AMA urged to limit corporate entanglements Physicians group should restrain its pursuit of profit, report says

November 23, 1998|By CHICAGO TRIBUNE

The American Medical Association must do more to police its corporate relationships and avoid acting like a "profit-maximizing business," according to a report examining the association in the wake of its now infamous product endorsement deal with Sunbeam Corp.

In August 1997, the AMA announced a five-year deal with Sunbeam in which some of the company's health-care products would carry the AMA name and logo and contain AMA literature in the package. The medical association was to receive royalties based on sales, the report notes.

"A profoundly negative response to the announcement both within and without the AMA ensued," says the report by the Task Force on Association/Corporate Relations, released last week, more than a year after the group was established as part of an effort to evaluate the AMA after the Sunbeam debacle.

The task force of outside legal, ethical and business experts as well as top AMA leaders recommended that the Chicago-based association further distance itself from corporate relationships and offered suggestions on how to screen proposals. The group specifically focused on grants, support from medical and health concerns and licensing agreements with others for production, promotion and sale of the others' products and services.

The AMA is expected to use the report and discuss it further at an interim meeting of its House of Delegates next month in Honolulu.

Task force co-chair Daniel Steiner, who was general counsel to Harvard University from 1970 to 1992, said the AMA isn't unlike other professional associations looking for ways to increase revenue. But, he said, the AMA needs to be careful of its relationships because of its powerful influence with the public.

"The AMA shouldn't set goals that require an increasing amount of money, otherwise you get too much tension there," said Steiner. "Even if your motives are good, you have to limit what you are trying to accomplish."

The task force consisted of nationally prominent ethicists, business school educators and medical scholars. AMA leaders, including AMA President Dr. Nancy Dickey and board member Dr. Timothy Flaherty, were also involved.

"As a professional association the AMA is not, and cannot function as a profit-maximizing business interested in perpetual growth," the task force said. "Thus, the AMA should not set ambitions of a kind that create a constant need to raise increasing amounts of money. Such financial pressures provide an incentive to evade, minimize, or overlook restraining guidelines for fund raising and corporate relations."

The AMA has been faced with a declining membership base, which has caused a decline in its dues revenue. In 1997, dues revenue fell to $69.3 million, according to the organization's 1997 annual tax return filed earlier this week. That compares to member dues of $69.5 million in 1996 and $71.2 million in 1995.

"The AMA has to be realistic of what it can do," said Dr. Raymond Scalettar, a Washington physician and former chairman who unsuccessfully tried to ride a wave of dissension in a campaign for the association's presidency. "The AMA tried to cover all the bases and approach many things in a Don Quixote fashion. They are going to have to budget more clearly in the future."

Among its many recommendations, the task force said the AMA should create an elaborate screening process for all corporate relationships, with three levels of checks and balances that include board approval and scrutiny.

The association should also appoint an officer for organizational ethics to help carry out these guidelines, the task force said. The group recommended random audits of corporate relationships be done annually.

The task force said the AMA can continue working with corporations, but should limit itself in ways that provide health information without "undue influence on affairs of the AMA."

Because the public values the AMA's opinions on medical issues, the AMA shouldn't be involved in "the production, sale, or marketing to consumers of products that claim a health benefit," the report says. For example, Steiner said the AMA is phasing out a practice of selling first-aid kits.

The Sunbeam affair has been one of the most embarrassing chapters in the AMA's 151-year history. Fallout surrounding the Sunbeam deal led to the dismissal of several AMA staff members, including former executive vice president Dr. P. John Seward.

Sunbeam filed suit for breach of contract, and last summer the AMA agreed to pay $9.9 million to settle the matter rather than go to court.

Pub Date: 11/23/98

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