SWINE FLU CONTROVERCY 1977: Public Health

Swine flu controversy.

The swine flu vaccination program was suspended in December 1976 by then Assistant Secretary for Health Dr. Theodore Cooper, who acted after reviewing studies showing a possible connection between use of the swine flu vaccine and the development of a severe neurological disorder called the Guillain-Barr‚ syndrome. According to statistics compiled by the Center for Disease Control, of 1,104 cases of Guillain-Barr‚ syndrome reported in late 1976, 535, including 28 resulting in death, had apparently followed inoculation of the patient against swine flu. Early in February, however, HEW Secretary Califano partially lifted the moratorium on the use of the vaccine because of an outbreak of A-Victoria influenza, against which one type of swine flu vaccine (the bivalent) was effective. Later, the Public Health Service advised that elderly persons and those with chronic illnesses receive inoculations against A-Victoria and B-Hong Kong influenza to prepare for the 1977-1978 flu season. The general suspension of the swine flu inoculation program remained in force, however.

Meanwhile, a group of consumer organizations, later joined by the Pharmaceutical Manufacturers' Association, urged Califano to establish a national immunization commission to develop and oversee a national vaccination policy.

Saccharin ban.

The Food and Drug Administration proposed on March 9 that the artificial sweetener saccharin be banned in itself and as a food additive. Recently released Canadian studies had linked administration of large quantities of saccharin to laboratory animals with development of bladder cancer. Although a storm of protest from diabetics, dieters, and soft-drink manufacturers followed this announcement, the FDA's case apparently was strengthened in June, when a report was released of a Canadian epidemiological study that appeared to demonstrate a definite association between consumption of saccharin and the development of bladder cancer in human males. Though the FDA had by that time already modified its proposal, to permit the sale of saccharin as an over-the-counter drug, Congress acted to delay implementation of the proposed ban. In September and October both houses gave approval to measures appropriating funds for further saccharin studies and postponing any FDA ban until such studies were completed.

Abortion funding.

The Center for Disease Control reported an increase of 12 percent in the number of legal abortions in the United States in 1975. About one-third of those having abortions were teenagers. According to the CDC statistics, the ratio of abortions to live births in 1975 was 272 per 1,000.

Meanwhile, Congress was sharply divided over whether to continue for fiscal 1978 a ban on the use of federal medicaid funds to pay for most abortions for poor women. (The ban, first voted for fiscal 1977, was actually not in effect until late in the fiscal year because of court challenges.) After the Senate modified the ban by approving all 'medically necessary' medicaid abortions, the House voted to adhere to the original terms of the ban, which prohibited the use of federal medicaid funds for all abortions except those required to save the mother's life. The ensuing deadlock over this issue stalled passage of the $60.3 billion appropriations bill to operate the Departments of Labor and HEW during the fiscal year beginning October 1. A House concession, on October 12, allowed federal funding of medical procedures for victims of rape and incest, but a final agreement between both houses was still awaited.

FTC actions.

The Federal Trade Commission has recently begun to gather information on the alleged lack of competition in the delivery and financing of health-care services. In one of its first actions in this area, the FTC on April 20 ordered the Minnesota State Medical Society to refrain from developing and publicizing 'relative value scales' and dollar conversion factors to guide physicians in setting fees. Relative value scales had been used to equate certain medical services and to rate some services as inherently more valuable than others. According to the FTC, publication of the scales amounted to illegal price fixing by the medical society.

In a related matter, the FTC indicated its concern about the American Medical Association's role in the Liaison Committee on Graduate Medical Education, the accrediting agency for medical schools. The commission focused its attention on a possible conflict of interest by the AMA in exerting influence over medical education. The FTC also issued a staff report which concluded that health maintenance organizations could stimulate competition in their areas of operation, and thus reduce health-care costs.

Foreign doctor phaseout.

Under a federal statute that took effect on January 10, foreign medical school graduates will be barred after 1980 from completing their medical education in the United States. Although the bill provides for waivers on a case-by-case basis if health services would otherwise be adversely affected, the American Hospital Association foresaw major problems resulting from the ban, particularly in big-city public hospitals, whose staffs traditionally have included significant percentages of foreign doctors. Presently, foreign medical school graduates make up 30 percent of the 50,000 interns and residents in U.S. hospitals, and as much as 80 percent of the house staffs at some metropolitan hospitals. In order to soften the impact of the ban, recruitment of foreign doctors will be phased out gradually over the next two years.

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SWINE FLU IN EARLY DAYS-1918

Swine flu and insurance.

In January some army recruits at Fort Dix, N.J., reported to the infirmary with what appeared to be bad colds. By February 13 further investigation, in cooperation with the federal Center for Disease Control in Atlanta, indicated that the recruits had so-called swine influenza, a relative of the Spanish flu that had broken out in the closing days of World War I and killed 500,000 persons in the United States and 20 million around the world in 1918 and 1919. This March 24, President Gerald Ford announced a program to inoculate everyone in the United States against the swine flu virus. The four largest U.S. drug firms began work to prepare the vaccine. In June, however, the Warner-Lambert Company, which was expected to supply half the vaccine, notified the federal government that it was losing its liability insurance on the vaccine program July 1. The other companies reported they too were having difficulty with their insurance programs. It was feared by the insurers that they would face not just the usual quality control and related problems involved in such a large crash program, but that the controversial nature of the mass inoculation drive would lead to the filing of a great number of lawsuits. The insurers estimated that it would cost them $25 billion in legal expenses just to defend the suits, in addition to any monetary settlements awarded by the courts. The pharmaceutical companies asked for governmental intervention.

In August, after long debate, Congress passed legislation under which people claiming injury as a result of the vaccination program would sue the federal government rather than the drug firms. The government in turn would be able to sue the drug firms and medical personnel involved to recover money paid out in cases where negligence was proved. But the firms were freed of the responsibility—and the cost—of defending unwarranted suits. Nobody could predict at the time what the cost of this risk assumption will be to the government. In the past there have been few negligence claims in connection with flu shots. Public health officials think the cost may be only a few million dollars. However, based on their medical malpractice experience, some insurance executives believe the cost might run into the billions.

Product liability.

The swine flu insurance problem is, essentially, one of product liability. Increasingly, consumers have turned to courts to obtain reparations for injury resulting from purchased goods or services. A recent study estimated that about 1 million product liability cases were filed this year. As in the swine flu situation, just the cost of appearing in court to answer the suits can be a staggering sum for the insurers.

Several proposals have been made to deal with this cost problem, including the substitution of arbitration for jury determination of awards; the establishment of a relatively short period during which claims could be made; and the elimination or restriction of the contingent fee basis for paying lawyers. It has been charged that this fee system, under which lawyers receive payment only if they win a case, leads some lawyers to encourage suits.

Property and liability companies.

There was an overall improvement this year in the financial position of property and liability insurance firms, which in 1975 experienced their worst year ever in terms of losses from claims. The firms' earnings on investments rose this year, in part because of the recovery of the stock market. Increases in insurance rates and a slowing of inflation (which had helped drive up such costs as automobile repair) also benefited insurers. Reflecting the industry's improved position, indexes of insurance stocks went up even faster this year than general stock market indexes. The increasing prosperity of the insurance companies will do much to solve one problem that appeared in recent years. Property and liability companies had been unable to meet the need for new policies because losses on claims and poor investments left them with insufficient funds to satisfy state requirements for capital necessary to write insurance. Thus, even some well-qualified applicants were being refused coverage.

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