AMA Vice President Sues Group for Breach of Contract
The American Medical Association's vice president and CEO, E. Ratcliffe Anderson, has filed a lawsuit in Illinois's Cook County Circuit Court against the group charging defamation and breach of contract, the Chicago Tribune reports. Anderson claims that the AMA did not permit him to fire its top lawyer because the attorney had "protected certain trustees from an embarrassing endorsement deal in 1997 with Sunbeam Corp." According to Anderson, the attorney, Michael Ile, who has since left the organization, "botched" a real estate deal in 1997 when he agreed to sell AMA-owned land in Chicago for $13.5 million below its fair market value. Although Anderson wanted to fire Ile over the deal, the AMA Board of Trustees prevented him from doing so because Ile "kept trustees insulated from" the Sunbeam deal, the complaint states. Anderson said, "When I pointed fingers and asked questions about why we were leaving millions of dollars on the table, the board of trustees accused me of flouting their authority and they subsequently threatened my job. When I refused to cooperate in their decision to hire a new general counsel (to replace Ile) who would 'cover their butts,' the board of trustees unleashed a series of assaults on my office ... in direct violation of the resolutions of the AMA's House of Delegates." Anderson seeks a jury trial and damages of more than $5 million (Japsen, Chicago Tribune, 6/19).
For its part, the AMA board called the lawsuit "frivolous," adding that it plans a "vigorous" defense. The board said it is "completely confident that it had not violated Anderson's rights" and has rejected a settlement offer (Winslow, Wall Street Journal, 6/19). In the meantime, Anderson remains executive vice president and CEO. He has an employment contract than runs through 2004 (Chicago Tribune, 6/19). The lawsuit was announced yesterday in a news release coinciding with the AMA's annual House of Delegates meeting, which began Sunday (Winslow, Wall Street Journal, 6/19).
In other AMA news, the group has decided not to renew its membership in the U.S. Chamber of Commerce, concluding that it "couldn't continue to pay dues to an organization that is actively fighting two of the AMA's top legislative goals: a patients' bill of rights and a bill that would let doctors collectively negotiate with health plans," National Journal reports. The AMA has been an "outspoken and very public supporter" of a patients' rights proposal by Sens. Edward Kennedy (D-Mass.), John McCain (R-Ariz.) and John Edwards (D-N.C.), but the Chamber of Commerce is "one of the leading business groups trying to defeat" the measure. National Journal reports that in public, both groups have "downplayed their breakup by saying it was mostly about the AMA ... sav[ing] money" (Serafini, National Journal, 6/16). The chamber is also opposed to a bill that would give doctors and other providers "antitrust relief" and the ability to "negotiate collectively" with managed care organizations. The House approved such a measure last year, but it died in the Senate. According to lobbyists, "tensions" between the AMA and the chamber, whose relationship dates back to the 1950s, "have been building ... for some time," but the "situation heated up" when Sen. James Jeffords (I-Vt.) left the Republican party last month, setting the stage for Democrats to take control of the Senate and begin debate on the Kennedy-McCain-Edwards bill (National Journal, 6/16).
The AMA also is considering ending a "controversial practice" in which the group sells information about its members to drug makers, the Tribune reports. The AMA makes about $20 million per year selling the "Masterfile," which contains information such as medical licenses, private telephone numbers and federal identification data used to track controlled substances on more than 800,000 doctors. The Masterfile does not include patient information, but is an "important tool" by which drug makers can track doctors' prescribing habits. Dr. Jack Lewin, president of the California Medical Association, which opposes the practice, said, "A drug company could use your Drug Enforcement Administration number to profile [you] and target advertising to physicians to prescribe more drugs. Because there are so many economic factors competing for patients and doctors, we need to set the bar extremely high in terms of protections and privacy." But supporters of selling data from the Masterfile say that it "improves patient care" because hospitals, insurance companies and state regulators also use the lists (Japsen, Chicago Tribune, 6/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.