Discontent in Physicians’ Group Fuels Campaign

A Washington physician Sunday challenged the leadership of the American Medical Assn., badly split after a marketing blunder last year tarnished its reputation as it struggles to deal with declining membership and threats from managed care.

Raymond Scalettar, who is conducting a last-minute insurgent campaign to defeat the heir apparent to the presidency of the organization, said during a candidate debate that the AMA has lost “confidence and credibility” with the medical profession and with the public and politicians it seeks to influence.

The immediate cause of the rebel candidacy and the members’ discontent is an episode last year in which the AMA, which represents 295,000 physicians, decided to raise money by endorsing home health care products made by Sunbeam Corp. The AMA quickly backed out of the deal after it was besieged by criticism for selling the association’s logo and reputation for outside use, a violation of its ethics rules.

In a broader sense, both the leadership fight and the lingering bitterness surrounding the aborted Sunbeam deal are visible signs of malaise in an organization that once wielded unparalleled clout in American health care but now is searching for new avenues to strengthen its membership and its mission.

Though it still spends more money on lobbying activities than any other organization in the nation, the AMA has been losing influence with its own profession. Earlier in the century, nine doctors in 10 belonged to the group; by the late 1970s, that proportion had dropped to about half, and today less than 40% of the nation’s physicians are members.

Long before last year’s embarrassing Sunbeam incident, several factors were causing erosion of the AMA’s fortunes: political miscalculations that led to opposing the creation of Medicare, changes in medicine that have made the profession less cohesive and the recent rise of managed-care plans that many doctors believe have hurt their status, autonomy and income.

In the new era of health maintenance organizations and other forms of managed care, doctors “feel someone somewhere should do the right thing and protect them,” said Lyle Thorstenson, a Texas ophthalmologist who is chairman of the membership task force. Because many physicians’ problems seem intractable, “they get frustrated and let their membership lapse,” Thorstenson said.

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Scalettar is hoping that such frustration exists among the 475 voting delegates who will decide Wednesday on a new AMA president. Many physicians here for the AMA’s annual meeting predicted Scalettar will have a close race against Thomas Reardon of Portland, Ore., the AMA board’s current chairman.

Although Scalettar is portraying himself as a candidate of a “new AMA,” he has been active in organized medicine for 30 years. The rheumatologist was an AMA trustee from 1985 to 1994, and was the trustees’ president in 1993. He also unsuccessfully sought the AMA presidency five years ago.

Whether Scalettar wins or not, the disaffection signified by his current candidacy is a remarkable change in an organization that once wielded immense power.

But at the middle of the century the organization began a long, slow decline. Part of it was due to a major political misstep, when it waged an all-out crusade in 1965 to try to block the creation of Medicare. The AMA argued that medical care should remain in the hands of doctors, not the government.

By losing the political fight, only to discover that Medicare actually enhanced many doctors’ incomes, the AMA “looked stupid,” said Eli Ginzberg, a Columbia University health economist. “That was the beginning of the end.”

Meanwhile the profession was changing internally, evolving new branches and specialties that made it difficult for one organization to represent all doctors’ interests, said Paul Starr, a Princeton University sociologist.

The rise of managed care has intensified this shift away from AMA loyalty, because doctors tend to be more frustrated, and many believe they have been inadequately protected.

This is a theme Scalettar is trading on. “We fought the Clinton health plan like a prizefighter, then went into hibernation” as HMOs took hold, he said in an interview Sunday.

With a smaller proportion of doctors as members, economic pressures have mounted. The percentage of the AMA budget that comes from members’ dues has dipped significantly in the last decade. The problem is compounded because the organization, worried about the potential deterrent of high dues, decided several years ago not to raise its $420 annual membership fee.

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In a climate in which the AMA must look harder for other sources of revenue, many physicians and health care experts believed unorthodox ventures such as the Sunbeam deal were more likely.

An internal report on the Sunbeam agreement, prepared for this meeting, concluded that the AMA’s trustees should have been more aware of the Sunbeam deal before it was signed.

On Sunday, Reardon, the board chairman and candidate, and other top AMA officials sought to portray that incident as behind them. Reardon said that once the board learned of the Sunbeam deal, it intervened swiftly, abandoning the contract and forcing the resignation of five top AMA administrators, including the executive vice president. Sunbeam has filed a $20-million lawsuit against the AMA.

E. Ratcliffe Anderson, the incoming executive vice president, told the doctors gathered here Sunday: “Now at last, the past is past, and the time for self-flagellation is over.

“Ladies and gentlemen, this case is closed,” he said to thunderous applause.

The outcome of Scalettar’s challenge will, in part, reflect whether the AMA’s delegates agree.