Special Report to Dynamic Chiropractic by Howard Wolinski, Chicago Sun-Times
Less than two months ago, Dynamic Chiropractic reported on the American Medical Association's botched endorsement-for-sale plan with Sunbeam Corporation (see "Chainsaw vs. Sawbones" in the November 17, 1997 issue). For those unfamiliar with the situation, in August of 1997, Sunbeam and the AMA made public a five year trademark licensing agreement. In the agreement, the AMA would lend its serpent-on-the-staff logo to Sunbeam's Health-Home product line for endorsement purposes.
The announcement set off a crisis among AMA members and related health associations, and received serious scrutiny from the media. In the August 25 edition of Time magazine, for instance, Dr. Quentin Young, the president-elect of the American Public Health Association, said that the deal would make it appear as if "the AMA is cashing in on its debilitated reputation as a guardian of American health and becoming straightforward feather merchants."
Faced with a further loss of credibility, the AMA tried to back out of its deal with Sunbeam in early September, but Sunbeam sued for breach of contract, demanding a minimum of $20 million in compensation. The AMA responded to the suit by saying that the original agreement was a mistake and that endorsing such products would violate its principles. (Apparently, this principle is a bitter pill for some AMA executives to swallow. As mentioned below, it has since been learned that the association is once again considering the idea of endorsing corporate products in exchange for money.)
The backlash from those failed financial dealings was felt throughout the upper levels of AMA management. As a result, four of the association's top executives either resigned or were terminated: Howard Monroe, the AMA's chief operating officer; James Rappel, the group's vice president for business; Kirk Johnson, the AMA's chief legal counsel since 1984; and Larry Jellen, vice president of marketing and the chief architect of the Sunbeam deal.
Through it all, it was thought that Dr. P. John Seward, the AMA's executive vice president, would escape the Sunbeam fiasco with his position at the association relatively intact. But it was not meant to be. On Wednesday, December 3, Seward resigned from the AMA effective immediately, acknowledging that he was to blame for the organization's disastrous re-entrance into the world of corporate endorsements.
"Last summer, the AMA entered into a contract with Sunbeam Corp., which was a serious mistake," said the 58-year old Seward, who first became a member of the association's board in 1995. "This happened on my watch, and I have always accepted that responsibility." A native of Rockford, Illinois, Seward practiced family medicine for decades and is the former president of the Illinois State Medical Society.
The board accepted his resignation "with deep regret," but as of this time they have yet to name an immediate successor. In fact, according to a statement issued by Dr. Thomas Reardon, the current chair of the AMA's Board of Trustees, the association has decided to look outside of its organization for a new leader and may even consider choosing a non-physician to fill the position, something that has not occurred since the position was created in the 1960s.
Upon his resignation, Seward said that "For the last three months, every fiber of my being has been committed to repairing the damage and moving ahead with the work of this outstanding institution." Seward's resignation raises a number of interesting questions. Is his resignation an attempt to save face instead of being unceremoniously voted out of office by the AMA's House of Delegates at their annual meeting? Will this additional bloodletting keep the ire of the membership away from the board of directors? Is the next executive director going to be a non-MD fall guy?
Is the AMA Still for Sale?
Although Seward became the first physician to lose his job as a direct result of the failed deal with Sunbeam, some critics feel that his departure will not resolve the fundamental problems caused by the AMA's apparent willingness to sell endorsements for financial gain. In fact, such a situation appears to already be in the development stages.
On December 4, the day after Seward resigned, the association's board of trustees considered proposing a new set of guidelines for commercial agreements with corporations similar to that of the ill-fated deal with Sunbeam. This would indicate that despite further possible media backlash and other negative ramifications, some of the AMA's leaders are still interested in endorsing corporate products in exchange for money.
Some members of the AMA wish the association would stay clear of such dealings. Stefanie Flora, an AMA student delegate at Indiana University, is uncomfortable with the view the association has taken. "I don't want my AMA endorsing commercial products," said Flora. "I think that it's selling out -- it is cheap." And Dr. George Lundberg, the editor of the Journal of the AMA, spoke for many members during a hearing on the issue of commercial arrangements when he said, "We are a professional association ... not a football team."
Others have been less charitable with their comments. Dr. Michael Grodin, the director of ethics at Boston University, says that "they (the AMA) really don't get it" when it comes to the association's plans for endorsements. Sidney Wolfe, the executive director of the Public Citizen's Health Research Group, said that Seward's resignation fails to clear what he calls the "stench" surrounding corporate endorsements.
As with Dr. Seward's resignation, the actions of the AMA's leadership raise several questions, perhaps the biggest of which is why. Why would the AMA be taking what could be seen as desperate measures in an effort to garner financial resources from the corporate sector? Are these "new" guidelines designed to allow the AMA to settle with Sunbeam and go through with a modified Sunbeam endorsement agreement that the AMA Board (and their bank account) can live with? Is the AMA convinced that more money will compensate for a declining membership, particularly by new MDs? Wouldn't it be wiser for the AMA to better understand the needs of the new practitioner rather that worry about selling endorsements?
The idea of commercial endorsements clearly has upset a good deal of its members and has only generated a negative response from the media thus far. What type of leadership does the AMA have, when its board members fail to correspond with the sentiment of many of its dues-paying members?
Perhaps the words of Dr. Arnold Relman sum it up best. The editor emeritus of the New England Journal of Medicine, Dr. Relman is an opponent of commercialized medicine and thinks that the AMA's leaders are missing the point many of its critics are trying to make.
"It's too bad that the AMA leadership does not have the courage to rid itself of corporate deals," Relman said in reference to the association's recent practices. "The AMA may make some money, but it will lose something more valuable: it will lose the respect of the majority of the profession and the public."
Editor's note: We would like to thank the Chicago Sun-Times and reporter Howard Wolinksy for continuing to keep the chiropractic profession updated on these events.
