco staff: Elinor Blake, Thomas Bodenheimer, Carol Mermey and Barry Roth. San Francisco office: 558 Capp Street, San Francisco, Cal. 94110. Telephone (415) 282-3896. Associates: Robb Burlage, Susan Reverby, Morgantown, W. Va.; Constance Bloomfield, Desmond Callan, Nancy Jervis, Kenneth Kimmerling, Marsha Love, New York City; Vicki Cooper, Chicago; Barbara Ehrenreich, John Ehrenreich, Long Island; Judy Carnoy, San Francisco. BULLETIN illustrated by Bill Plympton. 1974.

At the same time, many RN's have been influenced by the women's liberation movement, acquiring a new self-respect and militancy. Traditionally nursing has been women's workan extension of their caring, cleaning and serving roles as mothers and housewives (see BULLETINS, March, 1970, September, 1970 and April, 1972). Socialized to be passive and to accept the devaluation of their contributions as workers, women have been reticent to speak up for their rights and push forth their demands at the workplace. Although feminist issues were not at the forefront of this strike, women asserted leadership, self-reliance and self-confidence, taking themselves and their jobs seriously. A Kaiser RN stated, "If it weren't for women's lib, we wouldn't have been striking." Another went on to say, "It definitely gave us the courage to speak up and express our opinions." Also underlying the strike was the CNA's response to the new militancy of the rankand-file RN's. In Los Angeles, 600 public hospital RN's recently switched from the CNA to representation by the Service Employees International Union (AFL-CIO). In San Fran-

cisco, the AFL-CIO and the Teamsters are the collective bargaining agents for increasing numbers of public hospital RN's. This year seemed like the CNA's last chance to prevent widespread defection of RN's into labor unions. A final condition underlying the strike was the fact that the RN's didn't know what they were getting into. The CNA had little experience in conducting strikes and the RN's shared a widespread feeling that "We'll go out for a few days, win and be back on the job next Monday." Prelude to the Picket Line In December, 1973 the CNA entered into contract negotiations with three groups of northern California hospitals: Affiliated Hospitals (most of San Francisco's private hospitals, banded together solely for the purposes of collective bargaining), Associated Hospitals (a similar grouping mainly in Oakland and Berkeley) and the Kaiser hospitals and clinics. In January, 1974, the Bay Area Negotiating Council was created to represent the RN's

with each hospital electing two representatives to serve on it. The Council in turn selected 12 RN's to sit in on the negotiating team. These 12 joined five paid CNA staff members, led by Burton White, a non-RN and experienced labor negotiator. Thus the CNA leadership (staff plus elected officials) was under the surveillance of rank-and-file RN's at the bargaining table. During the five months of weekly bargaining sessions, the Negotiating Council served as a communications link between the RN's and the CNA. Information about negotiations and strategies passed from the negotiating team to the Council, and the Council brought questions and concerns from RN's at the individual facilities. In May, mass meetings attended by 1,300 RN's rejected a management proposal by a 95 percent vote and authorized strike action. On lune 7, Negotiating Council member Joyce Boone declared, "We are a new breed of nurses, fighting for our rights and those of our patients." The same day RN's set up picket lines around over 40 health facilities. Meanwhile, contracts for LVN's, aides, housekeeping and dietary workers, represented by Local 250 of the Service Employees International Union (AFL-CIO), had also expired January 1, 1974. Negotiations dragged on for the first five months of the year. As the CNA prepared for strike action, management became increasingly anxious to settle with Local 250. Hospitals can manage without RN's; after all, LVN's do many RN tasks anyway (even though they are paid fnuch less). But a simultaneous walkout by RN's and other hospital workers would be devastating. So shortly before the anticipated RN strike, management offered a 40 cent per hour (912 percent) across-the-board increase to Local 250 members. The union, which had negotiated without rank-and-file participation, recommended acceptance of the offer. Withholding the terms of the agreement from its members until 45 minutes before the vote, the union achieved ratification and thereby helped management avert a combined strike. No attempts had been made by the CNA and Local 250 to coordinate or combine their strategies. Hospital administrators heaved a sigh of relief: Divide and conquer had worked again. Going It Alone Unaware of the import of the Local 250 settlement on their own struggle, the RN's went

Too Many Beds Spoil the Budget

f w hy are Bay Area hospitals so insistent on understating in order to keep their costs down? The reason is that the hospitals have gotten themselves into financial trouble by overbuilding. As the San Francisco Examiner (June 9, 1974) editorialized, "San Francisco has too many hospitals occupying too much land, filled with too many beds, loaded with too many expensive medical devices and partly as a result of all these excessescharging too much for medical care." According to the Bay Area Comprehensive Health Planning Council, San Francisco and Oakland hospitals have occupancy rates around 65 percent. By 1978, San Francisco will have 1,412 unneeded beds. With an unoccupied bed costing $50,000 to build and $20,000 per year to maintain (see BULLETIN, March/April, 1974), these excess beds are costing $28 million per year plus the initial construction cost of $70 million. Since empty beds bring in no revenue, hospital management must make up the lost money by charging patients more and/or spending less on employees. The most effective way to save is to cut back the total number of workers. With the empty bed crisis worsening, competition among hospital managements is intensifying. Already one San Francisco hospital, Harkness, is closing down. To make sure his hospital won't be next, each administrator must look for new and better ways to admit more patients, charge them more, hire fewer workers and increase their productivity.

it alone. Bearing signs declaring, "Patients are our business," "We want to serve what you deserve," "Qualified nurses for specialty units," and "Better staffing equals better patient care," the RN's picketed the entrances to their hospitals. Some 50 to 95 percent of RN's participated in the strike, varying from hospital to hospital, a response far better than expected. The RN's encouraged other workers to wear blue armbands in support of the strike but not to leave their jobs.

The CNA hoped to exert financial pressure on the hospitals by eliminating the profitable elective surgery and non-emergency admissions. But not forgetting the patients, the RN's initially maintained staffing of emergency and intensive care areas. Hospitals reported occupancies running 40 to 50 percent of normal levels. Though these occupancy levels clearly hurt the hospitals financially, they were not low enough to bring the institutions to their knees. Three days after the strike began, 8,000 RN's gathered in San Francisco for the annual American Nurses' Association (ANA) convention. ANA delegates joined the picket line, raised funds and overwhelmingly passed a resolution in support of the strike. One nursing administrator at a struck hospital responded, "My spies tell me that this [strike] was planned three months ago in Kansas City" (the ANA headquarters), presumably as a staged show for the convention. On June 12, 200 Kaiser RN's rallied at the Kaiser Center in Oakland, and the following day several hundred RN's held a spirited demonstration in San Francisco. A week later, a march picking up RN's at each hospital converged on San Francisco's Civic Center Plaza for another major rally. Day after day, the strike was the leading story on local TV news broadcasts, with charges and countercharges flying between the CNA and the hospitals. On June 20, with negotiations at an impasse, the RN's upped the antethey withdrew from the emergency and intensive care areas. Irene Pope, President and Acting Executive Director of the CNA, charged that hospitals were assigning supervisory personnel to non-critical care areas because they had strikers available to staff emergency units. Others observed that patients who did not need critical care were kept in the critical care area. The pull-out from emergency units was the only tactic available to a professional association that bargains for only a limited number of workers in an institution. Strikes by all workers closing down profitable but not emergency areas of hospitalswould have been more effective in advancing the RN cause than the emergency unit pull-out. But the CNA did not want support strikes by other workers. At least one group, the X-ray technicians at Herrick Hospital, members of the International Longshoremen's and Ware-

housemen's Union, were on the verge of a sympathy strike when word came from Herrick RN's that the CNA had rejected the support offer, not wishing to be obligated to honor future X-ray technician strikes. One Herrick X-ray technician said, "We wanted to go out there was sympathy with the RN's standing up to the doctors and administration. But when the RN's told me they didn't want our strike, I pulled my blue armband right off." The RN's did gain substantial public support from other groups during the strike. Unable to unite with Local 250 in their own workplaces, the RN's did receive verbal backing from Local 1199 of the National Union of Hospital and Health Care Employees in New York City. The interns and residents organization at San Francisco's Children's Hospital issued a statement of support, as did 63 members of Mt. Zion's house staff. Over 100 unit clerks, lab techs, LVN's, social workers and housekeeping personnel at Mt. Zion Hospital signed a petition of support. But in several hospitals, the atmosphere was hostile toward non-RN staff who supported the strike. Many workers feel that RN's are the supervisors or the "foremen" on the floor, and the strike demands were seen as potentially increasing RN's power over other workers. Thus workers who donned blue armbands soon began to feel isolated. In fact, one Local 250 representative even threatened to fine armband wearers $50. As the strike wore on, RN's began to feel acutely the absence of their paychecks. The CNA leadership, fearing that RN's would straggle back to work, tried to hasten the bargaining process by edging the 12 elected RN's off the negotiating team. Told that they were too inexperienced to participate in this stage of the negotiations, the elected team members were forced to wait outside the negotiating room. CNA staff negotiators justified their moves by instilling a Henry Kissinger aura upon the delicate sessions and convinced the team not to speak with their rankand-file peers. On June 23, after several attempts to force management to sit down with third-party mediators, the CNA finally succeeded in securing the services of William J. Usery, Jr., chief federal negotiator and personal labor troubleshooter for then-President Nixon. Usery immediately called for around-the-clock negotiations and a news blackout that extended (Continued on page 10)

Dear Dr. Pomrinse:

W h a t follows is the somewhat abbreviated text ot a letter horn a patient to Dr. S. David Pomrinse, Director of New York City's Mt. Sinai Hospital, an 1,150-bed voluntary teaching hospital that joins with the Mt. Sinai School of Medicine to form the Mt. Sinai Medical Center. A "Consumer Guide to New York City Hospitals" published by New York magazine includes this description of Mt. Sinai: "One of New York's great teaching hospitals, Mt. Sinai has the distinction of being both a specialty referral center and a primary hospital for its community. Its large number of superspecialists attracts a highly gualified house staff. . . . Emergency department is highly recommended." The letter, whose author is especially well trained to evaluate the adeguacy of hospital care, throws a somewhat less glowing light on what it concretely means to be a patient in such a distinguished institution. Dear Dr. Pomrinse: From Thursday evening, November 15,1973 to Monday, November 19, I was an inpatient at Mt. Sinai Hospital. I am writing to you about my stay because of your position and the fact that I am a graduate of the Mt. Sinai Hospital School of Nursing and devoted close to five years of working experience to Mt. Sinai after my graduation in Adult and Child Psychiatry. On Wednesday, November 14, I went to see my own physician because of a leg infection which had become quite severe. On Wednesday evening I had cold, shaking chills and a temperature of 103.6 degrees. On Thursday afternoon, I phoned my doctor and he urged me to go to the Emergency Room of Mt. Sinai and be admitted. He notified the Emergency Room and the chief medical resident there. I went into the ER, informed them who I was and that I was to see the chief resident. They stated that they had no knowledge of this matter, became quite belligerent and hostile to me and told me I had to go to the admitting office. I stood there with my friend (also a former staff member) at a loss. After some minutes, a volunteer agreed to call the chief resident. She returned in a few moments to
NEXT TIME I'LL GOTO BELLEVUE

inform me that he had stated that he didn't know anything about it. At that point the doctor walked by, heard the conversation and ignored it. Some minutes later, my friend went to the door of the staff area and asked what was to be done, and at that point the chief resident acknowledged having spoken to my doctor and took me into the treatment area. He informed me that he did not think I should be admitted. He said he could either admit me or we could wait until he spoke with my doctor on the phone to discuss it. The Agony of Admission At this point, I should say that I was very ambivalent about admission. I felt physically ill and had a great deal of leg pain, making it almost impossible to walk; however, I was in great financial difficulties and knew a hospitalization would be a great added burden at this point. Five months ago I completed my graduate degree in Psychological Counseling. While a student I worked part-time in nursing and other capacities to support myself. From last June until about two weeks before hospitalization, I had been unemployed, working only part-time as a nurse-counselor in an abortion facility, and had no health or hospital coverage. I had incurred many debts, including government loans necessary to see me through graduate school. Two and a half weeks before hospitalization, I had begun working as an individual and family therapist at a facility for adolescents. Hospital coverage in this position would not begin until February 1974, and of course I was concerned as well with whether I would be allowed to keep my position or get sick time benefits since I had just begun working. For these reasons, I told the resident I would wait until he conferred with my doctor. The resident then disappeared for over an hour and I sat and waited. On his return, the resident got in touch with my doctor, who had been trying to return his call for some time. After consultation, it was decided that I should have an incision and drainage and if most of the difficulty was due to an abscess, I should be sent home; if, however, most of the problem was from the cellulitis in my leg, I should be admitted. The resident took me to a surgical intern. I had blood cultures drawn and an incision and drainage. Up to this point, the only person who had spoken to me as a human being was the surgical intern. It was

I went to admissions and was informed that unless I was prepared to pay $1,400 I could not be admitted.

obvious that the emotional as well as physical trauma I was experiencing was of no consequence to any member of the Emergency Room staff. The surgical intern felt, after doing the incision and drainage, that I should be admitted. The majority of the inflammation was cellulitis. He looked for and paged the medical resident, who never appeared and could not be found. The intern told me the surgical resident (who had walked into the treatment room for approximately 60 seconds, looked at the incision and drainage and left) had stated that I should not be admitted but would have to return daily to the ER to have my leg taken care of, packing changed, etc. I informed the intern that this was not feasible for two reasons: I refused to be put through such a dehumanizing and degrading experience daily and I live alone on the fifth floor of a walkup apartment, and going up and down those stairs was not possible in my condition. The resident said that was my problem, there was nothing he could do about it if I wanted treatment. The surgical intern suggested that I go home; he could not find the medical resident and saw that I was obviously in pain, feverish and distraught. I accept my mistake in having left at this point. On returning home, I called my doctor and told him of my experiences. He called the resident, and I was told to return to the emergency room for admission. I refused, feeling physically and emotionally drained and having no desire to see that staff again. I was told to go directly to 4 North. When I arrived there, I was told to go to admissions. This was approximately 10 or 10:30 p.m. I could hardly walk, I had not eaten for some time and I

was quite weak and upset. I asked if someone from admissions could come over there and without investigation was told no. I went to admissions and was informed that unless I was prepared to pay $1,400, I could not be admitted. I explained my financial situation and informed them that I was a graduate of the School of Nursing. After again conferring with my doctor, I returned to the Emergency Room on foot. I was at this point put in a wheelchair, to be brought to 4 North. Up to that point the only thing I had been given was a $10 ER bill. I arrived on 4 North at 1:30 a.m. Friday. The Inpatient as Outcast I was given the usual physical and a case history was taken. I also informed the doctors of my history of reactions to medications. I was given no medication, although I had been put on Oxycillin by my doctor. Finally, at 11 a.m., after inquiring of both nursing and medical personnel, I was given my first dose of Oxycillin since arriving. I had met several of the house staff but had no idea who was in charge of my case and soon found out that there was a complete lack of communication between any of the staff. If I asked about the medication or anything else, I was put off or told that "the doctor" would be told. He (whoever he was) never was informed. For the three days I was hospitalized, it was only by hitting the right person by luck that anything was communicated. Even then frequently nothing was done. By Friday afternoon I had severe, explosive diarrhea and severe nausea. I had not eaten anything for some time and never did eat during the entire hospitalization. I asked to see the doctor about these symptoms, and many hours later kaopectate was ordered. The doctor never acknowledged what I had told him about the nausea and retching except to say that my symptoms weren't dramatic enough for him to do anything about, it was just the infection. I have had this type of reaction with other antibiotics, but he would not believe it was from the medication. When I told him I had eaten nothing (he had not been told by the nursing staff, although they had removed my trays and commented about it during these three days), he laughed and said, "You haven't eaten?" He told me he would give me nothing. His manner was always flippant, arrogant, patronizing and egotistical. This seemed to be the attitude of sev-

eral of your medical house staff from my observation of their behavior toward myself and my roommates. I discovered also that the nursing staff, especially on evenings, were totally uninvolved and uncaring of the patients. I received remarks to the effect that I could change my own dressing. Although at home I kept my leg elevated, fixed a cradle to keep the blankets off my bed, fixed a doughnut to keep my heel from being irritated, kept myself on bedrest and made some clear fluids, in the hospital I was for the most part ignored and none of these things were done or even offered. Even my temperature and blood pressure, which were ordered four times a day, frequently were not checked more than twice a day. Twice during my stay, in the evenings,

He was not being called away for an emergency, he just seemed totally uninterested in talking to a patient.

I put on my light to ask for something for nausea. The bell was turned off at the nurses' station, and no one ever acknowledged it. My roommates had to help me back to bed from the bathroom several times. Friday evening I went to the nurses' station to ask the chief resident what was happening. I stood there, talking to the resident; another resident came by and interrupted our discussion. They then proceeded to go off together. The chief yelled back over his shoulder, "Oh, I'll be back in a while." I was dumbfounded. I was angry and stated that I wasn't finished talking. He was not being called away for an emergency, he just seemed totally uninvolved in talking to a patient. Saturday morning, when a few doctors made rounds, I again asked for something for the nausea. They looked at me and said, "Nausea, since when are you nauseated?" They didn't know. I don't know if there was

anything written in my chart by either nursing or medicine, whether they hadn't read it or whether they just weren't concerned. They left with, "We'll order something," and that was the last time I heard anything about it. At this point I should say that I was very emotionally upset about this whole experience. When I was in nursing school we learned that sick people, especially patients in a hospital, are more vulnerable and need help not only physically but also emotionally, socially, religiously and sometimes economically. We were taught to see and respect the whole person. What I was seeing was a lack of concern about any of these areas, including the physical. I know I wasn't the sickest patient at Mt. Sinai, but there is no excuse for the lack of concern and caring on the part of all disciplines of the supposed team. Saturday afternoon I did by chance meet a very nice resident, whom I begged to help me. Having been a patient at Mt. Sinai himself on previous occasions, he seemed to understand and spent a few moments talking with me and did order something for my symptoms. Finally Saturday evening the antibiotic was discontinued. This was done only because my own doctor had come up to the unit and I informed him of my symptoms. The house staff had told him nothing, despite the fact that he was the attending on the unit. . . . Enter the Bill Collector On Monday I asked to see the social worker. I told her of my financial difficulties, and she told me to go to patients' accounts. I was still not well and still shaky on my feet. I walked to patients' accounts, was kept waiting for some time, was passed from one person to another. I told the man who finally

spoke to me about my financial situation and asked about Medicaid. He excused himself, saying he was going for a pad of paper; he returned 20 minutes later to inform me not only that I could not receive Medicaid, but also that he had spoken to my place of employment and stated that I was employed there. (I had not denied that I had started working there two and a half weeks before.) He then informed me in a very nasty tone that I owed Mt. Sinai $200 per month until my bill was paid. I told him this was impossible, asked if the payments could be less per month and again explained my financial difficulties. He refused to compromise in any way and would not let me go until I signed a paper stating that I owe Mt. Sinai $200 per month. . . . This experience was a nightmare for me; it angers me, it dehumanized me. I know it was worse for me because I am a nurse with medical knowledge of what can be done for patients; because psychology is my field and I'm aware of feelings and attitudes more in myself and others; because I'm a woman who felt surrounded by men who haven't begun to understand people; because I spent three years being educated at Mt. Sinai, learning and believing everything in the opposite way from the way I was treated; and because I speak up for what I believe in and this, I am sure, was a threat to a lot of the staff. I am left with three things after my hospitalization. The first is an eight-pound weight loss (which I appreciate), the second is information I am utilizing in writing an article and the third is the sad knowledge that one does not enter a hospital to get better, one enters to not get worsehopefully! Yours with concern, Nancy Shamban, R.N., M.A.

Nurses Strike
(Continued from page 6) to the striking RN's. With the breakdown of the democratic process, some RN's began to shift their anger from management to the CNA. On June 26 a settlement was announced. At 7 p.m. on June 27 the striking RN's, without having been allowed to see the settle10 ment, assembled at San Francisco's giant Cow

Palace. Some of them angrily demanded individual hospital caucuses to discuss the agreement before voting on it. But after a short period of confused debate, a vote was forced. The RN's accepted the package by a vote of 1,670 to 494. Victory or Holding Action? The CNA leadership touted the strike settlement as a major victory for RN's. Most importantly, management failed to delete the key staffing clause from the existing con-

tract. Concerning the specialty units, the new agreement provides that "Except in case of emergency, nurses without appropriate training and /or experience shall not be assigned to such areas." The first five words are those of management, and whether this clause is a victory or defeat for the RN's depends on how "emergency" is defined. Management decides what is an emergency unless the CNA can overturn their definition by filing and winning grievances. The hospitals also agree to provide training for specialty care. The RN's won a whopping 11 percent pay boost, felt by some to be an overt attempt to buy them off. In fact, the figure represents the 5.5 percent raise asked for plus a oneshot 5.5 percent cost-of-living adjustment to cover inflation since January 1. (The RN's failed to win a continuing cost-of-living esca-

lator clause.) The demand for alternate weekends off was compromised, and the portable pension plan was not granted but was submitted for study. Management conceded to the opening of certain issues for renegotiation on January 1, 1975. Rather than a victory, the settlement is actually closer to a successful holding action. With the economy in decline, hospitals like all industries are trying to squeeze more work out of their employees at lower cost to themselves. The retention of the staffing clause provides the RN's with at least some leverage to fight against understaffing and speed-up. The pay increase slows the rate at which RN's incomes fall behind inflation. The specialty staffing clause, provided that the RN's fight for its implementation, is the only substantial move ahead. Given management's 11

refusal to yield the slightest decision-making authority to the RN's, the staffing portions of the new contract are of little use without constant grievances and battles for enforcement by the RN's at each hospital. The New Consciousness After five months of negotiating and 21 days of striking, the RN's won a holding action but made few advances in changing their objective conditions of work. RN's have returned to find the wards still understaffed and themselves still overworked. And the tensions manifested during the strike between RN's and those who take orders from them, such as LVN's, orderlies and aides, have not magically disappeared. Nevertheless, for the RN's the strike had significance that went past the bargaining table and changes in objective conditions of work. The most marked achievement was the mobilization of the RN's from the wards to the picket lines and the development of a sense of unity, militancy and self-reliance the antitheses of the passive role women are socialized into in nursing school. Equally important was the way the strike served to break down the isolation among RN's. There are many structural organizational reasons for hospital workers to be isolated from one another: Wards are physically separate, some jobs are more prestigious than others, some pay more and people on different shifts seldom see each other. Moreover, the assigned workloads are often so heavy that merely getting one's work done is difficult. Working together during the strike gave RN's a chance to get to know and trust one another as well as to develop collective strategies and solutions. An obstetric nurse at Alameda Hospital stated, "The strike has given us a new sense of unity." The strike also served to show the true face of the CNA. Throughout the five months of negotiations and for the first part of the strike the CNA was remarkably democratic, allowing for participation by rank-and-file RN's. RN's were represented on both the negotiating team and the Negotiating Council, bringing the latest developments and management offers back to RN's at the hospitals they represented. In the last week of the strike, however, the CNA reverted to top-down, heavyhanded tactics, which many RN's found in12 furiating. Reflecting this anger, a committee

of RN's at Mt. Zion Hospital sent the following letter to the CNA: "We at Mt. Zion feel that we were sold out. . . . The most charitable view expressed has been that the team members had hit a low point in their motivation and energy and that they were afraid to let Usery leave without a settlement. . . . The other, less charitable opinion is that the strike was, from the first, a grandstanding maneuver by the paid officials of the CNA; a tactic to tighten their hold on jurisdiction over RN's in the Bay Area. . . . "We feel that these questions must be spoken to by the leadership of CNA. We ask for the support of all CNA members in working to ensure that this betrayal of democratic principles in our organization does not repeat itself. We are willing to work within CNA to make the leadership more responsive to our needs and to strengthen their commitment to the democratic process. We are willing to work to use the contract to make whatever progress is possible on the issues of staffing, patient care, and professional self-determination. We hope that our analysis of the situation will provide food for thought for all CNA

CNA-Professional Standard Bearer

A he California Nurses' Association (CNA) was incorporated in 1907 to advance the professional status of nurses. Its overall purposes and philosophy are identical to those of the American Nurses' Association (ANA), of which it is a constituent group: "to foster high standards of nursing practice, promote the professional and educational advancement of nurses to the end that all people may have better nursing care." Membership is limited to registered nurses (RN's): thus the CNA fights for better wages and benefits, improved job conditions and upgrading of standards, status and education for only the elite of the highly stratified, predominantly female health labor force. LVN's, aides, orderlies and a long list of other workers directly and indirectly involved in curing and caring are set apart both in terms of occupational status and breadand-butter issues.

members returning to work under this contract." Democracy, however, is far from the central issue regarding the CNA. What is at question is the difference between a professional association and a non-hierarchial, anti-professional organization of workers fighting for their own power and interests. Historically the CNA, while making minimal support gestures in other hospital workers' struggles, has not even honored picket lines during their strikes. By choosing to go it alone, the CNA not only loses a powerful bargaining weapon, but keeps RN's separated from the majority of hospital workers. The Old Contradictions While on the one hand the strike raised the level of consciousness of the RN's, on the other hand it manifested and exacerbated the existing tensions and contradictions found in the hospital workforce namely the race, class and sex antagonisms upon which the hierarchical division of labor rests. At the top of this hierarchy are the male administrators and physicians, enjoying high status, income

and power. Next come RN's, predominantly white female professionals, who in this case were demanding a piece of the pie. Beneath them are LVN's, aides, orderlies and other low-paid, predominantly Third World workers who make up the majority of the workforce and take their orders from the RN's. While RN's are in supervisory roles and make more money than other hospital employees, they are still wage workers and are exploited as such. The ideology of professionalism promotes elitism on the part of RN's, but in fact they have more in common with other workers than with doctors or administrators. The RN's are pawns in the hospital hierarchy, placed in positions in which they must assume responsibility for running a floor and give orders to other workers. They are forced to act as a buffer for the doctors and administrators, becoming, whether they like it or not, the most visible authority figures, who do the dirty work of the administrators and boss other workers around. Reactions of other workers during the strike underscore these tensions and hostilities. An LVN at Alta Bates Hospital said, "I'm glad they're out, this will give us more space to

The structure of the CNA is similar to that of any other professional association. The governing body is the House of Delegates, which meets every other year. The Board of Directors, composed of the president, vice-president, secretary, treasurer and ten directors, conducts the business of the CNA. Daily activities of the Association, ranging from membership recruitment to public relations, are carried out by regional associations. Membership in the CNA requires payment of dues $25 to the ANA and $55 to the CNA, as well as the amount specified by each regional association. (Provisions are made for reduced dues classifications such as unemployed, parttime, or new graduate.) Having come a long way from its early-day legislative battles merely to gain recognition, pass licensing laws and put a ceiling on the numbers of hours of work for nurses and nursing students, the CNA in 1966 dropped the no-strike clause then in its by-laws; since then it has become an active collective bargaining agent for RN's. Along with this has come a new aura of militancyCNA nurses march-

ing and chanting on the picket line, demanding control over working conditions and engaging in hard-nosed bargaining with seasoned management negotiators. Despite this new image, the basic philosophy of the CNA and ANA remains unchangedto move their constituents up the professional ladder vis-avis physicians and administrators, to get a little bigger piece of the pie in terms of autonomy, decision-making and financial remuneration. "The day of the nurse as handmaiden to the physician is ending," was the message given to thousands of RN's at the recent ANA convention by Wilma Scott Heide, a former nurse and past President of the National Organization of Women. She went on to talk about a new role for nurses, calling for the creation of "joint practices" between doctors and nurses. Instead of calling into question the power and privilege at the apex of the medical hierarchy, such a demand asks to be part of it. While such views may not represent those of the rank-and-file RN's, there seems to be little doubt as to where the aspirations of the CNA leadership lie.
13

move." A worker at Children's Hospital in San Francisco added, "We're better off without them here." Another worker characterized the strike, "The attitudes of the nurses during the strike seem to have been taken over from doctors anti-union, pro-professional, pro-specialization. They were competing with doctors to gain more decisions over patient care by raising their level of professionalism to that of doctors." In the final analysis, RN's alone cannot shut hospitals down and bring significant change to their workplaces. In the long run,

demands for professional upgrading by RN's are made at the expense not only of other workers but of the RN's themselves. The RN strike has made clear the tremendous obstacles to success that exist when different hospital workers' groups fight their own battles in isolation and even opposition to those of other health workers. David Gaynor, Elinor Blake, Thomas Bodenheimer and Carol Mermey. (David Gaynor, a hospital administration student at Cornell University, was an intern at Health/ PAC's San Francisco office this summer.)

More on Women and the Health System WOMEN AND HEALTH These articles outline some of the problems faced by both women health workers and women health consumers in the American health system. It includes three back issues of the BULLETIN (March, 1970, September, 1970 and April, 1972). $1.50 ($.75 each for individual Bulletins.) WITCHES, MIDWIVES, AND NURSES: A HISTORY OF WOMEN HEALERS by Deidre English and Barbara Ehrenreich. A 45-page illustrated booklet on how women healers were suppressed and how the male medical profession rose to dominance. $1.25 each. COMPLAINTS AND DISORDERS: THE SEXUAL POLITICS OF SICKNESS by Barbara Ehrenreich and Deidre English A dynamite 94-page booklet analyzing how women have been historically put-down physically and emotionally, by the medical profession. $1.50. each. Write: Health/PAC 17 Murray Street New York, N.Y. 10007 (For orders of $5.00 or less add 20% postage; for orders over $5.00 add 10%.)
14

Media Scan
BLUE CROSS: WHAT WENT WRONG? By Sylvia A. Law (New H a v e n & London: Yale University Press) The presentation of a Blue Cross card is often both an admission ticket to most American hospitals and an exit visa as well. Many people covered by Blue Cross find hospitalization financially painless. Because patients never see the interchange between Blue Cross and the hospital, they remain oblivious to the connections between the financing mechanisms and the cost and quality of the care they receive. Who is the main beneficiary of this seemingly smooth, welloiled, impersonal system? Blue Cross asserts that it "has one objective: to protect people in terms of the hospital care they need." But Sylvia Law, in her carefully documented, wellreasoned book. Blue Cross: What Went Wrong?, sees an entirely different purpose. "In a nutshell, this book finds that Blue Cross is most accurately characterized today as the financing arm of American hospitals." What is Blue Cross? Child of the economically pressed voluntary hospitals, born during the Depression, Blue Cross has grown to robust, if impaired, maturity. It now provides about half of all hospital income. The 74 Blue Cross plans have a total enrollment of 80 million subscribers, four of every ten Americans. As designated fiscal intermediary for most of the publicly funded Medicare and

Medicaid programs, it administers insurance benefits for an additional 32 million people. The Blue Cross operating budget alone, about 6 percent of revenues, is equivalent to the cost of maintaining roughly 150,000 beds in US hospitals. Blue Cross advertises itself at subscribers' expenseas a public service organization, benevolent and munificent, that takes the worry out of hospital bills. Whether people accept this projected image, or see Blue Cross as an insurance company pure and simple, neither perception is accurate. Misconceptions of the true nature of Blue Cross, however, do have an effect on its operations. For example, its rate increases are rarely challenged by subscribers. Payroll deductions and employer contributions blunt the impact of premium payments. Since health insurance payments come from potential rather than actual wages, few notice, much less respond to, rate increases. And because most workers are enrolled in group plans, an individual who does understand the significance of Blue Cross on the functioning of the health industry is powerless to act alone. Finally, Blue Cross discourages organizing around such issues as rate increases because of the complexity of the collection mechanism and the relative obscurity of the hospital payment system. Blue Cross functions to encourage both these responses apathy and impotence. It is a near perfect mechanism for the hospital industryit bolsters occupancy and revenues while keeping at bay those who pay the bills. The Peculiar Institution Commercial health insurance dates back to the mid- 15

19th Century, when families paid a few cents a month to indemnify against income loss due to accidents or sickness. There wasn't much point in buying coverage for hospital or doctor bills because medicine was incapable of curing disease and hospitals were places where the poor went to die. True to its beginnings, commercial health insurance has remained basically a personal indemnity plan. That is, subscribers are reimbursed a fixed amount for specified medical expenditures, for example, $100 per day of hospital care. The extent of each person's reimbursement is directly related to the amount paid in premiums. Blue Cross operates on an entirely different principle. Its benefits are paid directly to the provider, and reimbursement rates are pegged to the provider's costs. Regardless of whether a Blue Cross subscriber is hospitalized at a fancy academic hospital where care costs $180 a day or at a small community hospital where it only costs $80 a day, his coverage is exactly the same. Blue Cross reimburses the hospital, while commercial , health insurance indemnifies the patient. Professor Law and her associates at the Health Law Project trace the history and development of this peculiar institution. It begins during the Depression, when hospitals, which had proliferated in the early years of this century, faced bankruptcy. Between 1929 and 1930 hospital receipts fell from an average of $236.12 per patient stay to $59.26. Occupancy, howeversince people continued getting sickfell by only 10 percent in the same year. Thus many institutions 16 found themselves treating peo-

ple who couldn't pay. Dr. Ford Kimball, Vice President of Baylor University, came up with a solution for his University's hospital. In 1929, he convinced a group of Dallas school teachers to prepay for hospitalization. By collecting only 50 cents a month from each teacher, Dr. Kimball was able to guarantee Baylor Hospital's solvency and to alleviate the teachers' financial worries about possible hospital bills. With the active encouragement of the American Hospital Association (AHA), the plan spread rapidly. Showing considerable foresight, the AHA registered the Blue Cross trademark, first used by a group of hospitals in Minnesota, and Blue Cross became a subsidiary of the AHA. In 1938 Blue Cross promulgated its standards for nonprofit prepayment health plans. No group could use its trademark without the approval of the AHA. (Since 1972 the Blue Cross trademark has not been owned by the AHA; in that year the formal tie between Blue Cross and the AHA was amicably dissolved.) It was no coincidence that 22 of the 36 local plans existing in 1938 had been entirely capitalized by the participating hospitals. Five others were partially financed by the hospitals. By 1938 these plans had enrolled a total of 1.4 million people. During these early days the AHA sponsored state enabling legislation to exempt its fledgling enterprise from state and local taxes and from the laws regulating the operations of traditional insurers. The hospitals, strapped as they were for cash, were unwilling to share the wealth with their host states. The AHA lobbyists successfully argued that as a service to nonprofit hospitals and

as a public service willing to enroll all comers, Blue Cross was substantially different from other insurers. This special privilege has been overruled in court challenges in four states. But in others, Blue Cross still maintains its separate and superior status. The essential difference, of course, is that Blue Cross passes its profits along to the hospitals, whereas other health insurance companies distribute dividends.

Of the first 39 Blue Cross plans, 22 were entirely capitalized by hospitals.

Blue Cross Falters Blue Cross' situation is not, however, as cozy as it was back in the 1930's. Until World War II, Blue Cross had a virtual monopoly on prepaid hospitalization insurance. But the wartime wage freeze underscored the potential profitability of hospitalization insurance; health insurance and other fringe benefits were the only items open to collective bargaining. Instead of being sold to the undifferentiated public, health insurance could be sold to a pool of relatively young and healthy unionized workers and their families. The commercial insurance actuaries calculated that these people would provide more premium payments than they would collect in benefits. At the time, Blue Cross was still operating under a com-

munity rating system which divided liability among all subscribers, young and old, sick and healthy. This egalitarian risk-spreading had been one of its major selling points to state legislatures. Community rating, even with Blue Cross' tax advantage and reserves exemption, allowed the commercials to offer cheaper insurance premiums for similar coverage. Blue Cross attempted to recoup its losses by switching to a similar experience rating system for all groups of over 100 people. This did not stop the encroachment of the commercials, whose allegiance is to their shareholders and not the hospitals. They sold less comprehensive coverage at lower cost, and many groups were willing to gamble on possible hospital bills. By 1955 the commercials had cap-

tured more than 50 percent of the health insurance market. Competition from the commercials was not the only inhibition to Blue Cross' growth. Its inflationary imperative was another. Professor Law's explanation of precisely how the Blue Cross system is inflationary is one of the outstanding contributions of the book. A health insurer, like any other type of insurance company, makes its money by holding down utilization. Blue Cross, however, was created by the hospitals to insure their revenues. Since hospitals spend about two-thirds as much on an empty bed as on a full one, high occupancy with paying patients must be maintained in order to meet expenses and produce the surplus with which to expand. In order to serve its masters. Blue

Cross had to promote utilization. Thus, against the interest of its own solvency, it limited benefits to in-hospital expenses while it would have been far cheaper to expand coverage of ambulatory care. Since revenues were guaranteed for a large part of the potential patient population, hospitals indulged in expensive equipment, high professional salaries and expansion of bed capacity, thus creating the need for even greater income. In other words, because reimbursement rates are determined by expenditures, hospitals can only take in more money if they spend more money. The more they spend, the more they get. Blue Cross could therefore not behave like a typical cost-conscious insurance company. This inflationary imperative nearly forced Blue Cross out of business. It was and is constantly appealing for rate increases in order to match its expenses. A final force curtailing Blue Cross' growth was increasing public disaffection with its operations. By the 1960's health activists had begun raising questions about the ethics of hospitals owning and controlling their financial mainstay. The very people who spend the money coming into the hospitals sit on the Blue Cross boards that determine the amounts they will be given to spend. The AHA Standards of Approval required that the boards of directors of local Blue Cross plans include at least one-third provider representatives. According to Sylvia Law, this usually worked out to be a majority. The rest of the board members were most often locally influential businessmen who often had their own conflicts of interest. The Massachu- 17

The rosters of Blue Cross directors "read like Who's Who of the Western World."
Blue Cross advertisement

setts Blue Cross board of 1969 is an illustrative example. Of the 31 members, 11 were either trustees or directors of participating hospitals. Others were executives or directors of major corporations that had other corporate officers sitting on hospital boards. Two were doctors on the staffs of prominent Boston hospitals and two were former directors of hospital supply companies. Of the remaining nine, one was president of Massachusetts Blue Shield and another ran a hospital consulting business. Despite some legally mandated changes, health care providers still dominate Blue Cross boards. Law cites 1970 Blue Cross Association figures that show that 56 percent of local board members were providers. Most of the remaining 44 percent so-called consumer representatives were selected by incumbent boards. In 21 states, the non-hospital representatives are selected outright by the provider members. Although the reality of board composition has not changed much, the rhetoric has. Blue Cross no longer boasts, as it did in 1966, of boards whose "rosters read like the financial Who's Who of the Western World." It has discovered that the byword of the consumer conscious 1970's is "maximum feasible participation." Before the Hart Committee in 1971, Walter McNerney, President of 18 the Blue Cross Association

(BCA), gave testimony to this ideal. "To assure that care is rendered at a time and place and in a way satisfactory to the consumer, the consumer must participate in decisions." There is no evidence that Blue Cross boards have switched their allegiance from the hospitals to the consumers. All they have done is play a game of modified musical chairs, keeping the same players and adding a few new seats. Raiding the Public Till Finding its growth stymied by these developmentscompetition from the commercials, enormous benefit payments and public disaffectionBlue Cross turned to a new source of income. lust as Dr. Kimball found the Dallas teachers, BCA found the public till. In 1962, for the first time in their history, Blue Cross and the AHA formally called for the enactment of publicly assisted health insurance for the poor and the elderly. Sylvia Law details the story of how the Blue Cross-AHA axis parlayed this policy turnabout into many millions of dollars. The fear of a providers' boycott had been offered by succeeding national administrations as the reason why no national health insurance programs were ever enacted. With the promise of support from the AHA and Blue Cross, President Kennedy incorporated them into the legislative drafting process, and his legislation was written by a joint HEWAHA-Blue Cross task force. A new concept was introduced into an old idea. For the first time in the half century of proposals for federally funded health insurance, the idea of a fiscal intermediaryan administrative layer between the government and the providers

was introduced. The only organization that fit the bill as it was written was Blue Cross. Having written itself into the legislation, Blue Cross went forward to use the income it generated from its Medicare/ Medicaid business to supplement its revenues from other sources. According to Professor Law, public programs in 1970 accounted for more than half of Blue Cross payments to hospitals$4.9 billion from Medicare, $1.9 billion from Medicaid and an additional $545 million from other federal health insurance programs. Far greater than originally estimated, the size of Medicare/ Medicaid expenditures is a logical consequence of the reimbursement mechanism. The Congress mandated the Secretary of Health, Education and Welfare to promulgate standards for payments to hospitals and other providers. If the Secretary had any intention of revising the established method by which Blue Cross forked over cash, the law instructed him otherwise. It instructed him to "consider, among other things, the principles generally applied by national organizations or established prepayment organizations." Not surprisingly, the only "national organization" that met this definition was Blue Cross. The Principles of Reimbursement adopted by HEW were nearly identical to those employed by Blue Cross. Both the Medicare program and Blue Cross reimburse providers on the basis of "reasonable costs." In the words of the Social Security Administration chief, Robert Ball, this meant, "Whatever it costs, that would be paid." In the lexicon of reimbursement, reasonable costs are defined as those that are allow-

able. Allowable translates to any cost incurred by an institution that can be related to the delivery of patient care. The only major categories of hospital expenditures that fall outside this definition are research and training, although, as the book shows, these costs are often channeled into allowable budgets. All of the backroom wheeling and dealing is not just unethical; it's expensive. Hospital costs have increased by 147 percent since the enactment of Medicare and Medicaid, while the Consumer Price Index for all items has gone up 44 percent. There is some debate over whether Medicare and Medicaid have resulted in better health care for the beneficiaries, but there is no question that all of us now pay more for the same health services. The Nixon Administration's chief health economic advisor

ical Economy," Scientific American, September, 1973; also see BULLETIN, May, 1973.) The main beneficiary of this system is the health industry. Except for Blue Cross it was doing quite well before the enactment of Medicare and Medicaid; it is now doing even better. Hospital expenditures in 1964-65 were $13 billion; in 1971-72 they had nearly tripled to $32 billion. The more hospitals spend, the more other parts of the health industry profit. Drug companies sell more drugs, supply companies sell more supplies, construction firms build more hospitals, doctors make higher salaries and so on. But not only were hospitals spending more money, they were also clearing more money. According to AHA figures, cited by Law, the surplus of net revenues over expenses for all US hospitals in 1964 was $115 million. In 1969, three years after the implementation of Medicare and Medicaid, net surplus had climbed to $400 million. National Health InsuranceGuaranteed Income Even the health industry, with its outward appearance of robust growth and immunity to economic crisis, is subject to pressures it cannot control. Health expenses have been consuming an ever-increasing share of the federal budget. In addition, as insurance premiums go up, unions are hesitant to trade off more benefits for lesser wage increases. The government in very tentative ways has been attempting to control health care inflation through such direct devices as the price freeze and smaller appropriations, and indirectly through utilization controls (see BULLETIN, July/August, 1974).

"Whatever it costs, that would be paid."

Robert Ball, Social Security Chief

has summarized the net result of this arrangement: "Unfortunately the production of high cost hospital care is a self-reinforcing process: the risk of very expensive hospital care stimulates patients to prepay hospital bills through relatively comprehensive insurance, while the growth of such insurance tends to make hospital care more expensive." (Martin S. Feldstein, "The Med-

This brings us to the question of national health insurance. Unfortunately, Sylvia Law's bookafter skillfully and carefully documenting the nature of power relationships in the health industry, the abuse of public funds by Blue Cross and most importantly the continued denial of decent care to the majority of Americansthen lapses into vague, Naderesque prescriptions for national health insurance. By some mystical process, not spelled out in the book, Law sees a national health insurance scheme that, having wrested power from the vested interests, will administer a program for the public good. "What is needed," she suggests, "is a structure that will enable those citizens who have a particular interest in health services to participate in the formulation of local health delivery systems within the framework of a national health system that makes basic allocations of available resources in response to local expressions of need." This sounds like a good idea. But which Congress is going to enact this legislation? Which bureaucracy is going to oversee it? Will it be the same Congress and bureaucracy that allowed Blue Cross and the AHA to tailor Medicare and Medicaid to their own needs and then wrote the regulations to suit them? Why should those who have power give it up and let public spirited citizens take over? The Blue Cross Association is undaunted by Professor Law's Utopian scenario. It knows that the same people who wrote Medicare/Medicaid will also enact national health insurance. It has been preparing for this eventuality for some time. In 1971, BCA's chief 19

20

Washington lobbyist, George Kelley, outlined the Association's national health insurance game plan. In a secret memo to local Blue Cross plan directors, he laid out BCA's strategy to insure the inclusion of Blue Cross as fiscal intermediary in whatever program is enacted. Kelley explained: "Based on an experience of many years, it was decided that an indirect approachconducted primarily in the key person's home surroundings where he is relaxed and receptivewould be the most effective means of communication." These key persons are "the 100 or so decision makers in Congress." The tactics, as Kelley wrote, pivoted around the use of locally influential political backers and brokers who would approach the Congressman, "someone who is personally known by the Member, one he will listen to with respect." The goal of this effort was to counteract what Kelley characterized as "the campaign to nationalize health care," i.e., enact federally administered national health insurance. Blue Cross was not planning to lobby for any particular proposal. Of course, the bigger the benefits, the larger would be the cut for Blue Cross. But whether Kennedy, Mills, Long, Ribicoff or Nixon got the credit, it was immaterial to Blue Cross so long as it was assigned a role akin to its role under Medicare and Medicaid. Kelley likened the mission of the lobbying task force to "that of John the Baptist, to make straight the path." The Congress will not ignore the advice it gets from Blue Cross and its legion of lobbyists. It's not that Congress doesn't understand what's going on. Even before the Medi-

care and Medicaid programs were enacted, Wayne Morse warned his colleagues of the consequences of their actions. Speaking to the nation of a fiscal intermediary, he said: "These are non-governmental agencies whose basic commitment is not to the beneficiaries of the program, but to whom Medicare is an incidental, profitable and subordinated supplement to other business. . . . Blue Cross is essentially a creature of the hospitals . . . it cannot possibly serve as the agent of government. Blue Cross simply cannot meet the requirement that it deal 'at arms length.' " BCA carries weight with the Congress, despite eight years of experience with its gross and subtle raids into the public till, because of the political clout of the voluntary hospital system. This the Congressmen will have to weigh against the inflationary imperative apparent in Medicare and Medicaid. They might decide to assign the fiscal and administrative responsibility to a government agencyHEW, SSA or a newly created one. But this decision will be based on what makes sense both economically and politically in the limited arena in which they operate.

What hospitals charge non-Medicaid patients "is of absolutely no concern to us under the bill."
Wilbur Cohen, Undersecretary of HEW, 1965

Balancing the demands of Blue Cross against the fiscal needs of the government is the task now facing the drafting committees. They will have to make some deals with the competing interestsBCA, AHA, commercial health insurers, the American Medical Association, the medical schools and the drug and hospital supply industry. So far, as Sylvia Law has described, the Congress has been the advocate of the Blue Cross-AHA axis in the health industry. The only factor now standing in the way of the continuation of this intimate relationship is the fiscal crisis of the American economy. Whatever the outcome, it is unlikely that national health insurance will be designed to promote the people's health. That sort of program would necessarily include provisions for reallocation of health resources and guarantees of free or low-cost high quality and accessible care. There is little in any of the national health insurance proposals providing for such an outcome. Rather all of the proposals concentrate on the administrative apparatus and the extent of benefits. The Congress is concerned with getting the contending forces off its back. People's anger at institutions that provide inadequate, impersonal care or at doctors who rip them off does not readily translate into organizing around such issues as who administers national health insurance. The system is organized to keep the financial interactions as far away as possible from the patient-provider interchange. Most people do not see that this level of health industry activity does, in fact, affect those things they are most angry about.

"Blue Cross simply cannot meet the requirement that it deal 'at arms length/"
Senator Wayne Morse, 1965

Blue Cross is a front for the hospital industry; it does not deliver care but it does the bidding of those that do. Confronting this insulated power structure only through its fagade is like trying to open the door by stripping the paint. Only if national health insurance is publicly administeredthat is to say, Blue Cross is excluded will we even have a fighting chance. At the very least, we will have more access to the kind of information Sylvia Law and her associates spent several years researching. But, again, no national health insurance proposal, with or without a fiscal intermediary, confronts the issues of maldistribution of resources and personnel training of health workers, profits in the monopolistic health industry and the priority of teaching and research over patient care. Ultimately, Blue Cross: What Went Wrong? is less importantly about Blue Cross than it is about how the hospital sector manipulates public policy. Sylvia Law has performed a needed service. By dissecting the skin, she has left the muscles open to view. Barbara Caress

Books Received Osofsky, Howard J. and Osofsky, Joy. (eds.) The Abortion Experience: Psychological and Medical Impact. Hagerstown: Harper and Row, 1973. 668 pp. $25.00. Rutstein, David D. Blueprint tor Medical Care. Cambridge: MIT Press, 1974, 284 pp. $8.95. Tushnet, Leonard. The Medicine Men: The Myth of Quality Medical Care in America Today. New York: St. Martin's Press, 1971, 217 pp. $7.95. Willard, Harold and Kasl, Stanislav V. Continuing Care in a Community Hosptal. Cambridge: Harvard University Press, 1972. 192 pp. $8.00. Townsend, Claire. Old Age: The Last Segregation. New York: Bantam Books, 1971. 229 pp. $1.95. Landau, Richard L. Regulating New Drugs. Chicago: University of Chicago, 1973. 297 pp. $5.25. Berki, Sylvester E. Hospital Economics. Lexington: Lexington Books, 1972. 270 pp. Mills, Richard. Young Outsiders: A Study of Alternative Communities. New York: Pantheon Books, 1973. 208 pp. $6.95. Hauser, M. M. The Economics of Medical Care. London: George Allen & Unwin, 1972. 334 pp. Levey, Samuel and Loomba, N. Paul. Health Care Administration: A Managerial Perspective. Philadelphia: J. B. Lippincott, 1973.603 pp. $17.00. Hollister, Robert M., Kramer, Bernard M. and Bellin, Seymour S. Neighborhood Health Centers. Lexington: Lexington Books, 1974. 349 pp. Milgram, Stanley. Obedience to Authority. New York: Harper and Row, 1974. 224 pp. $10.00. Silverman, Milton and Lee,

Philip R. Pills, Profits and Politics. Berkley: University of California Press, 1974. 403 pp. $10.95. Walbert, David F. and Butler, J. Douglas. Abortion, Society and the Law. Cleveland: Case Western Reserve University Press, 1973. 395 pp. Caplan, Gerald. Support Systems and Community Mental Health: Lectures on Concept Development. New York: Behavioral Publications, 1974. 267 pp. Kennedy, Edward M. In Critical Condition: The Crisis in America's Health Care. New York: Simon and Schuster, 1972. 252 pp. $6.95. McCleery, Robert. One LifeOne Physician. Washington, D.C.: Public Affairs Press, 1971. 167 pp. $5.00. Thorwald, Jurgen. The Patients. New York: Harcourt Brace Jovanovich, 1972. 43 pp. $10.00. Somers, Anne R. (ed.) The Kaiser-Permanente Medical Care Proaram: A Symposium. New York: The Commonwealth Fund, 1971. 238 pp. Meek, Ronald L. (ed.) Marx and Engels on the Population Bomb. Berkeley: Ramparts Press, 1971. 215 pp. 1.95. Atkinson, Ti-Grace. Amazon Odyssey. New York: Links Books, 1974. 257 pp. $4.95. Havinghurst, Clark C. Regulating Health Facilities Construction. Washington, D.C.: American Enterprise Institute for Public Policy Research, 1974. 314 pp. $4.00. Gitelson, Maxwell, Psychoanalysis: Science and Profession. New York: International Universities Press, 1973. 439 pp. $12.50. Zimmerman, David R. Rh: The Intimate History of a Disease and Its Conquest. New York: Macmillan Publishing, 1973. 371 pp. $8.95. 21

Vital Signs
WATERGATE IN WHITE

Even the hospital industry has its bugging and break-in scandals. In late August, the owner, attorney and administrator of the Clinton Community Hospital in Prince Georges County, Maryland were arrested for conspiring to bug and break into a local physician's office in an attempt to prevent the construction of another hospital he was setting up, reports the Washington Post. The three had engaged the services of a private investigator to steal documents and gather information that might prevent the building of the new hospital. The investigator arranged a job for his wife with the physician in question so that she might spy on him; the endeavor even included plans to crash-land a small plane on the new hospital site to demonstrate that it lay dangerously close to the flight path of Andrews Air Force Base. The private investigator, a long-standing friend of the physician, turned the case over to the county district attorney early in the game. To date no word of pardons, presidential or otherwise, is in the wind.
TRUSTEES GET TROUNCED

banks with which they are affiliated. (See also Health/PAC reprint of Washington Post series on Washington area hospitals, 30C.) While the court failed to find evidence of a conspiracy and did not recommend that the trustees be removed, it did establish guidelines concerning the financial duties of hospital trustees. These include responsibility for supervision of officers, employees and others making day-to-day financial decisions, prohibition against self-dealing and failure to disclose conflicts of interest, and responsibility to carry out their duties "honestly, in good faith, and with a reasonable amount of diligence and care."
CHP STEPS ON HALLOWED TOES

22

A US District Court in Washington, DC has ruled that trustees of Sibley Memorial Hospital have breached their fiduciary duty to supervise management of the hospital's funds and investments. The case was brought by a former patient who charged that the trustees arranged to have the hospital's money deposited in accounts yielding little or no interest at

Comprehensive Health Planning (CHP) is carrying it just a bit too far for the Wisconsin State Medical Society. A new amendment to the Social Security Act requires state planning agency approval for any capital expenditure exceeding $100,000, any change in bed capacity or substantial change in services if the health facility in question is to receive Medicare or Medicaid reimbursements for depreciation. The definition of a health facility was apparently left unclear, and now the Wisconsin state planning agency is extending the regulation to doctors' offices. The outraged Medical Society is appealing to HEW. Said a spokesman, "The society fears these rules could be used to control the movements of doctors from one location to another. They could prohibit the addition of partners to a group, limit the equipment a doctor could purchase, and restrict the services a doctor could provide his patients." Hmmmmm.

UPS AND DOWNS OF NATIONAL HEALTH INSURANCE

Prospects for the passage of national health insurance (NHI) this year have gone up and down like a roller coaster. Most observers would agree that the roller coaster is down at the moment, but no one's taking bets on the future. NHI started the year with a great deal of momentum, fueled by compromise stands taken by all its major proponents and the renewed interest of then President Nixon. But then it, together with most ma-

jor legislation, was overrun by the tide of Watergate and impeachment events. The fires were lit anew, however, when Ford entered as the new president, putting NHI high on his legislative agenda and indicating a new Administration willingness to compromise. With that Wilbur Mills, in whose House Ways and Means Committee such a measure must originate, went to work with a fury. He threw out existing proposals on which the Committee had earlier heard testimony and attempted to steamroller through a new

compromise proposal. The new measure resembled the old Nixon and Kennedy-Mills plans in that it consisted of a four-tier system: (1) basic coverage paid for by employers and employees; (2) coverage for the poor superseding Medicaid, administered by the states and the federal government; (3) Medicare for the elderly with expanded benefits commensurate with the rest of the plan; and (4) catastrophic coverage for medical expenses over $6,000 to be paid for by payroll taxes borne mostly by employers. The plan would include a graduated scale of coinsurance and deductibles. The measure was designed to please liberals in that it is mandatory and offers fairly generous benefits for the poor, and to please conservatives in that basic coverage is handled entirely by the insurance industry. In the end, however, the measure pleased no one, and Mills scotched the whole endeavor, concluding that at the moment there is no basis for consensus.
CHEATING THE CHILDREN

The decline in the number of children receiving immunizations is alarming some health authorities. In 1973, 5.8 million preschoolers were unprotected against either polio, measles, rubella, diphtheria, pertussis or tetanus. Polio immunizations have actually dropped from a high of 84.1 percent in 1963 to 60.4 percent in 1973; only 40.3 percent of nonwhite urban children were adequately protected against polio, compared to only 68.3 percent of suburban children, according to a 1972 survey. Similarly only 61.2 percent of preschoolers received measles immunization in 1973, down 1 percent from the year before, 2 3

and only 34.7 percent were immunized against the mumps. Consequently some 18 health organizations, coordinated by the U.S. Public Health Center for Disease Control, are sponsoring an Immunization Action Month to publicize the need.
FLEEING THE PROBLEM

In a study of why doctors choose to practice where they do, the Department of Health, Education and Welfare last year asked medical school graduates to rank the undesirable aspects of rural and innercity practice. They found leading reasons that young doctors choose not to work in rural areas to be: lack of continuing education programs (19 percent), long hours of practice (17 percent), and distance to support facilities (14 percent). Leading reasons for not choosing the inner city included risk of assault or bodily injury (19 percent), lack of desirable neighborhood to live in (18 percent), and risk of damage to office or theft (14 percent).
PHP-PHYSICIANS' HEFTY PROFITS

in recruiting patients, which have ranged from intimidation to misrepresentation to forgery, with recruiters often being paid on a per-head basis. The state auditor found that of $56.5 million being paid 15 PHP's in three years, 52 percent went into administrative costs or profits. Now poor patients are disenrolling faster than they are enrolling. And more than that, PHP's have now lost even their cost-saving allure for the State. Responding to protests that some PHP's were favored by the State, the Health Department has established flat, county-wide rates. The effect has been to boost the revenues of many groups as much as 25 percent and to cost the State more than it paid under the old cost-reimbursement system. All of this has sparked the investigative interest of the Los Angeles District Attorney, the Internal Revenue Service, the Government Accounting Office and several state agencies.
TREATING AT ARM'S LENGTH

payment only what Medicare will provide. The clinic was quickly swamped and Blue Cross-Blue Shield, which administers Medicare, balked, refusing to pay many claims. Minutes of a recent meeting between Blue Cross and the clinic quotes Blue Cross officials as saying, "We are being discriminatory against you because of the way you are set up." The clinic has been "singled out because you have opened your arms and said to everybody, come to uswe will take care of your problems."
WHY NORTHGATE ISN'T CALLED GOOD SAMARITAN

Prepaid health plans (PHP's), California's model for saving money while making profits on poor patients, have fallen on bad days, reports Medical World News. Using Medicaid and acting as HMO's for the poor, privately-run PHP's have been hailed by the Reagan Administration as cost-saving innovations in providing care for the poor, and some 53 have sprung up across the state in the last three years. But PHP's have instead provided a political scandal for the Reagan Administration. Three of the largest PHP's or PHP networks have been sued 24 to stop illegal pressure tactics

Blue Cross-Blue Shield of Minnesota has blacklisted a Minneapolis clinic for the elderly because of "the way it is set up." The clinic, sponsored by Abbott-Northwestern Hospital and the Minnesota Age and Opportunity Center, serves elderly persons with incomes under $4,500 and states that it will accept as full and final

"Where do you stop once you start going outside the hospital walls?" the administrator of Seattle's Northgate Hospital countered when asked why the hospital refused to aid a man who lay bleeding in a lot half a block away. The man was discovered by a hospital security guard who ran to the hospital's 24-hour emergency room, reports the July 11 Washington Post. The hospital refused assistance, citing the hospital's inability to render adequate treatment outside its walls, lack of personnel and fear of liability. "My staff and facilities are designed for patients to be cared for within the confines of the building," replied the administrator. The man died.

PHP Packet

A 50-page packet, "Materials on Prepaid Health Plans (PHP's)," has been prepared by Health/ PAC. It reproduces documents and articles describing a California innovation in health care financing. $1 including postage from Health/PAC, 558 Capp St., San Francisco, Cal. 94110.