Fluoride: The Ultimate Cluster Flux, Folder 1D

Fluoride: The Ultimate Cluster-Flux
And the Players Involved
A Compilation of Documents and Articles

Relating to Fluoride
This collection is dedicated to those who wrote the original works and
made them available on the internet. I have spent countless hours
searching for information on fluoride and it is my wish, by assembling
these works, to enable others to save time looking and make available
more time for them to ‘do’.
If you are sickened and appalled by the approved use of fluoride in

food, beverage and other consumer products then I ask that you spread
this knowledge on to others and contact your local representatives in the
hopes that one day fluoride will be more strictly regulated or, banned
altogether.
These documents are listed in roughly the order I found them. It would
be nearly impossible to group them in some kind of order since they are
all linked together – a cluster-flux of monumental proportions.
I would like to thank (or curse) Christopher Bryson whose excellent

book, The Fluoride Deception, opened my eyes to fluoride and started
me on this journey of uncovering the truth.
For more information on fluoride, I would recommend the Fluoride Action

Network (FAN) http://www.fluoridealert.org/ as a good place to start.
NOTICE
In accordance with Title 17 U.S.C., section 107, some material on this web site is provided without
permission from the copyright owner, only for purposes of criticism, comment, news reporting,
teaching, scholarship and research under the "fair use" provisions of federal copyright laws. These
materials may not be distributed further, except for "fair use" non-profit educational purposes,
without permission of the copyright owner.
1
1 FEDERAL TRADE COMMISSION
4 JOINT FTC/DEPARTMENT OF JUSTICE HEARING
5 ON HEALTH CARE AND COMPETITION LAW AND POLICY
10
11 Thursday, June 12, 2003
12 9:15 a.m.
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18 601 New Jersey Avenue, N.W.
19 Washington, D.C.
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For The Record, Inc.

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1 FEDERAL TRADE COMMISSION
2 I N D E X
3 PANELISTS: PAGE:
5 Newt Gingrich, The Gingrich Group 5
6 Warren Greenberg, George Washington University 26
7 Helen Darling, Washington Business Group on Health 31
8 Greg Kelly, Coalition Against Guaranteed Issue 36
9 Michael Young, Aon Consulting 40
10 David Lansky, Foundation for Accountability 49
11 Marcia L. Comstock, J.D., Wye River Group on Health care 55
12 Helen Darling, Washington Business Group on Health 99
13 Bernie Dana, American Health Care Association 149
14 Laura Carabello, CPRi Communications 161
15 Thomas Henry Lee, Jr., M.D., Partners Health care 179
16 Douglas D. Koch, M.D., Baylor College of Medicine 190
17 Richard Kelly, Federal Trade Commission 200
18 Peter M. Sfikas, American Dental Association 210
19 John E. Gebhart, III, DoctorQuality.com 219
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1 P R O C E E D I N G S
2 DR. HYMAN: I'm David Hyman, special counsel here
3 at the Federal Trade Commission. Let me welcome you all to
4 the reconvening of the Hearings on Health Care and
5 Competition Law and Policy jointly sponsored by the Federal
6 Trade Commission and the Department of Justice.
7 This is the latest in a series of hearings that
8 started in February and are going to last through September,
9 perhaps October, unless I can make it September, and
10 represent an ongoing investigation of the performance of
11 differing parts of the health care market with regard to the
12 cost of the services that are provided, the quality of those
13 services, and the extent to which ordinary Americans can
14 access information about those services and obtain those
15 services at a time and in a fashion that is desirable to
16 them.
17 This morning we have a very distinguished panel and
18 extensive bios for each of the speakers, not all of whom,
19 unfortunately, are here just yet, and are published in this
20 beautiful book that's available outside. Our rule is,
21 accordingly, short introductions because you can read about
22 the people in the book.
23 The format we're going to follow this morning is
24 our first speaker, Newt Gingrich, is going to make somewhat
25 extended remarks. And then there will be a panel discussion

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1 of those remarks, and we'll include, as time allows, members
2 of the audience in that discussion if they have questions or
3 comments that they'd like to make.
4 And then following the time that we've allotted for
5 that portion of the program, we will then move into
6 presentations by individual speakers. At the end of that
7 time, we will then have a moderated panel discussion among
8 the speakers about the issues that we'll be discussing today.
9 The focus of our discussion today is financing
10 options and consumer information. It's essentially a
11 constellation of subjects relating to how Americans get their
12 health insurance coverage, the availability of information
13 regarding that coverage, the extent to which current
14 institutional arrangements insure a range of options
15 available to them, and the impact of those financing
16 arrangements on the delivery system for health care.
17 Our first speaker of the morning is former Speaker
18 of the House Newt Gingrich, the author of seven books,
19 including one he's going to speak about today, "Saving Lives
20 and Saving Money." And there's a very nice handout outside
21 that outlines some of the book, which presents Newt's vision
22 of a 21st century system of health and health care.
23 Newt is currently the CEO of The Gingrich Group, a
24 communications and consulting firm specializing in
25 transformational change. He recently launched the Center for

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1 Health Transformation, which advocates for market-oriented
2 health care.
3 And just two other preliminary announcements. If
4 everyone can turn off their cell phones. The Speaker likes
5 nothing better than being interrupted by the sound of your
6 cell phone. And second, time will be kept by Cecile Kohrs
7 over at the table there. So if the speakers can just keep an
8 eye out for that, it will ensure that we'll have adequate
9 time for discussion.
10 Newt, you can either sit or stand at your option.
11 MR. GINGRICH: If it's okay, I'll just sit, if
12 that's all right. And I'll try to go through this pretty
13 rapidly as an outline.
14 But first of all, Dave, let me thank you and the
15 Federal Trade Commission and the Department of Justice
16 Antitrust Division for hosting us today. I think trying to
17 think about impediments to competition in health is a very,
18 very important topic, first because of the rising cost of
19 health care, second because the scientific and technological
20 breakthroughs are likely to increase the cost of health care,
21 and third, because the aging of the baby boomers guarantees
22 that the sheer volume of health care over the next decade of
23 15 years is going to continue to go up.
24 If you look at the current crisis in Europe and
25 Japan, one of my mentors, Steve Hanser, just spent a month in

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1 Europe. I called him when he got back. I said, "What did
2 you learn?" He said, "Well, I was in four countries and
3 there were four issues: pensions, pensions, pensions, and
4 pensions," he said, "with the cost of health care and
5 unemployment being a distant second and third."
6 And I think if we don't in the next few years bring
7 to bear a much different approach to how we have a
8 competitive health system, that in fact we will rapidly move
9 towards some kind of bureaucratic redistributionist and, I
10 think, mediocre system.
11 So what you're focusing on is exactly at the cusp
12 of either finding really dramatic solutions or getting in
13 trouble. As you mentioned, we just finished a book called
14 "Saving Lives and Saving Money," and we just opened up a
15 website called the Center for Health Transformation, which is
16 at HealthTransformation.net, or you can go to just my first
17 name, Newt.org. But in "Saving Lives and Saving Money," we
18 outline a model for transforming the health system.
19 Let me start by making an argument that I think
20 gives the Federal Trade Commission a particularly important
21 role in the next ten or fifteen years. It should be the
22 natural product of a scientific, technological,
23 entrepreneurial, free market system to produce more choices
24 of better quality at lower cost.
25 And I'm going to repeat this because I think in

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1 both health and education you see a tremendous impediment of
2 government blocking what should be a natural pattern. The
3 natural pattern should be more choices of better quality at
4 lower cost.
5 And in a sense, Wal-Mart is, for the 21st century,
6 what Alfred Sloan and General Motors were for the 20th
7 century, in the sense that Sloan's investigation of consumer-
8 led mass production defined management for most of the 20th
9 century.
10 Wal-Mart's model, that lower everyday price is a
11 function of lower everyday cost, and that they see themselves
12 as the largest and most efficient market makers in the world,
13 is something really worthy of study.
14 And any institution that gets 100 million Americans
15 to voluntarily show up every week is worth looking at and
16 saying, what is it they're doing right? I mean, without
17 arguing about other aspects of Wal-Mart, it seems to me that
18 they are an institution worthy of study.
19 What we're suggesting is that lowest everyday price
20 being a function of lowest everyday cost should apply to
21 health and health care, and that producing more choices of
22 higher quality at lower cost should apply to health and
23 health care, and that to the degree it doesn't, it is largely
24 a function of the mis-design of the current system.
25 Now, there are three areas where you see real proof

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1 that traditional market behaviors work. They're all in
2 health. None of them are in the third party payment system.
3 The first, which we have here copies of, is looking
4 at a paper that was done by the National Center for Policy
5 Analysis, which looked at the cost patterns for cosmetic
6 surgery. And it turns out -- and the chart is very, very
7 revealing -- it turns out that all goods goes up at a certain
8 rate. Health care goes up at a much more rapid rate.
9 Cosmetic surgery went up at less than the rate of CPI. That
10 is, cosmetic surgery actually increased in cost from 1992 to
11 2001 at a lower rate than the consumer price index, while the
12 rest of health care went up dramatically faster.
13 The second example is laser surgery. The average
14 cost of surgery per eye dropped from $2,079 in 1999 to $1,631
15 in 2002. Now, again, this is a health procedure. It's a
16 fairly sophisticated health procedure. This is not a
17 question of cheap medicine or inappropriate medicine. This
18 is, in fact, an area where the breakthroughs technologically
19 have continued to accelerate, and the ability to perform
20 laser surgery has gotten better with better outcomes at
21 declining cost.
22 The third area is over-the-counter medications,
23 which have actually declined by about 2 to 3 percent in cost
24 as compared to the consumer price index and are dramatically
25 under prescription drugs.

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1 Now, our argument, both in "Saving Lives and Saving
2 Money" and at the Center for Health Transformation, is that
3 you can't succeed in reforming the current system, that the
4 current system is inherently, by design, mal-designed so that
5 a third party payment model is inherently conflict-ridden
6 because you have the person receiving goods not responsible,
7 the person paying goods confused about who they're
8 responsible to, and the person who's paying the money
9 irritated with both the provider and the patient.
10 In addition, we suggest that you want an
11 individually-centered system, not a patient-centered system,
12 because you want to use early diagnosis. You want to use
13 nutrition, attitude, and activity to extend individual
14 healthy behaviors. So we always talk about health and health
15 care. We don't start by talking about health care.
16 Interestingly, Dr. Zerhouni, the head of NIH,
17 believes that if you had a system that was refocused on
18 maximizing health and delaying the need for health care and
19 designing health care to be return to health rather than
20 long-term maintenance by the system, he thinks you actually
21 could take 40 percent out of the system.
22 That is, instead of having an increase of
23 20 percent a year or 15 percent a year or 10 percent a year,
24 it would be 40 percent less expensive. Interestingly, Dr.
25 Bill Stead, who's the head of informatics at Vanderbilt,

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1 independently from his perception of building expert systems
2 at Vanderbilt University believes you could also get about 40
3 percent out of the system.
4 So what we're describing is a transformation that
5 could literally be worth, if you're an optimist, 5 percent of
6 the entire economy. If you think that's too high, it could
7 be worth 3 or 4 percent, which is still fairly big money.
8 We think there are four drivers of this change that
9 the FTC ought to look at. The first is patient safety and
10 patient outcome. And the reason I start with that is health
11 is inherently moral. We called our book "Saving Lives and
12 Saving Money" in that order because saving lives is the moral
13 cause and saving money is the practical cause.
14 If you start with patient safety and patient
15 outcome -- and I used to serve as the ranking Republican on
16 the Aviation Subcommittee; this was in a distant past when we
17 were in the minority -- and I represent the Atlanta Airport.
18 We value life in commercial aviation by several orders of
19 magnitude more than we value life in the health system.
20 So when the Institute of Medicine reports that we
21 lose at least one New York to Washington shuttle a day to
22 medical error in hospitals, the country says, yes, hospitals
23 are dangerous, and we go on to the next topic. If we lose a
24 shuttle, the National Transportation Safety Board, the
25 Federal Aviation Administration, the airlines, the

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1 manufacturer, all collaborate in a stunningly intense effort
2 to change the system, and when they learn what needs to be
3 changed, they retrain the pilot, the manufacturer, or the
4 maintenance people within 48 hours.
5 By contrast, the Institute of Medicine reports it
6 can take up to 17 years for a doctor to learn a new best
7 practice, and over 80 percent of doctors do not practice best
8 outcome medicine. Now, that's unacceptable in civil
9 aviation, and I simply tell every audience we should value
10 you as much in the health system as we value you in aviation
11 and you'll get to a dramatically better system.
12 The second driver should be information technology,
13 computing, and communications. The amount of information we
14 could get is stunning. I just talked with Dr. Korpman at
15 Health Trio, who runs an information system. One of their
16 major clients is Brigham & Women's.
17 As soon as they went to electronic information,
18 they reduced the number of call-backs each month by 30,000
19 phone calls a month to verify prescriptions. At $6 a call,
20 that's $180,000 difference for one hospital.
21 But more importantly, Dr. Corpman advised the Blair
22 government in Britain, who have now put out a request for
23 bids on a national electronic health record. His estimate is
24 that they will sustain that record once it's established for
25 ten cents per month per patient. That means you could have a

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1 medical record in the U.S. that was sustained for around
2 $29 million a month.
3 Now, that is an absurdity not to have that. And
4 you go down the list of things IT, information technology,
5 should bring you, almost all of which are inhibited by the
6 current structure of the health system, legal structure,
7 cultural structure, and incentive structure.
8 The third thing we focus on is quality, a system
9 and culture of quality in the sense of Deming and Juran. And
10 again, if you look at manufacturing in the last 80 years,
11 essentially all of it is coming out of the Western
12 Electric/Hawthorne experiment and the rise of systems
13 analysis at AT&T's manufacturing system in the 20s, which
14 Deming actually was part of. And then you look at Deming
15 teaching 75 percent of Japanese industrial capital in 1951 in
16 a four-day course which led to the Japanese creating the
17 Deming prize for the best-run company in Japan.
18 We have had stunning explosions of productivity and
19 quality in manufacturing because we recognize it is a system
20 and we recognize you need a culture of quality. None of that
21 has happened in health. And it is -- despite the best
22 efforts of a number of people, it has simply not penetrated
23 again because the distribution of power in the health system
24 has allowed people to simply say no and walk off.
25 The fourth thing we focus on is the notion that you

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1 have to re-center the health system on the individual. The
2 individual has to have the knowledge. They have to have
3 access to clear information. They have to have real power in
4 order to make real choices.
5 And they have to be held accountable. You need an
6 incentive system which says, you know, if you're diabetic and
7 you don't manage your diabetes, you have a responsibility.
8 This is not just a magic system where you can do nothing,
9 live badly, and then demand that the doctor fix you.
10 And I say this having helped author the welfare
11 reform legislation. And the direct parallel I would argue is
12 if we as a country are prepared to say to the poorest people
13 in the country, you have to go out and get a job or get an
14 education, we should have the nerve to say to every American,
15 you have a responsibility for monitoring your own health, for
16 having a health indicator system.
17 And again, one of the things that we should be
18 looking at is what is it that inhibits us from creating
19 marketing and having a system in which people could literally
20 monitor their own health on a regular basis.
21 Our goal is to consistently look for better
22 outcomes at lower cost, and we think if you aggregate those,
23 it is startling how many places there are where you can get
24 very dramatic improvements by applying better outcomes at
25 lower cost.

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1 Now, there are essentially four kinds of
2 inhibitions. The first is the guilds. And here, Adam Smith
3 is very clear in the wealth of nations, for everybody who
4 believes in free markets, let me just suggest to you if you
5 think of being a doctor as a guild, you understand a great
6 deal of what I'm about to talk about. If you think about
7 being a lawyer as a guild, you understand a lot of what I'm
8 going to talk about.
9 The second thing to look at is obsolete laws which
10 are based on a different era and which is based on an era of
11 a different kind of economy, a different kind of information
12 flow, and a different kind of capability.
13 The third is the impact of bureaucracies, both
14 public and private. I mean, large corporations and large
15 insurance companies are truly as bureaucratic as large
16 governments, and bureaucracies have inherent patterns of
17 avoiding competition and avoiding change that are valid
18 whether they're public or private.
19 And the fourth is we create the wrong incentives.
20 We create incentives which are acute care-focused. We create
21 incentives which are doctor-centered rather than
22 individually-centered. And we created incentives which do an
23 immense amount once you're sick, but almost nothing to incent
24 you not to get sick.
25 Let me suggest six quick areas where I think the

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1 FTC could profitably explore. I'm not suggesting here you
2 necessarily have rulemaking authority, but because of your
3 underlying instruction from the law that you should be
4 looking at how markets could operate better and what are the
5 impediments to market, I think if you explore these six, you
6 would have recommendations to the Congress that would be
7 very, very helpful in directing congressional exploration of
8 these issues.
9 The first is the degree to which we artificially
10 constrain and raise the cost of insurance for the self-
11 employed, the unemployed, small businesses, and family farms.
12 There is no inherent reason we can't have a nationwide market
13 based on something like eBay, where people can go online with
14 very little intermediation cost and buy into a national risk
15 pool. That is, no one should ever buy individual insurance.
16 You should individually be able to buy group insurance. But
17 you need pooling.
18 Every effort I have seen to block a nationwide rise
19 of large-scale insurance for small businesses, the self-
20 employed, family farms, and the unemployed, every effort has
21 been essentially an effort to restrain trade on behalf of
22 people who have large market share within the 50 states.
23 It has nothing to do with the capacity to do it
24 technologically or the desirability of doing it for citizens.
25 We've seen studies that indicate you could lower the cost of

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1 insurance by 40 percent for the self-insured -- I mean, for
2 individuals, small businesses, and notice that under ERISA
3 we're quite cheerful about doing this for the biggest
4 companies in America.
5 So the biggest companies in America are exempted
6 from the 50 state mandates. They're exempted from the 50
7 state insurance commissioners. And if you get to be big
8 enough, you get to play in one league, but if you're not that
9 big, you're actually in an artificially -- and I want to
10 emphasize artificially -- dramatically more expensive league.
11 The second thing I want to suggest to you is to
12 look at medical rules that break America up into 50 states.
13 There's no doubt in my mind that many of the restrictions on
14 doctors are explicitly guild behavior designed to minimize
15 competition.
16 But beyond the question -- and I would argue that
17 there ought to be some kind of national registry, and if
18 you're a board-certified doctor you ought to be able to
19 practice in all 50 states. We live in a modern age. We live
20 in an age where information flows worldwide. The rules that
21 grew out of a 19th century industrial model strike me as
22 obsolete.
23 But in addition, you want to be able to move
24 medical information across state lines. The Mayo Clinic
25 exists in three states, Arizona, Minnesota, and Florida.

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1 They should be able to have a control digital database, have
2 you have an MRI in one state, and if the best person in the
3 world to read that MRI is in a different state, it is
4 irrational and destructive of life and money to say that you
5 can't have access to that.
6 So second, you ought to look at the degree to which
7 state lines today artificially inhibit these things. And let
8 me point out that in terms of interstate commerce, there is
9 no constitutional reason that the health system shouldn't be
10 seen as a national system.
11 And, by the way, the minute you have a SARS threat
12 or an anthrax threat or a new model of flu, we behave like a
13 national system. So I think this is when you look at what's
14 the additional cost in inhibition, both for lives and money,
15 by the current model of state-by-state guild behavior?
16 The third is to look at what inhibits the rise of
17 the right kind of investigation systems. There's a firm
18 called Health Share which has taken the Medicare data and has
19 developed an expert system which enables you to pull up
20 hospitals based on the Medicare data.
21 And it is very interesting that consistently the
22 best hospitals tend to be the least expensive. It is the
23 inverse of the automobile business. In the health business,
24 you very often can get a Ferrari for the cost of a Subaru,
25 and if you go to a Subaru quality, you very often pay the

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1 price of a Ferrari.
2 And this is a system which indicates -- and, now,
3 it's only Medicare data today; it's not all data -- but it
4 really begins to give you an ability to access what are
5 outcomes, how many medical errors are reported, how many
6 hospital-induced illnesses are there, what do they charge,
7 how many days do you spend in the hospital, et cetera.
8 There are all sorts of inhibitions against these
9 kinds of systems growing up, including -- and I'm going to
10 come to it at length -- the liability system, which inhibits
11 the development of this kind of information, but also, the
12 unwillingness of doctors and hospitals to share data.
13 And one should look at the question -- there was a
14 huge fight a number of years back about whether or not you
15 could put prices on cars. And as with all good guilds, the
16 manufacturers and the auto dealers did not want to put prices
17 on cars. And this was a big fight over the public's right to
18 know what does a car cost.
19 Well, let me suggest to you that you're in the same
20 cycle right now. Interestingly, in 1999 12 percent of the
21 country went online to find the price of a car before they
22 bought a car. In 2002, in three short years, that number
23 exploded to 58 percent of the country. And on average, they
24 save 2 percent on the cost of the car they purchase. So I
25 just want to suggest there's no inherent reason that you

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1 couldn't have an accurate information system about
2 capabilities and cost.
3 The fourth change, though, is one which you only
4 have an indirect interest in but a big interest in the
5 market, and that is HIPAA will almost certainly have to be
6 modified both for research data and for price and outcome
7 data. And there's no reason you can't design it so that you
8 can have a patient confidentiality-compliant system.
9 But the way HIPAA technically is written right now,
10 for example, it's very difficult to do longitudinal research
11 under HIPAA rules. And NIH will probably be making
12 recommendations on this topic. But again we have to say, to
13 what degree does the government become self-destructive?
14 Because in the name of protecting your privacy we have
15 designed a rule which actually makes it more likely you'll
16 die.
17 And so I think we have to look at, in the age of
18 electronics, how do we both protect your privacy and enable
19 the gathering of quantitative data that we need very badly.
20 The fifth proposal I want to suggest to you is a
21 radically different way to think about purchasing drugs. The
22 current drug system -- and this is particularly timely
23 because of Medicare, but again, it goes back to the issue of
24 how do you get markets to work right.
25 The current drug system is wrong on a couple of

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1 accounts. First of all, there is no pricing for drugs.
2 Drugs are almost -- particularly if you're in any kind of
3 group purchasing plan, drugs are purchased as a function of
4 rebates or kickbacks.
5 It is as though the Ford Motor Company announced
6 that they had a $600,000 truck, but for you there was a
7 $560,000 rebate so it's only a $40,000 truck for you; whereas
8 the Chrysler Company said, we have a $45,000 truck, and for
9 you we're willing to take off $5,000. Somehow,
10 psychologically, taking off 560,000 sounds better.
11 So the current system actually incents the
12 pharmaceutical manufacturers to optimize the price of the
13 drug in order to have the widest possible margin to rebate to
14 the pharmacy benefit manufacturers.
15 The second thing wrong with the current system is
16 that requiring copays up front perversely maximizes the price
17 of the drug for the person who has the choice. If I'm going
18 to put up $10 as a copay and my choice is a $40 drug or a $70
19 drug, I actually psychologically want the $70 drug because I
20 get the seven-to-one return on my money. The ideal model
21 would be to reverse that, that is, to put the subsidy up
22 front, so that every additional dollar cost came out of my
23 pocket.
24 Two other points. Historically, we couldn't handle
25 data as it related to the sheer flow of drugs. And in 1965,

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1 when Medicare was developed, drugs were a relatively small
2 part of medical care. Anyone who's gone to Travelocity,
3 Expedia, or Gallileo knows you can handle huge volumes of
4 data 24/7 for free. You can allow people to know every
5 airline flight in the world and go on and pick the seat they
6 want to be in and know every price permutation and pick based
7 on a combination of time and price.
8 NDC Health is a firm which handles four billion
9 drug transactions a year, 70 percent of the market. They
10 handle half of all of the doctors' practices of one, two, and
11 three doctors. They believe unequivocally you can design a
12 Travelocity model in which you'd get two kinds of
13 prescriptions.
14 You went to the doctor, the doctor said, you have a
15 unique genetic requirement. The only drug you can take is X,
16 and they issue a unique prescription. You get that
17 prescription, and say in the case of Medicare, it ought to be
18 subsidized if people want to subsidize it.
19 But in a very large number of cases, there are
20 multiple drugs available. Imagine the doctor then gave you a
21 class prescription and said, you need an allergy drug. There
22 are nine allergy drugs available, and I would explicitly
23 include medically appropriate over-the-counter drugs.
24 The idea that Claritin drops off when it becomes
25 cheap tells you everything you need to know about how

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1 perverse the current system is. This is a system that
2 because the doctor gets no psychological reward out of
3 prescribing a nonprescription drug -- you went to the doctor,
4 you want a prescription.
5 If the doctor said to you, you know, last year or
6 two years ago this was the second most prescribed drug in the
7 world -- I mean, for the FTC to just say, what's wrong with
8 this picture and how come the market isn't working, strikes
9 me as a very important investigation.
10 So here's how it would work. You'd have a
11 Travelocity-type page. It would list all the drugs available
12 and medically appropriate indicators. Your government, which
13 loves you, will pay 100 percent of the least expensive and
14 will give you the same dollar value for any other drug.
15 So it's an open formulary. You don't get into
16 politics. You don't get into bureaucrats picking. You don't
17 get into the kind of things we're going to see with all the
18 various closed formularies. And the drug company has to tell
19 you an honest price. It can't give you a rebated price
20 that's totally artificial because it's out in the open.
21 NDC Health believes they could provide for the
22 government every night the subsidy price for the next day
23 because they handle over ten million transactions a day.
24 Now, I just offer that as a model, but if you had a model
25 like that, the patient would have more information -- it's,

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1 by the way, a pharmacy benefit administrator system where the
2 patient with the pharmacist or the doctor is the manager.
3 So you return to a genuine marketplace. You
4 empower the patient. You have a downward-pricing mechanism,
5 which I think all the airlines will tell you is stunningly
6 powerful. And you would have a system in which you would
7 come back and have to raise the question at the level of the
8 FTC talking with the FDA and NIH, which is, building the page
9 that lists the medically appropriate drugs becomes really
10 important.
11 And you have to ask yourself why these things
12 haven't happened more rapidly, although there is a firm
13 called RXaminer. It's R-X-a-m-i-n-e-r dot com, I believe,
14 which actually does a variation of this for people who are
15 paying for their own drugs, and on average saves them between
16 60 and 70 percent of the cost of drugs.
17 The last thing I want to talk about is the impact
18 of the legal system. It is very important in a free society
19 to have an orderly, predictable system of law. A few lawyers
20 is central to the health of a free society. An epidemic of
21 lawyers is a disaster. And we clearly have a malfunctioning
22 system in which the signals are being sent to drop out of
23 medical school and go to law school so you can sue your
24 friends who were too dumb to follow you.
25 This is very dangerous for the country. And I want

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1 to suggest three areas for you to look at that I think are
2 central to having a healthy system.
3 The first is the degree to which there is
4 conspiracy behavior almost in a RICO sense when you have --
5 recently, for example, the New York Times reports a hundred
6 law firms creating, in effect, an investment pool for suing.
7 It strikes me that this is behavior that has no relationship
8 to justice and no relationship to appropriate solving of
9 problems, but every relationship to an increasingly self-
10 directed profession of greed that designs strategies to
11 maximize -- to judge shop, jury shop, and maximize return on
12 investment. And that if one were actually to have access to
13 the internal documents of these law firms, you would be
14 startled by the degree to which this is economic behavior,
15 not legal behavior, and economic behavior essentially of a
16 predatory nature.
17 The second thing I think you need to look at is the
18 cost to the system on inhibiting the flow of information
19 about mistakes. In the aviation administration, one of the
20 things we did when I was a very junior member is work with
21 the FAA to change how pilots reported near-misses because
22 pilots wouldn't report them because they're afraid they'd get
23 penalized.
24 So they were simply suppressing the information,
25 and it was dangerous. And the ground rule came up that you

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1 could report it anonymously and that no disciplinary action
2 would be taken unless there was some extraordinary
3 circumstance -- you'd been drinking or you were doing
4 something really stupid in the cockpit.
5 The result was a dramatic increase of reporting
6 near-misses and significant systems modifications that
7 ultimately saved people from running into each other and
8 killing people.
9 There ought to be some tie between quality
10 reporting, error reporting, being open about things like
11 hospital-induced illnesses and protection with a reasonable
12 framework for having participated to improve the outcome of
13 the system to save lives.
14 And again, I draw a distinction. If the doctor is
15 drunk, if the doctor is egregiously misbehaving, if there's a
16 boundary condition that clearly is what would historically
17 before 1963 have been a guilty behavior, then you ought to be
18 able to sue in a different fashion. But there ought to be
19 protections and structures.
20 The last thing I think you have to look at is the
21 degree to which -- and you see this now in Pennsylvania, West
22 Virginia, and Mississippi and Nevada -- the degree to which
23 predatory legal behavior is actually beginning to endanger
24 lives because the principles that are being established drive
25 people out of practice.

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1 I was told recently that in Las Vegas, there are no
2 obstetricians willing to take any new patients. Now, there
3 has to be a public health cost here. An epidemic of lawyers
4 can be as dangerous as an epidemic of SARS, and literally
5 dangerous in the sense that by driving doctors away from
6 behavior they would otherwise engage in. We are killing
7 people. And there should be some way for this to be
8 investigated in a straightforward manner to find out to what
9 degree it is not, in fact, legal behavior but is economically
10 predatory behavior, and to recommend to the Congress ways of
11 thinking about these problems.
12 Because our interest is to have an orderly system
13 in which we optimize the activities that are productive and
14 in which we optimize the desirability to become a doctor or
15 to run a hospital or to provide good health, and in which the
16 individual citizen is guaranteed justice if they are
17 aggrieved, but we don't create classes of behavior as a
18 result of which we are economically self-destructive.
19 Thank you for letting me outline all this.
20 DR. HYMAN: Okay. Well, let me just start by
21 throwing it open to the panel generally and asking any of
22 them whether they have questions, comments. I have a whole
23 series of them, but let me defer to the panel first.
24 Warren?
25 DR. GREENBERG: I must say it was a very

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1 stimulating, very thoughtful group of remarks, and I
2 appreciate hearing them myself, and I'm sure everyone else
3 did. I'd like to have a world out there, which is perhaps
4 close to yours, and just describe it just for a second. It's
5 part of my talk, but what the heck, you're here and I'll do
6 it now.
7 You talked about Wal-Mart first, Wal-Mart the
8 department store. And you talked a lot about information,
9 the lack of information that we have. How about a world, Mr.
10 Gingrich, where we would have Wal-Mart in health care,
11 competing against K-Mart, competing against Bloomingdale's,
12 competing against Nordstrom's, competing against Lord &
13 Taylor.
14 Look at the information we would have in that
15 marketplace. Look how we know, when we go into K-Mart, we're
16 going to get a particular type of good, a particular quality
17 of jewelry, perhaps, at a lower price than we would going
18 into Bloomingdale's or Nordstrom's, knowing almost nothing
19 about jewelry, perhaps knowing very little about men's
20 clothes, yet that symbol of the department store that George
21 Stigler spoke about 40 years ago, the Nobel Prize-winning
22 economist, perhaps can be applied to health care.
23 Look at all the information we would get if firms
24 of health plans -- if we could name a health plan today that
25 we know is the Nordstrom's of health care, that we know is

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1 the Wal-Mart. Instead, it's ABB, blah, blah, blah, Fidelity
2 Mutual. We don't even know how good they are. But why don't
3 we have that development of brand names?
4 And this is what I'd like to address in my talk,
5 and I would ask you if you can believe that maybe this is the
6 way we ought to tie in information, and ask you and perhaps
7 other panelists, what are the imperfections that we have that
8 we don't have health plans. And it's not only the department
9 store approach. I'm talking about automobiles. I don't know
10 anything about what goes into a Lexus or who the mechanics
11 were in making that Chevrolet. But somehow, I know a Lexus
12 works better than a Chevrolet.
13 Why don't we have these brand names, from good to
14 bad, with prices, as a way to provide information to every
15 consumer in America?
16 MR. GINGRICH: Well, let me say first of all, Dr.
17 Greenberg, I agree with your core vision that -- with this
18 caveat, which I think you also agree with, because I want to
19 make this clear so we don't get some kind of attack on the
20 idea of markets.
21 Part of the genius of the modern system has been
22 the invention of regulated free markets in which, if I go
23 into McDonald's, I know that the water will be drinkable and
24 that the beef will actually be beef. And this is not a small
25 thing.

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1 If you go back to the rise of the Food & Drug
2 Administration under Theodore Roosevelt, this was in fact an
3 appropriate response to the need to have a refereed or
4 regulated framework within which the market operates and the
5 delivery is by the market, but it's a delivery guaranteed by
6 the government in terms of quality.
7 And I say that because otherwise we're going to get
8 somebody attacks us: How can you compare health to -- within
9 that framework, you're exactly right. Now, interestingly,
10 when we first went out to begin working on "Saving Lives and
11 Saving Money" back in 1999, we started by looking for
12 branding.
13 What are the startups? What are the better
14 outcomes at lower cost, et cetera. You have some limited
15 branding. The Mayo Clinic is a world-class name. The
16 Cleveland Clinic is a very good name.
17 But what you discover early on is that the
18 inhibitions against their growing, it almost resembles
19 Lancashire cottage industries prior to the rise of the mills
20 and the degree to which you can't aggregate behavior. It's
21 very hard. So that we look at firms -- Visicu is a Johns
22 Hopkins spinoff that deals with electronic intensive care
23 units.
24 Every hospital in the country ought to have either
25 their own intensivist or they ought to be attached to an

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1 electronic intensive care unit, period. I mean, this just
2 should be a minimum standard.
3 But when you go to the local intensive care doc, he
4 says, wait a second. What are you saying to me? Or you go
5 to the local group of doctors and you say, well, I don't know
6 that I want my hospital to do this, even though statistically
7 there is no question: If you go to a -- if you have
8 abdominal surgery in a hospital without an intensivist, the
9 odds are three times as high you'll die.
10 And so what I discovered, to go back to your point,
11 is it is very hard to get the rise of these branded
12 structures. Probably the Hospital Corporation of America is
13 as close as we've come to that kind of a model. But it's
14 also really hard to get to the aggregation of behavior. And
15 part of it is because of doctors and the way they're trained
16 by medical schools, which has to be redone. Part of it is by
17 legal inhibitions.
18 The other point I'd make is that historically, the
19 mistake that was made in the '80s was creating a so-called
20 health management approach, managed care approach, which
21 actually was about managed cost. There was no data for
22 managed care, and so you ended up in the wrong kind of fight
23 and you actually -- I think society was pushed back a step
24 because the design was backwards.
25 DR. HYMAN: Helen?

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1 MS. DARLING: Yes. I'd like to get back to one of
2 the excellent points you made about your vision, and
3 particularly combine your history as a politician and your
4 current activities as transforming the health system, for
5 which I'm sure everybody in the room will be very grateful,
6 especially if you can do it.
7 Over-the-counter drugs and generics offer the
8 consumer much of what you're talking about. First of all,
9 the minute they become generic and over-the-counter, a lot of
10 other things happen, usually. And just generally, you know,
11 you can debate about some of the data and what it shows,
12 especially absent the competitive system -- that is, more
13 than one generic.
14 But generally, consumers and employers will save a
15 lot of money to the extent that drugs are moved to over-the-
16 counter generics. But the industry, as you know, has, shall
17 we say, kindly made it as difficult as possible for that to
18 happen even to the extent that trying to use the authority
19 that the Congress has given, both the FDA and themselves, to
20 limit either movement to generics or anything that could
21 possibly work.
22 Could you please talk a little bit about your
23 thoughts about how, number one, we move that along faster,
24 and two, if there are other barriers that we should be paying
25 attention to that keeps those kinds of changes from happening

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1 in a timely way.
2 MR. GINGRICH: Thank you. I think that's a very
3 insightful question that goes to the heart of one of the
4 biggest changes that we need.
5 Let me start by saying that I think that American
6 history is filled with moments when economically very
7 powerful entities that forgot that profit is supposed to be a
8 by-product of service and began to try to rig the game for
9 themselves found that, in fact, this is a stunningly populous
10 society. I think of Robert LaFollette and the railroads as a
11 perfect example, leading to the rise of the progressive
12 movement.
13 I very much favor the branded pharmaceutical system
14 which has created two generations of therapeutic
15 breakthroughs that are extraordinary. But I think that they
16 are now trapped in exactly the same crisis that doctors are
17 trapped in.
18 Several years ago I went and spoke to the AMA when
19 I was Speaker, and I got a very nice round of applause
20 because I had followed somebody they didn't like. But when I
21 got up, I said to them, you're either going to go to Wal-Mart
22 or you're going to go to Canada. You're either going to end
23 up in a regulated, unionized, government-run bureaucracy, or
24 you're going to be in a genuine market where people have real
25 information.

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1 And that's my message, basically, to the
2 pharmaceutical companies. I am for people paying the
3 appropriate price with knowledge in a competitive setting for
4 the drugs they get. I think a system which is dominated by
5 detail people, a system which is dominated by rebates, a
6 system in which doctors prescribe in ignorance, is a system
7 that is doomed to failure. And let me talk briefly about how
8 that will happen, I think.
9 First of all, I have talked to no audience in the
10 last six months where you describe automatic teller machines,
11 self-service gas stations with credit cards, and Travelocity,
12 and then you mention the phrase "paper prescription."
13 They don't just get it. I mean, all of their
14 common experiences every day now are that you can have
15 electronic interfaces that are stunningly accurate, and then
16 you get a paper prescription. And paper prescriptions
17 require a massive volume of call-backs. Forty percent of all
18 prescriptions require a call-back. And the doctor very often
19 doesn't even know what else you're taking. So start with
20 that.
21 At a large scale, what you want to do is simple.
22 You want to take something like Scholar, which is a Stanford
23 spinoff that has been certified by the AMA for continuing
24 medical education, and you want to have a Scholar-quality
25 page, much like Travelocity, so the doctor is an informed

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1 prescriber. You can put it on a Palm. You can do -- but
2 doctors ought to know, here are the nine drugs and here's
3 what they cost.
4 By the way, in the studies that have been done,
5 when doctors do know the cost, they consistently prescribe
6 less expensive drugs. I mean, some outliers don't, but as a
7 general rule, it does have an impact.
8 Second, you want electronic prescribing. My hope
9 is that the Medicare drug bill is going to mandate electronic
10 prescribing. You want computer order entry in hospitals of
11 medications, and you want every drug that you get to have an
12 electronic indicator on it so that you automatically can
13 match up the drug and the patient.
14 And again, Pfizer has taken the lead in developing
15 that, but I think you're going to see it happen -- this has
16 been going on in grocery stores now for about 40 years. And
17 I think it's finally migrating into health. All of these
18 things have a big impact on accuracy, safety, and cost.
19 But what the country has to say, and I think the
20 Medicare drug debate may be precisely the place to start
21 saying it, is -- and this is historically how -- we
22 historically get change out of two things. We either have a
23 grievance, you know, again, Nader versus the big auto
24 companies, which whatever you may think of Ralph in terms of
25 being, from my standpoint, much too liberal, his crusade in

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1 the '60s and '70s clearly changed the standard of safety in
2 America, despite the fact that the biggest companies in the
3 United States were opposed to it. But in the end, they
4 couldn't stand up to the public debate.
5 Similarly, the most successful companies in America
6 right now may well be the pharmaceutical companies, but when
7 the country decides, A, this is what I'm missing -- you know,
8 why am I paying 65 percent more than I should be paying, or
9 why is it that a detail person's ability to get the
10 receptionist to schedule ten minutes becomes an integral part
11 of which drug I get.
12 And so I think you will see a different model
13 emerge fairly rapidly, and I think it will almost certainly
14 be an internet-based model. It will almost certainly be an
15 information-rich model. And it will happen either because
16 the government shifts in the direction I'm describing or
17 because ten or fifteen large payors shift and decide that
18 they'll subsidize 100 percent of the least expensive.
19 And again, what I'm arguing for is an open
20 formulary. So none of the pharmacy benefit management
21 companies are going to like this because it takes away the
22 rebate model and the information control model which is at
23 the heart of their being an intermediary.
24 But the modern information systems take out
25 middlemen, empower you to make choices, and drive prices

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1 downward by letting you choose what you want.
2 DR. HYMAN: Greg?
3 MR. KELLY: Yes. Going back to what you guys were
4 both touching in, Mr. Speaker and Dr. Greenberg, a little
5 earlier on quality and how you were mentioning it. One of
6 the questions I wanted to ask you to maybe elaborate on a
7 little further is how some of the best hospitals out there
8 are the least expensive.
9 And I think, from my standpoint, what is going to
10 be important going forward is for the consumer to have value,
11 which is the equation of both price and quality. And looking
12 at the car example, it's kind of an intuitive sense that we
13 have. We're spending our own money, and when you spend your
14 own money, you do it wisely and you don't add in all of the
15 data.
16 When I go and take a look at a car or buy something
17 at the store, I don't look at all the data. But intuitively
18 I know, since it's money out of my own pocket, what is the
19 best mixture of both price and quality. I'm not going to buy
20 the most expensive thing out there, but at the same time I'm
21 going to get the best deal for my money.
22 So you were elaborating a little bit on the
23 direction of where that was going right now, and I was also
24 inquisitive on why the best hospitals out there are also the
25 most -- the least expensive. Is it because the consumers are

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1 gravitating towards those hospitals, and just because of the
2 volume, the prices are lower, or what is the reason that is
3 currently taking place right now?
4 MR. GINGRICH: Well, it's interesting. I was a
5 student of Edwards Deming, and I ended up being a student of
6 Edwards Deming in part because I went down to Milliken, to
7 their annual management retreat, because I wanted to learn
8 more about management in the '80s.
9 And they spent a half-day out of their three-day
10 retreat redoing Deming's red bead experiment. And I asked
11 Roger Milliken how they'd gotten so deeply involved in Deming
12 and in quality, and he said he'd read a book by Phil Cosby
13 called, "Quality is Free."
14 And Cosby is the popularizer of Deming, and Cosby's
15 point was if you do the right thing right the first time, it
16 is cheaper -- quality in a manufacturing sense is never more
17 expensive than sloppiness. It's an exact mis-design.
18 And in fact, it was Phil Cosby's argument that as a
19 general rule for most manufacturing in America in 1980, about
20 a third of what they were doing was waste. And as Milliken
21 said, since he was the owner of Milliken, it suddenly hit him
22 that was his money.
23 And so they dramatically changed the entire company
24 from the ground up, made a remarkable -- made it far and away
25 the most effective textile company in the world in terms of

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1 output per dollar. So I studied under Deming as a result of
2 that experience.
3 You start with a premise: If you're really, really
4 good, you're probably less expensive. Toyota is less
5 expensive than Mercedes. In fact, there's a terrific book by
6 Womack called, "The Machine that Changed the World," which is
7 the MIT project on automobiles. They make the point that
8 Mercedes and Toyota produce about the same quality car, the
9 difference being Mercedes rebuilds one-third of their cars;
10 Toyota rebuilds 2 percent of their cars.
11 Then they make the point that if Mercedes can't
12 learn the Toyota production system, that you cannot compete
13 very long at the same price, if I have to rebuild a third of
14 my cars for quality and you're rebuilding 2 percent of yours.
15 And that's why Paul O'Neill, who had brought the
16 Toyota production system into Alcoa and had dramatically
17 reduced days lost to occupational accidents, had dramatically
18 reduced cost of production, he then migrated it into the
19 Pittsburgh health system in what I think is maybe the most
20 interesting experiment in trying to get doctors, for example,
21 to do statistical analysis of outcomes. So let me start with
22 that.
23 A place like Mayo that first of all selects out in
24 its recruiting for people who want to be part of teams, that
25 selects out for people who want to learn best practices, that

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1 selects out for people who want to engage in research -- so
2 you have to start with the idea that, I mean, best of class
3 very often recruit to best of class.
4 Second, they have the professional commitment to
5 force themselves to learn things they don't want to know,
6 which is very, very difficult. And it's part of the key to a
7 quality culture.
8 Third, if you in form, do it right, you don't have
9 medical errors and you don't have medication errors and you
10 don't have hospital-induced illnesses, all of which cost
11 money. There are two million hospital-induced illnesses a
12 year in the United States. If you stay in a hospital longer
13 than four days, the odds are even money the hospital will
14 give you a disease which it will then charge you to cure.
15 This goes back to perverse incentives.
16 The U.S. government ought to pay a bonus to every
17 hospital which has significantly less medical error and has
18 significantly less medication error, has significantly less
19 hospital-induced illness. One specific example: When
20 Wishard Hospital went to -- Wishard Memorial went to complete
21 order entry of drugs, they reduced the average stay by nine-
22 tenths of a day per patient. Now, seen from the standpoint
23 of the CFO, they just reduced their income. But they saved
24 nine-tenths of a day per patient by going to computer order
25 entry.

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1 Visicu, according to Centera Hospital, has --
2 Visicu is the electronic intensive care system -- Centera,
3 which has it in five hospitals connected to one office for
4 electronic screening, says that they now save 20 percent of
5 the time per intensive care patient, on average, in moving
6 them through the intensive care unit because there are fewer
7 errors, fewer hospital-induced illnesses, better treatment.
8 So you actually -- true quality should actually
9 improve hospitals, not cost them more. And true quality
10 should actually improve doctors' incomes, not make them
11 poorer. But the incentive system does, in a perverse way,
12 almost incent you to have the errors and have the illnesses
13 because you get to charge for them.
14 DR. HYMAN: You get to double hit. You're having
15 them in first and then again.
16 Mike?
17 MR. YOUNG: I guess before I ask a question, I will
18 say -- you mentioned HIPAA. And HIPAA was a consulting gold
19 mine for us in the first -- for consultants for the first
20 quarter of this year.
21 But I absolutely agree with you that it has clearly
22 gone way too far, and we have a number of situations where
23 the access to data is very hard to get and seemingly, you
24 know, each holder of data makes their own determination of
25 how they use HIPAA, either as an excuse or a realistic way to

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1 protect peoples' rights. So I absolutely agree that it's
2 gone too far and I think we need to come back.
3 But what I'd like to touch on is this whole issue
4 of a lot of the consulting that I do is in rural communities.
5 And I've been doing it for many years. And two of the things
6 we see are situations -- and I'll use Hot Springs, Arkansas
7 as an example. They have 30,000 people there. They have
8 three hospitals. They have eight MRIs. And so there's just
9 an incredible glut of providers, if you will, more than they
10 need.
11 And then we see other communities where there are a
12 lack of physicians, especially. And I've found with rural
13 communities especially, there are two types of physicians.
14 One are the people that tended to either grow up in those
15 communities and want to give back and go back and work in
16 those communities. And, quite frankly, another group that
17 goes there to hide from the system.
18 And so there's kind of this double-edged sword. In
19 some of these communities, there seems to be such a glut that
20 everybody in Hot Springs who has any possible illness gets an
21 MRI, and in other areas there's just -- the only doctor in
22 town may not be a good doctor, but he's the only doctor in
23 town.
24 And how do we kind of allocate, I guess, resources
25 among those types of communities?

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1 MR. GINGRICH: Well, you raised a couple of things.
2 Let me go through quickly.
3 First of all, rather than complaining about HIPAA,
4 people ought to start drafting the modifications. Congress
5 writes laws so Congress can meet to hold hearings so Congress
6 can write laws. I mean, instead of saying, gee, this is now
7 locked in concrete, we ought to say, okay. This was a good
8 try in the right direction. It's largely better than having
9 no law. Now, what do we have to fix?
10 And just -- I think people should say certainly by
11 early next year that Congress should be holding hearings on
12 the better patient safety, better information model of HIPAA
13 based on what we're now learning. And this will be an
14 ongoing iterative process as we get used to living in an
15 information age.
16 Second, you reminded me, there really should be a
17 nationwide database, for example, of doctors who've been
18 disbarred or of doctors who have been heavily sanctioned.
19 And it ought to be an accessible database. That is, I should
20 be able to find out whether or not I'm dealing with a doctor
21 who has lost 14 malpractice suits in 14 different states.
22 Today there are state databases, but they're not
23 accessible. They're not together. And there's no reason you
24 couldn't have a nationwide database. This is pretty easy.
25 And at a minimum, it will flush out the worst

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1 doctors, which ought to be flushed out. I mean, there's no
2 reason the worst doctors should be allowed to practice. We
3 would not allow the worst airline pilots and the worst
4 airline mechanics to practice. We say there is a standard
5 above which you have to be or you kill people.
6 Third, when you have eight MRIs in a town that
7 size, as long as you know what the price is and as long as
8 that price is public, the least efficient ones are presently
9 going to go out of business unless they're self-directed,
10 which gets me to a fourth point.
11 But I think this is part of why pricing has to be
12 out in the open. Three hospitals won't survive unless they
13 can survive. I mean, I don't care how many retail stores --
14 back to your point about department stores. I don't ask you
15 how many stores there are in a town. You know, if they can
16 make a living and they're willing to do it, that's fine. You
17 could have 30 MRIs if they can do it. But what I object to
18 is that they pass the cost on and it becomes part of an
19 embedded base of what we mean by health care costs. I think
20 that's inappropriate.
21 The other thing that's wrong, where I think the FTC
22 could usefully look at, is when you have a doctor-owned
23 facility which is also self-referred. And I want to draw a
24 real distinction because I think we made a mistake in
25 designing this.

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1 I have no problem with doctors investing in
2 hospitals unless they refer to the hospital they invest in.
3 But if you end up in a situation, as was described to me the
4 other day in another part of the country, where the
5 doctors -- the cardiologists are really pretty clever.
6 If it's going to be an easy cardiology problem, it
7 goes to their clinic. If it's going to be a really
8 expensive, hard cardiology problem, it ends up in the local
9 general hospital. Now, that kind of behavior strikes me as
10 absolutely wrong and unprofessional and inappropriate, and we
11 need to figure out how we monitor that.
12 The other example is places where hospitals tend
13 not to run emergency rooms so that they don't get the heart
14 attack patient until the second day when they've stabilized,
15 which again means that they have a very high likelihood of
16 success rate without having run the big risk.
17 The last point I want to make about rural America:
18 Rural America will profit more from the rise of internet
19 diagnostics and internet-based capabilities than will urban
20 America. And properly designed, you could have a Visicu for
21 an entire rural state that would literally allow you to have
22 an intensivist for all the hospitals in the state
23 simultaneously.
24 Visicu, for example, is now going to be monitoring
25 the intensive care unit in Guam for the Air Force from

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1 Hawaii. And there's technically no reason not to do that.
2 So you could imagine two years from now every rural state in
3 the country could have a connectivity to an intensivist even
4 for very small rural hospitals, and the coaching improvement
5 would be dramatic.
6 I'd also say for small rural areas -- and again,
7 this is the cultural crisis -- you know, you're now talking
8 to the local doctor who's been totally in charge for all
9 their life. No one has ever questioned them. They're the
10 only doctor within 25 miles. And somebody is now going to
11 look over their shoulder?
12 I mean, this is a -- you know, and what I'm arguing
13 is, yes. For patient safety reasons, for public outcome
14 reasons, you're right. And the other example I would cite is
15 Active Health, which is a very good firm, which works for
16 large corporations. And they basically get world class
17 doctors to coach your doctor if you have an expensive
18 illness.
19 And it turns out that by getting the world class
20 doctor to work with your doctor, your doctor's quality of
21 care goes up dramatically. And again, for rural America,
22 these things are potentially doable, but they're only doable
23 from the state level down. They're not doable by small
24 hospital by small hospital because they never aggregate the
25 resources to do it.

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1 DR. HYMAN: Let me ask a question about
2 information. I mean, information is an important part of a
3 functioning market. You've emphasized it in your remarks.
4 And the absence of good information is a quite traditional
5 and well-recognized justification for regulation.
6 But -- and you knew that was coming -- in health
7 care, the presence of information can result in adverse
8 selection problems on the coverage side, and moral hazard
9 problems on the delivery side; that is, knowing more about
10 what you've got will influence what kind of health care you
11 sign up for and what kind of benefits you end up receiving.
12 So I guess I'm wondering how you sort of see a
13 patient- or consumer- or individual-centered health care
14 system dealing with the problems that we've had that have
15 resulted in some of the institutions that you've criticized
16 here.
17 MR. GINGRICH: Well, I think -- first of all, the
18 absolute bias has to be in favor of information. I mean,
19 there is no evidence in the last 300 years of rising
20 prosperity and rising positive outcomes and longer lifespan
21 that keeping people from knowing things is a good idea.
22 So then you have to deal with the consequences of
23 the information. In some cases, we'll do that, I suspect, by
24 law. That is, we'll say, you can't use a certain kind of
25 information in employment decisions, or you can't use certain

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1 kind of information in insurance decisions.
2 I would argue in part that you want to have -- and
3 this may sound contradictory coming from a conservative, but
4 I think we want a country that is very close to 100 percent
5 insured. And the reason you want that is we made the
6 decision we're not going to let people die without caring for
7 them, and so to not have them insured just maximizes the
8 complexity of the delivery system.
9 I think between vouchers, tax credits, and tax
10 deductions, you can create a system in which people have
11 virtually 100 percent insurance. And then you want to make a
12 ground rule for offering insurance that you can't cherry-
13 pick.
14 And there are a variety of ways to do that by
15 having open access. You can have an open access system that
16 also incents good behavior. That is, you could have -- you
17 could say to people, if you keep your cardiovascular within
18 certain parallels, you know, we'll give you $100 back at
19 Christmastime. And you can do that without having cherry-
20 picked.
21 But I do think you want to say basically that in
22 the case of health insurance -- which is really an anomaly
23 because it's mostly not true insurance. Health insurance is
24 mostly prepaid medical care with some insurance components.
25 Now, we go a step further in "Saving Lives and

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1 Saving Money." We propose that Congress should pass a law
2 creating a personal health account, which would in essence
3 mean that when you first went to work, you'd get, say, a
4 $1500 deductible and we'd put the $1500 in your account so
5 you're now spending your dollars.
6 It would be -- it could carry and have tax-free
7 interest buildup. So when you're young, you probably
8 wouldn't spend it, and within a very few years, you'd be at
9 the 20-, $30,000 deductible level with it being your own
10 money.
11 When you got above the value at which you got any
12 kind of break on the -- now you would be on a true insurance
13 system because now you would have set aside your maintenance
14 health money, which you'd be spending, and the insurance
15 company would actually be offering genuine insurance.
16 The other piece of that is probably we need,
17 whether it's designing a government-sponsored enterprise that
18 would be competitive or some other model, we probably need
19 only to go to a reinsurance system, that is, to create a
20 national pool where, whether it's a $200,000 -- there's some
21 dollar value where the price becomes so large that you can
22 never really create smaller risk pools that make any sense.
23 Because what you want to do is take the cherry-
24 picking out of the system by saying, there'll be some kind of
25 universal reinsurance cost for -- whether it's 200,000 or a

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1 million or something -- probably done by a government-
2 sponsored enterprise.
3 But I think the inability today to have that kind
4 of insurance pool means you get grotesquely expensive small
5 business insurance plans because they are buying a risk
6 premium against one bad event in a way which really optimizes
7 cherry-picking.
8 So I'll just close by saying part of what you want
9 to do is think through a design which minimizes the incentive
10 for cherry-picking.
11 DR. HYMAN: Dr. Comstock, did you want to have a
12 question? Or Mr. Lansky, do you have a question or an
13 observation you want to make?
14 MR. LANSKY: I'll ask a question, yes.
15 The managed care/managed competition model
16 foundered for a variety of reasons. Its original premise was
17 system integration, integration of care delivery and
18 accountability for performance. And then in that model there
19 may have been a market to choose integrated systems.
20 The consumer-directed models, as commonly
21 discussed, radically fragment the system into individual
22 commodity services that are bought and sold. And you could
23 have an information flow and you could have pricing of those
24 individual elements. A mammography is one price. A doctor
25 visit is another. An insurance coverage policy is another.

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1 The information burden and the lack of integration
2 and coordination in the highly fragmented model are two big
3 problems. So one question is, how do you see the relative
4 balance between essentially bundling, creating continuity,
5 integration of services which manage, for example, chronic
6 conditions or end-of-life care, complex care, rather than a
7 highly fragmented marketplace?
8 And secondly, what do you see as the balance
9 between the regulatory function on the information
10 requirements in such a market and the self-issued information
11 opportunities?
12 And I'm probably interested in -- to the extent
13 that I've become more and more of a believer that there has
14 to be government standardization of information requirements
15 and disclosure requirements and so on and of infrastructure,
16 as you've supported for a long time, electronic
17 infrastructure to support that information capability.
18 But that becomes massively complex in a highly
19 fragmented system in which you've got very diverse products
20 competing, and the kind of lack of information that Dr.
21 Greenberg talked about.
22 MR. GINGRICH: Well, I mean, the fact is we've had
23 a very long track record, starting with railroad track size
24 and the development of the Morse code and the rise of
25 standard time, which are late 19th century developments, all

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1 of which are proof that you can have systematized national
2 standards.
3 There's a -- and I can't remember the name of it
4 right now; some of you will know -- there is a national
5 association founded, I believe, in 1916 for electric
6 standards during a period when the government wanted to
7 ensure things happened but didn't want to do it itself. And
8 so all electrical appliances in the United States go through
9 the same standard-setting, which is actually a private
10 association, legally empowered to do that.
11 You could -- you know, and whether you have HHS set
12 an information standard or you have the government establish
13 a freestanding commission for medical information, which may
14 be the right parallel -- but your point's exactly right.
15 I mean, jumping out five years, or no more than
16 eight but within five years, automatic electronic health
17 record -- I want to distinguish a health record from a
18 medical record. A health record is all the information that
19 you should carry with you for the next doctor. The medical
20 record is everything the doctor and the hospital need to keep
21 for the lawsuit. A very big difference in detail, in level
22 of detail.
23 Everybody ought to have an electronic health
24 record. It ought to be compatible across all the systems.
25 All the major providers of these kind of systems should be

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1 part of an open systems architecture as opposed to I'm going
2 to design some cute device so once I have you, you're a
3 captive and you can't use anybody else's equipment.
4 And again, all of us who use the internet and who
5 use laptops are -- you know, everybody who uses a cell phone
6 has experienced this. And I want to draw a distinction
7 between two different points you made, and then talk briefly
8 about managed care.
9 The model that Dr. Greenberg described is a model
10 of stunning consumer choice. You know, I decide today I want
11 to go buy X. I have lots of places to go buy X. It's the
12 job of the aggregator to provide me a reputation and a price
13 and a convenience I want to go to.
14 And then you're exactly right in your analogy. You
15 know, there are all sorts of places I can go for what I want,
16 and I get signals from the system about reputation, et
17 cetera.
18 So you could have a consumer-driven system in which
19 you had a very high level of common information, more, I
20 would say, than you get today. That is, if I had an
21 electronic health record so that the next doctor knew what
22 the last doctor had prescribed, you'd already be at a quantum
23 jump above current behavior.
24 The second part, though, I think, is a misnomer
25 about what happened with managed care. It goes back again to

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1 the moral cause. Health is different than buying clothing or
2 buying jewelry. There is a moral component because it's
3 about my life or my daughter's life or my granddaughter's
4 life or my mother's life.
5 And so the minute I think that a decision about
6 their life will be profit-driven as distinct from profit
7 being derived from the right decision, if it is a profit-
8 driven decision, I am very suspicious that I am now going to
9 have my granddaughter get bad care so somebody has a better
10 quarterly report.
11 I mean, the analogy -- and by the way, I'm told
12 this all the time. Insurance companies will tell you with
13 great openness, we don't do preventive care because people
14 don't stay with us long enough to justify it economically.
15 Well, that's like an airline saying, you know, we're going to
16 be as safe as our quarterly report permits. Now, we wouldn't
17 tolerate that for one minute.
18 So what the insurance company is tell you is they
19 are putting your health needs below their profit margin. And
20 it is a perfectly rational behavior in the current market.
21 And that's why people have this deep suspicion of the
22 financing of health care, that a decision will be made, I
23 won't get what I want.
24 Now, I'll give you a couple of examples. And here,
25 AARP and others are actually showing some real leadership.

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1 Comorbidities are the largest single problem in Medicare.
2 Five percent of the people on Medicare use up 50 percent of
3 the money. That 5 percent has, on average, somewhere between
4 five and seven comorbidities. It's very clear they ought to
5 get managed as a complete person and not have five to seven
6 separate verticals.
7 That can be done in a system where you basically
8 say, we're going to incent the doctor to have full
9 information through an electronic health record. And we're
10 going to incent the doctor to deal with all the comorbidities
11 at one time.
12 And you can design a system that does that while
13 still allowing the patient to pick which doctor they want to
14 go to. So it's not an either/or. It's not either that we've
15 got to trap people into a system where it's controlled for
16 them, or they've got to be out here in a chaotic jungle
17 without any kind of information.
18 If you use the incentives right and you use the
19 structure of information right, you can migrate to a system
20 in which I still have choice, but it's choice among a series
21 of very high value products with much more complete knowledge
22 than we have today.
23 I would argue if you've got the right electronic
24 health records and the right kind of requirements for
25 electronic prescriptions, et cetera, you will have

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1 dramatically better health almost overnight in terms of the
2 way in which we minimize medication errors and other kind of
3 mistakes.
4 DR. COMSTOCK: I do have a comment, actually. I
5 think everybody in this room, and certainly around the table,
6 agrees with a lot of what Newt has said. And whether you
7 believe that there's 30 percent waste in the system or 40
8 percent waste in the system and all of these dollars were
9 there that could be easily used to do things like create
10 access for everybody in this country or create the
11 infrastructure, improve the transparency of information, we
12 have been involved in a community project across the country.
13 And when you talk to health care leaders there,
14 fundamentally they say, well, it's all well and good to say
15 that money exists, but you can't wait to take all of that
16 efficiency and put more efficiency into the system. There
17 needs to be an investment now.
18 And what we're doing is we're talking about --
19 we're not really talking about what we really want to
20 achieve. We're talking about where the dollar is coming
21 from.
22 And I guess I'm wondering whether you have any
23 ideas of how you manage that transition from an economic
24 perspective. I mean, do we suddenly decide we're going to
25 spend X billions more money in order to squeeze the

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1 efficiencies into the system and take that waste out so that
2 we can create access and infrastructure, or do we wait until
3 we've gotten some dollars up? It's all about money.
4 MR. GINGRICH: Well, okay. Let me give you three
5 parallel answers because I think there are actually three
6 different components.
7 First of all, we recommend strongly in "Saving
8 Lives and Saving Money" that the federal government pick up
9 the equivalent of Eisenhower's interstate highway system
10 because if you look -- we have a long chapter at the back of
11 the book on biological warfare. I personally am convinced
12 that biological threats -- if you're listing all the weapons
13 of mass murder, that biological threats are 80 percent of the
14 danger, nuclear is about 19-1/2, and chemical is about 1/2
15 percent.
16 And I talked to one Nobel prize-winning biologist
17 and said, if we had an engineered virus, what would a
18 reasonable casualty rate by? And by engineered, I mean
19 something which was not susceptible to a current vaccine. He
20 said, 50 percent. And I said, that would be 145 million. He
21 said, that's a reasonable number. And he said, I won't say
22 that publicly because I haven't got any solution.
23 But if you go back as a historian and you look at
24 really good epidemics, it is breathtaking. Florence as late
25 as the 1440s was losing 20 percent of its population in one

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1 year. This was some 80 years after the bubonic plague first
2 began sweeping through Europe.
3 So let's just start with the idea none of us -- and
4 we get scared by SARS, which has killed a couple hundred
5 people. I mean, none of us has seen what a real epidemic
6 would be like, and it would be horrifying.
7 So I would argue that under homeland security
8 requirements, we need about a $40 billion investment in the
9 equivalent of the interstate highway system. And in our
10 book, we quote Eisenhower, who specifically had the
11 interstate highway system as a national defense act, although
12 it's obvious from the middle class that it has been
13 enormously successful in other ways.
14 That system should also include a virtual public
15 health service which connects all 55,000 private pharmacies,
16 all retired nurses and doctors as well as currently active
17 nurses and doctors, and includes veterinarians. Because if
18 you lose a central city, one of the largest sources of health
19 resources in the surrounding countryside will turn out to be
20 veterinary hospitals.
21 Second, I want to suggest to you that here's a
22 place where there are opportunities for huge improvements.
23 We work with the people at IBM who do logistics supply system
24 modernization, where they take huge amounts of cost out of
25 logistics systems.

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1 And I was talking the other night with doctors at
2 the major medical groups, who said that the paper-handling
3 transaction cost of getting paid is three or four times
4 greater in health care than it would be if you were dealing
5 again with the big department stores you were describing.
6 Imagine a -- and it's particularly stupid for the
7 self-insured. I mean, for a self-insured company to engage
8 in a long-time value of money for doctors means the doctor
9 will countervail by charging more to make up for the lost
10 value of money and will then have to add clerical staff, et
11 cetera.
12 So imagine a system where doctors filed
13 electronically with your health record and your bill
14 simultaneously, by one click, and were paid every night by
15 electronic funds transfer on a post-payment reconciliation
16 system.
17 Now, you'd have dramatically fewer clerks. There
18 was a study done, I was told, for Blue Cross -- I have not
19 seen this, but a study, I was told, was done for Blue Cross
20 of Massachusetts that they figured out if you could have
21 realtime verification of eligibility, you would eliminate
22 one-half of their clerical staff.
23 Now, this is not heavy lifting. I mean, if you
24 think about what happens worldwide when you use your Visa,
25 MasterCard, American Express, you name it, I mean, we somehow

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1 are able to stand at a restaurant or at a store buying a
2 tourist trinket and in virtually real time, 20 seconds, two
3 minutes if it's a bad location, you know, they know who you
4 are no matter what country you're in and they validate the
5 payment.
6 And American Express doesn't have 600 people doing
7 physical labor reading your paperwork. I mean, that's not
8 how it works any more. So imagine you could take 2 to 4
9 percent out of the total cost just by going to the electronic
10 fund transfer with reconciliation.
11 But I want to make one last point, which is,
12 hospitals and doctors who explain to you that they can't
13 afford a Palm pilot -- I want to stick with electronic
14 prescriptions, which can be done on a Palm. This technology
15 has been around for at least six or seven years.
16 There have been three or four firms that have
17 designed systems on Palm -- I think Hippocrates is one of
18 them -- where -- and over a quarter million doctors have
19 downloaded Hippocrates because it's free, and it gives you
20 the formulary and all this stuff.
21 The notion that it's a price problem is just plain
22 baloney. And part of the reason you don't get change in
23 health care is people who are doctors and people who are
24 hospital administrators assert the right in a totemic manner
25 to explain to you that you don't know anything, and therefore

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1 you just don't understand because it's so complicated.
2 And the correct answer with some of this is, that's
3 silly. I mean, to tell me that a doctor can't afford to go
4 online and pull up Dell or Gateway or Compaq and get a
5 computer, when they have one? To tell me they can't use a
6 Palm?
7 It would be like somebody saying to you, I'd like
8 to use a cell phone but, you know, cell phones are so
9 expensive and we just can't invest in cell phones. I mean,
10 you'd break up laughing because you know all of their
11 teenagers have one.
12 So I would just assert that some of this stuff
13 isn't done because they don't want to do it. The excuse they
14 use is malarkey. And I say that in the context of saying, I
15 think we ought to have a nationwide IT investment of about
16 $40 billion in health care, and I think that we actually
17 ought to have the federal government much more concerned
18 about realtime connectivity. But I don't accept the idea
19 that you couldn't go to electronic prescriptions tomorrow
20 morning because doctors couldn't figure out how to use Palm
21 Pilots.
22 DR. HYMAN: Well, the panel has been such a
23 vigorous participant in the discussion, I'm afraid we've run
24 out of the time that we had allotted for having Newt speak.
25 So although he's going to be with us for a little bit longer,

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1 I'd like, since he's going to have to leave in the middle of
2 the presentations, a round of applause for the presentation.
3 (Applause.)
4 DR. HYMAN: I'm just going to introduce everyone on
5 the panel at once, and we can sort of go across. People can
6 either speak from where they're sitting or up at the podium.
7 The first speaker, since he's over on the far left,
8 is going to be Warren Greenberg, who's a professor of health
9 economics and health care sciences at George Washington.
10 Next will be -- he's going to speak for about ten minutes.
11 Next, David Lansky, who is sitting to Newt's left,
12 who is the president of the Foundation for Accountability,
13 has been the president since the organization was founded in
14 1995.
15 Following him will be Michael Young, who is senior
16 vice president at Aon Consulting, focusing on health and
17 welfare issues.
18 To my immediate left is Helen Darling, who wins the
19 frequent flyer award for the panel because she has spoken
20 more than anyone else on the panel, and I think probably more
21 than anyone else we've had, she's such a wonderful speaker.
22 She's the president of the Washington Business Group on
23 Health.
24 Seated to Helen's left is Dr. Marcia Comstock,
25 who's the chief operating officer and a member of the board

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1 of the Wye River Group on Health care, who has done a lot of
2 work on emerging trends in health care finance and delivery
3 and is going to talk about some reports that the Wye River
4 Group has released.
5 And then finally, batting cleanup, Greg Kelly, the
6 executive director of the Coalition Against Guaranteed Issue,
7 and I believe also the Coalition for Affordable Health
8 Insurance -- Council for that.
9 And so without further ado, why don't we start with
10 Warren.
11 DR. GREENBERG: Thank you very much, David. It's a
12 pleasure to be here and it's a pleasure to be with this
13 distinguished panel and the audience here as well.
14 I understand I only have ten minutes, but I'm glad
15 that the Speaker's talk was so comprehensive because I'll be
16 able to just fill in the blanks, I think, from what he had to
17 say.
18 I was at one time staff economist with the Federal
19 Trade Commission. I believed that every imperfection at that
20 time in the marketplace was due to an antitrust violation. I
21 soon found out that in addition to antitrust violations,
22 which are remedied by the FTC and DOJ here, that there are
23 many imperfections due to ill-conceived government
24 interference in the economy or simply market failures.
25 In this testimony, I suggest three examples of

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1 these latter imperfections. My goal, as I believe is the
2 goal Chairman of the Federal Trade Commission as well as the
3 entire FTC, is to achieve both price and quality competition
4 in the health care sector, and I mean the entire health care
5 sector, not just the Medicare program.
6 The three imperfections I'd like to focus on are:
7 the failure to tax employer-paid health insurance premiums;
8 adverse risk selection for health plans; and U.S. and state
9 "any willing provider" laws. This is filling in the blanks,
10 perhaps, for the Speaker's talk you heard previously. Now, I
11 shall go over each one of these in turn.
12 The failure to tax employer-paid health insurance
13 premiums has led to the retention of employer-paid health
14 insurance. Absent this tax, there would be no advantage to
15 the employer paying health insurance premiums instead of
16 providing increased wages in order to retain employees.
17 Employer-paid health insurance, which would be subject to
18 state and federal income taxes as well as Social Security and
19 Medicare taxes, would become less attractive for the employer
20 to offer and the employees to receive. It would soon
21 disappear if it were taxed.
22 An individual-based health insurance system without
23 the involvement of the employer would be much more conducive
24 to the introduction of quality and price into the
25 marketplace. What am I talking about here?

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1 There is a substantial amount of turnover in the
2 U.S. labor force. Although this differs by geographic areas,
3 location, type of job, age and gender of workers, it has been
4 estimated that job turnover is between 12 and 16 percent
5 throughout the economy. In higher turnover industries, such
6 as agriculture or construction, the turnover rate is even
7 much higher.
8 And we talk about incentives here. When job
9 turnover is high, there is little incentive by the employer
10 to invest in health plans, to invest in expensive but perhaps
11 better quality treatment and procedures, as well as superior
12 physicians and hospitals, which can improve quality of care
13 and perhaps lower cost in subsequent periods. Why? Because
14 within one or two years, those employees are going off to
15 other jobs with other health care plans.
16 In contrast, if there were an individual-based
17 health insurance system rather than an employer-based system,
18 individuals would retain their health plan whether employed
19 with the firm, self-employed, retired, or disabled.
20 Individuals would choose a health plan from a variety of
21 health plans during yearly open enrollment periods.
22 Individuals will buy health insurance in the same
23 way they purchase automobile insurance without regard to
24 employment status. Income-adjusted premiums may be needed to
25 help those with lesser incomes if universal coverage is

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1 desired.
2 Individual-based health insurance is found in many
3 European countries and Israel. In an individual-based
4 system, individuals might belong to a health care plan for
5 many years or decades, providing incentives for these health
6 care plans to do disease management and to try to insure
7 quality early on.
8 There would be greater incentives for the health
9 plan to invest in a person's health and to improve quality of
10 care rather than the current system that we have in force
11 with our individual -- with our employer-based health care
12 system.
13 However, under an individual-based system, and this
14 was touched on by the Speaker, precautions will be needed,
15 however, to insure that health plans are not avoiding high
16 risk enrollees. And therefore I would suggest we also need,
17 in addition to employer-based health insurance, the idea of a
18 case mix risk adjustment system.
19 Why? Because if health plans competed on a quality
20 of care basis, and we touched on this before, the plans which
21 provided the highest quality of care, in the language that we
22 talked about before the Nordstrom's, the Lord & Taylor,
23 perhaps, would attract the highest risk employees in the
24 following opening enrollment period, increasing its cost
25 considerably.

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1 This leaves little incentives for health plans to
2 compete on a quality of care basis or to disseminate
3 information on quality. This is why I say we don't have
4 Nordstrom's and Bloomingdale's. One health care plan that
5 comes out and says, we are the Lexus of all health care
6 plans, next year will see its costs go through the roof.
7 Changing these incentives will be therefore a
8 factor in achieving quality in health care. And how might we
9 focus on that?
10 A risk adjustment payment should be applied to each
11 competing health care plan. There's a market failure here.
12 We have to somehow solve it somehow. Risk adjustment may
13 improve quality of care, creating a marketplace based on
14 quality and price for the first time among competing health
15 care plans. An accurate risk adjustment payment will create
16 incentives for health plans to deliver a higher quality of
17 care to attract higher risk individuals since they will be
18 paid for enrolling these higher risk individuals.
19 However, achieving an accurate risk adjustment
20 payment has been difficult. But even Medicare has been
21 trying it under their risk adjustment PIP DCG approach, and
22 other countries have tried it with some success. The
23 Netherlands examines age, gender, employment status, and
24 region of the country. Germany uses age, gender, and
25 disability. Israel uses only age.

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1 Health plans would be reimbursed by a neutral party
2 according to the number and severity of the individual
3 enrolled. Those health plans with a great number of high
4 risk individuals would be reimbursed at a higher amount.
5 This would create incentives for health plans to compete on
6 quality in order to attract the higher risk individuals.
7 Those health plans which do not necessarily compete
8 on quality, and perhaps stress lower premiums, would receive
9 little or no risk-based reimbursement. Price and quality
10 competition here. Each of the health plans would be required
11 to help finance the payments to the health plans which have
12 enrolled the high risk individuals.
13 Again, I won't repeat what I said before. But
14 under these circumstances, I do believe we will see the
15 department store approach where health plans are competing
16 both on price and quality, the same way we might see a Saks
17 Fifth Avenue and Bloomingdale's approach.
18 Under this kind of competition, the difficulty in
19 determining quality of care would also be less daunting for
20 the patient. It is also possible that individuals with the
21 same price/quality tradeoffs may differ on their view of
22 particular department stores, yet with its faults, many
23 individuals are satisfied to make this one of our most
24 important buying tools.
25 Finally, in the third step, each health plan should

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1 be encouraged to utilize every avenue to improve both quality
2 of care and lower price. This would include selective
3 contracting with a limited number of physicians and hospitals
4 in the geographic area to attempt to achieve the lower cost
5 or higher quality.
6 Lower cost may be achieved by playing providers off
7 one against another to achieve increased volume and lower
8 cost. Improved quality can be maintained by contracting
9 only, perhaps, with the Cleveland Clinic or Mayo or a limited
10 number of hospitals. And physicians who increase volume may
11 translate into higher quality.
12 Unfortunately, recently the Supreme Court ruled
13 that "any willing provider" laws may be enacted by state
14 governments in which a health plan must contract with all
15 providers which would like to sign a contract with the health
16 plan. "Any willing provider" laws, if enacted by state
17 governments, would eliminate the potential for contracting
18 with only a limited number of providers.
19 In order for health plans to compete based on price
20 and quality, states should no longer to attempt to enact
21 these "any willing provider" laws, and those laws which have
22 been enacted should be repealed. Thus far, in 17 states,
23 "any willing provider" laws have been enacted to prevent
24 selective contracting with physicians. Thirteen states have
25 enacted laws which prevent selective contracting in regards

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1 to hospitals.
2 Health care expenditures, including studies here by
3 economists at the FTC, have been shown to be much higher in
4 those states where they have "any willing provider" laws.
5 I would sum up by saying these three steps -- an
6 individual-based health insurance, which could be achieved by
7 taxing employer-based health insurance; a risk adjustment
8 payment; and selective contracting -- are necessary to
9 achieve both price and competition in health.
10 Each of these steps is interrelated and is
11 essential to competition. Without the possibility of both
12 price and quality competition, the health care marketplace
13 will remain inefficient. There will be over-investment of
14 price competition at the expense of improved quality,
15 resulting in economic loss for those who desire improved
16 quality. Even those who put a greater emphasis on price
17 competition will be confronted with a downward spiral of
18 quality if there are no incentives to provide quality of
19 care.
20 With $1.4 trillion spent on health care in the
21 United States, it is imperative to create incentives for
22 improved quality as well as reduced costs and to eliminate
23 these three market imperfections to compliment the antitrust
24 efforts of the FTC and the Department of Justice.
25 DR. HYMAN: Dr. Lansky, your PowerPoint is up on

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1 the screen. So you can run it from up there if you like.
2 DR. LANSKY: Thank you, David and the Commission,
3 for letting me join you. I appreciate it.
4 My particular area of interest is in the
5 information requirements of consumers to be successful in
6 this health care system and market. And you had a marvelous
7 set of witnesses in the last few months covering much of what
8 I would normally have wanted to say.
9 So given that, I thought I would take a particular
10 slant on a theme, I think, that has not been adequately
11 addressed, which is the genuine experience of patients
12 seeking and getting health care, and what information is
13 needed in the course of our real lives, leaving a little bit
14 aside the legal and technical requirements that I think are
15 vital but I do think have been fairly well addressed.
16 So I'll introduce the term person-centered. And
17 the Speaker has certainly emphasized that throughout his
18 work. And I'll give you -- I wanted to start with a couple
19 of examples, but I'll have to figure out how to -- okay.
20 Just briefly, our organization, the Foundation for
21 Accountability, was founded in '95. It was primarily founded
22 by large purchasers, including HCFA, General Motors, American
23 Express, large consumer groups like AFL-CIO and AARP. And
24 our charge at that time was to make managed care work by
25 developing a set of quality measures that could be used to

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1 support competitive purchasing.
2 We developed about fifteen different sets of
3 measures addressing a number of chronic illnesses, end-of-
4 life care. We've done a great deal of work the last five
5 years on child and adolescent health, particularly to support
6 the CHIP and Medicaid purchasing requirements.
7 In the course of doing that, we quickly learned
8 that measures and data per se were not sufficient to support
9 a successful market, and we had to think about a framework
10 for presenting and communicating information. We developed
11 such a framework that's summarized very briefly here, and
12 NCQA, the National Quality Report, the IOM, Newsweek
13 Magazine, a number of organizations, have used that approach
14 we recommended.
15 More recently, the last three or four years, our
16 shift has been very much toward understanding what do
17 consumers do with information, how do they make decisions,
18 and how do they access information. We've done a lot of work
19 on how do you present comparative information to consumers
20 for their use, a set of interactive web tools to allow people
21 to make their own decisions using available comparison
22 information.
23 We've been doing quite a bit of work on the
24 personal health record the Speaker just spoke about, the idea
25 that you own your health information, that it's

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1 interoperable, it's transportable, and it is lifelong. And
2 we are just now working on a project with the maternal and
3 child health bureau here to develop what we call a data
4 resource center, which allows the consumer or a policy-maker
5 to access all the knowledge there is that may help them
6 understand and advocate for health improvements.
7 We've done about a hundred focus groups in the last
8 few years. We've done very large surveys. We do a lot of
9 interviewing. And we spend a lot of time working with
10 patients, veterans, labor organizations, to understand what
11 their constituency may be concerned about.
12 So that is context. I think the main theme I want
13 to mention today in terms of the quality, information, and
14 field that we work in is that the history of the last ten
15 years or so in this field -- and the Speaker spoke about the
16 idea of guilds influencing the behavior of the delivery of
17 care.
18 It's equally true in the information field, that
19 the information constructs that are often used to communicate
20 to the public are actually driven from above, not from the
21 experience of the person who needs to make a decision.
22 So the categories we use to fund health care and
23 the categories of specialty training tend to be the
24 categories we use to collect and disseminate information. I
25 don't think those always serve the needs of a real family

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1 making a difficult health care decision.
2 And therefore, I think as we think about the future
3 marketplace in health care and the use of information in
4 health care, we need to think harder and work harder at
5 embracing the patient and family experience, and having them
6 tell us what information they need to make decisions.
7 So let me tell you a couple quick stories. The
8 first one, of course, is a personal story. On the left of
9 this picture is my mother-in-law. Grandma Lou, we call her.
10 She at the time of this story was 72 years old. She was a
11 coal miner's daughter from up in the Canadian border area of
12 Washington state. She started smoking when she was 13,
13 stopped when she was 55.
14 When she was 72, she went in for a routine primary
15 care visit. They did an x-ray. They spotted an apparent
16 tumor on the x-ray, referred her for a CT scan. The primary
17 care doctor was concerned, referred her to a community
18 surgeon.
19 I asked around in my network to see if this surgeon
20 was any good, a common question we all ask. I was very much
21 reassured that not only was he good, he was a very aggressive
22 surgeon, which for cancer is taken to be a good thing.
23 We went to see this surgeon. He said he could not
24 biopsy the tumor in this location that was revealed on the
25 film, and therefore he immediately recommended a lobectomy,

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1 removal of the section of the lung to remove this tumor.
2 Obviously, my mother-in-law and my wife were
3 paralyzed with fear and anxiety, and immediately wanted to
4 pursue the doctor's recommendations. But my wife, on the far
5 right of this picture, being at least interested in the web,
6 got online. And this is her weekend's work, between the time
7 of the recommended scheduled surgery and the end of the
8 weekend.
9 She found a lot of resources to try to assess what
10 was going on in this case. You'll see the one on the left
11 there says "Probability of malignancy in solitary pulmonary
12 nodules," which is actually an online calculator that allows
13 you to enter the information that you may have from the film
14 and get a prediction of whether or not this is in fact a
15 malignancy or benign.
16 And my mother-in-law's data said it was 24 percent
17 chance of being malignant. So whether it was appropriate
18 with a 24 percent probability of malignancy to do this
19 radical surgery was certainly something needing a little more
20 discussion than we'd had the first time around. You also see
21 information from the cancer support groups, and a quick
22 education on imaging.
23 It turns out that one of the articles my wife found
24 has an NCBI study that she found in 1999 when this occurred
25 of a three-year-old study which talks about the evaluation of

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1 solitary pulmonary nodules by PET scanning, which was a
2 relatively new but not brand-new technology. And at the
3 bottom of this and circled, it says, "This technology is
4 highly accurate in differentiating malignant from benign
5 solitary tumors."
6 Now, the surgeon, in his guild and in his own
7 personal experience and community, had brought none of this
8 information to our attention. It turns out four miles down
9 the road from the surgeon's office was a PET scanner at the
10 University of Washington.
11 To make a long story short, my wife got involved in
12 this process, redirected the care to the PET scan. The PET
13 scan showed a benign tumor. That was four years ago and no
14 surgery took place. The taxpayers and Medicare were saved
15 40- to $60,000 of cost. My mother-in-law was saved a lung.
16 And the story has a happy ending.
17 One footnote to that story, just on the question of
18 choosing quality. Among the decisions to be made was where
19 do you go for this operation, if it had in fact been needed?
20 This data is available for some states. I happened to pick
21 this New York because I gave this presentation, or parts of
22 it, in New York.
23 You'll see that the Speaker again referred to the
24 differential mortality rates in different locations. In this
25 case, for this lobe resection surgery, there's about a

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1 fourfold difference in mortality if you go to a place that
2 does a lot of them versus a place that does only a few of
3 them.
4 And if you look at this New York City data, one of
5 our concentrations of medical excellence in America, only one
6 hospital in the entire central area of New York City performs
7 above the threshold number of lobe resection surgeries in a
8 year. A huge number of hospitals perform one, two, seven
9 operations a year in this very complex and very invasive
10 procedure.
11 My mother-in-law again had no information
12 whatsoever provided to her to guide her decision. And as I
13 suggested earlier, even in this one story, there are maybe
14 ten, fifteen important consumer decisions to be made: the
15 primary care doctor, the first imaging center, the second
16 opinion, the second imaging center, the facility to have the
17 operation done in, the surgeon to have conducted the
18 operation, in a moment of enormous anxiety, pressure, and
19 fear. It's a very complex set of consumer decisions to
20 unravel in the real world.
21 A second example I want to give is our development
22 of a set of quality measures for HIV and AIDS care. And this
23 would -- we had a wonderful commission or advisors, the
24 chairman of the President's Commission on AIDS, and a great
25 group of experts.

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1 And they listed, as you see here, about eighteen
2 things which they think are important to measure to describe
3 the quality of HIV and AIDS care. And if you're a patient or
4 if you're in an oversight position and you want to evaluate
5 the quality of care in this arena, here are the things you
6 might want to look at.
7 We asked the experts to rank order which of these
8 eighteen things are the most important to use to assess the
9 quality of care for HIV and AIDS. And you see the rank
10 ordering they have here. The first was that the patients
11 receive anti-retroviral therapy, the second that they be
12 regularly assessed for viral load, the third that we have
13 treatment to prevent opportunistic infections, and so on.
14 We then asked a series of focus groups of patients
15 how they regarded the priorities in making a decision on
16 where to seek care. And here's the ranking the patients
17 provided. We tapped quite a variety of different kinds of
18 patients -- gay white men, IV drug users, people who were not
19 primarily English-speaking -- to find out what their
20 perceived needs were in quality. And these are people who on
21 average had been diagnosed eight years earlier, so they were
22 very experienced patients.
23 Their number one concern was the prevention of
24 opportunistic infections. Their second most important
25 criterion was that they be involved in making decisions about

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1 their care. The third most important was that they can
2 function, down at the bottom of that slide, that they can
3 live.
4 The doctors had actually recommended we not include
5 that as a quality measure at all because they thought it was
6 beyond their ability to control and not a fair measure of
7 their performance. It was a pure outcome measure, and
8 therefore not within their responsibility of scope.
9 Now, the patients -- I'll just give you one quote
10 from one of the focus groups. "I'm not taking any drugs or
11 anything like that," basically because, he says, "I'm a young
12 black male and in my age group there's very little research
13 being done, and as a black male most of it doesn't affect me.
14 It's for white people 35 to 45. So until there's more
15 research, I'm not taking those drugs."
16 And a number of these patients said, if I don't
17 trust my doctor and if my doctor does not respect and
18 understand my life, I'm not following their advice. So the
19 concept of constructing information for consumer decision-
20 making has to capture the real behavior and real criteria of
21 patients themselves.
22 The third example I'll just mention just for one
23 observation from it, we've been doing a series of projects in
24 Vermont with family practice and pediatrics to understand
25 what do people want to know to evaluate their care. And this

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1 was actually given to the doctors, not to the patients.
2 But the thing I found most interesting in talking
3 to many patients -- these are parents of sick children -- was
4 that what they said was, I don't want to choose a new doctor.
5 I don't want to be told my doctor is poor. I want to make my
6 doctor better. I've been using this doctor for four years,
7 ten years, whatever. It's a place I'm comfortable getting
8 care. I want to know what they're doing poorly so that I can
9 basically beat them over the head with it and I can work with
10 them to improve the quality of care they receive.
11 So I think the ah-hah for us who had done an awful
12 lot of worn on exit, on choice, was that a lot of patients
13 really want voice and they want tools to improve their
14 interaction with their providers. So it's a much more
15 complex use of information than we had previously discussed.
16 Just to tie this all together and again reveal the
17 complexity of it, this is a map we did with the General
18 Electric workforce to identify all the information patients
19 want to know in real life -- these are people who've been
20 diagnosed with breast cancer. We asked them, what do you
21 want to know to get the best possible health care?
22 And as you look at a spectrum from the far left,
23 where people are at risk of breast cancer but not diagnosed,
24 to the far right, where they have had successful intervention
25 and are now living with the disease as a survivor, there's a

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1 lot of information.
2 And it's very contextual, not surprisingly. The
3 information a young woman who may feel at risk for cancer
4 because of her relatives' experience wants to know is
5 dramatically different than someone who's about to have an
6 operation to remove a vital part of their body or deciding on
7 a form of therapy postoperatively.
8 So the sensitivity, the specificity, the
9 personalization of information is in some ways self-evident,
10 but most of our discussions about making the market work have
11 not been very finely attuned to where patients are in their
12 experience of seeking care.
13 And one other footnote on this particular example.
14 This is a study done in comparing care in Massachusetts and
15 Minnesota for breast cancer. And I think there are two
16 astonishing numerical figures on this slide.
17 One is that twice as many people in Massachusetts
18 as Minnesota are even seeing an oncologist as part of their
19 decision-making, let along deciding which oncologist to see
20 or evaluating those oncologists. And ultimately, then, twice
21 as many women, almost, are not told that they have an option
22 of breast-conserving surgery, having been given a diagnosis
23 of early-stage breast cancer. And these are in two,
24 nominally speaking, excellent states for medical care and for
25 the dispersion of medical knowledge.

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1 So my conclusion, much like the Speaker's, is that
2 we need a modern information strategy which is sensitive to
3 these complexities of real life, and one which understands
4 that in a democratic consumer culture, people can and must be
5 capable of using information.
6 Let me just tick off some of the dimensions I think
7 we have to address in building such a modern information
8 system. First, medical care is very complex. My wife,
9 knowing nothing about medicine, is suddenly an expert on PET
10 scanning and solitary pulmonary nodules. And she had to be.
11 There was nobody else in the entire enterprise of medical
12 care in the Seattle area who stepped up and made the
13 investigations and decisions to support her decision-making.
14 Secondly, we have many, many sub-specialities and
15 many, many layered organizations. We have doctors, nursing
16 homes, home health agencies, and so on, all of which play a
17 part in achieving successful care.
18 Thirdly, care is multi-dimensional. There is
19 technical care, guidelines-based care, humanistic care,
20 patient education care, care in dealing successfully with
21 daily living, and simply the service aspects of care, all of
22 which have to be addressed by consumer information strategy.
23 Fourth, I am increasingly aware, as I mentioned in
24 my Vermont pediatric story, that what people are seeking in
25 health care are relationships, not transactions. So to treat

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1 medical care as a bundle of transactions underestimates the
2 complexity of the human exchange of information and decision-
3 making, let alone therapy, that goes on.
4 Fifth, the population is not uniform. Not only do
5 we vary where we are in the course of an illness, but each of
6 us in this room has a different way of processing information
7 and using it. And in a vital area like health care decision-
8 making, this is a very subtle and complex problem.
9 We did a segmentation model that identifies four
10 types of American health care consumers. And we
11 differentiate them partly by their level of independent
12 action and partly by how much they listen to their doctors.
13 And depending on which type of these four groups you see at
14 the top of the slide a person may be, that will affect the
15 kind of information they want and how they will use it.
16 Next is the issue of transparency or, actually,
17 lack of transparency. But there simply isn't the information
18 available, period. Not only does the patient not know the
19 information they would use to make good marketplace
20 decisions, neither do the providers. Neither does the
21 government. The information does not exist. It's not known.
22 Next, the issue of third party payment all of us
23 have talked about for quite a while creates a barrier between
24 the purchaser, the financial transaction source, and the
25 person who actually needs to receive the superior care.

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1 We have mediating decision-makers. In my mother-
2 in-law's case, there was a primary care doctor referring to a
3 surgeon, and a surgeon referring to a hospital. The actual
4 locus of control had been taken away from the patient. We
5 differ in where we are on the trajectory of illness, as my
6 breast cancer slide suggested, and we have to target
7 information to where a person really is in their decision-
8 making.
9 Therefore, just as we in getting medical care
10 expect personalization -- we want someone to hear our
11 history, understand our allergies, understand our values, and
12 help us make a good decision -- so in the information arena
13 we have to personalize the support of marketplace information
14 to the specific needs of each person.
15 Now, fortunately, as the speaker suggested, the web
16 and related technologies enable us to do that. But we
17 haven't really put our effort behind that so far. We've
18 tended to have very blanket strategies for public
19 information.
20 Finally, as I mentioned in my family's case, there
21 is nobody else out there who will do this for you. We may
22 not be confident that every American can step up, master all
23 this information, and make successful decisions. But there
24 really isn't an alternative.
25 There are some mediating organizations who will

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1 certainly help. There are information advisors. There are
2 ombudsmen. There are a variety of other sources. But for
3 the vast majority of us, there's no one else you can rely on
4 to take your illness as seriously as you do.
5 So what can be done about it, and what can the FTC
6 and other agencies do? A couple of focal points I want to
7 suggest. First is we need to do more work on outcomes, not
8 process. As I suggested in my question earlier, the more
9 that we try to have a process measure for every fragment of
10 the American health care system, the more crazy we will
11 become. We have an enormously rich and technically complex
12 system, and we can't possibly cover the landscape with
13 everything.
14 And unfortunately, most of our research and others'
15 shows that there are not good correlations between being good
16 at A and being good at B. A clinic may be great at heart
17 disease care, and the same group of doctors, nurses,
18 technicians, could be terrible as asthma care. And they're
19 sitting in the same offices. You can't say because they're
20 good at heart disease, I'll go there for my asthma. There's
21 no correlation in any evidence we've seen so far.
22 So what do you do? Do you expect to have a set of
23 quality measures for every conceivable health problem?
24 That's not very practical. So the benefit of focusing on
25 outcome measures is it drives innovation because people

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1 compete to achieve better results. It drives integration
2 because you cannot achieve a good result by only doing the
3 operation and then not doing the rehabilitation. And it
4 drives person-centeredness because ultimately the person
5 wants to get back to school, back to work, and achieve the
6 best functioning they can.
7 Second general point that I think many of us agree
8 on is we want more disclosure of information. The public
9 should be able to access information about the care and the
10 cost of the care that's provided. I put disclosure in
11 quotes, however, because again I'll say I don't think anyone
12 knows the information we'd like to disclose.
13 It's not sitting stuffed in a file cabinet in the
14 basement of the HMO or the medical group practice or the
15 nursing home. They don't know, either, how they're doing.
16 So we have an enormous problem of building infrastructure
17 which would provide that information.
18 I would encourage FTC and others to involve more
19 patients in their deliberations. Patients experience the
20 care. They are the taxpayers. They are the underwriters of
21 the benefit plan through their wages. And they have
22 ultimately to be convinced that they are receiving good care
23 if we're going to make a more successful system.
24 As I mentioned earlier, we should deal with the
25 voice as well as exit, that is, use information about quality

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1 not only to help individuals make personal choices, but to
2 help all of us see where quality is good and bad and
3 influence public policy and professional practices.
4 And last thing, the national health information
5 infrastructure at the bottom of this slide. I think we need
6 to use disclosure as a driver to force, as in the case of e-
7 prescribing that the Speaker mentioned -- we need to force
8 institutionalization of health information so that if we
9 require disclosure, that may in turn require PBMs or
10 providers to make more information available, and therefore
11 build the infrastructure to do so.
12 Lastly, we have learned, to our sadness, that
13 distribution of information is absolutely as important as
14 simply getting data. So you can mandate measures. You can
15 mandate data collection, what CMS is doing now. You can
16 publish report cards on nursing homes and dialysis centers
17 and hospitals.
18 Frankly, it doesn't matter. It doesn't influence
19 much behavior. It influences a little behavior at the
20 margin, but if you don't distribute that information in ways
21 that it is actionable in the context of real experience,
22 you're not really contributing to solving the problem.
23 Therefore, several -- four ways one might think
24 about distribution that are a little different than the norm.
25 Think about infusing that information into the relationship

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1 between a patient and doctor. We've been working on
2 something we call the ASK, the Agreement to Share Knowledge,
3 which is actually an agreement between a patient and their
4 doctor about the way they will each play their parts in the
5 care relationship and the way they will share information
6 with each other.
7 Using information intermediaries, whether it's AARP
8 or senior centers, to distribute information and make it
9 usable to people.
10 Providing interactive coaching of information on
11 the web. And I don't mean just simply portraying a table of
12 numbers on the web, but providing interactive decision
13 support tools.
14 And then finally, personalized choice aids using
15 the patient's own values and preferences as a way to help
16 them make decisions with this information.
17 I just wanted to illustrate a couple of ways on the
18 web that we've been approaching that, but let me just
19 conclude. Where I think there's a regulatory role per se:
20 In particular, I think it's the information infrastructure.
21 That does include what to measure and what must be disclosed,
22 but I think it goes further than that, and it goes back to
23 the Speaker's example of the interstate highway system.
24 There has to be a massive commitment and a public
25 awareness that we will not be able to improve this health

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1 system short of centrally managing it in a way that the
2 National Health Service or perhaps the VA or Kaiser might do,
3 short of a central management system working off a centrally
4 allocated budget. Otherwise, there's no way to improve this
5 health system short of building an information
6 infrastructure.
7 So that requires information standards. It
8 requires requiring every player in the health system to
9 collect and disclose the relevant information. It requires
10 that the content be patient-driven and patient-centered. It
11 requires that we integrate that information infrastructure.
12 It's not enough to say to every doctor, you must
13 buy a personal electronic medical record. Those medical
14 records, if they can't talk to each other and talk to the
15 pharmacy system and talk to the nursing home system and talk
16 to the patient in their living room, that's not going to add
17 value to the system. So there has to be an integrated
18 electronic information infrastructure.
19 And I would encourage the regulatory approach to be
20 wary of commoditization. That is, if you try to treat every
21 health care interaction as a commodity, as a discrete,
22 individually-priced transaction, which by itself has a flow
23 of information and set of requirements around information,
24 that will actually undermine the ability of us to improve the
25 health system through what I'll broadly call relationship-

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1 based care.
2 And finally, as public agencies, I hope that these
3 groups will realize that there is no one else out there
4 representing the patient and family. Everyone else has a
5 legitimate but primarily self-directed interest in the health
6 care system.
7 The public sector, part of why we use public funds
8 and why we have election is that someone has to say, we
9 represent the interests and the will, and we have means of
10 listening to the voice of, the American public in its breadth
11 and diversity. That's a very daunting challenge, and I'm
12 very concerned that some major initiatives going on at
13 present in the government don't fully make the effort to
14 listen to the public will.
15 Thank you.
16 DR. HYMAN: Okay. I think we'll take about a five-
17 minute break and then we'll continue with the rest of the
18 speakers.
19 (A brief recess was taken.)
20 DR. HYMAN: I'd like to get started again. Our
21 next speaker will be Michael Young. Your PowerPoint should
22 be up right now.
23 MR. YOUNG: Thank you for having me. When I first
24 saw these hearings, I talked to Ed and then to David. This
25 was exciting for me to come down from Philadelphia because

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1 for 25 years I've been working with employer groups of all
2 sizes, from 50 employees all the way up to 50,000. And
3 invariably, each year it gets tougher and tougher to get
4 through this process that we go through this time of year,
5 which is helping companies strategize about how to deliver
6 health care benefits to their employees for the next year.
7 So I was really excited to be able to come down and
8 share some of the thoughts. And what I did was I actually
9 took the questions from the hearing and threw them at some of
10 my clients of all sizes to get their perspective. Because
11 what I'd like to do today is be one of the panelists that
12 kind of shares with you, you know, what the specific employer
13 problems are and what their issues are when it comes to some
14 of the things we've been discussing today.
15 And the Speaker was right. Being from
16 Pennsylvania, I will say that not a week goes by that my wife
17 or another family member or a neighbor or somebody tells me
18 about somebody whose doctor has left the state. It is a very
19 serious problem in all of Pennsylvania, more so in Pittsburgh
20 and Philadelphia but just in the state in general. So
21 clearly, a significant issue.
22 What I did is actually -- because I work with
23 actuaries, although I'm not one. I'm somewhat anal about
24 this, so I actually put the questions into the overhead so I
25 knew what they were.

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1 But I thought, you know, I'd spend more time --
2 since we don't have a lot of time and I'd like to leave space
3 for the other panelists and some questions -- but basically
4 wanted to talk about, you know, how do employers go through
5 that process of determining what kinds of health care
6 benefits they're going to offer the employees. And again,
7 I'll talk a little bit more in a minute about the various
8 size of employers and how that affects things.
9 But the bottom line is -- and I don't think this is
10 a surprise to anyone in this room -- employees want good
11 coverage at a reasonable price. That's fairly simple. And
12 what employees usually get when they deal with -- you know,
13 with their company is they tend to get choices.
14 They tend to get choices of health care plans.
15 Depending on the area, the geographic area they're in, the
16 size of the employer, the number of choices may vary. But
17 they get some choices. We find that invariably employees
18 like choice. They like to have a feeling that they can take
19 health care plans that they can pick because they meet their
20 particular families' needs.
21 A second thing they get is catastrophic coverage.
22 And what that means is that, you know, most company plans
23 provide a benefit for large catastrophic situations. Most
24 company plans have one million or sometimes two million or
25 sometimes even unlimited lifetime maximum benefits. So from

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1 the standpoint of being covered for a traumatic, large-cost
2 situation, employees tend to get that coverage.
3 They also get typically some sort of preventive
4 benefit covered -- we'll talk a little bit in a minute about
5 the move from HMOs to PPOs -- but the Speaker was right.
6 It's kind of a mixed bag. What we find is what one company,
7 what one client of ours or what their insurance company might
8 define as good preventive care benefits versus another could
9 vary drastically.
10 We have some with very -- schedules of benefits
11 based on peoples' ages and the types of tests they have, and
12 then we have other clients who basically say, well, we'll
13 give you $300 each year towards preventive benefits. You
14 decide how you want to spend them. So although preventive
15 benefits seem to make sense to a lot of employers, they don't
16 know how to deliver the right kind of preventive benefits.
17 What employees would like beyond those is lower
18 cost. And I would say clearly the vast majority of our
19 clients each year, and certainly this year, are going to be
20 passing along larger cost increases for health care coverage
21 than they're going to be passing along salary increases.
22 So at the end of the day, a lot of our clients will
23 have employees whose payroll deduction for health care will
24 be greater than their increase in their salary. And what
25 happens is their take-home pay becomes less.

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1 They also would like coverage for alternative
2 treatments. As you all know, there are more and more types
3 of treatments out there -- you know, acupuncture,
4 biofeedback, and all kinds of things that are on the horizon.
5 And employees are becoming more savvy. They are reading
6 the -- you know, they are going to the internet. They are
7 finding some of these kinds of treatments. They are making
8 suggestions that they would like to get those treatments
9 done.
10 Typically, though, the clients we have, the
11 companies we have, tend to rely on the insurance company, the
12 Blue Crosses, to set the standard as to what's covered and
13 what's not covered, what's considered valuable and reasonable
14 treatment and what's not. And that tends to lag from where
15 the marketplace is. So we have kind of a lag period, and as
16 employees find these kinds of information, they tend to get
17 pushed back from the plan still not covering them.
18 Administrative ease: Yes, we are getting close to
19 a world of having all this data pass electronically, but we
20 are not there yet. And it still does vary by each of the
21 claim intermediaries that exist. Some are better than
22 others. Some have spent more on technology and IT than
23 others. So it's still -- there are certainly still a lot of
24 employees out there who find, you know, working through the
25 health care system to still be an administrative nightmare.

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1 And then finally, coverage after retirement. I
2 think the latest study showed that there's only 23 percent of
3 large employer who provide a retiree medical benefit for
4 retirees after the age of 65, which is a continuing and fast-
5 dwindling percentage of employers.
6 Employees recognize, I think, at this point that
7 that trend is not going to change or reverse. What we see
8 now from employers, though, is at least the understanding
9 that they've got to educate their employees that even though
10 they're not going to provide a benefit, that you're going to
11 need to save significant amounts of money during your active
12 life to have that money to supplement Medicare, even with the
13 possibility of prescription drug coverage, when you do
14 retire.
15 There's a great article in Fortune, I think it's
16 this week or last week, suggesting huge amounts of money that
17 need to be put away prior to age 65 that you would need to
18 have to cover those expenses as you go forward.
19 I also had some other statistics. This is from the
20 Robert Wood Johnson Foundation. Again, 43 -- I thought this
21 was interesting -- 43 percent of people that were polled said
22 they feared that their employer or their spouse's employer
23 might eliminate some health benefits within one year, some of
24 their benefits.
25 Twenty-one percent said they feared that out-of-

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1 pocket expenses will increase to an unaffordable level, and
2 8 percent said that they fear that the company plan may just
3 go away in one year. So there's continued fear, there's
4 continued uncertainty, as to the role of whether the employer
5 is even going to provide a benefit in the near future.
6 I don't want to -- we can talk a little bit about
7 distortions. Again, I was very intrigued by what the Speaker
8 said. I think that there is a role for employers in this
9 process, although it does -- today, the way it's set up,
10 small employers clearly do not have the same size, the same
11 leverage in the marketplace as large employers to get the
12 kind of coverage they need.
13 And benefit levels, types of plans, those things,
14 are going to vary by the ability of a company to pay --
15 what's their bottom line, whether they are a public or
16 private company, those kinds of things -- and whether they
17 need to be competitive.
18 And again, though, saying all that and despite all
19 that, I do believe that the employer does have a role here.
20 And I say that, and I think employers in general believe
21 that, although as the costs continue to skyrocket, there are
22 employers saying, you know what? Maybe we were the right
23 people to do that, but we're just not doing it well. The
24 infrastructure is not in place, and therefore maybe in the
25 next five years somebody else ought to come in and do that.

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1 We're hearing more and more of that from employers every day.
2 And again, I just wanted to put up this statistic
3 because I think it shows that the key problems that smaller
4 employers had -- and the Speaker made mention of this --
5 because of the risk pools and the abilities for these small
6 employers, employers that have 24 employees or less, you
7 know, what kind of health coverage can they get?
8 And you can see that if you take employers with
9 less than 25 lives, 40 percent of those employers do not
10 provide health coverage today. And what that means is that
11 the spouse's plan has to pay or these people may be going
12 uninsured, you know. But in any way, it exacerbates the
13 problem in the system.
14 What changes have there been? Clearly, there's
15 been a move away from the more tightly managed HMOs -- and
16 again, the Speaker was absolutely right, it wasn't managed
17 care, it was managed cost -- to more loosely managed PPOs,
18 which the employees embraced, getting away from the referral
19 mechanism and all the paperwork with that, was just something
20 that they were very much in favor of.
21 But what that led to is, it's led to more cost as
22 it's become a more unmanaged system. So what employers have
23 done, what our clients have done, is basically used -- you
24 know, the good message is, we're getting rid of your HMO and
25 we're putting in a PPO, which is less managed. The bad news

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1 is, your costs are going to go up just as ours are at a
2 faster rate.
3 Clearly, most cost-sharing with employees, whether
4 it's in payroll deductions or higher deductibles, copays,
5 again, as companies feel that's the only way they can affect
6 their bottom lines.
7 I say more choices of plans. It's actually more of
8 a consolidation of vendors. There are far fewer vendors in
9 the marketplace today. There really is only a small handful
10 of national vendors -- Blue Cross, the association Blue
11 Cross, Cigna, Aetna, United Health care, and some would argue
12 they're not even national any more. So the number of vendors
13 has really dropped.
14 And consideration of consumer-driven plans, we
15 could probably have a whole segment on that. It's certainly
16 something that's out there. The whole concept of the
17 consumer-driven plan has been touched on, as we've discussed
18 this morning. The idea of financial incentives and providing
19 consumer education so that patients will more effectively buy
20 health care services is at the root of consumer-driven plans.
21 Unfortunately, we don't have enough data yet to
22 support whether that will happen or how well it will affect
23 utilization. But I will say to you is that many employers
24 will embrace consumer-driven plans, as they did the HMOs in
25 the '80s. Most of them will embrace it not because they

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1 philosophically believe it's the right thing, but quite
2 frankly because they have no other option and they're
3 desperate. Okay?
4 They probably wouldn't know the underpinnings of
5 why consumer-driven plans actually work, but their CFO has
6 said, we have to cut cost. It is a new thing to try and they
7 don't have many other strategies. So I think you'll see a
8 great proliferation of consumer-driven plans.
9 Is it going? No, it's not. Okay. Here we go.
10 Actually, this is from the Washington Business Group on
11 Health and I just wanted to touch on some of the access to
12 health care information. Again, because we're running low on
13 time, I'm going to skip that. Helen can certainly talk about
14 that. I think they do a wonderful job.
15 The Speaker did talk a little bit about group
16 underwriting, about the fact that when you're in an
17 employment-based situation you're able to take all risk --
18 good risk, bad risk, whatever. Certainly, in the individual
19 market we've seen all kinds of issues with employees trying
20 to get coverage, questionnaires, you know, being selected
21 against, paying higher rates if they have certain medical
22 conditions, and then seeing the rates go up maybe on a
23 quarterly basis versus an annual basis. So clearly, the
24 individual market, unlike life insurance, is not anywhere
25 near as competitive as the group market.

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1 And I think what I would do to summarize this,
2 because I don't want to -- I'd like to save time for some
3 questions and things -- is just to leave you with the fact
4 that employers out there are questioning their roles today.
5 They're not ready to give up the ship yet, but they recognize
6 that they can't continue to maintain the structure the way it
7 is.
8 And I think the structure today has a lot of
9 inherent problems with it. And if we don't do something
10 soon, I think you're going to see employers start to take
11 more drastic actions. Thank you.
12 DR. HYMAN: Next is Helen Darling from the
13 Washington Business Group on Health.
14 MS. DARLING: Thank you. Thank you for the
15 opportunity for the FTC and the Department of Justice taking
16 on these complex issues that have burdened the system since
17 the turn of the century. But we're very grateful that
18 they're paying so much attention to these matters.
19 I'll skip some things that I would have said both
20 because they've been said by others and because they are
21 probably less central to what we need to -- I know that
22 actually Marcia will talk about some of these.
23 I'd like to talk about the trends in an employer-
24 based system and try to hit some of the things that haven't
25 been said, although I would say that what has been said in

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1 fact is very true, and especially what Michael was talking
2 about. Not just our data but his experience as well sounds
3 very familiar.
4 Also, you have researchers. Our very own David
5 Hyman and others like Judith Lave have done research. And
6 for those of us who are real benefits managers at heart or
7 have been at some other time, I think we are pleasantly
8 surprised to see repeated data of how much employees value
9 their benefits.
10 Because if you actually manage them, all you hear
11 about are the problems. Nobody says, yes, we really think
12 this is great. But interestingly, in the last five years,
13 thanks to the work of some really great health economists and
14 some survey researchers, we have seen evidence that employees
15 really do greatly value their health benefit. And we see
16 evidence, which again we didn't see till this past five
17 years, that employees actually are making decisions about
18 where they work, you know, relative to the benefits.
19 So if the economy turns around, health benefits
20 again could become a competitive advantage, which is one of
21 the things that had kind of gotten lost in the shuffle in the
22 last two years. I mean, things are just generally so bad out
23 there that, in fact, it's hard to sort out what's happening.
24 But if what we saw up until about two years ago is
25 true and the economy begins to pick up, then the companies

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1 that offer these better -- as the Speaker said, better
2 quality and more choice at a lower cost, those initiatives
3 will become far more important.
4 What I would like to say is that employers are
5 doing the best that they can right now to try to balance the
6 competing pressures that they have of trying to control cost.
7 And several people commented on the relationship between
8 wages and health benefits.
9 For the first time in my career, which is as long
10 or longer than anybody in the room, I'm sure, we also saw
11 direct tradeoffs. As the economists say, all benefits are
12 foregone wages or other benefits paid for by the worker. And
13 unfortunately, the worker doesn't get that message very
14 often, although we keep trying.
15 But for the first time, we actually began seeing
16 with this recession -- which, as you know, it's lasted longer
17 for particular sectors like the tech sector and others over
18 the last couple of years -- we saw companies like Charles
19 Schwab and Goodyear and others absolutely suspend their
20 contributions to 401(k) for their workers. They made some
21 changes in the health benefits, but they didn't suspend
22 those. But they did the 401(k). And, of course, you've seen
23 some of the strikes that have happened, and you see labor
24 unions going in and sitting down and saying, okay, this is
25 another nickel on the wage package.

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1 Now, the amazing thing to some of us is that they
2 will take the health benefits. And actually they'll take the
3 thing that's the worst thing for them, which is overly-
4 comprehensive packages with very low copayments and, you
5 know, further sheltering themselves, we would say foolishly,
6 from even getting the information on cost.
7 And when again, all of us try to explain, do you
8 realize not only are you giving up cash wages and other
9 benefits which you need, especially given how slowly wages
10 have grown, but you're also fueling the inflation in the
11 health system by doing it this way -- and, you know, my
12 experience and the people I talk to is they look at you like
13 you're crazy and they still go on strike.
14 You may recall that Hershey was on strike for 42
15 days over going from a 3 percent contribution to a 5 percent
16 contribution, which was -- you know, it's wild stuff.
17 So most employers right now are trying very hard to
18 ease into a new model, and ease is the right word. Because
19 while those of us sitting here talking about this know what's
20 happening because we can see across the country, and in some
21 ways because we talk in percentages, you know, it sounds like
22 a lot.
23 But in some instances we're going from a $5 copay
24 to a $7 copay in terms of, you know, what makes people move
25 and how that relates to the total cost of care is not so

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1 obvious. And so people will say, well, I'd rather have the
2 $5 copay.
3 So we've got a lot of confusion out there. But
4 employers are trying to move us to more cost-sharing, and not
5 just in symbolic terms but real cost-sharing.
6 We did a survey of our own members recently about
7 what they had been doing in the last few years, and this
8 won't surprise anybody here. They are doing more cost-
9 sharing and generally feel that enough cost-sharing for the
10 consumer to have a financial stake is really essential, and
11 that coinsurance, not copayments -- many people that I talk
12 to and work with and our own members feel that going to
13 copayments to encourage people to join managed care
14 organizations, where the delivery system did the management,
15 was one thing. But copayments have really become the kiss of
16 death for much of what we're trying to do in this system now.
17 Once you have a wide-open system, which we
18 essentially have now -- I mean, even the PPOs are --
19 everything is wide open and the data show that -- then
20 copayments become truly absurd. So we're moving to
21 coinsurance across the board.
22 The second thing is that all of our members, our
23 large employers, believe and are working hard that consumer
24 involvement is essential. And if you've heard some -- and I
25 thought David's presentation was just superb on that point.

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1 And he's described, if you will, the world we all want to
2 have, especially with the actual data to do it.
3 I actually went through for a friend a similar
4 experience recently. Fortunately, he was being hospitalized
5 in New York City, and New York is one of the few states where
6 you can get information. He was going to have a radical
7 nephrectomy. Now, you'd think that that is a rare enough
8 event that it would be pretty easy to find out who's good and
9 not good.
10 Well, this is a very sophisticated consumer,
11 very -- had lots of time and money, really, because he was
12 under so much medical care simultaneously. And the way we
13 found out where he should go was by going online to the New
14 York data set and to just put in "radical nephrectomy" by
15 hospital throughout the state of New York.
16 And it was shocking, absolutely shocking, even to
17 us cynics, that there were only about two hospitals in the
18 entire state that did more than about 90 a year, and there
19 were -- almost every hospital in the state did a few.
20 Well, you know, this is a very complicated
21 procedure in just the postoperative care. And, I mean, you
22 can just think -- so, you know, we know that we want consumer
23 involvement and it's essential. But we have -- and many
24 around the table, of course, are working to make this
25 happen -- we've got to not only get the information out there

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1 that's there, but we also have to make sure that people can
2 access it and know it's there, and you don't have to know the
3 system.
4 Again, David's point and others about transparency,
5 we believe that's essential. And we have a report out on the
6 table -- I hope you all have picked it up -- about
7 transparency and accountability. It's essential.
8 We also believe that in the short term, that it
9 would be very easy to require that all currently publicly
10 reported information, which is already -- all the battles
11 have been fought about whether these are the right measures
12 and all those, and they're imperfect, to be sure.
13 But they're already in the public domain because
14 they have to be reported to somebody, whether it's Medicare
15 or the state health department or, like in Texas, the
16 commission. If that information just has to be required to
17 be available on the website of every hospital, and in
18 libraries and things like that, so that people can get to it.
19 One of the things that we've found is it's very
20 difficult to measure or to get information on cost and
21 benefits because the data are limited. We also found that
22 disease and health management programs are growing and
23 there's a lot of reliance on those, but that's also another
24 area where we don't have a lot of information about what
25 works and what doesn't and what's effective. And are these

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1 areas where some people would just be pouring a lot more
2 money into the system and may not in fact make much
3 difference.
4 And several people talked about patient safety and
5 adverse drug events. I sit on a hospital board where just a
6 year ago there started to be a requirement from the Joint
7 Commission that you report near-misses, not just adverse
8 events. And we've never had that.
9 The board now receives a report to the board that,
10 in fact, gives you exactly the number of, you know, adverse
11 events and near-misses. We never did that before. And each
12 of those is being used to investigate the root cause of that.
13 And just that small requirement has transformed the behavior
14 at the board level.
15 I just want to take a second to mention some of the
16 other things that are going on that are really important. We
17 need to move the system towards more health accounts.
18 And I won't go into the detail because of time, but
19 we are doing a lot of work trying to make certain that the
20 Congress authorizes and the federal government continues its
21 movement towards allowing employers to have health accounts,
22 employees to have health accounts, and for us ideally to have
23 this dream of the employee human personal health account,
24 financial account, in which individuals are allowed to pool
25 all of the money they may want to pool and employers can put

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1 the money in, and that can go into retirement, if you want.
2 Essentially, it becomes the 401(k) of health accounts, with
3 portability and lot more flexibility.
4 These are times of great challenge. We are
5 struggling with health care cost increases five years in a
6 row, 50 percent, this year 14 percent. They say next year
7 it's probably another 14 percent on top of that.
8 Some people have raised a question about whether or
9 not employers will stay in this business. And we would say
10 that the likelihood is that they will stay in the business,
11 but the account and the allowance and the amount of money
12 they pay will grow more slowly than the cost of health care
13 will, and therefore the employees and their retirees will be
14 spending a lot more money.
15 There was a story in today's New York Times, if you
16 haven't seen it, an excellent story. It starts on the front
17 page, Milt Freudenheim, about how the coinsurance is, in
18 fact, beginning to have an effect. So maybe we'll see some
19 changes soon. Thank you.
20 DR. HYMAN: Dr. Comstock?
21 DR. COMSTOCK: Yes. Good morning. When you come
22 at this point in the panel, you have to throw out everything
23 you were already going to say because it's already been said.
24 But I'm not ever at a loss for words, so I'm going to pick up
25 a little bit on some of the things that David said. But

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1 before I do that, I'm going to make a couple comments from
2 what I originally had prepared.
3 I'm a strong proponent of this whole, you know,
4 patient-directed health care movement. But there's a number
5 of caveats there and I think there's a number of cautions.
6 So let me just cite a couple of them.
7 One of them you've already alluded to, Helen, and
8 that is the whole regulatory framework for these kinds of
9 accounts. And as you all know, this movement was given a
10 significant boost last June when the IRS clarified the tax
11 status, that these health reimbursement arrangements could be
12 rolled over. They were tax-free.
13 But that is employer dollars, not employee dollars.
14 And we need to -- one of the things that needs to happen is,
15 as you've already alluded to, to make it even richer is to
16 allow those monies to be blended.
17 Another area that's been touched on is that whole
18 issue of selection of costs. And there are definitely
19 concerns about these things because while about three-
20 quarters of people spend less than $500 a year on health care
21 and they're going to be able to accumulate funds, well, those
22 who are going to -- who are hit with high medical bills are
23 likely to pay more. And that's a reality. And depending on
24 your perspective, you can say, when costs go up we can tax
25 everybody or we can tax the high users. And that depends,

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1 obviously, on your philosophy.
2 Another issue that's been talked about a great deal
3 this morning is information needs. There just is not enough
4 information out there for consumers. And I want to also
5 point out that we have to remember that at least 25 percent
6 of people in this country are medically illiterate, and they
7 are going to need a great deal of help, and that information
8 that is relevant and useful to a 45-year-old college
9 graduate, woman college graduate, may not be at all useful to
10 a 20-year-old Hispanic mother of three who doesn't speak
11 English. And so we have to remember that there's got to be
12 ways of getting information to people that is useful and
13 meaningful.
14 I really want to -- what I would like to talk about
15 a little bit is a project that is related to this in the
16 sense that we have had strong validation that this is a real
17 movement that is not the final form of health care, but it is
18 a major move in the right direction.
19 Wye River has been involved in the past year in a
20 project where we have gone around the country to ten
21 different carefully selected communities and conducted
22 listening sessions with leaders, health care leaders,
23 consumer advocates, hospital CEOs, employers, health plan
24 execs, the entire spectrum, 25 in a room, with the White
25 House and with Democratic support, Progressive Policy

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1 Institute, Senator Lieberman's office, and so on. So it's a,
2 you know, bipartisan, multi-stakeholder initiative to talk
3 about the values and principles that should drive health
4 policy. David Lansky participated in our Portland meeting.
5 The first thing I want to -- the first comment I
6 want to make about that is that there's much more agreement
7 than difference when you get out of Washington and you get
8 into communities. These leaders really want to roll their
9 sleeves up and work together to move this health care system
10 in the right direction.
11 There is broad support from liberals and
12 conservatives toward a patient-directed health care system.
13 But there are some caveats. From the perspective of the
14 liberal, they'll say, that's all well and good to talk about
15 personal responsibility. But remember that 25 percent who
16 need extra help. And also, it only is going to work if it
17 comes with system accountability, telling the patient you've
18 got to take care of yourself and you've got to be responsible
19 for your health behaviors. So that's very, very important.
20 The other thing that's very, very heartening to me
21 is that the most conservative elements in the meetings are
22 saying that the world's richest country cannot afford to have
23 40 million people in this country who do not have access to
24 health care. And, of course, we all know insurance doesn't
25 equal access, and getting care in the emergency room doesn't

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1 equal coverage. So this has to be balanced.
2 We also have heard in our meetings at every single
3 community across the country that if there's one thing that
4 we need to do, we need to start a dialogue that we've never
5 had in this country. And that is, what is it we want from
6 our health and health care system? We haven't even defined
7 health and health care. And how do we talk about whether
8 we're spending too much or too little or what kind of system
9 we should have when we don't know what we want out of the
10 system? So that's something that they feel very strongly.
11 And as we move forward into phase two of this
12 project, we have been told by both the White House,
13 Lieberman's office, the Food & Drug Administration, HRSA, are
14 all interested in getting engaged more in these dialogues.
15 We have listened to consumers about how do we
16 create a system that's focused on patients, that serves
17 patients? And as David put it so beautifully, it's about
18 relationships and not transactions. So I think that that's a
19 very, very critical issue.
20 Some of the barriers. Well, you've all alluded to
21 the financial incentives. Every one of these leaders, even
22 when you're talking about values and principles, will say, we
23 have the most pathetically malaligned incentives across the
24 board and we've got to start from square one and figure out
25 how do we create the incentives for people to be healthy and

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1 take responsibility, for providers to educate patients, and
2 to provide preventive care services? Because all of the
3 dollars being spent on end-of-life care or unnecessary
4 technology could do an awful lot. And that's why I
5 challenged Newt this morning about, okay, we can't wait for
6 all that money to be freed up. We need to make an investment
7 now. And I think he gave a good answer.
8 The biggest barrier, though, I think, is culture,
9 whether it's the culture of individuals or the culture of
10 organizations. The physician culture has been slammed
11 several times today, and I'm probably more guilty as a
12 physician of slamming the physician culture than many non-
13 physicians.
14 But the reality is, this is not a cottage industry
15 any more. It has to move away from being a cottage industry.
16 And in order to do that, physicians have got to take
17 responsibility for thinking totally differently about what
18 their role is. They have got to work as part of a team. And
19 doctors don't do that very well. So that's another barrier.
20 And I've already alluded to the issue on
21 information. We have to have multiple ways of providing
22 information. And in part, it's not just technology. There's
23 going to be millions in this country who'll never had access
24 to technology. So we need to find other ways of creating
25 outreach into these communities, these diverse communities in

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1 these rural areas, whether it's through community health
2 workers or lay educators. And this is kind of like, it's
3 very low tech but it's high touch, and people love it. And
4 we need to build that into what we're thinking about.
5 So I'm not sure -- you know, when I was invited to
6 come and talk to the Department of Justice, I went, oh, God.
7 I spent six years as a corporate medical director. I like to
8 steer clear of lawyers. But the reality is, I'm sure there
9 is a role, and certainly around creating the framework for a
10 system where communities can then build their own local
11 solutions. Because that is another theme that we hear loudly
12 from communities, is we need to be able to work together to
13 find the answers. But we need the support of the federal
14 government, whether it's with regard to that structure or
15 with regard to resources. But they want to find their own
16 solutions.
17 And I'm just going to stop there and let that go.
18 But I thought that would be something that would be a little
19 different twist on what's being talked about, but clearly the
20 things that you are saying about patient-directed health care
21 and the movement is definitely borne out in the communities.
22 DR. HYMAN: Thank you.
23 Finally, batting cleanup, Greg Kelly.
24 MR. KELLY: Thank you, David. First of all, I want
25 to commend David Hyman and the FTC for holding such an

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1 ambitious set of hearings this year talking about a wide
2 range of topics, 30 hearings on the competition in the health
3 care marketplace. I think it's very, very important.
4 Today I'm going to touch on -- a little bit on what
5 the Speaker, Dr. Greenberg, and David Hyman brought up
6 regarding adverse selection and some of the problems in
7 pooling of insurance and how we can move forward there. And
8 given the questions posed today, I'll focus on how a specific
9 regulation, that of guaranteed issue, affects costs and
10 availability of health care coverage in the marketplace.
11 Obviously, in our complex health care system, there
12 are many factors that drive up the cost of health care
13 coverage. But even so, there's ample empirical evidence that
14 isolates and displays the dramatic effects of one particular
15 regulation, guaranteed issue.
16 Perhaps the easiest way to take a look at that is
17 to look at the three different market segments. We have a
18 private insurance market system that is segmented into three
19 very distinct categories, the large group market, the small
20 group market, and the individual market.
21 I'm not going to spend a lot of time talking about
22 the large group market because it's the least regulated of
23 the three. There are no federal guaranteed issue
24 requirements on insurers to issue plans to large groups.
25 Insurance is widely available. There tends to be a choice of

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1 coverage. And so the focus of where I'm going to be looking
2 at is the federal and state regulations in the small group
3 and individual market.
4 The individual market, which accounts for about 10
5 percent of private coverage, is primarily regulated by the
6 states, while the small group market, which accounts for
7 about 25 percent of private coverage, is regulated by both
8 the state and the federal government.
9 Given these different regulatory environments, we
10 have guaranteed issue imposed by the states in certain
11 individual markets while guaranteed issue is opposed across
12 the board by the federal government on the entire small group
13 market?
14 First of all, what is guaranteed issue? Guaranteed
15 issue is a law that requires insurers to accept everyone who
16 applies for health insurance, regardless of their health
17 condition. Under guaranteed issue, an individual who has no
18 health insurance and becomes ill may apply for private
19 insurance coverage and must be accepted. This is comparable
20 to allowing a person to purchase auto insurance for their
21 accident after being involved in a car wreck.
22 When people know they can get insurance when
23 they're sick, they'll forego it when they're healthy.
24 Younger and healthier people cancel their policies. The
25 health insurance pool gets smaller and sicker. Escalating

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1 premiums occur, and eventually the pool is left with just the
2 sickest and most -- and people with the most expensive health
3 care needs.
4 We eventually reach a point where many insurers are
5 no longer able to offer a product under such chaotic
6 conditions. The end results are: inordinately high prices
7 for insurance; considerably reduced choices for coverage; a
8 greater number of uninsured; and ultimately, a health
9 insurance market where few, if any, insurers are offering
10 coverage.
11 I want to look at both the states' individual
12 market and what's happening on the state level as well as
13 what's happening across the board in the small group market.
14 Let's look at the state examples first.
15 States such as New Jersey, Maine, and New York have
16 passed guaranteed issue laws in the 1990s, with disastrous
17 consequences on competition and affordability. Rates have
18 increased and insurers have left these states.
19 For example, a family living in Portland, Maine
20 pays a minimum of $1,176 a month for a $500 deductible PPO
21 policy. A similar family living in Trenton, New Jersey would
22 pay $3,576 a month for a similar plan. In New York, you
23 cannot even purchase a PPO or indemnity plan, and if you live
24 in Ithaca, you have a choice of one plan and it costs $1,113
25 a month.

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1 Conversely, in states without a guaranteed issue
2 law, health insurance is much more affordable. Average
3 families in Arlington, Virginia, Pittsburgh, Pennsylvania,
4 and Madison, Wisconsin can purchase a $500 deductible PPO
5 policy for $410, $461, and $335 a month respectively. And
6 there tend to be a wider range of coverage choices and
7 options.
8 The bottom line is that no state has implemented
9 blanket guaranteed issue without a loss of consumer choices
10 and a dramatic increase in price. So it's pretty easy to
11 compare the wide range of affordable products available in
12 non-guaranteed issue states with the limited choice and
13 expensive coverage options, or non-options, should I say, in
14 guaranteed issue states.
15 Now I'd like to look at the small group market.
16 Remember that the small group market is a hybrid where we
17 have a mixture of both federal and state regulations. In
18 1996, HIPAA imposed guaranteed issue across the board in the
19 small group market, and almost all states have followed with
20 restrictions on the price that insurers can charge small
21 groups.
22 This means that insurers must make all plans
23 available to any small employer that applies for coverage.
24 And insurers are often limited in the variance on what they
25 can charge employers with different characteristics.

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1 Like in the individual market, guaranteed issue
2 destroys the basic risk classifications of insurance. Very
3 small employers, especially baby groups of ten and under,
4 will wait to obtain coverage until one of their employees
5 need it, or under guaranteed issue other employers will
6 switch to a plan with more generous benefits when one of
7 their employees need it. These adverse selection problems
8 cause healthier groups to leave the market, prices to
9 skyrocket, and insurers to stop offering coverage.
10 Small group guaranteed issue has impacted the cost
11 and availability of coverage nationwide. Mark Littow, an
12 actuary with Milliman USA, who has priced small group
13 products and premiums for over 27 years, recently provided
14 congressional testimony on the abysmal shape of the small
15 group market.
16 Mr. Littow has estimated that the small group is
17 poor to questionable in 35 out of the 50 states. He
18 determines this ranking based upon an environment where
19 losses exist for almost all group insurance companies, even
20 with prudent management.
21 He attributes much of the deteriorating market to
22 the federal guaranteed issue laws and the state rating
23 restriction laws. He submits that the small group market is
24 only viable today in about ten states.
25 With these losses, evidence clearly shows that the

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1 carriers are exiting the market in droves. The General
2 Accounting Office recently completed a study that showed a
3 disturbing market concentration in the small group market,
4 with the top five carriers controlling more than 75 percent
5 of the market share in the majority of the states that the
6 GAO studied.
7 Healthier groups are dropping coverage because of
8 escalating prices. For example, in Colorado, the state
9 division of insurance has reported a loss of 14,663 small
10 groups, covering more than 125,000 individuals, in just the
11 last two years. The state attributes much of this problem
12 due to the guaranteed issue requirements in the small group
13 market. Healthier groups are just leaving.
14 While the increases in health insurance costs and
15 the loss observe coverage options do not occur in a vacuum,
16 guaranteed issue is the one regulation where you can see the
17 distinct impact on the cost and availability of coverage.
18 Given that guaranteed issue is nationwide in the
19 small group market and limited only to certain states in the
20 individual market, guaranteed issue is one of the
21 contributing reasons why the small group market is more
22 expensive than the individual market.
23 Contrary to popular conception, the small group
24 market is, on average, much more expensive than the
25 individual market. For example, even though coverage is not

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1 quite as comprehensive always in the individual market as it
2 is in the employer-based market, policies sold through e-
3 health insurance are on average 25 percent higher for small
4 business members than they are for individual members, and
5 this is done in a state-by-state comparison.
6 So we get into a tricky situation. Results show
7 that if you make insurance available to everyone, it's simply
8 not going to be affordable. And if you make it widely
9 affordable, it's not going to be available to absolutely
10 everyone.
11 So if we want affordable and accessible policies,
12 instead of regulating 100 percent of the market, regulations
13 or programs should be designed to address the 1 to 2 percent
14 that cannot obtain coverage. For example, high risk pools
15 are such programs that allow the market to work for the 98
16 percent of the population who can obtain coverage while
17 providing a strong and viable safety net to cover the sick.
18 States with the least regulatory burden
19 successfully rely on high risk pools to cover their
20 uninsurables, and have affordable health insurance for the
21 rest of the population.
22 Since the effects of guaranteed issue, regulations
23 on the cost and availability of coverage can be pronounced
24 and identified. These regulations can often be repealed.
25 For example, on the state level, Kentucky, Washington, and

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1 New Hampshire repealed their guaranteed issue laws recently
2 after these laws caused a complete dearth of health insurance
3 options in their states.
4 With the deteriorating state of the small group
5 market, Congressman Mike Pence is planning on introducing
6 legislation to repeal guaranteed issue in the small group
7 market.
8 The clearcut effects of guaranteed issue on
9 competition, price, and availability of coverage should be
10 helpful to policy-makers as they revise these laws, and I
11 hope that this examination is helpful to the participants in
12 this room as we look at the effects of regulation and
13 competition in our health care marketplace. Thank you.
14 DR. HYMAN: Thank you. Well, everybody has done a
15 great job of staying on time. You're all very public
16 spirited. And so we've got about 20 to 25 minutes left to
17 have a panel discussion about these various presentations.
18 Let me just start, and people can feel free to ask
19 questions themselves of other panelists if they want. But
20 I'll exercise the speaker's privilege of filling the
21 uncomfortable silence that might otherwise result if I just
22 threw it out at the start and just ask the following
23 question.
24 There's been a lot of discussion today and in past
25 hearings about the extraordinary saliency when it's time to

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1 actually receive health care of the need for information, of
2 picking the right provider, of deciding whether the
3 recommendations that you're getting are sensible ones, and
4 the difficulties of obtaining information about that.
5 But the options that you have and who you get to
6 see are tremendously influenced by the nature of your
7 coverage. And the saliency of the coverage tradeoffs, it
8 seems to me, is a different matter entirely.
9 So I guess the question I would ask is how do you
10 make the coverage tradeoffs more salient to people? Is
11 consumer-directed health care a way of finessing that by
12 putting the burden on the patient to make those decisions at
13 the time they receive care? And is it really realistic to
14 expect people to pay close attention to their health
15 insurance when they only get to choose once a year and it's
16 aggregated for them, for many people, by employers? So
17 that's, I think, a range of questions we can start with.
18 Helen?
19 MS. DARLING: Well, I'd like to take that one on.
20 Actually, I'd like to take on your assumption.
21 DR. HYMAN: Go right ahead. Then it's a really
22 good question.
23 MS. DARLING: Yes. Because actually, most people
24 have choice. I mean, if you look at the numbers of -- you
25 know, you look at visits by coverage, between the fact that

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1 more than half of the employees are in PPOs. And usually
2 there's not a lot of constraint. There's some, but not a
3 lot. And you have -- a lot of the health care is under
4 Medicare and Medicaid, where with a few state exceptions,
5 it's still pretty wide open.
6 So actually, I almost wish it were the coverage
7 because that's easier to manipulate and do something about
8 than it is to deal with the lack of information when you're
9 ready to make a decision.
10 There may be some challenges on particularly kind
11 of obscure problems where research and experimental treatment
12 is the only thing that's available. But the vast majority of
13 care in this country is not that, and it is covered and you
14 do have lots of choices, but you don't have the information
15 that -- some of the things that David talked about.
16 So the pressure ought to be on that point, it seems
17 to me.
18 DR. HYMAN: Marcia?
19 DR. COMSTOCK: Some people only define consumer-
20 directed or patient-directed health care when there is
21 actually a decision made at the point of service as opposed
22 to just once a year. Because the reality is, under a
23 cafeteria plan that exists today, you can say, well, that's
24 consumer-directed health care.
25 But you're not incentivizing, thinking through

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1 decisions actually at the very time. Same thing in the
2 pharmaceutical business. I mean, if at the point of
3 purchasing something you have coinsurance and you make that
4 decision, as opposed to later on getting a bill for whatever
5 it is, you're not really going to drive good decision-making.
6 A couple thoughts. One, when people are really
7 sick, that is the great equalizer of everything. They
8 want -- they're not in a position, really, to make major
9 decisions. But assuming that you have some kind of a
10 consumer-directed plan where you have a high deductible
11 policy that's pretty broad and that you can basically go to
12 whomever you really want, the decision-making, as you say,
13 it's really around -- you're trying to drive the decision-
14 making toward that discretionary kind of care, not toward
15 those critical kinds of things.
16 And the other thing that I find quite interesting
17 is that almost by definition, quality is incompatible with
18 complete choice in the sense that every doctor is not
19 equivalent. I mean, you know from the Dartmouth Atlas and
20 from all the other work that's done.
21 So until you really have got the kind of
22 information for people to make decisions around serious
23 illness or whatever in terms of where they want to go, it's
24 kind of almost funny that people want complete choice, but
25 then that's opening you up to virtually any level of quality

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1 of care.
2 MR. YOUNG: No, I agree. I mean, I think we have
3 to be careful, though, and make sure we understand that there
4 are kind of exceptions to every situation.
5 And just as we have exceptions to the fact that not
6 everybody is going to be able to use the same level of health
7 care information, the other exception is that under the
8 current system, there is a need for, in the employer
9 marketplace, a claim intermediary, whether it's a Blue Cross
10 or an insurance company, but some sort of claim intermediary,
11 whether it's an insured plan or a self-insured plan.
12 And most employees -- most employers are relying on
13 that claim intermediary to not just process claims, but to
14 contract with providers and to provide information to the
15 employees and do all those things. And what happens is then
16 the employee is kind of held to whatever that claim
17 intermediary can provide.
18 And we have -- and I know you talked about this in
19 prior sessions -- but we have areas of this country, fairly
20 large areas of this country, where one claim intermediary has
21 a stranglehold on that geographic market because the network
22 discounts they have with their providers are so great
23 compared to everyone else that it precludes any type of --
24 any other claim intermediary or any managed care
25 organization, whatever you want to call them, coming into the

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1 marketplace.
2 And if that claim intermediary says, I don't
3 believe in consumer-driven plans; I don't believe, you know,
4 in providing quality health care information to employees,
5 then you're stuck unless the employer circumvents the whole
6 system and overlays something on top of it, which large
7 employers may be inclined to do but small employers won't.
8 So, you know, there are a number of claim
9 intermediaries, without taking shots, that really have a lot
10 vested in keeping the status quo, you know. And so you can
11 talk all -- you know, consumer-driven will work for 60, 70
12 percent of the market, but 30 or 40 percent of the market
13 will not have access to it for a number of years, not from
14 their own choosing.
15 DR. HYMAN: Well, you'll be pleased to know that
16 the claim intermediaries were in here complaining about the
17 providers insisting that the status quo is preferable. So
18 there's a high degree of finger-pointing, certainly, in this
19 industry.
20 MS. DARLING: Everybody is a vested interest,
21 almost, I think.
22 DR. HYMAN: David?
23 DR. LANSKY: Another angle on the same issue. I
24 think this transition, the bridge between the coverage and
25 the care, that creates this tension.

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1 I think an interesting thing is going on where
2 those who are -- whether it's the intermediary or the payor
3 is creating transparency around the criteria of network
4 participation. So Leapfrog, I think, was an example where
5 they were trying to say you -- in theory, Leapfrog said, we,
6 the purchaser, will continue to do business with you, the
7 plan, if you in turn prefer -- do preferential business with
8 high safety institutions that adopt certain practices.
9 And they supported that, with an employee education
10 program to help the employee recognize, here's where care is
11 superior. And I'm part of a chain of relationships with my
12 employer, with the plan, and in a sense with Leapfrog as a
13 policy organization, that is trying to help me seek out and
14 get the safer quality care.
15 I think there's a series of initiatives in which
16 the payor or the intermediary can either give visibility to
17 or money to entities which adopt elements of superior care.
18 And so whether it's transparency or pay for performance,
19 either way it's a way to try to make the system work better
20 without directly managing care with a heavy hand.
21 DR. COMSTOCK: Actually, that just reminded me of
22 something I wanted to say earlier that the Speaker talked
23 about, and that is, whose job is it and on whom should we
24 rely to make certain that data are standardized and things
25 like that?

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1 And I would be very concerned if that became a
2 governmental role, except as a purchaser. And to the extent
3 that CMS and other powerful buyers in the system as a
4 purchaser, as a condition of participation, insist on
5 information being collected and analyzed and everything done
6 in a standardized way, that's terrific.
7 But the organization or organizations that decide
8 what those measures are going to be, I believe, has to be
9 outside of government, and for a couple of reasons. First,
10 there's no evidence that the government -- the government has
11 actually essentially owned the health system about 40 to 50
12 percent since 1965. They have enormous power. They have
13 never used it for those purposes. So counting on them at
14 this point to be our guide in that regard is not a good idea.
15 It's certainly not going to get us anything before I'm dead
16 in my grave, I'm sure.
17 The second thing is that a lot of these things, as
18 David knows because his foundation has done a lot of work and
19 I've been involved with NCQA's committee on performance
20 measurement, that you need a lot of people sitting around a
21 table working as fast as possible with a nimble approach to
22 it to get these things right and to keep making them better
23 and better.
24 And when you have new information, you do a pilot.
25 You can -- you know, FACCT and other organizations can

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1 decide, okay, it's not going to be this. We just found this
2 doesn't work out in Colorado, and so we're not going to do
3 it.
4 So having the organizations, whatever -- you know,
5 the private sector arm and how they're put together is less
6 important than there are people who have that as their
7 responsibility, organizations. They know what they're doing.
8 They're able and willing to test. They're able and willing
9 to bring from the best and the brightest whatever the issue
10 might be, come up with the best measures, pilot them, test
11 them, fine-tune them, and then they can be picked up by the
12 larger purchasers, including the government and be driven
13 that way. But if we try to put it in the government, it just
14 won't happen with the kind of speed. The other thing is that
15 once it gets in the government, it is so vulnerable to
16 pressures from narrow special interests who have no interest
17 in seeing progress in these areas.
18 DR. HYMAN: David?
19 DR. GREENBERG: All right. Let's take the
20 government out of that for a little bit and put it in the
21 third party payor. And I remember when we used to have HMOs,
22 and I remember when women on normal deliveries used to be in
23 the hospital for four and five days, and people having
24 surgery used to come one or two nights before, and stayed for
25 much longer than they are now.

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1 That wasn't my doing as a consumer or patient, or
2 the person next door's doing as a consumer or patient. I
3 don't really know how long a person has to be in the hospital
4 after a normal delivery, after a certain kind of surgery.
5 How many days, really, does that person have to be there
6 before the actual surgery?
7 That was done by a third party payor who has
8 thousands and thousands of patients, perhaps experts on the
9 team, who could make such decisions, provide information to
10 that patient. Gee, a normal delivery, two days may be
11 enough.
12 Okay. We can always debate that the managed care
13 firms overstep their bounds, that they have other incentives
14 to contain cost and only those incentives. But I would
15 maintain that I just can't do it. I can't do it as a patient
16 right there before the surgery in the hospital, even a couple
17 days before the surgery.
18 And we have these experts as managed care firms. I
19 still come back to perhaps my earlier point: Without the
20 government interference, Helen, let's have those third
21 parties -- when we pick them on a yearly basis, we decide
22 ourselves, based on a variety of information, brand name,
23 signaling, however you want to deal with it, the same way we
24 pick automobiles and other difficult -- we have so many
25 difficult products that we buy today, cell phones, whatever.

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1 Somehow, the market works, a little bit imperfectly, but the
2 market works.
3 In the comfort of our living room, picking a health
4 care plan based on price, quality, brand name, signaling --
5 and I think that's the best we could do. I mean, you could
6 find things on the Web that says, this cures cancer, and go
7 another website and it says, this does not cure cancer.
8 DR. HYMAN: And we do enforcement on some of the
9 first category for fraud.
10 DR. GREENBERG: But anyway, I go back to the
11 comfort of the living room, deciding on the third party plan,
12 and creating incentives for those third parties to provide
13 health care cost containment as well as quality of care.
14 DR. HYMAN: Let me follow up on a point that got
15 made earlier and see if we can push this in a slightly
16 different direction because we could use all of our time just
17 to talk on this one.
18 On the issue of quality, David asked the Speaker a
19 question that I thought was quite insightful, which was, you
20 know, there's -- basically, do you fragment or do you
21 aggregate? And there are virtues and costs with both of
22 those strategies.
23 Aggregation allows you to sort of leverage your
24 purchasing power for both price and quality, if you choose.
25 And I guess the challenge is how do we think about these new

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1 arrangements for benefit design in the context of trying to
2 deal with the problems of integration and quality? And given
3 the information that we have, how confident can we be that
4 this is going to head off in the right direction?
5 MS. DARLING: I'm not sure I understand the
6 question.
7 DR. HYMAN: All right. I didn't ask it very well,
8 then. Do we -- when we disaggregate purchasing pools by
9 essentially open-ended choice and by allowing people to make
10 their own decisions as to who they go to and how much to pay,
11 it makes it much harder for employers to do things like
12 Leapfrog because they can't selectively contract, okay,
13 unless you're going to do it with everyone, and to impose
14 minimum quality standards.
15 So I guess I'm really just trying to put a sharper
16 point on David's question.
17 MS. DARLING: Well, but they could -- you can do it
18 two ways. You can give people lots of choice at the point of
19 care but still have a plan who administers.
20 The other thing is that you could provide
21 information that's especially penetrating and useful about
22 the providers. And you are allowing the employee or their
23 dependents or their retirees to choose, but with information,
24 just as they do now -- again, David's example. They suddenly
25 have information about different hospitals.

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1 Your pressure comes from -- and by the way, I've
2 actually seen this happen. The pressure comes from the fact
3 that the hospital goes on whatever it is, the website or
4 whatever's published, and says, oh, my heavens. We are like
5 number seven in this market. This is really bad news.
6 And we know -- in fact, the research on even the
7 use of quality metrics and plans was less used by consumers,
8 but it sure was used by providers. And I, again having been
9 on a hospital board, actually, all my adult life, it seems, I
10 can tell you that we pay a lot of attention to reports, even
11 those in these kind of fluffy magazines, using what many of
12 us would consider kind of questionable data, although it's
13 not terribly wrong. But it's just -- you know, you're not
14 totally comfortable with it.
15 But you will have hospital boards saying, what is
16 this? You know, we're number six in this market? I mean,
17 heads roll inside organizations when there's public
18 information about how something stands out.
19 So the data will drive at least the hospitals and
20 providers to change their behavior independent of whether or
21 not even the employees change their behavior because of it.
22 MR. YOUNG: I think one of the things -- one of the
23 criteria that employees sometimes use to determine quality is
24 if they are in a PPO or any kind of managed care plan is
25 their assumption is that the providers in the network are

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1 better providers, which in most cases probably has very
2 little to do with quality and has a lot more to do with the
3 contracting, you know, possibility of contracting between
4 that provider and that claim intermediary.
5 So you have to be very careful. I mean, there are
6 many times -- and this is where I think we have to have
7 pressure on -- and I keep coming back to these claim
8 intermediaries -- to if they're going to contract, if we're
9 going to have a structure where somebody is buying services
10 at a unit price discount, that some of -- that the criteria
11 for making the decisions of who those networks are has to
12 much more involve quality.
13 DR. COMSTOCK: I mean, that's all true. Just a
14 couple issues. One is we all know that the vast majority of
15 health care has not definitive best practice. I mean, so
16 much of what is done in health care does not have an
17 absolute, this is the right thing and the wrong thing.
18 Yes, if you have colon cancer, you need surgery,
19 whether to cure it or to keep you from being obstructed. But
20 for many other things, there is no definitive answer. The
21 real issue is: is the physician engaging with the patient in
22 a shared decision-making process around their values and
23 what's important for them?
24 But I wanted to make the comment -- you know, you
25 said the hospitals will respond to information. I know one

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1 of our supporting organizations is Jack Wennburg's group up
2 at Dartmouth. And they've done some wonderful work that
3 showed that, you know, physicians don't like to be measured a
4 whole lot. But they have a way of doing it that's
5 collaborative and collegial.
6 And what they do, for example, in the northern New
7 England cardiovascular disease project is physicians looked
8 at each others' processes of care and they began talking
9 about what did they do and what results did they get. And
10 they immediately responded. Nobody had to hit them over the
11 head with it.
12 So I think that getting back to the importance of
13 culture when it comes to any of these things related, you
14 know, to delivery changes. You've got to recognize the
15 culture. The hammer over the head doesn't work well with
16 physicians but other kinds of methodologies do work well with
17 physicians. So it's just a little bit of a flip side.
18 And then I just think we just have to remember that
19 quality metrics are great, but there's only so many things
20 that you can measure definitively.
21 I thought your question to Newt was different. I
22 thought -- was it different? Was your question --
23 MR. LANSKY: It was a very subtle question. Go
24 ahead. I'd like to her your interpretation.
25 DR. COMSTOCK: I thought you were asking a very,

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1 very different question about is it more appropriate when
2 you're looking at quality: to look at quality of the entire
3 process of care, like around the chronic disease and the
4 outcome of that, versus a particular transactional kind of
5 metric. So I guess I misunderstood your question.
6 MR. LANSKY: No. I don't think you misunderstood
7 it.
8 DR. HYMAN: I did.
9 MR. LANSKY: No. I was actively asking two
10 questions at once.
11 DR. COMSTOCK: Well, you're very clever. I got one
12 of them, at least.
13 MR. LANSKY: Because I think they are -- I
14 personally think they are related problems to solve, that the
15 good managed care model which the original theorists
16 advocated for included both integration of care, particularly
17 in support of both preventative health maintenance, and
18 chronic care.
19 And that still seems to me to be a hallmark of
20 those kind of care models and tying incentives to the
21 successful performance across that spectrum. And that, in
22 turn, built the kind of teams you both just spoke about in
23 terms of internal recognition of quality rewards and
24 opportunities.
25 And I'm concerned that the current trends we're all

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1 talking about today may go in a different direction and also
2 create a technical problem that measurement becomes very
3 difficult if we fragment. And then access to information
4 becomes very difficult if we have a high fragmented system.
5 So I was concerned about both impulses.
6 I wanted to answer your question as well, David, or
7 start a piece of it. I think most of us in this field have
8 been fairly naive about thinking about the solutions, and we
9 need a new way of thinking that is more subtle.
10 We've got a system we're talking about here in a
11 room among ourselves that accounts for a sixth of the
12 national economy, millions and millions of peoples'
13 livelihoods, enormously complex. It's not a -- we use words
14 like system and managed care and chronic diseases if we're
15 talking about a thing that we can implement to address. And
16 we just can't.
17 So we have to -- we need some other way of
18 recognizing that it's a very layered problem. I think it is
19 more achievable for federal agencies, the regulatory process,
20 the legislative process, to deal with what we would call
21 infrastructure, making sure that the highways are there and
22 the railroad tracks are the right gauge and that the
23 underlying structure is in place that would permit us to do
24 all the things we've talked about today, without yet saying
25 what those things are.

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1 And we've gotten all of us a little bit ahead of
2 ourselves in some of the work we've done the last ten years,
3 fifteen years, in thinking we knew what some of the solutions
4 were rather than building pipes and paving roads that would
5 let us at least drive around a little bit without saying
6 where we drive or what kind of cars we drive in.
7 So I would encourage you -- and I think the
8 SEC/FASB model that was talked about a lot ten years ago and
9 underlay the President's advisory commission report but was
10 never implemented remains a very important model to think
11 about carefully.
12 In Helen's point, you know, what does the FASB part
13 of that need to look like, in which you have an open dialogue
14 with private sector interests, very involved? And what does
15 the heavy hand of government need to look like, which asserts
16 specific requirements upon the entire regulated industry,
17 having had that input and standard-setting done by the
18 private sector?
19 I am more concerned than Helen about allowing the
20 private self-regulating model to continue because I think
21 we've had some experience where, in both the case of the
22 Joint Commission and NCQA, a relatively voluntary
23 participation leads to under-participation and whole sectors
24 of the system not being involved at all if they don't choose
25 to. And that is a disservice to many patients interest the

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1 system.
2 FEHB, for example, still has 70 percent of the
3 employees in fee-for-service models. Therefore, in a sense,
4 those who choose the managed care models or the managed care
5 plans are punished for participating in NCQA and in doing the
6 right things.
7 So I think there has to be some government
8 standard-setting to ensure full participation and that the
9 public really has meaningful information to make decisions.
10 But where to draw that line is just a very difficult problem.
11 DR. HYMAN: Let me follow up on that point because
12 so far we've talked about information at great length. We've
13 talked about government purchasing a little bit. But we
14 haven't talked about what David nicely called the heavy hand
15 of government, the regulation, direct regulation. And to the
16 extent we have, it's been concerns expressed about guaranteed
17 issue, concerns expressed about the tax treatment.
18 And let me use as a springboard David's slide that
19 you showed about the number of institutions in New York state
20 that performed more than a minimum number of a particular
21 procedure. And it really doesn't matter which procedure; you
22 see the same patterns in every state and for every procedure.
23 So the question is, is there a role for government
24 directly in dealing with that? Is that a health planning
25 sort of thing? Is that, you can't do this procedure unless

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1 you have a minimum amount? Or do we want to instead
2 designate centers of excellence? And how do we guard against
3 the kinds of risks that Greg has talked about in the context
4 of guaranteed issue?
5 MS. DARLING: Well, I'll be happy to jump in on
6 that. A couple of things. The first study I did at the
7 Institute of Medicine was of the health planning certificate
8 of need program some years ago, and I can tell you that when
9 we were done, that even the most liberal people on the
10 committee that love that stuff and believe in it in their
11 souls concluded that it will never work in this country for a
12 whole bunch of reasons, which I could do a whole session on.
13 DR. HYMAN: We'll have you back.
14 MS. DARLING: Yes. Okay. But that was actually
15 when it was a lot easier. I mean, we were smaller by quite a
16 bit. We had a lot fewer hospitals. We had relatively few
17 surgery centers. And even at that, it just was -- and
18 actually, there was more of a belief in those days that the
19 government had a role.
20 We had PRSO programs developed. You know, there
21 was a lot going on. A lot of people even thought we had
22 national health insurance around the corner. So it was a
23 very different era. But even then, with everything much more
24 compatible with the concept, it was generally an utter
25 failure, and actually left a lot of people really turned off

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1 at the idea for the next 20 years.
2 Somehow, the government can play a role that is
3 both a combination of a carrot and standard-setting at a
4 minimum, but the concern is that it will always be the least
5 common denominator. If you look at every other program like
6 it and everything that's been done -- and I was a senate
7 staffer for a while, and among other things, I dealt with all
8 these issues from a senator's office.
9 And there's just nothing like getting 500 letters
10 from all the old ladies in a small town about a doctor who
11 has been demonstrated to have been absolutely fraudulent,
12 doing terrible things like, you know, charging Medicare for
13 30 colonoscopies a day or something like that -- I mean,
14 blatant, blatant, blatant fraud and errors, and yet the town
15 loved him.
16 So that's when you've got all the evidence.
17 Ninety-nine percent of the time, you don't have that much
18 evidence, and there are all these grey areas. And the second
19 you have grey areas, then as long as the government is doing
20 it, there will be somebody who says, you can't have the heavy
21 hand of government doing this, so a lot of really bad things
22 happen.
23 DR. GREENBERG: At the same time, David, I think
24 there may be a role, a continued role, for the FTC, is when
25 the private sector tries to regulate itself. The AMA in the

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1 early '70s and prior to that refused to allow physicians to
2 advertise or disseminate information, and in fact the FTC did
3 bring a case against the AMA, went to the Supreme Court, and
4 the FTC won that case, which submitted that the physicians
5 should be able to advertise.
6 We have something called the Joint Commission on
7 Accreditation of Health care Organizations. I submit this
8 would be another avenue for the FTC to go into. This Joint
9 Commission has acted like a cartel against hospital
10 dissemination of real information on hospitals for as long as
11 its existence, and should go after these people.
12 There have been other sorts of professional groups
13 that perhaps the FTC ought to do something as far as its
14 Section 5, Federal Trade Commission Act. So this might be a
15 role for government because those -- maybe some of these
16 accrediting medical schools or whatever might be examined by
17 the FTC.
18 DR. HYMAN: Greg, you haven't spoken yet.
19 MR. KELLY: Yes. Just that separately on what you
20 were mentioning a little bit earlier, as the Speaker brought
21 up, regulation sometimes is needed. When he goes into
22 McDonald's, he wants to make sure that he is ordering beef.
23 And it's up to the private market to decide how best to
24 deliver that. So some regulation is, of course, needed.
25 And going back to guaranteed issue, if you actually

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1 ensure that 100 percent of the people were participating in
2 the pool, theoretically it could work. But we have a
3 voluntary system in this country. And if you take auto
4 insurance, for example, we have mandates in the auto
5 insurance market and we suspend peoples' licenses.
6 We impound cars. We have financial penalties, and
7 we still have a 14 percent auto insurance uninsurance rate in
8 this country as well, with massive databases to also enforce
9 the law in 47 out of the 50 states.
10 So when you try to go against the very principle of
11 insurance, you have a lot of problems. So my standpoint on
12 the heavy hand of regulation, as you brought up, is that we
13 should be focusing regulations on areas that could work, and
14 looking at situations where government does have a role, like
15 insuring that what we are actually ordering is beef, but not
16 going into areas where we're looking at a situation where, in
17 a voluntary system, people will -- even with a mandate, will
18 not comply with that.
19 MS. DARLING: Let me just make one quick additional
20 point on this.
21 DR. HYMAN: Very quickly.
22 MS. DARLING: You know, it seems to me there's a
23 difference between the government saying we have to have
24 standards in this area and then asking a group to do that.
25 We know, in fact, with a lot of the requirements and

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1 standards, they are far too low, and frequently the voluntary
2 are higher -- you need both. I'm not saying you shouldn't
3 have government doing a certain thing. You need the
4 government to make sure it happens no matter what.
5 But frankly, some of these standards, when you
6 start reading about the latest -- you know, the monkeypox and
7 things like that, I mean, who even thought about letting
8 these creatures into the United States? You need somebody
9 who has got really high standards. The government is
10 always -- as a sort of general body is always going to be
11 more the least common denominator.
12 So if you could combine the authority and possible
13 legislation of government with the actual details being
14 worked out by multi-stakeholder groups, presumably, good ones
15 who -- and if they don't do what they're supposed to do, you
16 could always get it done yourselves.
17 But at least you're more likely to get much better
18 standards, in my judgment, not the chicken guarding the -- I
19 mean, the fox guarding the henhouse, but if you've got a
20 combination of the authority and you have a group of
21 stakeholders that include consumers and others who will drive
22 to a higher standard, that would be the best combination.
23 DR. HYMAN: Well, I think we unfortunately need to
24 stop here. I'd like to thank all of the speakers for their
25 excellent presentations and enthusiastic participation that's

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1 taken us past our authorized time.
2 We're going to reconvene at 2:00, when we'll be
3 discussing information and advertising.
4 (Whereupon, at 12:30 p.m., the hearing was
5 concluded.)
6 * * * * *
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1 A F T E R N O O N S E S S I O N
2 MS. KOHRS: Good afternoon. My name is Cecile
3 Kohrs. I'm with the General Counsel's Office in the Federal
4 Trade Commission. And on behalf of the Federal Trade
5 Commission and the Department of Justice, I'd like to welcome
6 you all here today.
7 We're continuing our hearings on the health care
8 and competition law, and policy. I'd like to particularly
9 thank our distinguished panelists who have taken the time and
10 made the effort to be present today to give us their
11 testimony.
12 To put today's testimony in context, I'd like to
13 let you know this is one of about 30 days of hearings that
14 we've been holding on myriad health care issues. Both the
15 Department of Justice and the Federal Trade Commission share
16 responsibility for enforcing the nation's antitrust laws.
17 But the FTC has the additional mandate of enforcing consumer
18 protection laws.
19 This panel today will allow both agencies to look
20 at an area of key interest to both agencies. The information
21 and advertising issues have played an important role in both
22 aspects of the FTC's enforcement areas.
23 We like to see how players -- that is, providers,
24 hospitals, insurance companies -- should be able to
25 coordinate in order to provide advertising and information to

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1 consumers. And we'd like to see how that information is used
2 by consumers and how it's interpreted.
3 We've already had some hearings on how consumers
4 receive and evaluate the information, and I would commend
5 that testimony to you. It's available on the FTC's website,
6 which is www.ftc.gov.
7 So after that incredibly long setup, I'd like to
8 introduce the panel very briefly and encourage you to pick up
9 the more complete booklet that has the bios of all of the
10 panelists. I'm going to keep this very, very short in the
11 interest of moving things along so that we'll have sufficient
12 time to have a really ample discussion of these issues.
13 I'd like to also ask you all if you would please
14 turn off your cell phones because I'm sure someone is going
15 to be saying something incredibly brilliant and I don't want
16 them to be distracted by anybody's cell phone ringing.
17 I'll introduce the speakers in the order of their
18 presentations. After the presentations go on, we'll take a
19 short break and then at the conclusion of the testimony will
20 have a panel discussion. Everyone will come to the front and
21 we'll be able to have a little bit of a dialogue.
22 First of all, we're going to have Bernie Dana, who
23 has come all the way in from Ohio. I think he's one of the
24 farthest fliers in today. He's an assistant professor of
25 business at Evangel University in Springfield -- I'm sorry,

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1 Springfield, Missouri. Sorry about that.
2 Second of all, we'll have Laura Carabello, who is
3 with CPRi Communications.
4 Following that will be Dr. Thomas Henry Lee of
5 Partners Health care.
6 Following that will be Dr. Douglas Koch, who's come
7 up from Baylor College of Medicine.
8 After that, the shortest trip was made by Richard
9 Kelly, who's representing the Federal Trade Commission. He's
10 an attorney in the Division of Advertising Practices. What
11 is that, sixth floor?
12 MR. KELLY: Third floor.
13 MS. KOHRS: Third floor. Sorry. Even shorter.
14 Following that, we'll have Peter Sfikas, who's
15 representing -- he's with the American Dental Association,
16 will be discussing some of the California Dental Association
17 issues.
18 And then John Gebhart of DoctorQuality.com. He's
19 chairman and CEO. He'll be speaking next.
20 And last will be Helen Darling, who's president of
21 the Washington Business Group on Health. And she'll be here
22 talking about some of the issues that some of the employers
23 in the region are looking at with regard to information and
24 advertising.
25 So I will stop. Mr. Dana?

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1 MR. DANA: Well, as was mentioned, my name is
2 Bernie Dana. I chair the American Health Care Association's
3 quality improvement subcommittee. And I'm representing AHCA
4 today.
5 I'm also, as was stated, an assistant professor of
6 business at Evangel University in Springfield, Missouri. And
7 prior to joining the faculty there two years ago, I spent 28
8 years as a corporate leader and consultant in all segments of
9 the long-term care industry, both nonprofit and for-profit
10 organizations.
11 Equally important to me, and I hope to others, is
12 the fact that I am also a consumer of long-term care
13 services. And I'll be explaining that a little bit later.
14 When we talk about long-term care, we're talking
15 about a dynamic, diverse, and evolving sector of our nation's
16 health care system that refers to many settings, not just
17 institutional settings like nursing homes and assisted living
18 facilities. Yesterday you heard from our sister
19 organization, the National Center for Assisted Living. Today
20 I will focus our nation's system on skilled nursing services.
21 The American Health Care Association represents
22 approximately 11,000 long-term care facilities of both
23 nonprofit and for-profit ownership. Many of these facilities
24 are providing multiple types of services, from post-acute
25 services to special care units for those suffering from

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1 Alzheimer's disease and related dementia.
2 Also, our membership includes a very specialized
3 area of long-term care that provides services to persons with
4 mental retardation and developmental disabilities, called
5 immediate care facilities and group residences.
6 Let's talk a little bit about our customers.
7 Nursing home care is something that most of us are likely to
8 deal with at some point in our lives, but is not a service
9 that very many of us are actively seeking either for
10 ourselves or for any of our loved ones. As a result, many
11 consumers end up not being very educated about the complex
12 issues of long-term care until they actually or suddenly need
13 that service.
14 Now, this was the case for my siblings and me when
15 we were advised that our mother, at age 89, was going to be
16 needing to transfer to a nursing home after a short stay in
17 the hospital. I was miles away in Nebraska at that time, and
18 my sister and my father in Ohio went through two days of
19 unbelievable pressure trying to navigate all of the admission
20 process and choose an appropriate nursing facility.
21 Our consumers do expect long-term care services to
22 continue to evolve and diversify. And we can look forward to
23 even more segmentation of the long-term care marketplace than
24 has already happened simply because our primary customers,
25 the residents and their families, want and demand more

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1 options. Clearly, adaptation to the consumers' needs and
2 wants is a positive trend and challenge for us.
3 Let's talk about the marketplace and how consumers
4 make choices. Any discussion on this subject, particularly
5 consumer choice, competition, advertising -- and remember to
6 flip the thing, excuse me -- and quality in nursing homes
7 must include an understanding of the relationship of
8 government policy to these issues.
9 Health planning policies in the '80s and '90s was
10 based on the concept that limiting the supply and usage of
11 health care services would help control the costs of those
12 services. The federal government provided incentives to
13 states to develop certificate of need laws and regulations
14 designed to limit or reduce the supply of nursing home beds.
15 As a result, consumer choices were limited and
16 nursing home providers were somewhat assured of high
17 occupancy rates. Under these policies, nursing home
18 providers had little incentive to compete for customers based
19 on quality or price.
20 As the cost of nursing homes increased, consumers
21 and public policy-makers began to seek lower-cost
22 alternatives to the highly regulated nursing homes. In
23 response, many states began to shift Medicaid funds to cover
24 payment of assisted living and home health care services for
25 consumers whose care needs were on the lower end of the

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1 spectrum.
2 Even though many states have continued policies
3 that limit the growth of nursing home services, the growth in
4 alternatives over the past ten years has reduced the demand
5 for nursing home services. And that lower demand for nursing
6 home services has reduced occupancy rates, and in many cases,
7 prompting nursing home providers to actively compete for
8 residents.
9 Even within the prevailing paradigm of regulatory
10 compliance, the increased competition has brought a renewed
11 interest in the expectations of the customers and in
12 providing value-added services to them. The lower occupancy
13 rates are once again giving consumers a choice in selecting
14 where they will receive nursing home services when they need
15 it.
16 Another important factor in consumer choice for
17 nursing homes relates to their ability to pay. Medicare and
18 Medicaid programs have become important resources to assist
19 nursing home residents with payment for their care. Medicaid
20 is a state-administered and federally-supplemented program
21 for the poor who can't pay for their own care and have very
22 limited resources. Medicare is a federal health insurance
23 program for people age 65 and over.
24 It's important to note that in both of these
25 programs, they determine the rate that they will pay the

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1 nursing home for the services being provided. The Medicaid
2 rate is usually significantly less than the rates charged to
3 people who pay from their own resources, and in some cases
4 even less than the cost of providing the care.
5 At any one time, approximately 65 percent of the
6 nursing home residents in the United States qualify for
7 Medicaid assistance, and approximately 10 percent of nursing
8 home residents are receiving Medicare assistance. The
9 remaining residents pay from their own financial resources,
10 and a small percentage of residents -- and it's growing --
11 are covered by long-term care insurance.
12 Now, even though the Medicaid and Medicare programs
13 provide payment assistance to many residents, and they also
14 set extensive standards for providers' participation, it is
15 the customers -- again, the families and the resident, both
16 prospective and current, who choose where to receive those
17 services.
18 How are consumers informed about these services?
19 In addition to having a choice of where to go, consumers need
20 appropriate information to make the best choice related to
21 their wants and needs. Nursing home consumers rely on a
22 variety of sources of information.
23 Most nursing facilities do not spend large amounts
24 of resources to mass promote their services. Many rely on a
25 simple brochure, a Yellow Page advertisement, limited media

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1 advertising, a website, and a direct mail newsletter to
2 supplement their efforts to reach potential customers through
3 staff visits with referral agents such as physicians,
4 hospital discharge planners, and social workers for
5 congregate living facilities. They also rely on positive
6 interaction with staff, residents, and families to promote
7 word-of-mouth advertising.
8 Most potential customers will visit a facility or
9 personally observe and learn about the environment of
10 services from a facility staff. Many states severely limit
11 the amount of advertising costs that can be included in a
12 Medicaid cost report from which Medicaid rates are
13 determined. Because of that, many will only allow
14 informational advertisements.
15 Print or media ads usually include the facility's
16 licensure level and may list some of the services or special
17 features of the facility. Few if any facilities make quality
18 claims other than to announce the winning of a quality award
19 or perhaps provide a testimonial from a resident or family
20 member.
21 The American Health Care Association provides free
22 pamphlets for consumers through a toll-free call-in line and
23 the web. And many nursing facilities provide these or
24 similar tools to help educate and clear up common
25 misconceptions.

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1 Generally, the only quantitative information
2 available to consumers about nursing home quality relates to
3 the results of the federal inspections that are conducted
4 annually and whenever there is a complaint. In theory, these
5 unannounced surveys conducted by a team of state regulators
6 are okay, but in practice they are often plagued by surveyor
7 inconsistencies among regions and even within states. It is
8 a subjective process that encourages caregivers to focus on
9 paperwork and compliance with government regulations.
10 By regulatory requirement, consumers can easily
11 access these reports at every nursing home, or they can
12 obtain the reports from the state health department.
13 However, it is important to remember that these reports are
14 not designed for consumer information and they can easily be
15 confusing or misinterpreted.
16 In the 1990s, the Health Care Financing
17 Administration, HCFA, now known as Centers for Medicare and
18 Medicaid Services, CMS, launched the Nursing Home Compare
19 website so that consumers could more easily access
20 comparative information about the federal inspections of
21 nursing homes. The information is arranged to enable the
22 consumer to obtain this information about a single or
23 multiple nursing homes in a market area.
24 CMS continues to support this Nursing Home Compare
25 website as an answer to consumer education and informed

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1 decision-making. As a component of the Nursing Home Quality
2 initiative, which was launched this last year, the site now
3 includes the quarterly reporting of eight standardized
4 quality measures that are intended to provide meaningful
5 insight into nursing care outcomes.
6 Unfortunately, many of the quality measures are
7 flawed in their construction or they simply report
8 demographic characteristics of a nursing home's residents.
9 The measures do little to reflect the respect,
10 responsiveness, living environment, and quality of life that
11 really make a difference in the satisfaction level of nursing
12 home residents and their families. As a result, the
13 information has dubious value in enabling consumers to
14 actually compare and choose a nursing home.
15 I know this to be true from personal experience.
16 There are three nursing homes in the community where my
17 mother needed care six years ago before she passed away. We
18 picked the nursing home that had the fewest deficiencies at
19 their last inspection. In fact, they had zero deficiencies.
20 After Mom was in the nursing home for a week, my
21 sister called me in Nebraska and asked me to come to Ohio
22 because she was upset with the way Mom was being treated. I
23 flew to Ohio immediately, and after all, I, being the
24 executive vice president of a company that owned and operated
25 32 nursing homes in a five-state region, was the expert in

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1 nursing home care for our family.
2 I was appalled and frustrated at the lack of
3 consideration of my mother's needs and preferences simply
4 because of the operating policies. This facility was
5 compliant with the regulations but they didn't listen to the
6 customer very well.
7 What are the solutions? Most consumers don't want
8 confusing clinical statistics or deficiency information.
9 They simply want to know which facilities have the most
10 satisfied residents and families. Until recently, this kind
11 of information has only been available anecdotally.
12 In the last six years, several long-term care
13 provider associations have taken the initiative to
14 quantitatively measure, compile, and publish satisfaction-
15 based information. For example, the three trade associations
16 that represent nursing homes in Michigan have collaborated to
17 both publish and present on the internet a consumer guide to
18 nursing homes.
19 This consumer guide is published every two years
20 and reports the number of inspection citations for each
21 facility, but most importantly, it presents the percentage of
22 families that are satisfied with the facility's services and
23 the percentage that are willing to recommend the facility to
24 others.
25 The American Health Care Association affiliate in

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1 West Virginia publishes a similar consumer guide annually,
2 with the same kind of issues addressed. But they have also
3 added to the report, to the consumer guide, the percentage of
4 staff members who are satisfied with the facility as a good
5 place to work.
6 The various trade associations in Ohio have
7 collaborated with the state health department there to
8 require nursing homes to participate in collecting and
9 reporting on a state-funded website the results of family and
10 resident satisfaction surveys that measure all aspects of the
11 services in addition to overall satisfaction.
12 My dad's nursing home is in Ohio. Of the three
13 facilities in his community, his nursing home has the worst
14 record on the Nursing Home Compare website, but by far the
15 highest family satisfaction rating in Ohio's new consumer
16 guide web report. Interestingly, the nursing home that my
17 mom was in had the lowest family satisfaction rating, despite
18 having the fewest inspection issues.
19 When given a choice, consumers clearly prefer the
20 satisfaction results because they understand them. Nursing
21 home residents are not merely users of services. The nursing
22 home is their home, even their entire world sometimes, a
23 place where relationships and quality of life assume
24 paramount importance.
25 As a result, the focus of long-term care must not

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1 only be on the nursing care outcomes, it must also include
2 quality of life issues such as respect, dignity, and resident
3 choice.
4 Research conducted by Dr. Vivian Tellis-Nayak in
5 1999 analyzed satisfaction survey results of 11,715 families
6 of residents in 504 nursing homes across 26 states. The
7 research shows that family and staff satisfaction are
8 compelling measures of a nursing home's overall quality and
9 performance.
10 Family satisfaction is a window to that quality of
11 care that residents receive, to the stability and devotion of
12 the staff, to the way state surveys turn out, and to the
13 nursing home's overall operation.
14 For this reason, AHCA has developed a model to
15 encourage its state affiliates to begin developing a
16 satisfaction-based consumer guide. The model focuses on
17 reporting a nursing home's three-year trend of family
18 satisfaction, family willingness to recommend, and staff
19 willingness to recommend, as well as the inspection data, but
20 presented as a percentage of the 495 standards that each
21 nursing home must meet.
22 Our profession is committed to quality and is
23 further -- our commitment to quality is further demonstrated
24 by the launching of the Quality First initiative in July
25 2002. This is a proactive, profession-wide partnership of

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1 AHCA, the American Association of Homes and Services for the
2 Aging, and the Alliance for Quality Nursing Home Care.
3 The Quality First initiative declares that we are
4 collectively and individually committed to healthy,
5 affordable and ethical long-term care services that are
6 rooted in continuous quality improvement, openness and
7 leadership. An independent national commission is being
8 formed to assess the report to the public -- and report to
9 the public our collective improvement on six important
10 outcomes.
11 So where does all of this take us? Nursing homes
12 are facing tremendous challenges. We have 52,000 vacancies
13 for certified nursing assistants, the true backbone of the
14 long-term care system and the key to customer satisfaction.
15 The GAO predicts that the overall demand for nurse aide
16 positions in all areas of health care will grow by 38 percent
17 between 1998 and 2008.
18 Current challenges are compounded by knowing that
19 the number of individuals 85 and older are double from the
20 current -- will double from 3.5 million to 7 million in 2020,
21 and the number will again double to 14 million by 2040.
22 We are also facing a crisis in funding for Medicare
23 and Medicaid assistance. An analysis by the national
24 accounting firm of BDO Seidman found that Medicaid has
25 underfunded nursing care nationally by nearly $3.5 billion

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1 annually. Many nursing homes are experiencing extensive and
2 significant financial strength.
3 Long-term care providers are proactively working
4 with the federal and state governments to find solutions to
5 these critical problems. At the same time, we are also
6 actively pursuing ways to provide consumers with the
7 reliable, valid and timely information they need to make
8 informed choices about the type and quality of care of
9 services they need when they need it.
10 We are intent on hearing the voice of our customers
11 as we continuously improve and design long-term care services
12 for the future. Thank you.
13 MS. KOHRS: Thank you, Mr. Dana.
14 Next will be Laura Carabello.
15 MS. CARABELLO: Good afternoon. I am Laura
16 Carabello, founder and principal owner of CPRi
17 Communications. And I'm located in New Jersey. And when I
18 gave this presentation about a year ago in Texas, the doctors
19 in the audience wanted to know if I was related to the
20 Sopranos. And I am not.
21 CPRi Communications specializes in the positioning
22 of health care-related business and services, products and a
23 whole host of health care opportunities in the marketplace.
24 We offer a full range of market and communications services,
25 including public relations and media relations, advertising,

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1 online marketing, interactive communications including web
2 and multimedia development, direct mail programs and market
3 research.
4 We are headquartered in Teterborough, New Jersey.
5 We have a large airport there that serves the DEA
6 extensively. And we have an office in Scottsdale, Arizona.
7 We have clients in 35 states and strategic partners located
8 in London, and we have a global presence and a continuous
9 focus on generating results for our customer base.
10 I want to commend the Federal Trade Commission on
11 these hearings to address the quality of information provided
12 to consumers through physician advertising and marketing and
13 its impact on the decision-making processes for selecting a
14 provider of health care or financing arrangement. And I can
15 say that I've been involved in this for about 20 years --
16 actually, 22, 23 years.
17 And at the time when I started this company, when I
18 founded this company, it was the time frame that coincided
19 with the U.S. Supreme Court decision to grant physicians the
20 right to advertise. And they went at it. And they flexed
21 their marketing muscles to really take on a lot of
22 advertising initiatives that were available to that time.
23 And over the past two decades I have witnessed a dramatic --
24 I and my colleagues have witnessed a dramatic change in the
25 way that physicians look at the marketplace and the way they

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1 advertise their services.
2 And several key factors have influenced these
3 changes: obviously, regulatory oversight; guidance and
4 censure from professional trade associations and
5 organizations; increased competition, which is now fierce,
6 particularly for non-covered services classified as out-of-
7 pocket expenditures; the advent of the internet and website
8 communications; the commercialization of medicine; and
9 consumer empowerment.
10 And I think that all of these areas have had an
11 impact on the way physicians approach the marketplace and the
12 way that their advisors help them to structure their
13 advertising and marketing campaigns.
14 If you take a look at Yellow Page advertising, for
15 example, and you look back, how many of you in the audience
16 can look back to prior to the 1980s when Yellow Pages, for
17 example, in the Manhattan Yellow Page book revealed doctor
18 listings, including addresses and telephone numbers.
19 And if you jump ahead from 1980 to 1990, that same
20 section provides small space advertising and full-page
21 promotions in black and white promoting specific services.
22 And by the way, Yellow Page advertising is not inexpensive.
23 The listings became aggrandized with boxed
24 information as an upcharge, as well as detailed information
25 on practice offerings. And I can tell you that Yellow Page

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1 advertising gets more expensive because the Yellow Pages
2 tells you that you have to be in every single Yellow Page for
3 a particular community, and then they narrow those areas down
4 so that they have to spend more money.
5 And if you fast forward to the present, not only
6 did the Yellow Pages triple in size with the sheer number of
7 doctors listed, but also the number of color display ads has
8 grown exponentially. And if you look in any Yellow Pages in
9 any city or states, you will see that doctors advertise
10 extensively. And, by the way, the return on investment for
11 Yellow Page advertising is high.
12 I guesstimate, and I say guesstimate because
13 there's nobody really tracking the number of physicians, but
14 I would say that 95 percent of all physicians engage in some
15 form of paid advertising or marketing. And I will go into
16 that in a few moments because I think that the scope of the
17 opportunity is far greater than we realize.
18 And about 25 percent -- actually, that's an
19 approximation; it might even be less -- of all physicians opt
20 for public relations activities. When you look at public
21 relations versus advertising, public relations is considered
22 earned media. Advertising is paid media.
23 And consultants are usually offering a range of
24 both. They're paying for it. They are consulting with them.
25 They are helping them to work with their practices to

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1 generate coverage in local, regional, national print and
2 electronic media, whether it's press releases complimented by
3 outreach to editors, reporters, and producers.
4 And the results are mentioned in newspaper and
5 magazine articles, appearances on TV and radio, speaking
6 engagements and other venues where the physician is
7 positioned as an authority or thought leader in his or her
8 given field. Many physicians opt for this coverage since it
9 offers an opportunity to share quality information and may be
10 perceived as a third party endorsement. The credibility of
11 public relations versus paid advertising cannot be disputed.
12 Many physicians seek both.
13 The advent and growth of web-based communications
14 has clearly changed the marketplace. And this is taken from
15 the AMA. Approximately three out of ten, or 29 percent of
16 physicians using the web, currently have a website. And this
17 has been increasing every year and has remained constant over
18 the past few years.
19 Websites are greatest among physicians in solo or
20 two-physician practices, and lowest among physicians in a
21 hospital-based practice, as you would imagine. And the
22 primary reasons that physicians offer why they have a site on
23 the web is: 43 percent to promote and advertise their
24 practice; 35 percent to provide patient education and
25 information; and 11 percent increase in physicians using the

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1 web to advertise and promote their practice since the year
2 2000. I think that's pretty impressive in terms of their
3 confidence in web-based communications.
4 The Federal Trade Commission, which oversees
5 regulation and enforcement of physician advertising, has
6 raised some reg flags of concern regarding substantiation for
7 both the express and implied claims of some of the promotions
8 now being offered. These concerns may be well-founded.
9 We are seeing a rise in consumer-driven health care
10 which is really taking on a whole new aspect to how consumers
11 access information and obtain health care. They're taking on
12 a greater role in the selection of providers and services.
13 And there is increased physician participation in advertising
14 and marketing venues. And this is likely to continue.
15 Patients employee comparison shopping techniques,
16 scrutinizing media outlets for information and following up
17 with calls to providers to ascertain coverage options and
18 costs.
19 And I can tell you, in the thousands of physicians
20 that I have consulted with over the years, and that includes
21 physicians in solo practice, multi-physician practices,
22 IPAs -- they always complain to me that the physicians [sic]
23 call and they want to know, how much am I willing to do it
24 for? How much can they get? So they really do shop around.
25 In paid advertising, the quality of information is

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1 largely at the discretion of the physician advertiser.
2 Health care advertising in general, even for the
3 pharmaceutical companies, which are spending a ton of money,
4 is steep. And for physicians engaging in an advertising
5 opportunity, even for public relations, the costs are very,
6 very high. Most advertisers cannot afford to offer detailed,
7 quality information and prefer to tout benefits, if they're
8 real or otherwise.
9 Some advertising has led to misunderstandings and
10 has resulted in lawsuits involving false, deceptive, or
11 misleading claims. The FTC and others will make even greater
12 demands for competent and reliable scientific evidence as
13 substantiation, a burden that lies with the advertiser and
14 his consultants or her consultants.
15 Physician advertising, in my estimation, has
16 changed, the regulations now are so complex from state to
17 state. But they are receiving ample guidance for developing
18 and advertising and promotional materials with the FTC, AMA,
19 state legislatures, local and state medical societies, and
20 specialty medical organizations offering regulations,
21 policies, and guidelines.
22 There is certainly not a shortage of this
23 information. Regulations grant the relevant medical board
24 certain powers to take disciplinary action, which may result
25 in reprimands or lead to licensed suspension or revocation

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1 against a physician whose advertisements violate the
2 applicable regulations.
3 And I would say for the most part that physicians
4 are concerned. They are nervous. When they call our office
5 and they want to set up an advertising campaign, they say,
6 you know, I know certain of the regulations. So I think
7 there is definitely cognizance of these rules.
8 And the state attorneys general usually have the
9 authority to seek injunctive relief and civil penalties
10 against individuals or entities that violate general consumer
11 protection laws that prevent deceptive trade practices.
12 Physicians are urged and directed to avoid
13 deceptive advertising which may mislead consumers.
14 Physicians need not wonder what is allowed or appropriate.
15 State boards of medicine, state laws, and federal law govern
16 advertising by health care providers, with professional
17 organizations providing appropriate verbiage.
18 Ethical advertising is achievable but not always
19 practiced. And I can tell you that very often, physicians
20 will try to pressure into getting something into an ad that I
21 know in my heart is not right. And I will tell them so.
22 And I'm just going to go through a little bit of
23 the advertising rules, the FTC. According to the FTC, an
24 advertisement is deceptive under the Federal Trade Commission
25 Act if it contains a material misrepresentation or omission

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1 of fact that is likely to mislead consumers acting reasonably
2 under the circumstances.
3 I put this ad up because -- and this is not a real
4 ad; obviously, the numbers are made up -- but I happened to
5 see this in the paper a couple of days before I came to this
6 hearing. And is it good taste? Does it give you good
7 information? One of the things that sort of turned me off
8 was the $499 for the first 1,000 eyes. You know, how do you
9 ascertain that you're one of the first 1,000 eyes? That sort
10 of set up a red flag. But the question comes to mind: Is it
11 bad taste? A lot of ophthalmologists I know would say yes,
12 it is in very bad taste and we wouldn't have any part of it.
13 Obviously, there were people that liked it and wanted to use
14 it as their ad.
15 The AMA also offers policies governing advertising
16 and publicity, offering no restrictions on advertising by
17 physicians except those that can be specifically justified to
18 protect the public from deceptive practices. And it goes on
19 to say a physician may publicize him- or herself as a
20 physician through any commercial publicity or other form of
21 public communication -- newspapers, magazines, telephone
22 directories, radio, television, direct mail. I could go on
23 and on how physicians market their practices.
24 They do direct mail. They announce when their
25 office is changing. They announce when somebody is joining

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1 the practice. There are lots of ways that they go about it,
2 lots of opportunities to advertise.
3 When I called the AMA to see how they were tracking
4 physician advertising, the quote from their spokesperson
5 said, "The AMA is a membership organization, not a regulatory
6 body. The FTC put us out of that business in 1980," and had
7 very, very little information to offer, in fact, cut me
8 short.
9 It is evident, however, from their policies that
10 the organization is concerned about the quality of physician
11 advertising, and throughout the profession, most responsible
12 physicians endeavor to adhere to the guidelines cited.
13 If you go on the web and you look at all the
14 different states, every state has their own little quirks and
15 their own little tweaks on what is allowed and what is not
16 allowed. So I'll just give you an example here.
17 North Carolina, Maryland, Virginia, District of
18 Columbia, Illinois. Illinois doesn't allow testimonials or
19 claims of superior quality. A lot of states do not allow
20 testimonials. New York and Texas also preclude the use of
21 testimonials by physicians, but you can see that the trend is
22 that they all agree that you cannot use deceptive practices.
23 However, advertising is advertising, and they're
24 allowed to do so. And what is the purpose of advertising?
25 It's designed to spark the interest of the health care

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1 consumer and prompt the buyer, the patient, to access or
2 purchase services. In some instances, consumer expectations
3 are elevated, leading to liability for physicians who cannot
4 deliver what they promise.
5 How do consumers get this access to this
6 information? For those consumers who are employed,
7 information regarding health care financing and doctors is
8 usually provided by their employers. This is a hit-or-miss
9 opportunity at best, depending on the individual employer and
10 its concern to deliver good information.
11 For employers that are bearing the majority
12 of costs, particularly in the current economic environment,
13 plan selection may largely be a function of price. Large
14 employers usually distribute brochures, which are provided by
15 the plans, and often sponsor health fairs, offering plans the
16 opportunity to provide more information not only about the
17 plan but about the doctors.
18 Employees have come to count on the fact that their
19 employers have reviewed quality aspects of the plan. I'm an
20 employer, and employees just guess or have enough faith in
21 our power to review these plans, especially since we're in
22 the health care business.
23 In fact, it's interesting: Because we're in the
24 health care business, I think all of our employers think that
25 we know everything about health care. I can tell you that

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1 people call us all the time for doctor referrals, and I keep
2 saying, we are not a doctor referral agency. We can't give
3 you information. But we must get probably, I would think, 20
4 to 25 calls a week from consumers.
5 For small employers, which we are a small employer,
6 this information can be scant, leaving the consumer more
7 dependent upon the recommendation of the employer's insurance
8 broker or suggestions from friends and relatives. In both
9 settings, employees can log onto the plan website for
10 information, benefits, and provider rosters.
11 And I must say that most plans to have extensive
12 websites offering information about the plan and the doctors.
13 Since this information, however, is largely self-reported,
14 the quality of the information may be driven by marketing
15 objectives to drive enrollment.
16 Provider selection criteria are more vague.
17 Consumers turn to their health plans for provider bios and
18 don't always get them. And they usually rely upon word of
19 mouth from family and friends regarding quality of care. And
20 the bottom line is people still ask their friends and family
21 about doctors.
22 Quality indicators, including board certification,
23 may offer some comfort level, but people still don't
24 understand what a board-certified physician is. The bottom
25 line from consumers is often the personal recommendation from

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1 friends or colleagues.
2 When they select a health plan, when the price is
3 the determining factor, the provision of quality information
4 means little to the consumer. And consumers often select
5 plans based upon the participation of doctors that they know,
6 that their friends know, and not necessarily quality
7 benchmarks.
8 For those who are unemployed and do not have
9 coverage, the options to access information are even
10 narrower. These consumers must turn to advertising or web
11 messaging, and their reliance on personal recommendations is
12 heightened.
13 We can also look at web messaging, though. If you
14 think about the number of doctors that have websites now and
15 the number of people that are actually web connected,
16 internet connected, there is a disparity. Not everybody has
17 access to the web, although we all are electronically
18 connected today, here.
19 The growth of consumerism, including consumer-
20 driven health care plans, medical savings accounts, flex
21 spending accounts and other offerings may drive the need for
22 more quality information.
23 As consumers spend their own money -- and as my
24 kids always said to me, "This is my money I'm spending" -- to
25 pay for their own health care services, they may be seeking

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1 better information regarding quality. This will put more
2 emphasis on the advertising and marketing and further burden
3 on the providers themselves to establish credibility and
4 substitute claims.
5 Consumers can access select information regarding
6 provider quality. As noted earlier -- and that should be
7 NCQA; I'm going to have to smack somebody -- URAC, JCAHO
8 accreditations for plans and networks offer benchmarks.
9 Many, not all, employers utilize accreditation as
10 criteria for offering the plans to their workforce and tout
11 these achievements in a variety of advertising venues.
12 However, employees and consumers do not really have a clue.
13 They really don't understand accreditation, and may not
14 regard this as important to the selection process.
15 I always am tickled when I ride along the highway
16 and see those kinds of JCAHO accreditations and say, do
17 people really understand what they're talking about?
18 Furthermore, the economics of achieving accreditation or
19 issuing report cards often forces plans to forego the
20 process.
21 Condition-specific advertising dominates physician
22 advertising and often includes information about the nature
23 of the underlying condition, whether it's chronic or acute.
24 Many advertisers play upon the emotional aspects of the
25 condition, particularly those that represent life-threatening

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1 conditions such as cancer or heart disease.
2 There is usually a strong call to action with a
3 toll-free number or opportunity to respond. Many physicians
4 who advertise track the overall response and attempt to gauge
5 the return on investment of a particular venue.
6 Ads may target the impact on a spouse or loved one,
7 or the impact on patient quality of life or appearance. The
8 more responsible physicians do not claim to offer a cure, but
9 may offer diagnostic, treatment, or management options which
10 may be surgical or medical.
11 How do you communicate quality? The quality and
12 quantity may depend upon the advertising venue. For example,
13 billboards offer up to a two-second opportunity to deliver
14 the message, two to three seconds at the most, leaving little
15 room for information or quality communication. Radio spots
16 usually run 30 to 60 seconds, hardly enough time to cover
17 details. Here we go. That's the end of the billboard.
18 That's as much time as you probably had to get that message.
19 And what are the effects on the behavior of health
20 care providers? Physicians who advertise often adopt their
21 own marketing persona. For every patient generated -- this
22 is a rule of thumb -- through advertising, four additional
23 patients will be referred by that patient. So they look at
24 it as an opportunity to really drive their practices.
25 Physicians that make the investment in advertising

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1 must also follow through during the patient encounter to
2 ensure a pleasant experience regardless of the diagnosis.
3 And marketing-oriented physicians often undergo training, not
4 only to prepare them for media interviews but also to deal
5 with patients.
6 Practice management and public relations counselors
7 advise on a variety of issues impacting multiple aspects of
8 interpersonal relations, from developing appropriate body
9 language to eliminating bad breath.
10 Physician marketers may encounter some push-back
11 from their colleagues or a drop off in referrals. There's
12 professional jealousy. Their colleagues who do not engage in
13 advertising express disdain by minimizing referrals. For
14 successful marketers, however, these issues are no loner of
15 grave concern.
16 Physicians who run advertising for elective, out-
17 of-pocket procedures not covered by insurance usually tout
18 benefits, substantiated or otherwise, along with cost-
19 competitive positioning and opportunities to charge your
20 services to a credit card. Plastic surgery, corrective
21 vision procedures, laser hair removal, fertility, and diet
22 plans are among those conditions which fall into this
23 category.
24 The quality or credentials of the physicians are
25 not a key selling feature. In some of these instances, the

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1 volume of procedures performed or the number of pounds lost
2 are cited. Before and after photos are often featured as the
3 incentive. This hard-sell approach extolls the volume of
4 procedures, not the quality of the outcomes.
5 Is advertising driving up the cost of care or
6 simply fueling the competitive spirit? Physician
7 reimbursement is established by the government, Medicare and
8 Medicaid, or set by individual health plans. The fees do not
9 change for physicians who advertise. In the area of non-
10 covered benefits, however, physicians can use pricing as a
11 sales tool.
12 The competition for patients remain fierce and
13 competitive market forces come into play. What forms of
14 advertising are good? Quality pays off in the long term.
15 As the competitive climate escalates, there is
16 likely to be surge in comparative advertising. And one of
17 the things I want to point out is that a lot of physicians
18 are dying to be featured as the leading doctor, the best
19 doctor, New Jersey Monthly or New York Magazine, U.S. News.
20 But they realize this is a popularity contest unrelated to
21 performance, not a real litmus of quality. Hospitals and
22 health plans also use these ratings.
23 Marketing quality services and actually delivering
24 quality services are two distinct issues. There are no
25 restrictions, which limit the quality of -- limit the

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1 advertising of health care goods and services based on
2 quality, but there are regulations articulating standards for
3 avoiding advertising claims that are misleading. These
4 standards are widely respected and adhered to by most
5 physician marketers, and coupled with guidelines, they know
6 what to say.
7 The ability to advertise and market health care
8 services supports a competitive climate and should ultimately
9 drive improved quality. Competition is healthy, even in this
10 delicate market niche. And for those that stray from
11 restrictions and guidelines, however, there should be
12 enforcement that protects consumers. And obviously, selling
13 health care services is different than selling vacuum
14 cleaners.
15 My final thoughts: When developing and
16 implementing a marketing campaign, it is incumbent upon
17 physicians and their advisors to know and play by the rules?
18 Advertising that is in bad taste is simply distasteful.
19 Advertising that is false or misleading is illegal.
20 Guarantees are simply not allowed. The objective
21 is to elevate quality of care goals to the same level as
22 financial goals. And advertising that adheres to standards
23 set forth by government and others is mandatory. Advertising
24 that communicates quality and provides information should be
25 the end result. Thank you.

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1 MS. KOHRS: Thanks very much. We'll have Dr. Lee
2 speak.
3 DR. LEE: I'm Tom Lee. I'm an internist and a
4 cardiologist and the chief medical officer for the network of
5 Partners Health care System in Boston. And I'm speaking
6 today about direct-to-consumer marketing of high-cost
7 radiology tests, at least I will if we can get in slide show
8 mode.
9 The issue that I'm speaking about are high-cost
10 radiology tests that are being directly marketing to
11 consumers. And I'm really going to focus on two of them, the
12 two most common ones, which are general screening for
13 malignancies, the most common being lung cancer screening
14 with chest CT versus whole body CT, and then a coronary
15 artery disease screening with electron beam CT, EBCT, as it's
16 called. It's technology that I'll talk a little about more
17 on the next slide.
18 To summarize, you know, these technologies are
19 marvelous. Technologically, they are really incredible if
20 you understand what they're doing, particularly with the
21 EBCT. But just because they're marvelous doesn't mean they
22 actually help anyone, or at least given our current state of
23 medicine. So their value is unproven. They have not been
24 shown to make people live longer or live healthier lives.
25 In fact, there's concern. There's concern about

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1 the impact of false positive rates, the economic consequences
2 of false positive rates as well as the anxiety, and even the
3 medical consequences of false positive rates.
4 And there's also concern about whether the
5 advertising is misleading regarding the false negative rates.
6 That is to say, if you have a negative CT of your body
7 looking for cancer, do you really have -- should you really
8 have peace of mind? And as you can probably guess, my answer
9 is no. And as I said, there's no evidence that they improve
10 patient outcome.
11 The insurance companies are completely correct in
12 not paying for these tests. The evidence doesn't support it,
13 and where there are many things that are supported by
14 evidence that need to be paid for.
15 As a result, consumers are being asked to pay for
16 these tests out of their pocket. A lot of people would say,
17 well, if they want to pay for it out of their pocket, that's
18 fine. One of my arguments is that we are all paying,
19 however, for the sequelae of these tests being performed.
20 The sequelae are real, and as evidence I would cite
21 the fact that the tests are sometimes offered at very lost
22 cost or even free by health care organizations, physician
23 groups and other kinds of organizations, with the
24 expectations that the follow-up tests are going to be covered
25 by insurance, and that is where the health care providers

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1 will make their money.
2 I want to talk first about electron beam CT. I'm
3 not going to give you a lecture. I'm just going to try to
4 give you the bare minimum. It is an incredible technology
5 that was very promising when it was first developed. It can
6 detect calcium deposits in coronary arteries.
7 And what's remarkable about it is that it takes
8 such a quick image that the heart is essentially holding
9 still. And the heart is always moving, of course, but the
10 image is done so quickly that you can get a picture that
11 allows you to figure out whether or not there are calcium
12 deposits in the walls of the coronary artery.
13 It's not so sophisticated they can look inside the
14 coronary arteries and tell you whether the artery is
15 narrowed. But it can tell you whether there's calcification.
16 And such calcifications are present in virtually all patients
17 with coronary disease. And there are very good studies
18 showing that the higher your calcium score, the higher your
19 risk for having atherosclerosis and the higher your risk for
20 having a heart attack in the long run.
21 But tempering these facts which would support the
22 promise of this technology is the fact that the overall risk
23 for asymptomatic people -- that is to say, people who
24 currently feel fine, don't have chest pain or other symptoms
25 of heart disease -- the overall risk for a heart attack in

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1 the next year is very, very low, like in the 1, 2, 3 percent,
2 even if they have coronary artery disease.
3 And no study has shown that the treatment of high
4 calcium scores improves outcome. There have been studies
5 where they take people who feel fine but have high calcium
6 scores and randomize them to statin therapy versus placebo,
7 and there is no difference in outcome because all of them
8 tend to do very, very well.
9 There is, however, a very high false alarm rate.
10 Let me give you -- this is what the scans look like. This
11 is, you know, cut through horizontally the top of your heart,
12 and that is like the main artery going down the front of the
13 heart, a little segment of it, the left anterior descending
14 artery. And you see those bright white shadows are
15 calcifications in the wall of the left anterior descending
16 artery. And you would rather not have calcification than
17 have calcification.
18 This is the kind of image that gets people -- there
19 are some very good people who are very interested in the
20 technology, and this is why they're so interested. You can
21 get an image like that, and you would like to think that
22 would help you take better care of those patients.
23 However, it hasn't worked out that way, but
24 nevertheless, these are being advertised. You know, Father's
25 Day is Sunday, and you can get both the heart and lung scan

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1 rolled together for early disease detection. And this is a
2 New York Times ad, so it didn't reproduce too well on my
3 slide. And there are ads like this all over the country, for
4 $499. My children haven't gotten me one. I don't know what
5 that means.
6 So what do these results mean? Well, first, if you
7 have a low score, there's a 99 percent chance of no cardiac
8 events over the next year. If you have a high score, there's
9 a 1 to 5 percent risk over the next year. As I said, the
10 problem is that no one has shown that you can change that
11 risk, because it really is pretty low to begin with, by
12 giving people medications.
13 But here's what really bothers me most about these
14 tests. If you don't have obstruction in your coronary
15 arteries and you're over the age of 65 and you're an American
16 who's been eating an American diet, what are the chances that
17 you have a worrisome calcium score? It's 50 to 70 percent.
18 There's a very, very high false positive rate. It really is
19 calcium in the walls, but it isn't atherosclerosis that's
20 going to cause a heart attack.
21 So what are the implications? Most people do not
22 get the reassurance they seek. That's what they're hoping
23 for. They're hoping for this clean bill of health, and most
24 people don't get it. They get this intermediate calcium
25 score. Very few of them get the low calcium score that

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1 they're hoping for.
2 The result is that many patients can't sleep at
3 night until they get further testing and further treatment.
4 And every cardiologist I know who's active at all has
5 patients at this point who are perfectly fine, got these
6 tests, and it set in motion a series of other
7 interventions -- exercise tests, cardiac catheterizations.
8 They find some narrowings. They don't know what to
9 do with it. They do an angioplasty or even bypass graft
10 surgery. And some of the celebrities and very wealthy people
11 in our community, in Boston, have had the angioplasties and
12 bypass surgery and they think their lives were saved, but
13 they weren't.
14 The bottom line is that the American Heart
15 Association and American College of Cardiology do not
16 recommend this test. Nevertheless, a lot of the members of
17 the American College of Cardiology and American Heart
18 Association sell these tests.
19 Okay. A whole body CT scanning? It's basically
20 the same story. This is from the FDA website, I believe.
21 And you can see the bold print, you know: "At this time, the
22 FDA knows of no data demonstrating that whole body CT
23 screening is effective in detecting any particular disease
24 early enough for the disease to be managed, treated, or
25 cured." And I can tell you that that is the state of the

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1 science. There is no evidence indicating that it is helpful.
2 That doesn't stop other websites from telling you a different
3 story. And, you know, you don't need to read all this, but
4 this is from an organization that's trying to hook people up
5 with getting low-dose spiral CTs looking for lung cancer.
6 I'll just -- the next slide is the bottom part of
7 this. And I just want to highlight for you the third line
8 from the bottom: "Schedule a spiral CT today. It could save
9 your life." Well, maybe it could, but there's no evidence to
10 support that particular claim. That phrase, "It could save
11 your life," appears over and over and over in the advertising
12 for these technologies.
13 Well, do they save lives? Well, it's not proven in
14 any study. It's very difficult to prove something doesn't
15 save lives. You need huge, huge, huge studies, and no one's
16 got a particular interest in funding them. The government
17 is, in fact, though, funding some good research.
18 Research in the past has shown that chest x-rays do
19 not prevent death from lung cancer. They just lead to
20 earlier detection. And here's the reason why: Because
21 intuitively, you would expect if you find tumors earlier, you
22 would help save lives.
23 The problem is this, and it's discouraging -- I
24 wish it wasn't true, but this is the basic science: Tumors
25 have millions of cells by the time that they are one to two

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1 millimeters in diameter. That's the tip of a pencil point.
2 The tip of a pencil point is millions of lung cancer cells.
3 And there's plenty of good research -- not some,
4 plenty of research -- that indicates that genetic factors
5 have programmed those cells so that the ones who are
6 programmed to metastasize have already metastasized by the
7 time that there's a one- or two-millimeter mass, and the ones
8 that are not going to spread very easily are not going to
9 spread. And they may reach golf ball size, and you can take
10 them out then, and the patient will still have a good
11 prognosis.
12 So that by the time you can find them on a CT scan,
13 it's -- probably the game is going to be over one way or
14 another anyway. But it's an unanswered question, and at this
15 point I would say somewhere by saying proponents, the
16 optimists, say it would be unethical to ask people to wait
17 while the big studies are done. The opponents say it's
18 unethical to ask people to pay for an unproven technology.
19 Again, my problem here is the false reassurance
20 issue. A negative CT can easily miss small tumors, and some
21 tumors are just not visible by routine CT unless contrast
22 agents are given. So anyone who's a clinician here knows
23 that you can't find adrenal tumors and renal tumors and many
24 other tumors unless you infuse intravenous contrast, but
25 those contrast agents carry a small, about 1 percent, risk of

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1 reactions and they're also very expensive.
2 Fortunately, no one out there is doing screening
3 CTs with contrast. They're not that irresponsible. That
4 said, people walk out thinking that they've got a clean bill
5 of health. They may continue smoking because they believe
6 that they are getting away with it.
7 So, I mean, this -- I put this slide in here just
8 to say that I don't -- I hope I won't sound like a
9 paternalistic physician, but I'm very concerned that patients
10 just can't understand the risk information, at least as it's
11 being portrayed in the kind of marketing materials that I
12 see.
13 You've got physicians and celebrities advocating
14 testing. And my second bold point in that graph is just to
15 make the point that everyone -- patients, physicians, all
16 human beings -- have difficulty putting risks in perspective.
17 There is this whole interesting line of work about
18 prospect theory. And some of you may know that prospect
19 theory won the Nobel prize for economics in 2002. It's about
20 why you will drive five miles to save $5 on a $20 purchase,
21 but you won't drive five miles to save $5 on a $1,000
22 purchase. It's about why people can't be rational about
23 money.
24 Well, the same is true about health care risk.
25 Something that seems to increase your risk a tiny bit that

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1 you didn't know about before has disproportionate value in
2 your mind, so that you have people smoking cigarettes while
3 worrying about SARS or worrying about, you know, other things
4 that are just not, you know, important.
5 And, you know, for me the epitome was a car that
6 someone pointed out to me in Boston the other day, a sports
7 car with a bumper sticker saying, "Ban nuclear power," and
8 there was a radar detector in the front. So the chance this
9 person will die from a car accident, of course, is much, much
10 greater than from a nuclear accident. But the prospect of a
11 nuclear accident was much more worrisome. There is this
12 whole line of thinking. The bottom line of it is that we're
13 not rational animals and it's very difficult for us to put
14 risks in perspective.
15 Well, what do physicians do? These are my last two
16 slides. I did, after being invited to come down here, do an
17 e-mail poll of the internists and the cardiologists of Mass
18 General Hospital and Brigham & Women's Hospital. And I
19 actually got responses from 141 internists, and I asked them,
20 have you undergone a CT to screen yourself for cancer? And
21 then the follow-up question -- and I asked the cardiologists,
22 have you had an EBCT to screen yourself for coronary disease?
23 And then the follow-up question was, if so, did you pay with
24 your own money? And third question was going to be, did you
25 pay with post-tax dollars?

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1 But I never got to the third question because not
2 one internist at the Brigham or Mass General has had a CT
3 scan to screen themselves for lung cancer or other cancers.
4 Two out of the 26 cardiologists have had electron beam CT,
5 but neither paid. One of them indicated that he would have
6 paid, but as my wife said, she'd believe it when she saw it.
7 So these were some of the comments I got back in
8 the e-mail from the cardiologists on electron beam CT. You
9 know, "I would not have done it even if it was covered by
10 insurance. It's hype. I discourage my patients from having
11 it done if they ask."
12 "No. I was asked by my wife's rich uncle in
13 Argentina whether he should invest, and I told him if it was
14 a good plan to get in and then make sure there as a good exit
15 strategy once people figured out the limitations."
16 "No. I can't see use for it save to generate
17 anxiety and more business for the ETT lab" -- exercise test
18 lab -- "which would be good from a purely commercial
19 standpoint."
20 And the last one is, "Absolutely not. This test is
21 not ready for prime time."
22 The last comment I'd make is that I wish the
23 medical profession was effective enough in trying to regulate
24 it. When the leaders of cardiology and general medicine
25 don't believe these tests have value, I wish our profession

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1 was effective in keeping physicians from marketing things.
2 But it's not, and I don't have realistic
3 expectations it will be in the near future. So I'm hoping
4 that these hearings will lead to some other kinds of
5 interventions. Thanks very much.
6 MS. KOHRS: Thank you, Dr. Lee.
7 We're going to have Dr. Koch speak next, if I don't
8 have the computer shut down one more time.
9 DR. KOCH: Thank you very much. It's a pleasure to
10 be here. I was asked to speak because of the notoriety of
11 good and probably a lot bad that ophthalmology has with
12 regard to LASIK advertising and how it tends to dominate the
13 marketplace in terms of the amount of -- proportion of
14 medical ads. And I think that was shown or reflected in Ms.
15 Carabello's talk as well.
16 I'm from Baylor College of Medicine. I also would
17 like to acknowledge that I've been discussing this with my
18 colleagues at the American Society of Cataract and Refractive
19 Surgery, and as a society, we have a lot of interest in this
20 area and in appropriate mechanisms for informing patients
21 about LASIK surgery.
22 And I'll start with my recommendations or my
23 thoughts, which are, we'd like to see more stringent and
24 consistent enforcement of FTC regulations for advertising in
25 LASIK. And we would like the FTC to help us to -- you know,

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1 to reach out to our societies and other societies to
2 encourage them to give them a kind of maybe perhaps moral
3 support, and perhaps certainly to be a little bit more public
4 in their encouragement of medical societies to report member
5 violations, and maybe even consider some kind of complaint
6 hotline.
7 Let me tell you just a brief thing or two about
8 LASIK surgery. It's approved to treat a certain range of
9 nearsightedness, farsightedness, and astigmatism. It is not
10 for everyone. And very careful screening of patients is
11 required in order to maximize the likelihood of good outcomes
12 and to minimize the risk of complications.
13 It involves making a corneal flap with a device
14 called a microkeratome. Just recently there's a laser device
15 that can also make the flap. This flap is elevated -- the
16 microkeratome, by the way, uses a steel blade, and then the
17 flat is elevated and the XMER beam is then used to reshape
18 the corneal surface in the desired fashion in order to modify
19 the patient's refractive error.
20 And typical outcomes might include 80 percent of
21 patients seeing 20/20 or better without glasses, with 1
22 percent losing a certain amount of vision and a very small
23 number of patients losing large amounts of vision. But the
24 results do vary to a great extent by the magnitude of the
25 preoperative refractive error. So low corrections get better

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1 results, as you might logically feel.
2 It's a big business. In 2002, there were over one
3 million LASIK procedures, with a total cost of $1.9 billion.
4 And a marketing cost at about $140 an eye is about $160
5 million, so there's a lot involved here.
6 Now, where do our patients learn about LASIK? The
7 American Society of Cataract and Refractive Surgery just
8 worked with the Harris Interactive to do a poll, and you can
9 see that they learn about it from their eye physicians,
10 opthalmologists/optometrists; family and friends; internet;
11 other media; and then advertising. And of course,
12 advertising -- really, these things probably also are part of
13 the advertising, and then less so from the medical
14 associations.
15 As physicians, obviously, our first role is to do
16 no harm, to be the caretaker. And we have a pact with our
17 patients as ophthalmologists who are entrusting their vision
18 to us. And so cannot advertising be consistent with this
19 goal?
20 Absolutely. If it honestly informs the patients of
21 availabilities of practices and procedures, describes them,
22 and even fair comparisons are doing -- probably are
23 beneficial to our patients. They drive costs down. They
24 inform patients. We're not opposed to any of that.
25 Obviously, there must be no deception, stated or implied.

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1 The fundamental problem is this whole thing about
2 health care and commodities and is LASIK truly a commodity in
3 a free market? Clearly not in the traditional sense, and
4 again, this was alluded to earlier.
5 You can't test-drive your surgical result. You
6 can't try to remove one spot and see if this cleaner works
7 better than the other cleaner. You have one crack at having
8 surgery on your eyes. And it's difficult to get data
9 regarding quality of surgeons and outcomes.
10 The ads kind of run the spectrum. There are those
11 that are legal and ethical, those that are legal but we would
12 consider unethical, and then clearly illegal ads. So an ad
13 can be legal but not in the best interests of patients. And
14 we're also worried about the profession and about not only
15 the image of the profession to the public, but about what we
16 try to instill in our colleagues as physicians.
17 So the advertising can deceive patients in a
18 variety of ways. These are at least four ways that
19 advertising in LASIK surgery can deceive patients, the first
20 one being price.
21 The classic one was already really shown, the
22 asterisk, which is a bait and switch: 499 for your eye, and
23 all of a sudden you end up using -- the patient realizes
24 that's not the laser they want to have used. There's a
25 limited refractive range, up to myopia, up to minus 2, for

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1 example, a low correction. And no follow-up or retreatments
2 are included. So by the time everything is added in, in
3 fact, the fee is much higher.
4 I think money-back guarantees are particularly
5 pernicious because there's the implication of reversibility
6 so that 20/20 or your money back. Well, that doesn't help
7 you if you go blind from the operation. Your money back
8 doesn't quite cut it. So that's, I think, a problematic
9 area.
10 And look what we got here, 299 for the first 1,000
11 eyes. You're in the wrong market, you know. Your market's
12 overpriced, clearly. Why we have performed more laser -- and
13 this is the top part of the ad. This is in our Sunday paper
14 every Sunday, in the comic page, the head of the comic page,
15 by the way.
16 And not only do you get, this is all the stuff, oh,
17 you can get Botox, again with the asterisks. And the
18 asterisks start to -- you know, only for the -- they had the
19 VISX laser in the ad, but the low price is actually only for
20 the Nidek laser, et cetera, et cetera. And it goes on from
21 there.
22 Here's one: "Don't wait because this offer is too
23 good" -- two eyes for the price of one -- "to last." Let's
24 see here. The computer is having a hard time crunching my
25 large files.

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1 Here's one: "LASIK eye surgery for free. I can
2 see clearly now." Their website is seeclearly.com. And
3 again, the implication that everything is clear. "Win a free
4 laser vision correction." These kinds of inducements that
5 are misleading about price. Two-for-one pricing.
6 This is one of my favorites: "Guess what I won,
7 hon?" And, you know, which media? And you can see, there's
8 your fine print. You'd need LASIK surgery just to read the
9 fine print.
10 And my favorite of all time, and I want to
11 acknowledge Dr. Terry O'Brien, who sent me some of these:
12 "Kiss a pig and you can win free LASIK vision correction."
13 You know, it's a trivialization. It's a kind of -- the humor
14 in these kinds of approaches kind of minimize the seriousness
15 of the decision that patients make in contemplating this type
16 of surgery.
17 Well, what about the eligibility criteria? There's
18 the implication that the procedure is for everybody. And
19 I'll give you one example of that. Here's one -- let's
20 see -- "Get rid of your glasses. Cataracts. Nearsigned.
21 Farsightedness." So it doesn't matter what you've got, we
22 can fix you.
23 And again, it draws patients in. It makes them
24 think that, gee, I must be eligible for this, and makes them
25 less critical in thinking about the applicability of this

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1 procedure for themselves.
2 Outcome: There's implications of the perfect
3 result, of the permanent results, of no complications.
4 "20/20 for 2995." You can get rid of your contacts for life.
5 "The only laser vision correction facility offering a 20/20
6 promise." Refund the final fee. "To the best." How do they
7 define "best"? There are the glasses. No more glasses. No
8 more contacts. Things that are clearly not accurate or
9 correct.
10 "Participate in our free LASIK" -- dah dah dah dah
11 dah -- "seminar." The "get-rid-of-your-reading-glasses"
12 seminar. And learn how it uses -- for the best results. And
13 again, no data to substantiate these claims.
14 Other claims from recent ads: "Quick and pain-free
15 way to eliminate your way for corrective lenses." "The
16 world's most advanced ophthalmic lasers." "The only 3-D eye
17 tracker." "To treat a lifetime of nearsightedness,
18 farsightedness, and astigmatism." The eye tracker doesn't
19 even do the treatment. There's one who -- this physician is
20 referred to as an "opinion leader" here in the Washington
21 area. Nobody really knows who she is.
22 Fear: Fear of complications, and building on fear.
23 I actually object to this probably least because at least it
24 makes patients think about the seriousness of it. But it's
25 still obviously an issue.

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1 This surgeon no longer does LASIK. He does laser
2 on the surface, so he shows a razor blade and, "No blade
3 used. Safer than LASIK. Better quality and quantity of
4 vision." No proof for that. "Greater long-term comfort."
5 No proof of that. In fact, there's proof to the contrary of
6 that. "Don't subject your eyes to the risks," et cetera.
7 But he does himself one better. A box-cutter. So again, you
8 know, that's the kind of material that's out there being
9 viewed by our patients.
10 Other claims: "Can virtually eliminate potential
11 complications." "Ask about our no-glare, no-halo
12 technology." Nobody has no-glare, no-halo technology.
13 There's proven. CK, which is another operation, "is a non-
14 invasive procedure." CK involves putting a needle about two-
15 thirds of the way through the cornea and applying a current
16 to it and causing a little burn in the cornea. To me, if
17 you're sticking a needle in somebody's eye, that has a kind
18 of invasive feel to me.
19 "No hassles, just crisp, clear vision." So again,
20 the issue with testimonials is that again it implies that
21 patients are eligible; that the outcomes, you know,
22 incorporate safety components, and obviously ignores whatever
23 this person giving the testimonial often is paid. We see
24 baseball players, movie stars, et cetera.
25 So false advertising deceives patients. It fosters

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1 poor patient decisions regarding undergoing a procedure. It
2 demeans the profession, and is a violation of the implied
3 pact between physician and patient.
4 As part of this survey, we found that dissatisfied
5 patients after LASIK surgery were less likely to know what
6 procedure they had -- they didn't even know if they had LASIK
7 or another procedure -- or to be knowledgeable about the
8 benefits, risks, and expected amount of visual improvement
9 that could occur with the surgery. And they were more likely
10 to note advertising as a source of information about LASIK
11 surgery.
12 So how can we better protect our patients? We have
13 to provide better information. That falls upon the medical
14 profession to do that. And I think tighter scrutiny in
15 advertising is important.
16 Now, at the American Society of Cataract and
17 Refractive Surgery, we've developed the Eye Surgery Education
18 Council, and that has a website that has a range of
19 materials, including very detailed LASIK patient-screening
20 guidelines that are designed really to stimulate patients to
21 think about all aspects of what LASIK surgery involves and
22 whether they might be a candidate, and provide them with a
23 list of questions they can ask physicians.
24 We have guidelines for refractive surgery
25 advertising, and FTC was very helpful in this, actually. And

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1 combined with the American Academy of Ophthalmology and the
2 American Society of Cataract and Refractive Surgery, they
3 were approved by the FTC. They provide a legal framework for
4 those issues as you see. And they talk about the kinds of
5 claims, and they give good examples about efficacy,
6 comparative efficacy, safety, permanence and predictability,
7 and success rates.
8 So what we'd like to have is stronger enforcement
9 of the guidelines. And are there other things that -- maybe
10 some ideas about how we as professional organizations can
11 oversee our members without subjecting ourselves to these
12 threats of litigation.
13 We believe that if we work together, we can improve
14 our patients' welfare, and that FTC enforcement of current
15 regulations will bolster professional societies' self-
16 policing and make it easier for societies to enforce the
17 guidelines that FTC has worked with to create.
18 So we'd like to see this more stringent
19 enforcement, further working with our societies, dialogue
20 about this, public announcements of this, and consider maybe
21 even a hotline of some sort as a way of promoting or making
22 it easier to report these sorts of things.
23 And again, I appreciate the opportunity of being
24 with you this afternoon.
25 MS. KOHRS: Actually, our next speaker is going to

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1 be -- sorry. It's going to be Richard Kelly from the Federal
2 Trade Commission.
3 MR. KELLY: Good afternoon. I think the
4 presentations so far have really been excellent. Given me a
5 lot to think about even before I walked up here.
6 It reminds me of the story of why lab technicians
7 prefer lawyers to white rats for their laboratory
8 experiments. And maybe you've heard this story before, but I
9 think it's an interesting one.
10 One of them, of course, is there are just much more
11 lawyers than white rats. And the second reason is that the
12 lab technicians don't get attached to those lawyers. And the
13 third one, of course, is that there are just some things you
14 can't get a white rat to do.
15 So, you know, here I am today, listening to these
16 presentations and desires for the agency to do more. And
17 certainly we're listening and we want to respond.
18 And what I wanted to do today was to talk a little
19 bit about the FTC's experience with LASIK, but also to give
20 you a little background in case you don't know a little bit
21 about what this agency is about and the kinds of things we
22 do.
23 It's probably useful for this slide to be up there
24 in terms of the value, the positive value, of advertising.
25 Because inherently, we're going to hear about some negative

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1 things. These ads are deceptive. These ads have
2 misrepresented this or that. These ads lead people down the
3 wrong path.
4 And I think Laura had mentioned the Supreme Court's
5 intervention in the area to open up the doors to advertising
6 by health care professionals several decades ago. And that
7 was certainly over First Amendment concerns, but it's also a
8 recognition that advertising, if done well and right, can
9 help the marketplace.
10 Obviously, it can do all of those things that are
11 on that slide. You yourselves can think of experiences where
12 advertising has helped you make a choice or a selection or
13 become aware of something new that you just didn't know was
14 out in the marketplace. But that last point, that last point
15 on that slide, is of course essential. But of course it must
16 be truthful and non-misleading.
17 You know, it's interesting: When I hear the
18 discussions about the FTC, I mean, and all the things that we
19 might do or could do, today, right now, we're in court today,
20 not on a case involving physician advertising, but we're in a
21 court today, right now, seeking a temporary restraining order
22 against a marketer of a product called coral calcium.
23 And coral calcium was being marketed as to treat or
24 cure cancer and other diseases such as multiple sclerosis and
25 heart disease. Very widely promoted on television. So we're

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1 in court today challenging that.
2 Just last week we went into court, got a temporary
3 restraining order against a marketer of the Q-ray. Q-ray,
4 which is being marketed as something to relieve muscular and
5 joint pain, even though a very recent Mayo Clinic study
6 showed that it was no better than a placebo.
7 So there is much to do, and many areas for us at
8 the FTC on the consumer protection side to be focused on.
9 And that basic mission, as is set out in that slide, is to
10 prohibit unfair or deceptive acts or practices, and to go
11 against false advertisements for food, drugs, devices, and
12 services.
13 A practice is deceptive if it's likely to mislead
14 consumers acting reasonably under the circumstances, and is
15 material to a consumer's decision to buy or use a product.
16 And a practice is unfair if it is likely to cause injury to
17 consumers, injury as such that cannot be avoided by consumers
18 themselves and is not outweighed by some benefit.
19 One of my handouts was some pictures of some ads.
20 And the first one was for this, this amazing Gutbuster. The
21 ad says, "Turns ordinary sit-ups into tummy-tightening power
22 stretches." It's an old case from the FTC, old, I guess by
23 most standards, 1990. But what was interesting about that
24 case, it's a combination of both that unfairness and
25 deception concept.

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1 It turned out that Gutbuster really didn't do
2 anything to tighten your stomach. So those claims were
3 deceptive. But the other concern -- and this is a
4 Gutbuster -- the other concern about the Gutbuster was that
5 it could break upon use and maybe actually bust that gut by
6 piercing it or hurting some other part of the body. That
7 part of the advertising was unfair because it would cause
8 injury that consumers could not reasonably expect or avoid,
9 simply by using the product.
10 Core advertising principles: I don't think anybody
11 could disagree with any of these. Obviously, tell the truth.
12 But that's an important point, too: Tell all the truth.
13 Don't omit information that's needed to keep what's being
14 said in an ad from being deceptive. And, of course, to make
15 sure it's the truth, which is a core, very significant
16 approach that the Commission takes, and is certainly very
17 vital for any health care advertising.
18 The concept is, is before an advertiser makes a
19 claim in their ads, they'd better have a basis, a reason, to
20 believe that in fact that product or service will do what's
21 being said. And this standard, which we call the
22 substantiation standard as it says here, is flexible. It
23 depends on the claim.
24 So if you say in an ad, four clinical studies show
25 that this does this, well, then, you'd better have four

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1 clinical studies that show that. If you say in an ad that 98
2 percent of our customers or our patients or the consumers
3 taking this product achieve this result, that certainly is an
4 implication that you've done some kind of study or follow-up
5 with your patients to demonstrate that that's true.
6 But the point is that the standard is also flexible
7 so that if something new has been developed, some new
8 technology is being developed that information can get out in
9 an advertising about this technology so that there isn't some
10 absolute bar that you must have at this point this amount of
11 evidence before you can say anything, but still if you do
12 choose to do that you've got to present it in a fair and
13 reasonable way that consumers would understand what that
14 evidence means and what it doesn't mean. And of course, it
15 requires competent and reliable, and in the health care area
16 scientific, evidence, evidence that an expert would say is
17 needed.
18 A little concept here about ad meaning. When you
19 look at those ads that were being put up on the board before,
20 advertisers are certainly responsible for any express
21 statement they make in the ad, but also for ones that are
22 reasonably implied by the express statements they make.
23 The net impression of the ad -- we always look at
24 everything. Take a look at a couple of the other slides I
25 gave you, which are sort of interesting. Because they get

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1 into some of the issues that we might address in FTC cases.
2 This ad here, the one that has this big, blown up,
3 "A 1994 contemporary pediatrics recommendation study found
4 that 88 percent of pediatricians who recommend baby food
5 recommended this particular product."
6 Now, that's not what the -- that was a small fine
7 print disclaimer or disclosure at the bottom of the ad. The
8 ad actually looked more like this. I know you can't all see
9 it, but it was in bold print. "Four out of five
10 pediatricians recommend Gerber." Okay? Then they had put
11 this disclaimer that you see blown up.
12 Now, the facts are, and the Commission brought this
13 case in part because of these facts, there was in fact a
14 survey done of physicians. And they surveyed 562 docs. And
15 these were pediatricians. And 408 responded to the survey
16 that, yes, we recommend baby food. But almost all of them,
17 82 percent, said, but we don't recommend any specific brand.
18 So there were in fact 76 out of that original 562
19 that did recommend a specific brand. Now, there the company
20 was absolutely right. Of that 76 who recommended a specific
21 brand, 67, about 88 percent, recommended that product.
22 But it's still a sign that, you know, again, the
23 banner headline was, "Four out of five." Then there's a
24 disclaimer or an asterisk or an explanation in sort of fine
25 print. Then you hear the rest of the story and you go, is

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1 this exactly -- you know, this doesn't make sense.
2 The other ad is also interesting as well. This is
3 for a product that was being promoted as being 93 percent
4 fat-free. Now, I could take a survey in the audience here
5 and ask you, all right, how many grams of fat do you think
6 would have been in a serving of that product that was 93
7 percent fat-free? The answer is ten grams of fat. And about
8 14 percent of the product was actually fat.
9 Apparently where most of the fat was coming from
10 was not the light version of the ice cream. It was the
11 chocolate covering that was on the ice cream bar. And the
12 other fact that the commission noted in its complaint was
13 that the amount of calories in that product was very little
14 or hardly at all different from the calories that were in the
15 non-light version of this product. Most of the calorie
16 saving was because the product was smaller in size. So you
17 got less ice cream; therefore, you got less fat.
18 We've got this four-piece placement/proximity/
19 prominence/presentation. I think we saw some of those
20 examples by some of the ads that have already been put up.
21 But we look at issues like, is the disclaimer big enough for
22 people to notice? Is it easy to understand? Is it where
23 consumers might look? And is it near the claim that it
24 qualifies?
25 We had a little discussion about consumers

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1 testimonials. It's worth pointing out that you can't say --
2 basic rule: An advertiser cannot say in a testimonial what
3 they couldn't otherwise say in an ad. So just because
4 someone who has gone through a particular procedure or bought
5 the product had this particular result, if the advertiser
6 felt, I couldn't say that because I don't have substantiation
7 for that, I don't think that's true, just because some
8 consumer says it is, you couldn't use it in the ad.
9 And testimonials can often contain claims that are
10 basically statements of efficacy. We can see it in the area
11 of LASIK. We see it in many, many other areas, where that
12 testimonial is making some kind of statement that, you know,
13 basically says, this product will do this. It did it for me
14 and it will do it for you. And, of course, such claims need
15 to be supported.
16 Let's talk a little bit about LASIK. We've been
17 interested, involved, working with others in this area for a
18 number of years. And it seems like some of the issues
19 continue to be the issues that have been from day one: Throw
20 away, eliminate the need for glasses or contacts, has
21 certainly been a major question, a major issue.
22 Misrepresentations being made about the safety of the
23 procedure are certainly of issue. And concerns raised about
24 making comparisons.
25 And what our approach has been to date has sort of

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1 been this multi-faceted approach combining not just one area
2 exclusively, but looking at others. So we're going to do
3 education, we're going to encourage self-regulation, and
4 where needed, going to do law enforcement.
5 So we have over the years been working with a
6 number of groups, and again trying to come together.
7 Absolutely right, we did help and assist in the development
8 of guidelines. We have been in discussions and had meetings
9 with the various professional groups. We've talked with the
10 state medical boards. Again, where we have found examples of
11 advertising that have been questionable, we have tried to get
12 someone interested in going after it.
13 That last point: Bring cases where necessary.
14 And -- did I jump ahead? Well, let's go right there. Recent
15 Commission cases: We just announced two cases in March
16 against national advertisers, and they focus again on some of
17 these claims that people have been concerned about for a
18 number of years.
19 Eliminate glasses and contacts for life. Eliminate
20 the need for reading glasses. Risk of glare and halo.
21 Significantly less risk than contacts or glasses. It really
22 seemed to be an inappropriate thing to be comparing the risks
23 of going through a LASIK procedure with what might happen if
24 you put a contact on your eye or a pair of glasses on your
25 nose. They were really speaking to very different issues,

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1 and so we challenged that.
2 This false claim of free consultation: The problem
3 wasn't that the consultation wasn't free. The problem was,
4 the consultation didn't have anything to do with your
5 suitability for the procedure. Even though the ad expressly
6 said, come in for a free consultation to see if you qualify
7 for this procedure, when you showed up what you saw was
8 someone who basically told you what the price would be.
9 And then you had to pay over $300 if you wanted to
10 go to the next stage. At the next stage you would find out,
11 in fact, whether you were suitable, and you'd find out about
12 the risks. Those cases, again, were put out for comment in
13 March, and we're awaiting final action by the Commission.
14 Let me finish up here with some key points, and
15 look forward to the discussion that will occur later today.
16 Truthful and non-misleading advertising: Of course this can
17 be of great assistance too consumers. But deceptive
18 advertising, misleading advertising, will certainly distort
19 consumer choice.
20 So what we need, what we think we need here at the
21 FTC, is reasonable industry self-policing, informative
22 education efforts, and targeted government action, working
23 together to protect consumers and encourage fair competition.
24 Thank you very much.
25 MS. KOHRS: Thanks, Dick.

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1 And I'm very grateful to Mr. Sfikas, who's next,
2 because I don't have to worry about his PowerPoint
3 presentation because he doesn't have one. Mr. Sfikas argued
4 an advertising case a while ago before the Supreme Court,
5 California Dental, which was brought by the Federal Trade
6 Commission. Mr. Sfikas? Thanks for joining us today.
7 MR. SFIKAS: I would like to thank the Justice
8 Department and the Federal Trade Commission for inviting me
9 as a representative of the American Dental Association to
10 speak to you today.
11 As it was indicated, I did represent the California
12 Dental Association in a case that went to the United States
13 Supreme Court and thereafter was remanded to the Ninth
14 Circuit Court of Appeals.
15 In that case, the California Dental Association,
16 with reference to quality advertising, took the position that
17 in order for a dentist in California who was a member of the
18 association -- in order for that member to advertise quality
19 claims, the claims had to be verifiable.
20 The FTC took the position that that was a restraint
21 of trade, interfering with both the consumer's right to hear
22 that information and the dentist's right to utilize that sort
23 of information. The case ended up that the California Dental
24 Association prevailed and the case was dismissed against the
25 California Dental Association.

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1 Now, I'd like to give you a little bit of
2 background, and then I will try to answer some of the
3 questions that appeared on the FTC website relating to
4 quality advertising.
5 Quality advertising is considered by many
6 inherently deceptive because it cannot be verified and it
7 cannot be precisely measured. The rationale for this
8 statement is the striking disparity between the knowledge on
9 the other hand of the professional and the knowledge of the
10 consumer.
11 Professionals, obviously, supplying information
12 have far greater knowledge regarding the quality than the
13 individual consumer who is buying that service. Thus, it is
14 extremely difficult for a patient to discern whether he or
15 she has had, let's say in this case, good dentistry.
16 If there is an individual who goes into a dentist
17 and has a tooth filled, it is very difficult for the patient
18 to determine whether or not that restoration was a good
19 restoration. The same is obviously true for medicine and the
20 other health care professionals that we saw with their
21 presentations today.
22 The quality of professional services tend to resist
23 evaluation by patients in part, as noted above, because of
24 the specialized knowledge, but also with reference to whether
25 or not that service was the type of outcome that was expected

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1 as a result of what the health care professional did to the
2 patient.
3 Many economists in this area and other experts have
4 come to the conclusion that the lay public is totally
5 incapable of evaluating the quality of medical services. A
6 patient's loyalty to his or her dentist also complicates the
7 effectiveness of quality advertising.
8 In other words, there are bonds between patients
9 and dentists and patients and various physicians so that
10 irrespective of how you might rate that physician or dentist,
11 they will continue to go to that dentist because they have a
12 relationship with the dentist or the other health care
13 professional.
14 Now, as a result, the Supreme Court determined that
15 these various significant challenges to informed decision-
16 making by the customers for professional services suggest
17 that advertising restrictions arguably protecting the
18 patient -- this is the requirement for verification of the
19 quality advertising -- could not be looked upon in the rather
20 cursory manner that the Federal Trade Commission had in
21 determining that there was an antitrust violation.
22 The Bates case has been mentioned by a couple of
23 speakers now, and that was the case that first introduced
24 advertising to the professions. But even in the Bates case,
25 although it said advertising for routine services was fine --

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1 and that was not an antitrust case; it was basically a First
2 Amendment case -- nevertheless, the Chief Justice at the
3 time, who wrote the opinion, also noted that: "Claims
4 relating to the quality of legal services probably are not
5 susceptible of precise measurement or verification, and under
6 some circumstances might well be deceptive or misleading to
7 the public or even false."
8 Now, with this background, I'd like to try to
9 answer some of the questions that were posed on the website
10 in introducing this hearing this afternoon.
11 What information regarding quality is available to
12 consumers? Well, of course, there is quality advertising.
13 However, we have all the cautions that not only I've raised
14 here in the background but that the other speakers in showing
15 various forms of advertising that were troubling.
16 But let me give you an illustration with reference
17 to dentistry. Let us suppose that Jane Jones, DDS, who
18 practices in the State of California, advertises herself as
19 the best dentist in the West. Is this misleading? Is it
20 verifiable?
21 Well, in California and as a result of this Supreme
22 Court decision, Jane Jones would have to try to show that she
23 is the best dentist in the West or she would not be
24 permitted, if she were a member of the association, to run
25 this ad.

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1 Now, how are the ways that Jane Jones can show that
2 she is the best dentist in the West? I suppose if something
3 like a magazine like Consumers Union did a study and
4 determined that she was the best dentist or among the very
5 best dentists, that would probably satisfy the fact that this
6 advertisement had been verifiable.
7 What are the problems that might arise if this type
8 of advertising is permitted? Well, a patient may go to Jane
9 Jones, believing that she is the best dentist in the State of
10 California, and Jane Jones may not be the best dentist in the
11 state and may, as a result, leave the patient with lips that
12 are sore and a mouth that is sore as a result of this. Well,
13 certainly this patient will not return to Jane Jones. She
14 will go on and look at other dentists, and it may be trial
15 and error before she finds a dentist who she considers is
16 best for her.
17 Well, that trial and error constitutes search
18 costs, which would therefore interfere with the delivery of
19 services. And one of the arguments in the California Dental
20 Association case was that the elimination of those search
21 costs meant that this type of advertising would be pro-
22 competitive and, in fact, the Ninth Circuit Court of Appeals
23 found that to be the case.
24 What is the difference -- here's another
25 question -- what is the difference between dentists who

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1 advertise and those who do not advertise quality services?
2 Well, there may be no difference between them in terms of
3 training and skill. It's simply one is advertising that she
4 is the best, and the other is not advertising. So it would
5 appear as if the advertisement might give the dentist who was
6 advertising sort of the ability to say that they are superior
7 to the other dentists in the community.
8 What role does comparative advertising play in
9 dental advertising? There is almost no comparative
10 advertising; at least, I've never come across comparative
11 advertising in dentistry.
12 Are there governmental and association limitations
13 on advertising? And yes, as you saw with Mr. Kelly speaking,
14 the advertisement does have to be truthful. And in the case
15 of the California Dental Association, it also has to be
16 verifiable.
17 And the question then is, is that -- what effect is
18 that on the marketplace? In my judgment, that's a salutary
19 effect on the marketplace because consumers in California,
20 for example, can rely on the fact that the professional
21 association of dentists in that state verify the
22 advertisements that are being run in the Yellow Pages or in
23 newspaper columns or newspapers in general.
24 There's another question: What empirical evidence
25 supports this justification? Well, I'm really not aware of

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1 any empirical evidence that supports this. However, I
2 suppose one way that you could determine that is to run a
3 study and see whether or not -- let's take California again
4 as the illustration -- whether dentists in California who are
5 not members of the California Dental Association run more
6 quality advertisements than members of the California Dental
7 Association, who cannot run quality advertising unless
8 they're ready to verify those.
9 As a matter of fact, just as others have said here
10 with various physician-type advertising, advertising among
11 dentists is flourishing. The last time the ADA survey center
12 took a survey on advertising was in 1996 and I'm sure the
13 numbers would be much higher today. But in 1996, 65 percent
14 of all dentists were advertising. Now, that's not to say
15 they were advertising quality, but they were advertising in
16 general.
17 And the survey further asked those dentists, did
18 they believe that their advertising was worthwhile? And 70
19 percent of the dentists of that 65 percent stated that the
20 advertising was in fact worthwhile.
21 Now, the aftermath of the CDA litigation indicates
22 that probably the California victory was a pyrrhic victory
23 because what has happened because of the expense of that
24 litigation, none of the state associations are enforcing
25 advertising principles of ethics.

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1 But it's even more significant: They are so
2 concerned about anything, any enforcement, any disciplinary
3 actions, under the ADA principles of ethics that they are not
4 moving forward to try to obtain discipline for any violation
5 of the principles of ethics.
6 Now, I'd like to make one other statement for the
7 record. There was a dentist here yesterday, I guess during
8 the Noerr Pennington discussions, whose name -- I'll leave
9 his name out. But he made a statement which I would like to
10 challenge.
11 His statement was that a dentist may not advertise
12 that he is a mercury-free dentist. And although the ADA
13 Judicial Council has never been called upon to resolve that
14 issue, nor am I aware of any state association ever being
15 called upon to make a determination with reference to this
16 ad, the likelihood is that that ad, without more -- mercury-
17 free dentist, John Smith is a mercury-free dentist -- that
18 would not violate the principles of ethics.
19 On the other hand, if that dentist went further and
20 stated that he or she were mercury-free dentists because of
21 the toxicity of a certain type of restorative material, that
22 very likely would violate the principles of ethics because
23 that claim is untruthful and it's not verifiable.
24 In fact, the Food & Drug Administration, Health and
25 Human Services, has an extraordinarily large body of

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1 literature, that supports the notion that that form of
2 restorative is not harmful to patients and, in fact, except
3 for a very small element of the population who may be
4 allergic to that restorative.
5 But with reference to history, that restorative has
6 been used for 150 years. All the governmental agencies, the
7 scientific bodies, all conclude that it does not harm
8 patients. And therefore, if this dentist were to go further
9 and say he is a mercury-free dentist because of the toxicity
10 of a certain restorative, that probably would violate the
11 principles of ethics.
12 Let me conclude by telling you a joke that I used
13 to tell all of the dentists when I litigated with the Federal
14 Trade Commission. And that litigation lasted for a number of
15 years. And that was, how many lawyers does it take to screw
16 in a light bulb? And the answer is, as many as you can
17 afford.
18 And I would tell the dentist that the United States
19 government has many, many lawyers that it affords who work
20 for them in litigation with the FTC. Thank you very much
21 for permitting me to speak to you today about this subject
22 matter.
23 MS. KOHRS: Thanks, Mr. Sfikas. I think we're just
24 going to take about a ten-minute break to give everybody just
25 a chance to get up and stretch your legs and think a little

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1 bit before we come back for the final speakers. So we'll
2 reconvene, actually, at about 4:00 by this clock here on our
3 wall.
4 (A brief recess was taken.)
5 MS. KOHRS: It's 4:00 here. So I'm going to go
6 ahead and start with our next presenter, who is John Gebhart.
7 MR. GEBHART: Thank you. Good afternoon, and I'd
8 like to express my appreciation to the FTC and the Department
9 of Justice for inviting me here today. DoctorQuality is a
10 company that perhaps many of you do not know. We serve
11 anonymously or invisibly, in many cases. But I'm interested
12 in giving you some background about what we do. No, I don't
13 see where it fits with the agenda of today's discussions.
14 First, a word about myself. I'm actually trained
15 as a financial executive, financial and general management,
16 although I've spent about the last 15 years in health
17 services in a variety of different activities.
18 I've worked in areas that pertain to health care
19 marketing, hospital marketing, demand and disease management,
20 where we've delivered advice directly to consumers; also, in
21 physician referral, physician practice management. I had
22 some brief involvement in providing information services to
23 mental health professionals, and most recently have been
24 focusing on patient safety and physician quality with
25 DoctorQuality.

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1 Earlier this year as well, I had the opportunity to
2 serve on a panel at the NCQA that dealt with the issues of
3 provider referral and what kind of directory information
4 should be available to consumers. So hopefully I have some
5 insights onto some of the issues we're dealing with today.
6 I'm also going to talk a little bit about the
7 company. We provide a couple services, one of which I think
8 is directly germane to today's discussions. And I would
9 submit the other one is as well, but perhaps not as obvious.
10 And we're going to focus primarily on my Quality Coach, which
11 is a provider service -- or a service that we provide to
12 health plans and large self-insured employers.
13 DoctorQuality was founded in 1999 during what I'd
14 like to refer to as the apex of the dotcom toga party. I
15 actually represent the second generation of management. The
16 academic physicians who founded the company are back in
17 academic medicine, and doing so, they were able to double
18 their salaries and they now have 401(k) matching, to which I
19 say God bless America.
20 Even though we have a very -- we're very young and
21 very new on the scene, we do have a very strong customer base
22 made up of some reputable clients who have really helped us
23 shape the platforms that we provide today.
24 We're also very fortunate to have the guidance of
25 some very prominent individuals on our board of directors.

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1 One is a gentleman named Chuck Buck, who actually is a member
2 of the Institute of Medicine, who published the frame-
3 breaking report in 1999, "To Err Is Human," which really kind
4 of blew the covers off of medical errors. And the other is
5 Dr. David Nash. Dr. Nash heads up the Center for Health
6 Policy and Outcomes Research at Thomas Jefferson University,
7 nationally known as one of the experts in quality and patient
8 safety.
9 We are a company that uses health care technology
10 to improve quality and safety. We believe in the transparent
11 marketplace. We believe that there's an opportunity to get
12 more information into the right hands as people try to either
13 monitor performance or make critical decisions.
14 To that end, we have a hospital and physician
15 selection tool that helps consumers choose resources based on
16 performance and quality. We also have a hospital incident
17 and adverse event reporting tool which is used for quality
18 assurance purposes, and from that activity we today house the
19 largest database that we know of -- we've looked everywhere
20 to find anything comparable, and we haven't been able to --
21 we've got the largest database in existence for medical
22 errors and near-misses. And I'll talk a little bit about
23 that.
24 The two products that we offer are Risk Prevention
25 and Management, or RPM -- this is the hospital error

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1 collection tool. It's used for quality assurance purposes.
2 And we also have My Quality Coach, and that's the physician
3 and hospital selection tool.
4 I'd like to emphasize, it's very important as we're
5 trying to provide information to consumers to make informed
6 decisions. You must know that there is an impermeable wall
7 between these two platforms. The information that we collect
8 in the conduct of the RPM program is private, confidential
9 information for quality assurance purposes only.
10 Frequently I get the question, so you collect
11 hospital error information and tell consumers who makes the
12 most mistakes? That's not the objective of the program, nor
13 will it ever be.
14 I want to start by talking about the hospital error
15 reduction program. I think it's important -- maybe not
16 directly in the context of today's discussions, but I think
17 it's important in the context of: at some or another every
18 one of us here is going to be a patient or has been a
19 patient.
20 Between 44,000 and 98,000 people are killed
21 annually in the United States as a result of an unnecessary
22 medical error. Let's put that into context because 98,000 a
23 year is a big number. It's hard to really figure out what
24 that means. I've been given 15 minutes today. Three people
25 will die while I'm up here. And that's a pretty sobering

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1 fact. So it's a very significant problem.
2 The other thing that's very interesting is of the
3 numerous medical errors that are made, it's been estimated
4 that only about 5 percent are actually reported, reported in
5 the context of trying to analyze why the mistakes happened so
6 preventive measures can be taken.
7 Not only is it a tragedy, but it costs a lot of
8 money, too. Medical errors cost this country about $140
9 billion a year, both in terms of repeated procedures and the
10 costs for those procedures, and there's also a growing
11 concern, a crisis in many states, with respect to malpractice
12 insurance. And this is a piece of it.
13 Now, it's very encouraging to see that many of the
14 states in this country are now requiring some form of
15 mandatory medical error reporting. About 20 states today
16 actually have some legislation on the books requiring error
17 reporting.
18 I think two in particular are, I think, very near
19 and dear to DoctorQuality's heart. In New York, there's a
20 program called NYPORTS, and it might not be generally known,
21 but every single hospital in New York has a dedicated NYPORTS
22 terminal at which the hospital employees are required to
23 report certain errors to New York State.
24 Also, in Pennsylvania, I'm very proud to say that
25 yesterday our company submitted the bid to provide error

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1 reporting across the state to a new regulatory agency in
2 Pennsylvania known as the Patient Safety Authority. And
3 Pennsylvania is really going to be the first state of its
4 kind that is going to encourage not only what's known as
5 serious events -- in other words, the things that harm
6 patients -- but Pennsylvania wants to know about the near-
7 misses as well. And I think it's a big step forward in terms
8 of really being able to find ways to be proactive about some
9 of these problems.
10 The problems that we see here are not necessarily
11 individual acts of negligence or incompetence. The problems
12 that we see, we believe, most often are the result of a
13 system of care.
14 Here's a very startling statistic: From the time
15 that an individual is admitted to a hospital for what's
16 become a fairly routine procedure, coronary artery bypass --
17 from the time that person is admitted to the time they're
18 discharged, about 400 people are going to be involved in
19 delivering care to that individual, 400.
20 Not all of these are going to be hands-on. Some of
21 these people are going to work in the lab, some in the
22 pharmacy, some in the kitchen. Some are going to work in
23 maintenance, and they're going to clean up the operating room
24 after the fact.
25 But 400 employees of the hospital are involved in

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1 delivering service to one person. If each of them do three
2 things, that's more than a thousand opportunities for an
3 error someplace in the process.
4 So we believe that it's important to be able to
5 collect data and understand where in the system things break
6 down. And we think this is a function of both variation from
7 accepted medical practices, and it's also an important
8 element in trying to house the right kind of culture in
9 medical institutions.
10 And this might be the point where the service that
11 we provide internally and the service we provide externally
12 overlap. And this might be the point that has the greatest
13 relevance for today's discussion.
14 We start with trying to help our hospital clients
15 get an understanding of their culture, and someone in public
16 relations told me a long time ago, public relations starts at
17 home. You have to understand your own organization's culture
18 if you're going to understand how you want to portray a
19 message or an image publicly.
20 One of the big problems in health care is that we
21 have not practiced an open and blame-free culture of
22 gathering information about mistakes. Whether if it's for
23 fear of reprimand or whether it's arrogance or something in
24 between, a lot of these mistakes don't happen -- pardon me,
25 they happen; they don't get reported. We'd like to be able

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1 to change that, help our clients change that, and start to
2 gather the information to help them figure out where the
3 problems are.
4 So we start with culture. We move to data capture.
5 Once we know -- once we have the data, we can start to
6 analyze the data to figure out what the solutions are,
7 implement the solutions. And we find among a lot of our
8 clients, once we've nailed down one solution, another one
9 pops up. Health care technology changes constantly. Or once
10 you've solved a problem on the surface, it might expose
11 several other problems underneath.
12 So we believe that it's important at every level,
13 and I think in particular with respect to health care policy,
14 legislative policy, something has to be done to really evolve
15 the culture of health care.
16 I mentioned a little bit earlier the database that
17 we have. Earlier this week we crossed the line. We now have
18 a little more than 80,000 medical errors. Next week, it will
19 be more than 81,000, collected from more than 150 health care
20 facilities across the country.
21 You'll see that about two-thirds fall into either
22 the adverse clinical or medication areas. And I think the
23 statistics on the right-hand side are pretty telling as well.
24 The one I like the most is that of all the items that are
25 reported to us, 43 percent involve a near-miss.

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1 You know, this might be a situation where in the
2 middle of the night you see the nurse come into your hospital
3 room and say, "It's time for your pill," and she hands you a
4 yellow pill. And maybe you're going to be awake enough to
5 say, "Wait a second. Mine is blue." That's a near-miss. It
6 was caught in time. And there could be about 15 people
7 someplace in the chain that somehow put a yellow pill on that
8 tray for you instead of your blue one.
9 We've seen numerous cases where our clients being
10 able to quantify the recurrence of near-misses has led to
11 some very significant improvements in their procedures. And
12 we were able to prevent similar recurrences in the future.
13 I'm just going to say one more thing about the
14 medical error situation before we roll into the physician and
15 provider selection tool that we provide. But I get a lot of
16 questions very frequently about why should anyone really want
17 to report a medical error?
18 The first one, you know, why should you want to do
19 it? Well, I believe that doctors went to medical school to
20 learn how to do a good job. And there's a little bit of a
21 Pollyanna in me about that. I don't believe doctors go to
22 medical school so they can golf on Wednesday. There are
23 cheaper ways to golf on Wednesday.
24 I think that health care professionals try very
25 hard to do a good job, and I think it's harder and harder to

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1 do a good job. And what we provide is an improvement tool
2 that helps people understand where their weaknesses are and
3 be able to react to them.
4 Next question: Won't error reporting lead to
5 lawsuits? A very, very common misperception. And the answer
6 is, in 49 states, no. In 49 states, any information that's
7 collected as part of a quality improvement is protected by
8 the peer review statutes, which means you cannot subpoena it.
9 I'm sure that will be challenged, and it's probably a
10 question that we're going to have to wrestle for a long time.
11 But I'm very pleased to say that at a policy level, in 49
12 states the answer is no. This does not lead to lawsuits.
13 This leads to better health care.
14 Who would want to report on a coworker? Well, let
15 me tell you about one of the programs that one of our clients
16 has in place, which I think is just the perfect embrace of
17 the kind of culture that we hope our clients are promoting.
18 We have a client who has a program called the Plant a Flag
19 program, and what happens is the hospital gives lapel pins
20 and collar pins to the doctors and nurses that report an
21 error.
22 They take the attitude that the errors are like
23 potholes in the road. If you stepped in the pothole, please
24 plant a flag so that your coworkers don't step into the same
25 pothole. And we see hospitals give out gift certificates for

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1 cookies in the cafeteria, movie tickets, anything to promote
2 a culture of blame-free reporting.
3 And does this offend doctors? Well, it doesn't
4 offend doctors if they've embraced this culture of blame-free
5 reporting. It's very important that we look at error
6 collection data in a non-punitive fashion. And I go back to
7 my first point: 98,000 people die because of medical errors.
8 It seems pretty apparent to me that blame has not worked. We
9 need to try something else.
10 Let me turn to our second product, My Quality
11 Coach, which is an online consumer decision support system
12 whereby consumers can choose physicians and hospitals based
13 on quality and satisfaction data. With this program, we
14 encourage consumers to log on and prepare ratings on their
15 doctors. And we also invite doctors and hospitals to present
16 certain information about themselves.
17 Now, this information, we think, is pretty
18 important in the context of how resources are chosen, VHA
19 did -- the Voluntary Hospital Association, that is, did a
20 study last year and it seems pretty clear that health care is
21 becoming more consumer-centric. I won't go ahead and read
22 all those, but you can probably them.
23 But in other words, this slide makes the point that
24 consumers are interested in finding out quality information.
25 They would be very pleased to make decisions based on the

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1 standards of performance and the quality of care that's
2 delivered.
3 It's also becoming an increasing trend that
4 employers are very interested in this as well. It doesn't
5 cost more -- in fact, it actually costs less -- for the
6 employees to go to better quality doctors and better quality
7 hospitals. And to the extent that this both is a way to
8 reduce health care cost and to bolster employee satisfaction,
9 this is something that large employers in particular are
10 increasingly becoming very interested in.
11 This last point on the slide: Network size is
12 taking a back seat to network quality. Actually, that's
13 backwards, and the person who drafted that is going to be in
14 big trouble tomorrow morning when I get back to the office.
15 Network quality -- no. I'm sorry. I'm backwards.
16 Start again. Network size is taking a back seat to network
17 quality. It used to be that when you'd get into a health
18 plan, you'd look at the book and say, is my doctor in here?
19 Well, now people are increasingly trying to figure out, is
20 the good doctor in here?
21 Just a snippet from the Philadelphia Business
22 Journal, where last year the Blue Cross organization in town
23 has actually developed an incentive program based on quality.
24 If institutions are delivering certain quality metrics,
25 they're paying bonuses, cash from a health plan, for doing a

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1 good job.
2 We have a number of prominent clients -- I see the
3 two-minute sign is up, so -- we have big clients and we're
4 proud of them. I do want to point out that Patient Choice,
5 Luminos, and Destiny Health are all in the defined
6 contribution, defined consumer choice plans.
7 My Quality Coach has information on about 750,000
8 physicians and all of the hospitals in the country. And it's
9 available via a secure password-protected site.
10 We offer our members an opportunity to rate
11 physicians. This is my -- one of my customs is to put up on
12 slide that's just not legible. This is it. But you can see
13 that there is a questionnaire that you can fill out, and
14 immediately upon completing the questionnaire, you can see
15 satisfaction rankings for your physician compared to other
16 physicians in the plan and other physicians in that same
17 specialty.
18 We, in addition to providing access to information
19 about how to find the best qualified physician and hospital,
20 provide some personal health information tools, health risk
21 assessments and health guides, that can help you better
22 understand your circumstances and prepare for your
23 interactions with the system.
24 Time is very short, so I'm going to go ahead and
25 skip over a couple of these. And I want to jump to, at the

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1 very end here, a couple of things on -- the impact of this
2 kind of information on the providers and the hospitals
3 themselves.
4 We work very closely with the Pennsylvania Health
5 Care Cost Containment Council, or PHC4. And they have
6 published a number of studies over the years. They got a lot
7 of attention in 1998 around a study regarding coronary artery
8 bypasses in Pennsylvania and the associated report cards that
9 emanated from that study.
10 David Nash, prior to the formation of our company,
11 was quoted in the Wall Street Journal pointing out that the
12 great thing about the report cards is it tells institutions
13 where to start looking. It's a place to start looking at
14 performance and what to do about it. One of the surgeons at
15 Lehigh Valley Hospital admits that they're under a
16 microscope, and says it's a good thing. It's causing them to
17 move forward.
18 In the interest of time, we'll jump over these
19 statistics. But I do want to point out that the public
20 dissemination of performance data has had a very positive
21 impact in Pennsylvania. You can see that in the ten years
22 concluding in the year 2000, there's been a pretty dramatic
23 decrease in mortality surrounding coronary artery bypasses.
24 This has also been demonstrated in other disease
25 states and other procedures, where the impact of revealing

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1 this performance data has had a very positive impact on the
2 actual performance of the physicians themselves.
3 And I'll end with the last one from a fellow you
4 might know of, Dan Rather. "When it comes to choosing a
5 heart surgeon, Pennsylvania is on the cutting edge in helping
6 consumers pick the right one."
7 So we like the idea of making information
8 available. We think it has a good impact on the institutions
9 themselves. And we think it's a trend that consumers are
10 continuing to demand. Thank you very much.
11 MS. KOHRS: Thank you, John.
12 I'll ask all of the panelists to come up. Helen,
13 you're going to speak. You don't have a PowerPoint, but
14 everyone else can come up and have a seat. You can choose to
15 speak from your seat or from the podium, whichever you would
16 prefer. Helen has been here all day.
17 MS. DARLING: I just -- obviously, the satisfaction
18 of what I have to say will be inversely related to how long
19 it takes me to say it. So I will try to make it as fast as I
20 can.
21 I'd like to mention that two of our Washington
22 Business Group on Health public policy goals, two of our
23 highest, are to increase transparency in the system -- and
24 there is a report out there; if you haven't gotten it, I hope
25 you will read it. It talks a lot about what's now available.

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1 I think for anybody who hasn't worked in this field
2 recently doesn't really appreciate how much incredible
3 information, DoctorQuality.com being one of the best
4 examples, is available to especially companies. I know one
5 of the companies that uses them is G.E. And they are a very
6 demanding purchaser and very sophisticated purchasers.
7 So they have a product. Others have products. The
8 interesting thing is how many are emerging, how all of them
9 are getting better, how -- I mean, they have data and tools
10 that would just make us salivate even as recently as five
11 years ago.
12 And the ability -- it's probably one of ours,
13 too -- but the ability to put in something like your personal
14 zip code, and say you want a hospital within ten or fifteen
15 miles, and these are the things you care about, like
16 complication rates and things like that, it will create its
17 own report for you, ranking all the hospitals in your
18 immediate area.
19 And again, if you're not familiar with that, what's
20 amazing is what's available and how critical it is that we
21 keep moving. They're now using data that I hear now, but
22 we're not going to have more data unless we have more
23 pressure to have more data.
24 We certainly think as an organization that
25 advertising can be fine, and we certainly wouldn't want to

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1 squelch that, whether it's First Amendment or not. But we do
2 think that the role of FTC -- and the FDA, by the way, and we
3 met with the Commissioner the other day about the role they
4 can play from where they have authority to try to drive the
5 system to more fact-based information, and also, obviously,
6 certainly no deceptive advertising.
7 If anybody has -- you should see Tom Lee's letter
8 in the -- article in the New England Journal of Medicine on
9 the topic, the best I've ever seen about how you don't get
10 peace of mind. For us, it's hard to believe that anyone can
11 even today run an ad and say that if you get this scan, you
12 can be assured and have peace of mind. I mean, if that's not
13 deceptive advertising, I don't know what is.
14 In the past, critics have said -- a lot of people
15 who are scornful of some of these things have said, neither
16 consumers nor purchasers use quality information. Well, that
17 is not true any more. And usually that was said based on
18 surveys at a time when we didn't have information, so you did
19 a survey with a two-year look-back and say, do you use
20 quality information? They'd say, no, they don't. Well, they
21 didn't have it. It wasn't available to anybody.
22 And in many instances now, it's available. Also,
23 in other instances, a lot of useful information is tucked
24 away in places like state health departments and quality
25 improvement organizations and that sort of thing.

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1 So one of the things we'd like to see in every
2 piece of legislation that goes through any time in the next
3 two years are requirements around reporting. At a minimum,
4 of all currently publicly reported information, that such
5 reporting would be easily accessible to consumers. But we'd
6 like to go further and eventually have even better
7 information.
8 There is evidence, as we just heard from John a
9 minute ago, that public disclosure of provider performance is
10 resulting in clinical quality improvement, in Pennsylvania
11 but also in New York. In fact, in every state that has such
12 information available, we are seeing improvements and people
13 do pay attention. The interesting thing is that providers
14 pay attention because they don't like looking bad, and for
15 obvious reasons.
16 We also know that consumer information needs to
17 move beyond hospital quality report cards, not because
18 they're not wonderful, but because the information has to get
19 much more complicated because we're going to have tiered
20 networks and they're going to be often by specialty and that
21 sort of thing. So the kind of drill-down detail will be more
22 important.
23 I would just say, just to end, really, we hope the
24 FTC and the FDA will be very aggressive in stopping all
25 deceptive and misleading advertising; that they will see

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1 protecting the consumer, especially in these complex areas,
2 at a time when consumers, employees will have much more of a
3 role to play, whether they want it or not; they will be
4 playing a much bigger role, and they're going to have to have
5 information. And the only way they're going to have it is if
6 we keep the pressure on. Thank you.
7 MS. KOHRS: Thank you very much, Helen.
8 It's sort of the policy here to give the first half
9 of the panel an opportunity to respond to some of the things
10 that were said after they spoke. To make things a little bit
11 easier for me and to move these things a little bit easier,
12 if you're interested in speaking, just tilt your name tent on
13 its side so that I can see. If it's tilted like that, I'll
14 know that you want to participate and ask a question.
15 So we'll go ahead and just start down the line, if
16 you want to just make a comment briefly. Bernie Dana had to
17 leave, so we have a fill-in. Ms. Condeelis?
18 CHRIS CONDEELIS: Thank you. I guess one of the
19 things that I'd just like to share, a couple points, is that
20 I think with the panelists today, we do in long-term care
21 share some things in common, in that our residents, our
22 consumers, come to us with a very critical need. We are not
23 an elective care service.
24 The fact that 75 percent of our customers are
25 coming to our homes and their payments are capped does have a

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1 very specific influence on the way we provide our services
2 that is -- you know, it kind of caps competitiveness. And I
3 think that's different from the other panelists.
4 We do for our consumers have quality measures.
5 There is difference in the marketplace about how good those
6 measures are, but I think that as a profession, we have
7 pioneered the consumer satisfaction data that is then
8 allowing us to give yet another indicator of quality to those
9 that are seeking our services.
10 MS. KOHRS: Great. Laura?
11 MS. CARABELLO: If we are to insist upon getting
12 quality information out to the consumer, what is going to be
13 the best way to get it out there? Whose responsibility is it
14 to do so? Is it incumbent upon the physician himself? Is it
15 the organization? Who's going to take on that job? Is it
16 going to be the FTC to help out?
17 Getting out information is not inexpensive.
18 There's a big price tag to it. And the fact that the quality
19 website is up there for getting quality information, if
20 you're not a member of G.E., does that mean you can't get the
21 information? Who is going to take that responsibility to get
22 that information, for example, that a body CT scan is not
23 advisable? Whose responsibility is it and who's going to pay
24 for it?
25 MS. KOHRS: Well, I think she's thrown that out

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1 generally. Helen, you look like you're --
2 MS. DARLING: Well, I can always answer a question.
3 I think on that one, it's a good example of where the complex
4 system that we have will govern. That is, all purchasers
5 should make certain that it's available to the people they
6 purchase for -- Medicare to its beneficiaries, the states for
7 their Medicaid beneficiaries, and private purchaser employers
8 for their employees.
9 And many of the companies, as you saw, some of the
10 insurance companies that provide coverage for lots of middle-
11 sized and small employers, provide these tools as well. So
12 that is who's paying should pay for it.
13 Now, in a way, it isn't expensive. That is, we
14 already spend billions of dollars reporting information, and
15 you could go on and on on that. We have a lot of
16 information, but much of which isn't nearly as useful as it
17 could be.
18 It's already -- we have built into the system the
19 expenses of collecting that information. In fact, they
20 estimate, I guess -- some people estimate about 20 percent of
21 health care costs are the transactions that we have in our
22 system in contrast to other countries. So we've got a lot of
23 money already in the system. We simply need to use it
24 differently.
25 MS. KOHRS: Okay. Dr. Lee?

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1 DR. LEE: You know, I would actually add that I
2 think the professional societies, they should be challenged
3 more by the business community and by others to pick up the
4 role and really show some leadership in this area about
5 making even stronger statements about what is and isn't
6 supported by evidence.
7 And I actually think they're ready for it. I mean,
8 I do a lot of stuff with the American College of Cardiology,
9 and I think they're primed. They're actively discussing
10 having -- you know, taking stands on -- you know, to try to
11 reduce waste. Because frankly, they know they need to. You
12 know, providers need to show that they are also trying to
13 make the system work because they haven't been doing that
14 much thus far.
15 I'd also that, you know, people don't usually think
16 of physicians being in synch with the business community.
17 But I would say that in general, our physician -- at least
18 our leadership is very much in synch with what Helen said on
19 both counts, in that first, we would be very supportive of
20 strong action to try to reduce, you know, misleading
21 advertising that generates demand where there isn't really
22 need, and we'd do everything we could to try to support that
23 with our, you know, experts and so on.
24 And then the second half, which is that how do
25 physicians feel about public disclosure of data related to

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1 quality, and there's certainly a bit more neurosis and
2 ambivalence about that. But I would say that times have
3 changed, and that many of our physician leaders accept it and
4 are for it. They think that it's -- you know, it's like
5 having your teeth cleaned. It's, you know, uncomfortable, it
6 draws some blood, but it's good for you.
7 And then there are others who just understand that
8 it's going to be this way, and they're not going to resist it
9 any more. So I actually think that there's enough people who
10 understand that it's a tremendous driver for improvement, and
11 that wherever something isn't -- wherever we are against data
12 being made public, we'd better have a good internal sense of
13 accountability. And that's sort of where we've arrived in
14 our system.
15 So I actually think the providers are in synch on
16 both counts: better quality data being released to the --
17 made available to the public, while a reduction in the poor,
18 misleading information that makes up a lot of advertising.
19 MS. KOHRS: Dr. Koch?
20 DR. KOCH: I think consistent with that, in terms
21 of elective procedures, if we get after something like LASIK
22 surgery, the manufacturers, industry and medicine, both want
23 procedures like this to be successful, to work, to give good
24 outcomes, because that's what drives it forward.
25 And so false advertising, patients who have the

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1 surgery who shouldn't have it, spoil it for everybody. In
2 addition, of course, to the primary problem, which is those
3 patients, you know, end up with an outcome that they weren't
4 expecting.
5 So I think that in general, really consistent with
6 what you're saying, there's a feeling about wanting to move
7 ahead. As far as the societies becoming involved, I think
8 Mr. Sfikas has given us a good feeling for what the down side
9 of societies becoming involved is in terms of the costs. And
10 that's always a problem.
11 I mean, what does a society do? Do you just -- do
12 you do the bully pulpit and just talk, talk, talk, because if
13 you proceed and try and get to any level of enforcement, then
14 the restraint of trade issues come up and it becomes
15 extremely expensive, time-consuming, and everybody washes
16 their hands of the next case.
17 MS. KOHRS: After the encouragement of Drs. Lee and
18 Koch about the FTC's involvement, I think it sort of leads me
19 to ask a question of Mr. Sfikas. I'm going to quote from the
20 Cal Dental decision. The concern -- the decision says that
21 there were many instances in which the dental association
22 suppressed such advertising claims as, "We guarantee all
23 dental work for one year," "Latest in cosmetic dentistry,"
24 and, "Gentle dentistry in a caring environment." And I'm
25 wondering if the California Dental Association has changed

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1 its perspective, whether those types of claims would be
2 allowed now.
3 And you said that there was a reticence on the part
4 of the California Dental Association, or indeed any dental
5 association, to pursue any types of claims. How do we
6 encourage them to get involved in the process, as Drs. Lee
7 and Koch would want an association to be involved, without
8 causing anticompetitive problems?
9 MR. SFIKAS: Well, it's a real irony because, of
10 course, we prevailed in the California Dental Association
11 case. We won. The Court said that it was not an antitrust
12 violation.
13 I think you've heard that in the case of
14 guarantees, that they're really not a solution. If someone
15 is injured, the mere fact that they get the cost of the
16 dental services back is not really anything that's extremely
17 helpful.
18 How do you encourage the associations to get
19 involved? I think if the FTC -- I think from the standpoint
20 of the dental profession, it would be very helpful -- and
21 there's really no way to do this, I mean, because the
22 principles of ethics are already out there. But it would be
23 very helpful if we could present the principles of ethics to
24 the FTC where they would say, excluding the advertising -- we
25 wouldn't give those to you because we've already won that, in

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1 our opinion -- but if we gave everything else to you and you
2 said, you know, none of these would raise antitrust
3 concerns -- and many of these certainly would not raise
4 antitrust concerns.
5 For example, some of the things that are not being
6 done today, in the case of peer review, peer review was
7 always used as an alternative dispute resolution mechanism.
8 A patient comes forward, says they're unhappy with what the
9 dentist did. They don't like the procedure that was done.
10 The association hears it, often agrees with the patient,
11 would make the dentist reimburse the patient.
12 Now, because it's no longer obligatory since it's
13 not being enforced, the patient is left to file a lawsuit,
14 which is not a good way out of that. Consultation and
15 referral, when it is in the best interests of the patient,
16 certainly that doesn't raise any antitrust issues. This is
17 the dentist determining that the dentist ought to refer, more
18 likely than not, to a specialist. That's not being enforced.
19 And even a very recent one, the dentist should
20 avoid interpersonal relations that could impair personal
21 judgment, sort of something on the order of sexual
22 harassment. None of those are being enforced, and I'm sure
23 that we could agree that none of those would raise antitrust
24 issues.
25 So it's a real irony. It's the expense of the

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1 California Dental Association having to litigate that case,
2 first before the administrative law judge, then before the
3 Federal Trade Commission, then in the Ninth Circuit Court of
4 Appeals; then, because the first time, as you know, the Ninth
5 Circuit Court of Appeals ruled for the Commission, a two-to-
6 one decision, then the Supreme Court takes the case. The
7 Supreme Court reverses, and then sends it back down to the
8 Ninth Circuit Court of Appeals before that litigation came to
9 an end.
10 Well, the other state associations, not as large as
11 the California Dental Association, are saying, we just don't
12 want to get into that. So there is a great reluctance to
13 enforcing not only the advertising restrictions in the
14 principles of ethics, but other provisions as well.
15 MS. KOHRS: Go ahead. Dick?
16 MR. KELLY: Yes. I'm not an antitrust lawyer. I'm
17 not in the Bureau of Competition. So to directly respond to
18 some of those issues would be foolhardy on my part.
19 Clearly, in the California Dental case, there was a
20 debate as well as to what kind of record needed to be in
21 evidence to justify or not justify those restrictions. And
22 ultimately, that case, at least, turned in significant part
23 on what approach was being used. There's something called a
24 per se approach to evaluating restrictions, and then there's
25 a truncated rule of reason. And the Court was saying the

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1 Commission picked the wrong one, and sent it back.
2 The Commission at the time it dismissed that case
3 did say that it was concerned, and continued to be concerned,
4 about restrictions that would be in place that would
5 needlessly, in essence, restrict truthful or nondeceptive
6 advertising. And that discussion, I think, continues today.
7 On the consumer protection side, I mean, we worked
8 with AAO in adopting -- in their adoption of some guidelines
9 for advertising in 1997, I believe. We have been reached out
10 to by those groups as well as state medical boards to look at
11 and evaluate specific complaints.
12 And there is clearly agreement, at least in part,
13 on a number of things. I think everyone agrees, everyone
14 agrees, that false and deceptive advertising should not be
15 allowed. And what I think sometimes the debate turns on as
16 well: What methods can you use to prevent false and
17 deceptive advertising? How far can you go in adopting
18 restrictions?
19 The Commission, on the consumer protection side,
20 generally proceeds on a case-by-case basis. We look at the
21 record in a particular case. We look at the evidence in
22 support for a particular claim, and make a judgment whether
23 that advertiser at that time was engaged in deception.
24 And that is a contrast to adopting board rules that
25 seek to prevent -- prohibit broad categories of speech. I

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1 think one of the ones that went up there was prohibition on
2 using testimonials in advertising, for example. And that's
3 where I think the debate has been, at least in major part,
4 over these decades about this issue.
5 It seems to me that it is important to deal with
6 all of these issues that have been raised today and, of
7 course, are raised in other forums on other days on similar
8 kinds of problems. It requires a joint tri-part, multi-part
9 approach from the role of a consumer of having easy ways to
10 complain if they feel they've been taken and deceived, and
11 encouraged to come forward and complain so that people can
12 get access to that information.
13 It requires, on the part of responsive professional
14 groups that oversee that, to, in fact, be forthcoming if they
15 see problems or abuses within their industry; to try to find
16 a way to present them to the Commission in some sense in
17 which way some things were being presented today.
18 It requires a response on the part of government to
19 look at that and to evaluate that information, and if there
20 is a strong case being made, to proceed. I mean, we at the
21 FTC, like everyone else, have to have priorities.
22 I mean, we've been involved for a number of years
23 in looking at claims on the internet, health care claims, not
24 necessarily by doctors but health care claims. And there's a
25 huge number -- as you know, just filled with claims. So

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1 where do you draw the line? What do you focus on? And we
2 try to focus on claims that are making representations about
3 curing dread diseases, for example. And that's where our
4 focus is.
5 So it requires consumers, it requires the groups,
6 it requires government, in some sense working together to try
7 to address some of these problems as best as possible. And,
8 you know, I remain hopeful.
9 In the coral calcium case I mentioned today, one of
10 the things we're doing at the same time we were going into
11 court seeking this temporary restraining order, the FTC and
12 the FDA were together sending out letters to marketers on the
13 web, trying to get them to stop making similar claims for
14 coral calcium products.
15 So, you know, there is hope. There is approaches
16 that can be taken. And, you know, hopefully we're all
17 willing to try to work together to achieve that.
18 MS. KOHRS: And speaking of things going on on the
19 web, John, you have dealt with the gamut of physicians and
20 consumers and various entities. Can you talk a little bit
21 about what that experience has been like? Do you have a
22 minimum pool of doctors? If I wanted to look up my doctor,
23 John Smith, and I see that 100 percent of the comments have
24 been negative and I click on it, does it tell me that there's
25 only been one comment made, something like that? How do you

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1 assess -- how does a consumer assess the data?
2 MR. GEBHART: We try to make everything as
3 transparent as possible. So if one person has submitted the
4 rating, it will say one. You know, whatever the number of
5 ratings have been, that's obvious to the consumer when
6 they're using our site.
7 Some of our clients have actually asked us to
8 suppress any rating information until 30 ratings are
9 submitted, so at least there can be some semblance of an
10 average. Now, of course, you get into a little bit of a
11 Catch-22 game when that happens because if you submit a
12 rating but you can't see the results right away, then it's
13 not a very satisfying experience for the consumer.
14 So we've really encouraged keeping the information
15 as open as possible, not really trying to take sides, but
16 really just in trying to encourage more ratings.
17 MS. KOHRS: And what's the response been from the
18 physicians?
19 MR. GEBHART: Initially, physicians have been
20 pretty much against it, pretty much against it. And I can
21 certainly appreciate that. There's a lot of fear of the
22 unknown. There's a fear that they might have one bad case
23 and that person will continue to rate and tell all their
24 friends to rate.
25 And we actually have some safeguards for that as

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1 well. But this is a new territory, and obviously it's going
2 to be a little awkward and a little intimidating until
3 there's more trial in what we do.
4 I guess -- I'm not letting the social issues slow
5 us down here. I take the attitude that, you know, myself and
6 the rest of the baby boomers are really hitting our health
7 care consumption prime right now. And we're the ones that
8 fired a president 30 years ago, and getting health care
9 information is just another one of the things we're going to
10 solve.
11 MS. KOHRS: One of the issues that I wanted to ask
12 about with regard to LASIK is one of the concerns is that
13 there are a lot of consumers who are getting a great deal of
14 information about LASIK from the media, but they're not
15 really talking to a physician about it until they come in and
16 say, I want to have this procedure done.
17 How does that affect informed consent? Do you have
18 consumers who come in and say, I want this, and they will
19 not -- they just want to have the surgery, they want you to
20 go forward with it?
21 DR. KOCH: Well, I think that's true of all these
22 elective procedures. You've got people who are just
23 convinced they're going to have it done, whether it's a
24 facelift or LASIK or whatever. And they come in and they're
25 totally focused upon having that procedure done.

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1 And we just have to try to pull them back, you
2 know, show them the informational video. We give them the
3 informed consent. We tell them explicitly that there are
4 these risks of complications, and you do the very best job
5 possible.
6 And at the extreme, if you're cautious as a
7 physician, you will actually reject patients who clearly do
8 not appreciate that there is the risk of complications
9 because of the concern about what would happen both to the
10 patient and to yourself were there a bad outcome.
11 I don't know that the majority of -- probably the
12 majority of physicians do that, but there's certainly a
13 minority that do not.
14 MS. KOHRS: And as you said, they can't -- getting
15 your money back after a bad outcome is not going to do the
16 patient any good. But is there some kind of mechanism we
17 could use that would brand the doctor as being a more capable
18 provider, that there's some kind of way he can identify
19 himself as being somehow better, a safer risk, if you will?
20 DR. KOCH: Well, it gets into the whole issue of
21 self-reporting of results. And I have a colleague in my
22 community who reports that 98 percent of his patients see
23 20/20 after LASIK surgery, or some such statistic, and yet I
24 continue to see complications from his office drift into my
25 office and they are not in that 20/20 category.

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1 So you're at risk. We keep our own data, for
2 example, and for a while we used to put it up on the website.
3 But no matter whatever number we put up, the next person down
4 the street somehow had a number that was a little bit better.
5 And so unless you have some kind of an external, objective
6 measure of quality, either in terms of results or risks or
7 incidence of complications, it's a difficult problem. And
8 it's particularly difficult when you're not in a hospital or
9 other type of setting where you have other people overseeing
10 and monitoring your outcomes.
11 DR. LEE: You know, it's a very tough area and I
12 think you have to have realistic expectations about what you
13 can do. I mean, another area where a lot of numbers get
14 thrown around is prostate surgery for prostate cancer, and
15 what's the risk that someone is going to have incontinence?
16 What's the risk that they're going -- what's the chance that
17 they're going to have sexual function afterwards?
18 And you don't see this advertised on billboards or
19 in the newspaper, but believe me, when the patient gets in
20 the door, a lot of numbers are thrown around. And the
21 patients either are not sophisticated enough or they don't
22 even want to find out what's really behind the numbers. They
23 hear 99 percent, and they want to believe that the surgeon
24 they're talking to is great.
25 So I just don't know how -- I think that this is

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1 not an area where investment in energy and time is going to
2 have a great return. I mean, I'm not against going in there,
3 but I would be realistic.
4 One thing that ran through my mind that I -- you
5 know, this is going to sound like a, you know, like a
6 physician-like, Taliban-like perspective on things. But I
7 think that in the interests of promoting fair competition in
8 the health care marketplace, I think a number of my
9 colleagues would be -- they would support a ban of
10 advertising of anything which required a physician decision,
11 that is to say, a prescription being written, a test being
12 ordered, with the logic being that if the decision-making is
13 supposed to be restricted to a physician, then the lay public
14 doesn't have the expertise to judge their need for it. And
15 this obviously would limit all direct-to-consumer advertising
16 in pharmacy.
17 And I think that that kind of thing does provide --
18 have some small benefit. I think it creates much more demand
19 where there isn't much need. You know, the ratio, you know,
20 of that to good is not a good ratio.
21 And I think that people should compete, but they
22 should compete fairly with people who can judge things
23 appropriately. I think physicians have the training. So
24 this is kind of a paternalistic point of view. I don't think
25 it's politically feasible. But I think that physicians would

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1 support a movement in that direction, which I know would be
2 not easy for you. But physicians would be right behind you.
3 MS. KOHRS: Well, our advertising specialist, who
4 assures us she's not related to the Sopranos, is behind you
5 chuckling. So Laura, do you want to weigh in on this one?
6 MS. CARABELLO: Well, I think it's unrealistic to
7 assume that we're going to turn back the clock at this point
8 on the pharmaceutical industry or on the physician industry,
9 or on the hospital industry, for that matter.
10 Hospitals are the ones who are driving the
11 marketing engine more than anybody else with issuing all
12 kinds of not only quality reports, but investing fortunes --
13 and I have to say that over the years, I have handled many,
14 many marketing projects for hospitals where they want to get
15 out to the community.
16 My concern is this, and it comes down to: How does
17 the consumer -- and I've marketed products; I've marketed
18 physician services, disease management companies, and you
19 name it across the board in the health care spectrum -- how
20 does the consumer, who doesn't have access to the internet --
21 we talk about all these websites -- who doesn't have access
22 to newsletters, who is the run-of-the-mill -- or who might
23 get his or her information at the beauty parlor or at the
24 barber shop, going to be able to judge quality? And is that
25 quality information simply going to come to them on a

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1 billboard that they may be able to read or not because it
2 wasn't in their language?
3 Are they going to get it from, you know, the health
4 club? Are they going to get it from some other source? Or
5 have they lost total confidence in the quality components of
6 advertising?
7 MS. KOHRS: Dr. Lee?
8 DR. LEE: My response is that I'm not really
9 worrying that much, actually, whether the consumer really
10 understands it. I think that if solid quality measures get
11 put out there, it produces the desired effect, which is it
12 makes consumers like, you know, me in my day job, you know,
13 sweat bullets and try to create systems to make it better.
14 So that it will be great if the consumers
15 understand it, but to me it doesn't really matter if your
16 goal is to actually improve care.
17 MS. KOHRS: Well, going back again to that Cal
18 Dental decision, when "gentle dentistry in a caring
19 environment" was seen as a quality assessment that Cal Dental
20 was not willing to allow dentists to advertise, how would you
21 assess what quality advertisement really is? Do you have
22 a -- can you give us a sense of what that might be?
23 MS. CARABELLO: Well, in my mind, anything that
24 flies in the face of the regulations is not quality. So that
25 has to be the first benchmark, whether it's the state

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1 regulation or it's the FTC or it's your association or some
2 guideline that you're following, as long as you're in the
3 guidelines.
4 It's a question of good taste versus bad taste. I
5 mean, there are doctors who are advertising regularly who are
6 advertising in good taste and promoting quality. And I think
7 quality wins no matter what. That's the bottom line.
8 And I somewhat take issue with the fact that, do we
9 care whether the consumer gets it? I think we have to care
10 whether the consumer gets it because ultimately, when they
11 get the right information, they take better care of
12 themselves, the outcomes are better, and it costs the system
13 less money.
14 So I think it is incumbent upon those who are on
15 leadership decisions, and certainly I take my
16 responsibilities very seriously when I work with clients, to
17 make sure that they are promoting quality. Because
18 ultimately, if we don't -- and the employer. And one thing
19 that Helen said about those who pay for the health care are
20 responsible for providing the information. And I think
21 that's true.
22 I think if an employer is going to recommend a
23 particular panel or endorse -- and by offering it, they're
24 really endorsing a particular PPO or HMO or whatever it is
25 they're offering as a health care option -- they should get

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1 behind giving that information.
2 How expensive that is becomes a different story,
3 and I think as far as the employers go, they sort of, from
4 what I hear, have had it up to here as far as assuming more
5 cost. So I think there's got to be a buy-in from other
6 sources as well as far as getting the information across.
7 MR. SFIKAS: I think quality is very important in
8 the hospital, in the physician's office, in the dentist's
9 laboratory. But quality advertising, it's pretty clear that
10 the difference between what a physician or dentist or other
11 health care professional knows and what the consumer knows,
12 there is a striking dissimilarity in their ability to
13 understand that.
14 So I think it's very, very difficult to use quality
15 advertising as you would some of the other types of
16 advertising, like price and other things, because of the
17 difficulty in consumers understanding it.
18 MS. KOHRS: Helen?
19 MS. DARLING: Well, I think we have a lot more
20 positive experience than the tone of this conversation is
21 headed. A number of people have been working on HEDIS
22 measures of health plans for, now, about ten years. In fact,
23 Tom and I co-chair the committee that oversees that
24 evolution.
25 And one of the things that's been very

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1 interesting -- because we've got about seven years'
2 experience now -- is that the health plans that allowed their
3 information to be reported publicly initially got better and
4 better; that the ones who were doing -- basically, people who
5 did a good job and made it available did better in lots of
6 ways. They got better.
7 The plans themselves in many instances, we know
8 from reports that if they didn't do well one year on
9 something inside the plan, then a lot of things happened. A
10 lot of steps were taken to improve it.
11 We do know that there are companies that pay a
12 differential and provide information. When I managed health
13 care at Xerox, we actually provided data from the HEDIS
14 report, and we had an allowance, and our employees had
15 numerous options. And they migrated to the better plans.
16 And this goes back several years, before we even
17 had the kinds of tools that DoctorQuality has. So now we've
18 got much richer tools. We already have evidence going back
19 as far as about eight years, as the data began to become
20 available for health plans in particular and then later
21 hospitals, that when people see it, they do pay attention.
22 And you can -- I don't know whether I'd want to see
23 ads doing this; I don't know that I really care -- but you do
24 have hospitals now advertising that they were, you know,
25 number one in a certain geographic area, with a little

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1 footnote and everything.
2 We have -- we know that health plans do that, that
3 they advertise in their markets around open enrollment
4 season. You know, they have 99 percent of all people who had
5 a heart attack got a beta blocker in our health plan, and all
6 women got mammograms, and things like that.
7 So there is a pretty rich area of information and
8 experience already that data move people. Measures,
9 especially those that are seen as quality, and which have a
10 certain either face validity or intuitive appeal, that people
11 know it's a good thing. They do pay attention. And they
12 will do even more so if we give them that information in an
13 easily understandable form.
14 MS. KOHRS: One of the other issues that we've seen
15 come up in the information and advertising area is a question
16 about providing adequate information to various cultural
17 groups. Have you seen anything like that, John, on
18 DoctorQuality? Any requests for other languages or are you
19 just seeing the traditional health care user?
20 MR. GEBHART: I have not seen it at DoctorQuality,
21 but at other companies, multilingual capability in
22 particular. And for that matter, not just different
23 nationalities, but any demographic sort -- you know, age-
24 specific services as well, I think, are very important.
25 I mean, when you take a look at health care

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1 decisions and interactions with the system, they're very
2 personal, very intimate interactions. And I think to the
3 extent that different age groups and different cultures have
4 different needs, we think one expression of quality is that
5 the services are appropriate for the individual
6 circumstances, not just their diagnosis.
7 So I think it's a very important component of it.
8 It hasn't been demanded of us yet at DoctorQuality, but, you
9 know, sure enough, it will be coming.
10 MS. KOHRS: Helen?
11 MS. DARLING: Actually, it's become the hot topic.
12 And cultural competence is the current language on this.
13 It's actually a big issue and very important, and large
14 employers who especially -- like the hotel industry, the
15 hospitality industry, companies that have a lot of people in
16 places like California and New York where you have large
17 immigrant populations with many languages.
18 I know, for example, not too long ago I was at a
19 meeting with some people from Oxford Health Plans and, you
20 know, they actually have to cover 14 languages. And that's
21 just one where they have a lot of people. That's not
22 counting all the other dialects.
23 So this is because our workforce has become so much
24 more diverse and we have a lot of large employers -- again,
25 Marriott is the best example, probably -- where basically all

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1 the HR material is done in Spanish or -- you know, they are
2 particularly good on, if you will, the easier languages for
3 us now as a country, where we have a lot of people speaking
4 that language in a lot of different places. It's easy to get
5 the resources.
6 But they're recognizing that there are many, many
7 categories of people from different cultures. It's going to
8 be very expensive, though, to deal with it. But employers
9 really think this is extremely important.
10 MS. KOHRS: Dr. Koch?
11 DR. KOCH: I want to just touch base again on this
12 issue of doctor quality and quality health care provision.
13 And I’m very intrigued by your website and what's occurring,
14 and also a little concerned about the possibility that, you
15 know, unhappy patients can try to get in multiple ways. And
16 certainly in the LASIK world, there are whole websites
17 devoted to complications, and then certain physicians will be
18 spoken of, you know, based on one case.
19 And when we try to think about who is best capable
20 of evaluating quality of care, it's really our peers, our
21 peers in our specialty and, to a certain extent, peers not in
22 our specialty.
23 And I guess maybe my request for your next project
24 is, why not have doctors evaluate doctors? Don't do it
25 through the best doctors of America, which is one way to do

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1 it, but why not have doctors evaluate doctors and have those
2 ratings become available? I know that's all the competitive
3 and all that sort of issues, but who else better than those
4 in their own peer group?
5 MR. GEBHART: I think that's a very valid
6 observation. And let me respond to that a couple of ways.
7 And I failed to mention this earlier.
8 It's interesting: We do not have enough ratings to
9 really see what the true pattern is going to be yet. But the
10 overwhelming majority of ratings that we have are quite
11 favorable. So we find there's probably a greater propensity
12 for people to get online and help their doctor out with, you
13 know, thank you for a good experience.
14 Having any kind of a peer review function, it would
15 be great to be able to present it. My immediate reaction was
16 to try to figure out how to organize it, and that would take
17 a little bit of work. But what we do provide is a survey
18 that both the doctor and the patient can use that for any
19 given condition displays what the evidence-based standard of
20 care is. And an evidence-based standard of care is prepared
21 by peers.
22 The doctor is able to get online and indicate
23 whether or not they follow that standard, and then that
24 standard is displayed to the member, to the user, so they can
25 determine if what's happening in the process is indeed in

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1 accordance with that standard.
2 So, you know, whether or not your doctor has a nice
3 office staff and free parking and things like that, that's
4 good to know. Whether or not you're actually going to get
5 the treatment you need and they're going to follow a pattern
6 that's been proven to be effective in the past, that's really
7 where the rubber meets the road. And we try to help people
8 with that as well.
9 MS. KOHRS: Well, I'm afraid that that's going to
10 have to be our last word on the topic today. I'd like to
11 thank everyone who was able to come and be a part of this
12 panel, and I'd like to ask everybody to join in a round of
13 applause at this point. Thanks very much.
14 (Whereupon, at 5:02 p.m., the hearing was
15 concluded.)
16 * * * * *
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1 C E R T I F I C A T I O N O F R E P O R T E R
3 DOCKET/FILE NUMBER: P022106
4 CASE TITLE: HEALTH CARE AND COMPETITION LAW AND POLICY
5 DATE: JUNE 12, 2003
7 I HEREBY CERTIFY that the transcript contained herein is
8 a full and accurate transcript of the tapes transcribed by me
9 on the above cause before the FEDERAL TRADE COMMISSION to the
10 best of my knowledge and belief.
11
12 DATED: JUNE 11, 2003
13
14
15 LISA SIRARD
16
17 C E R T I F I C A T I O N O F P R O O F R E A D E R
18
19 I HEREBY CERTIFY that I proofread the transcript for
20 accuracy in spelling, hyphenation, punctuation and format.
21
22
23 SARA J. VANCE
24
25

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May 1, 2008
Honorable Ron Wyden

United States Senate
Washington, DC 20510
Honorable Robert F. Bennett

United States Senate
Dear Senators:
At your request, the staffs of our two organizations have collaborated on a

preliminary analysis of a modified proposal for comprehensive health insurance
based on S. 334, the “Healthy Americans Act,” which you introduced last year.
That modified proposal includes various clarifications and changes that you have
indicated you would like to examine as part of the consideration of that bill.
Attachment A summarizes our understanding of your modified proposal.
The staffs of the Congressional Budget Office (CBO) and the Joint Committee on
Taxation (JCT) have worked closely together for the past several months to
analyze your modified proposal; this collaboration reflects both the novelty of the
undertaking and the intimate connection between the revenue and expenditure
components of this proposal. We have summarized our conclusions in this joint
letter; its purpose is to give you preliminary guidance regarding an approximate
range of revenue and cost results that might be expected from your modified
proposal. This joint letter does not constitute and should not be interpreted as a
formal estimate of your proposal’s budgetary impact, which—for the purposes of
scoring under the Congressional Budget Act—would ultimately be provided by
CBO and would incorporate revenue estimates prepared by the JCT staff.
The basic thrust of your modified proposal is to require individuals to purchase

private health insurance and to establish state-run purchasing pools and a system
of Federal premium collections and subsidies to facilitate those purchases. The
system’s premium collection and subsidy mechanisms would be based largely on
income tax filings, and the required benefits would initially be based on the Blue
Cross/Blue Shield standard plan offered to Federal workers in 2011 and then
allowed to grow at the rate of growth of the economy. Although employers would
have the option of continuing to offer coverage to their workers, nearly all
individuals who were not enrolled in Medicare would obtain their basic health
insurance coverage through this new system. Most enrollees in Medicaid and all
enrollees in the State Children’s Health Insurance Program (SCHIP) would have
their primary insurance coverage shifted to the new system.
Your proposal also would replace the current tax exclusion for employer-based
health insurance premiums with a fixed income tax deduction for health
insurance. (In addition, employers that had provided health insurance would be
expected to “cash out” their workers––that is, to increase workers’ wages by the
average contribution that the employers would have made for their health plan.)
The proposal also would require new tax payments from employers to the Federal
government and further would seek to recapture the savings to state governments
from reduced expenditures on Medicaid and SCHIP.
There are several important distinctions between the proposal we analyzed and
S. 334 as it was introduced. For example, our analysis was limited to the
operation of the new health insurance purchasing system and did not take into
account most of S. 334’s provisions regarding the Medicare program or other
provisions that would not directly affect the new system. More fundamentally, the
modified proposal would tie the premiums collected through the tax system—as
well as the premium subsidies for lower-income households—to the cost of the
least expensive health plan available in an area that provided required benefits,
not to the average premium amount, as under S. 334. Furthermore, the value of
the new tax deduction would not vary with the premium of the insurance policy
that was actually purchased, and the schedule of employers’ payment rates would
range from 3 percent to 26 percent (rather than 2 percent to 25 percent) of the
average premium. Attachment B describes in more detail the main differences
between your modified proposal and S. 334.
The preliminary analysis reflected in this letter is subject to three important

limitations. First, the staffs of both JCT and CBO are in the process of enhancing
our capabilities to estimate the effects of comprehensive health care proposals.
Improvements in our methodologies or more careful analysis of your modified
proposal’s provisions—particularly as you translate those concepts into formal
legislative language—could change our assessment of its consequences.
Second, any formal budget estimate will reflect the macroeconomic assumptions
and the baseline projections of current-law tax and spending policies in effect at
the time it is issued. That baseline could differ materially from today’s baseline.
Third, we focused our analysis on a single future year in which the proposed
system would be fully implemented. For that purpose, we settled on 2014, the
sixth year of the current 2009–2018 budget window. Under an assumption that the
proposal is enacted in 2008, that timeline for full implementation seems to us to
2
be achievable but could be optimistic, as we expect that it would probably take
until 2012 for the new system to begin operation, and several years after that for
various phase-ins and behavioral adjustments to take place. The new system
would involve temporary net budgetary costs in its initial years; we have not
analyzed the magnitude of those early-year transition costs.
Overall, our preliminary analysis indicates that the proposal would be roughly
budget-neutral in 2014. That is, our analysis suggests that your proposal would be
essentially self-financing in the first year that it was fully implemented. That net
result reflects large gross changes in Federal revenues and outlays that would
roughly offset each other.
More specifically, under your proposal, most health insurance premiums that are
now paid privately would flow through the Federal budget. As a result, total
Federal outlays for health insurance premiums in 2014 would be on the order of
$1.3 trillion to $1.4 trillion. Those costs would be approximately offset by
revenues and savings from several sources: premium payments collected from
individuals through their tax returns; revenue raised by replacing the current tax
exclusion for health insurance with an income tax deduction; new tax payments
by employers to the Federal government; Federal savings on Medicaid and
SCHIP; and state maintenance-of-effort payments of their savings from Medicaid
and SCHIP. Attachment C provides more information about the approximate
magnitudes of those components.
For the years after 2014, we anticipate that the fiscal impact would improve
gradually, so that the proposal would tend to become more than self-financing and
thereby would reduce future budget deficits or increase future surpluses. That
improvement would reflect two features of the proposal. First, the amount of the
new health insurance deduction would grow at the rate of general price inflation
and thus would increase more slowly than the value of the current tax exclusion.
Second, the minimum value of covered benefits that all participating health plans
had to provide would initially be set at the level of the Blue Cross/Blue Shield
standard option offered to Federal workers in 2011 (we assume that the system’s
inaugural year would be 2012); but under your proposal that average value would
from that point forward be indexed to growth in gross domestic product per capita
rather than growth in health care costs. Because Federal premium subsidies would
be based on the cost of providing that level of coverage, the cost of those
subsidies would grow more slowly over time.
We hope this analysis is useful to you. Not surprisingly, a number of uncertainties

arise in attempting to predict the effects of such large-scale changes to the current
health insurance system. Although we have provided a range of results that reflect
our current expectations about likely outcomes, actual experience—and the results
of a formal cost estimate—could differ substantially in either direction. If you
3
have any questions about this analysis, please do not hesitate to contact us; the
staff contacts are Pam Moomau and Nikole Flax for JCT at 226-7575 and Philip
Ellis for CBO at 226-2666.
Sincerely,
Peter R. Orszag Edward D. Kleinbard

Director Chief of Staff
Congressional Budget Office Joint Committee on Taxation
Attachments
4
Attachment A
Specifications of the Healthy Americans Private Insurance System
Overview of proposal
• Universal coverage - Under the proposal, all citizens and permanent

residents (with only limited exceptions discussed below) are enrolled in a
basic minimum benefits package within the Healthy Americans Private
Insurance System (HAPI). Any enhanced coverage is purchased separately
by direct payment by the individual to the insurer (or direct payment to a
newly created “Health Help Agency” (HHA), described below, if the
HHA performs this function).
• Tax structure - The proposal provides for employers and individuals to
share the cost of the program and to provide a tax subsidy for the cost of
health insurance to individuals. However, the amount of the tax on
employers and individuals and the subsidy for individuals is divorced from
their choices with respect to health care.
a. Payment for minimum coverage - Universal coverage is partially
enforced through a requirement that payment for the lowest-cost
premium is part of an individual’s tax liability, and withholding tables
are adjusted to reflect this liability, except that certain low-income
individuals are eligible for premium assistance.
b. Standard health deduction - The proposal replaces the exclusion for
employer-provided health benefits with a health care standard
deduction, which is phased in for employees who are entitled to a
reduced premium and phased out for higher-income individuals and
families.
c. New tax on employers - Under the proposal, employers pay a new tax
equal to between 3 percent and 26 percent (depending on employer
size and revenue per full-time employee) of the national average
premium for the minimum benefits package for each employee
enrolled in HAPI.
• Administration - Administration of the program is by new state-sponsored
HHAs. States must establish these organizations, which will approve
health plans, provide for enrollment in plans, and act as a conduit for
premium payments from the Federal government to individual insurance
carriers.
• Effective date - The proposal will be first effective in 2012.
Universal coverage
• Generally, all citizens and permanent residents are enrolled in a HAPI

plan, with certain exceptions detailed below. A HAPI plan is required to
provide at least a minimum benefits package benchmarked to the actuarial
value of the Federal Employees Health Benefits (FEHB) Program standard
benefit option BlueCross/Blue Shield plan for 2011, indexed for
subsequent years by the per capita increase in gross domestic product
(GDP), rather than medical cost growth. Exceptions are as follows:
a. Enrollment is optional for individuals enrolled in the health system of
the Department of Veterans Affairs (VA) or the Indian Health Service
and for non-Medicare retirees enrolled in employer-based coverage
who retire before HAPI begins operation. Those individuals may
continue their enrollment in non-HAPI plans until death. Alternatively,
those individuals can switch into a HAPI plan.
b. Individuals enrolled in Medicare and the military health system
(TRICARE) (other than VA enrollees) are ineligible for enrollment.
• Individuals enroll by choice during an open season, but the default is
automatic enrollment in the lowest-cost plan (that is, the lowest-cost basic
HAPI plan) if an individual fails to enroll.
• In the event that the lowest-cost plan in a given area does not have
sufficient capacity to accommodate all automatically enrolled individuals,
the next cheapest plan is required to accept those enrollees to the extent
that the least expensive plan did not have room. This process will continue
(moving up the list of bids) if more capacity is still needed to
accommodate automatically enrolled individuals.
Premium submissions
• Plans may establish up to four different premiums for coverage: single
individuals; married couples; married couples with children; and adult
individuals with children.
• Otherwise, premiums may vary only to reflect geography and smoking
status, as determined by state regulators—that is, premiums are
community rated for each type of policy.
• Submissions must meet requirements for minimum loss ratios (the share of
premiums paid out as covered benefits); however, no minimum has been
specified.
• Plans submit bids to reflect the average costs of all HAPI enrollees; that is,
the bids are standardized. Payments to the plans are risk-adjusted by the
HHA to reflect differences in demographic factors or health status for each
enrollee.
2
a. On a monthly basis, HHAs generally pay plans an amount based on
their total premium bids (subject to risk adjustment); states cover the
“float” on any discrepancies and settle up through a reconciliation
process later.
• Plans do not have to provide a benefit with the same actuarial value as the
requirement. That is, all of their submissions may provide for additional
benefits, but they have to identify separately the costs of the required
benefit level and the costs of added benefits.
• To maintain unified risk pools, plans’ bids are standardized to reflect a
representative sample of all HAPI enrollees in the state (including any
enrollees included in the employer coverage option described below).
Premium payments and subsidies
• Universal coverage is partially enforced through the requirement that

payment for the lowest-cost premium is part of an individual’s tax
liability, and withholding tables are adjusted to reflect this liability, except
that certain low-income individuals are eligible for premium assistance.
• The payment of the premium for the lowest-cost plan (determined by the
regional HHA as the average of the two lowest bids for basic HAPI plan
coverage) is by payroll withholding (or payment on the individual’s
return) unless the individual is eligible for full premium relief or a reduced
premium.
a. No premium subsidy is available for individuals or families with
income equal to or above 400 percent of the Federal poverty level
(FPL).
b. No premium is required for individual filers (not claimed as
dependents) or joint filers with no income tax liability (and thus not
required to file a Form 1040) or with income less than or equal to
100 percent of the FPL.
c. A sliding premium subsidy amount applies for individuals or families
with income between 100 percent and 400 percent of the FPL.
d. Payment of the lowest-cost premium is required independently of
enrollment.
e. The premium for an individual or family is treated as a Federal tax
liability. Thus, resources will be provided to ensure that enforcement
and collection tools of the Internal Revenue Service are adequate for
this task.
f. For the basic package, health plans generally are paid only the
premium for the lowest-cost plan from the HHA via payroll
withholding (or payment on the return). In the case of the two lowest-
cost plans for a region, such plans are paid their actual premium bids
by the HHA for providing such coverage. Any additional costs for the
3
basic package above the premium for the lowest-cost plan must be
paid by individuals outside of the tax system.
• Enhanced coverage may be purchased under the proposal by an individual
by direct payment to the HHA or insurance carrier. Basic coverage that is
more expensive than the premiums collected through the tax system also
must be paid for by direct payment to the HHA or insurance carrier. The
payment amount is the excess of the premium for the plan over the
premium amount collected through the tax system.
Replacement of tax exclusion with a health care standard deduction
• The proposal provides for a health care standard deduction for each tax
return. The deduction depends on the taxpayer’s filing status and the
number of dependent children.
a. The amount of the health care standard deduction is not related to the
amount of the individual or family health insurance premium or other
health care costs. The deduction is indexed to the consumer price
index.
b. For purposes of the estimate, the dollar amounts of the maximum
health care standard deduction in S. 334, indexed by the consumer
price index, are being used. The maximum deduction amounts in the
Senate bill for 2009 are as follows:
i. Individual: $6,025.
ii. Couple with no dependent children: $12,050.
iii. Single individual with dependent children: $8,610 plus $1,000 for
each additional dependent child (beyond the first child).
iv. Couple with dependent children: $15,210 plus $1,000 for each
additional dependent child (beyond the first child).
c. The health care standard deduction reduces the filer’s adjusted gross
income and thus is available to taxpayers subject to the alternative
minimum tax.
• The health care standard deduction phases in for low-income taxpayers
who are entitled to a subsidized premium and phases out for higher-
income taxpayers:
a. The deduction is phased in for individuals and families with income
between 100 percent and 400 percent of the FPL to reflect the phasing
out of the premium payment subsidy. Thus, there is no deduction for
individuals at or below 100 percent of the FPL.
b. The deduction is phased out for individuals with adjusted gross
incomes between $62,500 and $125,000 and for joint filers between
$125,000 and $250,000 to limit the tax subsidy to a specified income
4
range. Thus, there is no deduction allowed for individuals with income
at or above $125,000 ($250,000 for joint filers).
• The proposal provides that most of the present-law tax subsidy provisions
for medical care costs generally are eliminated or significantly reduced for
individuals covered by HAPI:
a. The exclusion for employer-provided health coverage, including
amounts in health flexible spending accounts under cafeteria plans and
health reimbursement accounts, is eliminated except for the following:
i. The exclusion is retained for health coverage for people who retire
more than two years before enactment and for employees who, by
collectively bargaining, are covered under a plan on January 1
following the second anniversary of enactment.
ii. The exclusion continues for long-term care services (as defined in
section 7702B(c)). A cafeteria plan is permitted to provide long-term
care insurance as a qualified benefit.
b. The deduction for health insurance costs for self-employed individuals
under section 162(l) is limited to the same group for which the
exclusion for employer-provided health coverage is retained. It also
remains available for long-term care. The new employer tax payment
is also deductible. Otherwise, the deduction under section 162(l) is
eliminated.
c. The deduction under section 213 for medical care costs above
7.5 percent of adjusted gross income is retained under the proposal
only for taxpayers who are not covered by a HAPI plan.
d. Beginning two years after the date of enactment, the exclusion of the
value of employer-provided health coverage for purposes of
employment taxes (under the FICA, FUTA, and RRTA statutes) is
retained only to the extent that the exclusion for employer-provided
health coverage is retained. * Thus, it is retained only for certain
retirees and collectively bargained employees and for long-term care
insurance.
• Certain tax subsidies for medical care costs are modified as follows:
a. Health savings account (HSA) contributions are allowed only in the
context of a high-deductible health plan that is actuarially equivalent to
the minimum benefits package; that is, insurers contribute to the HSA
the amount needed to give the plan the required actuarial value.
Additional contributions by individuals are not tax-preferred.
Otherwise, the proposal does not change the current tax treatment for
HSAs.
*
FICA = Federal Insurance Contributions Act; FUTA = Federal Unemployment Tax Act; RRTA =
Railroad Retirement Tax Act.
5
b. The tax exemption under section 501(c)(9) for voluntary employees’
beneficiary associations (VEBAs) established by the date of enactment
is retained. The exclusion under section 106(a) continues to apply for
employers’ contributions to VEBAs to the extent that the contributions
are needed to fund existing obligations to non-Medicare retirees or
those who retire within two years of enactment. The current limits for
the deduction for employers’ contributions to VEBAs under section
419 continue to apply.
Employer tax payments
• Employers pay a tax equal to between 3 percent and 26 percent of the

national average premium for the minimum benefits package for each
employee (except those employees excluded from HAPI), depending on
their firm size and amount of gross revenues per employee.
• The following chart shows the percentage of the national average premium
used to calculate the new tax, calculated per full-time-equivalent (FTE)
employee.
Revenue per FTE Fewer than 50 Over 200 FTE

Employee FTE Employees Employees
0 to 20th percentile 3% 18%
21st to 40th percentile 5% 20%
81st and higher
11% 26%
percentile
• The rate for employers with 50 to 200 FTE employees is determined on a

sliding scale (increasing 0.1 percentage point for each additional FTE).
• The rate for state and local governmental employers is the rate for
employers with revenue of 41st to 60th percentile per FTE employee
(7 percent to 22 percent of the national average premium depending on the
number of FTEs).
• During the first two years of the program, employers who currently offer
health coverage do not owe this tax with respect to eligible individuals
enrolled in their health plan.
• This tax payment is deductible by employers.
“Cash-out” provisions
• For a two-year transition period, all employers are required to “cash out”
their health plans. The cash-out is an increase in wages that an employer is
6
required to pay to reflect the replacement of employer-provided health
benefits.
• In general, the amount of the cash-out is equal to the average costs that the
employer had paid for a given employee’s insurance policy (so that all
enrollees in the same health plan with the same type of policy receive the
same amount).
Health Help Agencies
• States must establish HHAs, which are charged with administering the
selection of health plans to serve in each area.
• The determination of lowest-cost plan is made by HHAs as follows:
a. Annually, plans submit bids to the regional HHAs on the premium
they will charge for the minimum benefits package.
b. The average of the two lowest bids will set the maximum amount of
the premium that is collected through the tax system for all enrollees in
that area.
• Insurance companies are permitted to charge premiums for the additional
cost for any more comprehensive benefits plans they offer. Insurance
companies with premiums for basic coverage that are more expensive than
the premiums collected through the tax system are also permitted to
charge individuals (directly or via their employers) for the extra premium
amounts.
• The HHAs also are responsible for enrolling people in the plans they
choose during the annual open enrollment period.
a. Employers with 10 or more employees are required to administer
annual open enrollment for their employees and their dependents using
materials supplied by the area HHA. The results are communicated to
the HHAs, who are responsible for actually enrolling people in the
plans they have selected.
b. Alternatively, people can change coverage during open enrollment
online or directly with the HHA.
c. Premium revenues for the lowest-cost plan in the area are forwarded to
the HHA, which is responsible for payments to individual insurance
carriers based upon the health plans selected by individuals.
• For the first two years of operation, administrative costs for HHAs are
paid by the Federal government; after that, insurers are assessed fees to
cover HHAs’ administrative costs (and will build those fees into their
premium bids).
7
Employer coverage option
• Employers can arrange to have HAPI plans that are available only to their
employees. Such employer-only plans are approved by and paid by HHAs
in the same manner as other HAPI plans. Enrollees continue to pay the
premium they owe (if any) for the lowest-cost plan through the tax system.
• This option is similar to the option under the Medicare drug benefit
whereby prescription drug plans approved by the Centers for Medicare
and Medicaid Services can be offered to an employer’s retirees on an
exclusive basis. The HAPI employer option does not include the
additional option that exists in the drug benefit whereby employers
provide the drug plan for their retirees and receive a subsidy payment from
Medicare.
• In particular, the HAPI employer option does not allow for the
establishment of separate risk pools for providing the basic benefits to
each employer’s workforce; all enrollees in the same health plan in the
same state pay the same basic premium for basic coverage (varying only
according to the type of policy purchased––single, married with
dependents, etc.).
Subsidies for cost-sharing and additional benefits
• For individuals who are enrolled in Medicaid or SCHIP as well as a HAPI
plan, Medicaid or SCHIP payments reduce their cost-sharing liabilities for
services that are covered by the HAPI plan––either to Medicaid/SCHIP
cost-sharing levels or by the amount of the Medicaid/SCHIP payment for
such services, whichever is less.
• Similarly, services covered by Medicaid or SCHIP that are not covered by
HAPI plans (including but not limited to long-term care services) are
covered and reimbursed for such enrollees under current rules for
Medicaid/SCHIP.
• Ongoing Medicaid and SCHIP costs continue to be shared between
Federal and state governments, as under current law.
Effect on other Federal programs
• The FEHB Program is replaced by HAPI for active employees but
continues for the existing stock of retirees (and those within two years of
retirement upon enactment).
• As discussed above, Medicare is not changed by HAPI. However,
Medicare payments to hospitals treating a disproportionate share (DSH) of
low-income patients are eliminated under the proposal, as are 90 percent
of Medicaid’s DSH payments.
8
States maintenance-of-effort payments
• States must make maintenance-of-effort (MoE) payments to the program

equal to the amount of the reduction in state Medicaid and SCHIP
spending.
• A state’s MoE payments include savings in state government spending for
people who would have been eligible for Federally matched Medicaid and
spending for noncustodial adults covered under Federal 1115 waivers
(HAPI replaces Medicaid to the extent of coverage in the minimum
benefits package).
• A state’s MoE payments do not include savings to state-only programs
covering other groups that happen to have been administered as a part of
Medicaid.
• A state’s MoE payments reduce the premium subsidies paid by Federal
government.
• MoE payments are calculated in a manner that is similar to that for the
“claw-back” payments under the Medicare drug benefit.
a. State savings from having HAPI plans cover the costs of acute care
services for Medicaid and SCHIP enrollees who are not also enrolled
in Medicare will be estimated for an initial year (the year of or the year
prior to enactment).
b. In future years, that dollar amount will be indexed by the nominal
growth in national health expenditures.
c. Adjustments will also be needed to address changes in enrollment over
time.
d. The Federal government could enforce the MoE requirement by
withholding the appropriate amount from its payment to an HHA for
premium subsidies or by withholding other Medicaid payments.
9
Cash flows
Payor Payee Description

Individuals/employer Federal Payment amount is the average
payroll withholding government premium for the lowest-cost
(reduced payments/ basic HAPI plan in the
withholding for taxpayer’s region; treated as a
individuals qualifying Federal tax liability
for assistance)
Employers Federal Tax based on number of FTEs,
government employer’s revenue per
employee, and average
national premium for basic
HAPI plan
Federal government HHAs Premiums for basic HAPI plan
coverage; premium assistance
for families that qualify
(Federal payment reduced by
state MoE payments); during
transition period, payments for
HHA administration
HHAs Insurance Premiums for basic HAPI plan
companies (and additional premiums for
enhanced coverage or more
expensive basic coverage if
HHA performs this function)
Individuals/employers Insurance Premiums for enhanced
companies (or coverage or more expensive
HHAs) basic coverage
Insurance companies HHAs After transition period, fees for
payment of HHA
administration expenses
State governments HHAs State MoE payment: For
premium assistance for
families that qualify; amount is
equal to state’s reduction in
Medicaid spending on account
of HAPI program
10
Attachment B
Key Differences Between the Current Proposal and S. 334
Some important distinctions exist between the proposal that we analyzed and S.
334 as it was introduced. For example, our analysis was limited to the operation
of the new health insurance purchasing system and did not take into account most
of the bill’s provisions regarding the Medicare program or other provisions that
would not directly affect the new system. Other prominent differences between
the modified proposal and the original legislation, as well as key refinements and
clarifications, include the following:
• The minimum value of covered benefits that all participating health plans
had to provide would initially be set equal to the value of the Blue
Cross/Blue Shield standard option offered to Federal employees in 2011;
in future years, that average value would be indexed to the overall growth
rate of gross domestic product per capita.
• The premiums collected through the tax system—and the premium

subsidy for lower-income households—would be tied to the cost of the
least expensive plan available in an area that provided the required
benefits, not to the average premium amount. Individuals could choose a
more expensive health plan or one with more extensive benefits, but
amounts in excess of that lowest-cost premium would not be collected
through the tax system or be liabilities of the Federal government.
• Individuals who were required to enroll in a health plan through the new
system but who did not select a plan would be automatically enrolled in
the lowest-cost plan offered to them. Individuals would be liable to pay
the premium for that plan through their tax return (regardless of whether
they had actively enrolled) but would not face an additional penalty for
failing to choose a plan.
• Premium withholding through the Federal tax system would be

accompanied by information-reporting requirements and administrative
resources allocated to the Internal Revenue Service and other relevant
Federal agencies.
• The new tax deduction would be a fixed amount per year and would not
vary with the premium of the insurance policy actually purchased; the
additional deduction per child would be $1,000 and would not apply to the
first child in a household.
• The schedule of rates for the employer tax would range from 3 percent of
the average premium for smaller employers to 26 percent for larger
employers, rather than 2 percent to 25 percent.
• Employers who had provided health insurance would be expected to “cash

out” their workers—that is, to increase their wages by the average
contribution that the employers would have made to pay for their health
insurance—but the requirement would be more flexible than was specified
in S. 334.
• Employers could arrange for a health plan that served their workers
exclusively—which could provide more extensive benefits financed by an
additional, unsubsidized premium—but otherwise that health plan would
be approved and reimbursed by the state-run oversight agency in the same
manner as the plans made available to the general public. This option
would be similar to one that exists for employers under the Medicare drug
benefit and would not create a separate risk pool for the minimum package
of benefits provided to those workers.
• For individuals enrolled in Medicaid or SCHIP as well as in a plan in the

Healthy Americans Private Insurance System (HAPI), Medicaid or SCHIP
payments would reduce their cost-sharing liabilities for services also
covered by the HAPI plan—either to Medicaid/SCHIP cost-sharing levels
or by the amount of the Medicaid/SCHIP payments for such services,
whichever was less. Additional or alternative Federal subsidies to reduce
cost-sharing liabilities would not be available.
• The maintenance-of-effort requirement placed on states would seek to

capture all state savings on Medicaid and SCHIP resulting from the shift
in enrollees’ coverage; the methods of calculation, enforcement
mechanisms, and indexing provisions would be similar to the “claw-back”
provisions of the Medicare drug benefit.
2
Attachment C
Approximate Magnitudes of Major Revenue and Outlay Components
As indicated in this letter, our preliminary analysis indicates that the health
insurance proposal you asked us to analyze would achieve a rough balance
between additional Federal outlays and additional Federal revenues in 2014. The
net impact of this proposal reflects the largely offsetting effects of much larger
gross changes in Federal revenues and outlays in that year, as follows:
• Most health insurance premiums that are now paid privately would flow
through the Federal budget, and total Federal outlays for health insurance
premiums would be on the order of $1.3 trillion to $1.4 trillion in 2014.
Assuming outlays were in the middle of that range, individuals would pay
from $650 billion to $800 billion through their tax returns, so the net
Federal cost of premium payments would be in the range of $550 billion
to $700 billion.
• Eliminating the current tax exclusion for health insurance premiums (as
well as certain other health-related tax preferences) would raise Federal
revenues, as would the new tax payments from employers, but instituting
the new health insurance tax deduction would reduce revenues. The net
effect of those three steps would be to increase Federal revenues in 2014
by an amount that would range between $400 billion and $500 billion.
• In our preliminary modeling, the factors that would cause net Federal
premium payments to be higher would also reduce the cost of the new tax
deduction in largely offsetting ways—narrowing somewhat our overall
range of uncertainty. Thus, the combined effect on the budget of the
provisions for premium payments, collections, and subsidies and the
various changes in tax law described above would be to raise outlays more
than they raised revenues by an amount ranging from $150 billion to
$200 billion in 2014.
• Shifting Medicaid and SCHIP enrollees into separately financed private

health plans would reduce Federal and state costs for those programs;
depending on how effectively the maintenance-of-effort provisions for
states were enforced, those savings would be between $150 billion and
$200 billion in 2014 (figures that also reflect Federal administrative costs
for the new system as well as the elimination of Medicare’s
“disproportionate share” payments to hospitals). Thus, the proposal would
yield a rough balance between the net increases in outlays and the net
increases in revenues in that year.
Hydrogen peroxide
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Hydrogen_peroxide#Therapeutic_use
Hydrogen peroxide (H2O2) is a very pale blue liquid which appears colorless in a dilute
solution, slightly more viscous than water. It is a weak acid. It has strong oxidizing
properties and is therefore a powerful bleaching agent that is mostly used for bleaching
paper, but has also found use as a disinfectant, as an oxidizer, as an antiseptic, and in
rocketry (particularly in high concentrations as high-test peroxide or HTP) as a
monopropellant, and in bipropellant systems.[1] The oxidizing capacity of hydrogen
peroxide is so strong that the chemical is considered a highly reactive oxygen species.
Hydrogen peroxide is naturally produced as a byproduct of oxygen metabolism, and

virtually all organisms possess enzymes known as peroxidases, which harmlessly
catalytically decompose low concentrations of hydrogen peroxide to water and oxygen
(see Decomposition below).
History
Hydrogen peroxide was first isolated in 1818 by Louis Jacques Thénard by reacting
barium peroxide with nitric acid.[2] An improved version of this process used
hydrochloric acid, followed by sulfuric acid to precipitate the barium sulfate byproduct.
Thénard's process was used from the end of the 19th century until the middle of the 20th
century. [3] Modern production methods are discussed below.
For a long time it was believed that pure hydrogen peroxide was unstable, because
attempts to separate the hydrogen peroxide from the water, which is present during
synthesis, failed. This was because traces of solids and heavy metal ions led to a catalytic
decomposition or explosions of the hydrogen peroxide. 100% pure hydrogen peroxide
was first obtained through vacuum distillation by Richard Wolffenstein in 1894.[4] At the
end of 19th century, Petre Melikishvili and his pupil L. Pizarjevski showed that of the
many proposed formulas of hydrogen peroxide, the correct one was H-O-O-H.
History
Hydrogen peroxide was first isolated in 1818 by Louis Jacques Thénard by reacting
barium peroxide with nitric acid.[2] An improved version of this process used
hydrochloric acid, followed by sulfuric acid to precipitate the barium sulfate byproduct.
Thénard's process was used from the end of the 19th century until the middle of the 20th
century. [3] Modern production methods are discussed below.
For a long time it was believed that pure hydrogen peroxide was unstable, because
attempts to separate the hydrogen peroxide from the water, which is present during
synthesis, failed. This was because traces of solids and heavy metal ions led to a catalytic
decomposition or explosions of the hydrogen peroxide. 100% pure hydrogen peroxide
was first obtained through vacuum distillation by Richard Wolffenstein in 1894.[4] At the
end of 19th century, Petre Melikishvili and his pupil L. Pizarjevski showed that of the
many proposed formulas of hydrogen peroxide, the correct one was H-O-O-H.
Uses
Industrial applications
About 50% of the world's production of hydrogen peroxide in 1994 was used for pulp-
and paper-bleaching.[5] Other bleaching applications are becoming more important as
hydrogen peroxide is seen as an environmentally benign alternative to chlorine-based
bleaches. It is highly corrosive to metal.
Other major industrial applications for hydrogen peroxide include the manufacture of
sodium percarbonate and sodium perborate, used as mild bleaches in laundry detergents.
It is used in the production of certain organic peroxides such as dibenzoyl peroxide, used
in polymerisations and other chemical processes. Hydrogen peroxide is also used in the
production of epoxides such as propylene oxide. Reaction with carboxylic acids produces
a corresponding peroxy acid. Peracetic acid and meta-chloroperoxybenzoic acid
(commonly abbreviated mCPBA) are prepared from acetic acid and meta-chlorobenzoic
acid, respectively. The latter is commonly reacted with alkenes to give the corresponding
epoxide.
In the PCB manufacturing process, hydrogen peroxide mixed with sulfuric acid was used
as the microetch chemical for copper surface roughening preparation.
A combination of a powdered precious metal-based catalyst, hydrogen peroxide,

methanol and water can produce superheated steam in one to two seconds, releasing only
CO2 and high temperature steam for a variety of purposes.[6].
Recently, there has been increased use of vaporized hydrogen peroxide in the validation
and bio-decontamination of half suit and glove port isolators in pharmaceutical
production.
Hydrogen Peroxide is also used in the Oil and Gas exploration industry to oxidise rock
matrix in preparation for micro-fossil analysis.
Domestic uses
• Diluted H2O2 (between 6% and 12%) is used to bleach human hair when mixed
with ammonia, hence the phrase "peroxide blond". It is absorbed by skin upon
contact and creates a local skin capillary embolism which appears as a temporary
whitening of the skin. It is used to whiten bones that are to be put on display. The
strength of a solution may be described as a percentage or volume, where 1%
hydrogen peroxide releases 3.3 volumes of oxygen during decomposition.Thus, a
3% solution is equivalent to 10 volume and a 6% solution to 20 volume, etc.
• 3% H2O2 is used medically for cleaning wounds, removing dead tissue, and as an
oral debriding agent. Peroxide stops slow (small vessel) wound bleeding/oozing,
as well. Most over-the-counter peroxide solutions are not suitable for ingestion.
• 3% H2O2 is effective at treating fresh (red) blood-stains in clothing and on other
items. It must be applied to clothing before blood stains can be accidentally "set"
with heated water. Cold water and soap are then used to remove the peroxide
treated blood.
• The United States Food and Drug Administration (FDA) has classified hydrogen
peroxide as a Low Regulatory Priority (LRP) drug for use in controlling fungus
on fish and fish eggs. (See ectoparasite.)
• Some gardeners and users of hydroponics advocate the use of hydrogen peroxide
in watering solutions. They claim that its spontaneous decomposition releases
oxygen that enhances a plant's root development and helps to treat root rot
(cellular root death due to lack of oxygen).
• Laboratory tests conducted by fish culturists in recent years have demonstrated
that common household hydrogen peroxide can be used safely to provide oxygen
for small fish.[7][8] Hydrogen peroxide releases oxygen by decomposition when it
is exposed to catalysts such as manganese dioxide.
• Hydrogen peroxide is a strong oxidizer effective in controlling sulfide and organic
related odors in wastewater collection and treatment systems. It is typically
applied to a wastewater system where there is a retention time of 30 minutes to 5
hours before hydrogen sulfide is released. Hydrogen peroxide oxidizes the
hydrogen sulfide and promotes bio-oxidation of organic odors. Hydrogen
peroxide decomposes to oxygen and water, adding dissolved oxygen to the system
thereby negating some Biological Oxygen Demand (BOD).
• Mixed with baking soda and a small amount of hand soap, hydrogen peroxide is
effective at removing skunk odor. [9]
• If a dog has swallowed a harmful substance (e.g. chocolate), small amounts of
hydrogen peroxide can be given to induce vomiting. [10]
• Hydrogen peroxide is used with phenyl oxalate ester and an appropriate dye in
glow sticks as an oxidizing agent. It reacts with the ester to form an unstable CO2
dimer which excites the dye to an excited state; the dye emits a photon (light)
when it spontaneously relaxes back to the ground state.
• Diluted hydrogen peroxide can be used in a 50/50 mixture with white vinegar in
the removal of accumulated lead and gun powder from a stainless steel firearm
suppressor. The acetic acid is the main reagent, but the bubbling action of the
hydrogen peroxide is used to agitate the mixture and accelerate the reaction. The
chemical mixture should be replaced every 24 hours as it will become ineffective
after that period. Responsible care of the waste mixture is required as the end
result is an aqueous solution of lead acetate, which is highly toxic and must be
disposed of through a Hazardous Waste facility. Alternately, the solution may be
reacted with salt water or sulfuric acid to precipitate insoluble lead chloride or
lead sulfate, respectively. The solids may then be removed by mechanical
filtration and are safer to dispose of than aqueous lead acetate. This method
should not be used on aluminum suppressors, as acetic acid will dissolve the
aluminum and form aluminum acetate.
Storage
Regulations vary, but low concentrations, such as 3%, are widely available and legal to
buy for medical use. Higher concentrations may be considered hazardous and are
typically accompanied by a Material Safety Data Sheet (MSDS). In high concentrations,
hydrogen peroxide is an aggressive oxidizer and will corrode many materials, including
human skin. In the presence of a reducing agent, high concentrations of H2O2 will react
violently.
Hydrogen peroxide should be stored in a cool, dry, well-ventilated area and away from
any flammable or combustible substances.[11] It should be stored in a container composed
of non-reactive materials such as stainless steel or glass (other materials including some
plastics and aluminium alloys may also be suitable).[12] Because it breaks down quickly
when exposed to light, it should be stored in an opaque container, and pharmaceutical
formulations typically come in brown bottles that filter out light.[13]
Use as propellant
For more details on this topic, see High test peroxide.
H2O2 can be used either as a monopropellant (not mixed with fuel) or as the oxidizer
component of a bipropellant rocket. Use as a monopropellant takes advantage of the
decomposition of 70–98+% concentration hydrogen peroxide into steam and oxygen. The
propellant is pumped into a reaction chamber where a catalyst, usually a silver or
platinum screen, triggers decomposition, producing steam at over 600 °C which is
expelled through a nozzle, generating thrust. H2O2 monopropellant produces a maximum
specific impulse (Isp) of 161 s (1.6 kN·s/kg), which makes it a low-performance
monopropellant. Peroxide generates much less thrust than hydrazine, but is not toxic. The
Bell Rocket Belt used hydrogen peroxide monopropellant.
As a bipropellant H2O2 is decomposed to burn a fuel as an oxidizer. Specific impulses as

high as 350 s (3.5 kN·s/kg) can be achieved, depending on the fuel. Peroxide used as an
oxidizer gives a somewhat lower Isp than liquid oxygen, but is dense, storable,
noncryogenic and can be more easily used to drive gas turbines to give high pressures. It
can also be used for regenerative cooling of rocket engines. Peroxide was used very
successfully as an oxidizer in World-War-II German rockets (e.g. T-Stoff for the Me-
163), and for the low-cost British Black Knight and Black Arrow launchers.
In the 1940s and 1950s the Walter turbine used hydrogen peroxide for use in submarines
while submerged; it was found to be too noisy and require too much maintenance
compared to diesel-electric power systems. Some torpedoes used hydrogen peroxide as
oxidizer or propellant, but this was dangerous and has been discontinued by most navies.
Hydrogen peroxide leaks were blamed for the sinkings of HMS Sidon and the Russian
submarine Kursk. It was discovered, for example, by the Japanese Navy in torpedo trials,
that the concentration of H2O2 in right-angle bends in HTP pipework can often lead to
explosions in submarines and torpedoes. SAAB Underwater Systems is manufacturing
the Torpedo 2000. This torpedo, used by the Swedish navy, is powered by a piston engine
propelled by HTP as an oxidizer and kerosene as a fuel in a bipropellant system[14].
While rarely used now as a monopropellant for large engines, small hydrogen peroxide
attitude control thrusters are still in use on some satellites. They are easy to throttle, and
safer to fuel and handle before launch than hydrazine thrusters. However, hydrazine is
more often used in spacecraft because of its higher specific impulse and lower rate of
decomposition.
Recently H2O2/propylene has been proposed as an approach to inexpensive Single Stage

To Orbit: a fuel tank containing propylene has a bladder floating in it containing H2O2.
This combination offers 15% superior Isp to O2/RP4 (a kerosene used as rocket
propellant), does not need turbines or cryogenic storage or hardware, and greatly reduces
the cost of the booster. The potential of this and other alternative systems is discussed in
some detail at Dunn Engineering.
Therapeutic use
Hydrogen peroxide is generally recognized as safe (GRAS) as an antimicrobial agent, an

oxidizing agent and for other purposes by the US Food and Drug Administration.[15]
Hydrogen peroxide has been used as an antiseptic and anti-bacterial agent for many years
due to its oxidizing effect. While its use has decreased in recent years with the popularity
of better-smelling and more readily-available over the counter products, it is still used by
many hospitals, doctors and dentists in sterilizing, cleaning and treating everything from
floors to root canal procedures.
• Like many oxidative antiseptics, hydrogen peroxide causes mild damage to tissue
in open wounds, but it also is effective at rapidly stopping capillary bleeding
(slow blood oozing from small vessels in abrasions), and is sometimes used
sparingly for this purpose, as well as cleaning.
• Hydrogen peroxide can be used as a toothpaste when mixed with correct
quantities of baking soda and salt.[16]
• Hydrogen peroxide and benzoyl peroxide are sometimes used to treat acne.[17]
• Hydrogen peroxide is used as an emetic in veterinary practice.[18]
Alternative uses
• Some people have tried using peroxide as a treatment for cancer. The American
Cancer Society states that "there is no scientific evidence that hydrogen peroxide
is a safe, effective or useful cancer treatment", and advises cancer patients to
"remain in the care of qualified doctors who use proven methods of treatment and
approved clinical trials of promising new treatments." [19]
• Another controversial alternative medical procedure is inhalation of hydrogen
peroxide at a concentration of about 1%. Internal use of hydrogen peroxide has a
history of causing fatal blood disorders, and its recent use as a therapeutic
treatment has been linked to several deaths.[20][21]
Physical properties
While the anti conformer would minimize steric repulsions, a 90° torsion angle would
optimize mixing between the filled p-type orbital of the oxygen (one of the lone pairs)
and the LUMO of the vicinal O-H bond.[22] Reflecting a compromise between the two
interactions, gaseous and liquid hydrogen peroxide adopts an anticlinal "skewed" shape.
This rotational conformation is a compromise between the anti conformer, which would
minimize steric repulsion, and between the syn conformer that associates O-H bonds with
lone pairs on the oxygen atoms. Despite the fact that the O-O bond is a single bond, the
molecule has a remarkably high barrier to complete rotation of 29.45 kJ/mol (compared
with 12.5 kJ/mol for the rotational barrier of ethane). The increased barrier is also
attributed to repulsion between one lone pair and other lone pairs. The bond angles are
affected by hydrogen bonding, which is relevant to the structural difference between
gaseous and crystalline forms; indeed a wide range of values is seen in crystals
containing molecular H2O2.
Chemical properties
H2O2 is one of the most powerful oxidizers known -- stronger than chlorine, chlorine
dioxide, and potassium permanganate. Also, through catalysis, H2O2 can be converted
into hydroxyl radicals (.OH) with reactivity second only to fluorine.
Oxidant Oxidation potential, V
Fluorine 3.0
Hydroxyl radical 2.8

Ozone 2.1
Hydrogen peroxide 1.8
Potassium permanganate 1.7
Chlorine dioxide 1.5
Chlorine 1.4
Hydrogen peroxide can decompose spontaneously into water and oxygen. It usually acts
as an oxidizing agent, but there are many reactions where it acts as a reducing agent,
releasing oxygen as a by-product.
It also readily forms both inorganic and organic peroxides.
Decomposition
Hydrogen peroxide always decomposes (disproportionates) exothermically into water and

oxygen gas spontaneously:
2 H2O2 → 2 H2O + O2
This process is very favorable thermodynamically. It has a ∆Ho of −98.2 kJ·mol−1 and a
∆Go of −119.2 kJ·mol−1 and a ∆S of 70.5 J·mol−1·K−1. The rate of decomposition is
dependent on the temperature and concentration of the peroxide, as well as the pH and
the presence of impurities and stabilizers. Hydrogen peroxide is incompatible with many
substances that catalyse its decomposition, including most of the transition metals and
their compounds. Common catalysts include manganese dioxide, and silver. The same
reaction is catalysed by the enzyme catalase, found in the liver, whose main function in
the body is the removal of toxic byproducts of metabolism and the reduction of oxidative
stress. The decomposition occurs more rapidly in alkali, so acid is often added as a
stabilizer.
The liberation of oxygen and energy in the decomposition has dangerous side effects.
Spilling high concentrations of hydrogen peroxide on a flammable substance can cause
an immediate fire, which is further fueled by the oxygen released by the decomposing
hydrogen peroxide. High-strength peroxide (also called high-test peroxide, or HTP) must
be stored in a suitable, vented container to prevent the buildup of oxygen gas, which
would otherwise lead to the eventual rupture of the container.
In the presence of certain catalysts, such as Fe2+ or Ti3+, the decomposition may take a
different path, with free radicals such as HO· (hydroxyl) and HOO· being formed. A
combination of H2O2 and Fe2+ is known as Fenton's reagent.
A common concentration for hydrogen peroxide is "20 volume", which means that when
1 volume of hydrogen peroxide is decomposed, it produces 20 volumes of oxygen. A 20
"volume" concentration of hydrogen peroxide is equivalent to 1.67 mol/dm3 (Molar
solution) or about 6%.
Hydrogen peroxide available at drug stores is three percent solution. In such small
concentrations, it is less stable, and decomposes faster. It is usually stabilized with
acetanilide, a substance which has toxic side effects in significant amounts.
Redox reactions
In aqueous solution, hydrogen peroxide can oxidize or reduce a variety of inorganic ions.
When it acts as a reducing agent, oxygen gas is also produced. In acidic solutions Fe2+ is
oxidized to Fe3+,
2 Fe2+(aq) + H2O2 + 2 H+(aq) → 2 Fe3+(aq) + 2H2O(l)
and sulfite (SO32−) is oxidized to sulfate (SO42−). However, potassium permanganate is

reduced to Mn2+ by acidic H2O2. Under alkaline conditions, however, some of these
reactions reverse; for example, Mn2+ is oxidized to Mn4+ (as MnO2).
Another example of hydrogen peroxide acting as a reducing agent is the reaction with
sodium hypochlorite, which is a convenient method for preparing oxygen in the
laboratory.
NaOCl + H2O2 → O2 + NaCl + H2O
Hydrogen peroxide is frequently used as an oxidizing agent in organic chemistry. One

application is for the oxidation of thioethers to sulfoxides. For example, methyl phenyl
sulfide was oxidised to methyl phenyl sulfoxide in 99% yield in methanol in 18 hours (or
20 minutes using a TiCl3 catalyst):
Ph-S-CH3 + H2O2 → Ph-S(O)-CH3 + H2O
Alkaline hydrogen peroxide is used for epoxidation of electron-deficient alkenes such as

acrylic acids, and also for oxidation of alkylboranes to alcohols, the second step of
hydroboration-oxidation.
Formation of peroxide compounds

Hydrogen peroxide is a weak acid, and it can form hydroperoxide or peroxide salts or
derivatives of many metals.
For example, on addition to an aqueous solution of chromic acid (CrO3) or acidic

solutions of dichromate salts, it will form an unstable blue peroxide CrO(O2)2. In aqueous
solution it rapidly decomposes to form oxygen gas and chromium salts.
It can also produce peroxoanions by reaction with anions; for example, reaction with
borax leads to sodium perborate, a bleach used in laundry detergents:
Na2B4O7 + 4 H2O2 + 2 NaOH → 2 Na2B2O4(OH)4 + H2O
H2O2 converts carboxylic acids (RCOOH) into peroxy acids (RCOOOH), which are
themselves used as oxidizing agents. Hydrogen peroxide reacts with acetone to form
acetone peroxide, and it interacts with ozone to form hydrogen trioxide, also known as
trioxidane. Reaction with urea produces carbamide peroxide, used for whitening teeth.
An acid-base adduct with triphenylphosphine oxide is a useful "carrier" for H2O2 in some
reactions.
Alkalinity
Hydrogen peroxide is a much weaker base than water, but it can still form adducts with
very strong acids. The superacid HF/SbF5 forms unstable compounds containing the
[H3O2]+ ion.
Manufacture
Hydrogen peroxide is manufactured today almost exclusively by the autoxidation of 2-
ethyl-9,10-dihydroxyanthracene (C16H14O2) to 2-ethylanthraquinone (C16H12O2) and
hydrogen peroxide using oxygen from the air. This is known as the Riedl-Pfleiderer
process.
In this reaction, the hydroxy groups on the middle ring of anthracene are deprotonated
and are turned into ketones, while two double bonds are lost from the middle ring and are
replaced as C=O double bonds in the ketone groups. The anthraquinone derivative is then
extracted out and reduced back to the dihydroxy compound using hydrogen gas in the
presence of a metal catalyst. The overall equation for the process is deceptively simple:
H2 + O2 → H2O2
However the economics of the process depend on effective recycling of the quinone and
extraction solvents, and of the hydrogenation catalyst.
Formerly inorganic processes were used, employing the electrolysis of an aqueous
solution of sulfuric acid or acidic ammonium bisulfate (NH4HSO4), followed by
hydrolysis of the peroxydisulfate ((SO4)2)2− which is formed.
In 1994, world production of H2O2 was around 1.9 million tonnes and grew to 2.2 million
in 2006,[5] most of which was at a concentration of 70% or less]. In that year bulk 30%
H2O2 sold for around US $0.54 per kg, equivalent to US $1.50 per kg (US $0.68 per lb)
on a "100% basis.
High test peroxide

Hydrogen peroxide works best as a propellant in extremely high concentrations-- roughly
over 70%. Although any concentration of peroxide will generate some hot gas (oxygen
plus some steam), at concentrations above approximately 67%, the heat of decomposing
hydrogen peroxide becomes large enough to completely vaporize all the liquid at standard
temperature. This represents a safety and utilization turning point, since decomposition of
any concentration above this amount is capable of transforming the liquid entirely to
heated gas (the higher the concentration, the hotter the resulting gas). This very hot
steam/oxygen mixture can then be used to generate maximal thrust, power, or work, but it
also makes explosive decomposition of the material far more hazardous.
Normal propellant grade concentrations therefore vary from 70 to 98%, with common
grades of 70, 85, 90, and 98%. Many of these grades and variations are described in detail
in the United States propellant specification number MIL-P-16005 Revision F, which is
currently available. The available suppliers of high concentration propellant grade
hydrogen peroxide are generally one of the large commercial companies which make
other grades of hydrogen peroxide; including Solvay Interox, FMC and Degussa.
Peroxide Propulsionis upgrading technical grade hydrogen peroxide to HTP. Other
companies which have made propellant grade hydrogen peroxide in the recent past
include Air Liquide and DuPont. DuPont recently sold its hydrogen peroxide
manufacturing business to Degussa.
Propellant grade hydrogen peroxide is available to qualified buyers. Typically this

chemical is only sold to commercial companies or government institutions which have
the ability to properly handle and utilize the material. Non-professionals have purchased
70% or lower concentration hydrogen peroxide (the remaining 30% is water with traces
of impurities and stabilizing materials, such as tin salts, phosphates, nitrates, and other
chemical additives), and increased its concentration themselves. Many amateurs try
distillation, but this is extremely dangerous with hydrogen peroxide; peroxide vapor can
ignite or detonate depending on specific combinations of temperature and pressure. In
general any boiling mass of high concentration hydrogen peroxide at ambient pressure
will produce vapor phase hydrogen peroxide which can detonate. This hazard is
mitigated, but not entirely eliminated with vacuum distillation. Other approaches for
concentrating hydrogen peroxide are sparging and fractional crystallization.
High concentration hydrogen peroxide is readily available in 70, 90, and 98%
concentrations in sizes of 1 gallon, 30 gallon, and bulk tanker truck volumes. Propellant
grade hydrogen peroxide is being used on current military systems and is in numerous
defense and aerospace research and development programs. Many privately funded
rocket companies are using hydrogen peroxide, notably Blue Origin, and some amateur
groups have expressed interest in manufacturing their own peroxide, for their use and for
sale in small quantities to others.
Hazards
Hydrogen peroxide, either in pure or diluted form, can pose several risks:
• Above roughly 70% concentrations, hydrogen peroxide can give off vapor that
can detonate above 70 °C (158 °F) at normal atmospheric pressure. This can then
cause a boiling liquid expanding vapor explosion (BLEVE) of the remaining
liquid. Distillation of hydrogen peroxide at normal pressures is thus highly
dangerous.
• Hydrogen peroxide vapors can form sensitive contact explosives with
hydrocarbons such as greases. Hazardous reactions ranging from ignition to
explosion have been reported with alcohols, ketones, carboxylic acids
(particularly acetic acid), amines and phosphorus. The saying is "peroxides kill
chemists".
• Concentrated hydrogen peroxide, if spilled on clothing (or other flammable
materials), will preferentially evaporate water until the concentration reaches
sufficient strength, at which point the material may spontaneously ignite. [23][24]
• Concentrated hydrogen peroxide (>50%) is corrosive, and even domestic-strength
solutions can cause irritation to the eyes, mucous membranes and skin.[25]
Swallowing hydrogen peroxide solutions is particularly dangerous, as
decomposition in the stomach releases large quantities of gas (10 times the
volume of a 3% solution) leading to internal bleeding. Inhaling over 10% can
cause severe pulmonary irritation.
• Low concentrations of hydrogen peroxide, on the order of 3% or less, will
chemically bleach many types of clothing to a pinkish hue. Caution should be
exercised when using common products that may contain hydrogen peroxide,
such as facial cleaner or contact lens solution, which easily splatter upon other
surfaces.
• Large oral doses of Hydrogen peroxide on a 3% concentration may cause
"irritation and blistering to the mouth,(which is known as Black Hairy Tongue)
throat, and abdomen", as well as "abdominal pain, vomiting, and diarrhea". [26]
• Vitiligo is an acquired skin disorder with the loss of native skin pigment, which
affects about 0.5-1% of the world population. Recent studies have discovered
increased H2O2 levels in the epidermis and in blood are one of many hallmarks of
this disease.[27]
Historical Incidents
• Several people received minor injuries after a hydrogen peroxide spill on board
Northwest Airlines flight 957 from Orlando to Memphis on October 28, 1998 and
subsequent fire on Northwest Airlines flight 7.[28]
• During the Second World War, Doctors in Nazi concentration camps
experimented with the use of hydrogen peroxide injections in the killing of human
subjects.[29]
• Hydrogen peroxide was said to be one of the ingredients in the bombs which
failed to explode in the 21 July 2005 London bombings.[30]
References
• J. Drabowicz et al., in The Syntheses of Sulphones, Sulphoxides and Cyclic Sulphides,
p112-116, G. Capozzi et al., eds., John Wiley & Sons, Chichester, UK, 1994. ISBN 0-
471-93970-6.
• N. N. Greenwood, A. Earnshaw, Chemistry of the Elements, 2nd ed., Butterworth-
Heinemann, Oxford, UK, 1997. A great description of properties & chemistry of H2O2.
• J. March, Advanced Organic Chemistry, 4th ed., p. 723, Wiley, New York, 1992.
• W. T. Hess, Hydrogen Peroxide, in Kirk-Othmer Encyclopedia of Chemical Technology,
4th edition, Wiley, New York, Vol. 13, 961-995 (1995).
1. ^ A vertical empire by C.N.Hill

2. ^ L. J. Thenard (1818). Annales de chimie et de physique 8: 308.
3. ^ C. W. Jones, J. H. Clark. Applications of Hydrogen Peroxide and Deriatives. Royal
Society of Chemistry, 1999.
4. ^ Richard Wolffenstein (1894). "Concentration und Destillation von
Wasserstoffsuperoxyd". Berichte der deutschen chemischen Gesellschaft 27 (3): 3307–
3312. doi:10.1002/cber.189402703127.
5. ^ a b Ronald Hage, Achim Lienke (2005). "Applications of Transition-Metal Catalysts to
Textile and Wood-Pulp Bleaching". Angewandte Chemie International Edition 45 (27):
206–222. doi:10.1002/anie.200500525.
6. ^ Instant steam puts heat on MRSA, Society Of Chemical Industry
7. ^ Great-lakes.org
8. ^ fws.gov
9. ^ Chemist Paul Krebaum claims to have originated the formula for use on skunked pets
at Skunk Remedy
10. ^ How to Induce Vomiting (Emesis) in Dogs[1]
11. ^ Hydrogen Peroxide MSDS
12. ^ Ozonelab Peroxide compatibility
13. ^ "The Many Uses of Hydrogen Peroxide-Truth! Fiction! Unproven!". Retrieved on
2008-06-30.
14. ^ Scott, Richard (November, 1997). "Homing Instincts". Jane's Navy Steam generated by
catalytic decomposition of 80-90 % hydrogen peroxide was used for driving the
turbopump turbines of the V-2 rockets, the X-15 rocketplanes, the early Centaur RL-10
engines and is still used on Soyuz for that purpose to-day. International,
http://babriet.tripod.com/articles/art_hominginstinct.htm.
15. ^ "Sec. 184.1366 Hydrogen peroxide". U.S. Government Printing Office via GPO Access
(2001-04-01). Retrieved on 2007-07-07.
16. ^ Shepherd, Steven. "Brushing Up on Gum Disease". FDA Consumer. Retrieved on
2007-07-07.
17. ^ Milani, Massimo; Bigardi, Andrea; Zavattarelli, Marco (2003). "Efficacy and safety of
stabilised hydrogen peroxide cream (Crystacide) in mild-to-moderate acne vulgaris: a
randomised, controlled trial versus benzoyl peroxide gel". Current Medical Research and
Opinion 19 (2): 135–138(4). doi:10.1185/030079902125001523,
http://www.ingentaconnect.com/content/libra/cmro/2003/00000019/00000002/art00010.
18. ^ "Drugs to Control or Stimulate Vomiting". Merck Veterinary manual. (2006). Merck &
Co., Inc.
19. ^ "Questionable methods of cancer management: hydrogen peroxide and other
'hyperoxygenation' therapies". CA: a cancer journal for clinicians 43 (1): 47–56. 1993.
doi:10.3322/canjclin.43.1.47. PMID 8422605.
20. ^ Cooper, Anderson (2005-01-12). "A Prescription for Death?", CBS News. Retrieved on
7 July 2007.
21. ^ Mikkelson, Barbara (2006-04-30). "Hydrogen Peroxide". Snopes.com. Retrieved on
2007-07-07.
22. ^ Dougherty, Dennis A.; Eric V. Anslyn (2005). Modern Physical Organic Chemistry.
University Science, 122. ISBN 1-891389-31-9.
23. ^ NTSB - Hazardous Materials Incident Brief
24. ^ Armadilloaerospace material tests with HTP
25. ^ For example, see an MSDS for a 3% peroxide solution.
26. ^ Hydrogen Peroxide, 3%. 3. Hazards Identification Southeast Fisheries Science Center,
daughter agency of NOAA.
27. ^ [2]
28. ^ Hazardous Materials Incident Brief DCA-99-MZ-001, "Spill of undeclared shipment of
hazardous materials in cargo compartment of aircraft". pub: National Transportation
Safety Board. October 28, 1998; adopted May 17, 2000.
29. ^ "The Nazi Doctors: Medical Killing and the Psychology of Genocide". Robert Jay
Lifton. Retrieved on 1 November, 2007.
30. ^ Four Men Found Guilty in Plot to Blow Up London’s Transit System,
"FOXNews.com". (July 9, 2007)
External links
• Hydrogen Peroxide Distillation for rocket fuel
• Material Safety Data Sheet
• ATSDR Agency for Toxic Substances and Disease Registry FAQ
• Food Grade Hydrogen Peroxide Information
• Experimental Rocket Propulsion Society
• Computational Chemistry Wiki
• International Chemical Safety Card 0164
• NIOSH Pocket Guide to Chemical Hazards
• IARC Monograph "Hydrogen Peroxide"
• General Kinetics Inc. Hydrogen Peroxide Rocket Engines and Gas Generators
• Oxygenation Therapy:Unproven Treatments for Cancer and AIDS
• Explosion of a lorry carrying hydrogen peroxide closes M25 motorway.
• Hydrogen Peroxide in the Human Body
• Information on many common uses for hydrogen peroxide, especially household
uses.
• Hydrogen peroxide in tooth whiteners summary by GreenFacts of the European
Commission SCCP assessment
IMC Agrico - Phosphate Processing Facility.
(Click to see more photographs)
The Phosphate Fertilizer

Industry: An Environmental
Overview
by Michael Connett
Fluoride Action Network
May 2003
1) Introduction
2) Effects of Fluoride Pollution
3) Litigation from Fluoride Damage
4) Scrubbing away the problem
5) A Missed Opportunity: Little Demand for Silicofluorides
6) Fluoridation: "An ideal solution to a long-standing problem"?
7) Recent Findings on Silicofluorides
8) Gypsum Stacks & 'Slime Ponds'
9) Radiation Hazard
10) Will radioactive gypsum be added to roads?
11) Commercial Uranium Production
12) Cold War Secrets & Worker Health
13) Wastewater Issues
14) References
15) Photographs of the Phosphate Industry
16) Further Reading
1) Introduction (back to top)
They call them "wet scrubbers" - the pollution control devices

used by the phosphate industry to capture fluoride gases
produced in the production of commercial fertilizer.
In the past, when the industry let these gases escape,
vegetation became scorched, crops destroyed, and cattle
crippled.
Today, with the development of sophisticated air-pollution

control technology, less of the fluoride escapes into the
atmosphere, and the type of pollution that threatened the
survival of some communities in the 1950s and 60s, is but a
thing of the past (at least in the US and other wealthy
countries).
However, the impacts of the industry's fluoride emissions are

still being felt, although more subtly, by millions of people -
people who, for the most part, do not live anywhere near a
phosphate plant.
That's because, after being captured in the scrubbers, the

fluoride acid (hydrofluorosilicic acid), a classified hazardous
waste, is barreled up and sold, unrefined, to communities
across the country. Communities add hydrofluorosilicic acid to
their water supplies as the primary fluoride chemical for water
fluoridation.
Even if you don't live in a community where fluoride is added to

water, you'll still be getting a dose of it through cereal, soda,
juice, beer and any other processed food and drink
manufactured with fluoridated water.
Meanwhile, if the phosphate industry has its way, it may soon

be distributing another of its by-products to communities
across the country. That waste product is radium, which may
soon be added to a roadbed near you - if the EPA buckles and
industry has its way.
2) Effects of Fluoride Pollution (back to top)
Central Florida knows it well. So too does Garrison Montana,

Cubatao Brazil, and any other community where phosphate
industries have had inefficient, or non-existent, pollution
control: Fluoride.
The Canadian Broadcasting Corporation (CBC) called the

phophate industry a "pandora's box." That, while it brought
wealth to rural communities, it also brought ecological
devastation. The CBC described the effects of one particular
phosphate plant in Dunville, Ontario:
"Farmers noticed it first... Something mysterious burned the

peppers, burned the fruit, dwarfed and shriveled the grains,
damaged everything that grew. Something in the air destroyed
the crops. Anyone could see it... They noticed it first in 1961.
Again in '62. Worse each year. Plants that didn't burn, were
dwarfed. Grain yields cut in half...Finally, a greater disaster
revealed the source of the trouble. A plume from a silver stack,
once the symbol of Dunville's progress, spreading for miles
around poison - fluorine. It was identified by veterinarians.
There was no doubt. What happened to the cattle was
unmistakable, and it broke the farmer's hearts. Fluorosis -
swollen joints, falling teeth, pain until cattle lie down and die.
Hundreds of them. The cause - fluorine poisoning from the air."
Fluoride has been, and remains to this day, one of the largest
environmental liabilities of the phosphate industry. The source
of the problem lies in the fact that raw phosphate ore contains
high concentrations of fluoride, usually between 20,000 to
40,000 parts per million (equivalent to 2 to 4% of the ore).
When this ore is processed into water-soluble phosphate (via

the addition of sulfuric acid), the fluoride content of the ore is
vaporized into the air, forming highly toxic gaseous compounds
(hydrogen fluoride and silicon tetrafluoride).
In the past, when the industry had little, if any, pollution control,
the fluoride gases were frequently emitted in large volumes into
surrounding communities, causing serious environmental
damage.
In Polk County, Florida, the creation of multiple phosphate

plants in the 1940s caused damage to nearly 25,000 acres of
citrus groves and "mass fluoride poisoning" of cattle. It is
estimated that, as a result of fluoride contamination, "the cattle
population of Polk County dropped 30,000 head" between 1953
and 1960, and "an estimated 150,000 acres of cattle land were
abandoned" (Linton 1970).
According to the former president of the Polk County

Cattlemen's Association:
"Around 1953 we noticed a change in our cattle... We watched

our cattle become gaunt and starved, their legs became
deformed; they lost their teeth. Reproduction fell off and when a
cow did have a calf, it was also affected by this malady or was a
stillborn" (ibid).
In the 1960s, air pollution emitted by another phosphate plant in

Garrison, Montana was severe enough to be branded "the worst
in the nation" by a 1967 National Air Pollution Conference in
Washington, D.C.
As in Polk County, and other communities downwind of fluoride

emissions, the cattle in Garrison were poisoned by fluoride. As
described in a 1969 article from Good Housekeeping:
"The blight had afflicted cattle too. Some lay in the pasture,
barely able to move. Others limped and staggered on swollen
legs, or painfully sank down and tried to graze on their knees...
Ingested day after day, the excessive fluoride had caused tooth
and bone disease in the cattle, so that they could not tolerate
the anguish of standing or walking. Even eating or drinking was
an agony. Their ultimate fate was dehydration, starvation - and
death."
3) Litigation from Fluoride Damage (back to top)
Damage to vegetation and livestock, caused by fluoride

emissions from large industry, has resulted, as one might
expect, in a great deal of expensive litigation. In 1983, Dr.
Leonard Weinstein of Cornell University, stated that "certainly,
there has been more litigation on alleged damage to agriculture
by fluoride than all other pollutants combined" (Weinstein
1983). While Weinstein was referring to fluoride pollution in
general, his comments give an indication of the problem facing
the phosphate industry - one of the most notorious emitters of
fluoride - in its early days.
So too does an estimate from Dr. Edward Groth, currently a

Senior Scientist at Consumers Union. According to an article
written by Groth, fluoride pollution between the years 1957 to
1968, "was responsible for more damage claims against
industry than all twenty (nationally monitored air pollutants)
combined."
The primary reason for the litigation against fluoride emitters

was "the painful, economically disastrous, debilitating disease"
that fluoride causes to livestock (Hodge & Smith 1977). As
noted in a 1970 review by the US Department of Agriculture
(USDA),
"Airborne fluorides have caused more worldwide damage to

domestic animals than any other air pollutant" (Lillie 1970).
Another review on air pollution reached the same conclusion.

According to Ender (1969):
"The most important problem concerning damage to animals by

air pollution is, no doubt, the poisoning of domestic animals
caused by fluorine in smoke, gas, or dust from various
industries; industrial fluorosis in livestock is today a disorder
well known by veterinarians in all industrialized countries."
According to a review discussing "Fluorine toxicosis and

industry", Shupe noted that:
"Air pollution damage to agricultural production in the United

States in 1967 was estimated at $500,000,000. Fluoride damage
to livestock and vegetation was a substantial part of this
amount" (Shupe 1970).
4) Scrubbing away the problem (back to top)
Due to the inevitable liabilities that fluoride pollution presented,

and to an increasingly stringent set of environmental
regulations, the phosphate industry began cleaning up its act.
As noted by Ervin Bellack, a chemist for the US Public Health

Service:
"In the manufacture of super-phosphate fertilizer, phosphate

rock is acidulated with sulfuric acid, and the fluoride content of
the rock evolves as volatile silicofluorides. In the past, much of
this volatile material was vented to the atmosphere,
contributing heavily to pollution of the air and land surrounding
the manufacturing site. As awareness of the pollution problem
increased, scrubbers were added to strip particulate and
gaseous components from the waste gas..." (Bellack 1970)
A 1979 review, published in the journal Phosphorous &

Potassium, added:
"The fluorine compounds liberated during the acidulation of

phosphate rock are now rightly regarded as a menace and the
industry is now obliged to suppress emissions-containing
vapors to within very low limits in most parts of the world...
In the past, little attention was paid to the emission of gaseous

fluorine compounds in the fertilizer industry. But today fluorine
recovery is increasingly necessary because of stringent
environmental restrictions which demand drastic reductions in
the quantities of volatile and toxic fluorine compounds emitted
into the waste gases. These compounds now have to be
recovered and converted into harmless by-products for
disposal or, more desirably, into marketable products"
(Denzinger 1979).
5) A Missed Opportunity: Little Demand for Silicofluorides (back

to top)
Considering the great demand among big industry for fluoride

chemicals as a material used in a wide variety of commercial
products and industrial processes, the phosphate industry
could have made quite a handsome profit selling its fluoride
wastes to industry. This was indeed the hope among some
industry analysts, including the authors of the review noted
above (Denzinger 1979).
However, the US phosphate industry has thus far been unable

to take advantage of this market. The principal reason for this
failure stems from the fact that fluoride captured in the
scrubbers is combined with silica. The resulting silicofluoride
complex has, in turn, proved difficult for the industry to
separate and purify in an economically-viable process.
As it now stands, silicofluoride complexes (hydrofluorosilicic

acid & sodium silicofluoride) are of little use to industry.
Thus, while US industry continues to satisfy its growing

demand for high-grade fluoride chemicals by importing calcium
fluoride from abroad (primarily from Mexico, China, and South
Africa), the phosphate industry continues dumping large
volumes of fluoride into the acidic wastewater ponds that lie at
the top of the mountainous waste piles which surround the
industry.
In 1995, the Tampa Tribune summed up the situation as follows:
"The U.S. demand for fluorine, which was 400,000 tons, is

expected to jump 25 percent by next year... Even though
600,000 tons of fluorine are contained in the 20 million tons of
phosphate rock mined in Florida, the fluorine market has been
inaccessible because the fluorine is tied up with silica, a hard,
glassy material."
Of course, not all of the phosphate industry's fluoride waste is
disposed of in the ponds. As noted earlier, the phosphate
industry has found at least one regular consumer of its
silicofluorides: municipal water-treatment facilities.
According to recent estimates, the phosphate industry sells

approximately 200,000 tons of silicofluorides (hydrofluorosilicic
acid & sodium silicofluoride) to US communities each year for
use as a water fluoridation agent (Coplan & Masters 2001).
6) Fluoridation: "An ideal solution to a long-standing problem"?

(back to top)
In 1983, Rebecca Hanmer, the Deputy Assistant Administrator

for Water at the US Environmental Protection Agency,
described the policy of using the phosphate industry's
silicofluorides for fluoridation as follows:
"In regard to the use of fluosilicic acid as the source of fluoride

for fluoridation, this agency regards such use as an ideal
solution to a long standing problem. By recovering by-product
fluosilicic acid from fertilizer manufacturing, water and air
pollution are minimized, and water authorities have a low-cost
source of fluoride available to them." (See letter)
Another EPA official, Dr. J. William Hirzy, the current Senior

Vice-President of EPA Headquarters Union, recently expressed
a different view on the matter. According to Hirzy:
'"If this stuff gets out into the air, it's a pollutant; if it gets into
the river, it's a pollutant; if it gets into the lake it's a pollutant;
but if it goes right into your drinking water system, it's not a
pollutant. That's amazing... There's got to be a better way to
manage this stuff" (Hirzy 2000).
7) Recent Findings on Silicofluorides (back to top)
Adding to Hirzy's, and the EPA Union's, concerns are three

recent findings.
First and foremost are two recent studies reporting a

relationship between water treated with silicofluorides and
elevated levels of lead in children's blood (Masters & Coplan
1999, 2000). The authors of these studies speculate that the
silicofluoride complex may increase the uptake of lead (derived
from other environmental sources, such as lead paint) into the
bloodstream.
The second finding is the recent, and quite remarkable

concession from the EPA, that despite 50 years of water
fluoridation, the EPA has no chronic health studies on
silicofluorides. All safety studies on fluoride to date have been
conducted using pharmaceutical-grade sodium fluoride, not
industrial-grade silicofluorides. A similar concession has also
been obtained from the respective authorities in England.
The defense made by agencies promoting water fluoridation,

such as the US Centers for Disease Control, to the lack of such
studies, is that when the silicofluoride complex is diluted into
water, it dissociates into free fluoride ions or other fluoride
compounds (e.g. aluminum-fluoride), and thus the treated
water, when consumed, will have no remaining silicofluoride
residues (Urbansky & Schock, 2000).
This argument, while supported by a good deal of theoretical

calculation is backed by a notable lack of laboratory data.
Moreover, a recently obtained and translated PhD dissertation
from a German chemist (Westendorf 1975) contradicts the
claims. According to the dissertation, not only do the
silicofluorides not fully dissociate, the remaining silicofluoride
complexes are more potent inhibitors of cholinesterase, an
enzyme vital to the functioning of the central nervous system.
The third finding, although perhaps of less concern, is that the

silicofluorides, as obtained from the scrubbers of the
phosphate industry, contain a wide variety of impurities present
in the process water - including arsenic, lead, and possibly
radionuclides. While these impurities occur at low
concentrations, especially after dilution into the water, their
purposeful addition to water supplies directly violates EPA
public health goals. For instance, the EPA's Maximum
Contaminant Level Goal for arsenic, a known human
carcinogen, is 0 parts per billion. However, according to the
National Sanitation Foundation, the addition of silicofluorides to
the water supply will add, on average, about 0.1 to 0.43 ppb,
and as much as 1.6 ppb, arsenic to the water.
As noted by the Salt Lake Tribune,
"Those who had visions of sterile white laboratories when they

voted for fluoride weren't thinking of fluorosilicic acid.
Improbable as this sounds, much of it is recovered from the
scrubbing solution that scours toxins from smokestacks at
phosphate fertilizer plants."
8) Gypsum Stacks & 'Slime Ponds' (back to top)
To make 1 pound of commercial fertilizer, the phosphate

industry creates 5 pounds of contaminated phosphogypsum
slurry (calcium sulfate). This slurry is piped from the
processing facilities up into the acidic wastewater ponds that
sit atop the mountainous waste piles known as gypsum stacks.
(See photos)
According to the EPA, 32 million tons of new gypsum waste is

created each year by the phosphate industry in Central Florida
alone. (Central Florida is the heart of the US phosphate
industry). The EPA estimates that the current stockpile of waste
in Central Florida's gypsum stacks has reached "nearly 1 billion
metric tons." (The average gypsum stack takes up about 135
acres of surface area - equal to about 100 football fields - and
can go as high as 200 feet.)
9) Radiation Hazard (back to top)
It is sort of a misnomer, however, to call these stacks "gypsum"

stacks. Indeed, if the stacks were simply gypsum, they probably
wouldn't exist, as gypsum can be readily sold for various
purposes (e.g. as a building material). What can't be readily
sold, however, is radioactive gypsum, which is about the only
type of gypsum the phosphate industry has to offer.
The source of the gypsum's radioactivity is the presence of

uranium, and uranium's various decay products (i.e. radium), in
raw, phosphate ore. As noted by the Sarasota Herald Tribune
"there is a natural and unavoidable connection between

phosphate mining and radioactive material. It is because
phosphate and uranium were laid down at the same time and in
the same place by the same geological processes millions of
years ago. They go together. Mine phosphate, you get
uranium."
While uranium, and its decay-products, naturally occur in

phosphate ore, their concentrations in the gypsum waste, after
the extraction of soluble phosphate, are up to 60 times greater.
The gypsum has therefore been classified as a "Naturally

Occurring Radioactive Material", or NORM waste, although
some, including the EPA, have questioned whether this
classification understates the problem. According to the Tampa
Tribune, the gypsum "is among the most concentrated
radioactive waste that comes from natural materials."
It is so concentrated, in fact, that "it can't be dumped at the one

landfill in the country licensed to take only NORM waste."
Thus, according to US News & World Report, the EPA is

currently "weighing whether to classify the gypsum stacks as
hazardous waste under federal statutes, which would force the
industry to provide strict safeguards" (to nearly 1 billion tons of
waste).
One of EPA's main concerns with gypsum stacks centers

around the fact that radium-226 breaks down into radon gas.
When radon gas is formed, it can become airborne, leading to
potentially elevated exposures downwind of the stacks. Such
airborne exposures are of particular concern to areas like
Progress Village, Florida, where "a new gypsum stack is rising
a few hundred yards from a grade school."
According to US News & World Report, there is evidence to

suggest that cancer rates downwind of the stacks may be
elevated. A 1995 article in the magazine stated:
"Some epidemiological studies suggest that lung cancer rates

among nonsmoking men in the phosphate region are up to
twice as high as the state average. Acute leukemia rates among
adults are also double the average. An industry-sponsored
study of male phosphate workers, however, found lung cancer
rates no higher than the state average. There is no proof that
mine wastes cause cancer, but the evidence is worrisome."
10) Will radioactive gypsum be added to roads? (back to top)

With the growing realization that gypsum stacks represent a
serious environmental threat to Central Florida, both now and
for generations to come, the phosphate industry has been
looking into ways of reducing the size of the stacks (and the
size of their liability.)
In an interesting parallel to fluoride, the phosphate industry is

looking to turn its gypsum waste into a marketable product: as
a potential cover for landfills, as a soil conditioner, and as a
base material for roads.
According to Robert Vanderslice, head of Phosphate

Management for Florida's Department of Environmental
Protection, the gypsum is a "good material to replace lime rock
in roads. Lime rock will run out at some time, and we're still
building a lot of roads. Building roads with phosphogypsum
would consume quite a bit of gypsum."
In 1995, a "Phosphogypsum Fact-Finding Forum" organized by

the Florida Institute of Phosphate Research, presented a
"message aimed straight at Washington: Relax the rules on
using gypsum and the mountains will gradually disappear."
As of yet, however, the EPA does not appear willing to relax its
rules and lift its ban on commercial uses of gypsum. According
to the Tampa Tribune, "EPA's limit for use is 10 picocuries of
radium per gram, well below the levels usually found in the
mounds."
A recent statement from the EPA reads:
"Only two uses (for the gypsum) are permitted: limited

agricultural use and research. Other uses may be proposed, but
otherwise the phosphogypsum must be returned to mines or
stored in stacks."
11) Commercial Uranium Production (back to top)
While the presence of uranium decay-products makes gypsum

a tough sell for the phosphate industry, the uranium has, at
various times, presented the industry with a business
opportunity of its own.
One of the lesser-known-facts about the phosphate industry is

that its processing facilities have produced and sold sizeable
quantities of uranium.
In 1997, just two phosphate plants in Louisiana produced

950,000 pounds of commercial uranium, which amounted to
roughly 16% of the domestically produced uranium in the US.
In 1998, the same two plants produced another 950,000 pounds,

but due to declining market prices for uranium, both plants
have since ceased production.
If market prices improve, however, 4 US phosphate plants (2 in

Louisiana & 2 in Florida) would have the capacity to produce a
combined 2.75 million pounds of uranium per year, according
to the Department of Energy (DOE). The DOE has termed these
4 facilities "Nonconventional Uranium Plants."
12) Cold War Secrets & Worker Health (back to top)
The Department of Energy has not always been so open about

the uranium-making potential of the phosphate industry. During
the Cold War, its predecessor institution, the Atomic Energy
Commission (AEC), kept this fact closely under wraps - even to
the workers who were, unknowingly, handling large quantities
of the radioactive material.
In Joliet, Illinois, it has only recently come to light that the local
phosphate plant had secretly produced some 2 million pounds
of uranium for the US government in the years 1952 to 1962.
According to local newspaper reports, the cancer rates of
people who worked at the plant, especially "Building 55" where
the uranium was processed, are unusually high.
"We used to kind of joke that if you worked for Blockson, you
got cancer," quipped Vince Driscoll, the son of a cancer-
stricken worker.
Today, with the Cold War over, it is becoming clear that workers
in the phosphate industry need special protection. According to
a report from the European Commission:
" Processing and waste handling in the phosphate industry is

associated with radiation levels of concern for workers and the
public. The level of protection for these groups should be more
similar to the level of protection that is state of the art in other
industries, particularly the nuclear industry."
13) Wastewater Issues (back to top)
While the radioactivity of the gypsum stacks has probably been

the key health concern of the EPA, it is not the only one.
Resting atop the phosphate industry's gypsum piles are highly-

acidic wastewater ponds, littered with toxic contaminants,
including fluoride, arsenic, cadmium, chromium, lead, mercury,
and the various decay-products of uranium. This combination
of acidity and toxins makes for a poisonous, high-volume,
cocktail, which, when leaked into the environment, wreaks
havoc to waterways and fish populations. As noted by the St.
Petersburg Times, "Spills from these stacks have periodically
poisoned the Tampa Bay environs. "
One spill, in 1997, from a now-defunct gypsum stack in Florida,

"killed more than a million fish."
"Strike the Alafia River off your list of fishing spots," wrote one
journalist after the spill. "It's gone, dead as a sewer pipe, killed
by the carelessness of yet another phosphate company."
Today, the same gypsum stack which caused this particular

spill, is considered by Florida's Department of Environmental
Protection to be "the most serious pollution threat in the state."
That's because tropical rains over the past couple of years have
brought the wastewater to the edge of the stack's walls.
As noted by the Tampa Tribune, "The gypsum mound is near

capacity, and a wet spring or a tropical storm could cause a
catastrophic spill."
To prevent such a spill, which was all but inevitable, the EPA
recently agreed to let Florida pursue "Option Z": To load 500-
600 million gallons of the wastewater onto barges and dump it
directly into the Gulf of Mexico.
The dumping of the wastewater into the Gulf represents the

latest in a series of high-profile embarrasments for Florida's
phosphate industry; one of the most dramatic of which
happened on June 15, 1994.
On that day, a massive, 15-story sinkhole appeared in the

middle of an 80 million ton gypsum stack. The hole was so big
that, according to US News & World Report, it
"could be as big as 2 million cubic feet, enough to swallow 400

railroad boxcars. Local wags call it Disney World's newest
attraction -- 'Journey to the Center of the Earth.'"
But, as US News noted,
"there's nothing amusing about it. The cave-in dumped 4 million

to 6 million cubic feet of toxic and radioactive gypsum and
waste water into the Floridan aquifer, which provides 90
percent of the state's drinking water."
And so it goes.
As summarized by the Tampa Tribune:
"It's not like you can padlock the doors and walk away. The
complexities of keeping a phosphate processing plant
operating are becoming clear to government regulators now
overseeing two of them. Ponds full of 1.5 billion gallons of acid
and three mountains of radioactive waste mean you just can't
shut off the machinery and turn out the lights. The state could
be stuck with the plants for years. And taxpayers would be
stuck with the tab."
14) REFERENCES (back to top)
Full citations of the studies listed above, can be accessed at:
http://www.fluoridealert.org/phosphate/overview-refs.htm
Note: Full-text copies of all newspaper articles cited in this

article can be accessed by clicking on the links within the text.
15) PHOTOGRAPHS OF THE PHOSPHATE INDUSTRY (back to
top)
Photographs of the phosphate industry are available at:

http://www.fluoridealert.org/phosphate/photographs.htms.htm
16) FURTHER READING (back to top)
(Many thanks to Anita Knight for continually supplying FAN

with newspaper articles on the phosphate industry in Florida.)
Fluoride Pollution Issues
• Wastewater Dump Seen As `Lesser Of Two Evils' The

Tampa Tribune February 19, 2005
• Tribes object to Simplot plan Idaho State Journal
January 14, 2005
• Cattle Suffered Due to Fluoride The Ledger June 21,
2004
• Medical Mystery The Tampa Tribune April 18, 2004
• Emotional week for area residents Fort Saskatchewan
Record March 5, 2004
• Heartland: “a pollution ghetto" Fort Saskatchewan
Record February 27, 2004
• Residents fight Agrium expansion; want controls
Edmonton Journal February 24, 2004
• Companies skewed Pensacola pollution evidence Fort
Worth Star September 9, 2003
• Official Urges Coronet Probe The Tampa Tribune July
18, 2003
• What Lies Beneath May Affect Rising HomeTampa
Tribune July 13, 2003
• Neighbors fear health effects of blowing gypsum The
Edmonton Journal June 14, 2003
• Fears over level of toxic fluoride: Homegrown produce
threatened by emissions Otago Daily Times (New
Zealand) June 9, 2003
• Concerns over high levels of fluoride - Otago Daily
Times (New Zealand) June 4, 2003
• Oswal Phosphate Plant facing Closure due to Fluoride
Contamination - India Business Insight June 13 & 18,
2002
• Investigation into Buffalo deaths near Phosphate plant
- The Hindu December 9, 2002
• Superfund site might pose greater risk, legal fight
shows Pensacola News Journal (Florida) September
15, 2002
• Air of Death Canadian Broadcasting Company 1967
• The Town that Refused to Die Good Housekeeping
January 1969.
• Death in the Air: Air Pollution from Phosphate Fertilizer
Production Synthesis/Regeneration Fall 2002
• Terracide: America's Destruction of Her Living
Environment Ron M. Linton, Little, Brown and
Company, 1970
• Fluoride-tainted Pasture Grass May Harm Cattle The
• Air Pollution from Stauffer Chemical Phosphate Plant
Ombudsman Report, Agency for Toxic Substances and
Disease Registry, December 29, 2000
• Old plant may contaminate Anclote River, report says
Tampa Tribune March 21, 1994
• EPA Amends Phosphoric Acid and Fertilizer Rules
Chemical Engineering Progress August 1, 2002
• A host of roasted daffodils - The Guardian (UK)
December 15, 1988
• Technology Developed to Capture HF Emissions from
Phosphate Ponds Tampa Tribune April 17, 1993
• Keysville air quality to be monitored East Hillsborough
Tribune January 20, 1986
• Assessment of the vegetation risk by fluoride
emissions from fertiliser industries at Cubatao, Brazil
Science of the Total Environment 1996
• Chromosomal aberrations and micronuclei in
lymphocytes of workers at a phosphate fertilizer
factory Mutation Research, Volume 393, 1997
• Sedimentary Fluorite in Tampa Bay, Florida
Environmental Letters, Vol. 60, 1974
• Fluorine Recovery in the Phosphate Industry: a review
Phosphorous & Potassium #103 SEPT/OCT 1979,
pages 33-39.
• Recovery of fluosilicic acid and fluoride bearing waters
for the production of a mixture of silica and
precipitated calcium fluoride usable for the production
of cement International Fertilizer Industry Association's
2000 Technical Conference in New Orleans
Fluoridation Chemicals
• What's in the Water? - Salt Lake Tribune June 16, 2002

• Dartmouth Researcher Warns of Chemicals Added to
Drinking Water Dartmouth News March 15, 2001
• EPA Admits to Having No Studies on the Health Effects
of Silicofluorides Letter from EPA's Robert Thurnau to
Roger Masters, November 16, 2000
• Fluoridation Chemicals Have Not Been Safety Tested -
Here's the Proof National Pure Water Association (UK)
August 2002
• A Resolution on the Silicofluoride Controversy Dr.
Robert Carton & Myron Coplan, 2001 (Resolution
submitted to the American Public Health Association
for consideration at October 21-25, 2001 conference in
Atlanta, Georgia)
• The Official Spinning of Pollution into an Elixir George
Glasser 2000
• Letter from Rebecca Hanmer, EPA's Deputy Assistant
Administrator for Water, 1983. .
Phosphogypsum Stacks
• Will EPA Rethink Gypsum Policy? The Ledger October
11, 2004
• About Phosphogypsum US Environmental Protection
Agency
• Frequently Asked Questions US Environmental
Protection Agency
• Waste bypasses federal regulation despite radioactivity
Tampa Tribune July 21 1991
• Tally conference will debate use of phosphate
byproduct Tampa Tribune December 3, 1995
• Gypsum finds ecological concerns stacked against it
The Tampa Bay Business Journal December 6, 1996
Wastewater Issues
• Wastewater Dump Seen As `Lesser Of Two Evils' The

• An unacceptable breach St Petersburg Times
September 8, 2004
• Cargill Was Told Thin Berm A Threat The Tampa
Tribune September 8, 2004
• Spill corrodes reputation for aiding environment St.
Petersburg Times September 8, 2004
• Wastewater Spill Is Worrisome Tampa Tribune
September 7, 2004
• Cargill Scrambles To Mitigate Wastewater's Effect On
Creek Tampa Tribune September 6, 2004
• Piney Point: An ecological powder keg Sarasota
Herald-Tribune July 16, 2003
• DEP says Piney Point biggest threat to environment -
The Herald Tribune June 25, 2003
• Waste Water Heading To Gulf With Federal OK - Tampa
Tribune April 11, 2003
• 500-million gallons of acidic waste heading to gulf - St.
Petersburg Times April 5, 2003
• Gypsum Stacks Cleanup Costly - Tampa Tribune March
15, 2003
• Dumping Acidic Water In Gulf Is Best Of Dismal
Alternatives - Tampa Tribune February 22, 2003
• DEP Aims To Up Dump In Bay - Tampa Tribune January
10, 2003
• DEP let phosphate waste flow into preserve - St.
Petersburg Times November 22, 2001
• Phosphate Discharge to Resume Tampa Tribune
December 14, 2001
• Groups seek solution for wastewater woes - Bradenton
Herald December 11, 2001
• Mulberry bailout tops $1M - Herald Tribune Newscoast
June 17, 2001
• Phosphate plants under close eye Tampa Tribune
March 17, 2001
• Sinkholes and Stacks; Neighbors claim Florida's
Phosphate Mines are a Hazard US News & World
Report June 12, 1995
• Coronet Working to Control Arsenic Tampa Tribune
December 30, 2002
• Phosphate industry hits another low Tampa Tribune
December 19, 1997
Fluoride & Radon Air Emisions from Waste Ponds
• Neighbors fear health effects of blowing gypsum The

Edmonton Journal June 14, 2003
• Regional planners OK phosphate gypsum stack Tampa
Tribune August 23, 1994
• Fluoride-tainted Pasture Grass May Harm Cattle The
• Gaseous Fluoride Emissions from Gypsum Settling
and Cooling Ponds Florida Scientist Vol. 50 No. 2
Spring 1987 No. 2
• Technology Developed to Capture HF Emissions from
Phosphate Ponds Tampa Tribune April 17, 1993
Radiation Hazards
• Will EPA Rethink Gypsum Policy? The Ledger October

11, 2004
• Cancer mystery deepens: Uranium secret, long ago in
Joliet area, prompts questions - The Herald News
October 1, 2001
• Building 55: Was a killer in our midst? - The Herald
News September 17, 2000
• Radiation victims urged to file claims - The Herald
News July 19, 2001
• Workers share stories about health woes - The Herald
News April 3, 2001
• Waste bypasses federal regulation despite radioactivity
Tampa Tribune July 21, 1991
• Tally conference will debate use of phosphate
byproduct Tampa Tribune December 3, 1995
• Sinkholes and Stacks; Neighbors claim Florida's
Phosphate Mines are a Hazard US News & World
Report June 12, 1995
• Phosphate mining legacy feared Sarasota Herald
Tribune June 14, 1995
• About Phosphogypsum US Environmental Protection
Agency
• Frequently Asked Questions US Environmental
Protection Agency
• Yellowcake Production at Stauffer Chemical from
Agency for Toxic Substances and Disease Registry,
Ombudsman Report of Findings and
Recommendations Regarding the Stauffer Chemical
Company Site Tarpon Springs, Florida, December 29,
2000
• Handling of radium and uranium contaminated waste
piles and other wastes from phosphate ore processing
Nuclear Science and Technology, Report EUR 15448
EN European Commission, Luxembourg 1995.
• Eastern Michaud Flats Contamination Agency for Toxic
Substances and Disease Registry, Superfund Site
Assessment Branch, October 21, 1998
• A Study of Radium-226 and Radon-222 Concentrations
in Ground Water Near a Phosphate Mining and
Manufacturing Facility The Water Resources Research
Institute March 1984
Mining Issues
• A mining showdown at Horse Creek - St. Petersburg

Times November 12, 2001
• Opposition builds to stop mine - St. Petersburg Times
June 18, 2001
• Campaign to protect creek has few allies - St.
Petersburg Times July 20, 1999
• Mining Threat - St. Petersburg Times June 20, 2001
• Reclaimed mine is not as safe as once thought -
Tallahassee Democrat February 17, 2002
• One Third of Fish Species in Peace River May be
History Sun Herald February 9, 2002
• Sheep Herd Dies from Contamination at Phosphate
Mine Articles from Idaho State Journal July 2001
• A Study of Radium-226 and Radon-222 Concentrations
in Ground Water Near a Phosphate Mining and
Manufacturing Facility The Water Resources Research
Institute March 1984
Politics/Greenwashing
• Florida Institute of Phosphate Research Accused of

Whitewashing The Ledger January 14, 2002
• Phosphate industry aims to be corporate neighbor
Herald Sun (Florida) December 2, 2002
• Mining Threat - St. Petersburg Times June 20, 2001
Other
• Phosphate Fertilizer Pollution in Israel (Haifa Chemical)

Greenpeace June 8, 1998
• Greenpeace Action Alert on Phosphate Industry
Pollution in Mediterranean Greenpeace Mediterranean
September 21, 2000
Back to top
Fluoride Action Network | 802-338-5577 | info@fluoridealert.org

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eliminate barriers to care. In what they need to conduct their product can bear the seal, man-
1994, a second poll indicated own surveys in the future. ufacturers must submit an ap-
that consumer confidence was - Ten people participated in the plication and the product must
up, with 61 percent of respon- dental section of the annual pass safety and efficacy evalua-
dents believing that the dental HVO orientation workshop, tions. Last year the ADA grant-
office was safe. Last year, the which prepared them for future ed seals to more than 49 new
Public Relations Society of service with Dentistry Overseas. products, bringing the total of
America recognized the effec- consumer and professional prod-
tiveness of ADA Cares with the GUARDIAN OF THE ucts bearing the seal to approxi-
PROFESSION AND PUBLIC
Silver Anvil Award-one of the mately 1,300.
most prestigious awards in pub- The Association also engages in - The Communications division
lic relations. a wide range of activities aimed helped coordinate Association-
- The ADA also promoted Na- at maintaining dentistry's sta- wide promotion of the ADA Seal.
Launched at an annual session
Downloaded from jada.ada.org on November 6, 2008

tional Children's Dental Health tus as a respected health profes-
Month in conjunction with the sion dedicated to the well-being press conference in Las Vegas,
50th anniversary of water fluori- of its patients. the campaign includes media
dation in February. Nearly m Scientists from the ADA kits, a satellite media tour, a
4,000 planning kits and 400,000 Division of Science, including video news release, a new
posters were sent to dental soci- the Paffenbarger Research brochure on the seal and a spe-
eties thoughout the country to Center, presented 20 papers at cial reproducible insert in the
help members get kids fired up the American Association for Oct. 23, 1995, issue of ADA
about dental care. Seven hun- Dental Research meeting, held News.
dred television stations nation- in San Antonio last March. - In 1995, the ADA's Health
wide also received a video news Studies included topics such as Foundation approved three New
release on NCDHM. mechanical properties of mer- Dental Scientist Awards from a
- In 1995, the ADA prepared cury-free restorative materials, field of six recent fellows of
oral health sections that ap- shear bond strength of dentin NIDR's Dentist Scientist Pro-
peared in Good Housekeeping and size distribution of particles gram. Each dentist received a
and Time magazines, reaching a in dental wastewater. grant of $5,000 to pursue dental
potential audience of more than - The Association's House of research projects.
13 million people. Delegates approved a dozen new - A new award, The Frederick
Since 1990, the ADA Council parameters of dental practice in S. McKay Award for Excellence
on ADA Sessions and Interna- October 1995, adding to the 12 in Preventive Dentistry, was es-
tional Programs has encouraged adopted in 1994. These parame- tablished with support from
dentists and dental staffers to ters dealt with conditions such Accutron. The first award was
share their expertise with their as dental abrasion, traumatic presented to Dr. Larry Coffee of
counterparts in underdeveloped displacement of teeth and soft the National Foundation of
countries through the Dentistry tissue lesions and are being dis- Dentistry for the Handicapped.
Overseas Division of Health tributed to members as a sup- Dr. Coffee was recognized for his
Volunteers Overseas. The plement to this issue of JADA. role in developing access pro-
Council produces a publication - Last year, an expert panel grams for the disabled.
called International Dental was assembled -including rep- - The Commission on Relief
Volunteer Organizations: A resentatives from government Fund Activities, in tandem with
Guide to Service and a Directory agencies, private practice den- the state society relief funds,
of Programs, with up-to-date in- tistry and the research and in- provides financial assistance to
formation on volunteering and a dustrial communities-to exam- dentists who are no longer able
list of organizations needing vol- ine ways to improve the water to be self-supporting because of
unteers. quality in dental unit water- accidental injury, advanced age
- In 1995, seven program sites lines. or physically debilitating illness-
received 37 dental volunteers. - Since 1930, the ADA has es. Dentists need not be ADA
34 JADA, Vol. 127, January 1996

-NEEWSIS
members to apply for assistance. at 29 dental schools across the ADA members visiting Chicago
As of July 1, 1995, 94 dentists country in 1995. for meetings, personal business
had received grants totaling - Through the ADA's Commit- or vacation.
$653,775. tee on the New Dentist, the - The Council on Insurance
- The ADA oversees several Division of Membership and added three new investment op-
charitable programs through the Dental Society Services expand- tions to the ADA Members
ADA Endowment and ed the new dentist committee Retirement Program last year.
Assistance Fund, Inc. Programs network from 80 to 115 commit- These include the MFS Emerg-
provided through the Endow- tees nationwide-and in August ing Growth Fund, which has
ment Fund include loans to hosted the Ninth National Con- waived its front-end load (the
cover treatment expenses associ- ference on the Young Dentist. fee charged to buy into a fund),
ated with chemical dependency, - The 1995 ADA House of Dele- as well as two asset allocation
loans to facilitate retraining of gates voted at annual session to funds that are designed to re-
dentists who have become dis- boost student representation to flect the performance of major
abled, a disaster-assistance loan from one delegate up to five. market indexes. The retirement
program and various scholar- - The Paffenbarger Research program now holds more than
Downloaded from jada.ada.org on November 6, 2008

ship programs that award Center received a gift of $30,000 $1 billion in savings of members
grants to dental, minority dental from the Great-West Life and and their employees. It also is
and allied dental health stu- Annuity Insurance Co. to fund a open to non-participating mem-
dents. Since the inception of the Research Training Fellowship. bers who want to invest money
scholarship programs four years currently held in other tax-qual-
ago, the Endowment Fund has MEMBER BENEFITS ified retirement plans.
awarded 360 scholarships total- Being an ADA member also has - The ADA Members group in-
ing $559,000. direct benefits-including dis- surance plans offered coverage
counts on hotel rooms, low-cost at their lowest rates ever in
COMNMITTED TO THE insurance and the ADA 1 PLAN, 1995. Dentists seized on the op-
FUTURE
one of the most comprehensive portunity by increasing their
Beyond dealing with issues fac- financial services programs in disability and overhead expense
ing dentistry today, the Asso- the country. coverage and adding more than
ciation also keeps an eye on - In 1995, ADAFINCO, a for- $1.2 billion of additional life in-
where dentistry is headed in the profit subsidiary of the ADA, surance. To help dentists and
future. This requires maintain- teamed up with Mellon Bank their families better protect
ing close connections with den- Corp. of Pittsburgh to establish themselves against rising medi-
tal students and new dentists. the ADA 1 PLAN. Some of the cal care costs, the ADA In-
- Last year, the ADA Division services under the plan include: Hospital Plan reduced rates by
of Membership Services, * a Gold Mastercard that fea- 10 percent and added benefits
through its office on student af- tures no annual fee and a low for emergency room care.
fairs, kicked off a plan to estab- six-month introductory annu-
lish a permanent link between al percentage rate; IT JUST MAKES SENSE
dental students and organized I loan programs that include As many dentists already know,
dentistry. The plan involves student loans, federal HEAL membership in the ADA just
joint membership activities with consolidation loans, home makes good sense. Successful
the American Student Dental mortgage loans and home collaboration with selected con-
Association, as well as gathering equity lines of credit; stituent and component societies
information on dental student I investment opportunities over two years resulted in a 26.4
needs and concerns through sur- like certificates of deposit and percent improvement in mem-
veys, the first of which was money market accounts as bership retention. The
mailed to more than 6,000 stu- well as investment consult- Association also has seen an in-
dents and was completed in ing. crease in the representation of
June. The ADA, along with state - In 1995, the Division of young, female and minority den-
and local dental society repre- Conference and Meeting Serv- tists on dental society member-
sentatives, made presentations ices booked more than 12,000 ship committees across the
to 2,100 senior dental students nights at discounted rates for country. It is because of its
36 JADA, Vol. 127, January 1996

Kidney Foundation Admits: Kidney Patients Should be Notified of Potential
Risk from Fluorides and Fluoridated Drinking Water
http://www.fluoridealert.org/press/nfk2.html
Ellijay, GA: June 3, 2008 – A new position paper from the National Kidney Foundation concludes that
individuals with chronic kidney disease should be notified of the potential risk from exposure to
fluorides. The document acknowledges gaping holes in research concerning kidney impacts from
fluorides, lending new ammunition to the growing numbers of cities, health professionals, water
agencies, and citizens who question industry and government assertions that water fluoridation has
been proven safe.
The statement formally cancels NKF’s previous position paper on water fluoridation and
recommends that kidney patients be notified of the risks via the organization’s web site.
Opponents of fluoridation believe the statement is a step in the right direction, but say that the
document still does not go far enough and is not reaching the millions of average kidney patients –
perhaps due to an apparent conflict of interest the National Kidney Foundation has in receiving
grant funding from the U.S. Centers for Disease Control (CDC), the federal government’s largest
promoter of water fluoridation.
NKF has issued no press release about the April 15th statement and has offered no direct link to the
new information on its web site except when a search for the term “fluoride” is entered.
Daniel Stockin is a career public health professional now at The Lillie Center, Inc, a Georgia-based
public health training firm that is working to end water fluoridation. He observes, “If you read the
statement, it appears the Kidney Foundation wants to have its cake and eat it too. NKF apparently
recognizes that it stands to be sued by thousands of its own kidney patients and doctors for
negligent misrepresentation and failure to warn, but doesn’t have the stomach to oppose the CDC
who has been a funder of NKF. So NKF has told some of the story of fluoride’s toxicity, but not all,
and quietly put the news on a difficult-to-find web page. Lawyers and fluoride opponents are going
to have a field day with the inconsistent statements in the paper.”
Opponents of fluoridation do appreciate that the new paper strikes a blow to organizations such as
the American Dental Association that list NKF as supporting, endorsing, or recognizing the public
health benefits of fluoridation. In bold-faced type the paper states, “The NKF has no position on the
optimal fluoridation of water.” This statement appears to require the American Dental Association to
remove the National Kidney Foundation’s name from ADA’s list of organizations recognizing
fluoridation’s benefits at http://www.ada.org/public/topics/fluoride/facts/compendium.asp
Fluoridated water is acknowledged to be potentially harmful to patients on dialysis machines. The

position paper lists cases where dialysis patients died or were fluoride-poisoned when filtration
systems on the machines allowed fluoride into the bodies of the patients.
Stockin points out, “Fluoride must be removed from water used for dialysis, but people with kidney
stones, transplants, or other kidney issues ingest it in drinking water, foods, drugs, and from other
sources without anyone knowing their total fluoride dose. Sounds a little like someone’s not telling
the whole story of Fluoride-Gate,” he says.
“The kidneys are exposed to significant amounts of toxic fluoride as they try to eliminate it from the
body,” he continues. “How many kidney patients could have avoided dialysis – or perhaps sadly
even death from chronic kidney disease – if they had been told the whole story about fluoride
toxicity?”
The revised fluoride statement from the National Kidney Foundation can be viewed at:
http://www.kidney.org/atoz/pdf/Fluoride_Intake_in_CKD.pdf and the attorney’s letter sent to NKF that
initiated NKF’s re-look at fluoridation can be found at: http://www.fluoridealert.org/NKF_letter01.pdf.
For more information, contact:
Daniel G. Stockin, MPH

The Lillie Center, Inc.
P.O. Box 839 Ellijay GA 30540
Ph: 706.669.0786 // Fax: 706.635.8170
Email: stockin2@yahoo.com
NOTES FROM FAN:
• The print version of the National Kidney Foundations's April 15, 2008, statement
• June 2, 2008, Press Release: Kidney Foundation Admits: Kidney Patients Should be Notified of
Potential Risk from Fluorides and Fluoridated Drinking Water
• September 18, 2007: The attorney’s letter sent to National Kidney Foundation that initiated their re-
examination of fluoridation: http://www.fluoridealert.org/NKF_letter01.pdf
• October 9, 2007, Press Release: Did Kidney Foundation Leave Millions at Risk by Failing to Warn
about Fluorides and Fluoridated Drinking Water?
62
FLUORSPAR
(Data in thousand metric tons unless otherwise noted)
Domestic Production and Use: A small amount of fluorspar was recovered as a byproduct of limestone quarrying in
Illinois and stockpiled for future processing. Some byproduct calcium fluoride was recovered from industrial waste
streams, although data are not available on exact quantities. Material purchased from the National Defense Stockpile
or imported was screened and dried for resale to customers. Domestically, about 85% of reported fluorspar
consumption went into the production of hydrofluoric acid (HF) in Louisiana and Texas and aluminum fluoride in
Texas. HF is the primary feedstock for the manufacture of virtually all organic and inorganic fluorine-bearing
chemicals and is also a key ingredient in the processing of aluminum and uranium. The remaining 15% of the
reported fluorspar consumption was as a flux in steelmaking, in iron and steel casting, primary aluminum production,
glass manufacture, enamels, welding rod coatings, cement production, and other uses or products. An estimated
47,000 tons of fluorosilicic acid (equivalent to about 83,000 tons of 92% fluorspar) was recovered from phosphoric
acid plants processing phosphate rock. Fluorosilicic acid was used primarily in water fluoridation, either directly or
after processing into sodium silicofluoride.
Salient Statistics—United States: 2003 2004 2005 2006 2007e

Production:
Finished, all grades — — — — —
Fluorspar equivalent from phosphate rock 94 90 86 70 83
Imports for consumption:
Acid grade 533 546 586 490 556
Metallurgical grade 34 53 43 62 47
Total fluorspar imports 567 599 629 553 603
Fluorspar equivalent from hydrofluoric acid
plus cryolite 180 197 209 233 246
Exports1 31 21 36 13 13
Shipments from Government stockpile 75 62 28 66 17
Consumption:
Apparent2 589 691 616 608 601
Reported 616 618 582 523 550
Price, average value, dollars per ton, c.i.f. U.S. port
Acid grade 138 167 202 217 NA
Metallurgical grade 85 83 93 101 111
Stocks, yearend, consumer and dealer3 206 105 131 90 85
Employment, mine and mill, number — — — — —
Net import reliance4 as a percentage of
apparent consumption 100 100 100 100 100
Recycling: A few thousand tons per year of synthetic fluorspar is recovered primarily from uranium enrichment, but
also from petroleum alkylation and stainless steel pickling. Primary aluminum producers recycled HF and fluorides
from smelting operations. HF is recycled in the petroleum alkylation process.
Import Sources (2003-06): China, 62%; Mexico, 18%; South Africa, 14%; Mongolia, 5%; and other, 1%.
Tariff: Item Number Normal Trade Relations

12-31-07
Acid grade (97% or more CaF2) 2529.22.0000 Free.
Metallurgical grade (less than 97% CaF2) 2529.21.0000 Free.
Depletion Allowance: 22% (Domestic), 14% (Foreign).
Government Stockpile: During fiscal year 2007, the Defense National Stockpile Center (DNSC), Defense Logistics
Agency, sold about 9,070 tons (10,000 short dry tons) of metallurgical-grade fluorspar and 2,020 tons (2,230 short dry
tons) of acid-grade fluorspar from the National Defense Stockpile.
Stockpile Status—9-30-075
Uncommitted Committed Authorized Disposal plan Disposals
Material inventory inventory for disposal FY 2007 FY 2007
Acid grade — — — 11 2
Metallurgical grade 1 (6) — 54 9
Prepared by M. Michael Miller [(703) 648-7716, mmiller1@usgs.gov, fax: (703) 648-7757]

63
FLUORSPAR
Events, Trends, and Issues: In 2007, Hastie Mining Co. and Moodie Mineral Co. continued their drilling program for
fluorspar in Livingston County, KY. Drilling on the vein deposit during 2006 and 2007 had resulted in reserves in
excess of 1 million metric tons with an average ore grade of 55% calcium fluoride. Additional drilling was planned for
the fourth quarter of 2007. Mine development was scheduled to begin in 2008 with production expected in the latter
part of the year. Hastie Mining installed a briqueting machine to manufacture fluorspar briquets for the metallurgical
market. The company planned to install a heavy-media plant in 2008 to process stockpiled fluorspar ore produced as
a byproduct at its limestone quarry in Hardin County, IL. Work on restarting an idle flotation plant at Salem, KY, also
was planned for 2008.7
Effective June 1, 2007, China raised the export tax on fluorspar to 15% from the previous rate of 10%, which had only
been introduced in the fourth quarter of 2006. This move was part of a policy intended to conserve important
resources for domestic use. This and other actions by the Chinese Government in recent years have resulted in
significant price increases for Chinese acid-grade fluorspar. By the second quarter of 2007, export prices for acid-
grade fluorspar reportedly were at $230 per metric ton, free on board, China. Including insurance and freight costs,
delivered prices to U.S. Gulf of Mexico ports were $280 per ton or higher.
World Mine Production, Reserves, and Reserve Base:

Mine production Reserves8, 9 Reserve base8, 9
2006 2007e
United States — — NA 6,000
China 2,750 2,750 21,000 110,000
France 40 — 10,000 14,000
Kenya 83 90 2,000 3,000
Mexico 938 900 32,000 40,000
Mongolia 388 400 12,000 16,000
Morocco 95 95 NA NA
10 10
Namibia 130 130 3,000 5,000
Russia 210 210 Moderate 18,000
South Africa 270 295 41,000 80,000
Spain 132 140 6,000 8,000
Other countries 294 300 110,000 180,000
World total (rounded) 5,330 5,310 240,000 480,000
World Resources: Identified world fluorspar resources were approximately 500 million tons of contained fluorspar.
The quantity of fluorine present in phosphate rock deposits is enormous. Current U.S. reserves of phosphate rock are
estimated to be 1.0 billion tons, which at 3.5% fluorine would contain 35 million tons of fluorine, equivalent to about 72
million tons of fluorspar. World reserves of phosphate rock are estimated to be 18 billion tons, equivalent to 630
million tons of fluorine and 1.29 billion tons of fluorspar.
Substitutes: Olivine and/or dolomitic limestone have been used as substitutes for fluorspar. Byproduct fluorosilicic
acid from phosphoric acid production has been used as a substitute in aluminum fluoride production, and also has the
potential to be used as a substitute in HF production.
e
Estimated. NA Not available. — Zero.
1
Exports are all general imports reexported or National Defense Stockpile material exported.
2
Excludes fluorspar equivalent of fluorosilicic acid, hydrofluoric acid, and cryolite.
3
Industry stocks for three leading consumers, fluorspar distributors, and National Defense Stockpile material committed for sale pending shipment.
4
Defined as imports – exports + adjustments for Government and industry stock changes.
5
See Appendix B for definitions.
6
Less than ½ unit.
7
D. Hastie, Owner, Hastie Mining Co., oral commun., October 2007.
8
See Appendix C for definitions.
9
Measured as 100% calcium fluoride.
10
Data are in wet tons.
U.S. Geological Survey, Mineral Commodity Summaries, January 2008

http://www.relfe.com/history_1.html
1900 By 1900, all PhD's in the United States were trained in Prussia (Germany). The
degree is a German invention. These German educated men would become presidents of
American Universities, heads of research facilities (both corporate and government).
1900 AMA began to achieve goal of replacing existing medical system with allopathy
(system that treats diseases with drugs).
1900 Cancer causes 4% of deaths in the United States.
1900 Deaths from measles were 13 per 100,000.
1901 Rockefeller Institute for Medical Research founded.
1902 The Chicago Health Department develops its "vaccination creed", which states that
"true vaccination repeated until it 'no longer takes' always prevents smallpox. Nothing
else does." The policy is immediately taken up by the US military.
1904 Eugenics (the study of the hereditary improvement of the human race by controlled
selective breeding) established as a course at University College in London.
1904 Eugenics laboratory established at Cold Springs Harbor on Long Island, constructed
by Charles B. Davenport. Cold Springs facility is funded in excess of $11 million by the
Harrimans and the Rockefellers.
1905 Food and Drug Act passed in the United States.
1905 Eleven states in the US have compulsory vaccination laws; 34 states do not. No
states physically force injections on citizens, Vaccination was made compulsory without
state legislation providing for analysis of its history.
1906 First Pure Food and Drug law in the United States passed.
1906 Investigations into the content of Coca-Cola are halted by the US Secretary of
Agriculture.
1907 England passes the Vaccination Act of 1907, after the newly elected government
comes to power. The act allowed a statutory objection from a parent relative to a child
vaccination before the child was four months old.
1907 Bureau of Chemistry empowered by Congress to police quality of US food.
1909 Massachusetts Senate introduces bill prohibiting compulsory vaccination.
1909 Rockefeller Sanitary Commission established. Beginning of Rockefeller Foundation.
1909 New York Press, January 26, 1909 publishes a report by W.B. Clark which states, "
cancer was practically unknown until cowpox vaccination began to be introduced. I have
seen 200 cases of cancer, and I never saw a case of cancer in an unvaccinated person."
Scientific evidence begins to mount that where human lymph is employed in a vaccine,
syphilis, leprosy and TB soon follow. Where calf lymph is employed in the creation of a
vaccine, TB and cancer soon follow. (Cancer and Vaccination by Esculapius).
1910 Japan acquires a source of cheap and abundant sugar on Formosa. Incidence of
tuberculosis (TB) rises dramatically in Japan.
1910 First TB Sanitarium opened. TB death rate 180 per100,000.
1910 AMA requests Carnegie Foundation to survey all US medical schools. Simon Flexer
(later to be a director of the Rockefeller Foundation) produces the report.
1910 Dr.James Douglas founds the National Radium Institute for treatments.
1911 Denmark sugar consumption 82 pounds per person annually. (This goes up to 113
lb per person in 1934).
1911 Death rate for diabetes in Denmark is 8 per 100,000. (This goes up to 19 per
100,000 in 1934).
1911 General vaccination programs against typhoid begin in the United States.
1911 Britain passes the "Official Secrets Act" which prevents future discussion of
anything the government deems secret.
1911 Encyclopedia Brittanica contains "a guide for acquisition, operation and care of the
opium pipe."
1912 Dr. Robert Boesler, New Jersey dentist, notes that "modern manufacturing of sugar
has brought about entirely new diseases. Sugar has caused a vast degeneration of the
people."
1912 First International Congress of Eugenics at the University of London. The president
of the Congress is Leonard Darwin, son of Charles Darwin. One of the first English vice
presidents is Winston Churchill. American vice- presidents included Charles Elliot,
president emeritus of Harvard, and Alexander Graham Bell. Also attending was Starr
Jordon, president of Stanford University.
1912 First whooping cough (Pertussis) vaccine created by two French bacteriologists,
Jules Bordet and Octave Gengou, who wanted to use it in Tunisia. After they grew
Pertussis bacteria in large pots, they killed it with heat, mixed it with formaldehyde (used
to embalm bodies) and injected it into children.
1913 John D. Rockefeller founds Rockefeller Institute with $100 million grant.
1913 The American Cancer Society is formed. .
1915 A doctor in Mississippi alters the diet of 12 prison inmates and is successful in
producing pellegra, in a curious attempt at reverse contradictory logic in an "attempt to
find a cure for the disease".
1915 J.P. Morgan organizes control of US newspaper businesses.
1915 Tetanus epidemics in trenches of World War I.
1916 The first evidence of brown mottling of teeth is reported in the United States.
1917 Constituents try and force Harrison Drug Control Act on Coca-Cola and are
defeated.
1917 Freud writes "Introduction to Psychoanalysis".

1917 Wagner von Jauregg treats syphilitic paralysis by injecting malaria.
1917 Post WW1 supplies of chlorine designated to be added to water supplies.
1917 AMA hostility toward compulsory health insurance.
1917 Outbreaks of encephalitis in China and Europe.
1917 Fifteen states in the US have eugenics laws on the books which authorize
sterilization of criminals, epileptics, the retarded and insane.
1918 Great influenza epidemic attributed to widespread use of vaccines.
1918 The Surgeon General of the United States issues a report that states that
tuberculosis is the leading cause for discharge of men from the Armed Forces.
1919 Diptheria vaccinations injure 60 and kill 10 in Texas.
1919 Death rate from encephalitis accelerates. Between 1919 and 1928, over 500,000
deaths and 1,000,000 cases of neurological impairment were attributed to this disease,
which affects males more than females. Recent research indicates that this epidemic was
a late manifestation of the post World War I influenza outbreaks, and that both were due
to the appearance of a swine flu virus.
1920 Prohibition in the US brings narcotics trafficking and large scale organized crime
into the US.
1920 Dr. Otto Walberg experiments with human cells. Removes 35% of the oxygen and
cells become non-reversibly cancerous.
1921 Second International Congress of Eugenics held in New York City. Sponsoring
committee includes Herbert Hoover and the presidents of Clark University, Smith College
and the Carnegie Institute of Washington (owned by Rockefeller Foundation).
1921 Ghandi begins agitating against the British opium imports into India. He would be
eventually assassinated.
1921 BCG tuberculosis vaccine developed.
1922 Aluminum production (along with production of toxic by-product sodium fluoride)
increases. Aluminum cookware is mass introduced in the US, beginning the gradual
accumulation of aluminum in the brains of Americans. Additional aluminum is injected
into society in "antacids".
1922 Coca-Cola plant built in Ashtabula, Ohio. The drink contains coal tar derivatives ,
flavoring, and massive amounts of sugar.
1922 By 1922,more than 100 radiologists died from X-ray induced cancer.
1922 A study by Samuel Torrey Orton connects emotional disturbance with neurological
problems. This insight was lost after World War II when psychology, psychiatry and
psychoanalysis became popular, breaking the connection.
The emotional disturbances caused by vaccines then became financial fodder for the new
psych-industries. With the causes suppressed, a new industry was born.
1923 Canadian physician Frederick Banting receives Nobel Prize for discovery of a way to
extract the hormone insulin , which permitted control of blood sugar in those with
diabetes. This opens a whole new medical market because of the growing sugar addiction
in the US public.
1923 Earl of Inchscape publishes his report which insists that British opium trade must be
maintained to protect the revenue of the British Empire, much to the protest of the
League of Nations.
1924 Dr. Seale Harris of the University of Alabama discovers that sugar can cause
hyperinsulinism and recommends people cut sugar consumption. The medical
establishment comes down on Harris and his work is suppressed. Harris would be
awarded a medal by the AMA 25 years later, as pharmaceuticals to control low blood
sugar are developed and put into production. The basic contribution of refined sugar to
the problem remains suppressed.
1924 Heroin, originally created by I.G. Farben, is outlawed as a prescription drug in the
United States.
1924 Diptheria vaccinations kill 25 in Bridgewater, Connecticut and 20 in Concord, New

Hampshire.
1925 Danish researcher Thorvald Madsen tries a modified Pertussis vaccine during an
epidemic in the Faroc Islands. It did not prevent Pertussis. (See 1933).
1925 Doctors at the Paris Academy of Medicine discuss deaths occurring shortly after
vaccination in Holland and other European countries.
1925 In England, less than 50% of infants are vaccinated for smallpox. 6 deaths occur.
(See 1872).
1925 General vaccine programs against tuberculosis began in the United States.
1925 I.G. Farben is reorganized by the Warburgs as a merger between Badische Anilin,
Bayer, Agfa, Hoechst, Welierter-Meer, and Griesheim Elektron.
1926 American I.G. founded as a holding company controlling I.G. Farben assets in the
United States. Some board members were Edsel Ford, Charles Mitchell (President of
Rockefeller's National City Bank of New York), Walt Teagle (President of Standard Oil),
Paul Warburg (Federal Reserve chairman and brother of Max Warbug, financier of Nazi
Germany's war effort and Director of American I.G.) and Herman Metz, a director of the
Bank of Manhattan, controlled by the Warburgs. Three other members of the Board of
Governors for American I.G. were tried and convicted as German war criminals.
1926 General Medical Society for Psychotherapy created in Germany, an international

organization.
1927 Conference at the Hague, under the auspices of the League of Nations, on the
subject of vaccination-caused deaths in Europe.
1927 Oliver Wendell Holmes writes the US Supreme Court decision in the case Buck v.
Bell. In the case, a psychiatric inmate, Carrie Buck, was chosen for sterilization after
having a child because she was deemed "feeble-minded"; Oliver Wendell Holmes writes,
"It is better if society can prevent our being swamped with incompetance, it is better to
prevent those who are manifestly unfit from breeding their kind. The principle that
sustains compulsory vaccination is broad enough to cover cutting of the fallopian tubes ...
three generations of imbeciles is enough".
They then sterilized Carrie Buck. The crux of the matter is that Carrie Buck was not
retarded, but just a little slow, based on environmental conditions. Her child grew to be
an honor student.
1927 Diptheria vaccinations injure 37 and kill 5 people in China.
1927 Austrian psychiatrist Menfred Sakel develops insulin shock (insulin coma treatment,
ICT). Patients are overdosed with insulin, which induces a coma. By 1937, all
neuropsychiatric hospitals in Germany would use ICT.
1927 British government appoints a committee to inquire into "vaccine lymph", as it is

noticed that the "glycerinated calf lymph" used in vaccinations causes deaths from
"sleepy sickness". Two London professors bring notice of the problem to the government
in 1922. It takes 5 years before the government responds.
1927 Smallpox in England dwindles almost to the vanishing point. Fatality of the
unvaccinated cases is less than half of the vaccinated cases.
1928 Edward L.Bernays, nephew to Sigmund Freud, writes the book Propaganda, in
which he explains the structure of the mechanism which controls the public mind, and
how it is manipulated by those who wish to create public acceptance for a particular idea
or commodity.
Says Bernays, "those who manipulate this unseen mechanism of society constitute an
invisible government which is the true ruling power of our country. Our minds are
molded, our tastes are formed, largely by men we have never heard of."
1928 Cases of post-vaccination encephalitis force creation of two Committees of

Investigation in Britain.
1928 Fleming discovers penicillin.
1928 Development of the discovery of the EEG machine and brain waves.
1928 Third International Congress of Eugenics. At the conference, a Dr. Robie calls for
the sterilization of 14 million Americans with low IQ scores.
1928 Henry Ford merges assets with I.G. Farben.
1928 John D. Rockefeller interlocks his empire with I.G. Farben in Germany.
1929 Dr. Wileys book "The History of a Crime Against the Food Law" published, detailing
the subversion of the food purity laws and government corruption. All books produced are
mysteriously bought up, and no copies can be found.
Wiley's Bureau of Chemisty is dismantled and replaced by the Food Drug and Insecticide
Administration, precursor of the FDA. All lists of "dubious compounds in food" were
declared "Generally Recognized as Safe (GRAS)".
1929 Consumption of refined sugar in Sweden 120 pounds per person annually.
1929 I.G. Farben, Standard Oil and Shell Oil consumated agreement.
1929 I.G. Farben concluded limited cartel agreements with Dupont Chemical in US.
1930 William Wirt, who pioneered Carnegie's German Wundt school system in Gary,
Indiana and tried it in New York, is committed to an insane asylum in Washington, D.C
where he died in 1932. Wirt was committed because he began to make public speeches
saying that he had been part of a world wide conspiracy to bring about a controlled state
in the hands of certain people - the same people, no doubt, who committed him.
1930 Max Theiler develops a yellow fever vaccine.
1930 Diptheria vaccinations injure 32 and kill 16 in Columbia.
1931 Fluoride in drinking water is found to be the cause of brown teeth - now known as
dental fluorosis.
1931 H.Trendley Dean of the U.S. Public Health Service initiates studies on fluorides
under the jurisdiction of Treasury Secretary Andrew Mellon. Mellon is founder of Alcoa
aluminum, who is one of the main suppliers of toxic sodium fluoride as a by-product of
aluminum manufacture. He publishes a purposely skewed study showing that, at 1ppm,
fluoride results in the reduction of tooth decay.
1931 I.G. Farben and Alcoa Aluminum sign Alig Agreement pooling patents.
1931 Roosevelt endorses polio "immune serum", precursor to vaccines in 1950's.
1932 The US Public Health Service initiates a study in Tuskegee, Alabama where black
men are given syphilis. Four hundred men were unwittingly given the disease. No medical
care was offered. The study ended when it was discovered in 1972, after 40 years. The
office supervising this study was the predecessor of the Center for Disease Control unit
now in charge of the AIDS program.
1932 Diptheria vaccines injure 171 and kill 1 in Charolles, France.
1932 Research (Young) indicates that neuritis is commonly precipitated following

vaccination with anti-tetanus, anti-pneumococcal, and anti-meningitis serums.
1932 Third International Congress of Eugenics held in New York. Dr. Theodore Russell
Robie of the Essex County Mental Hygiene Clinic in New Jersey presents "Selective
Sterilzation for Race Culture", in which he called for the sterilzation of at least 14 million
Americans who had received low IQ scores since World War I.
1933 Danish researcher Thorvald Madsen discovers the Pertussis vaccine's ability to kill
infants without warning (SID). He reports that two babies vaccinated immediately after
birth died in a few minutes.
1933 Outbreak of encephalitis in St. Louis, Missouri.
1933 American researchers report that children react to Pertussis vaccine with fever,
convulsions and collapse.
1933 Vaccination programs against Yellow Fever begin in the United States.
1933 Compulsory immunization instituted in Geneva.
1933 Diptheria cases decline in Britain over the period of a year.

1933 I.G. Farben gives Nazis 4.5 million RM.
1933 World Fair in Chicago has amoebic dysentary outbreak. AMA conceals it.
1934 Denmark sugar consumption is 113 pounds per person annually.
1934 Death rate for diabetes in Denmark is 19 per 100,000.
1934 Drs. Chaffee and Light publish manuscript entitled "A Method for Remote Control of
Electrical Stimulation of the Nervous System".
1934 IG. Farbenindustrie completely under Nazi control.
1935 Lobotomy introduced in the United States. In the next 30 years, over 100,000
people would have their brain mutilated in American institutions. At the University of
Mississippi Medical Center, Dr. Orlando J. Andy would apply lobotomy to six-year-old
children.
1936 Pertussis vaccine introduced in the United States. Autism begins to appear in
children shortly thereafter. (Autism: A mental illness of children characterised by inability
to communicate or to relate to other people and, often, mental subnormality).
1936 Diptheria vaccine injures 75 in France.
1936 I.G. Farben produces Zyklon B gas for extermination camps.
1937 German manufacturing trials for nerve gas Tabun begin using fluorides.
1937 Another outbreak of encephalitis in St. Louis, Missouri.
1937 AMA "approves" drug sulfanilamide with diethylene glycol. Kills people.
1938 Fifty-eight British physicians sign a mandate against compulsory immunization in

Guernseypoint to the virtual disappearance of Diptheria in Sweden, a country without
Diptheria vaccination.
1938 Sandoz Pharmaceuticals, now a subsidiary of I.G. Farben, begins manufacture of

LSD / Lysergic acid.
1938 Ugo Cerletti becomes the first to use electroconvulsive treatment in fascist Italy.
The first victim was a 39 year old engineer who was found wandering on trains without a
ticket. Present at this event was Lothar Kalinowsky, who would become a member of the
American Psychiatric Association and an avid promoter of electroshock in the United
States.
1938 German chemist Schrader discovers Sarin, 10 times more lethal than Tabun, which
is made with various compounds including Sodium Fluoride, which is later dumped into
planetary water supplies to placate the population.
1938 Food, Drug and Cosmetics Act certifies 19 dyes for use in foods.
1938 The idea of "booster shots" arose as a "solution" to poor antibody response in
infants and newborns. These become customary in the 1940's.
1938 Reich Air Ministry is shipped 500 tons of tetra-ethyl lead gas additive from Standard
Oil of New Jersey (EthylStandard) in the United States, through I.G. Farben, with
payment secured through Brown Brothers Harriman on Sept 21, 1938.
1938 Germany invades Austria.
1938 Compulsory immunization instituted in Hungary. Diptheria cases rise 35% by 1940.
1938 Ugo Cerletti introduces electroshock into the psychiatric hospitals in Italy.
1939 Health Practitioners Law (Heilpraktikergesetz) is put into practice in Germany.

Allowed psychotherapists to advance their professional claims within the field of health
and medicine during the Third Reich. The law ended the 'freedom to cure' that had
existed in Germany since 1870. The 'freedom to cure' which had given personal and
professional access to all aspects of healing, current and future, instead of the narrowly
defined parameters which exist today.
In future, the government would supervise all training of medical personnel, including
officially approved health practitioners.
1939 Compulsory vaccination in Germany raises diptheria cases to 150,000.
1939 Psychiatrists in Brandenburg Germany begin operation of gas chambers to kill

mental patients.
1939 Germany invades western Poland. Russia invades eastern Poland. Both Germany
and Russia commit atrocities and mass murder.
1939 Dr.Emanuel Josephson reveals AMA coverup of Vitamin E benefits.
1939 Dr.Weston Price, a research dentist, publishes Nutrition and Physical Degeneration:
A Comparison of Primitive and Modern Diets and Their Effects, which proved that refined
foods and sugar causes physical degeneration and disease as opposed to natural
unrefined foods.
1940 Germany orders compulsory mass immunization for children. As a result, by 1945,
Germany's Diptheria cases increase from 40,000 to 250,000.
1940 Soviet concentration camps maintained by fluoride administration to inmates to

decrease resistance to authority and induce physical deteriorization.
1940 American intake of petroleum-based food colorings/additives increases ten-fold (to

1977). Most of the additives prove later to be carcinogenic.
1941 Louis Sauer of Evanston, Illinois, an avid supporter of mass vaccination, reports
that only 27% of a group of 89 babies developed "protective antibodies" when vaccinated
at three months of age or less." Sauer urges that Pertussis vaccination "begin no earlier
than seven months" because "most of these infants did not yet possess the power to
develop adequate immunity when they were injected so early in life".
1941 AMA "approves" I.G. Farben subsidiary "sulfathiazole", which kills many.
1941 Wilhelm Reich meets with Albert Einstein to discuss discovered phenomena. A
second meeting follows. Einstein retains use of orgone accumulator until 1942 for study.
Later, Einstein is silent about the accumulator and refuses to return it to Reich, whose
work ultimately means discredit to Einstein's theories.
1941 Among the American corporations supporting Germany were Sterling Drug (Bayer).
1942 I.G. Farben known to be operating using slave labor from Nazi camps.
1942 Epidemic of typhus in Egypt and North Africa into 1943.
1942 Germany becomes world's largest producer of aluminum (and Sodium Fluoride)
1943 Researchers from the US Public Health Service examine the health of residents of
Bartlett, Texas to see if the 8ppm fluoride in the drinking water was affecting their
health. It was checked again in 1953. They find that the death rate in Bartlett was three
times higher than a neighboring town which contained 0.4 ppm fluoride.
1943 American vaccine researcher Pearl Kendrick reports that adding a metallic salt
seemed to heighten the capacity of the Pertussis vaccine to produce anti-bodies. (Metal
salt is an "adjuvant" in this way). Some metallic salts used are those of aluminum
(alum). Pearl Kendrick is the researcher that urged that Pertussis vaccine be combined
with Diptheria vaccine. Later the Tetanus vaccine was added, producing the nefarious
DPT Vaccine.
1943 Dr. John Tinterta rediscovers the vital importance of the endocrine system, and
connects sugar use to production of hyper-adrenocortic episodes in humans intolerent to
sugar. This is where adrenal hormones are suppressed, producing inability to think
clearly, allergies, inability to handle alcohol, depression, apprehension, craving for sweets
and low blood pressure.
1943 General vaccine program against influenza begins in the US.
1943 Infantile paralysis epidemic kills 1200 and cripples more in US.
1943 Penicillin "successfully used in the treatment of chronic diseases".
1943 The Journal of the American Medical Association on September 18, 1943, states,
"fluorides are general protoplasmic poisons, changing the permeability of the cell
membrane by inhibiting certain enzymes. The exact mechanism of such actions are
obscure. The sources of fluorine intoxication are drinking water containing 1ppm or more
of fluorine, fluorine compounds used as insecticidal sprays for fruits and vegetables
(cryolite and barium fluorosilicate) and the mining and conversion of phosphate rock to
superphosphate, which is used as a fertilizer. That process alone releases approximately
25,000 tons of pure fluorine into the atmosphere annually."
1943 Child psychologist LeoKanner observes a new illness appearing in US children,

"inborn autistic disturbance of affective contact". The problem became known as
"infantile autism" or simply "autism".
Outstanding features of this new problem: self-absorbed alienation, inability to relate in

the ordinary way to people and situations from the very beginning of life, detachment,
nervous hostility with strangers, emotional bluntness and isolation, impaired
relationships, and reading with little or no comprehension and inability to process
experience. .
1943 Diptheria cases in Nazi occupied France rise to 47,000 after Germans force
compulsory vaccination. In nearby Norway, which refused vaccinations, there were 50
cases of Diptheria.
1944 Asperger in Vienna describes the first cases of adult "autism" to appear.
1944 The city manager of Grand Rapids, Michigan announces that the Michigan State
Department of Health is planning a long range experiment with fluoridated water and that
Grand Rapids was selected as the location for the experiment. The city commission
approves a motion to fluoridate on July 31, and decide it is to begin in January 1945,
despite the warning issued three months earlier by the American Dental Association.
Grand Rapids becomes the first city in the United States to conduct this experiment. It
was to serve as the test city to be compared against un-fluoridated Muskegon for a
period of ten years relative to tooth decay, at which time it would be determined whether
or not fluoride was "safe and effective." Dr. H. Trendley Dean was put in charge of the
project. The experiment was terminated early with the pronouncement that fluorides in
public water supplies was "safe". See 1945.
1944 Oscar Ewing is put on the payroll of the Aluminum Company of America (ALCOA),
as an attorney, at an annual salary of $750,000. Within a few months, Ewing was made
Federal Security Administrator, with the announcement that he was taking a big cut in
salary. The US Public Health Service, then a division of the FSA, comes under the
command of Ewing , and he begins to vigorously promote fluoridation nationwide. Ref:
May 25-27 Hearings before the Committee on Interstate and Foreign Commerce. A by-
product of aluminum manufacture is toxic c. Ewings public relations strategist for the
fluoride campaign was the nephew of Sigmund Freud, Edward L. Bernays. Bernays
conducts a public relations campaign to promote fluorine ingestion by applying Freudian
theory to induce public acceptance. It was one of Bernays most successful campaigns.
1944 Health Practitioners Journal, June 1944, reports Dr.S.S.Goldwater, the New York
Commissioner of Hospitals states "as a result of the drugs, vaccines and other
suppressive treatments used to check diseases, chronic diseases are growing at such a
rate that America may become a nation of invalids."
1944 The Journal of the American Dental Association on October 1, 1944 warned that
"We do know that the use of drinking water containing as little as 1.2 to 3.0 ppm of
fluorine will cause such developmental disturbances in bones as osteoporosis, and we
cannot run the risk of producing such systemic disturbances in applying what at present
is a doubtful procedure intended to prevent development of dental disfigurement in
children. In the light of our present knowledge or lack of knowledge of the chemistry of
the subject, the potentialities for harm far outweigh those for good."
1944 The American Cancer Society (ACS) is reorganized, chiefly under the wing of Albert
Lasker (an advertising tycoon) and Elmer Bobst (president of two drug companies,
Hoffman LaRoche and Warner Lambert).
Mary Lasker in New York was the driving force of the ACS for decades. The Albert and
Mary Lasker Foundation, which is based on the Lasker advertising fortune, provides the
impetus to dominate cancer research.
1945 1952 I.G. Farben split into BASF, Bayer, and Hoechst.
1945 A survey of 10,000 boys in the US having had the smallpox vaccination also notes
that 6% were associated with crime.
1945 Newburgh, New York has their water supply fluoridated. Subsequent exams of the
children by x-ray reveal that almost 14% have cortical defects in bone, compared to the
nearby unfluoridated town of Kingston, where 7.5% have bone defects.
1945 As a result of government propaganda on fluorides, the ten year Michigan study
was terminated after 1 year. The fluoride-free control city, Muskegon, was then
fluoridated to conceal any differential between the two cities.
1945 Japan surrenders twice, followed by US bombing of Hiroshima/Nagasaki and a third
and final surrender. The Allies mandate compulsory vaccination in Japan. The first cases
of autism follow pertussis vaccine introduction.
1945 Postwar nitrate supplies designated to be added to food chain as fertilizer.
1945 Dr. Edwin Katzen-Ellenbogen, former member of the faculty at Harvard Medical
School, sentenced to life in prison at Nuremberg for his role at Buchenwald. Ellenbogen
became a member of the faculty at Harvard in 1910, left the US in 1915 and reappeared
in Paris in 1941. He was heavily involved in the killing at Buchenwald.
NUTRITION DATA SYSTEM FOR RESEARCH WITH FLUORIDE
(NDSR FLUORIDE 2007)
Descriptive Overview
The University of Minnesota Nutrition Coordinating Center has developed a software program
designed to assess total fluoride exposure. The software has been developed in conjunction with
the Nutrition Data System for Research (NDSR), a computerized database and interview system
that is well recognized in the nutrition research community as the premier dietary data collection
and nutrient calculation tool.
The NUTRITION DATA SYSTEM FOR RESEARCH WITH FLUORIDE has been created for the
specification, collection and analyses of both dietary and non-dietary sources of fluoride. The
newly released USDA National Fluoride Database provides the foundation for the fluoride
values found in the nutrient database. An interview process is used to collect food, beverage and
water intake and use of dental products and supplements for a given day. Prior to the interview,
respondents are instructed to collect samples of ingested water and water-based beverages to
provide the level of specificity necessitated by investigations of fluoride exposure.
• Information about food, beverage, and water intake is collected during the first phase of the
interview. Data are collected utilizing direct data entry that features standardized interview
prompts and multiple-pass interview methodology.
• For the second phase of the interview, the software verifies each water source used, and
specifies those foods and beverages that require further information related to water source
while providing interview prompts specific to those items and their respective collected
samples. Following the interview, the collected water and water-based beverage samples are
sent for laboratory assay of fluoride content, and results are later electronically merged into
the corresponding intake record.
• During the third phase of the interview, information about the use of non-dietary sources of
fluoride, including toothpaste, mouthrinse and fluoride-containing supplements is collected.
The software guides the interviewer through the process of collecting and specifying product
information and the amount used.
Resulting fluoride data are available in a variety of reports and output files. Data are reported
separately for dietary sources, non-dietary sources, and total fluoride intake.
University of Minnesota Nutrition Coordinating Center

www.ncc.umn.edu
THE DATABASE
The NCC Food and Nutrient Database was originally designed in 1974 under the sponsorship of
the National Institutes of Health for use by large, population-based nutrition research studies.
Important qualities of the database include standardized procedures for evaluating and collecting
nutrient data, a high level of specificity for describing foods and food preparation methods,
ability to enter food amounts as reported by the study participant, and inclusion of food products
by brand name. Additionally, items contained within the database remain market reflective over
time, nutrient fields contain no missing values of nutritional significance, and nutrient fields
continue to expand to include those of current research interest. Recently, the National Institute
of Dental and Craniofacial Research requested and funded the addition of fluoride to the NCC
database to support examination of total fluoride exposure.
Including the newly added fluoride fields (dietary fluoride, non-dietary fluoride, total fluoride), a
total of 158 nutrients, nutrient ratios and food components are currently provided by the NCC
database. The database consists of approximately 18,000 food descriptions, including more than
8,000 branded items. Automated amount conversion factors allow foods to be described in any
of the forms a food can be reported, e.g. solid, sliced, grated, chopped, and refuse versus edible
portion and raw-to-cooked yields are automatically converted. To address fluoride specificity, a
flagging code has been assigned to categorize all database foods by food type in relation to water
composition. When a food has been prepared using water, the flag activates a fluoride
adjustment factor specific to that food. If a respondent is unable to provide the level of detail
required to make a selection, default assignments based on nationally representative data are
utilized.
To remain current with marketplace additions and changes and the availability of new or
improved product data, the database is continually in the process of update and maintenance.
The USDA Nutrient Data Base for Standard Reference serves as the primary resource of nutrient
data for basic core foods, and the October 2004 USDA National Fluoride Database has been used
as the primary source for dietary fluoride. Drug Facts and Comparisons has been used as a main
source for fluoride-containing product information. Manufacturers, scientific literature, other
published tables, and occasionally unpublished analytical data also serve as important sources of
information. Data from all sources are evaluated for reliability before being selected for
incorporation into the NCC database.
THE INTERVIEW SYSTEM

The interview system linked to the NCC database has been designed for the specification,
collection and calculation of reported intake data. Standardization of the data collection process
is facilitated by the multiple-pass approach interview methodology. This method uses four
distinct passes to elicit information about a respondent’s food intake and has been found to
reduce underreporting of intake since several opportunities to recall food intake are provided.
The interview system also utilizes a sophisticated search mechanism to locate foods, beverages
and branded products by name. An extensive range of options for describing foods and the
quantities consumed is available to enable interviewers to capture reported foods and the
amounts ingested, with ease. Fields for entering notes are available throughout the interview
process.
The specification and collection of dietary and non-dietary data is accomplished through a series
of screens that guide the interview process. General data such as the respondents’ date of birth
and gender, date of the interview, etc. is collected first. Next, the system provides the
www.ncc.umn.edu
interviewer with multiple prompts to facilitate data collection. As dietary intake data are entered
and details are completed, a fluoride flag assigned to each database food and beverage designates
whether a sample will be requested for laboratory assay and whether further information about
the water source used in its preparation is warranted. Following the collection of dietary intake
information, interview prompts are provided to obtain further information about water used in
the composition and/or preparation of foods, and to enter the ID code for each of the water and
water-based beverage samples collected. Finally, information specific to the identification and
use of dental products such as toothpaste, mouthrinse, and fluoride-containing supplements is
collected.
REPORTS AND OUTPUT FILES

NDSR FLUORIDE protects data by saving the information collected as it is entered. NDSR
reports are immediately available; however, dietary fluoride and total calculated fluoride will
remain incomplete until laboratory values from collected water and water-based beverage
samples have been assayed and the results have been merged into the respective record. NDSR
FLUORIDE reports include:
• Foods Report (list of foods and amounts as entered)
• Food Samples Report (list of foods with identifier for each collected sample)
• Non-dietary Fluoride Report (list of non-dietary products and amounts as entered)
• Nutrient Totals Report (nutrient totals per day)
• Nutrients Per Food Report (nutrient intake per food, per meal, and per day)
• Recommended Dietary Allowances/Adequate Intake Report (nutrient intake compared
with the nutrient recommendations for the corresponding Life Stage Group)
• Fluoride Source Report (overview of fluoride intake totals by dietary and non-dietary
source)
Output files provide nutrient data linked to food identification numbers for foods at the
component/ingredient level and at the whole food level. Dietary data are available as foods and
nutrients reported per eating occasion or meal. Nutrient data collected in NDSR 2006 FLUORIDE
will have the ability to be re-run to capture nutrients that may be added to future NDSR
FLUORIDE versions.
The NDSR FLUORIDE software was developed with the support of contracts from the National
Institute of Dental and Craniofacial Research (NIDCR) and the National Heart, Lung, and Blood
Institute (NHLBI) at the National Institutes of Health, Bethesda, Maryland.
CONTACT INFORMATION:
UNIVERSITY OF MINNESOTA
NUTRITION COORDINATING CENTER
1300 SOUTH SECOND STREET, SUITE 300
MINNEAPOLIS, MN 55454-1087
PHONE: 612-626-9450
FAX: 612-626-9444

www.ncc.umn.edu
New Hampshire Court Opinions
Hillsborough-northern judicial district
No. 2002-469
JUNE BALKE & a.
v.
CITY OF MANCHESTER
Argued: May 8, 2003
Opinion Issued: September 30, 2003
Baldwin, Callen & Hogan, PLLC, of Concord (Jed Z. Callen on the brief and orally), for
the plaintiffs.
Daniel D. Muller, Jr., office of city solicitor, of Manchester, on the brief and orally, for
the defendant.
Peter W. Heed, attorney general (Mary P. Castelli, senior assistant attorney general, on
the brief and orally), for the State, as amicus curiae.
NADEAU, J. The defendant, City of Manchester (city), appeals a decision by the Trial
Court (Lynn, J.) that interprets RSA 485:14 (2001) to require approval by the voters of
each municipality in which residents use water provided by the Manchester Water Works
(MWW) before MWW can provide fluoridated water to any residents of the community.
We affirm.
The plaintiffs, residents of Manchester and five surrounding municipalities, filed a

petition for declaratory judgment, injunctive relief and damages in the superior court,
arguing that the city had violated RSA 485:14 by fluoridating its water supply prior to
conducting public hearings and obtaining voter approval in other municipalities which
MWW served. The plaintiffs’ request for a preliminary injunction to stop the fluoridation
of the water supply was denied. Both parties moved for summary judgment on the
statutory violation claim, and each objected to the other’s motion. The trial court granted
the plaintiffs’ motion for summary judgment, ruling that the city had violated RSA
485:14, and ordered the city to cease fluoridation by April 2004 unless a legislative
remedy was enacted or the surrounding towns voted to approve the fluoridation. The city
filed a timely motion for reconsideration, which was denied. This appeal followed.
The trial court found the following facts. The MWW was established by a special act of
the legislature in 1871 and has operated as a department of the city since that time. In
addition to providing water service to residents and businesses in the city, MWW
extended its water distribution system to include areas outside the city limits of
Manchester sometime in the 1920s. At the present time, MWW has direct retail
customers (i.e., residential or business properties that are connected to the MWW
pipeline system) in the towns of Auburn, Bedford, Goffstown, Hooksett and
Londonderry. MWW also has entered into wholesale water contracts with the Town of
Derry, the Grasmere Water Precinct, the Central Hooksett Water Precinct and
Pennichuck/Consumers New Hampshire Water Company. These wholesale customers in
turn provide water service to retail customers in Bedford, Derry, Goffstown, Hooksett
and Londonderry.
Because an MWW "customer," whether wholesale or retail, simply means a "connection"

to its pipeline system, there is no easy way to correlate the number of customers with the
actual number of consumers of MWW water. A "connection" may vary from a single
family home to a duplex, a large apartment complex, or a commercial establishment.
Despite this difficulty in correlating connections with consumers, the parties appear to
have agreed at trial that MWW provides water service to over 99% of the residents of the
city. The parties also agreed that the "connections" outside the city limits of Manchester
account for between 20% and 30% of MWW’s total connections.
The parties disagreed as to the percentage of the population served by MWW in each of
the satellite towns. Based upon demographic information and information supplied by the
New Hampshire Department of Environmental Services (DES), the city estimated that
these percentages range from a low of 4.7% for Auburn to a high of 44.1% for Derry. The
plaintiffs, on the other hand, proffered an analysis prepared by an architect they retained
as an expert, who opined that the percentages range from 8% for Auburn to 57% for
Hooksett.
Following a public hearing conducted by the city pursuant to RSA 485:14, a question was
placed on Manchester’s 1999 municipal election ballot asking the voters to decide
whether the city’s public water supply should be fluoridated. By a margin of 11,594 to
10,938, the vote was in favor of adding fluoride to the water supply. No similar public
hearings or referendums were held in any of the other towns that are serviced by MWW,
although MWW did notify officials of these towns of its plans to fluoridate the water.
The city began adding hydrofluorisilic acid (HFS) to the water supply on December 19,
2000. In June 2000, the city obtained approval of its fluoridation plan, including the use
of HFS, from DES pursuant to RSA 485:8 (2001).
The sole question on review is one of statutory interpretation. The city argues that the
trial court’s interpretation of RSA 485:14 is inconsistent with the rules of statutory
construction and the historical treatment of water companies in this State. In particular,
the city argues that (a) the trial court failed to construe the plain language of RSA 485:14
and the referendum statutes incorporated therein as a whole, (b) the trial court’s
interpretation of RSA 485:14 conflicts with the statutory scheme and other legal
principles, and (c) the trial court’s interpretation of RSA 485:14 leads to absurd and
unjust results.
This court is the final arbiter of the legislature’s intent as expressed in the words of the
statute considered as a whole. See In the Matter of Breault & Breault, 149 N.H. 359, 361
(2003). We first examine the language of the statute, and, where possible, ascribe the
plain and ordinary meanings to the words used. Id. When a statute’s language is plain and
unambiguous, we need not look beyond it for further indication of legislative intent, and
we refuse to consider what the legislature might have said or add language that the
legislature did not see fit to incorporate in the statute. Id. Furthermore, we interpret
statutes in the context of the overall statutory scheme and not in isolation. Id.
RSA 485:14 provides:
No fluorine shall be introduced into the water of any lake, pond, reservoir or stream
tributary from which the domestic water supply is taken unless and until the municipality
using said waters has held a public hearing as to the introduction of fluorine into the
public water supply of said municipality, and the voters of such municipality have
approved such action pursuant to RSA 44:16 or 52:23.
We first address the argument that the plain language of RSA 485:14, read together with
the referendum statutes incorporated therein, requires only that there be a referendum in
the municipality that runs the water system. The city argues that the language requiring a
referendum by the "municipality using said waters" is ambiguous, and contrasts that
wording with other possible formulations that would have been clearer, such as "a
municipality within which said waters are used." We agree, however, with the trial
court’s interpretation of "municipality using said waters." It would be illogical to read the
statute to require a referendum vote only when a municipality as a municipality, rather
than its residents, uses fluoridated water from MWW. We believe it obvious that the
statute is concerned with the use of fluoridated water by individuals, not by
municipalities as corporate entities. Reading the language in context, the use of the word
"municipality" is to designate the municipality as the entity that would hold a referendum
for approval of fluoridation of the public water supply: "No fluorine shall be introduced
into the water . . . until the municipality . . . has held a public hearing . . . and the voters
of such municipality have approved such action." RSA 485:14.
The city argues that "‘[p]ublic water system’ is a term of art under the current statutory
scheme," a term used in the referendum before the voters under RSA 44:16: "Shall
permission be granted to introduce fluorides into the public water system?" The trial
court’s interpretation, the city argues, means that MWW is the public water system of
every municipality to which MWW provides water, and this contradicts RSA 38:24. We
note, however, that RSA 485:14 does not use the term "public water system," but rather
the terms "public water supply" and "domestic water supply." See RSA 485:14. As the
other statutes within the statutory scheme make clear, the legislature knows how to use
the term "public water system," and we will not add words that the legislature has chosen
not to include. See Breault, 149 N.H. at 361. Furthermore, the use of the word "domestic"
synonymously with the word "public" when referring to the water supply in RSA 485:14
strengthens our conclusion that the legislature intended to regulate waters used by private
individuals within a municipality, not merely the use of water by a municipality as a
public, governmental body.
The city and the State argue that the plain language of the statute requires a referendum
vote only by the municipality that owns and operates the water system, not every
municipality in which a resident receives water from the water system. We disagree. The
statute requires a public hearing in each "municipality using said waters," not merely the
municipality that introduced the fluorine into the water. RSA 485:14. Any municipality
that has residents using water from MWW is a "municipality using said waters" within
the meaning of RSA 485:14. Therefore, we agree with the trial court that "before a public
water supply which is used within a municipality may be fluoridated[,] there must be a
hearing and referendum in that municipality."
The city argues that the trial court’s interpretation of RSA 485:14 leads to absurd and
unjust results. Among other things, the city notes that a vote against fluoridation in one
small municipality could prevent fluoridation of an entire water system, even if the other
municipalities approved it, and that the failure to satisfy the prerequisites to referendum
in any municipality would defeat fluoridation for all municipalities using the water
system. Although those concerns are valid, these difficulties are the natural result of the
statutory language adopted by the legislature. While the city’s interpretation might avoid
these concerns, it would cause other, equally troubling difficulties. For example, if only
the municipality owning the water system were required to approve fluoridation, one
small municipality owning a water system could hold a referendum on fluoridation
among its voters, and then provide fluoridated water to numerous large municipalities
without the residents of the large municipalities having a vote.
Finally, the State argues that regulations and the overall statutory scheme place
responsibility for the operation of the water system upon the municipality that operates
the system, and "placing responsibility for the operation of the water system upon the
municipality which operates the system is critical to the success of the statutory scheme."
Thus, the State argues, only the municipality that runs the water system should be
required to approve fluoridation by referendum. As difficult as it may be for the city to
comply with the statute as currently written, we are constrained by the clear and plain
language of RSA 485:14. We will not rewrite the statute; that is the province of the
legislature. The trial court’s order, decided in June of 2002, did not require the city to
"cease and desist from fluoridating the water supplied, directly or indirectly, to any
properties located in the towns of Auburn, Bedford, Goffstown, Hooksett or
Londonderry" until April 1, 2004, thereby allowing the legislature time to consider
whether to amend RSA 485:14. We agree with this approach, and therefore affirm the
order of the trial court, but extend the time for compliance to June 30, 2005.
Finally, having reviewed the record regarding the city’s remaining arguments, we
conclude that they either have been waived or are without merit and warrant no further
discussion. See Vogel v. Vogel, 137 N.H. 321, 322 (1993).
Affirmed.
BROCK, C.J., and DALIANIS and DUGGAN, JJ., concurred.
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=nh&vol=0309%5Cbalke123&invo
l=1
NORTH ATTLEBORO BOARD OF HEALTH

Meeting Minutes of
April 9, 2007 6:30 pm
OLD BUSINESS
Cease and Desist Fluoridation
MOTION made by Mr. Bates to vacate the cease and desist fluoridation order sent to the North
Attleboro Department of Public Works on March 15, 2005. Seconded by Mr. Donohue. In
discussion,
Ms. Shaw stated her belief that it was the job of the Department of Public Works to ensure that
the Town
has good clean water, and that any additives should be left up to the patients and their physicians.
With no
further discussion, the Members voted Bates and Donahue aye and Shaw nay, motion passes 2-1
Fluoridation suit
MOTION made by Mr. Donohue to remove the North Attleboro Board of Health’s support for,
and dismiss with prejudice, the fluoridation suit against the North Attleboro Department of Public
Works,
docket #BRCV2006-00465 to be heard next on May 29, 2007 in New Bedford Superior Court.
Seconded
by Mr. Bates. With no further discussion, the Members voted Bates and Donahue aye and Shaw
nay,
motion passes 2-1
http://north-attleboro.ma.us/boh/PDF/minutes/2007%20minutes/4-9-07%20minutes.pdf
California court directs city to comply with state Posted Aug. 13, 2004
fluoridation policy
By Stacie Crozier
Watsonville, Calif. — Judge Robert Atack ruled that state health and safety codes pre-
empted a city voter approved measure to ban community water fluoridation and will
order Watsonville to comply with state orders to fluoridate the city's water.
Citizens voted in November 2002 not to fluoridate the water supply, despite receiving a
grant for capital equipment and one year's operating costs to implement water
fluoridation. In February 2003 the California Department of Health Services issued an
order for Watsonville to submit a schedule for fluoridation by May 2003 or face fines of
up to $200 per day if it did not comply.
Watsonville filed suit against the CDHS asking the court to rule that the city ordinance
blocking fluoridation is not in conflict with state law, that it may legally prohibit
fluoridating its water supply and that the CDHS be barred from enforcing its order to
fluoridate.
The city has 60 days to appeal the decision, once it is finalized.
Another California city will have its case heard in court in October.
Escondido's city council voted to ban fluoridation in March 1999, then overturned the
ban in June 2001, when it also passed a resolution to accept capital cost funding from
the California Fluoridation Project.
A court challenge begun in September 2001 involving a class action lawsuit to stop
fluoridation is scheduled for jury trial in October 2004. This case may be significant, says
ADA Chief Counsel Peter M. Sfikas, because it may reach the scientific merits of
fluoridation and could be the first time a jury will be asked to determine whether
fluoridation is hazardous.
Fluoridation suits in the last decade have for the most part dealt with procedural and
jurisdictional matters, adds Mr. Sfikas.
http://www.ada.org/prof/resources/pubs/adanews/adanewsarticle.asp?articleid=1010
ADA: Beryllium in
Dentalmaterialien
verboten!
10.1.2003
14.2.2002
Zitat aus http://www.dimensional.com/~mhj/1999.html:
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Beryllium Support Group
1999 Beryllium Related Journal Articles
Balkissoon, R. C. and L. S. Newman (1999).

Beryllium copper alloy (2%) causes chronic beryllium disease.
J Occup Environ Med 41(4): 304-8.

We describe two newly confirmed cases of chronic beryllium
disease who
presented to our clinic from a facility that only used 2%
beryllium copper
alloy. These cases illustrate that the 2% beryllium copper alloy
continues to
cause chronic beryllium disease and that appropriate preventive
measures must
be taken to control exposures and educate industries and their
workers about
the hazards of beryllium alloys.
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Bei der Bearbeitung von Beryllium und Beryllium-haltigen Legierungen durch Sägen,
Fräsen, Bohren und Feilen entstehen feine Späne, die in der Lunge die unheilbare
Beryllium-Krankheit, eine Krebs-Art, verursachen können.
Beryllium ist enthalten in Beryllium-Kupfer, aus dem Kühlkörper und Kontaktfedern für
Elektronik hergestellt werden.
Wieviel Beryllium ist in Dental-Legierungen ?
Beryllium in Dentalmaterialien verboten!
Mit Datum vom 10.1.2003 teilt die ADA mit :

http://ada.org/prof/pubs/daily/0301/0110suit.html :
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[/QUOTE]
ADA News
Posted Jan. 10, 2003
Court denies injunction of ADA Seal program
By James Berry
A federal judge Dec. 31 rejected a dental manufacturer's

plea for an injunction that would have prevented the ADA
from going public with a decision to lift its Seal of
Acceptance from all products containing the base metal beryllium.
In denying the preliminary injunction sought by CMP

Industries LLC, Judge John A. Nordberg of the Northern
Illinois U.S. District Court said the Association's
Council on Scientific Affairs relied on a "significant
amount of new evidence" in deciding to withdraw
the ADA Seal from products containing beryllium
alloy.
New York-based CMP sued the ADA in October 2002, alleging

that the council had unlawfully revised its requirements
for acceptance of base metal alloys to exclude beryllium
as a component of an ADA-accepted product. The company
also sought an injunction to bar the Association from
making its decision public knowledge
(see related story,
Change of requirements for ADA Acceptance of base metal alloys).
Judge Nordberg noted in a six-page opinion that, in

making its decision, the council reviewed a warning
on beryllium from the U.S. Occupational Safety and
Health Administration, as well as other information on
beryllium safety.
In April 2002, OSHA issued a Hazard Information Bulletin

warning that beryllium exposure posed a serious potential
health threat in dental workplaces. The agency also
recommended, for the first time, that alternatives
to beryllium be used.
CMP is one of nine companies with a total of 14

beryllium-containing products granted the ADA Seal
since the mid-1960s. Used in fabricating some partial
dentures and crowns, beryllium has been linked to
respiratory ailments in humans.
ADA Chief Counsel Peter M. Sfikas hailed Judge Nordberg's

decision as a victory for both the Association and the
public at large.
"The court's decision recognizes the importance of

the ADA as a respected and impartial body, and reaffirms
the right of the ADA to express its opinion on matters
affecting public safety," Mr. Sfikas said.
CMP argued that the ADA's proposed statement on beryllium

constituted "trade disparagement" because
it implied that CMP's products are unsafe. Judge
Nordberg said he found it "hard to see how the
implied statement is untrue."
He added, "The ADA correctly states that the only

implied statement that can be taken from the proposed
announcement is that the ADA believes that beryllium
products pose enough of a safety concern to justify
removing the Seal. This statement cannot be untrue;
the ADA's opinion is what it is."
CMP also argued that the ADA must have a "significant

amount of new evidence" that a product is no
longer safe or effective before revoking the Seal
or declining to renew it.
"The argument," said Judge Nordberg, "boils
down to whether the OSHA bulletin could be
considered significant new evidence. The ADA council
thought it was, and this court agrees."
If CMP were to prevail in this case, he said, "the

harm to the ADA would be significant. It would be unable
to express a truthful opinion on an important public
safety issue, its reputation as an impartial body
could be questioned, and it would be subject to
lawsuits from those harmed from products bearing the
ADA Seal."
The Council on Scientific Affairs "acted in a

conscientious manner," Judge Nordberg said.
"Its decision was not specifically targeted at
CMP but applied to all applicable companies."
He added, "The reason that the Seal is so respected—and,

in fact, the reason why CMP is fighting so hard to keep
it—is that it represents the independent and respected
opinion of the ADA."
CMP's lawsuit contending the ADA wrongfully terminated

the Seal is still pending before the court. The ADA has
filed a motion to dismiss the lawsuit.
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[QUOTE]
ADA News
Posted Jan. 10, 2003
Change of requirements for ADA
Acceptance of base metal alloys
The Council on Scientific Affairs recently changed

the requirements for ADA Acceptance of base
metal alloys. Products containing beryllium will no
longer be considered for Acceptance. This action
was taken in response to an April 2002 OSHA
Hazard Information Bulletin (HIB) titled,
Preventing Adverse Health Effects for Exposure to
Beryllium in Dental Laboratories.
The OSHA HIB makes the following points:
* Cases of chronic beryllium disease (CBD) are continuing

to occur among dental laboratory technicians working with
dental alloys containing beryllium.
Recent studies have questioned whether the Permissible
Exposure Limit (PEL) is adequate to prevent CBD among
exposed workers. The current PEL limits occupational
exposure to 2.0 µg/cubic meter over an 8-hour time
weighted average.
* Extensive engineering, work practice and other controls

are recommended to protect workers exposed to beryllium
in dental laboratories and dental offices where appliances
containing beryllium are fabricated or modified. However,
the very first OSHA recommendation is, "Where possible,
alloys that do not contain beryllium should be substituted
for beryllium-containing alloys in dental work."
There are many substances used in dentistry that require proper

handling by dental care workers to avoid occupational risk.
However, this is the first time that OSHA has gone on record
recommending substitution of one dental product for another as
the first level of control.
The Council concluded that suitable base metal alloys without

beryllium are available to replace beryllium-containing alloys in
all dental applications. Consequently, beryllium-containing base
metal alloys will no longer be considered for ADA Acceptance.
The Council saw no evidence to suggest that dental devices
made from items made from beryllium-containing alloys (e.g.,
crowns, bridges, partial dentures) cause any ill effects in
patients.
For more information, see the statement on the proper use of

beryllium-containing alloys.
--> LINK: http://ada.org/prof/prac/issues/statements/alloys.html
[/QUOTE]
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[QUOTE]
Proper Use of Beryllium-Containing Alloys
Many dental prosthetic restorations placed in the United States

are
made of a variety of base metal alloys. Base metal alloys are
composed
of metallic elements other than gold, silver, platinum,
palladium,
ruthenium, iridium, rhodium, and osmium.
Beryllium is added to some base metal alloys for use in crowns,

bridges
and partial denture frameworks. Incorporation of beryllium into
the
base metal alloy formulation facilitates castability (lowering
the melting
temperature and surface tension) and increases the porcelain
metal
bond strength.1,2 Beryllium also allows the alloys to be
electrolytically
etchable for bonding veneers in conjunction with resin-bonded
restorations.3
However, exposure to beryllium vapor or particles is associated

with a
number of diseases from contact dermatitis4,5 to chronic
granulomatous lung disease, known as chronic beryllium disease
(CBD). In addition, beryllium and some beryllium compounds in
vapor
and particulate form have been shown to be carcinogenic based on
human epidemiological and animal experimental models.6 Tumors
linked to beryllium include lung carcinoma6 and osteosarcoma.7
Potential hazards or risks from exposure to beryllium result from

melting, grinding, polishing and finishing procedures. The risk
is
greatest during the casting process in the absence of an adequate
exhaust and filtration system. Both the National Institute of
Occupational Safety and Health (NIOSH) and the ADA8 have
promulgated standard practices for the safe management of
beryllium-containing alloys. These practices have focused on
dental
laboratories where beryllium-containing alloys are routinely used
for the
fabrication of crowns, bridges and partial dentures.
According to the Occupational Safety and Health Administration

(OSHA) the current Permissible Exposure Limits (PELs) for
beryllium
allow exposure to 2 micrograms per cubic meter of air (2 mg/m3)
as an
8-hour time-weighted average (TWA), between 5 mg/m3 and 25
mg/m3 exposure for up to 30 minutes at a time, and 25 mg/m3 as a
maximum peak limit that can never be exceeded. However, some
recent studies and reports have questioned whether the current 2
mg/m3 PEL for beryllium in the workplace is adequate to prevent
the
occurrence of CBD among exposed workers.9,10 A recommendation
of 0.1 mg/m3 for the 8-hour TWA has been made based on a study of
unaffected populations near a beryllium plant.11
In a recent Hazard Information Bulletin entitled Preventing

Adverse
Health Effects from Exposure to Beryllium in Dental Laboratories
("OSHA Bulletin"), 12 OSHA expressed concern that cases of CBD
are
continuing to occur among dental laboratory technicians and
cautioned
the nation's dental laboratories and lab technicians to be alert
to the risk
of developing CBD from exposure to dust from beryllium.
With regard to the dental office, reports of toxicity to

beryllium-containing alloys are limited to a few cases of
transient
contact dermatitis.4,5 The recent OSHA Bulletin does not appear
to
question the fundamental safety and effectiveness of
beryllium-containing alloys when handled appropriately, and no
cases
of CBD have been documented to date in dental practitioners,
dental
office employees, or patients. The OSHA Bulletin does, however,
indicate that the precautions regarding the use of beryllium-
containing
alloys apply to dental offices if these are fabricated or
modified there.
So in cases where beryllium-containing dental prostheses are
ground or
polished in the dental office, precautions should be considered
to
minimize any exposure to beryllium-containing dust.
The following OSHA recommendations should be taken by dental

practitioners using beryllium-containing alloys for dental
prostheses:
* Obtain Material Safety Data Sheets (MSDSs) for all dental

alloys
used in the dental office;
Where possible, alloys that do not contain beryllium should be
substituted for beryllium-containing alloys in dental
prostheses (a
number of other non-beryllium-containing alloys have been
granted the ADA Seal of Acceptance);
* All procedures related to grinding or polishing

beryllium-containing dental alloys should be conducted using
properly designed and installed local exhaust ventilation;
Vacuum systems and local exhaust ventilation systems should be
equipped with high-efficiency particulate air (HEPA) filters;
* When possible, use local exhaust ventilation (hoods) properly

to
minimize the generation of dust when working with
beryllium-containing alloys;
* Use HEPA vacuums to clean equipment and the floor around the
work area;
* Monitor employee exposures to airborne beryllium dust, using

personal sampling techniques on a regular basis, to ensure
that
beryllium exposures are below the OSHA PELs and are as low
as feasible;
* Limit the number of office staff who have access to areas
where
beryllium-containing alloys are being ground or polished;
* To minimize skin contact and to reduce take-home exposures

and beryllium contamination of non-work areas, ensure that
protective clothing is worn in areas where dental prostheses
containing beryllium alloy are being ground or polished;
* Recent studies suggest that exposure to beryllium at levels

below
OSHA's 2 mg/m3 PEL may have caused CBD in some
individuals. Therefore, even in the dental office where
exposures
are likely to be considerably below the 2 mg/m3 limit,
dentists
should consider providing their beryllium-exposed staff with
National Institute of Occupational Safety and Health
(NIOSH)-approved air-purifying respirators equipped with
100-series filters (either N-, P-, or R-type as applicable)
or,
where appropriate, powered air-purifying respirators equipped
with HEPA filters. Clinicians should also note that short-term
exposures may exceed the 2 mg/m3 PEL.11
* Use of a surgical type mask does not provide adequate

respiratory protection because it does not seal the face or
effectively filter out fine particles.
Dentists and their staffs may obtain additional information about

beryllium-containing products directly from manufacturers or at
the
OSHA Web site ( www.osha.gov ). This informational statement is
advisory in nature and intended to assist dentists in providing a
safe and
healthful workplace.
References
1. Leinfelder K. An evaluation of casting alloys used for
restorative
procedures. JADA 1997;128:37-45.
2. Covington J et al. Beryllium localization in base metal

dental casting
alloys. J Biomed Mat Res 1985;19:747-750.
3. Perez A. Given the recent controversy concerning beryllium,

what
should be our concern or not be our concern as dental lab
managers. J
Dent Tech 2000;17(5):28-29.
4. Haberman A et al. Contact dermatitis from beryllium in dental

alloys.
Contact Dermatitis 1993;28(3):157-62.
5. Vilaplana J et al. Occupational and non-occupational allergic
contact
dermatitis from beryllium. Contact Dermatitis 1992;26(5):195-
8.
6. Kuschner M. The carcinogenicity of beryllium. Environ Health

Perspect 1981;40:101-5.
7. Fodor I. Histogenesis of beryllium-induced bone tumors. Acta

Morphol Acad Hung 1997;25(2-3):99-105.
8. Moffa, J. P. and Jenkins, W. A. Status report on base-metal

crown
and bridge alloys. JADA 1974; 89: 652-55
9. Balkissoon, R. C. and Newman, L. S. Beryllium Copper Alloy

(2%)
causes chronic beryllium disease. J. Occup Environ Med 1999;
41:
304-8.
10. Martyny J. W. Hoover, M. D. Mroz, M. M. Ellis, K. Maier, L.

A.
Sheff, K. L. Newman, L. S. Aerosols generated during
beryllium
machining. J. Occup. Environ. Med. 2000; 42: 8-18.
11. Wambach P.F. and Tuggle R.M. Development of an eight-hour

occupational exposure limit for beryllium. Appl. Occup.
Environ Hyg.
2000, 15. 581-87.
12. Occupational Safety and Health Administration. OSHA Hazard
Information Bulletin: Preventing Adverse Health Effects from
Exposure
to Beryllium on the Job. Available at:
http://www.osha-slc.gov/dts/hib/hib_data/hib19990902.html
Accessed April 12, 2002.
[/QUOTE]
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[QUOTE]
U.S. Department of Labor

Occupational Safety & Health
Administration
www.osha.gov
OSHA Hazard Information Bulletins

Preventing Adverse Health Effects From Exposure to Beryllium on
the Job.
OSHA
Hazard Information Bulletins - Table of Contents by Year
Information Date: 1999 09 02
Record Type: Hazard Information Bulletin
Subject: Preventing Adverse Health Effects From Exposure to

Beryllium on the Job.
September 2, 1999
WARNING!
INHALING BERYLLIUM DUST OR FUMES MAY CAUSE SERIOUS,
CHRONIC LUNG DISEASE AMONG EXPOSED WORKERS;
THIS LUNG DISEASE CAN BE FATAL.
BERYLLIUM CAN ALSO CAUSE LUNG CANCER.
The Occupational Safety and Health Administration (OSHA) has

recently
obtained information suggesting that OSHA's current 2 micrograms
per cubic
meter of air (micrograms/m3) eight-hour time-weighted average
(TWA)
permissible exposure limit (PEL) for beryllium in the workplace
may not be
adequate to prevent the occurrence of chronic beryllium disease
(CBD), a
disabling and often fatal lung disease, among exposed workers.
OSHA is publishing this Hazard Information Bulletin to alert
employees
working with beryllium about the hazards associated with their
work. It
describes engineering controls, work practices, and personal
protective
equipment recommended for controlling exposures to beryllium
through
inhalation and skin contact. It also suggests health surveillance
methods to
identify workers who may have become sensitized to beryllium, or
who may
have CBD.
BACKGROUND
Beryllium is a metal that is found in nature, especially in beryl

and
bertrandite rock. It is extremely lightweight and hard, is a good
conductor
of electricity and heat, and is non-magnetic. These properties
make beryllium
suitable for many industrial uses, including: metal working (pure
beryllium,
copper and aluminum alloys, jet brake pads, aerospace
components); ceramic
manufacturing (semi-conductor chips, ignition modules, crucibles,
jet engine
blades, rocket covers); electronic applications (transistors,
heat sinks,
x-ray windows); atomic energy applications (heat shields, nuclear
reactors,
nuclear weapons); laboratory work (research and development,
metallurgy,
chemistry); extraction (ore and scrap metal); and dental alloys
(crowns,
bridges, dental plates); and sporting goods (golf clubs, bicycle
frames).
CURRENT EXPOSURE LIMITS
The current OSHA PELs for beryllium are 2 micrograms/m3 as an 8-

hour
TWA, 5 micrograms/m3as a ceiling not to be exceeded for more than
30
minutes at a time, and 25 micrograms/m3as a peak exposure never
to be
exceeded. The OSHA limits have been in place for nearly 30 years
and have
not been revised in that time. The American Conference of
Governmental
Industrial Hygienists (ACGIH) has recently published a Notice of
Intended
Change for its Threshold Limit Value (TLV) for beryllium that
would lower
the TLV from the current level of 2 micrograms/m3 to 0.2
micrograms/m3averaged over an 8-hour work shift.
POTENTIAL ADVERSE HEALTH EFFECTS FROM BERYLLIUM EXPOSURE
CHRONIC BERYLLIUM DISEASE
Chronic beryllium disease (CBD) primarily affects the lungs. CBD

may occur
among people who are exposed to the dust or fumes from beryllium
metal,
metal oxides, alloys, ceramics or salts. It occurs when people
inhale
beryllium in these forms. CBD usually has a very slow onset, and
even very
small amounts of exposure to beryllium can cause the disease in
some people.
In some cases, CBD develops while workers are still on the job,
but in others
it may not develop until many years after a person has stopped
working in the
beryllium industry, or has been transferred to a job that does
not involve
beryllium exposure. The amount or length of exposure to beryllium
necessary
to cause a specific individual to develop CBD is not known, but
recent
information suggests that exposure below OSHA's 2 micrograms/m3
TWA
PEL over a very short time (weeks or months) can lead to CBD in
some
workers.
Signs and Symptoms of Chronic Beryllium Disease
Workers with advanced CBD may have one or more of the following
symptoms: unexplained cough; shortness of breath, especially with
activity;
fatigue; weight loss or loss of appetite; fever; or night sweats.
However,
because the disease may develop slowly over a period of many
years,
workers may have the disease for a long time without knowing it.
BERYLLIUM SENSITIZATION
CBD only develops in workers who have become sensitized to

beryllium. A
sensitized worker is one who has developed an allergic reaction
to beryllium.
A worker may become sensitized at any point during job exposure,
or in some
cases may not become sensitized until after leaving a job where
there has been
beryllium exposure. Beryllium sensitization can be detected
through the use of
a blood test called the BeLPT, which stands for beryllium
lymphocyte
proliferation test. This test measures how specific white blood
cells called
lymphocytes react to beryllium. A positive test result means that
a worker is
sensitized.
ACUTE BERYLLIUM DISEASE
Acute beryllium disease usually has a quick onset and has

symptoms that
resemble those of pneumonia or bronchitis. The acute form of the
disease is
believed to occur as a result of exposures well above the current
PEL. This
form of beryllium disease is now rare.
CANCER
Studies of workers exposed to beryllium have demonstrated

significantly
elevated risks of lung cancer. The International Agency for
Research on
Cancer (IARC), the expert cancer agency of the World Health
Organization,
has concluded that exposure to beryllium can cause lung cancer in
humans.
SKIN DISEASE
A skin disease, which is characterized by poor wound healing and

a rash or
wart-like bumps, can occur as a result of the skin being exposed
to beryllium
dust.
RECOMMENDATIONS
OSHA recommends the following measures to reduce exposure to

beryllium in
the workplace and to determine whether workers have beryllium
sensitization
or CBD.
1. ENGINEERING CONTROLS
Employers should use appropriate engineering controls and work

practices to
ensure that worker exposures to beryllium are maintained below
the current
OSHA PELs to the extent feasible. The following engineering
controls and
practices should be used by employers:
* enclose processes;
* design and install appropriate local exhaust ventilation;
* use vacuum systems in machining operations;
* use pellets instead of powders wherever possible;
* use product substitution where possible;
* minimize the number of workers who have access to areas where

there
is a potential for beryllium exposure;
* monitor employee exposures to airborne beryllium dust and

fume, using
personal sampling techniques, on a regular basis to ensure
that
exposures are below the PELs and that proper respiratory
protection is
being used where necessary.
2. WORK PRACTICES TO REDUCE BERYLLIUM EXPOSURE
Employers should ensure that employees use the following safe

practices to
reduce their exposure to beryllium:
* use high-efficiency particulate air (HEPA) vacuums to clean

equipment
and the floor around their work areas;
* do not leave a film of dust on the floor after the water dries
if a
wet mop is used to clean;
* do not use long vacuum hoses and do not loop the hoses that
are used;
* do not disconnect or disable the vacuum system during any

machining
operation;
* never use compressed air to clean parts or working surfaces;
* avoid prolonged skin contact with beryllium particulate; and
* do not allow workers to eat, drink, smoke, or apply cosmetics

at their
work stations.
3. HYGIENE AND PERSONAL PROTECTIVE CLOTHING
OSHA is aware of CBD cases that have occurred among family

members of
beryllium-exposed workers. To reduce "carry-home" exposures,
employers
should provide showers, clean work clothes, and clean areas for
storing street
clothes. Protective clothing should be provided to employees who
work in
areas where beryllium-containing powders are used and where there
is a
potential for spills. In addition, employers should ensure that
employees:
* change into work uniforms before entering their work area;
* place their uniforms in a labeled bin with a cover at the end

of the work
shift;
* shower and change into street clothes prior to leaving the

facility;
* wash their face, hands, and forearms before eating, smoking,

or applying
cosmetics;
* keep their work clothes as clean as possible during the

workshift;
wipe off their shoes before leaving the work area; and
* do not wear their work uniform (including their work shoes)
outside of
the facility.
4. RESPIRATORY PROTECTION
Recent data suggest that exposures to beryllium even at levels

below the 2
micrograms/m3 PEL may have caused CBD in some workers. Therefore,
employers should consider providing their beryllium-exposed
workers with
air-purifying respirators equipped with 100-series filters
(either N-, P-, or
R-type) or, where appropriate, powered air-purifying respirators
equipped
with HEPA filters, particularly in areas where material
containing beryllium
can become airborne.
5. TRAINING
Employers should give employees exposed to beryllium training and

information about the following items:
* material safety data sheets (MSDSs) for beryllium;
* the fatal lung disease that may occur as a result of exposure;
* the availability of the BeLPT blood test to determine whether

an
exposed worker has become sensitized to beryllium;
* the potential for developing lung cancer as a result of

exposure;
* the importance of avoiding skin contact;
* the engineering controls the employer is using to reduce

worker
exposures to beryllium;
* specific work practices that can be used to reduce exposure to

beryllium;
* the use of appropriate protective equipment, including the use

of
respirators;
* the results of any industrial hygiene sampling for levels of

beryllium in
the workplace; and
* a copy of this Hazard Information Bulletin.
6. HEALTH SCREENING METHODS FOR BERYLLIUM

SENSITIZATION AND CHRONIC BERYLLIUM DISEASE
To the Employer:
Employers should consider sending beryllium-exposed employees to

a
physician or other licensed health care professional to be
evaluated for
beryllium sensitization or the presence of CBD. The screening
examination for
CBD usually begins with a chest x-ray and a blood test for
beryllium
sensitization, namely, the BeLPT, plus any further evaluation
considered
appropriate by the health care professional. The blood test can
detect an
adverse health response to beryllium exposure earlier than
breathing tests or
chest x-rays can. The BeLPT is not routinely done in most medical
laboratories; however, the health care professional may order
this test from
any laboratory that has overnight courier service to one of the
Medical
Research Centers listed below. If a worker is sent to a health
care
professional for health screening, a copy of this Hazard
Information Bulletin
should accompany the employee.
To the Employee:
If you work in a place where beryllium is used and have developed

any of the
symptoms listed below, you should inform your health care
professional of
your past beryllium exposure, or seek information from a health
care
professional who specializes in occupational lung diseases to
determine
whether you may have developed CBD:
* unexplained cough,
* shortness of breath,
* fatigue,
* weight loss or loss of appetite,
* fevers, and/or
* skin rash.
If you do not have any of the above symptoms but are concerned
that you may
have become sensitized to beryllium, you should inform your
health care
professional that you would like to be tested with the blood
BeLPT. Take a
copy of this Hazard Information Bulletin with you.
BLOOD TESTING FOR BERYLLIUM SENSITIZATION
Only the three medical research centers and the one laboratory
listed below
currently offer the blood test to identify beryllium-sensitized
workers as
indicated by a positive blood BeLPT. As other research centers
and
laboratories develop the capacity to screen workers for beryllium
sensitization, they will be added to the list.
Medical Research Centers
Cleveland Clinic Foundation

9500 Euclid Avenue, L-15
Cleveland, Ohio 44195
phone: (800) 628-6816
Division of Environmental and Occupational Health Sciences

National Jewish Medical and Research Center
Denver, Colorado 80206
phone: (303) 398-1722
Pulmonary Immunology Laboratory

Hospital of the University of Pennsylvania
421 Curie Blvd.
844 BRB II/III
Phliadelphia, Pennsylvania 19104
phone: (215) 573-9875
Testing Laboratory
Specialty Laboratories, Inc.

2211 Michigan Avenue
Santa Monica, California 90404-3900
phone: (800) 421-4449
http://www.osha.gov
http://www.dol.gov
Occupational Safety & Health Administration

200 Constitution Avenue, NW
USA
http://www.ariplex.com/ama/amaberyl.htm
Nuremberg Code
http://en.wikipedia.org/wiki/Nuremberg_Code
The Nuremberg Code is a set of research ethics principles for human experimentation
set as a result of the Subsequent Nuremberg Trials at the end of the Second World War.
Specifically, they were in response to the inhumane Nazi human experimentation carried
out during the war by individuals such as Dr. Josef Mengele.
Background
In August 1947, the judges delivered their verdict in the "Doctors' Trial" against Karl
Brandt and several others. They also delivered their opinion on medical experimentation
on human beings. Several of the accused had argued that their experiments differed little
from pre-war ones and that there was no law that differentiated between legal and illegal
experiments.
In April of the same year, Dr. Leo Alexander had submitted to the Counsel for War
Crimes six points defining legitimate medical research. The trial verdict adopted these
points and added an extra four. The ten points constituted the "Nuremberg Code".
Although the legal force of the document was not established and it was not incorporated
directly into either the American or German law, the Nuremberg Code and the related
Declaration of Helsinki are the basis for the Code of Federal Regulations Title 45
Volume 46[1], which are the regulations issued by the United States Department of
Health and Human Services governing federally funded research in the United States. In
addition, the Nuremberg code has also been incorporated into the law of individual states
such as California, and other countries[citation needed].
The Nuremberg code includes such principles as informed consent and absence of
coercion; properly formulated scientific experimentation; and beneficence towards
experiment participants.
[edit] The ten points of the Nuremberg Code

The ten points are, (all from United States National Institues of Health) [1]
1. The voluntary consent of the human subject is absolutely essential. This means that the
person involved should have legal capacity to give consent; should be so situated as to be
able to exercise free power of choice, without the intervention of any element of force,
fraud, deceit, duress, over-reaching, or other ulterior form of constraint or coercion; and
should have sufficient knowledge and comprehension of the elements of the subject
matter involved as to enable him to make an understanding and enlightened decision.
This latter element requires that before the acceptance of an affirmative decision by the
experimental subject there should be made known to him the nature, duration, and
purpose of the experiment; the method and means by which it is to be conducted; all
inconveniences and hazards reasonable to be expected; and the effects upon his health or
person which may possibly come from his participation in the experiment.
The duty and responsibility for ascertaining the quality of the consent rests upon each
individual who initiates, directs or engages in the experiment. It is a personal duty and
responsibility which may not be delegated to another with impunity.
2. The experiment should be such as to yield fruitful results for the good of society,
unprocurable by other methods or means of study, and not random and unnecessary in
nature.
3. The experiment should be so designed and based on the results of animal

experimentation and a knowledge of the natural history of the disease or other problem
under study that the anticipated results will justify the performance of the experiment.
4. The experiment should be so conducted as to avoid all unnecessary physical and

mental suffering and injury.
5. No experiment should be conducted where there is an a priori reason to believe that

death or disabling injury will occur; except, perhaps, in those experiments where the
experimental physicians also serve as subjects.
6. The degree of risk to be taken should never exceed that determined by the
humanitarian importance of the problem to be solved by the experiment.
7. Proper preparations should be made and adequate facilities provided to protect the
experimental subject against even remote possibilities of injury, disability, or death.
8. The experiment should be conducted only by scientifically qualified persons. The

highest degree of skill and care should be required through all stages of the experiment of
those who conduct or engage in the experiment.
9. During the course of the experiment the human subject should be at liberty to bring the
experiment to an end if he has reached the physical or mental state where continuation of
the experiment seems to him to be impossible.
10. During the course of the experiment the scientist in charge must be prepared to
terminate the experiment at any stage, if he has probable cause to believe, in the exercise
of the good faith, superior skill and careful judgment required of him that a continuation
of the experiment is likely to result in injury, disability, or death to the experimental
subject.
Reprinted from Trials of War Criminals before the Nuremberg Military Tribunals under
Control Council Law No. 10, Vol. 2, pp. 181-182. Washington, D.C.: U.S. Government
Printing Office, 1949.
[edit] See also

• Civil rights
• Declaration of Geneva
• Declaration of Helsinki
• Good clinical practice (GCP)
• Green report
• Human rights
• Medical ethics
• Medical torture
• Hippocratic Oath
• Nuremberg Principles
• Universal Declaration of Human Rights
• World Medical Association (WMA)
[edit] References
1. ^ U.S. National Institutes of Health, Office of Human Subjects Research. "Nuremberg
Code". Retrieved on August 27, 2008.
[edit] Further reading

• Weindling, Paul: Nazi Medicine and the Nuremberg Trials (Palgrave, Basingstoke
2004)
• Schmidt, Ulf: Justice at Nuremberg. Leo Alexander and the Nazi Doctors' Trial
(Palgrave, Basingstoke 2004)
• Schmidt, Ulf: Karl Brandt. The Nazi Doctor. Medicine and Power in the Third
Reich (Continuum, London, 2007)
• Weindling, Paul (Spring 2001). "The Origins of Informed Consent: The

International Scientific Commission on Medical War Crimes, and the Nuremberg
Code". Bulletin of the History of Medicine 75 (1): 37–71.
doi:10.1353/bhm.2001.0049.
• Marrus, Michael R. (Spring 1999). "The Nuremberg Doctors' Trial in Historical
Context". Bulletin of the History of Medicine 73 (1): 106–123.
doi:10.1353/bhm.1999.0037.
• BRITISH MEDICAL JOURNAL No 7070 Volume 313: Page 1448,7 December
1996.
• The Nuremberg Code (1947) In: Mitscherlich A, Mielke F. Doctors of infamy: the
story of the Nazi medical crimes. New York: Schuman, 1949: xxiii-xxv.
COMPETITION COMMITTEE
ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS

IN THE UNITED STATES
OCTOBER 2002-SEPTEMBER 2003

ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN THE UNITED STATES – OCTOBER 2002-
SEPTEMBER 2003
Introduction
I. Changes in law or policies

A. Changes In Antitrust Rules, Policies, or Guidelines
B. Proposals to Change Antitrust Laws, Related Legislation or Policies
C. International Antitrust Cooperation Developments
II. Enforcement of antitrust laws and policies: actions against anticompetitive practices
A. Department of Justice and FTC Statistics
1) DOJ Staffing and Enforcement Statistics
2) FTC Staffing and Enforcement Statistics
B. Antitrust Cases in the Courts
1) United States Supreme Court
2) U.S. Court of Appeals Cases
a. Significant DOJ Cases Decided in FY2003
3) Private Cases Having International Implications
C. Statistics on Private and Government Cases Filed
D. Significant DOJ and FTC Enforcement Actions
1) DOJ Criminal Enforcement
2) DOJ Civil Non-Merger Enforcement
3) FTC Non-Merger Enforcement Actions
E. Business Reviews Conducted by the Department of Justice
F. Advisory Letters from the Commission
III. Enforcement of antitrust laws and policies: mergers and concentrations

A. Enforcement of Premerger Notification Rules
B. Significant Merger Cases
1) DOJ Merger Challenges or Cases
2) FTC Merger Challenges or Cases
a. Preliminary Injunctions Authorised
b. Commission Administrative Decisions
IV. Regulatory and trade policy matters

A. Regulatory Policies
1) DOJ Activities: Federal and State Regulatory Matters
2) FTC Staff Activities: Federal and State Regulatory Matters
B. DOJ and FTC Trade Policy Activities
V. New Studies related to antitrust policy

A. Antitrust Division Economic Analysis Group Discussion Papers
B. Commission Studies and Reports, and Economic Working Papers
1) Commission Studies and Reports
a. Workshops
b. Studies and Reports
2) Economic Working Papers
Appendices
Department of Justice: Fiscal Year 2003 FTE and Actual Amount by Enforcement Activity
Federal Trade Commission: Fiscal Year 2003 Competition Mission FTE and
Dollars by Program by Bureau/Office
2
ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN THE UNITED STATES– OCTOBER 2002-
SEPTEMBER 2003
Introduction
1. This report describes federal antitrust developments in the United States for the period October 1,
2002, through September 30, 2003 (“FY 2003”). It summarises the activities of both the Antitrust Division
(“Division”) of the U.S. Department of Justice (“Department” or “DOJ”) and the Bureaus of Competition
and Economics of the Federal Trade Commission (“Commission” or “FTC”).
2. Following the departure of Assistant Attorney General Charles James on November 22, 2002,
Deputy AAG R. Hewitt Pate served as Acting AAG until his confirmation as AAG on June 16, 2003.
David S. Sibley began serving as the DAAG for Economic Analysis on May 6, 2003, and J. Bruce
McDonald started as DAAG for Regulatory Matters on June 29, 2003. Makan Delrahim became DAAG
for international, policy, and appellate matters on July 27, 2003.
3. In August 1, 2003, Susan Creighton assumed the position of Director of the FTC’s Bureau of
Competition, following the resignation of Joseph Simons. On the same day, Luke Froeb replaced David
Scheffman as the Director of the Bureau of Economics at the Commission.
I. Changes in law or policies
A. Changes in Antitrust Rules, Policies or Guidelines
4. Premerger Notification: As part of an overall movement to make government more accessible

electronically, the FTC, working with DOJ, has accelerated efforts to complete an electronic system for
filing Hart-Scott-Rodino (HSR) premerger notifications. Providing an e-filing option will reduce burdens
for both business and the government. The FTC also made available to the public a searchable database of
thousands of letters memorialising advice from staff in responding to inquiries about interpretations of
HSR rules.
5. Guidelines and Statements for Merger Investigations: In December 2002, following a series of
workshops on possible improvements to the merger investigation process nationwide, the Commission
announced a new set of Guidelines for Merger Investigations, which incorporate the learning from these
workshops. The new measures include a host of reforms including: prompt release of investigational
hearing transcripts to testifying witnesses; simplification of Second Requests responses; increased
transparency regarding the standards used in evaluating Second Request compliance; and facilitation of the
submission of electronic materials. The Guidelines are available at:
http://www.ftc.gov/os/2002/12/bcguidelines021211.htm. The Commission also released a statement on
best practices for empirical analyses, encouraging practices that facilitate effective incorporation of
merger-related empirical analyses, while reducing the burden on parties in complying with data requests.
Among other reforms, the staff is also completing work on a Model Second Request, including industry-
specific variations.
6. Transparency of Decision-Making: The Commission has sought new ways to expand public
awareness and understanding of its merger assessment beyond adjudicative opinions, press releases, and
analyses to aid public comment on consent agreements traditionally employed. In particular, the FTC has
provided more insight into Commission decisions not to intervene by issuing statements in matters in
which the agency conducted a significant inquiry but brought no enforcement action.
7. On December 12, 2003, the Antitrust Division announced that it would on appropriate occasions
issue a public statement describing the reasons for closing an antitrust investigation. Considerations
3
SEPTEMBER 2003
underlying the new policy include the Division's belief that public dissemination of both enforcement and
non-enforcement rationales benefits businesses attempting to comply with complex antitrust standards and
consumers through a better understanding of the antitrust laws. In addition, transparency of analysis
encourages international convergence and helps to prevent non-competition issues from influencing
antitrust enforcement.
8. Use of Monetary Equitable Remedies: On July 31, 2003, the Commission issued a policy
statement on the use of monetary equitable remedies such as disgorgement and restitution in competition
cases, specifically, those involving violations of the HSR Premerger Notification Act, the FTC Act, and the
Clayton Act. While the decision to seek such remedies will be determined on a case-by-case basis, the
Commission stated that disgorgement and restitution can play a useful role in some competition cases. In
determining whether to seek disgorgement or restitution, three factors will be considered. First, the
Commission will ordinarily seek monetary relief only where the underlying violation is clear. Second,
there must be a reasonable basis for calculating the amount of remedial payment. Third, the FTC will
consider the value of seeking monetary relief in light of other remedies available in the matter, including
private actions and criminal proceedings. In general, however, the policy statement explained that the FTC
will continue to rely primarily on more familiar, prospective remedies, and seek disgorgement and
restitution in exceptional cases.
9. Increase in Administrative Litigation: The FTC had more competition cases in administrative
adjudication than at any time in recent history. Cases on the docket in FY 2003 involved, among other
issues, price fixing in physician services, collective rate setting in the household moving industry and the
role of the State Action defence, and consummated mergers involving hospitals and high-tech markets.
B. Proposals to Change Antitrust Laws, Related Legislation or Policies
10. In October 2003, the DOJ and FTC concluded more than 25 days of public hearings that began in
February covering competition issues related to the health care industry, including health insurances,
hospitals, and other health care providers. The Agencies used the hearings and the preparation of a report
to enhance their understanding in this area and to promote learning among the various participants in the
healthcare field. The Agencies expect to issue the report in 2004.
11. Clarifying the State Action Doctrine: After a two year study, the Commission released a staff
report on the reach and applicability of the State Action doctrine, which had been first articulated by the
Supreme Court 60 years earlier. The doctrine states that certain regulatory conduct is shielded from federal
antitrust enforcement, provided that the conduct is in furtherance of a clearly articulated state policy and is
actively supervised by the state. The report concluded that many courts have applied the doctrine too
broadly and recommended several approaches the agency should take. The staff report concluded that
courts have interpreted the “clear articulation” requirement too broadly, often focusing on the
“foreseeability” test to find a general grant of authority to a local government entity to act in a specific
area, while overlooking the substance of the state’s policy choice. The report recommended a return to the
principle that the authorising statute must evince also an intent to displace competition with respect to the
particular conduct at issue. The report noted that more guidance is needed on the “active supervision”
prong of the doctrine and advocates use of the three-part test used in a recent FTC case: (1) obtain
information sufficient to determine the actual character of the private conduct at issue, (2) measure that
conduct against the legislature’s stated policy criteria, and (3) come to a clear decision that the private
conduct satisfies that criteria, so as to make the final decision that of the State itself. Finally, the report
urged that courts consider “spillover” effects on citizens of other states in determining whether the State
Action doctrine protects the alleged conduct, and that courts should impose an active supervision
requirement on municipalities that participate in the marketplace in competition with private firms. In
addition to these recommendations, the agency also is pursuing enforcement matters to clarify the State
4
SEPTEMBER 2003
Action defence. Recent matters include administrative litigation against an intrastate mover association
and the South Carolina Board of Dentistry.
C. International Antitrust Cooperation Developments
12. The International Competition Network (ICN) was launched in October 2001 as a network for
antitrust officials from around the world to address proposals for procedural and substantive convergence
in antitrust enforcement. In its third year, the ICN has grown from 15 founding members to include over
80 antitrust agencies in over 70 jurisdictions and has experienced increased participation from both
international organisations, such as the OECD, and non-governmental advisors, including academics,
industry groups, legal practitioners and consumer groups. Since the first conference, ICN working groups
focused on substantive and procedural issues in multi-jurisdictional merger review, competition advocacy,
and capacity building. The Merger Review Working Group pursued ways of making merger review more
efficient and effective by reducing unnecessary delay and burdens. The DOJ is chair of the Group, which
has subgroups focusing on three areas: notification and procedures, chaired by the FTC; the analytical
framework for merger review; and investigative techniques. The Notifications and Procedures subgroup
produced, and ICN members adopted, seven detailed Recommended Practices for merger notification
procedures, including issues of jurisdiction, transparency, timing, and the scope of merger notifications.
The Investigative Techniques subgroup held a two-day conference, hosted by the U.S., on merger
investigative techniques.
13. The ICN’s Advocacy Working Group explored the role of agency advocacy in promoting a
culture of competition, especially in interaction with other government entities, and developed an online
information and resources centre, prepared a compilation of advocacy provisions, conducted sectoral
studies of advocacy, and assembled a “tool kit” of competition advocacy mechanisms. Its work continues
in the Capacity Building and Competition Policy Implementation Working Group. The Capacity Building
Group prepared a report on the challenges developing countries face in implementing competition policies;
one of its subgroups, co-chaired by the FTC, is conducting a study on the types of technical assistance that
work best. At its June 2003 conference, the ICN created a new working group to explore antitrust
enforcement in regulatory sectors and agreed to pursue work related to hard core cartels.
14. On October 30, 2002, AAG James, Chairman Muris, and Commissioner Monti of the European
Commission released a set of “best practices” for coordinating merger reviews. The best practices were
developed by a working group of staff lawyers and economists from the three agencies. The objectives of
the best practices are to enhance cooperation between the U.S. antitrust agencies and the European
Commission in merger review, minimise the risk of divergent outcomes and reduce burdens on parties
participating in merger investigations. The best practices recommend that investigative staffs establish
schedules for conferring with each other and encourage senior antitrust officials in the U.S. and EU to
engage in discussions at key stages of one another’s investigations. They also offer merging parties a
meeting at an early point in each review to discuss timing issues. In addition, the best practices encourage
joint interviews of parties and third-parties, where appropriate, and provide for increased coordination with
respect to remedies.
5
SEPTEMBER 2003
II. Enforcement of antitrust laws and policies: actions against anticompetitive practices
A. Department of Justice and FTC Statistics
1) DOJ Staffing and Enforcement Statistics
15. At the end of FY 2003, the Division employed 797 individuals: 357 attorneys, 58 economists,
162 paralegals, and 220 other professional staff. For FY 2003, the Division received an appropriation of
$133.3 million.
16. During FY 2003, the Division opened 282 investigations and filed 55 civil and criminal cases in
federal district court. The Division was party to three antitrust cases decided by the federal courts of
appeals.
17. During FY 2003, the Division filed 41 criminal cases in which it charged 16 corporations and 28
individuals. Seventeen corporate defendants and sixteen individuals were assessed fines totalling $64.2
million and 15 individuals were sentenced to a total of 9,341 days of incarceration. Another six individuals
were sentenced to spend a total of 1,025 days in some form of alternative confinement.
18. During FY 2003, 1,014 proposed mergers and acquisitions were reported for review under the
HSR Act. In addition, the Division screened a total of 994 bank mergers. The Division further
investigated 95 mergers and challenged 9 of them in court. An additional six transactions were
restructured or abandoned prior to the filing of a complaint as a result of the Division’s announcement that
it would otherwise challenge the transaction. The Division opened 128 civil investigations (merger and
non-merger), and issued 631 civil investigative demands (a form of compulsory process). The Division
filed five non-merger civil complaints. Also during FY 2003, the Division responded to twelve requests
for review of written business proposals.
2) FTC Staffing and Enforcement Statistics
19. At the end of FY 2003, the FTC’s Bureau of Competition had 269 employees: 186 attorneys, 36
other professionals, 25 paralegals and 22 clerical staff. The FTC also employed about 58 economists who
participate in its antitrust enforcement activities. In FY 2003, $45,333,900 was directly allocated to the
Commission’s competition mission, and an overall $75,998,300, which includes indirect support for the
mission, was attributed to the mission.
20. During FY 2003, the Commission brought a total of 44 competition enforcement actions. The
Commission staff opened 209 initial phase investigations under the mergers and joint ventures program
and issued requests for additional information (“second requests”) in 15 transactions. In the “merger”
context, the Commission challenged 11 transactions. Three preliminary injunctions were authorised; 7
consent orders were accepted; 1 Part III (administrative adjudication) complaint was issued; 5 transactions
were abandoned after the issuance of the second request and 5 abandoned during the course of the
investigation.
21. In the non-merger area, the Commission brought 23 enforcement actions challenging a variety of
anticompetitive conduct. Six were tentatively resolved by consent agreements, five of which were pending
at the end of FY 2003. There were seven administrative complaints issued during the fiscal year, 11 trials
are pending at the end of FY 2003.
6
SEPTEMBER 2003
B. Antitrust Cases in the Courts
1) United States Supreme Court
22. The United States Supreme Court did not decide any antitrust cases in FY 2003. The Court
granted the petition for certiorari in an antitrust case, not involving the Antitrust Division or the
Commission, brought against an agency or instrumentality of the United States (United States Postal
Service v. Flamingo Industries (U.S.A.) LTD., 123 S. Ct. 2215 (2003)). On February 25, 2004, the
Supreme Court held that the United States Postal Service was not a “person” separate from the United
States itself, and since the United States is not a “person” subject to liability under the Sherman Act,
neither is the United States Postal Service. 2004 WL 344016. The Court also granted the petition for
certiorari in a case where the United States submitted a brief amicus curiae urging the Court to do so
(Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, 123 S. Ct. 1480 (2003)). On January
13, 2004, the Supreme Court ruled in favour of Verizon, concluding that the 1996 Telecommunications
Act did not create a duty to deal with rivals enforceable under Section 2 of the Sherman Act, and that the
plaintiff had failed to adequately allege the anticompetitive conduct element of a Section 2 offence. 2004
WL 51011. The government was not a party to this private case, but the United States and the FTC filed as
amici curiae, advocating the result the Court reached.
23. The Court denied a petition for certiorari in a case where the United States submitted a brief
amicus curiae opposing review (Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd., 123 S. Ct. 2638 (2003)).
(The court of appeals decision in Dee-K was discussed in the FY02 annual report.)
2) U.S. Court of Appeals Cases
a. Significant DOJ Cases Decided in FY 2003
24. There were four dispositions by U.S. courts of appeals in Antitrust Division cases in FY 2003,
two civil and two criminal. In one of the civil cases, the court of appeals affirmed a district court judgment
that MasterCard International, Inc., Visa U.S.A., Inc., and Visa International, Inc., violated Section 1 of the
Sherman Antitrust Act by reason of their exclusivity rules (United States v. Visa U.S.A., Inc., 344 F.3d 229
(2d Cir. 2003)). In the other, the court affirmed a district court grant of summary judgment for the
defendant in a case alleging monopolisation and attempted monopolisation by American Airlines at its
Dallas, Texas hub; the court concluded that the government’s evidence failed to establish liability under
the government’s legal theories (United States v. AMR Corp., 335 F.3d 1109 (10th Cir. 2003)). In one of
the criminal cases, the court of appeals affirmed convictions for bid-rigging in the meat products industry
(United States v. David Solomon, 2002-2 Trade Cas. (CCH) ¶ 73,892 (2d Cir. 2002)). In the other,
involving bid-rigging on Egyptian construction contracts financed by the U.S. Agency for International
Development, the court of appeals affirmed convictions as to liability but remanded on sentencing issues
(United States v. Anderson, 326 F.3d 1319 (11th Cir. 2003)).
25. There was a final decision in a federal antitrust case in which the United States participated as
amicus curiae. In In re Stock Exchanges Options Antitrust Litigation, 317 F.3d 134 (2d Cir. 2003), the
court affirmed summary judgment for the defendants in a case in which plaintiffs alleged that aspects of
conduct related to the listing and trading of equity options violated the antitrust laws. The court ruled that
the securities regulation statute effected an implied repeal of the antitrust laws with respect to this conduct.
The United States had filed an amicus brief taking the contrary position. The United States also filed an
amicus brief supporting plaintiffs’ petition for rehearing en banc, which the court denied.
7
SEPTEMBER 2003
3) Private Cases Having International Implications in FY 2003
26. Empagran S.A. v. F. Hoffman-LaRoche, Ltd., 315 F.3d 338 (D.C. Cir. 2003), is the latest Court of
Appeals decision addressing, under the Foreign Trade Antitrust Improvement Act of 1982 (FTAIA), 15
U.S.C. § 6a, the extent to which foreign plaintiffs may bring suit under the Sherman Act for injuries
suffered when they purchased fixed-price goods abroad, where the cartel as a whole had a "direct,
substantial, and reasonably foreseeable effect" on United States commerce, but the foreign plaintiffs'
claims do not arise from those domestic effects. A three-judge panel held that there was jurisdiction under
the FTAIA, taking a position it described as somewhere between the positions previously taken by the
Fifth Circuit in Den Norske Stats Oljeselskap As v. HeereMac v.o.f., 241 F.3d 420 (5th Cir. 2001), and the
Second Circuit in Kruman v. Christie’s Int’l PLC, 284 F.3d 384 (2d Cir. 2002). In response to a request
from the court, the United States recommended that the full court of appeals rehear the case, but the court
declined to do so. In early FY04, the Supreme Court granted a petition for certiorari, and the United
States has filed an amicus brief in the matter arguing that the case was wrongly decided by the court of
appeals.
27. In United Phosphorus, Ltd. v. Argus Chemical Co., 322 F.3d 942 (7th Cir. 2003) (en banc), the
court held that the requirements of the FTAIA involve the subject matter jurisdiction of the court (the
alternative possibility being that the FTAIA states an additional element of a Sherman Act claim). Thus,
satisfaction of the FTAIA requirements can be tested early in litigation, on a motion to dismiss for lack of
subject matter jurisdiction.
28. In Metallgesellschaft AG v. Sumitomo Corp. of America, 325 F.3d 836 (7th Cir. 2003), the court
considered the same FTAIA issue but concluded that there was no need to decide it in the case, because the
plaintiffs had adequately alleged injury resulting from transactions that took place within the United States.
C. Statistics on Private Cases Filed
29. According to the annual report of the Director of the Administrative Office of the U.S. Courts,
805 new civil and criminal antitrust actions, both government and private, were filed in the federal district
courts in FY 2003. (We do not have data on private cases filed in state courts.)
D. Significant DOJ and FTC Enforcement Actions
1) DOJ Criminal Enforcement
30. Electrical Carbon Products: On November 4, 2002, Morganite, Inc., a U.S. company, agreed to
plead guilty and pay a $10 million criminal fine for participating in an international cartel to fix the price of
various types of electrical carbon products sold in the United States and elsewhere. These products
included carbon brushes used to transfer electrical current in direct current motors, which are used in a
variety of products including automobiles, battery electric vehicles, and public transit vehicles, and carbon
collectors, which are used to transfer electrical current from wires or rails for use in vehicles that are not
independently powered. At the same time, Morganite’s UK parent corporation, the Morgan Crucible
Company plc, agreed to plead guilty and to pay a $1 million fine for attempting to obstruct the
investigation of the price-fixing conspiracy.
31. On September 24, 2003, the DOJ announced that charges had been filed against Robin Emerson,
a former Marketing Coordinator for Morgan, Jacobus Kroef, former Chairman of Morgan's Industrial and
Traction Division, and F. Scott Brown, former Global President and Board Member of Morgan Advanced
Materials & Technology. Emerson, a UK citizen and resident, was indicted for conspiracy to obstruct
justice and obstruction of justice, and subsequently pled guilty to the obstruction of justice charge and was
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sentenced to serve five months in prison in the United States and to pay a $20,000 fine. Kroef was charged
with obstruction of justice via witness tampering; Kroef, a Dutch national, pled guilty and was sentenced to
serve a four-month jail sentence in the United States and to pay a $20,000 fine. Brown was charged with
aiding and abetting obstruction of justice related to document destruction; Brown pled guilty and was
sentenced to serve a six-month jail sentence and pay a $20,000 fine. Ian Norris, a former Chief Executive
Officer of Morgan and a UK resident and citizen, was also charged with conspiracy to obstruct justice and
to corruptly persuade others to destroy or conceal documents, and with witness tampering; in a superseding
indictment of October 15 he was charged in addition with participating in an international conspiracy to fix
the price of certain electrical and mechanical carbon products.
32. The indictments charge that the co-conspirators created a task force to search through Morgan's
files and to remove and conceal or destroy any documents or records that they found in the files that
reflected the pricing agreement Morgan had with its competitors. According to the charges, Norris and
Emerson, along with their co-conspirators, also prepared a “script” for the co-conspirators to follow in the
event they were questioned during the course of the investigation. According to the indictments, the
“script” falsely characterised the price-fixing meetings as joint venture meetings and deliberately omitted
any references to the pricing discussions held with competitors. The indictments charge that the “script”
was given to competitors who participated in the price-fixing agreement with instructions that they follow
the script to try to convince the Antitrust Division to close its investigation and to prevent the investigation
in the U.S. from spreading to the European antitrust authorities.
33. MCAA: On February 6, 2003, Hoechst Aktiengesellschaft, an international chemical

conglomerate based in Germany, agreed to plead guilty and pay a $12 million fine for its participation in a
conspiracy that suppressed competition in the world markets for monochloroacetic acid (MCAA). This
fine represented a substantial upward departure from the fine calculated under the Sentencing Guidelines
because of Hoechst’s prior price-fixing convictions in the 1990s. MCAA is an industrial chemical used in
the production of commercial and consumer products, including pharmaceuticals, herbicides, and plastic
additives, with annual U.S. sales of approximately $50 million. Hoechst was the third company to plead
guilty to participating in this conspiracy. In June 2001, Akzo Nobel Chemicals BV pleaded guilty and was
sentenced to pay a $12 million fine for its involvement in this conspiracy. In March 2002, Elf Atochem of
France pleaded guilty to participating in the conspiracy and was fined $5 million.
34. MIO: On January 30, 2003, Ishihara Sangyo Kaisha Ltd. (ISK Japan) of Japan pleaded guilty
and was sentenced to pay a $5 million fine for its role in a conspiracy to fix the prices of and to allocate
customers for the sale of video magnetic iron oxide (MIO) particles in the United States and elsewhere.
Video MIO particles are used in the manufacture of polyester film-based video tapes to give the tapes
magnetic quality to pick up sound and images.
35. Methyl Glucamine: On September 18, 2003, Phône-Poulenc Biochimie S.A., a subsidiary of the
French-based pharmaceutical company, Aventis S.A., agreed to plead guilty and pay a $5 million fine for
participating in a conspiracy to fix prices and allocate customers for pharmaceutical grade methyl
glucamine sold in the United States and elsewhere. Methyl glucamine is a chemical used to slow the rate
at which dyes disperse throughout the body during x-rays and other medical imaging procedures. Eric
Descourauz, Phône-Poulenc’s former sales and marketing director for active pharmaceutical ingredients,
was also indicted for his role in the conspiracy.
36. Polyester Staple: On October 31, Arteva Specialties, S.a.r.l., d/b/a KoSa, a Luxembourg-based
manufacturer of polyester staple, and its former U.S. director of textile staples, Troy F. Stanley, Sr., agreed
to plead guilty to participating in a conspiracy to fix prices and allocate customers in order to suppress and
eliminate competition in North American polyester staple industry from at least September 1999 through
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January 2001. Polyester staple is a petroleum-derived fiber used to make products such as clothing, table
linens, and upholsteries. KoSa agreed to pay a $28.5 million criminal fine, while Stanley agreed to pay a
$20,000 fine, and to serve eight months jail time. The cases of KoSa and Stanley were the second and
third to be brought in the polyester staples industry.
37. Tankers: On September 30, 2003, Norwegian-based Odfjell Seachem AS and its executives,
Bjorn Sjaastad, CEO of its parent, Odfjell ASA, and Erik Nilsen, Vice President, both Norwegian citizens,
agreed to plead guilty to participating in an international cartel to allocate customers, rig bids and fix prices
on parcel tanker affreightment contracts for the shipment of specialty liquids to and from the United States
and elsewhere. Parcel tanker shipping is the ocean transportation of bulk chemicals, edible oils, acids and
other specialty liquids. Parcel tankers are deep sea vessels equipped with compartments designed to carry
shipments of various sizes. A contract of affreightment is a contract between a customer and a parcel
tankers shipping company for the transportation of bulk liquids from one port to another. The company,
Odfjell Seachem, agreed to pay a $42.5 million fine for its role in the cartel. Sjaastad agreed to pay a
$250,000 fine and to serve four months in prison, and Nilsen agreed to pay a fine of $25,000 and to serve
three months in prison. Odfjell Seachem is one of the largest parcel tanker shippers in the world.
Moreover, on December 8, 2003, Hendrikus van Westenbrugge, a Dutch citizen and former co-Managing
director of JO Tankers B.V., based in the Netherlands, pleaded guilty to the same charges and agreed to
serve three months in jail and pay a fine of $75,000.
2) DOJ Civil Non-Merger Enforcement
38. Microsoft: The DOJ’s complaint and the subsequent proceedings against Microsoft have been
described in prior years’ reports. In November 2002, the district court approved the settlement, finding
that entry of the Final Judgment was in the public interest. The court emphasised that, “[w]hile the
proposed final judgment, in general, is appropriately crafted to address the anticompetitive conduct, ... the
Court regards the document as laudable not for these traits alone, but for the clear, consistent, and coherent
manner in which it accomplishes its task. Far from an amalgam of scattered rules and regulations pieced
and patched together, ... the proposed Final Judgment adopts a clear and consistent philosophy such that
the provisions form a tightly woven fabric.” United States v. Microsoft Corp., 231 F. Supp. 2d 203, 259
(D.D.C. 2001).
39. The United States has assembled an enforcement team of lawyers, economists, and technical
experts to monitor Microsoft’s compliance with the Final Judgment. The Justice Department coordinates
its efforts with the various state enforcement authorities to collectively ensure the remedial effect intended
by the Final Judgment. Over the past year, the Department helped resolve a number of complaints against
Microsoft, including two that resulted in a changes to the Windows XP user-interface. The Department
also has reviewed and continues to oversee Microsoft’s communication protocol licensing program, a
significant provision of the final judgment. Through this process, the Department has required Microsoft
to make substantial improvements to the program’s terms, royalty rates, format, and scope.
40. Raytheon/DRS: On August 20, 2003, the DOJ announced that Raytheon Company and DRS
Technologies Inc. had agreed to modify their proposed agreement on infrared sights for military vehicle
programs to alleviate the DOJ’s concerns with respect to development and production of sights for future
programs. The parties agreed to modify the teaming agreement, which covers joint production of certain
infrared sights, so that it would not apply to future programs. The DOJ and Department of Defence
worked closely throughout the investigation.
41. Orbitz: AAG Pate announced on July 31, 2003 that the Division had closed its investigation of
the Orbitz joint venture, a travel website owned by five major domestic airlines. After an extensive
investigation, the DOJ concluded that none of the theories of harm were borne out by the information
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collected by the Division. These concerns included whether certain Orbitz contract terms would facilitate
collusion among the participating airlines or reduce their incentives to discount resulting in higher fares
and whether those contract terms would make Orbitz dominant in online air travel distribution. The
Division found that those terms did not result in higher fares or make Orbitz dominant in online air travel
distribution.
42. National Council on Problem Gambling: On June 13, 2003, the DOJ reached a settlement with
the National Council on Problem Gambling (NCPG) and filed a proposed consent decree that would free
NCPG state affiliates to sell problem gambling products or services outside their home states. The DOJ
alleged that the NCPG violated Section 1 of the Sherman Act by facilitating an unlawful territorial
allocation to prevent its affiliates from selling outside of their home states. The NCPG does not create the
services offered by its affiliates, but rather each affiliate independently creates and markets problem
gambling services, such as training and certification programs workshops and telephone help-lines. While
many associations have legitimate, pro-competitive territorial allocations, in this case the NCPG was not
designing a distribution system to enhance economic efficiency. The DOJ’s complaint alleged that
problem gambling service providers were threatened with sanctions or loss of their NCPG membership for
bidding outside of their territory.
43. NT Media/Village Voice Media: On January 27, 2003, the Division filed a lawsuit against NT
Media (New Times) and Village Voice Media, charging them with unlawful market allocation in violation
of Section 1 of the Sherman Act. New Times and Village Voice Media are the two leading publishers of
alternative news weeklies in the U.S., and had been head-to-head competitors in publishing alternative
news weeklies in Cleveland and Los Angeles. In October 2002, however, New Times agreed to shut down
its Los Angeles news weekly if Village Voice Media would close its news weekly in Cleveland. Thus, the
companies “swapped” markets, leaving New Times with a monopoly in Cleveland and Village Voice
Media with a monopoly in Los Angeles. The lawsuit was settled by consent decree, in which the parties
agreed to terminate their illegal market allocation agreement, allow affected advertisers in Los Angeles and
Cleveland to terminate their contracts, and divest the assets of the New Times Los Angeles and the
Cleveland Free Times to new entrants in those markets.
44. Northwest/Continental/Delta: On January 17, 2003, the DOJ announced an agreement with
Northwest, Continental, and Delta Airlines that would allow them to proceed with their proposed
marketing alliance and code share agreement under certain conditions to preserve competition. Under the
proposed alliance agreement, the carriers sell seats on each other’s flights, placing their own “code” on
partners’ flights. There was to be no sharing or pooling of revenues, so each carrier would continue to
compete for passengers. One of the DOJ’s conditions prohibited the carriers from code sharing on each
other’s flights wherever they offer competing non-stop service, such as service between their hubs. The
conditions also required the carriers to continue to act independently when setting award levels or other
benefits of their own frequent flyer programs and when they are competitors for corporate contracts. In the
DOJ’s view, the alliance would benefit consumers by offering code share service to new cities, increasing
frequencies or improving connections to cities already served by the carriers, and by permitting frequent
flyers to earn and redeem their miles on any participating carrier. Corporations could also benefit from
joint bids for contracts from alliance airlines where the airline partners offer complementary rather than
competing service.
45. Mountain Health Care: On December 13, 2002, the Division sued Mountain Health Care, an
independent physicians’ organisation in Asheville, North Carolina, charging that it was restraining price
and other forms of competition among physicians in Western North Carolina by adopting a uniform fee
schedule governing the prices of its participating physicians and negotiating with health plans on their
behalf, resulting in higher rates charged to health plans, and ultimately higher health costs for ultimate
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consumers. The case was settled with a consent decree requiring Mountain Health to cease operations and
dissolve.
3) FTC Non-Merger Enforcement Actions
46. The FTC’s record in fiscal year 2003 revealed the success of its recent investment in these
initiatives. The agency initiated 21 no merger enforcement actions, including multiple cases in each of its
priority areas, including healthcare, energy, and technology-related markets. These cases include 14
consent agreements and seven administrative complaints. The number of enforcement actions exceeds that
of any fiscal year in at least the past two decades.
47. Independent Physicians Associations: In the past year, the Commission has charged a number of
groups of physicians with colluding to raise consumers’ costs. The Commission obtained consent
agreements in nine matters and issued administrative complaints against another two groups involving
significant numbers of doctors, including:
• A settlement with a Dallas/Fort Worth area physicians association with 1,000 members and
an administrative complaint against a separate Dallas/Fort Worth physicians group of 600
members;
• A settlement with 900 faculty physicians and 600 community physicians serving St. Louis,
Missouri and surrounding areas;
• An administrative complaint against an organisation with more than 1,500 San Francisco
physicians, and the subsequent settlement with that organisation; and
• A settlement with two San Diego County, California anaesthesiologists groups whose
members work on approximately 70 percent of a San Diego area hospital’s cases requiring
anaesthesiology services.
48. The FTC’s enforcement actions stop, or seek to stop, allegedly collusive conduct that harms
employers, individual patients, and health plans by depriving them of the benefits of competition in the
purchase of physician services. The two administrative complaints issued in FY 2003 are:
California Pacific Medical Group, Inc.: On July 9, 2003, the FTC issued an administrative
complaint against California Pacific Medical Group, Inc., doing business as Brown & Toland, a
physicians' organisation, for allegedly fixing the prices and terms under which its doctors would
contract with payers to provide services for Preferred Provider Organisation (PPO) enrolees. In
filing the complaint, the FTC sought to prohibit Brown & Toland from unlawfully negotiating
PPO contracts with health plans on behalf of its member physicians and to nullify the allegedly
anticompetitive contracts the group has already negotiated with health plans. On February 9,
2004, Brown & Toland settles charges that its business practices violated federal antitrust laws.
North Texas Specialty Physicians: On September 17, 2003, the FTC issued an administrative
complaint against a group of Texas physicians, charging that they unlawfully restrained
competition, increasing the cost of health care for consumers in the Fort Worth area. The FTC
alleged that North Texas Specialty Physicians (NTSP) violated federal law by negotiating
agreements among its participating physicians on price and other terms, refusing to deal with
payers except on collectively agreed-upon terms, and refusing to submit payer offers to
participating physicians unless the terms complied with NTSP’s minimum-fee standards. The
case remains in administrative litigation.
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49. Collusion Involving Hospitals: The Commission also pursued collusive actions against
organisations that include hospital services (physician-hospital organisations). For example, on July 11,
2003, the Commission accepted a consent agreement with Maine Health Alliance (MHA), a group of 325
physicians and 11 hospitals, to resolve charges that MHA engaged in collusion that raised health care
prices in a five-county area in Maine. In a similar consent agreement, South Georgia Health Partners, a
group consisting of 15 hospitals and 500 physicians, settled charges that the group collectively fixed prices.
These two cases represent the Commission’s first challenges to provider organisations allegedly engaged in
collusive conduct in providing hospital services. In December 2002, the Commission settled charges that
Frye Regional Medical Centre and its parent, Tenet Healthcare Corporation, were instrumental in
facilitating price-fixing by local physicians in four North Carolina counties. This settlement represents the
first case in which the Commission named a hospital as a participant in an alleged provider price-fixing
conspiracy.
50. South Carolina Board of Dentistry: On September 15, 2003, the Commission authorised staff to
file an administrative complaint challenging a board regulation that prohibited licensed dental hygienists
from providing basic preventive dental care services in a school setting unless the patient first had been
seen by a dentist and a treatment plan had been established. According to the complaint, the South
Carolina state legislature passed a law in 2000 that eliminated a statutory requirement for a dentist to
examine a child before a hygienist was permitted to provide preventive care in schools, and the Board
responded by issuing an emergency regulation reinstating and expanding the restrictions. The
administrative complaint alleges that the Board’s action artificially insulated dentists from competition that
licensed and trained hygienists can provide, and thus deprived children – particularly economically
disadvantaged children – of important preventive dental health care. The case remains in administrative
litigation.
51. Bristol-Myers Squibb: On March 7, 2003, the Commission settled charges with Bristol-Myers
Squibb Company (Bristol), one of the world's largest drug makers, that it engaged in a series of
anticompetitive acts over the past decade to obstruct the entry of low-price generic competition for three of
Bristol's widely-used pharmaceutical products: two anti-cancer drugs, Taxol and Platinol, and the anti-
anxiety agent BuSpar. According to the FTC's complaint, Bristol's illegal conduct protected nearly $2
billion in annual sales at a high cost to cancer patients and other consumers who were denied access to
lower-cost alternatives, and were forced to overpay by hundreds of millions of dollars for important and
often life-saving medications. Under one of the provisions of the proposed consent order, Bristol will not
be able to obtain a 30-month stay, as provided in the Hatch-Waxman Act, on later-listed patents.
52. Union Oil Company of California (Unocal): On November 25, 2003, the Administrative Law
Judge (ALJ) dismissed the agency’s challenge to Unocal’s alleged misrepresentations to the California Air
Resources Board and to Unocal’s competitors. The ALJ based his decision in large part on his conclusion
that the Noerr-Pennington doctrine insulates Unocal’s conduct from antitrust challenge and rejected
various arguments why Noerr Pennington should not apply to Unocal’s alleged misrepresentations. The
case is on appeal before the Commission.
53. Moving Associations: Alabama Trucking Association, Inc., Movers Conference of Mississippi,
Inc., Kentucky Household Goods Carriers Association, Inc.: On July 9, 2003, the Commission authorised
staff to file three complaints against associations in Alabama, Kentucky, and Mississippi. These matters
concerned the collective filing by competing household goods movers of rates for intrastate moving
services in those states. The complaints alleged that each of these agreements violated Section 5 of the
FTC Act. The cases were settled on October 20, 2003. If litigated, these cases would have presented an
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opportunity for the Commission and the courts to provide greater analysis and elaboration of the state
action doctrine as a defence under the antitrust laws.
54. Rambus, Inc.: On June 19, 2002, the Commission authorised staff to file an administrative
complaint against Rambus, as described in last year’s report. The complaint charged that Rambus violated
the antitrust laws by knowingly failing to disclose its relevant intellectual property holdings to a standard
setting organisation in which it was a participant. According to the complaint, Rambus failed to disclose to
the Joint Electron Device Engineering Council (JEDEC) patents or patent applications covering critical
technologies that were the subject of that standard setting organisation’s work at the time, in violation of
JEDEC goals, policies, rules and procedures, thereby allowing Rambus to obtain monopoly power over
technology covered by JEDEC standards. On February 24, 2004, the Administrative Law Judge issued an
initial decision concluding that Rambus’s conduct did not amount to deception or violation of Rambus’s
duties to JEDEC, that there was no causal link between JEDEC standardisation and Rambus’s acquisition
of monopoly power, and that the challenged conduct did not result in anticompetitive effects because
JEDEC likely would have selected Rambus technology in any event. The matter is now on appeal before
the Commission.
55. The Three Tenors: On June 28, 2002, the Commission issued a final decision in “The Three
Tenors” case against subsidiaries of Vivendi Universal, S.A., as discussed in last year’s report. The case
involved allegations that two music distribution companies (Vivendi and Warner) entered into an
anticompetitive agreement not to advertise or discount certain older albums and video recordings in an
effort to channel consumers toward purchasing the newly released album and video recordings of the 1998
Three Tenors concert. The unanimous Commission opinion, upholding the ALJ’s finding of illegality,
provided a blueprint of how the Commission will analyse “inherently suspect” horizontal restraints, based
on established case law principles. The Commission found that the respondents’ agreements not to
discount or advertise Three Tenors products were inherently suspect, and thus “presumptively
anticompetitive” even absent a showing of market power -- because restrictions of this sort generally pose
significant competitive hazards. The Commission also determined that there was no legitimate efficiency
justification for the challenged restraints. Respondents have appealed, and the case is now pending before
the U.S. Court of Appeals for the District of Columbia Circuit.
56. Schering-Plough: On December 18, 2003, the Commission reversed and vacated an initial
decision by the administrative law judge in June 2002 to dismiss all allegations of anticompetitive conduct
brought by the Commission in its complaint against pharmaceutical manufacturers Schering-Plough
Corporation (Schering) and Upsher-Smith Laboratories with respect to delayed launching of a generic
version of Schering’s k-dor drug. The opinion explained that the applicable substantive test of legality of
horizontal restraints is not determined by bright lines of demarcation, but rather by a continuum “ranging
from per se condemnation of particularly egregious conduct to a detailed examination of more ambiguous
behaviour, responsive to the facts of individual cases.” In this case, the Commission conducted a more
detailed examination than was required in Three Tenors, but rejected the ALJ’s conclusion that it was
necessary to define markets indirectly, because the Commission found direct evidence of anticompetitive
effects. Schering has appealed the case to the U.S. Court of Appeals for the Eleventh Circuit.
E. Business Reviews Conducted by the Department of Justice
57. In FY 2003, the DOJ issued business review letters announcing that it would approve the
proposals by (1) Texas-based BroChem Marketing Inc. (BroChem) to establish a computer database aimed
at giving chemical distributors efficient access to the information they need when marketing chemicals
sold to them by chemical producers, after BroChem agreed to make substantial modifications to address
the Department’s competitive concerns, (2) the Woodwork Institute of California, a voluntary membership
association in the architectural millwork industry, to conduct a survey of general financial, cost, and sales
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data in an attempt to increase the efficiency of their operations, and (3) the American Trucking
Associations, which represent the interests of motor carriers, state trucking associations, and national
trucking conferences, to develop and circulate a model contract to members to help increase efficiency in
contract negotiations.
58. In addition, the Department cleared a proposal by the 3G Patent Platform Partnership, a group
that currently has nineteen European and Asian companies as members, to establish five patent licensing
and evaluation structures for “Third Generation” (3G) wireless telecommunications technologies. The
assent was given after the 3G Patent Platform Partnership agreed to make substantial modifications to
address the Department’s concerns. These modifications mainly involved the separation of the original
proposal’s single patent platform into five largely independent platforms.
F. Advisory Letters from the Commission
59. In FY 2003, FTC staff issued the following advisory letters: (1) to Bay Area Preferred
Physicians, stating that the conduct, concerning a proposed physician’s network to establish a common
messenger arrangement aimed at minimising costs associated with their members contracting with health
plans and other third-party payers, does not appear anticompetitive; (2) two letters to hospitals regarding
the Non-Profit Institutions Act (NPIA) on the sales of pharmaceuticals, stating that pharmaceuticals
dispensed by the hospitals would be covered by the NPIA; (3) to PriMed Physicians regarding a proposal
of PriMed Physicians, a physician group practice with 55 physician employees located in Dayton, Ohio,
that the Commission has no present intention to recommend law enforcement action against the group's
creation, with other Dayton-area physicians, of an advocacy group to collect and disseminate information
about Dayton health care market conditions.
III. Enforcement of antitrust laws and policies: mergers and concentrations
Enforcement of Premerger Notification Rules
60. On February 6, 2003, the Department filed a civil antitrust complaint and proposed consent
decree resolving its allegations that Gemstar and TV Guide had fixed prices, allocated customers, and
violated pre-merger waiting period requirements (a practice known as “gun-jumping”) prior to their merger
in July 2000. On July 11, 2003, the court entered a final judgment ordering Gemstar-TV Guide to pay a
record $5.67 million in civil penalties and to comply with certain restrictions to prevent it from engaging in
similar conduct in the future. Prior to mid-1999, Gemstar and TV Guide competed to provide interactive
program guides, or IPGs, to cable and satellite television service providers. IPGs allow television viewers
to use a television remote control device to view program schedule information and select programs for
viewing. Gemstar and TV Guide stopped competing for some customers in June 1999, when they were
negotiating a possible joint venture, and subsequently announced that they would merge in October 1999,
and filed a pre-merger notification under the HSR Act. Pending consummation of the transaction, and
while the DOJ conducted its review of the transaction, Gemstar and TV Guide secretly agreed to allocate
markets and customers, agreed on the prices and material terms that customers would be offered, and
began jointly conducting their IPG business.
61. On February 28, 2003, the Department filed a civil lawsuit against Smithfield Foods Inc., the
largest U.S. hog producer and pork packer, for twice failing to comply with premerger notification
requirements before making certain acquisitions of stock of its competitor, IBP Inc., the second largest
pork packer. The complaint, which is still pending, seeks a civil penalty of $5.5 million. The HSR Act
exempts from its premerger filing requirements and the mandatory waiting period certain stock
acquisitions that are “solely for the purpose of investment.” The Department alleges that Smithfield’s
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acquisitions were not exempt because Smithfield was also considering and taking steps toward a
Smithfield-IBP combination.
Significant Merger Cases
1) DOJ Merger Challenges or Cases
62. Hughes/Echostar: On October 31, 2002, the Department filed an antitrust lawsuit in U.S. District
Court in Washington, D.C., to block the proposed acquisition of Hughes Electronics Corp. by Echostar
Communications Corp. The Department was joined in its lawsuit by the Attorneys General of 23 states,
the District of Columbia and the Commonwealth of Puerto Rico. The Federal Communications
Commission had previously announced its objection to the proposed merger on October 10, 2002, and
ordered the matter set for an administrative hearing. The Department’s Complaint alleged that if the
merger were allowed to proceed, it would eliminate competition between the nation's two most significant
direct broadcast satellite services - Hughes's DirecTV and Echostar's DISH Network - and would
substantially reduce competition in the multichannel video programming distribution business to the
detriment of consumers throughout the United States. In areas where cable television was not available,
the merger would have created a monopoly, eliminating the only competitive choice for millions of
households, and in most areas of the country where cable television was available, the merger would have
reduced the number of competitors from three to two. On December 10, 2002, the parties abandoned their
proposed merger.
63. Alcan/Pechiney: On September 29, 2003, the Department reached a settlement with Alcan Inc.
that requires Alcan to divest Pechiney S.A.’s aluminum rolling mill in Ravenswood, West Virginia, if
Alcan’s pending $4.6 billion tender offer for Pechiney is successful. Alcan and Pechiney are among the
world’s leading aluminum producers, producing a similarly wide range of rolled aluminum products. The
Department said the acquisition, as originally proposed, would substantially lessen competition in the
development, production, and sale of brazing sheet and would likely result in higher prices. Brazing sheet
is a class of custom-engineered aluminum alloy used in fabricating the major components of heat
exchangers for motor vehicles, including radiators, heaters, oil coolers, and air conditioners.
64. GE/Instrumentarium: On September 16, 2003, the Department reached a settlement with General
Electric Corporation (GE), requiring the divesture of two Instrumentarium OYJ businesses – its Spacelabs
patient monitor business and its Ziehm C-arm business – in order for GE to proceed with its acquisition of
Instrumentarium. The Department said the acquisition, as originally proposed, would have lessened
competition in the sale of monitors for patients requiring critical care and mobile C-arms used for basic
surgical and vascular procedures, and would likely have resulted in higher prices or reduced quality for
consumers. Critical care patient monitors are medical devices used by hospitals and other healthcare
facilities to measure and display the vital physiologic signs of patients in serious medical condition.
Mobile C-arms developed for basic surgical and vascular procedures are full-size, fluoroscopic x-ray
machines that provide continuous, real-time viewing of patients during those procedures. GE and
Instrumentarium are two of only a few competitors that provide these important medical devices to
healthcare providers and have competed head to head on price, product features, and service. The DOJ
communicated and cooperated extensively with the EU in the course of this investigation.
65. DFA/Southern Belle: On April 24, 2003, the Department filed a lawsuit against Dairy Farmers of
America Inc. (DFA) and Southern Belle Dairy Co. LLC to compel DFA to divest its interests in Southern
Belle Dairy in order to prevent higher milk prices in more than 100 school districts in Kentucky and
Tennessee. The Department said DFA’s acquisition eliminated the only other independent bidder for
school milk – resulting in a monopoly – in 47 school districts, and reduced the number of independent
bidders from three to two in 54 school districts, in Kentucky and Tennessee. The litigation is ongoing.
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66. Northrop Grumman/TRW: On December 11, 2002, the Department announced that it would
require Northrop Grumman Corporation to agree to certain restrictions to ensure continued competition for
reconnaissance satellite systems in order for Northrop Grumman to proceed with its proposed $7.8 billion
acquisition of TRW Inc. Reconnaissance satellites obtain information important to the nation’s defence
that is unavailable by other means, through key components called payloads that detect radar signals that
bounce off of objects, and that detect radiation emitted or reflected by an object. Northrop is one of only
two U.S. companies that design, develop, and produce the payload used in reconnaissance satellites. TRW
is one of only a few companies with the ability to serve as a prime contractor on U.S. government
reconnaissance satellite programs. Northrop’s acquisition of TRW will allow it to be both the prime
contractor and the payload provider for reconnaissance satellites. Absent the requirements proposed by the
consent decree, the vertical integration created by this merger would give Northrop the ability and
incentive to lessen competition by favouring its in-house payload to the detriment or foreclosure of its
payload competitors and by refusing to sell, or selling at disadvantageous terms, its payload to competing
prime contractors.
67. SGL Carbon: On April 15, 2003, the Department filed a lawsuit to block SGL Carbon AG and its
United States subsidiary, SGL Carbon L.L.C., from acquiring certain assets of Carbide/Graphite Group in a
bankruptcy court auction. SGL Carbon and Carbide/Graphite are two of the only four producers capable of
manufacturing quality 18-inch diameter and larger graphite electrodes for sale in the United States.
Graphite electrodes are a critical input into electric arc furnace steel production, in which scrap metal is
melted and refined into steel. The Department said that the acquisition would have facilitated coordination
among the three remaining producers of large graphite electrodes for sale in the United States, and would
have substantially reduced competition in the production of large graphite electrodes. On May 8, 2003, the
Department filed a voluntary notice of dismissal after receiving notice that the alternative bidder at the
bankruptcy auction had purchased the assets on May 2, 2003.
68. Univision/HBC: On March 26, 2003, the Department announced that it would require Univision
Communications Incorporated to sell a significant portion of its partial ownership interest in Entravision
Communications Corporation and agree to other restrictions in order to proceed with its $3 billion
acquisition of Hispanic Broadcasting Corporation (HBC). The Department said that, without these
conditions, Univision’s acquisition of HBC would have lessened competition in the sale of advertising time
on many Spanish-language radio stations because HBC is Entravision’s principal competitor in Spanish-
language radio in many geographic areas.
69. UPM-Kymmene Oyj/Morgan Adhesives: On April 15, 2003, the Department filed suit in the
U.S. District Court for the Northern District of Illinois to block UPM-Kymmene Oyj's proposed acquisition
of Morgan Adhesives Co. from Bemis Company, Inc. The Department's complaint alleged that the
proposed transaction would have lessened competition in North American markets for the production and
sale of pressure-sensitive label stock. In July 2003, after substantial discovery and a two-week hearing on
the Department's motion for preliminary injunction, the District Court ruled in favour of the Department.
Upon the Court's issuance of a preliminary injunction, the defendants abandoned the proposed transaction.
2) FTC Merger Challenges or Cases
a. Preliminary Injunctions Authorised
70. Kroger Company/Raley’s: (non-public) In October 2002, the Commission authorised staff to seek
a temporary restraining order to prevent Kroger’s from acquiring 18 supermarkets in Las Vegas, Nevada.
The parties gave the Commission a timing agreement after the Temporary Restraining Order was
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authorised. Upon further investigation, staff concluded that there were no antitrust concerns with the
proposed transaction. The investigation was closed on November 13, 2002.
71. Nestle Holdings/Dreyer’s Grand Ice Cream: On March 4, 2003, the Commission authorised staff
to file a motion for a preliminary injunction based on staff recommendations that the merger would
eliminate competition and raise prices for super premium ice cream. If allowed to proceed, Nestlé would
have about 60 percent of the market for super premium ice cream, and together with Unilever, about 98
percent of the market. The motion was not filed, however, and on June 25, 2003, the parties settled FTC
charges by agreeing to divest three of Dreyer’s brands and Nestlé’s distribution assets, to make available
Dreyer’s license to manufacture, distribute, and sell another of its super premium brands, and other
measures aimed at remedying the Commission’s concerns.
72. Vlasic Pickle Co./Claussen Pickle Co.: On October 22, 2002, the Commission authorised staff to
file a motion for a preliminary injunction, based on concerns that Vlasic’s proposed acquisition of
Claussen would eliminate competition and the rivalry between these two national pickle brands. Claussen
is the dominant producer of refrigerated pickles and Vlasic serves as the primary price constraint on
Claussen. If the acquisition proceeded as proposed, the companies allegedly would have a monopoly share
of the refrigerated pickle market in the United States. The motion for preliminary injunction was filed in
federal district court in Washington DC on October 23, 2002. The parties abandoned the transaction on
October 29, 2002.
b. Commission Administrative Decisions
73. Aspen Technology: On August 7, 2003 the Commission authorised staff to file an administrative
complaint alleging that Aspen Technology’s acquisition of Hyprotech in 2002 was anticompetitive and led
to the elimination of a significant competitor in the provision of process engineering simulation software
for industry. Aspen remains in administrative litigation.
74. Chicago Bridge and Iron: As discussed in last year’s report, this merger already had been
consummated when the Commission authorised staff to file an administrative complaint on October 25,
2001. On June 27, 2003, the Administrative Law Judge (ALJ) upheld complaint allegations that the
acquisition by Chicago Bridge & Iron Company N.V. (CB&I) of the Water Division and the Engineered
Construction Division of Pitt-Des Moines, Inc. (PDM) violated Section 7 of the Clayton Act and Section 5
of the Federal Trade Commission Act. The ALJ found that complaint counsel had established that the
effect of CB&I's acquisition of the PDM assets may be to substantially lessen competition in four relevant
product markets in the United States in which both CB&I and PDM competed. CB&I and PDM appealed
the initial decision to the Commission. On January 2, 2004, the Commission approved an interim consent
order, subject to public comment, that stipulated that CB&I cannot alter in any way the assets acquired
from PDM subsequent to February 7, 2001, except in the ordinary course of business or for ordinary wear
and tear. The order also stated that if CB&I wished to dispose of any assets at its Provo, Utah facility, it
had to notify the Secretary of the FTC, complaint counsel, and the Commission’s Compliance Division at
least 60 days before taking such an action. It further ordered CB&I to take steps to notify employees at the
Provo facility that it has no plans to close the facility.
75. DSM/Roche: On September 23, 2003, the Commission reached a settlement agreement with
DSM and Roche. DSM is a multi-national firm active in numerous industries, including food,
pharmaceuticals, and transportation. Roche is a global healthcare firm that researches, develops,
manufactures, and sells vitamins, carotenoids, and fine chemicals used in the animal nutrition, food,
pharmaceutical, and chemical industries. DSM and Roche are in alliances with BASF and Novozymes,
respectively, that produce and market phytase. Phytase is added to poultry and swine feed to promote
digestibility of phosphorous and other nutrients that are vital to livestock production. Without the
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divestiture, the transaction would lead to DSM being part of alliances that supply more than 90 percent of
the phytase market worldwide. The settlement will protect competition in the market for phytase, and
allowed DSM to proceed with the acquisition of Roche, but with the requirement that DSM divest its
phytase business.
76. GenCorp/ARC: On December 30, 2003 the Commission issued a consent order allowing
GenCorp, Inc.’s acquisition of Atlantic Research Corporation on the condition that GenCorp divest its in-
space liquid propulsion business to a Commission-approved buyer, at no minimum price, within six
months of the date of the acquisition. The Commission issued the order after finding that GenCorp’s
acquisition of ARC would lessen competition in the U.S. markets for the research, development,
manufacture and sale of four different types of in-space propulsion thrusters: 1) monopropellant thrusters;
2) bipropellant apogee thrusters; 3) dual mode apogee thrusters; and 4) bipropellant attitude control
thrusters. For all four of these thrusters, the Commission found that the U.S. market is highly
concentrated, that in some cases they were the only viable suppliers and in many the closest competitors,
and that high entry barriers made the possibility of a new entrant unlikely.
77. Genzyme/Novazyme: On January 13, 2004, the Commission closed its investigation into the
2001 acquisition of Novazyme Pharmaceuticals, Inc. (Novazyme) by Genzyme Corporation (Genzyme).
At the time of its acquisition, Novazyme was engaged primarily in conducting early pre-clinical studies
relating to enzyme-replacement treatment (ERT) for Pompe disease. Genzyme was also engaged in such
preclinical animal testing of ERTs. The Commission’s investigation focused on the transaction’s potential
impact on the pace and scope of research into the development of a treatment for Pompe disease. There
are three separate statements on the decision to close the investigation. The Chairman’s statement
recognised the limitations on innovation market analysis, noting that economic theory and empirical
investigations have not established a general causal relationship between innovation and competition.
Instead, a careful, intense factual investigation was conducted that focused on how the transaction would
affect the pace and scope of research into pharmaceutical products to address a condition for which no
treatment presently exists. According to the Chairman’s statement, the facts of the investigation did not
support a finding of anticompetitive harm; moreover, on balance, the merger more likely created benefits
that will save patients’ lives. Commissioner Thompson, however, dissented, asserting that this case
involved a merger among two rival innovators that resulted in a merger to monopoly and, based on the
FTC/U.S. Department of Justice Horizontal Merger Guidelines, is presumptively anticompetitive. Further,
the Commissioner stated that the acquisition should have been challenged irrespective of this presumption
because the merger in this specific innovation market eliminated the only other rival in the world, while
providing no merger-specific efficiencies. Commissioner Harbour abstained, since that Commissioner had
only joined the Commission in the final stages of considering the complex issues raised by the acquisition.
78. Pfizer/Pharmacia: On April 11, 2003, the Commission ordered Pfizer, Inc., the largest
pharmaceutical company in the world, and Pharmacia Corporation to make certain divestitures to resolve
concerns that their merger would harm competition in nine separate and wide-ranging product markets,
including drugs to treat overactive bladder, symptoms of menopause, skin conditions, coughs, motion
sickness, erectile dysfunction, and three different veterinary conditions. The settlement required all
divestitures to occur no later than ten days after the Pharmacia acquisition was consummated, and that if
the Commission determined that the specified buyers were not acceptable purchasers, the assets had to be
divested to a Commission-approved buyer no later than six months from the date the consent order became
final.
79. Southern Union (Panhandle Pipeline): On July 16, 2003, the Commission approved a final
consent order designed to preserve competition in the market for the delivery of natural gas to the Kansas
City area. The order allowed Southern Union Company’s purchase of the Panhandle pipeline from CMS
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Energy Corporation, after Southern Union terminated an agreement under which one of its subsidiaries
managed the Central pipeline, which competes with Panhandle in the market for the delivery of natural gas
to the Kansas City, Missouri area. The complaint alleged that the transaction, if allowed to proceed as
originally proposed, would have placed the two pipelines under common ownership or common
management and control, eliminating direct competition between them, and likely resulting in consumers
paying higher prices for natural gas in the Kansas City area.
IV. Regulatory and Trade Policy Matters
A. Regulatory Policies
1) DOJ Activities: Federal and State Regulatory Matters
80. On May 29, 2003, the Department filed comments with the Department of Transportation (DOT)
concerning the application by the International Air Transport Association (IATA) for approval of and
antitrust immunity for an agreement reached by IATA members to change the volume conversion factor
used to calculate freight rates for low density shipments. DOJ recommended that the DOT deny approval
and antitrust immunity because the proposal was “effectively a price-fixing agreement to increase rates for
low density shippers, and IATA has not demonstrated any offsetting important public benefit or fulfilment
of a serious transportation need” as required by the applicable statute. In addition, the Department urged
DOT to re-examine whether approval and antitrust immunity should be withdrawn from all IATA
agreements on fares or rates charged by U.S. airlines for passenger tickets or air freight carriage sold in the
U.S. to consumers for travel or shipments to and for the U.S., as well as with respect to IATA agreements
on airline fares, rates and charges in other contexts in which U.S. national interests are strong. The
Department argued that such agreements are contrary to fundamental U.S. competition policy as set forth
in the antitrust laws, and any foreign policy or international comity justifications for immunising such
agreements have further eroded as other countries increasingly adopt policies more reliant on market
competition.
81. On June 9, 2003, the DOJ filed comments with the DOT concerning regulatory supervision of the
travel agent computer reservations systems (CRS) industry. The DOJ noted that many of the regulations,
in effect for nearly twenty years, had failed to make the CRS industry more competitive, may have
imposed costs of their own on consumers, and should not be extended. The DOJ also noted that two recent
developments – domestic airlines no longer own CRSs and now use the internet to sell tickets – have
reduced the need for extensive regulation. Adopting the Division’s analytical approach and most of its
factual findings and recommended regulatory responses, the DOT decided to allow most of its rules to
lapse on January 31, 2004, while keeping a few (relating to system bias and “most favoured nation” clauses
in contracts with airlines) for an additional 6 month transition period.
82. In FY2003, the DOJ continued to file comments with the Federal Communications Commission
(FCC) in several “Section 271” proceedings involving the FCC’s determination of whether local
telecommunications markets are fully and irreversibly open to competition, a condition that must be met
before a Regional Bell Operating Company is permitted to offer long-distance service in its own area. The
last 271 comments were filed in the fall of 2003 as the FCC granted 271 approval to the last state at the end
of 2003. The Regional Bell Operating Companies are now permitted to offer long distance services
anywhere in the country. The Division’s comments are available at
http://www.usdoj.gov/atr/public/comments/sec271/sec271.htm.
83. On December 20, 2002, the DOJ and FTC issued a joint letter urging the American Bar
Association (ABA) to substantially narrow or reject a proposed model definition of the practice of law.
The letter stated that if adopted by state governments, the definition likely would reduce or eliminate
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competition between non-lawyers and lawyers to provide a number of services, leading to higher prices
and a reduction in competitive choices for consumers. The DOJ/FTC letter argued that the proposed model
definition would prevent non-lawyers from offering many of the services they now provide in areas such as
real estate and landlord-tenant law and trusts and estates.
84. On March 20, 2003, the DOJ and FTC issued a joint letter urging the Georgia State Bar’s
Standing Committee on the Unlicensed Practice of Law to reject a request for an opinion that would
prevent non-lawyers from competing with lawyers to perform certain real estate closing-related functions.
The DOJ and FTC noted that if the opinion is approved, Georgia consumers and businesses could end up
paying more for real estate closing-related services and may be prevented from benefiting from
competition from out-of-state and internet lenders. The letter explained that laws that only permit lawyers
to prepare deeds and facilitate their execution are less apt to protect purchasers because the lawyer
performing the services will likely have been hired by the lender, not the consumer. The agencies sent
similar letters to the Rhode Island Senate (June 30, 2003) and House of Representatives (March 28, 2003)
urging those bodies to reject a proposed bill that would prevent non-lawyers from competing with lawyers
to perform real estate closings.
85. In FY2003, the Division approved three applications for new Export Trade Certificates
submitted under the Export Trading Company Act and its implementing regulations. The ETC
applications involved various products and services such as corn, apples, and professional consulting to
facilitate trade overseas.
2) FTC Staff Activities: Federal and State Regulatory Matters
86. Intellectual Property: Competition and patents can foster innovation, but errors or systematic
biases in one policy’s rules can harm the other policy’s effectiveness in promoting innovation. A failure to
strike the proper balance between them can harm innovation. The FTC and DOJ held 24 days of hearings
on this topic, with more than 300 expert panellists and 100 written submissions generating over 5,000
pages of transcripts. During the hearings many participants reported that, although competition and patents
often work well together, too many questionable patents are harming innovation and competition. To
address these concerns, the FTC issued a report in October 2003 entitled “To Promote Innovation: The
Proper Balance of Competition and Patent Law and Policy.” The Commission’s report makes ten
recommendations to reduce the proportion of questionable patents. Among other steps, the report
recommends new procedures for challenging patent validity, careful application of patent law to prevent or
invalidate obvious patents, and thoughtful integration of economic insights into patent law and policy.
87. Health Care Advocacy: Although the FTC typically uses its law enforcement authority to
challenge potentially anticompetitive hospital mergers, the agency employed another of its tools to
comment on the potential anticompetitive effects of the proposed acquisition of Slidell Memorial Hospital
by Tenet Healthcare. Under Louisiana law, both the voters and the state Attorney General must approve
the sale of a nonprofit hospital, such as Slidell, and the Attorney General requested the FTC’s views on the
transaction. In response, the FTC staff explained that the proposed merger of the Slidell area’s only two
full-service hospitals raised concerns about likely anticompetitive effects, including increased prices. The
analysis focused on the possible effects of the acquisition on health care plans, which ultimately must
reimburse hospitals in whole or in part for services provided to covered patients. Seventy seven percent of
area voters disapproved of the merger. In April 2003, the Commission voted unanimously to authorise the
filing of the staff's comments. In issuing its comments to the Attorney General, FTC staff noted that the
Commission currently has an ongoing investigation of the proposed transaction.
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88. Retrospectives and Other Economic Studies: The FTC continued its examination of selected
topics to develop policy positions and inform its enforcement activities. During FY 2003, the FTC staff
conducted retrospective studies of mergers involving hospitals and the oil industry. In Experimental
Gasoline Markets, the authors investigated the competitive effects of zone pricing on consumers, retail
stations, and refiners. In another paper, The Economic Effects of the Marathon - Ashland Joint Venture:
The Importance of Industry Supply Shocks and Vertical Market Structure, FTC economists analysed
whether there were anticompetitive price effects from a merger cleared by the FTC. The learning derived
from these studies facilitates better case selection and provides important economic support that helps the
agency succeed in its enforcement initiatives. Further information on these studies is provided in section
V.B below.
89. Generic Drug Report: This past year saw the implementation of specific recommendations made
in the FTC’s July 2002 report on generic drugs, entitled Generic Drug Entry Prior to Patent Expiration:
An FTC Study, as discussed more fully in last year’s annual report. The FDA approved a final rule in June
2003 that eliminates multiple 30-month stays on FDA approval of generic drugs, which the FTC study had
identified as harmful to consumers, and also limits the patents that can be listed in the FDA Orange Book,
consistent with another FTC recommendation. Moreover, the Medicare Act passed in 2003 implements
key FTC recommendations to facilitate entry of generic drugs and requires that the FTC be notified of
certain agreements between branded and generic drug firms. Information about the requirements to notify
the FTC can be found at: http://www.ftc.gov/os/2004/01/040106pharmrules.pdf
90. Gasoline Price Monitoring and Investigation Initiative: In 2002, the FTC initiated a project to
monitor gasoline prices to identify unusual movements in prices and then examine whether any such
movements might result from anticompetitive activity. FTC economists developed a statistical model for
the purpose of identifying such movements. The staff incorporates into their analysis customer complaint
data received from the states and the Department of Energy and also examines movements in the level of
gasoline prices and the spread between the price of crude oil and the price of gasoline. If the staff detects
unusual price movements, they research the possible causes, including, if appropriate, consulting with the
staff of various federal and state agencies. The FTC staff also contacts the appropriate State Attorney
General’s Office to discuss the pricing anomaly and to discuss the appropriate course for further inquiry,
including the possible opening of a law enforcement investigation.
91. Energy - Motor Fuel: The FTC staff submitted comments to the North Carolina Attorney General
stating that amendments to the state’s Motor Fuel Marketing Act could have significant potential to harm
consumers by causing higher gasoline prices at the pump. Under current North Carolina law, it is illegal to
sell gasoline below cost as a regular business practice with the intent to injure competition. Proposed
amendments to the statute would have eliminated the “intent” and “business practice” requirements and
would have redefined “cost” in a way that would not always reflect discounts to retailers. Because the
proposal could make dealers liable for procompetitive price-cutting, the staff was concerned that it would
deter aggressive competition, to the detriment of consumers. The FTC staff filed comments on similar
proposals pending in Alabama, New York, and Kansas, and an existing law in Wisconsin.
92. Energy - Electricity and Natural Gas: The FTC continued to provide its expertise and assistance
in connection with the ongoing process of opening electricity markets to competition. In FY 2003, agency
staff submitted comments to the Federal Energy Regulatory Commission on Market-Based Rates and
Authorisations, and on Remedying Undue Discrimination through Open Access Transmission Service and
Standard Electricity Market Design. In addition, the staff submitted comments to the Illinois Commerce
Commission on Asset Transfers Among Affiliated Companies, to the California Public Utilities
Commission on Exit Fees and Distributed Generation, and to the Georgia Public Service Commission on
Standards for Determining Whether Natural Gas Prices Are Constrained by Market Forces.
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93. Professional Services: In addition to the joint DOJ/FTC letters noted above, the FTC staff
provided comments to the Indiana State Bar Association opposing proposals that would unduly limit the
ability of non-lawyers to compete in the market for real estate closings. The FTC staff also provided
comments to the Tennessee legislature on proposed regulations for the practice of optometry, noting that
consumers could end up paying more for eyeglasses because the operation of commercial optometry
practices, especially chain optical stores, could be more difficult.
94. Financial Services: The agency recently submitted a letter urging the Commodity Futures
Trading Commission (CFTC) to support more competition in the market for futures trading by allowing a
new entrant to establish a competing U.S.-registered commodity futures exchange. The letter cited two
recent studies that found that securities-based options listed on multiple exchanges, rather than a single
exchange, have significantly lowered bid-ask spreads, a result consistent with the effects of multiple
exchanges in equity markets. The letter also criticised public restraints, such as regulatory barriers, that
impede competition, limit new entrants, stifle innovation, and raise prices in this sector. After receiving
the FTC’s letter, the CFTC voted unanimously to approve the new entrant’s application, with one CFTC
Commissioner issuing a statement acknowledging the FTC’s analysis.
95. Computer Reservation Services: FTC comments to the Department of Transportation (DOT)
urged that the Department use caution in applying monopoly leveraging and essential facilities theories in a
proposed rulemaking on airline computer reservation systems and that conduct not be condemned on these
grounds without a showing that it is exclusionary. DOT’s final rule eliminated most of the proposed rules
governing airline computer reservations systems and included a sunset provision to terminate the other
rules later this year.
96. Internet Wine Sales Report: In July 2003, the FTC released a staff report, Possible
Anticompetitive Barriers to E-Commerce: Wine, which concluded that e-commerce offers consumers lower
prices and more choices in the wine market, and that states could expand e-commerce by permitting direct
shipping of wine to consumers. The empirical study found that state bans on direct shipping prevent
consumers from saving as much as 21 percent on some wines and from conveniently purchasing many
popular wines from suppliers around the country. The report also concluded that states can limit sales to
minors through less restrictive means than an outright ban on direct shipping, such as by requiring that a
supplier verify the recipient’s age and obtain an adult’s signature before delivering the wine.
B. DOJ and FTC Trade Policy Activities
97. Both the Division and the FTC are extensively involved in interagency discussions and decision-
making with respect to the formulation and implementation of U.S. international trade and investment
policy as concerns competition policy. The Division participates in interagency trade policy discussions
chaired by the Office of the U.S. Trade Representative and is a participant in the trade policy activities of
the National Economic Council (NEC), a cabinet-level advisory group. The Department provides antitrust
and other legal advice to U.S. trade agencies, and has been actively involved in certain NAFTA Chapter 11
arbitrations relevant to competition issues and in the WTO Mexican telecommunications case. The
Division also works with other Justice components (including the Environment and Civil Divisions) on
international trade and investment issues that affect the interests of those components or of the Department
as a whole.
98. Both DOJ and FTC participate in bilateral and multilateral discussions and work projects to
improve cooperation in the enforcement of competition laws. The Division and the FTC participate in a
number of negotiations and working groups related to regional and bilateral trade agreements. The
Division and the FTC participate with the Office of the U.S. Trade Representative and State and
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Commerce Departments in competition policy groups associated with the Free Trade Area of the Americas
(FTAA) and Asia-Pacific Economic Cooperation (APEC), and chaired or co-chaired the negotiating teams
for the competition chapters of the FTAA and U.S.-Australia free trade agreements. The antitrust agencies
also have played an important role in the working group established by the World Trade Organisation
(WTO), which the FTC co-chairs for the U.S. delegation, to study issues relating to the interaction between
trade and competition policy.
99. For more than a decade the Department and the FTC have assisted transition and developing
economies that have made the commitment to market and commercial law reforms. In addition to
advancing the adoption of competition policies that incorporate sound economic principles and effective
enforcement mechanisms, these programs create long-term cooperative relationships with policy and
enforcement officials in the countries involved. During FY 2003, the technical assistance program was
active in Asia, South and Central America, Eurasia, Southeast Europe, the ANDEAN Community, Mexico
and South Africa. The FTC continued its resident advisor program in Indonesia, and, with the Department,
continued its resident advisor program in South Africa. The FTC and DOJ’s short term programs have
emphasised the development of investigative skills. These programs rely on a combination of resident
advisors, regional workshops, and targeted short term missions.
100. The Division co-chairs (with the Office of the U.S. Trade Representative) the Cross-Sectoral
Working Group under the U.S.-Japan Regulatory Reform and Competition Policy Initiative. In these
discussions, the United States has urged the Japanese government to take a variety of actions to strengthen
its enforcement of Japan’s antimonopoly law, take effective measures to eliminate bid rigging, make its
administrative procedures fair and open, and accelerate an effective program of deregulation to open
markets to competition
V. New Studies related to antitrust policy
A. Antitrust Division Economic Analysis Group Discussion Papers
101. The Economic Analysis Group issued the following papers during FY2003. Copies may be
obtained by contacting Janet Ficco at 600 E Street, N.W., Suite 10000, Washington, D.C. 20530 or at (202)
307-3779 (janet.ficco@usdoj.gov). Other Division public materials may be obtained through the Antitrust
Documents Group of the Division's Office of Operations. Requests should be directed to Ms. Janie Ingalls,
Room 215, Liberty Place Building, 325 7th Street, N.W., Washington, D.C. 20530. Ms. Ingalls may be
reached via fax at (202) 514-3763 or e-mail (janie.ingalls@usdoj.gov).
Eric Emch, GECAS and the GE/Honeywell Merger: A Response to Reynolds and Ordover, EAG 03-13,
August 2003.
Charles J. Romeo, Estimating Discrete Joint Probability Distributions for Demographic Characteristics at
the Store Level Given Store Level Marginal Distributions and a Market-Wide Joint Distribution,
EAG 03-12, August 2003.
Dean V. Williamson, Renegotiation, Dynamic Efficiency, and Vertical Restraints in Electricity Marketing
Contracts, EAG 03-11, August 2003.
Russell Pittman, Railways Reform and Electricity Reform in Russia, and the Role of the Ministry for
Antimonopoly Policy, EAG 03-10, August 2003.
Russell Pittman, Regulatory Reform: Lessons for Korea, EAG 03-9, August 2003.
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Gregory J. Werden, The American Airlines Decision: Not with a Bang but a Whimper, EAG 03-8, August
2003.
William W. Nye, Jumping the Gun: The Cellophane Strategy and the Incentives of Firms Contemplating
Merger, EAG 03-7, April 24, 2003.
W. Tom Whalen, Constrained Contracting and Quasi-Mergers: Price Effects of Code Sharing and Antitrust
Immunity in International Airline Alliances, EAG 03-6, April 24, 2003.
Russell Pittman, A Note on Non-Discriminatory Access to Railroad Infrastructure, EAG 03-5, April 24,
2003.
Jeffrey Wilder, Competing for the Effort of a Common Agent: Contingency Fees in Commercial
Insurance, EAG 03-4, February 21, 2003.
Fred Gramlich, Coupon Remedies in Antitrust Cases: The Form of the Discount Also Matters, EAG 03-3,
February 10, 2003.
Gregory J. Werden, The Effect of Antitrust Policy on Consumer Welfare: What Crandall and Winston
Overlook, EAG 03-2, January 2003.
Craig Peters, Evaluating the Performance of Merger Simulation: Evidence from the U.S. Airline Industry,
EAG 03-1, January 2003.
Sheldon Kimmel, The Supreme Court’s Efficiency Defense, EAG 02-13, September 2002. Forthcoming in
the Supreme Court Economic Review.
B. Commission Studies, Reports and Economic Working Papers
1) Commission Conferences and Workshops
102. Merger Efficiencies: In December 2002, the Bureau of Economics held a two-day roundtable on
merger efficiencies, entitled “Understanding Mergers: Strategy & Planning, Implementation and
Outcomes.” The roundtable brought together experts on mergers from economics departments, business
schools, M&A consulting, antitrust law practice, and business. The goals of the roundtable included: (1)
better understanding the M&A process from the development of a corporate strategic plan through the
various stages to the end of the implementation; and (2) obtaining a broader perspective on mergers that
might shed light on the factors that make mergers succeed or fail. A unique aspect of the roundtable was
the participation of several business executives from firms who have been action in M&A for over a
decade. Materials from the roundtable are available at: http://www.ftc.gov/be/rt/mergerroundtable.htm.
103. E-Commerce: In October 2002 the Commission held a three-day workshop on possible
anticompetitive efforts to restrict competition on the Internet. The goal of the conference was to address
the growing concern about possible anticompetitive efforts to restrict competition on the Internet either by
state regulations enacted to aid existing bricks-and-mortar businesses at the expense of new Internet
competitors, or practices where private companies are curtailing e-commerce by employing tactics such as
collectively pressuring suppliers or dealers to limit sales over the Internet. The workshops featured
testimony regarding industries that have experienced substantial growth in commerce via the Internet, but
that also may have been hampered by anticompetitive restrictions. In particular, the workshop had panels
on the following industries: (1) wine sales; (2) cyber-charter schools; (3) contact lenses; (4) automobiles;
25
SEPTEMBER 2003
(5) caskets; (6) online legal services; (7) health care (telemedicine and online pharmaceutical sales); (8)
auctions; (9) real estate, mortgages, and financial services; and (10) retailing. Materials from the workshop
are available at: http://www.ftc.gov/opp/ecommerce/anticompetitive/index.htm.
2) Economic Working Papers
104. The following papers may be obtained at http://www.ftc.gov/be/econwork.htm.
Steven Tenn, Estimating Promotional Effects with Retailer-Level Scanner Data, September 2003.
Cary A. Deck and Bart J. Wilson , Experimental Gasoline Markets, August 2003.
Christopher P. Adams & Van V. Brantner, New Drug Development: Estimating Entry from Human
Clinical Trials, July 2003.
David Schmidt, Robert Shupp, James Walker, Resource Allocation Contests: Experimental Evidence, July
2003.
Abraham L. Wickelgren, Moral Hazard and Renegotiation: Multi-Period Robustness, April 2003.
Alan Wiseman and Jerry Ellig, How Many Bottles Makes a Case Against Prohibition? Online Wine and
Virginia's Direct Shipment Ban, March 2003.
Patrick DeGraba, Volume Discounts, Loss Leaders, and Competition for More Profitable Customers,
February 2003.
Christopher P. Adams and Laura L. Bivins, Focusing on Demand: Using eBay Data to Analyse the
Demand for Telescopes, January 2003.
David J. Balan, Have Lazear-Style Implicit Contracts Disappeared?, January 2003.
Daniel P. O’Brien and Abraham L. Wickelgren, A Critical Analysis of Critical Loss Analysis, January
2003.
Martin Gaynor and William Vogt, Competition Among Hospitals, January 2003.
Christopher P. Adams, Agent Discretion, Adverse Selection and the Risk-Incentive Trade-Off, December
2002.
Christopher P. Adams Does Size Really Matter? Empirical Evidence on Group Incentives, October 2002.
26
SEPTEMBER 2003
Appendices
Department of Justice: Fiscal Year 2003 FTE and Actual Amount by Enforcement Activity
AMOUNT
FTE
CRIMINAL
ENFORCEMENT 269 $41,656,000
Civil Enforcement 500 $77,362,000
TOTAL 769 $119,018,000
Federal Trade Commission: Fiscal Year 2002 Competition Mission FTE and Dollars by Program
by Bureau/Office
FTE Amount ($ in thousands)

Total Maintain Competition Mission 488.9 $75,998.3
Bureau of Competition 262.9 $32,410.0
Bureau of Economics 80.6 $9,807.2
Regional Offices 26.3 $3,116.7
Mission Support 119.1 $30,664.4
Premerger Notification 26.8 $2,933.9

Bureau of Competition 25.9 $$2,828.4
Bureau of Economics 0.8 $94.0
Regional Offices 0.1 $11.5
Merger & Joint Venture Enforcement 173.7 $20,773.3

Merger & Joint Venture Compliance 8.5 $928.2

Bureau of Competition 8.4 $916.4
Regional Offices -- --
Nonmerger Enforcement 129.0 $16,592.0

Regional Offices 20.1 $2,359.1
27
SEPTEMBER 2003
28
SEPTEMBER 2003
FTE Amount ($ in thousands)

Nonmerger Compliance 1.4 $152.6
Bureau of Competition 1.4 $152.6
Bureau of Economics -- --
Antitrust Policy Analysis 10.3 $1,282.4

Bureau of Competition -- --
Other Direct Mission Resources 20.1 $2,671.5

29
MEMO TO: Clients and Friends
FROM: The Center on Philanthropy at Indiana University – continuing in the
tradition of Arthur C. Frantzreb
SUBJECT: 513 gifts in the fourth quarter of 2006
MILLION DOLLAR AND UP DONORS/INVESTORS

October 1, 2006 – December 31, 2006
Fourth quarter, 2006
The following is a list of 513 gifts in the fourth quarter of 2006. All were announced in various
newsletters, newspapers, press releases, or other publications. None are verbal reports. A
tabulation of this type was estimated by the late Arthur C. Frantzreb, founder of the Million
Dollar List, to be one-fourth to one-half of those gifts actually consummated during the quarter
because gifts to health care, religious organizations, cultural institutions, social service agencies,
and other organizations are not reported in a systematic way.
In the tables below, gifts contributed through personal or family foundations are considered
foundation gifts/grants, not individual gifts. Foundation and corporate gifts are reported in a
separate table and in the Total Gifts and Grants table. More information about these gifts, and
about the Center on Philanthropy at Indiana University, can be found at
http://www.philanthropy.iupui.edu.
TOTAL GIFTS AND GRANTS FROM

INDIVIDUALS, CORPORATIONS, AND FOUNDATIONS
2006 2005
Millions Annual 4th 3rd 2nd 1st Annual 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
$1,000* 6 0 1 5 0 0 0 0 0 0
$100 up 32 5 8 10 9 18 6 4 6 2
$50-100 36 13 5 14 4 20 8 2 6 4
$25-50 84 36 15 18 15 69 23 17 15 14
$10-25 247 85 37 74 51 236 67 60 50 59
$5-10 284 77 43 83 81 286 82 79 72 53
$1-5 1299 297 188 425 389 1570 368 478 323 399
No Amount 2 0 2
Totals 1990 513 297 629 551 2197 554 640 472 531
* $1 Billion and up
Fourth Quarter, 2006 Million Dollar List 1 The Center on Philanthropy at Indiana University
GIFTS FROM INDIVIDUALS
2006 2005
Annual 4th 3rd 2nd 1st Annual 4th 3rd 2nd 1st
Couples 315 93 34 107 81 258 93 64 61 40
Women Only 64 26 8 11 19 82 20 19 23 20
Men Only 274 93 28 74 79 246 74 70 51 51
Families 42 8 7 8 19 39 16 9 9 5
Groups 4 0 0 0 4 6 0 0 0 6
Anonymous 65 32 2 14 17 58 22 14 4 18
Estate 147 45 10 48 44 107 30 41 19 17
Totals 911 297 89 262 263 796 255 217 167 157
CORPORATE AND FOUNDATION GIFTS/GRANTS

2006 2005
rd nd
Annual 4th 3 2 1st Annual 4th 3rd 2nd 1st
Foundations 818 159 164 261 233 904 214 191 248 251
Corporate 229 46 38 90 55 464 79 213 49 123
Other 33 11 6 16 0 33 6 19 8 0
Total 1080 216 208 367 288 1401 299 423 305 374
GIVING CHRONOLOGY
Year Number of $1,000,000 Gifts Total US Giving in Billions *
(gifts of all sizes)
1983 243 $ 63.21
1985 425 $ 71.69
1987 660 $ 82.20
1989 685 $ 98.30
1991 891 $ 104.92
1993 1,470 $ 116.86
1995 972 $ 123.68
1997 1,515 $ 162.99
1998 1,719 $ 176.80
1999 1,873 $ 202.74
2000 1,801 $ 229.71
2001 2,354 $ 231.08
2002 1,491 $ 233.71
2003 1,118 $ 236.73
2004 1,429 $ 245.22
2005 2,197 $ 260.28
2006 1,181 To be released in June 2007
* Source: Giving USA 2006, a publication of the Giving USA Foundation, researched and written
at the Center on Philanthropy at Indiana University.
SOURCES FOR MILLION DOLLAR GIFT INFORMATION (Fourth Quarter, 2006)
The Center on Philanthropy conducts the research for the Million Dollar List using print and electronic media.
Donor Amount Recipient

Golden West Financial $370,000,000 Wachovia Foundation
Robert W. Woodruff Foundation $261,500,000 Emory University
David Rockefeller $225,000,000 Rockefeller Brothers Fund
Joan Palevsky (Estate) $200,000,000 California Community Foundation
T. Boone Pickens $135,000,000 T. Boone Pickens Foundation
Henry M. and Wendy J. Paulson $80,000,000 Bobolink Foundation
Anonymous $75,000,000 Westmont College
Joseph Neubauer $74,400,000 Neubauer Family Foundation
Ed Bass $60,000,000 Yale University
Anonymous $50,000,000 University of Tennessee
Enterprise Rent-A-Car $50,000,000 National Arbor Day Foundation
George Soros $50,000,000 Millennium Promise
Melvin and Bren Simon $50,000,000 Indiana University Cancer Center
Peter and Helen Bing $50,000,000 Stanford University
Rockefeller Foundation $50,000,000 Alliance for a Green Revolution in Africa
Starr Foundation $50,000,000 Rockefeller University
Tim and Bernadette Marquez $50,000,000 Denver Scholarship Foundation
William Polk Carey $50,000,000 Johns Hopkins University
H.F. (Gerry) Lenfest $48,000,000 Columbia University
Bill and Melinda Gates Foundation $46,000,000 Institute for OneWorld Health
Bill and Melinda Gates Foundation $44,000,000 The William and Flora Hewlett Foundation
Lilly Endowment $40,000,000 Center on Philanthropy at Indiana University
Gilbert and Jaylee Mead $35,000,000 Arena Stage
Ming Hsieh $35,000,000 University of Southern California
Hector Guy and Doris D. Stefano (Estate) $33,000,000 World Wildlife Fund
Hector Guy and Doris D. Stefano (Estate) $33,000,000 Visiting Nurse & Hospice Care of Santa Barbara
Hector Guy and Doris D. Stefano (Estate) $33,000,000 Santa Barbara Hospice Foundation
Hector Guy and Doris D. Stefano (Estate) $33,000,000 The Salvation Army
Hector Guy and Doris D. Stefano (Estate) $33,000,000 Greenpeace International, Inc.
Hector Guy and Doris D. Stefano (Estate) $33,000,000 Disabled American Veterans Charitable Service Trust
Hector Guy and Doris D. Stefano (Estate) $33,000,000 Direct Relief International
Hector Guy and Doris D. Stefano (Estate) $33,000,000 American Humane Association
Anonymous $31,500,000 Trinity College
Bill and Melinda Gates Foundation $30,000,000 NewSchools Venture Fund
Irwin M. and Joan Jacobs $30,000,000 American Technion Society
Jay A. Precourt $30,000,000 Stanford University
Monte Ahuja $30,000,000 University Hospitals
Bill and Melinda Gates Foundation $29,911,740 United Nations Foundation
Richard P. Simmons and family $29,500,000 Pittsburgh Symphony
Bill and Melinda Gates Foundation $29,300,000 PATH Malaria Vaccine Initiative
Bill and Melinda Gates Foundation $29,000,000 Malaria Control and Evaluation Partnership in Africa
Frederic N. and Eleanor Schwartz (Estate) $26,500,000 Syracuse University
Frederic N. and Eleanor Schwartz (Estate) $26,500,000 Brown University
Amgen Foundation $25,000,000 10 Universities
Anonymous $25,000,000 Marquette University
Anschutz Foundation $25,000,000 University of Colorado
Dorrance H. "Dodo" Hamilton $25,000,000 University of the Arts
Leona and Harry B. Helmsley Charitable $25,000,000 New York-Presbyterian Hospital
Trust
Lilly Endowment $25,000,000 Purdue University, School of Pharmacy and Pharmaceutical
Sciences
Lilly Endowment $25,000,000 Butler University, College of Pharmacy and Health Sciences
Randall B. Terry, Jr. (Estate) $25,000,000 Woodberry Forest
Sheldon G. and Miriam Adelson $25,000,000 Yad Vashem
Stanley Druckenmiller $25,000,000 Harlem Children's Zone
William and Joan Schreyer $25,000,000 Pennsylvania State University at University Park
Eugenia J. Dodson (Estate) $23,700,000 Diabetes Research Institute Foundation
Dutch Ministry of Foreign Affairs $23,400,000 Aeras Global TB Vaccine Foundation
William Allyn (estate) $23,000,000 The Allyn Foundation
Joe and Linda Chlapaty $22,000,000 University of Dubuque
Anonymous $20,000,000 Peddie School
David H. Koch $20,000,000 Johns Hopkins University
David H. Koch $20,000,000 American Museum of Natural History
GE Foundation $20,000,000 Cincinnati Public Schools
George R. Roberts and Family $20,000,000 Claremont McKenna College
Henry M. and Wendy J. Paulson $20,000,000 Goldman Sachs Philanthropy Fund
John Parke and Marie Smith Young (Estate) $20,000,000 Occidental College
Ludwig Institute for Cancer Research $20,000,000 University of Chicago
Ludwig Institute for Cancer Research $20,000,000 Stanford University
Ludwig Institute for Cancer Research $20,000,000 Memorial Sloan-Kettering Cancer Center
Ludwig Institute for Cancer Research $20,000,000 Massachusetts Institute of Technology
Ludwig Institute for Cancer Research $20,000,000 Johns Hopkins University
Ludwig Institute for Cancer Research $20,000,000 Dana Farber Cancer Institute/Harvard Medical School
Norman C. and Carmelita Teeter $20,000,000 Western Illinois University
Samuel J. Heyman $20,000,000 Partnership for Public Service
Kenneth and Anne Dias Griffin $19,000,000 The Art Institute of Chicago
Bill and Melinda Gates Foundation $17,000,000 PATH
Bill and Melinda Gates Foundation $16,654,000 International Bank for Reconstruction and Development
Bill and Melinda Gates Foundation $16,231,000 Ministry of Culture of the Republic of Latvia
Anonymous $15,000,000 Darlington School
Anonymous $15,000,000 City of Hope
Bill and Melinda Gates Foundation $15,000,000 Columbia University
Bill and Melinda Gates Foundation $15,000,000 California Department of Education (CDE) and California
County Superintendents Educational Services Association
(CCSESA)
Engelstad Foundation $15,000,000 Nevada Cancer Institute
GE Foundation $15,000,000 Stamford Public Schools
Grace M. Pollock (Estate) $15,000,000 University of Washington
Leland and Mary Pillsbury $15,000,000 Cornell University, School of Hotel Administration
Roger Holden $15,000,000 Pitzer College
S. Wilson and Grace M. Pollock Foundation $15,000,000 University of Pennsylvania
Scripps Howard Foundation $15,000,000 Ohio University
Wun Tsun Tam (Estate) $15,000,000 Columbia University
Bill and Melinda Gates Foundation $14,967,043 BRAC Foundation Tanzania Chapter
Robert Yik-Fong Tam (Estate) $14,200,000 Columbia University
Anonymous $14,000,000 The Nature Conservancy
Bill and Melinda Gates Foundation $13,444,609 International Development Enterprises
E. Philip Saunders $13,000,000 Rochester Institute of Technology
British Petroleum $12,500,000 University of Texas Medical Branch in Galveston
British Petroleum $12,500,000 Texas A&M University
Philip J. Purcell, III $12,500,000 University of Notre Dame
Bill and Melinda Gates Foundation $12,100,000 Region One Education Service Center
Bill and Melinda Gates Foundation $12,083,990 Asian Vegetable Research and Development Center
Frances M. Craig $12,000,000 Iowa State University
Margaret F. Galbraith (Estate) $12,000,000 Inland Northwest Community Foundation
Eugenia J. Dodson (Estate) $11,900,000 University of Miami Sylvester Comprehensive Cancer Center
Harry and Jeanette Weinberg Foundation $11,000,000 Center for Jewish Education
Broad Foundation $10,500,000 Green Dot Public Schools
Roger and Joyce Howe $10,500,000 Miami University
William C. Powers $10,500,000 Princeton University
Lumina Foundation for Education $10,250,000 Jobs for the Future
Dutch Ministry of Foreign Affairs $10,200,000 Global Alliance for TB Drug Development (TB Alliance)
American Express $10,000,000 World Trade Center Memorial Foundation
Annenberg Foundation $10,000,000 Pennsylvania Academy of the Fine Arts and the Philadelphia
Museum of Art
Anonymous $10,000,000 University of Minnesota, Institute of Technology
Anonymous $10,000,000 Jewish Funders Network
ALSAM Foundation $10,000,000 University of Colorado at Denver and Health Sciences Center
School of Pharmacy
C.J. and Elizabeth Segerstrom $10,000,000 Orange County Performing Arts Center
Charles Lakin and Family $10,000,000 Iowa West Foundation
Conrad T. Prebys $10,000,000 Scripps Health
Douglas C. Floren and Family $10,000,000 Dartmouth College
Eli Lilly and Co. $10,000,000 International Diabetes Foundation
Eli Lilly and Company Foundation $10,000,000 Riley Children's Foundation
Ford Foundation $10,000,000 National Women's Law Center
Ford Motor Company $10,000,000 Smith College
H.F. (Gerry) Lenfest $10,000,000 Mercersburg Academy
John S. and James L. Knight Foundation $10,000,000 University of Akron
John W. and Barbara Glynn $10,000,000 University of Notre Dame
Judy Avery $10,000,000 Stanford University
Lloyd Cotsen $10,000,000 University of California at Los Angeles
Madlyn and Leonard Abramson $10,000,000 Temple University, School of Dentistry
Mary Ann and Clayton Mathile $10,000,000 Ohio Northern University
Maxine and Stuart Frankel Foundation and $10,000,000 Campaign for Cranbrook
the Samuel and Jean Frankel Foundation
Michael Bloomberg $10,000,000 World Trade Center Memorial Foundation
Nancy B. Hamon $10,000,000 Presbyterian Healthcare System
New York Life Foundation $10,000,000 City College of New York
Richard and Rhonda Goldman Foundation $10,000,000 San Francisco Symphony
Robert D. and Margaret M. Walter $10,000,000 Columbus Museum of Art
Sharon and Timothy Ubben $10,000,000 Posse Foundation
Tim and Bernadette Marquez $10,000,000 Colorado School of Mines
Timothy and Linda O'Neill $10,000,000 Georgetown University
William and Flora Hewlett Foundation $10,000,000 San Francisco Opera
William S. and Jane Rossetti Mosakowski $10,000,000 Clark University
Bill and Melinda Gates Foundation $9,929,835 The William J. Clinton Foundation
Bill and Melinda Gates Foundation $9,900,000 Community in Schools
Bill and Melinda Gates Foundation $9,800,000 Foundation for Innovative New Diagnostics (FIND)
Anonymous (Estate) $9,600,000 College of William and Mary
Bill and Melinda Gates Foundation $9,500,000 University of Texas Medical Branch, Galveston
United Jewish Appeal-Federation of New $9,300,000 Kiryat Shemona, Israel
York
W.K. Kellogg Foundation $8,700,000 Louisiana Public Health Institute
Anonymous $8,000,000 Willamette University
David Markin $8,000,000 Bradley University
Wallace Foundation $8,000,000 Big Thought
William R. Kenan Jr. Charitable Trust $8,000,000 University of North Carolina-Chapel Hill
Anonymous $7,500,000 Valparaiso Family YMCA
Eli Lilly and Co. Foundation $7,500,000 Indiana University Cancer Center
Bill and Melinda Gates Foundation $7,100,000 Roll Back Malaria Partnership (part of the World Health
Organization)
Steve G. Stevanovich $7,000,000 University of Chicago, Center for Financial Mathematics
Bill and Melinda Gates Foundation $6,574,098 World Council of Credit Unions, Inc.
Sidney Cox (Estate) $6,500,000 Cornell University
Nobel Biocare $6,200,000 Medical College of Georgia School of Dentistry
Annenberg Foundation $6,000,000 University of Southern California, Annenberg School for
Communication
Anonymous $6,000,000 Woodland Park Zoo
Bill and Melinda Gates Foundation $6,000,000 Cristo Rey National Network of High Schools
Rick and Tina Caruso $6,000,000 University of Southern California
T. Boone Pickens $6,000,000 Johns Hopkins University
Bill and Melinda Gates Foundation $5,800,000 Centro Internacional de Mejoramiento de Maiz y Trigo DF
Norman Levan $5,700,000 Bakersfield College
Benjamin and Marian Schuster $5,500,000 Kettering Medical Center
Naples Children & Education Foundation $5,500,000 University of Florida College of Dentistry
Bill and Melinda Gates Foundation $5,447,746 Opportunity International Inc
John S. and James L. Knight Foundation $5,400,000 University of Maryland Philip Merrill College of Journalism
Lucy Tull (Estate) $5,300,000 Salisbury University
Park B. Smith $5,300,000 College of the Holy Cross
Anonymous $5,200,000 University of Oregon
Helen Ginsberg Forman (Estate) $5,100,000 Rhode Island College
Bill and Melinda Gates Foundation $5,056,468 World Health Organization
Adam Williams Family $5,000,000 Mission Hospital
Bill and Melinda Gates Foundation $5,000,000 Seattle Community Colleges
Bill and Melinda Gates Foundation $5,000,000 Fundacio Clinic per a la Recerca Biomedica
Bruce and Gloria Ingram $5,000,000 Texas State University - San Marcos
Charles Becker $5,000,000 Karmanos Cancer Institute
Coleman Fung $5,000,000 University of California, Berkeley
David G. Mugar $5,000,000 Cape Cod Hospital
Douglas and Diana Berthiaume $5,000,000 University of Massachusetts at Amherst
Ernst F. Lied Foundation $5,000,000 University of Kansas
Ewing Marion Kauffman Foundation $5,000,000 University of Wisconsin - Madison
Ewing Marion Kauffman Foundation $5,000,000 Arizona State University
J. Willard and Alice S. Marriott Foundation $5,000,000 University of Utah
J.R. (Pitt) and Barbara Hyde $5,000,000 University of North Carolina at Chapel Hill
James McWethy $5,000,000 Cornell College
Jerry and Phyllis Rappaport and the Jerome $5,000,000 Suffolk University Law School
Lyle Rappaport Charitable Foundation
John Randall Cook and Waverly Manson $5,000,000 Longwood University
Cole
John S. and James L. Knight Foundation $5,000,000 Campaign for Cultural Facilities
Kenneth and Frances Eisenberg $5,000,000 University of Michigan
Leonard and Jayne Abess $5,000,000 University of Miami
Mark Kingdon $5,000,000 Harlem Children's Zone
Mary and David Boies $5,000,000 Northern Westchester Hospital
Max Carrol Chapman , Jr. $5,000,000 University of North Carolina-Chapel Hill
Mike Curb $5,000,000 Rhodes College
Ohio State University Dept. of Athletics $5,000,000 Ohio State University
Paul G. Allen Family Foundation $5,000,000 Fred Hutchinson Cancer Research Center
Robert M. and Diane Levy $5,000,000 University of Pennsylvania, Wharton School of Business
Scott and Kathleen Kapnick $5,000,000 Naples Botanical Garden
Sheila C. Johnson $5,000,000 University of Virginia, Curry School of Education
Sheldon G. and Miriam Adelson $5,000,000 Birthright Israel Foundation
Starr Foundation $5,000,000 Carleton College
Steven and Alexandra Cohen $5,000,000 Stamford Hospital
Sybil B. Harrington Trust $5,000,000 West Texas A&M University
T. Boone Pickens $5,000,000 Texas Women's University
Theodore P. and Linda Desloge, Jr. $5,000,000 St. Luke's Hospital
Thomas and Stacey Siebel Foundation $5,000,000 Montana Meth Project
Victor and Gussie Baxt $5,000,000 Miriam Hospital
Walt Disney Company Foundation $5,000,000 Children’s Hospital Los Angeles
Warren P. Williamson, Jr. Family $5,000,000 Youngstown State University
William and Flora Hewlett Foundation $5,000,000 San Francisco Symphony
William and Flora Hewlett Foundation $5,000,000 San Francisco Ballet
William and Flora Hewlett Foundation $5,000,000 American Conservatory Theater
William B. Quarton $5,000,000 Cedar Rapids Museum of Art
Rollie Boreham, Jr. (Estate) $4,800,000 University of Arkansas at Fort Smith
Rollie Boreham, Jr. (Estate) $4,800,000 United Way of Greater Fort Smith
Rollie Boreham, Jr. (Estate) $4,800,000 Sparks Health System
Rollie Boreham, Jr. (Estate) $4,800,000 First Presbyterian Church of Fort Smith
Anonymous $4,600,000 Bethune-Cookman College
Darshan Dhaliwal $4,500,000 University of Wisconsin - Parkside
Harold and Phyllis Thomas $4,500,000 Northwest Nazarene University
Hodson Trust $4,500,000 Washington College
Hodson Trust $4,500,000 St. John's College
Hodson Trust $4,500,000 Johns Hopkins University
Hodson Trust $4,500,000 Hood College
John E. Lingo, Jr. and Family $4,500,000 Virginia Wesleyan College
Bill and Melinda Gates Foundation $4,428,606 University of Notre Dame
Gordon and Betty Moore Foundation $4,300,000 Santa Clara Valley Medical Center
Bill and Melinda Gates Foundation $4,157,729 African Malaria Network Trust (AMANET)
Anonymous $4,100,000 YMCA of Greater Omaha
George and Patience Humphrey $4,000,000 University Hospitals
Haya Wallace (Estate) $4,000,000 University of Oregon
Jill Roberts $4,000,000 New York Presbyterian Hospital and Weill Cornell Medical
Center
Paramount Farms $4,000,000 Children's Hospital Central California
Robert G. Wilmers $4,000,000 Buffalo Zoo
Tony and Mary Lariccia $4,000,000 Youngstown State University
Willard and Pat Walker Charitable $4,000,000 Washington Regional Medical System
Foundation
Houston Katrina/Rita Relief Fund $3,900,000 Houston Independent School District
Carl Menges $3,600,000 Hamilton College
George Gund Foundation $3,600,000 Neighborhood Progress, Inc.
Richard Strachan $3,600,000 Oregon State University
Bill and Melinda Gates Foundation $3,591,544 CARE
George Gund Foundation $3,500,000 Cleveland Institute of Art
Leon and Toby Cooperman $3,500,000 New Jersey Performing Arts Center
Peggy and Donald "Don" Cravens $3,500,000 College of the Desert
Shell Oil Co. $3,500,000 Louisiana State University
British Petroleum $3,400,000 Chicago Symphony Orchestra
Marilyn Ziering $3,250,000 Los Angeles Opera
Heinz Endowment $3,100,000 Sarah Heinz House
Anonymous $3,000,000 High Point University
Anonymous $3,000,000 Children's Hospital Los Angeles
Carmelo Anthony $3,000,000 Syracuse University
Ewing Marion Kauffman Foundation $3,000,000 Syracuse University
Ewing Marion Kauffman Foundation $3,000,000 Georgetown University
Ewing Marion Kauffman Foundation $3,000,000 Carnegie Mellon University
Florence Fang $3,000,000 University of California, Berkeley
H.F. (Gerry) Lenfest $3,000,000 Pennsylvania Academy of the Fine Arts and the Philadelphia
Museum of Art
John D. and Catherine MacArthur Foundation $3,000,000 New Communities Program (Local Initiatives Support
Corporation
Joseph Neubauer $3,000,000 Pennsylvania Academy of the Fine Arts and the Philadelphia
Museum of Art
Kari Grimm $3,000,000 Concordia University
Kitson & Partners $3,000,000 Florida Gulf Coast University
Pat and Shirley Boone $3,000,000 Pepperdine University
Pew Charitable Trusts $3,000,000 Pennsylvania Academy of the Fine Arts and the Philadelphia
Museum of Art
Todd Aaron (Estate) $3,000,000 Midland College
Willard and Pat Walker Charitable $2,960,000 University of the Ozarks
Foundation
William and Flora Hewlett Foundation $2,750,000 Hayward Unified School Districts
Jack Goodall, Leon Parma, and Robert Payne $2,700,000 San Diego State University
Melvin Lee Makower (Estate) $2,700,000 East Bay Community Foundation
Ulla Searing $2,700,000 New College
Alan and Marilyn Korest $2,500,000 Florida Gulf Coast University
Alberta Blanton $2,500,000 Florida Southern College
Assad Meymandi $2,500,000 North Carolina Museum of Art
David F. Bolger $2,500,000 Northfield Mount Hermon School
Donald Bren $2,500,000 Newport-Mesa Unified School District
Frances J. and Robert T. Monk (Estate) $2,500,000 East Carolina University
Joel Johnson $2,500,000 Hamilton College
Kelley Bergstrom $2,500,000 University of Florida
Ray and Carole Neag $2,500,000 University of Connecticut
Sam Kornblau $2,500,000 Virginia Commonwealth University
W. Baxter Perkinson, Jr. $2,500,000 Virginia Commonwealth University
Homer Cox $2,400,000 Southern Illinois University at Edwardsville
Kenshin Oshima $2,400,000 New York University Stern School of Business
McKnight Foundation $2,400,000 Local Initiatives Support Corporation
Rollie Boreham, Jr. (Estate) $2,400,000 University of the Ozarks in Clarksville
Rollie Boreham, Jr. (Estate) $2,400,000 The Salvation Army
Dr. Richard H. and Julia Rush $2,300,000 Edison College, Lee Campus
Peter Bennett $2,250,000 Lehigh University
William and Flora Hewlett Foundation $2,250,000 Carnegie Mellon University
Julia and Thomas Lanigan $2,200,000 Le Moyne College
Ruth Rammel $2,200,000 Columbus Zoo and Aquarium
Heinz Endowment $2,100,000 Pittsburgh Public Schools
William and Flora Hewlett Foundation $2,100,000 Oxfam America
Bill and Melinda Gates Foundation $2,003,750 Worldwide Foundation for Credit Unions
Anonymous $2,000,000 William Jewell College
Anonymous $2,000,000 Trevecca Nazerene University
Anonymous $2,000,000 Roswell Park Cancer Center
Anonymous $2,000,000 New Israel Fund
Anonymous $2,000,000 Friends University
Anonymous $2,000,000 Covenant College
Anonymous $2,000,000 Lancaster Mennonite School
Anthony R. Pasquinelli $2,000,000 Roosevelt University
Bill and Melinda Gates Foundation $2,000,000 World Health Organization
Bush-Clinton Katrina Fund $2,000,000 South Cameron Memorial Hospital
Cynthia and Edward Jr. DeBartolo $2,000,000 Cleveland Clinic
Dan Rather $2,000,000 Sam Houston State University
Dr. Robert C. Atkins Foundation $2,000,000 Tufts University School of Medicine
Dwanye (the "Rock") and Dany Johnson $2,000,000 University of Miami
Eric Schmidt $2,000,000 Virginia Tech University, College of Engineering
Ewing Marion Kauffman Foundation $2,000,000 University of Maryland - Baltimore County
Ewing Marion Kauffman Foundation $2,000,000 Brown University
George and Shirley Moore $2,000,000 Clinton Community College
George Gund Foundation $2,000,000 Foundation Fighting Blindness
Google, Inc. $2,000,000 Stanford University Law School
Hanover Insurance Group $2,000,000 Worcester Center for the Performing Arts
Hashem Naraghi (Estate) $2,000,000 California State University Stanislaus
Ina Anisfield Meyers $2,000,000 Ramapo College
Intermountain Healthcare $2,000,000 YWCA of Salt Lake City
J. Vance and Florence Highland Johnson $2,000,000 West Virginia University Foundation
(Estate)
James Irvine Foundation $2,000,000 The Huntington Library, Art Collections, and Botanical Gardens
James Irvine Foundation $2,000,000 Southern California Public Radio
James M. Hull $2,000,000 Augusta State University
Jay and Virginia Crofoot and Terry and Kelly $2,000,000 Texas Tech University Health Sciences Center
Crofoot
John S. "Jack" Cullen $2,000,000 St. Joseph's Collegiate Institute
Mark Edward and Theresa Thoman $2,000,000 University of Missouri at Columbia, School of Medicine
Marlyn Whitsitt Rinehart $2,000,000 University of Illinois at Urbana-Champaign
Martha Apgar $2,000,000 Stetson University
Martha Ann Dumke Healy $2,000,000 Weber State University
Mirant Foundation $2,000,000 Alliance for Mindanao Off-Grid Renewable Energy (AMORE)
Monsanto Company $2,000,000 University of Missouri
Robert Ortenzio $2,000,000 Gettysburg College
Robert L. Chapman (Estate) $2,000,000 Columbus Zoo and Aquarium
Roger and Lilah Stangeland Foundation $2,000,000 St. John's Northwestern Military Academy
Ron Venderly $2,000,000 Indiana University-Purdue University Fort Wayne (IPFW)
Ronald K. and Florence Washburn $2,000,000 Washburn University
Sean O'Sullivan $2,000,000 Rensselaer Polytechnic Institute
T. Boone Pickens $2,000,000 Big Brothers Big Sisters of North Texas
William and Amanda Madar $2,000,000 Cleveland Clinic
William Caldwell $1,940,000 University of Missouri at Columbia
Bill and Melinda Gates Foundation $1,900,000 Bellevue Schools Foundation
William and Flora Hewlett Foundation $1,800,000 United Kingdom’s Economic and Social Research Council
BB&T Charitable Foundation $1,750,000 West Virginia University, College of Business and Economics
Assad Meymandi $1,700,000 Sorbonne
John S. and James L. Knight Foundation $1,700,000 Stony Brook University
William and Flora Hewlett Foundation $1,700,000 Rice University
Burton D. Morgan Foundation $1,650,000 Baldwin-Wallace College
William Penn Foundation $1,600,000 PennPraxis, the clinical outreach arm of the University of
Pennsylvania School of Design
Burton D. Morgan Foundation $1,560,000 College of Wooster
Anonymous $1,500,000 Harlem Children's Zone
Arnold and Dianne Gazarian $1,500,000 California State University Fresno
Chicago Mercantile Exchange Trust $1,500,000 University of Chicago, School of Business
Donald and Michele D'Amour $1,500,000 Assumption College
Elsie Hoffman Burkhart (Estate) $1,500,000 Medcenter One
Ewing Marion Kauffman Foundation $1,500,000 Purdue University
Frederick M. Dierks $1,500,000 National Park Community College
Heinz Endowment $1,500,000 Pittsburgh Cultural Trust
Helen G. Nassif $1,500,000 St. Luke's Health Care Foundation
James Irvine Foundation $1,500,000 ConnectEd: The California Center for College and Career
John and Crystal Beuerlein $1,500,000 Drury University
John R. and Audrey Ellis $1,500,000 Drake University
Nell Mondy (Estate) $1,500,000 Williams Baptist College
PACCAR Inc $1,500,000 University of North Texas
Ralph Nelles $1,500,000 St. Vincent Healthcare
Robert Hartsook $1,500,000 Center on Philanthropy at Indiana University
Robert J. Herbold $1,500,000 University of Washington
Sandford and Mimi Furman $1,500,000 University of Illinois at Urbana-Champaign
W.A. "Tex" Moncrief $1,500,000 Western State College
Wal-Mart $1,500,000 America's Second Harvest
William and Flora Hewlett Foundation $1,500,000 Revenue Watch Institute
William and Flora Hewlett Foundation $1,500,000 Planned Parenthood Golden Gate
William and Flora Hewlett Foundation $1,500,000 African Population and Health Research Center
Anonymous $1,400,000 Crossroads Community Foundation
John S. and James L. Knight Foundation $1,400,000 The Opportunity Project
Norbert F. Lindskog (Estate) $1,400,000 St. Cloud State University
Burton D. Morgan Foundation $1,300,000 Lake Erie College
Lumina Foundation for Education $1,300,000 Public Agenda Foundation
Mary and Ivan Schrodt $1,300,000 National Corvette Museum
Olean U. Vincent (Estate) $1,300,000 University of Texas at Dallas
Vera and David Mefford (Estate) $1,300,000 University of Tennessee
A. Barry and Lori Cappello $1,250,000 University of California at Los Angeles, School of Law
Evelyn Arell (Estate) $1,250,000 Rotary Club of Concord
George Family Foundation $1,250,000 Harvard University
T. Boone Pickens $1,250,000 Senior Source
Anonymous (Estate) $1,200,000 University of Buffalo
Caterpillar Foundation $1,200,000 Opportunity International
Charles Stewart Mott Foundation $1,200,000 Genesee County Health Department
Golden Leaf Foundation $1,200,000 Elizabeth City State University Foundation
Markos and Eleni Tsakopoulos- Kounalakis $1,200,000 Georgetown University
McKnight Foundation $1,200,000 Greater Twin Cities United Way
Niswonger Foundation $1,200,000 Greene County Board of Education
Patrick and Jill McCuan $1,200,000 Howard Community College
Claud L. Sheats, Jr. (Estate) $1,129,000 Wichita State University
AIG $1,100,000 Count Me In for Women's Economic Independence
Anonymous $1,100,000 Northeastern Ohio Universities Colleges of Medicine and
Pharmacy
Chicago Mercantile Exchange Trust $1,100,000 Renaissance Schools Fund
Graphisoft $1,100,000 Colorado State University, Department of Construction
Management
Jerry D. and Linda Gregg Fields $1,100,000 Texas State University - San Marcos
John E. and Marva M. Warnock $1,100,000 University of Utah
Community Foundation Silicon Valley $1,080,000 De Anza College
Abbott and Laura Keller $1,000,000 University of Oregon
Allan and Alfie Norville $1,000,000 United Way of Tucson and Southern Arizona
Anonymous $1,000,000 Stockton Symphony Association
Anonymous $1,000,000 Punta Gorda's Military Heritage and Aviation Museum
Anonymous $1,000,000 Old Sturbridge Village
Assad Meymandi $1,000,000 University of North Carolina - Chapel Hill
Bank of America Charitable Foundation $1,000,000 Santa Clara University
BB&T Charitable Foundation $1,000,000 University of North Carolina-Greenville, Bryan School of
Business and Economics
Benjamin and Nancy Suarez $1,000,000 University of Akron
Bernard Osher Foundation $1,000,000 University of Vermont
Bill and Melinda Gates Foundation $1,000,000 Family Services of King County
Bill and Melinda Gates Foundation $1,000,000 Calvert Social Investment Foundation
Bob Kimball $1,000,000 University of West Florida
Bob and Cyndi Troop $1,000,000 Our Lady of the Wayside
Bob and Nancy Torray $1,000,000 DC Central Kitchen
Burford Leimenstoll Foundation $1,000,000 University of Virginia
Burton D. Morgan Foundation $1,000,000 Oberlin College
Burton D. Morgan Foundation $1,000,000 Hiram College
C. Kenneth and Dianne Wright $1,000,000 Virginia Commonwealth University
Charles Hammond, Jr. $1,000,000 University of Illinois at Urbana-Champaign
Chicago Mercantile Exchange Trust $1,000,000 Northwestern University, Kellogg School of Management
Chicago Mercantile Exchange Trust $1,000,000 DePaul University
Chicago Mercantile Exchange Trust $1,000,000 Children's Memorial Hospital
Chris Whitt $1,000,000 University of Arkansas at Fort Smith
Conrad N. Hilton Foundation $1,000,000 CARE
Country Insurance and Financial Services $1,000,000 Peoria Riverfront Museum
Countrywide Financial Corporation $1,000,000 Rebuilding Together
Craig and Elizabeth Stephens Campbell $1,000,000 Opportunity Village
Cydney and Tom Marsico $1,000,000 Denver's Road Home
Cynthia Gelsthorpe Fish $1,000,000 Hobart and William Smith Colleges
David A. Tepper $1,000,000 University of Pittsburgh
David Y. Lee $1,000,000 University of California at Los Angeles
Don and Kathy Steininger $1,000,000 Community Foundation of Greater Fort Wayne
Donald and Nancy Devorris $1,000,000 Pennsylvania State University, Altoona
Donald P. Bellisario $1,000,000 Pennsylvania State University
Dorvin D. and Betty Leis $1,000,000 Maui Community College
Dr. and Mrs. William H. Kaufman $1,000,000 University of Illinois at Chicago
Dr. Rocco and Verna (Houck) Motto $1,000,000 Cleveland Institute of Art
Estelle Wilhelm $1,000,000 Syracuse University
Ewing Marion Kauffman Foundation $1,000,000 New York University
ExxonMobil Foundation $1,000,000 Society of Women Engineers
First Tennessee Foundation $1,000,000 University of Tennessee
Freeman Family Fund of The Community $1,000,000 Maymont Foundation
Foundation
Gary Cohn $1,000,000 Harlem Children's Zone
George Gund Foundation $1,000,000 Cleveland Zoological Society
George W. Prentiss (Estate) $1,000,000 Holyoke Medical Center
Group Health Cooperative $1,000,000 King County
Harrah's Entertainment Inc. $1,000,000 United Service Organizations (USO)
Holland Foundation $1,000,000 Child Saving Institute
Homer and Dolly Hand $1,000,000 Stetson University
Jane Seddon Willson $1,000,000 Children's Hospital Central California
Jay and Debi Shaw $1,000,000 Colgate University
Jerome B. Miller $1,000,000 American Academy of Pediatric Dentistry Foundation
Joan and Irwin Jacobs $1,000,000 KPBS
John and Donna Crean $1,000,000 Chapman University
John and Gertrude Petersen $1,000,000 Pennsylvania State University, Erie
John and Jane Barnhill $1,000,000 University of Texas at Austin
John and Susan Sykes $1,000,000 The Florida Orchestra
Joseph and Harvey Meyerhoff Family $1,000,000 Baltimore Symphony Orchestra
Charitable Funds
Keith R. Westcott $1,000,000 University of Illinois at Urbana-Champaign
Ken Langone $1,000,000 Harlem Children's Zone
Kevin Delbridge $1,000,000 Western New England College
Lakshmi Mittal $1,000,000 Massachusetts Eye and Ear Infirmary
Larry and Polly Hendren $1,000,000 MSM-UMR Alumni Association
Lavin Family Foundation $1,000,000 Tulane University
Lester and Marie Winzenried (Estate) $1,000,000 Carroll College
Lewis Cirne $1,000,000 Dartmouth College
Lutheran Foundation $1,000,000 Indiana University School of Medicine-Fort Wayne
Margaret W. Beckner (Estate) $1,000,000 University of Texas Southwestern Medical Center at Dallas
Marshall and Vera Lea Rinker Foundation $1,000,000 Stetson University
McKnight Foundation $1,000,000 Iowa Natural Heritage Foundation
McKnight Foundation $1,000,000 Amherst H. Wilder Foundation
Meredith and David Mills $1,000,000 University of Illinois at Urbana-Champaign
MGM Mirage $1,000,000 University of Nevada Las Vegas (UNLV)
Microsoft Corporation $1,000,000 Performing Arts Center Eastside
Morris and Shirley Trachten $1,000,000 University of Connecticut at Storrs
Open Society Institute $1,000,000 Committee to Protect Journalists
Oscar Rennebohm Foundation $1,000,000 St. Mary's Hospital
Oskar Wenceslaus Elbert (Estate) $1,000,000 Dunedin Fine Art Center
Palm Foundation $1,000,000 University of California, Santa Barbara
Phyllis and Donald Campbell Charitable $1,000,000 Western New England College
Foundation
Radin Foundation $1,000,000 Clovis Community Medical Center
Raza Bokhari $1,000,000 Temple University, Fox School of Business
Robert Kraft $1,000,000 Hockomock Area YMCA's Foxboro branch
Robert Wilson $1,000,000 American Bird Conservancy
Roger Hertog $1,000,000 City University of New York's Baruch College
Sandra and Douglas Bergeron $1,000,000 Georgia State University
Savage and Associates $1,000,000 University of Toledo
Sheik Hamad Bin Khalifa Al-Thani $1,000,000 Abraham Lincoln Presidential Library and Museum
Sherry Gold $1,000,000 Albany Law School
Susan Bulkeley Butler $1,000,000 Purdue University
T. Boone Pickens $1,000,000 The Phoenix House
T. Boone Pickens $1,000,000 M.D. Anderson
T. Boone Pickens $1,000,000 Admiral Roy F. Hoffman Foundation
Target $1,000,000 The Salvation Army
Taylor Engineering $1,000,000 University of North Florida
The Colorado Trust $1,000,000 Regis University’s Rueckert-Hartman School for Health
Professions
The Links $1,000,000 National Civil Rights Museum
Thelma and Gilbert Schnitzer $1,000,000 University of Oregon
Tike and Ronde Barber and their families $1,000,000 University of Virginia
Tom and Mary James $1,000,000 Bayfront Medical Foundation
Verizon Foundation $1,000,000 LA's BEST (Better Educated Students for Tomorrow)
VH1 Save The Music Foundation $1,000,000 New York City public schools
Wallace Foundation $1,000,000 Arena Stage
Wal-Mart $1,000,000 Business Consortium Fund
Wal-Mart and Sam's Club Foundation $1,000,000 Thurgood Marshall Scholarship Fund
Wal-Mart and Sam's Club Foundation $1,000,000 The Salvation Army
Whitney Benefits Inc. $1,000,000 Sheridan College
Will and Jada Smith Family Foundation $1,000,000 Baltimore School for the Arts
William and Richard Eggers and the Melvin $1,000,000 Syracuse University
and Mildred Eggers Charitable Family
Foundation
William H. Draper, III $1,000,000 Stanford University
William R. Johnson, Jr. $1,000,000 University of Hawaii-Manoa
TL: Fluoridation of Water
A report published by J. M. Dunning in 1962 showed the

relationship of elevated fluoride levels in children to the
incidence of dental caries. 1. This data, and data from
subsequent reports shows a minimum incidence of caries when
water fluoride levels were held continuously at about 1.0
mg/L. Because of this fact, public water supplies are
usually fluoridated to optimum levels. In 1985, the center
for disease control stated that 130 million Americans, or
61% of those served by public water supplies, consume
fluoridated water. In 1968, this figure was about 80
million.
Dental caries, the most prevalent chronic disease of human

beings, is most widespread in children. Tooth decay reaches
a peak in adolescence, and diminishes in adulthood. It is
for this reason that fluoridated water has the greatest
effect on the teeth during the formative years. Fluoride is
absorbed on the teeth and bones. The softer tissues of the
body do not seem to retain fluoride. When teeth are
forming, an adequate source of fluoride will help to
strengthen the enamel, forming a more impervious layer to
the bacteria which cause decay. Caution is needed, though,
in that increased levels of fluoride above the optimum can
cause mottling of teeth from dental fluorosis. This
condition creates brittleness in the teeth, and moderate to
severe discoloration. Water purveyors must take every
precaution to control the levels of fluoride ion
concentration in their supply. The USEPA has set a maximum
contaminant level (MCL) for fluoride at 4 mg/L to prevent
crippling skeletal fluorosis.
A secondary MCL of 2 mg/L was established by USEPA to

prevent dental fluorosis. These limits are reviewed every
three years. It is generally agreed that a fluoride level
of 0.8 to 1.3 mg/L Fluoride is most effective, dependent on
temperature. (In hotter regions, people tend to drink more
water, and therefore will retain more fluoride.)
Chemicals Used in Fluoridation
Fluoride is the negative ionic form of Fluorine, a gaseous

element. Very abundant in nature, fluorine can be found in
all soils, water supplies, plants and animals in varying
amounts. Fluorine is a reactive element and therefore, it
is always found in combination form, never in the free
state. Fluoride-containing minerals are used by industry for
fluoride compound production, the most prevalent being
fluorspar, cryolite and apatite. From these minerals we get
the three most common fluoride adjustment compounds: Sodium
Fluoride (NaF); hydrofluosilicic acid (H2SiF6); and Sodium
Silicofluoride (Na2SiF6). These three compounds are by-
products of the phosphoric acid fertilizer industry, and the
availability of them is dictated by agricultural production.
Sales of fertilizer will have a direct effect on the
manufacture and availability of fluorides for water
treatment.
1. Principles of Dental Public Health, Harvard University

Press, 1962.
Sodium Fluoride
Sodium Fluoride (NaF) is a white, odorless powder or

crystal. It has a specific gravity of 2.79, a molecular
weight of 42 (Sodium = 23, Fluorine = 19), and a
solubility of 4 grams/100 mls, or 4% in water. When
added to water, the NaF will dissociate into Sodium and
the needed Fluoride ions. NaF can be purchased in
quantities which are very pure, usually near 97 to 98%.
A dosage of 19 lbs. NaF into 1 million gallons of

Fluoride free water will produce a 1 mg/L F- solution.
The percent of available Fluoride in NaF is 45% (1942).
Calculation for an estimated dosage of 1mg/L F- when

using NaF (97% purity):
19 lbs / MG NaF x (1 mg/L / 8.34 lbs/MG) x 0.97 purity =

1.0 mg/L F-
Sodium Silicofluoride
Sodium Silicofluoride (Na2SiF6) is a white odorless

crystalline material. It has a specific gravity of
2.679, a molecular weight of 188 (2 Sodiums = 46, S1 =
28, 6 Fluorines = 114), and a solubility ranging from
0.44 to about 2.5%. Na2SiF6 can be purchased in
purities of 98% or higher.
A dosage of 14 lbs Na2SiF6 into 1 million gallons of

Fluoride free water will produce a 1 mg/l F- solution.
The percent available Fluoride in Na2SiF6 is about 61%
(114 188).
Calculation for an estimated dosage of 1 mg/L F- when using

Na2SiF6 (98% purity):
14 lbs / MG Na2SiF6 x (1 mg/L /8.34 lbs/MG) x .61 available F-

x .98 purity = 1.0 mg/L F-
Hydrofluosilicic Acid
Hydrofluosilicic Acid (H2SiF6) is a straw or amber

colored, transparent, fuming, corrosive liquid. It has a
molecular weight of about 144 (2 Hydrogen = 2, Silicon =
28, 6 Fluorines = 114), and can be purchased as a liquid
in drums or bulk at 23 to 35 percent.
A dosage of 46 lbs of 23% (H2SiF6) into 1 Million

gallons of Fluoride free water will produce a 1 mg/L F-
solution. The percent of available Fluoride in (H2SiF6)
is about 79% (114 144).
Calculation for an estimated dosage of 1 mg/L F- when using (H2SiF6) (23%

purity):
46 lbs (H2SiF6) x 1 mg/L x .79 available F- x .23 Purity 8.34 lb/MG = 1.0
mg/L -
It can be noted that water has no "fluoride demand", and

therefore a contact period such as for chlorine is not
needed. Some fluoride ion will, however, be lost in
filtration (usually 0.1 to 0.3 mg/L), so the optimum feed
point for Fluoride is in the post filtration scheme. It is
prudent to perform daily checks of the Fluoride
concentration on plant tap water, and to perform hourly
checks of the feed system while in operation.
Feed Equipment
There are 3 accepted methods for feeding supplemental

fluoride to the supply:
1. The Fluoride saturator
2. Dry Chemical Feeder

3. Chemical solution feeder, using either (H2SiF6) acid
or a solution made from the dry chemicals.
The selection of feed equipment is based on many factors,

including size of plant, availability and type of fluoride
source, cost, and technical expertise of personnel. The
larger facilities seem to prefer the liquid storage and feed
systems. The operator is directed to the publication Water
Fluoridation Principles and Practices, AWWA M4 by the
American Water Works Association.
Fluoride chemicals are added to water as liquids, but may

be measured as either liquid or solid. Solid chemicals are
dissolved into solution before feeding. If so, the strength
of the solution must be controlled, usually by feeding a
predetermined chemical for a specific duration. Two types
of dry-feed machines exist: the volumetric and the
gravimetric. The volumetric delivers a predetermined volume
of dry chemical within a given time, and the gravimetric
delivers a predetermined weight of chemical within a given
time, and is more accurate.
Fluoride Removal with Lime
Defluoridation, or removal of excess fluoride is necessary

where the source of supply contains levels which are
detrimental to the health and welfare of the public.
Fluoride can be removed in the softening process where
waters are high in magnesium content. Lime will precipitate
Magnesium compounds at high pH levels. At these levels,
magnesium fluoride precipitates just as does magnesium
hydroxide. The sludge is settled in the sedimentation
basins and discarded. This discovery was published by R. D.
Scott in 1937 in the Journal AWWA in his work titles
"Fluoride in Ohio Water Supplies".
Ion exchange and adsorption on bone char and activated

alumina are other methods used in the removal of
fluorides.
Activate alumina is a porous inorganic adsorbent similar to

the ion-exchange resins. It works well because the fluoride
ion is "preferred" by the alumina over most other ions. This
process is finding increased use in the home as a point of
entry (POE) or point of use (POU) device.
Safety Precautions
Fluoride dusts from such chemicals as NaF and Na2SiF6 can

expose operators to higher than optimal levels of fluoride,
and can cause irritation of the nasal and mucous membranes.
In addition, fluoride acids can burn the skin. The
following precautions are advisable when handling these
chemicals:
1. Avoid breathing fluoride dusts. Dust masks should be

issued to all those who work with the fluoride dusts.
2. Wear rubber gloves and aprons when handling dusts.
3. Wash away any dusts from the skin immediately.
4. When handling hydrofluosilicic acid, one should wear
acid proof gloves, aprons and face shields. Wash these
items after use.
5. Do not allow persons with open cuts or sores handle
any fluoride acids or dusts.
6. Be sure to post safety rules in the vicinity of the
chemical storage and handling area.
7. Fluoride containers should be labeled as poisonous,
and should never be reused for other purposes.
8. If accidental ingestion occurs, give the operator a
1% solution of calcium chloride, a glass of saturated
lime (Ca(OH)2) water, or milk to drink. Flush the
chemical out of the eyes with warm water.
Get medical attention immediately.
Sample Dosage Scenario
A water plant treats 7.21 MGD, and wishes to keep a

Fluoride ion level of 1.1 mg/L in the plant effluent. If
the raw water source contains 0.36 mg/L natural Fluoride
ion, how many gallons of 24.3% H2SiF6 will be needed in the
month of September? Acid is 10.5 lb/gallon.
Answer: H2SiF6 has 79% available Fluoride ion
1.1 mg/L Desired - 0.36 mg/L available = 0.74 mg/L F-

needed dosage
0.74 mg/L F- x (8.34 lb/MG F- / 1 mg/L) x 7.21 MGD x (30

Days / month) = 1334.92 lb F-/month
1334.92 lb F-/month (.243 x .79) = 6953.8 lb H2SiF6/month

(6953.8 lb H2SiF6/month) x (1 gal/10.5 lb) = 662.26
gal/month
by Nick Pizzi, author of the 12th edition of

Hoover's Water Supply and Treatment.

Process Systems Engineering
Faculty: Loren z Biegler - Ignacio G rossmann - Steinar Hauan - Nikolaos V. Sahinidis -

Arthur Westerberg - Erik Ydstie
Research in Process Systems Engin eering (PS E) is curren tly directed by Prof essors Biegler,
Grossmann, Hau an, Sahinidis and Ydstie, while Professor Westerberg is currently em eritus
professor. The research in the PS E area is carri ed out by abou t 25 gradu ate studen ts an d 6
research ers with in th e department's Center for Advanced Process Decisio n-making (CAPD),
and with fundin g over $2 million per year. Our research goals are to provi de int ellectu al
leadership in compl ex design and operation issues faced by process industri es. Our
underlying approach is based on developing an d advanc ing syst ematic model ing and
solution metho ds for the opti mization an d contro l of multi- scal e process sys tems, rangin g
from mol ecul ar level to th e enterprise level.
The r esearch wo rk of th e PSE group is focused in three maj or areas: optimization, control,
and complex systems. To pics covered in o ptimization include nonlinear, m ixed-in teger,
disjunctive pro grammin g, and glo bal optimization; opti mization of differential algebraic
systems; synth esis of energy an d water systems, and metabolic netwo rks; pl annin g, an d
schedu ling; enterprise- wi de o ptimization; optimization met hods for data-han dling
pro bl ems. Topics in control inclu de adaptive an d self-learnin g contro l; passi vity th eor y;
design and verification of process operati ng systems; and fault tree an alysis for safety.
Finally, to pics in complex systems include microsc ale chem ical synth esis and sensing;
agent sys tems in en gin eering design an d optimization; synthesis and design of reac tion-
separation proc esses an d simulated mo vin g-bed
chromatography.
Over the past two decades, the PSE grou p at Carn egie
Mellon, the largest in th e country, has graduated over
70 Ph.D. students. The PSE faculty have also auth ored a
textbook on process design (Systematic Metho ds of
Chemical Process Design ), and there has been
wi despread adoption of Carn egie Mellon-developed
research strat egies amon g a large nu mber of ac ademic
departmen ts. The PSE fac ulty pl ay important editorial Vision PSE group: Modeling and optimization from
roles for a nu mber of journals, includin g AIChE Journal, molecular through enterprise level.
Automatic a, Journal of Gl obal Optimizat ion, Compu ters
and Ch emical En gin eering, Optimi zation in Engineering, I & EC Res earch , an d SIAM
Journal on Optimization .
In addi tion, th e PSE grou p is invo lved in a num ber of research in teractions with other
Carnegie Mellon departments and c enters, includin g: Tepper Busin ess School (Operations
Research and O perations Managem ent), Inst itute for Complex Engin eered Systems (ICES),
Biomedical En gineerin g, Civi l an d En viron mental Engineerin g, Electrical and Computer
Engineering, Co mputer Scienc e, an d Mathematical Sciences. Moreover, our research
activities inclu de numero us intern ational interactions and research collaborations which
inclu de Imperial Coll ege (UK); INTEC, PLAPIQUI (Argentina); Un iversidad Catolic a (Chil e);
Abo Akademi (Finland); Technic al University-Ber lin, RWTH-Aachen (G ermany); Kyoto
Uni versity (Japan); Universidad Ibero americ ana, Tecnolo gico de Celaya (Mexico); NTNU
(Norway), and Univ. Cant abri a, Univ. Pol itecnic a Catalun ya (S pain).
The Center for Advanc ed Process Dec ision-makin g (CAPD) provi des an umbrella
organization for in teractio ns with in dustry in th e Process Systems En gin eer in g area. Bas ed
on fundamen tal res earch i n modelin g, optimization and control, th e CAPD addresses a wide
ran ge of applications. These inclu de pro duct and process design (micros ystems, metabo lic
networks, separation networks, en ergy syst ems), process control an d safet y (adaptive
control, passivity theo ry, fault trees), and enterpris e-wide optimization (scheduling,
planning an d control of supply ch ains). Thes e applications are address ed th rough
metho dolo gies th at are based on process modeling (dynamics, superstruc tures),
math ematical pro grammin g (nonlin ear an d mi xed-in teger programming), modern search
metho ds (lo gic-based and agent-based) and advanced
computing (Beo wu lf cluster).
Companies that are currently members of CAPD inc lude the

followin g: ABB, Air Products, AspenTech, Bayer, BP, Cargill,
Dash Optim., Dow, Eastman, ExxonMobil, GAMS, Honeywell,
IBM, Kraft, Neste Eng. , Nova Chem ical, Petrobras, PPG,
SimSci, Sunoco, Total . These compani es help to support our
research through mem bership fees, an d in a number of cases,
through spec ial industrial proj ects. Students are in volved i n
the CAPD through an ann ual revi ew meeting in whi ch they
have the opportunity to present th eir work an d meet industrial
research ers. In addition, through the CAPD o ppo rtuniti es of
summer industrial internships are given to our graduate
students. I nd us t r i al p r oj ec t s : O p t i m iz at i o n
o f S ol a r Gr a d e S il ic o n a nd G as
Fi e l d P l an n i ng
The train ing of stu dents in our PSE grou p makes them
attractive can di dat es for industry an d ac ademia. Our students have taken academic
positions wi thin major departm ents (e.g. Illinois, Imperial Co ll ege, McMas ter, Princ eton,
Pur due, T exas A&M, Wisc onsin) or are curren tly emplo yed in indus try in a variety of
compan ies (e.g. As penTec h, Air Pro ducts, Bank of America, BP, ExxonMobil, McKinsey,
Shel l, United Technologi es, and North rop G rumman).
Proposed Governance Principles: Large Foundation
Discussions
http://www.cof.org/Learn/content.cfm?ItemNumber=1227
Accountability
Introduction
Foundations are private trusts for the public good. Stewards of foundation resources
therefore aspire to the highest standards of ethics, accountability, and good corporate
governance. They continually refine foundation policies and practices to reflect the
evolution of thinking about these important matters.
No single approach to accountability and transparency will fit the diverse foundations
across the U.S., nor are the governance standards from the for-profit world a perfect fit or
necessarily appropriate for the non-profit community. With this in mind, a group of
foundation presidents (Names listed at bottom of page) drafted a set of general
governance principles each is using to review its institution's governance practices. Since
our foundations have unique charters and missions and often operate differently, the
principles are being used by the presidents in discussions with trustees to reassess
existing practices related to accountability and transparency and continually improve
them in ways that are appropriate to each foundation.
We believe these principles are fundamentally sound and we share this draft to stimulate
discussion about governance principles in the varying communities of foundations in the
U.S. We recognize that donors select differing organizational forms for their
philanthropy. Thus, these principles are not intended as a prescription for all donors but
rather as one example of governance principles that may be useful for certain foundations
that are beyond a start-up period. As others draft principles that fit their types of
foundations, we will all benefit from comparative analysis of these documents.
I. Organizational Structure and Governance

The foundation's bylaws should clearly set out its corporate structure and be in
compliance with all applicable laws and regulations. The bylaws should establish policies
related to board committees and terms of board service. Board committees should have
charters approved by the full board or in the resolution establishing the committee. The
board should regularly evaluate its own governance policies to maintain high standards
consistent with evolving expectations for the foundation and non-profit community.
II. Board Composition

The board should make sure that its members are competent, knowledgeable and
sufficiently diverse to provide credible and effective oversight of all aspects of the
foundation's work.
III. Code of Ethics/Conflicts of Interest
The foundation should have a code(s) of ethics for officers, trustees and employees. The
code(s) should promote honest and ethical conduct, including the handling of conflict-of-
interest issues; accurate and clear disclosure of financial matters; legal compliance;
confidential use of proprietary information; and prompt internal reporting of violations of
the code. The code of ethics should be readily available to the public, for example, by
posting on the foundation's website, or by reference in the annual report. Trustees and
staff should be introduced to it in their orientation and acknowledge receipt by signing
the code.
Conflicts of Interest
Foundations benefit from having leaders and staff with past and current experience in the
non-profit world and in substantive fields in which the foundation works. Such
experience, however, can result in real or apparent conflicts of interest and, therefore, the
code of ethics for officers, trustees and employees discussed above should include a
conflict of interest policy for addressing these issues.
The policy should:
• Prohibit the use of one's position at the foundation for personal financial gain
or other benefit, including the receipt of gifts other than of nominal value
• Prohibit deriving personal financial benefit through the inappropriate use of
investment information acquired through the foundation
• Establish procedures for insulating trustees from decision-making on grants to
organizations in which they serve as officer or director or with which they
have a conflict of interest; and establish procedures for documentation of these
measures and making the procedures readily available to the public, such as by
posting them on the foundation's website.
Whistleblower Policy
The foundation should establish procedures for handling good faith complaints from
employees and trustees about violations of the policies of the foundation or any conduct
of foundation personnel.
IV. Mode of Operations

As a charitable organization, a foundation should conduct its affairs with a view to cost
containment and standards appropriate to the non-profit sector.
V. Audit Committee
The board should establish a separate audit committee of at least three members to
oversee accounting, financial reporting, and the external audit of the foundation. All
members of the committee should possess financial literacy skills sufficient to review and
understand the books and records of the foundation. Members of the committee should
not receive directly or indirectly any consulting, advisory or other compensation fees
from the foundation other than in their capacity as a member of the board or board
committees. The committee should have the authority to engage its own counsel and
advisors as necessary. The functions of the committee should include:
• oversight of the foundation's financial reporting process;

• review of significant accounting policies and the internal control environment;
• direct responsibility for the appointment, compensation, and oversight of the
foundation's external auditor; the external auditor should report directly to the
committee;
• review of the foundation's annual financial statements with staff and the
external auditor;
• review any issues associated with the 990-PF (the private foundation tax
return);
• meetings with management and internal and external auditors to review
matters raised by the auditors and management;
• regular meetings in executive sessions with the internal and external auditors
without management present;
• pre-approval of all audit and limited non-audit services provided to the
foundation by the external audit firm over a cost level set by the committee;
• establishing an appropriate time limit for external audit partner rotation; and
• review of compliance with conflict of interest policies.
VI. Internal Controls and Record Keeping

Foundations should establish effective internal controls, systems of checks and balances,
and formalized record keeping. These should include:
• keeping detailed books, records, and accounts which accurately and fairly
reflect the transactions and dispositions of assets;
• maintaining a system of internal controls which provides reasonable
assurances that grants, transactions and other expenditures are properly
authorized and appropriately recorded; that proper policies for reasonable
travel and other expenses are established and observed; that staff are aware of
who can authorize particular transactions; and that multiple people in the
organization understand the flow of monies through the foundation;
• providing sufficient information to the board to give assurance that the
foundation's investment portfolio is being responsibly managed, consistent
with applicable investment guidelines; and
• establishing a document retention policy that provides for the safekeeping of
key foundation documents and the prevention of their destruction upon
receiving notice of a legal inquiry into the foundation's operations.
VII. Trustees' Compensation

If foundation trustees are compensated for serving on the board or any committee,
compensation should be fixed by an affirmative vote of a majority of the foundation
board unless a higher percentage is required by the foundation's articles of incorporation
or set by a court of law. Compensation levels should be fair and reasonable and should
take into account the nature and amount of work required by trustees, and benchmarks
from comparable institutions. The foundation should not extend credit, including personal
loans, to any officer or trustee of the foundation.
VIII. CEO Evaluation and Compensation

The board should periodically review the job description of the chief executive officer
and evaluate the CEO's performance on a regular basis. Compensation of the CEO should
be set by either the full board, or the executive or audit committee in a process that takes
account of potential conflicts of interest. The responsible committee should report fully to
the entire board. The excess benefit transaction rules (i.e. basing the decision on
comparable data readily available to the board or committee and recording the process
and decision in the minutes), which create a legal presumption of reasonableness for the
compensation of disqualified persons of public charities, should be followed in this
process.
IX. Financial Statements and Reports

Financial statements and reports should be prepared in accordance with generally
accepted accounting principles and practices and should be audited annually by an
independent accounting firm.
The President and Chief Financial Officer (or equivalently responsible officers) should
review any interim and annual financial statements, federal tax returns, and reports to
state authorities to assure that they fairly present the financial position and financial
activities of the foundation and comply with the foundation's governing documents.
X. Trustee Evaluation and Orientation

Trustees should be evaluated regularly as to compliance with governance practices and
standards, attendance, and substantive contribution. Term renewal for trustees should
take into account evaluation results.
XI. Transparency
The financial, policy, grantmaking and governance practices of the foundation should be
described on the website and/or in annual reports in non-technical, understandable
language.
Vartan Gregorian
President, Carnegie Corporation of New York
William S. White
President, Charles Stewart Mott Foundation
John R. Healy
Chief Executive Officer, The Atlantic Philanthropies
Susan V. Berresford
President, The Ford Foundation
Carol Larson
President and CEO, The David & Lucile Packard Foundation
William C. Richardson
President and CEO, W.K. Kellogg Foundation
Gordon R. Conway
President, Rockefeller Foundation
Paul Brest
President, The William and Flora Hewlett Foundation
Stephen B. Heintz
President, Rockefeller Brothers Fund
Jonathan F. Fanton
President, John D. and Catherine T. MacArthur Foundation
William G. Bowen
President
Andrew W. Mellon Foundation
Karen Davis
President, The Commonwealth Fund
Ralph E. Gomory
President, Alfred P. Sloan Foundation
Rebecca Rimel
President, The Pew Charitable Trusts
Risa Lavizzo-Mourey, President and CEO

Robert Wood Johnson Foundation
For media inquiries contact:

Karen Lake
Director of Marketing and Communications
W.K. Kellogg Foundation
One Michigan Avenue East
Battle Creek, Michigan 49017-4058
Telephone: (269) 968-1611
Safe Drinking Water Act Amendments of 1996
http://www.epa.gov/safewater/sdwa/summ.html#3A
GENERAL GUIDE TO PROVISIONS

Environmental Protection Agency
August 1996
Office of Ground Water and Drinking Water
The Safe Drinking Water Act Amendments of 1996 (PL 104-182) establish a new
charter for the nation's public water systems, States, and the Environmental
Protection Agency in protecting the safety of drinking water. The amendments
include, among other things, new prevention approaches, improved consumer
information, changes to improve the regulatory program, and funding for States and
local water systems. President Clinton signed the Amendments on August 6, 1996.
Copies are available from the Government Printing Office (tel. 202/512-1808; fax
202/512-2250).
This General Guide provides a subject-indexed overview of the new amendments.

The guide will be supplemented with additional summaries and explanatory materials
now under preparation by the Environmental Protection Agency.
TABLE OF CONTENTS
I. PREVENTION APPROACHES
SOURCE WATER PROTECTION
ASSESSMENT PROGRAMS, PROGRAM ELEMENTS, TIME FRAME FOR

ASSESSMENTS, USE OF OTHER AUTHORITIES, ASSESSMENT LINK TO
ALTERNATIVE MONITORING, DWSRF FUNDS OR ASSESSMENTS, DEMONSTRATION
PROJECT, PETITION PROGRAM, CONTAMINANTS ADDRESSED BY PETITIONS,
RESPONSE TO PETITIONS, USE OF CLEAN WATER ACT FUNDS, GRANTS FOR
STATE PROGRAMS, WELLHEAD PROTECTION, NEW YORK CITY WATERSHED
STATE GROUND WATER PROTECTION
GROUND WATER GRANTS FOR STATES, GROUND WATER GRANT GUIDANCE,

REPORT TO CONGRESS
CAPACITY DEVELOPMENT
NEW SYSTEM AUTHORITY, SYSTEMS IN SIGNIFICANT NONCOMPLIANCE, STATE

CAPACITY DEVELOPMENT STRATEGIES, CONTENT OF STATE STRATEGY, EPA
INFORMATION, EFFECT OF REGULATIONS ON CAPACITY, REPORT ON STATE
PROGRESS, LINK TO SRF ASSISTANCE, FINANCE CENTERS, TECHNOLOGY
ASSISTANCE CENTERS
OPERATOR CERTIFICATION
CERTIFICATION PARTNERSHIP, CERTIFICATION GUIDELINES, STATE PROGRAMS,

TRAINING REIMBURSEMENT
II. CONSUMER INFORMATION
CONSUMER AWARENESS
CONSUMER CONFIDENCE REPORTS, COVERAGE, EPA REGULATIONS, HOTLINE,

BOTTLED WATER CONSUMER STUDY
PUBLIC NOTIFICATION
GENERAL REQUIREMENTS, VIOLATIONS WITH SERIOUS EFFECTS, OTHER

VIOLATIONS, STATE REPORTS, EPA REPORTS
III. REGULATORY PROGRAM
CONTAMINANT SELECTION
GENERAL AUTHORITY, GOOD SCIENCE, OCCURRENCE DATABASE, CONTAMINANT

LIST, DETERMINATION OF WHETHER TO REGULATE, URGENT THREATS
STANDARDS AND REGULATION DEVELOPMENT
RISK COMMUNICATION, COST-BENEFIT ANALYSIS, SETTING MCLs, STANDARD

SETTING FLEXIBILITY, LIMITATION ON FLEXIBILITY, RISK-RISK CONSIDERATIONS,
JUDICIAL REVIEW, REVIEW OF STANDARDS, GROUND WATER DISINFECTION,
EFFECTIVE DATE OF REGULATIONS, FILTER BACKWASH, REGULATION
DEVELOPMENT FUNDING, BOTTLED WATER STANDARDS
ARSENIC, SULFATE, RADON, DISINFECTION BYPRODUCTS
ARSENIC STUDY PLAN, ARSENIC DEADLINES, SULFATE STUDY AND REGULATION,

RADON STUDY BY NAS, RADON STANDARD, ALTERNATIVE RADON STANDARD,
STATE MULTIMEDIA RADON PROGRAMS, REVIEW OF MULTIMEDIA RADON
PROGRAMS, SCHEDULE FOR MICROBIAL/DISINFECTION BYPRODUCTS, DBP
STANDARD-SETTING AND RISK-RISK, DBP STANDARD-SETTING
DRINKING WATER STUDIES AND RESEARCH
BIOLOGICAL MECHANISMS, MICROBIAL/DBP STUDIES, WATERBORNE DISEASE

STUDIES ANDINFORMATION, SENSITIVE SUBPOPULATIONS, SCREENING FOR
ESTROGENIC SUBSTANCES, RESEARCH FUNDS, STRATEGIC PLAN, KERR LAB
SMALL SYSTEMS TECHNOLOGY, VARIANCES, AND EXEMPTIONS
AFFORDABLE TECHNOLOGIES, SURFACE WATER TREATMENT RULE, VARIANCE

TECHNOLOGY, SMALL SYSTEM VARIANCES, REGULATIONS FOR VARIANCES,
BLOCK ON CERTAIN VARIANCES, VARIANCE TIME FRAMES, AFFORDABILITY
CRITERIA, CHANGE TO EXISTING VARIANCE PROCESS, REVIEW OF VARIANCES,
TECHNOLOGY INFORMATION, EXEMPTIONS
MONITORING
INFORMATION COLLECTION, REVIEW OF MONITORING REQUIREMENTS, INTERIM

MONITORING RELIEF, PERMANENT ALTERNATIVE MONITORING, EPA GUIDANCE,
UNREGULATED CONTAMINANT MONITORING, SMALL AND MEDIUM SYSTEM
MONITORING PLAN, RESULTS REPORTING, AUTHORIZATION, ANALYTICAL
METHODS
ENFORCEMENT
ADMINISTRATIVE ORDERS, PENALTY CAP, PENALTY PROCESS, CONSOLIDATION

INCENTIVE, ENFORCEABLE REQUIREMENTS, NOTIFICATION OF LOCAL OFFICIALS,
EMERGENCY AUTHORITY PENALTY
IV. FUNDING FOR STATES AND WATER SYSTEMS
DRINKING WATER STATE REVOLVING FUND
ESTABLISHMENT, ALLOTMENT AND ELIGIBILITY, LINK TO PRIMACY, LINK TO

CAPACITY DEVELOPMENT, LINK TO OPERATOR CERTIFICATION, USE OF FUNDS,
INTENDED USE PLANS, STATE MATCH, SET-ASIDES, OTHER USES OF FUNDS,
COMBINED FINANCIAL ADMINISTRATION, TRANSFER OF FUNDS, REGULATIONS
AND GUIDANCE, AUDITS, NEEDS SURVEY, WATER CONSERVATION
V. OTHER PROVISIONS
PUBLIC WATER SUPPLY SUPERVISION
TIME FRAME FOR STATE PRIMACY, ADMINISTRATIVE PENALTY REQUIREMENT

FOR PRIMACY, INTERIM PRIMACY, PUBLIC WATER SYSTEM SUPERVISION
GRANTS, EPA PRIMACY
FEDERAL AGENCIES
SOVEREIGN IMMUNITY, REVIEW OF ORDERS, CITIZEN ACTION
MISCELLANEOUS
LEAD LEACHING STANDARD, LEAD PROHIBITION, LIMITED ALTERNATIVE TO

FILTRATION, GRANTS FOR ALASKA NATIVE VILLAGES, RELATIONSHIP OF GRANTS
TO DWSRF, WASHINGTON AQUEDUCT, DRINKING WATER FUNDS FOR COLONIAS,
WASTEWATER FUNDS FOR COLONIAS, ZEBRA MUSSEL CONTROL, DEFINITIONAL
CHANGE FOR ANALYTIC METHODS, DEFINITION OF COMMUNITY/NONCOMMUNITY
SYSTEM, OPEN CONVEYANCES, RETURN FLOWS
ADDITIONAL ASSISTANCE FOR WATER, INFRASTRUCTURE AND

WATERSHEDS (Title IV--does not amend SDWA)
GRANT AUTHORITY, USE OF GRANTS, FUNDING LEVELS
I. PREVENTION APPROACHES
SOURCE WATER PROTECTION
ASSESSMENT PROGRAMS: Establishes a new Section 1453 for source water quality
assessments. States with PWSS primacy shall submit source water assessment
programs to EPA for approval. EPA is required to publish guidance to States by
August 6, 1997. States must submit their program to EPA no later than 18 months
after EPA publishes guidance. A State program is automatically approved 9 months
after submittal to EPA unless EPA disapproves program. [1453] Sec. 132(a)
PROGRAM ELEMENTS: A State assessment program is required to: (1) delineate the
boundaries of the areas providing source waters for public water systems, and (2)
identify (to the extent practicable) the origins of regulated and certain unregulated
contaminants in the delineated area to determine the susceptibility of public water
systems to such contaminants. [1453] Sec. 132(a)
TIME FRAME FOR ASSESSMENTS: Assessments are to be completed for all public
water systems within 2 years after EPA approval of the State's program. EPA may
extend this period up to 18 months taking into account funds made available to the
State under the Drinking Water State Revolving Fund (DWSRF). States shall make the
results of the source water assessments available to the public. [1453] Sec. 132(a)
USE OF OTHER AUTHORITIES: To avoid duplication, assessments may make use of

sanitary surveys, State wellhead protection programs, pesticide State management
plans, State watershed initiatives including efforts under the Surface Water Treatment
Rule, and efforts under the Federal Water Pollution Control Act (Clean Water Act).
[1453] Sec. 132(a)
ASSESSMENT LINK TO ALTERNATIVE MONITORING: For a State to tailor alternative

monitoring requirements for public water systems under a new permanent monitoring
relief authority (Section 1418), a State must have an EPA approved source water
assessment program. Any public water system seeking alternative monitoring
requirements under a State's permanent monitoring relief authority must have a
complete source water assessment. [1453] Sec. 132(a)
DWSRF FUNDS FOR SOURCE WATER PROTECTION: A State may use up to 10% of
its DWSRF allotment in both FY 1996 and 1997 to delineate and assess source water
protection areas. Loans may also be used to acquire land or conservation easements
to protect source waters and to implement voluntary measures to facilitate
compliance. A State may use up to an additional 10% of its DWSRF allotment to
administer or provide technical assistance through source water protection
programs. [1452(g), (k)] Sec. 130
DEMONSTRATION PROJECT: EPA is to conduct a demonstration project of the most

effective and protective means of assessing and protecting source waters serving
large metropolitan areas and located on Federal lands. [1453] Sec. 132(a)
PETITION PROGRAM: A new authority is established for a source water petition

program. States may establish a program to receive, approve and respond to petitions
from a public water system operator/ owner or local government entity to assist in the
development of voluntary local incentive-based partnerships to (1) reduce the
presence of contaminants, (2) provide financial or technical assistance requested,
and (3) develop recommendations for voluntary, long-term source water protection
strategies. [1454] Sec. 133(a)
CONTAMINANTS ADDRESSED BY PETITIONS: Petitions may address only either

pathogenic organisms which are regulated (or for which regulation is required) or
contaminants detected that are not found "reliably and consistently" below the MCL.
[1454] Sec. 133(a)
RESPONSE TO PETITIONS: In responding to source water petitions, a State is to

provide, at a minimum, information on: priority of the public health concern identified
by the petition; funds available; and technical/financial assistance available from
other Federal and State programs, including the DWSRF and programmatic grants of
the CWA, Section 6217 of the Coastal Zone Act, Title XI of the Food Security Act, sole
source aquifer, wellhead protection, pesticide-ground water management plans, etc.
[1454] Sec. 133(a)
USE OF CLEAN WATER ACT FUNDS: A "Sense of Congress" provision states that
priorities established under section 606(c) of the Federal Water Pollution Control Act
give special consideration to projects recommended pursuant to local source water
petitions. [Free standing-- does not amend SDWA] Sec.133(b)
GRANTS FOR STATE PROGRAMS: By August 7, 1997, EPA is to publish guidance to

assist States in developing source water quality protection partnership programs, and
to assist local governments and community water systems in developing
partnerships and assessing source water quality. State grants of $5 million are
authorized to carry out such programs. [1454(c)] Sec. 133(a) Also, up to 10% of a
State's DWSRF allotment can be used by States for responding to petitions. [1452(g),
(k)] Sec. 130
WELLHEAD PROTECTION: Annual funding for States wellhead protection programs is

reauthorized for FYs 1997-2003 at $30 million, underground injection control
programs at $15 million, and critical aquifer protection at $15 million. [1428(k)] Sec.
120. States may use up to 10% of their DWSRF allotment to implement their wellhead
protection programs. [1452(g)] Sec. 130
NEW YORK CITY WATERSHED: Establishes the New York City watershed protection
program. EPA is authorized to provide financial assistance to State of New York for
demonstration projects implemented as part of the watershed program for the
protection and enhancement of the quality of source waters of the New York City
water supply system. Within 5 years, the Governor of New York is to provide EPA with
a report on the results of funded projects. $15 million grant to New York is authorized
for each fiscal year 1997 to 2003. [1443(d)] Sec. 128
STATE GROUND WATER PROTECTION
GROUND WATER GRANTS FOR STATES: Establishes a new Section 1429 for state
ground water protection programs. EPA may make grants to States to develop
programs to ensure coordinated and comprehensive protection of ground water
resources within the State. $15 million is authorized for State grants for each fiscal
year 1997 to 2003. [1429] Sec. 131
GROUND WATER GRANT GUIDANCE: By August 6, 1997, and annually thereafter,

EPA is to publish guidance establishing procedures for State grant applications.
[1429] Sec. 131
REPORT TO CONGRESS: By August, 1999, and every three years thereafter, EPA is to
report to Congress on the quality of the Nation's ground waters and effectiveness of
State programs for ground water protection. [1429] Sec. 131
CAPACITY DEVELOPMENT
NEW SYSTEM AUTHORITY: By October 1, 1999, each State must obtain the authority
to ensure that new community water systems and non-transient noncommunity water
systems have the technical, financial, and managerial capacity to meet National
Primary Drinking Water Regulations. A State will receive only 80% of its DWSRF
allotment unless the State has such authority. [1420(a)] Sec. 119
SYSTEMS IN SIGNIFICANT NONCOMPLIANCE: States must prepare and submit to

EPA by August 6, 1997 (and periodically update) a list of community water systems
and non-transient, non-community water systems that have a history of significant
noncompliance, and the reasons for their noncompliance. States must report to EPA
in 5 years on the success of efforts to assist small systems in improving capacity.
[1420(b)] Sec.119
STATE CAPACITY DEVELOPMENT STRATEGIES: States are required to establish

capacity development strategies to assist systems in developing and maintaining
technical, financial and management capacity. States not developing and
implementing a strategy receive only 90% of their DWSRF allotment in Fiscal Year
2001; 85% in 2002; and 80% in each subsequent fiscal year. [1420(c)] Sec. 119. The
total withholding for all capacity development provisions may not exceed 20%.
[1452(a)(1)(G)]. Sec. 130
CONTENT OF STATE STRATEGY: In preparing its capacity development strategy,

each State shall: consider the criteria it will use to identify public water supplies most
in need of improved capacity; describe factors that encourage or impair capacity
development; describe how the State will use its authorities to assist systems in
complying, encourage partnerships between systems, and assist in
training/certification of operators; describe how the State will measure progress; and
identify parties interested in capacity development [1420(c)] Sec. 119
EPA INFORMATION: Within 180 days of enactment, EPA is to conduct a review of

existing State capacity development efforts and publish information to assist States
and water systems in capacity development efforts. Within 2 years of enactment EPA
is to develop guidance, in consultation with the States, describing legal authorities
and other means to ensure that new systems demonstrate technical, financial, and
managerial capacity. [1420(d)] Sec. 119
EFFECT OF REGULATIONS ON CAPACITY: When promulgating new regulations, EPA

must include an analysis of the likely effect of regulations on the technical, financial,
and managerial capacity of water systems. [1420(d)(3)] Sec. 119
REPORT ON STATE PROGRESS: States must make available to the public a report to
the Governor (within 2 years and every 3 years thereafter) on the efficacy of their
capacity development strategy and progress in improving water system capacity.
[1420(c)(3)] Sec. 119
LINK TO DWSRF ASSISTANCE: Systems that are in significant noncompliance or lack

technical, financial and managerial capacity to ensure compliance may not receive
DWSRF assistance unless the assistance will ensure compliance and, where the
system lacks capacity, the system agrees to undertake appropriate changes, as the
State deems necessary, to ensure capacity. [1452(a)(3)] Sec. 130
FINANCE CENTERS: EPA is authorized to provide initial funding for one or more
university-based environmental finance centers (including a national public water
system capacity development clearinghouse) that would provide technical assistance
to State and local officials in developing the financial and managerial capacity of
public water systems. $1,500,000 is authorized for each fiscal year 1997-2003.
[1420(g)] Sec. 119
TECHNOLOGY ASSISTANCE CENTERS: EPA is authorized to make grants to

universities to establish and operate small public water system technology assistance
centers. The centers would conduct training and technical assistance relating to the
information, performance, and technical needs of small water systems. Criteria are
provided for EPA to use to select grant recipients. $2 million is authorized for each of
the fiscal years 1997 through 1999 and $5 million for each of the fiscal years 2000
through 2003. [1420(f)] Sec. 119
OPERATOR CERTIFICATION
CERTIFICATION PARTNERSHIP: Within 180 days EPA must initiate a partnership with
States, Public Water Systems, and the public to develop information on recommended
operator certification requirements. The information developed through this
partnership must be published within 18 months of enactment. [1420(d)] Sec. 119
CERTIFICATION GUIDELINES: Within 30 months of enactment, in cooperation with

the States, EPA must publish guidelines specifying minimum standards for
certification and recertification of operators of community and nontransient,
noncommunity water systems. [1419(a)] Existing State programs are to be considered
substantially equivalent to the guidelines unless the existing program fails to achieve
the overall public health objectives of the guidelines. [1419(c)] Sec. 123
STATE PROGRAMS: Beginning 2 years after guidelines are published, 20% of a

State's DWSRF allotment will be withheld if the State is not implementing an operator
certification program. [1419(b)] Sec. 123
TRAINING REIMBURSEMENT: EPA, through grants to the States (allocated on the

basis of "reasonable costs"), is required to reimburse training and certification costs
for operators of systems serving fewer than 3,300, including per diem for unsalaried
operators, who are required to undergo training as a result of the Federal
requirement. Grants of $30 million are authorized, and DWSRF funds may used if
appropriations are not sufficient. [1419(d)] Sec. 123
II. CONSUMER INFORMATION

CONSUMER AWARENESS
CONSUMER CONFIDENCE REPORTS: Community water systems are to prepare an
annual "consumer confidence report" on the source of their drinking water and the
levels of contaminants found in the drinking water. The report is to be sent to all
customers by mail. The report is required annually, and must include: (1) information
on the source of drinking water, (2) brief definitions of terms, (3) (if regulated
contaminants are found) the MCLG, MCL, and the level found, (4) (if MCL is violated)
information on health effects, and (5) information on levels of unregulated
contaminants (if required by EPA regulations). [1414(c)] Sec. 114(a)
COVERAGE: Governors may allow systems serving fewer than 10,000 persons to
publish the report in a local newspaper, in lieu of mailing. Governors may also allow
systems serving fewer than 500 people to notify customers that the report is
available, in lieu of mailing. The report is required annually. States may adopt
alternative requirements for the form and content of consumer confidence reports
(through State regulation). [1414(c)(4)] Sec. 114(a)
EPA REGULATIONS: EPA must issue regulations within 2 years of enactment, that
establish the requirements for the consumer confidence reports. These regulations
must be developed in consultation with public water systems, environmental groups,
public interest groups, risk communication experts, and the States. The regulations
must include plainly worded definitions of "maximum contaminant level goal,"
"maximum contaminant level," "variances," and "exemptions," as well as plain-
language explanations of the health concerns associated with contaminants. [1414(c)]
Sec. 114(a)
HOTLINE: EPA is required to have a Hotline for consumers to provide more

information on drinking water contaminants and potential health effects. [1414(c)]
Sec. 114(a)
BOTTLED WATER CONSUMER STUDY: The Food and Drug Administration is required
to publish in 18 months for public comment, a study on the feasibility of appropriate
methods for informing consumers of the contents of bottled water. The final study is
to be done in 30 months. [1414(c)] Sec. 114(b)
PUBLIC NOTIFICATION
GENERAL REQUIREMENTS: Clarifies general requirements for public notification of
violations of any MCL, treatment technique, testing procedure, or monitoring
requirement, and the existence or violation of a variance or exemption. The general
requirement includes unregulated contaminants if (as in the old law) notice is
required by EPA regulations. The basis for EPA's public notification regulation is
altered to clarify those violations requiring 24 hour notice and those that may be
provided at a later date. States are allowed to adopt alternative "form and content" of
public notice through State regulation. [1414(c)] Sec. 114(a)
VIOLATIONS WITH SERIOUS EFFECTS: Notices for violations with potential to have
"serious adverse effect" must contain an explanation of the violation, the potential
health effects, what the system is doing to correct the problem, and whether
consumers need to use an alternate source of water. Recipients of such notices must
include consumers and the State. Notices must be given by "appropriate" broadcast
media and newspaper serving area, or posted door-to-door in lieu of broadcast
media/newspaper. Notices must be given within 24 hours after occurrence of
violation. [1414(c)] Sec. 114(a)
OTHER VIOLATIONS: EPA is to prescribe the form and manner of the notice for
violations that do not have the potential to have a "serious adverse effect." Persons
served by a system must receive the notice in the first bill after the violation, in an
annual report, or by mail or direct delivery within a year. [1414(c)] Sec. 114(a)
STATE REPORTS: Each State is required to prepare an annual report on violations.

States are also required to publish and distribute summaries of the report and specify
where the full report is available. The first report is due on January 1, 1998. [1414(c)]
Sec. 114(a)
EPA REPORTS: EPA is required to prepare an annual report summarizing States'

reports and public notices submitted by Indian Tribes. The report will include EPA
recommendations on resources needed to improve compliance and will discuss EPA
enforcement activity against, and financial assistance to, Indian reservations. EPA's
first report is due in July, 1998. [1414(c)] Sec. 114(a)
III. REGULATORY PROGRAM

CONTAMINANT SELECTION
GENERAL AUTHORITY: EPA's general authority to set an MCLG and to regulate a
contaminant is modified to apply to contaminants that: may adversely effect human
health; are known or likely to occur at a frequency and level of public health concern
in public water systems; and for which regulation presents a meaning-ful opportunity
for health risk reduction for persons served by public water systems. [Section
1412(b)] Sec. 102(a)
GOOD SCIENCE: Continues the old law's requirement that EPA consult with the EPA's
Science Advisory Board and National Drinking Water Advisory Council in
promulgating regulations. A provision is added requiring EPA to use the "best
available, peer-reviewed science" and data collected by accepted or best available
methods in carrying out science-related actions under Section 1412 ("National
Drinking Water Regulations"). [1412(b)] Sec.103
OCCURRENCE DATABASE: EPA must establish an occurrence database within 3

years of enactment. In establishing the database, EPA must solicit recommendations
from the Science Advisory Board, States, and other interested parties. The database
is to include information on unregulated contaminants for which monitoring is
required by EPA, and regulated contaminants detected at quantifiable levels (whether
or not the level constitutes a violation of a standard). The information in the database
must be made available to the public in a readily accessible form. [1445(g)] Sec. 126
CONTAMINANT LIST: Within 18 months of enactment and every 5 years thereafter,

EPA will publish a list of contaminants not subject to any proposed or final national
primary drinking water regulation and which are known or anticipated to occur in
public water systems and may require regulation. In developing the list, EPA must
consult with the scientific community, allow for public comment, and consider the
occurrence database (established under Section 1445). [1412(b)] Sec. 102(a)
DETERMINATION OF WHETHER TO REGULATE: The requirement that EPA regulate

25 additional contaminants every 3 years is eliminated. Instead, starting five years
from the date of enactment and every 5 years thereafter, EPA is required to determine
whether or not to regulate at least 5 of the contaminants listed as potential
contaminants for regulation (see "contaminant list" above). EPA is directed to make
determinations for contaminants that present the greatest public health concern. In
selecting such contaminants, EPA must take into consideration the effect of
contaminants upon sensitive subpopulations, such as infants, children, pregnant
women, the elderly, and individuals with a history of serious illness. Within 2 years
after a determination to regulate a contaminant, EPA must propose a maximum
contaminant level goal and national primary drinking water regulation. EPA must
publish an MCLG and final national primary drinking water regulation 18 months
thereafter. [1412(b)] Sec. 102(b) (related to "25 every 3 years") and Sec. 104(a) (related
to "determination")
URGENT THREATS: EPA (after consultation with the Department of Health and
Human Services) may issue interim regulations for any contaminant which poses an
urgent threat to human health without making the usual "determination to regulate"
(see above) and completing the cost-benefit analysis (see "standards and regulation
development" below). However a cost-benefit analysis and the required determination
(to regulate or not) must be done within 3 years after the interim rule, and the rule
must be repromulgated or revised if necessary. [1412(b)] Sec. 102(a)
STANDARDS AND REGULATION DEVELOPMENT

RISK COMMUNICATION: In support of each regulation, EPA must make available to
the public a document that specifies, to the extent practicable, the population
addressed by the regulation; the central, upper and lower estimates of risk;
significant uncertainties and studies that would help resolve uncertainties; and peer-
reviewed studies that support or fail to support estimates. [1412(b)] Sec. 103
COST-BENEFIT ANALYSIS: Whenever EPA proposes a national primary drinking

water regulation, EPA must publish a cost-benefit analysis. The analysis for
alternative MCLs must include, among other things, consideration of effects on
sensitive subpopulations. The analysis for treatment technique regulations must take
into account "as appropriate" the cost and benefit factors required for an MCL
regulation. EPA may identify health benefit measurement and valua- tion methods,
including consumer "willingness to pay" for reductions in health risks. [1412(b)] Sec.
103
SETTING MCLs: The new law retains the old requirement that MCLs be set as close to
MCLGs "as is feasible," except when EPA determines that the cost of a standard at
that level are not justified by the benefits, or when certain "risk-risk" considerations
apply. [1412(b)] Sec. 104
STANDARD SETTING FLEXIBILITY: When EPA proposes an MCL, EPA must publish a
determination as to whether the costs of the standard are justified by the benefits. If
EPA determines that the costs of an MCL are not justified by the benefits, the law
allows EPA to set an MCL that maximizes health risk reduction benefits at a cost that
is justified by the benefits. [1412(b)(6)] Sec. 104
LIMITATION ON FLEXIBILITY: EPA cannot use the authority to adjust the MCL from
the feasible level if the benefits are justified (at the feasible level) for systems that
serve 10,000 or more persons and for systems that are unlikely to receive a variance.
[1412(b)(6)] Sec. 104
RISK-RISK CONSIDERATIONS: EPA may consider "risk-risk" tradeoffs when setting

an MCL. An MCL may be set at a level other than the feasible level if the technology to
meet the MCL would increase health risk by (i) increasing concentration of other
contaminants in drinking water, or (ii) interfering with treatment used to comply with
other primary drinking water regulations. When establishing such an MCL, EPA shall
(i) minimize overall risk by balancing both the risk reductions from treating the
individual contaminant with possible side-effects of such treatment on concentrations
of other contaminants, and (ii) assure that the combination of treatments for the
individual contaminant and other contaminants shall not be more stringent than the
"feasible" standard. [1412(b)(5)] Sec. 104
JUDICIAL REVIEW: EPA's determination of whether an MCL's benefits justify the cost
is judicially reviewable only as part of a Court's review of the associated primary
drinking water regulation. [1412(b)(6)] Sec. 104
REVIEW OF STANDARDS: The requirement for EPA to review every regulation is

changed from 3 years to 6 years. EPA shall revise national primary drinking water
standards, as appropriate. Any revisions must be in accordance with the new
provisions of section 1412, except that each revision "shall maintain, or provide for
greater, protection of the health of persons." [1412(b)(9)] Sec. 104(c)
GROUND WATER DISINFECTION: EPA shall issue regulations requiring disinfection

"as necessary" for ground water systems. These regulations shall be issued at any
time after August 1999 and no later than the final disinfection byproducts Stage II rule.
After consultation with the States, EPA shall promulgate criteria for determining
whether disinfection shall be required as a treatment technique for groundwater
systems. [1412(b)(8)] Sec. 107
EFFECTIVE DATE OF REGULATIONS: National primary drinking water regulations

shall take effect 3 years from date of promulgation unless EPA determines an earlier
date is "practicable." An additional 2 years for compliance may be provided if
necessary for capital improvements. [1412(b)(10)] Sec. 108
FILTER BACKWASH: Not later than August 2000, EPA shall promulgate a regulation
for filter backwash recycling within the treatment process of public water supply
systems, unless such recycling has been addressed in the Enhanced Surface Water
Treatment Rule prior to that date. [1412(b)(14)] Sec. 110
REGULATION DEVELOPMENT FUNDING: $35 million is authorized for conducting

studies, assessments, and analyses in support of regulations or the development of
methods for fiscal years 1996-2003. [1412(b)(3)(C)] Sec. 103
BOTTLED WATER STANDARDS: FDA is required to regulate the same contaminants

in bottled water that EPA regulates in public water supplies, unless the FDA makes a
finding that such a regulation is not necessary to protect public health. The standard
of quality regulation for bottled water shall be "no less stringent" than the MCL
established by a national primary drinking water regulation, and the regulations must
include appropriate monitoring requirements. [Section 410 of the Federal Food, Drug,
and Cosmetic Act] Sec. 305
ARSENIC, SULFATE, RADON, DISINFECTION BYPRODUCTS

ARSENIC STUDY PLAN: 180 days after enactment, EPA must develop an arsenic
study plan to assess health risks associated with exposure to low levels of arsenic. In
conducting this study, EPA must consult with, and may enter into a cooperative
agreement with, the National Academy of Sciences (NAS), other Federal agencies, and
interested stakeholders. [1412(b)(12)(A)] Sec. 109(a)
ARSENIC DEADLINES: EPA must propose an arsenic national primary drinking water
regulation by January 1, 2000 and issue a final regulation by January 1, 2001.
[1412(b)(12)(A)] Sec. 109(a)
SULFATE STUDY AND REGULATION: Prior to regulating sulfate, EPA and CDC must
conduct a study of the dose response relationship for adverse human health effects
from sulfate in drinking water, including effects on populations at greater risk. The
study shall be completed not later than 30 months after the date of enactment. Sulfate
must be among the 5 contaminants considered for regulation in the first 5 year cycle.
If sulfate is regulated, "notification" and "alternative" water must be included as
means of compliance. [1412(b)(12)(B)] Sec. 109(a)
RADON STUDY BY NAS: EPA will arrange for the NAS to prepare a risk assessment
for radon and an assessment of risk reduction benefits from various mitigation
measures. [1412(b)(13)] Sec. 109(b)
RADON STANDARD: Within 30 months of enactment, EPA will publish a health risk
reduction and cost analysis associated with possible maximum contaminant levels.
Within 3 years after enactment, EPA is to propose a maximum contaminant level goal
and drinking water regulation for radon. The final rule must be promulgated 1 year
thereafter. [1412(b)(13)] Sec. 109(b)
ALTERNATIVE RADON STANDARD: EPA is required to also establish an "alternative

MCL" for radon if the MCL is set a level that is "more stringent than necessary to
reduce the contribution to radon in indoor air from drinking water to a concentration
that is equivalent to the national average concentration of radon in outdoor air." The
level of the alternative MCL is linked to average outdoor radon levels. If an alternative
MCL is established, then EPA must publish guidelines for States to develop
multimedia radon programs. [1412(b)(13)] Sec. 109(b)
STATE MULTIMEDIA RADON PROGRAMS: Water systems may comply with the
alternative MCL in a State that submits a multimedia radon program that is approved
by EPA. EPA approval is required if a State's program is expected to achieve risk
reduction benefits that are equal or greater than the benefits that would be achieved
by implementing the (regular) MCL. EPA's approval or disapproval is required within
180 day of receipt of the State submittal. The compliance date of the radon regulation
is extended for 18 months in a State if the Governor of a State submits a letter to EPA
(within 90 days after the regulation is promulgated) committing to develop a
multimedia program. [1412(b)(13)] Sec. 109(b)
REVIEW OF MULTIMEDIA RADON PROGRAMS: EPA is to review State multimedia

programs every 5 years, and may withdraw approval of programs that do not meet the
approval requirements (achieving equal or greater risk reduction). Individual public
water systems may also submit mitigation programs where a State fails to submit a
program or where the State program is disapproved. [1412(b)(13)] Sec. 109(b)
SCHEDULE FOR MICROBIAL/ DISINFECTION BYPRODUCTS: EPA will promulgate an

Interim Enhanced Surface Water Treatment rule, a Final Enhanced Surface Water
Treatment Rule, a Stage I Disinfectants and Disinfection Bypro- ducts Rule, and a
Stage II Disinfection Byproducts Rule in accordance with a February 10, 1994 Federal
Register notice. If schedule delays occur, all subsequent rules must be completed no
later than a revised date reflecting the intervals for the rule. [1412(b)(8)] Sec. 102
DBP STANDARD-SETTING AND RISK-RISK: EPA may use "risk-risk" considerations

in setting DBP Stage I and II standards. The considerations used in proposing the
DBP rule in 1994 (developed through a regulatory negotiation) "shall be treated as
consistent" with the risk-risk authority for the purpose of finalizing the DBP
regulations. [Free standing provision -- does not amend SDWA.] Sec. 104(b)
DBP STANDARD-SETTING: EPA may not use the standard setting flexibility
(1412(b)(6)(A)0 to establish an MCL in Stage I and Stage II of the DBP rule, or for
Cryptosporidium. EPA may use such authority to establish ground water disinfection
regulations. [1412(b)(6)(C)] Sec. 104(a)(b)
DRINKING WATER STUDIES AND RESEARCH

BIOLOGICAL MECHANISMS: EPA must conduct studies to understand the
mechanisms by which chemicals cause adverse effects and on new approaches for
studying the adverse effects of contaminant mixtures in drinking water. [1458(b)] Sec.
137
MICROBIAL/DBP STUDIES: Within 180 days of enactment EPA, after consultation with
HHS and USDA, must conduct studies to support the development of the
DBP/microbial pathogen rules. The authorization to conduct the studies is $12.5
million annually for 1997- 2003. The studies must include: toxicological and, if
warranted, epidemiological studies to determine the adverse effects from
disinfectants and disinfectant by-products; and the development of dose-response
curves for Cryptosporidium and Norwalk virus. [1458(c)] Sec. 137
WATERBORNE DISEASE STUDIES AND INFORMATION: Within 2 years of enactment,

EPA and CDC must conduct pilot waterborne disease occurrence studies for at least 5
major U.S. communities or public water systems and within 5 years of enactment
must prepare a report on the findings and provide a national estimate of waterborne
disease occurrence. EPA and CDC must establish a national training and public
education campaign to educate professional health care providers and the general
public about waterborne disease and the symptoms that may be caused by infectious
agents, including microbial contaminants. The authorization for these activities is $3
million/year for 1997 through 2001. [1458(d)] Sec. 137
SENSITIVE SUBPOPULATIONS: Within 4 years of enactment, and periodically as new

data becomes available, EPA must conduct studies to identify subpopulations at
greater risk (e.g., infants, children, pregnant women) than the general public of
adverse health effects from exposure to contaminants in drinking water, and report to
Congress on the results of studies. [1458(a)] Sec. 137
SCREENING FOR ESTROGENIC SUBSTANCES: EPA may conduct testing under

Section 408(p) of the Food, Drug and Cosmetic Act screening program for substances
that may be found in sources of drinking water in which a substantial population may
be exposed. [1457] Sec. 136
RESEARCH FUNDS: Funds "as may be necessary" are authorized for research, not to
exceed $26.593 million, for drinking water research for fiscal years 1997-2003. Title II--
Sec. 201
STRATEGIC PLAN: EPA must develop a strategic plan for drinking water research and
transmit this plan to Congress and the public for review (no deadlines included for
completing the plan). Title II--Sec. 202]
KERR LAB: EPA is allowed to re-establish a partnership between the Kerr

Environmental Research Lab and the National Center for Ground Water Research to
conduct research, training, and technology transfer for ground water quality (no
funds are authorized for this activity). Title II--Sec. 203
SMALL SYSTEMS TECHNOLOGY, VARIANCES, AND

EXEMPTIONS
AFFORDABLE TECHNOLOGIES: When promulgating new national primary drinking

water regulations, EPA is to identify technologies that are affordable and which
achieve compliance for categories of systems serving fewer than 10,000.
Technologies may include packaged or modular systems and point-of-use (POU)/
point-of-entry (POE) units under the control of the water system (no POU for microbial
contaminants). [1412(b)(4)(E)] Sec. 105
SURFACE WATER TREATMENT RULE (SWTR): EPA must within 1 year list small
system technologies that meet the SWTR. Within 2 years, EPA (in consultation with
the States) must list technologies that achieve compliance with all existing
regulations. [1412(b)(4)(E)] Sec. 105
VARIANCE TECHNOLOGY: Whenever an affordable technology cannot be identified

that meets an MCL, EPA is required to identify "variance technologies" that are
affordable, but do not necessarily meet the MCL. Such technologies shall "achieve the
maximum reduction or inactivation efficiency that is affordable considering the size of
the system and the quality of the source water." EPA is to issue guidance on variance
technologies for existing regulations within 2 years. [1412(b)(15)] Sec.111(a)
SMALL SYSTEM VARIANCES: States are authorized to grant variances from

standards for systems serving up to 3,300 people if the system cannot afford to
comply (through treatment, an alternative source, or restructuring) and the system
installs the variance technology. The terms of the variance must ensure adequate
protection of human health. States can grant variances to systems serving 3,300-
10,000 people with EPA approval. [1415(e)] Sec. 116
REGULATIONS FOR VARIANCES: Within 2 years, EPA, in consultation with the

States, must promulgate regulations for variances. Regulations must specify
procedures to be used to grant or deny variances, requirements for the installation
and proper operation of variance technologies, eligibility criteria for a variance, and
information requirements for variance applications. [1415(e)(7)] Sec. 116(a)
BLOCK ON CERTAIN VARIANCES: Variances are not available for microbial

contaminants or for contaminants regulated prior to 1986. [1415(e)(6)] Sec. 116
VARIANCE TIME FRAMES: A variance must require compliance with its conditions
within 3 years of the date it is issued. States may allow an additional 2 years when
needed. [1415(e)(4)] States must review variances every 5 years following the
compliance date established in the variance.[1415(e)(5)] Sec. 116
AFFORDABILITY CRITERIA: Within 18 months of enactment, EPA, in consultation

with the States and the Rural Utilities Service of the Department of Agriculture, must
publish information to assist States in developing affordability criteria to use in
making variance determinations. [1415(e)(7)(B)] Sec. 116
CHANGE TO EXISTING VARIANCE PROCESS: The process for variances (retained

from the old law) is streamlined by allowing a system to receive a variance "on the
condition" that the system install the BAT, rather than after the installation of the
technology, as previously required under SDWA. (NOTE: This change applies to ALL
system sizes, not just small systems.) [1415(a)(1)(A)] Sec. 115
REVIEW OF VARIANCES: EPA must review/approve variances for systems serving

3,300-10,000 people. EPA may review and object to any proposed variance.
Consumers of water systems for which a State proposes a variance may petition EPA
to object to a variance. States must respond to EPA objections before granting a
variance. [1415(e)(10)] Sec. 116
TECHNOLOGY INFORMATION: EPA may request information from manufacturers,

States, and other interested persons on the effectiveness of commercially available
treatment systems and technologies for the purpose of developing guidance or
regulations related to small system technologies and variances. [1445(h)] Sec. 111(b)
EXEMPTIONS: In granting exemptions, a State may consider whether a community

may be defined as "disadvantaged" for the purpose of receiving DWSRF funds, or
whether DWSRF funds are reasonably likely to be received. States must determine
whether management or restructuring changes (or both) would improve water quality
or achieve compliance before granting an exemption. Schedules for compliance must
include "increments of progress" (retained from old law) or "measures to develop an
alternative source of water supply" (new law). A system is not eligible for an
exemption if the system receives a small system variance. The period of an exemption
is lengthened from 1 year (old law) to 3 years. Eligibility for renewable exemptions is
expanded from systems serving fewer than 500 service connections (approximately
1500 persons) under the old law, to systems serving fewer than 3,300 persons.
Renewals are limited to a total of 6 years. [1416] Sec. 117
MONITORING
INFORMATION COLLECTION: Previous law is modified to clarify that EPA may collect
information from "every person who is subject to any requirement of this title or who
is a grantee." By regulation, EPA may require information to assist in developing
standards, determining compliance, and evaluating health risk or advising the public
of risks. EPA may require information without rulemaking to determine, on a case-by-
case basis, whether a person has or is acting in compliance. EPA may also require
information without rulemaking to assist in developing standards, but EPA may not
require the installation of treatment, testing of technologies, or analysis of monitoring
samples unless EPA provides funding. [1445(a)] Sec. 125(a)
REVIEW OF MONITORING REQUIREMENTS: Within two years after enactment, EPA is

required to review the monitor-ing requirements for at least 12 contaminants and
promulgate any necessary modifications. [1445(a)] Sec. 125(a)
INTERIM MONITORING RELIEF: A State may modify the monitoring requirements for
public water systems serving 10,000 or fewer persons for any regulated or
unregulated contaminant (except for microbial contaminants, disinfection byproducts,
or corrosion byproducts) so that no further quarterly monitoring be required if initial
monitoring fails to detect the presence of the contaminant, and the State determines
that the contaminant is unlikely to be detected by further monitoring. This monitoring
relief will end when permanent monitoring relief is adopted or 36 months after
enactment. [1418] Sec. 125(b)
PERMANENT ALTERNATIVE MONITORING: A State exercising primary enforcement

authority for public water systems may adopt permanent alternative monitoring
requirements in accordance with EPA guidelines, if the State has an approved source
water assessment program. The States alternative monitoring program must be
adequate to assure compliance with, and enforcement of, applicable drinking water
regulations. The alternative requirements may not apply to regulated microbial
contaminants or indicators thereof (e.g., Giardia, coliform), disinfectants or
disinfection by-products, or corrosion by-products. [1418] Sec. 125(b)
EPA GUIDANCE: EPA must issue guidelines for alternative monitoring requirements
at the same time as guidelines for source water assessments (under section 1453).
EPA may also approve alternative monitoring requirements for systems in a State that
does not have primacy. [1418] Sec. 125(b)
UNREGULATED CONTAMINANT MONITORING: EPA must issue regulations

establishing criteria for the monitoring of unregulated contaminants. Monitoring shall
vary based on system size, source water, and contaminants likely to be found. Only a
representative sample of systems serving 10,000 persons or fewer must monitor. EPA
shall list for unregulated contaminant monitoring no more than 30 contaminants
within 3 years after enactment, and every 5 years thereafter. Results of the monitoring
are to be included in the national contaminant occurrence data base. [1445(a)] Sec.
125(c)
SMALL AND MEDIUM SYSTEM MONITORING PLAN: Each State may develop an
unregulated contaminant monitoring plan for small and medium systems (serving
fewer than 10,000). EPA is required to cover the reasonable costs of testing and
laboratory analysis for such plans, using funds authorized for unregulated
contaminant monitoring (see below), or a $2 million DWSRF reservation. EPA shall
waive the requirement for monitoring of unregulated contaminants in a State if the
State demonstrates that the criteria for monitoring are not applicable in the State.
[1445(a)] Sec. 125(c)
RESULTS REPORTING: Water systems must provide the results of unregulated

contaminant monitoring to the primacy agency (State/EPA) and must notify persons
served by the system of the availability of results. [1445(a)]Sec. 125(c)
AUTHORIZATION: Congress authorizes $10,000,000 per year for FYs 1997-2003 to

carry out provisions for unregulated contaminant monitoring. [1445(a)] Sec. 125(c)
ANALYTICAL METHODS: EPA is required to review new methods for screening

regulated contaminants, and may approve them, if they are more accurate or more
cost-effective than established methods approved for use in compliance monitoring.
[1445(i)] Sec. 125(d)
ENFORCEMENT
ADMINISTRATIVE ORDERS: The process for issuing administrative compliance
orders is streamlined by deleting the requirement for EPA to issue a proposed order.
[1414] Sec. 113(a)
PENALTY CAP: The maximum administrative penalty for violating an administrative

order is raised from $5,000 to $25,000. [1414] Sec. 113(a)
PENALTY PROCESS: The process for assessing an administrative penalty of $5,000

or less is streamlined by deleting the requirement for a hearing in accordance with the
Administrative Procedures Act for these penalties. Requires a hearing in accordance
with APA procedures if the penalty sought is between $5,000 and $25,000. [1414] Sec.
113(a)
CONSOLIDATION INCENTIVE: A public water supply may submit a plan (with specific
measures and schedules) for approval by EPA or a primary enforcement State for
consolidation (physical or managerial) or transfer of ownership. If the plan is
approved, no enforcement action shall be taken with respect to the specific violation
identified in the approved plan prior to 2 years after plan approval or the date on
which consolidation is completed, whichever is first. [1414(h)]. Sec. 113(a)
ENFORCEABLE REQUIREMENTS: Defines provisions that are enforceable

("applicable requirements of this title"). Applicable requirements are defined as
requirements of 1412, 1414, 1415, 1416, 1417, 1441, or 1445; regulations promulgated
pursuant to those sections; schedules or requirements imposed pursuant to those
sections; and requirements of, or permits issued under a State program which
satisfies the requirements of section 1413 or is otherwise approved by EPA. [1414]
Sec. 113(a)
NOTIFICATION OF LOCAL OFFICIALS: In nonprimacy states, EPA is required to notify

an appropriate locally elected public official before proceeding with an enforcement
action. [1414] Sec. 113(a)
EMERGENCY AUTHORITY PENALTY: The penalty for violating an order issued under
Section 1431 (Emergency Powers) is increased from $5,000 per day to $15,000 per
day. [1414] Sec. 113(d)
IV. FUNDING FOR STATES AND WATER SYSTEMS

DRINKING WATER STATE REVOLVING FUND
ESTABLISHMENT: EPA is required to enter into agreements with eligible States to
make capitalization grants to further the health protection objectives of SDWA. A total
of $9.6 billion -- $599 million in FY94 and $1.0 billion annually -- is authorized in FY's
95-2003. To be eligible to receive a grant, a State must establish a drinking water
treatment revolving loan fund and comply with other requirements of the DWSRF
section. [1452(a),(m)] Sec. 130
ALLOTMENT AND ELIGIBILITY: Through fiscal year 1997, funds will be allotted by the
formula used to distribute federal grants to States for drinking water program
implementation ("public water supply supervision program"). A minimum grant
amount of 1% will be available for all States, including Wyoming and DC. Up to 0.33%
is available for allotment to other specified areas (Virgin Islands, Guam, et. al.). Funds
for FY98 and beyond will be allotted based on the results of the most recent Drinking
Water State Revolving Fund (DWSRF) needs survey. Eligible systems are community
water systems and non-profit non-community water systems. No loans can be made
to Federal systems. [1452(a),(i)] Sec. 130
LINK TO PRIMACY: States that lose primacy in the future, except for Wyoming, will
not be eligible for DWSRF grants. [1452(a)(1)(F)] Sec. 130
LINK TO CAPACITY DEVELOPMENT: EPA is required to withhold DWSRF funds from

States that do not set up capacity development programs (20% of DWSRF grant
starting in FY99 for new system authority; and 10% in 2001,15% in 2002, and 20% in
2003 for capacity development strategies). Withholding for all capacity development
purposes is capped at 20% total. [1452(a)(1)(G)] Sec. 130
LINK TO OPERATOR CERTIFICATION: EPA is required to withhold 20% of DWSRF

funds if a State does not meet the requirement for operator certification programs.
[1452(a)(1)(G)] Sec. 130
USE OF FUNDS: DWSRF funds can be used for loans, loan guarantees, source of
reserve and security for leveraged loans (proceeds of which are placed in the
DWSRF), and other uses as allowed in the Act. Funds may be used by a public water
system only to "facilitate compliance with national primary drinking water
regulations" and "significantly further the health protection objectives of this title."
Small systems (fewer than 10,000 persons) are to receive 15% of annual assistance
from a State's DWSRF, to the extent such funds can be obligated for eligible projects.
Disadvan- taged systems may receive loan subsidies (including forgiveness of
principal) up to 30% of a State's DWSRF annual assistance. [1452(a)(2)] Sec. 130
INTENDED USE PLANS: States must annually prepare, after providing for public
review and comment, an Intended Use Plan that identifies how the DWSRF funds will
be used. States must give highest priority to projects that address the most serious
risks to public health, are necessary to achieve compliance, and assist systems most
in need on a per household basis. Types of assistance which may be made using
State loan funds are specifically defined. [1452(b), 1452(f)] Sec. 130
STATE MATCH: States must contribute an amount equal to 20% of the total federal
contribution. State funds must be received on or before the date federal funds are
received, except that States may delay the deposit of funds until no later than
September 30, 1999 for grant payments made for fiscal years 1994-1997. [1452(e)] Sec.
130
SET-ASIDES: (Prior to allotment to States) $10,000,000 per year is reserved for health
effects research and, starting in FY 1998, $2,000,000 per year for unregulated
contaminant monitoring. An amount up to 2% of the funds appropriated may be
reserved by EPA for technical assistance, and may be used to supplement fund-ing
for technical assistance under Section 1442(e). EPA may use up to 1.5% of funds for
grants to Indian Tribes and Alaska Native Villages for public water systems. Funds
must also be reserved for operator training cost reimbursement if there is no separate
appropriation. [1452(i),(n),(o),(q); 1419(d)(4)] Sec 130, Sec 123
OTHER USES OF FUNDS: (After allotment to States) Up to 4% of State allotment may

be used by the State for administration of the fund. An additional 2% may be used for
small system technical assistance. Up to ten percent may be used for a combination
of the following: PWSS activities, State capacity development strategies, operator
certification programs, and source water protection programs. [1452(g)] Sec. 130 Up
to 15% may be used for a combination of the following: loans for the acquisition of
land or conservation easements, loans to implement voluntary source water
protection measures; technical and financial assistance to water systems as part of a
State capacity development strategy; delineations/assessments of source water
protection areas; and establishment and implementation of wellhead protection
programs. No single item can receive greater than 10%. [1452(a)] Sec. 130
COMBINED FINANCIAL ADMINISTRATION: Financial administration can be combined

with other funds, such as the Clean Water Act DWSRF, as long as separate accounts
are maintained. The authority to establish assistance priorities and oversight
responsibilities will be carried out by the primacy agency. [1452(g)] Sec. 130
TRANSFER OF FUNDS: Anytime after one year after a State establishes a DWSRF, but
prior to fiscal year 2002, the Governor of a State may transfer 33% of the funds in the
Drinking Water DWSRF to the Clean Water Act DWSRF. The same dollar amount may
be transferred from the Clean Water Act DWSRF to the Drinking Water DWSRF. Within
4 years, EPA must submit a report to Congress regarding implementation of the
transfer provisions. [Free standing provision -- Title III, Sec. 302]
REGULATIONS AND GUIDANCE: EPA is required to publish DWSRF regulations and

guidance as necessary. The regulations and guidance will address how States
commit and expend allotted funds, use funds efficiently, prevent waste, fraud and
abuse, and avoid the use of funds for expansion of public water systems. Guidance
and regulations must also ensure that States and public water systems use
accounting, audit, and fiscal procedures that conform to generally accepted
accounting standards. [1452(g)(3)] Sec. 130
AUDITS: States are required to publish and submit to EPA a report every 2 years that
describes program activities and expenditures and includes the most recent audit of
the State's program. [1452(g)(4)] Sec. 130
NEEDS SURVEY: EPA is required to perform an assessment of the capital

improvement needs of all eligible public water systems, including Native American
systems, and submit a report within 180 days of passage of the Act. Addi- tional
surveys will be conducted every 4 years thereafter. [1452(h)] Sec. 130
WATER CONSERVATION: Within two years of enactment of the 1996 amendments to

the SDWA, EPA must publish guidelines for water conservation plans. Within a year
of publication of the guidelines, a State may, as a condition of receiving a DWSRF
loan, require a water system to submit a water conservation plan. [1455(a),(b)] Sec.
134
V. OTHER PROVISIONS
PUBLIC WATER SUPPLY SUPERVISION
TIME FRAME FOR STATE PRIMACY: In order to maintain primary enforcement
responsibility for regulations promulgated under the SDWA, States must adopt
regulations that are no less stringent than federal regulations within 2 years of the
date of promulgation of the federal regulations. EPA may grant an extension of 2
additional years if EPA determines that the extension is necessary and justified.
[1413(a)(1)] Sec. 112(a)
ADMINISTRATIVE PENALTY REQUIREMENT FOR PRIMACY: As a condition of

primacy, States must have the authority for administrative penalties. Specifically, for
systems serving more than 10,000 persons, States must be able to assess not less
than $1,000 per day per violation. For smaller systems, States must have authority
which is adequate to ensure compliance. The State may establish a maximum amount
of administrative penalties which may be imposed on a public water system. [1413(a)]
Sec. 113(b)
INTERIM PRIMACY: States with up-to-date primacy programs are considered to have
interim primacy for new regulations promulgated by EPA beginning on the effective
date of the State regulations adopted and submitted by the State, and ending at such
time as EPA disapproves a State program. [Section 1413(c)] Sec. 112(a)
PUBLIC WATER SYSTEM SUPERVISION GRANT: The authorization for carrying out
State Public Water System Supervision Programs (PWSS) is increased to $100 million
for each of fiscal years 1997-2003. [1443(a)] Sec. 124
EPA PRIMACY: EPA is given authority to use funds from a State's portion of the
Public Water System Supervision Program grant to implement the program where the
State does not have primary enforcement responsibility (primacy). EPA may cover a
shortfall in funds by using a portion of a State's DWSRF allocation to carry out
primary enforcement authority. If such funds are used, EPA must carry out all
activities required of a State. [1443(a)] Sec. 124, [1452(a)(1)(F)] Sec. 130
FEDERAL AGENCIES
SOVEREIGN IMMUNITY: Contains a clear waiver of sovereign immunity for federal
agencies with respect to all federal, State and local requirements. Provides EPA with
authority to issue an administrative penalty order if EPA finds that a federal agency
has violated an applicable requirement of this title. The penalty may not exceed
$25,000 per day per violation. Funds collected by a State from the federal government
in fines or penalties must be used by the State for projects designed to improve or
protect the environment or defray the costs of environmental protection or
enforcement. [1447] Sec. 129(a)
REVIEW OF ORDERS: Any interested party may obtain review in US District Court of
an administrative penalty order issued by EPA to a federal agency. [1447] Sec. 129(a)
CITIZEN ACTION: A citizen may bring an action for the collection of a penalty against
a federal agency that fails to pay a penalty by the date which is 18 months after the
effective date of the final order. The citizen is required to notify the Attorney General
and the affected federal agency 60 days before the suit is filed. [1447] Sec. 129(b)
MISCELLANEOUS
LEAD LEACHING STANDARD: If a voluntary standard for the leaching of lead from
new plumbing fittings and fixtures is not established within one year of the effective
date of the Act, then EPA must promulgate regulations setting a performance based
standard for lead leaching levels from such components. (Note: A voluntary standard
is now in place.) [1417] Sec. 118
LEAD PROHIBITION: Two years after enactment, it becomes illegal for any pipe or
plumbing fixture that is not lead-free to be introduced into commerce. The exception
is pipes used in manufacturing or industrial processing. It will also be illegal, two
years after enactment, to sell solder or flux that is not lead-free. Solder that is not
lead-free may be sold if it bears a prominent label stating that it is illegal to use it in
the installation or repair of plumbing providing water for human consumption. [1417]
Sec. 118
LIMITED ALTERNATIVE TO FILTRATION: States may allow unfiltered water systems

with surface water sources to use treatment other than filtration. In order to qualify for
alternative treatment, a water system must have an uninhabited, undeveloped
watershed in consolidated ownership and have control over access to and activities
in the watershed. The alternative treatment must ensure greater removal or
inactivation efficiencies of pathogenic organisms than would be achieved by the
combination of filtration and chlorine disinfection required by section 1412 (b)(7)(C).
[1412(b)(7)(C)] Sec. 106
GRANTS FOR ALASKA NATIVE VILLAGES: The Administrator is authorized to make

grants to the State of Alaska to pay 50 percent of the cost of improving sanitation for
rural and Alaska Native villages. Grants will be for development and construction of
public water and wastewater systems and also for training, technical assistance, and
educational programs. The State may use up to 4 percent of the amount of the grant
for related administrative expenses. EPA is required to consult with the State of
Alaska to prioritize the needs of individual villages. Authorization for this provision is
at $15,000,000 for each FY'97-2000. Title III--Sec. 303
RELATIONSHIP OF GRANTS TO DWSRF FUND: A "Sense of the Congress" states that

appropriations for grants should not be provided for watershed protection in New
York City's watersheds, sanitation improvements at colonias, or sanitation
improvements for Alaska Native Villages if such appropriations would prevent
adequate funding for state revolving loan funds. Title III--Sec 304
WASHINGTON AQUEDUCT: Congress grants consent for the District of Columbia,
Arlington County, VA and the city of Falls Church to establish an entity to operate,
maintain and manage the Washington Aqueduct. The Secretary of the Army is
required to develop a plan, within 1 year, for the transfer of the Washington Aqueduct
to a non-Federal entity. The Corps of Engineers is authorized to borrow up to $29
million in 1997, 424 million for 1998, and $22 million for 1999 to carry out capital
improvements until the time of transfer. ( Title III--Sec. 304.) The Secretary of the Army
may not pass on the costs of an enforcement penalty to the customers of the
Washington Aqueduct system. [1447] Sec.129(c)
DRINKING WATER FUNDS FOR COLONIAS: EPA and other appropriate Federal
agencies are authorized to award grants to Arizona, California, New Mexico, and
Texas, to provide assistance (up to 50% of project costs) to colonias where the
residents are subject to a significant health risk attributable to the lack of access to
an adequate and affordable drinking water system. Appropriations of $25,000,000 for
each of the fiscal years 1997 through 1999 is authorized. [1456] Sec. 135
WASTEWATER FUNDS FOR COLONIAS: The Administrator is authorized to make

grants for planning, design, construction, or improvement of sewers, treatment
works, and appropriate connections for wastewater treatment for colonias. Grants
cannot exceed 50 percent of the cost of carrying out any project. $25 million is
authorized for this provision in fiscal years 1997 through 1999. Title III--Sec. 307
ZEBRA MUSSEL CONTROL: The Nonindigenous Aquatic Nuisance Prevention and

Control Act of 1990 is amended to include Lake Champlain at 16 U.S.C. 4701(a).
Provision references zebra mussel control in Lake Champlain. Title III--Sec. 308
DEFINITIONAL CHANGE FOR ANALYTIC METHODS: Modifies the pre-existing

requirement that national primary drinking water regulations (NPDWR) contain quality
control and testing procedures for compliance purposes to now require "accepted
methods for" quality control and testing procedures. After the promulgation of a
NPDWR, EPA is allowed to "add equally effective" quality control and testing
procedures through guidance published in the Federal Register. [1401] Sec. 101(a)
DEFINITION OF COMMUNITY/NONCOMMUNITY SYSTEM: "Community water system"

is defined as a public water system that has at least 15 service connections or serves
25 persons year-round. "Noncommunity water system" is defined as a public water
system that is not a community water system. [1401] Sec. 101(a)
OPEN CONVEYANCES: The general definition of "public water system" (PWS) is

broadened from water systems that deliver water through pipes to include systems
that use "construct-ed conveyances." However, certain connections that might
otherwise qualify a system as a public water system under the broadened definition
are excluded from consideration where: the water is not used for "residential uses";
alternative water is provided for drinking and cooking; or water for drinking, cooking,
and bathing is treated (centrally or by point of entry). Alternative or treated water must
provide a level of health protection equivalent to the applicable standard(s). A
transition period of 2 years is provided for compliance. [1401] Sec. 101(b)
RETURN FLOW: Repeals Section 3013 of PL 102-486 (Energy Act). Deletes Energy Act
provision which encourages the use of heat exchange units. Title III
ADDITIONAL ASSISTANCE FOR WATER INFRASTRUCTURE

AND WATERSHEDS
(Title IV--does not amend the SDWA)
GRANT AUTHORITY: EPA may provide technical and financial assistance in the form
of grants to States for water supply improvements and for source water quality
programs consistent with Section 319 of the Clean Water Act (to address
contaminants for the purpose of making supplies usable for water systems). Not more
than 30% of funds appropriated may be used for Section 319 activities. Title IV
USE OF GRANTS: As a condition for receiving a grant, a State must ensure that
assistance will be used in the most cost-effective manner. The Federal share of
activities funded with grants shall be 50 percent. Title IV
FUNDING LEVELS: Annual funding of $25 million is authorized for grants for fiscal
years 1997-2003. An additional $25 million is authorized for each fiscal year 1997-2003
if the appropriations for the Drinking Water DWSRF exceed 75% of the authorized
level ($1 billion is authorized for the DWSRF). Title IV
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City of Santa Cruz, California
Status: Measure N, a citizens’ initiative-created ordinance, was
enacted on March 2,1999, following the March 24, 1998
enactment of an ordinance by the Santa Cruz City Council,
which defied state law by prohibiting fluoridation without a
vote of the citizens. The new ordinance extends the
prohibition to include any substance intended to treat
humans, and can not be overturned by future City Council
action.
___________________
BALLOT MEASURE; AMENDMENT TO THE MUNICIPAL CODE

PROHIBITING THE USE OF THE CITY’S WATER SUPPLY TO
DELIVER PRODUCTS OR SUBSTANCES INTENDED TO AFFECT
THE PHYSICAL OR MENTAL FUNCTIONS OF PERSONS
CONSUMING SUCH WATER.
Whereas water is essential to all and the public water supply should be safe for all to
drink; and
Whereas individuals vary in their susceptibility and responses to various substances as

well as in the amounts of water they consume; and
Whereas alternative methods of delivery for all substances exist; and
Whereas increased risk of hip fracture, cancer, neurological impairment, dental fluorosis
and other harmful effects have been linked to fluoride in the scientific literature; and
Whereas data from the U.S. Public Health Service and the State of California show no
significant difference in decay rates of permanent teeth and dental costs in fluoridated
and non fluoridated areas in California; and
Whereas each individual possesses the inalienable right to choose or reject what he or
she consumes; therefore
The public water supply shall not be used to deliver any product, substance, device,
element, medicine or preventative agent with the intent or for the purpose of affecting the
physical or mental functions of the body of any person consuming such water.
No fluoride or fluorine-containing substance may be added to public water

systems. All laws to the contrary are hereby repealed.
-30-
ORDINANCE NO. 98-01
AN ORDINANCE OF THE CITY OF SANTA CRUZ ENACTING A NEW CHAPTER

6.85 TO THE SANTA CRUZ MUNICIPAL CODE PERTAINING TO FLUORIDATION
OF THE MUNICIPAL WATER SUPPLY
FINDINGS
The City Council of the City of Santa Cruz finds that:
1. The addition of fluoride to the municipal water supply will not improve water quality.
2. The addition of fluoride to the municipal water supply will increase Water
Department maintenance costs.
3. The addition of fluoride to the municipal water supply will increase safety risks for
Water Department personnel.
4. Numerous residents of the City of Santa Cruz and customers of the City’s Water
Department have expressed concern over health hazards associated with a fluoridated
water supply and object to the introduction of fluorine to the water supply. Numerous
other residents and customers of the City’s Water Department have conversely taken
the position that a fluoridated water supply is an effective and efficient means of
preventing dental disease and tooth decay among all sectors of the population,
especially those who cannot afford or who have no access to other means of
preventative dental care.
5. Should the City’s water supply be fluoridated, it would be technically infeasible to

deliver non-fluoridated water to Water Department customers who for health reasons
cannot tolerate fluorine in their drinking water or who choose not to consume
fluoridated water.
6. The State of California has fallen short of meeting its historic and moral
responsibility to provide adequate health care for its residents, including prenatal,
child and adolescent preventative dental care which would reduce the need for
fluoridation of public water supplies for prophylactic purposes and preserve the
individual consumer’s right to choose the most appropriate method of care.
7. The City’s authority to operate a municipal utility such as its Water Department, both
within and outside its jurisdictional limits, emanates from Article XI, section 9 of the
California Constitution. In addition, Santa Cruz is a charter city formed pursuant to
Article IX, section 7 of the California Constitution and, as such, has the constitutional
authority to enact and enforce local, police, health and safety, sanitary and other
regulations not in conflict with general law. The fluoridation of local water supplies
is not a matter of statewide concern and is a proper subject of local charter city
regulation.
NOW THEREFORE BE IT ORDAINED BY THE CITY OF SANTA CRUZ AS
FOLLOWS:
Section 1. Chapter 6.85 is hereby added to the Santa Cruz Municipal Code to read as
follows:
CHAPTER 6.85 FLUORIDATION OF MUNICIPAL WATER SUPPLY
Sections:
6.85.010 PURPOSE
6,85.020 FLUORIDATION OF MUNICIPAL WATER SUPPLY
6.85.010 PURPOSE
The city council of the City of Santa Cruz declares that the purpose of the ordinance
codified in this chapter is to preserve and assure for the people of the City of Santa Cruz
their local prerogative to determine for themselves whether or not their water will be
treated with fluoride.
6.85.020 FLUORIDATION OF MUNICIPAL WATER SUPPLY
The addition of fluoride to the City of Santa Cruz municipal water supply shall be
prohibited unless the citizens of Santa Cruz affirmatively vote at a general or special
election to fluoride the City’s municipal water supply.
Section 2. This ordinance shall be in full force and take effect thirty (30) days after its final
adoption.
PASSED FOR PUBLICATION this 10th day of March, 1998.
PASSED FOR FINAL ADOPTION this 24th day of March, 1998.

Sodium bicarbonate
http://en.wikipedia.org/wiki/Baking_soda
Sodium bicarbonate or sodium hydrogen carbonate is the chemical compound with

the formula NaHCO3. Sodium bicarbonate is a white solid that is crystalline but often
appears as a fine powder. It has a slight alkaline taste resembling that of washing soda
(sodium carbonate). It is a component of the mineral natron and is found dissolved in
many mineral springs. The natural mineral form is known as nahcolite. It is also
produced artificially.
Since it has long been known and is widely used, the salt has many related names such as
baking soda, bread soda, cooking soda, bicarbonate of soda. Colloquially, its name is
shortened to sodium bicarb or bicarb soda. The word saleratus, from Latin sal æratus
meaning "aerated salt", was widely used in the 19th century for both sodium bicarbonate
and potassium bicarbonate. The term has now fallen out of common usage.
History
The ancient Egyptians used natural deposits of natron, a mixture consisting mostly of
sodium carbonate decahydrate and sodium bicarbonate. The natron was used as a
cleansing agent like soap.
In 1791, a French chemist produced sodium bicarbonate as we know it today. But it was
only in 1846 that two New York bakers, John Dwight and Austin Church, developed the
process of making baking soda from sodium carbonate and carbon dioxide.[1] Each
started a company, and the two companies later merged to form Church & Dwight, the
makers of Arm & Hammer baking soda.
Production
NaHCO3 is mainly prepared by the Solvay process, which is the reaction of calcium
carbonate, sodium chloride, ammonia, and carbon dioxide in water. It is produced on the
scale of about 100,000 ton/year (as of 2001).[2]
NaHCO3 may be obtained by the reaction of carbon dioxide with an aqueous solution of
sodium hydroxide. The initial reaction produces sodium carbonate:
CO2 + 2NaOH → Na2CO3 + H2O

Further addition of carbon dioxide produces sodium bicarbonate, which at sufficiently
high concentration will precipitate out of solution:
Na2CO3 + CO2 + H2O → 2NaHCO3
Commercial quantities of baking soda are also produced by a similar method: soda ash,
mined in the form of the ore trona, is dissolved in water and treated with carbon dioxide.
Sodium bicarbonate precipitates as a solid from this method:
Na2CO3 + CO2 + H2O → 2NaHCO3
Mining
Naturally occurring deposits of nahcolite (NaHCO3) are found in the Eocene-age (55.8 ±
0.2 - 33.9 ± 0.1 Ma) Green River Formation, Piceance Creek Basin in Colorado.
Nahcolite was deposited as beds during periods of high evaporation in the basin. It is
commercially mined using in-situ leach techniques involving dissolution of the nahcolite
by heated water which is pumped through the nahcolite beds and reconstituted through a
natural cooling crystallization process. Natural Soda, Inc., the only North American
processor of natural sodium
bicarbonate is owned by AmerAlia (AALA) and The Sentient Group. The operation is
located 54 miles northwest of Rifle, Colorado.
Chemistry
Sodium bicarbonate is an amphoteric compound. Aqueous solutions are mildly alkaline:
HCO3- + H2O → H2CO3 + OH-
Sodium bicarbonate can be used as a wash to remove any acidic impurities from a
"crude" liquid, producing a more pure sample. Reaction of sodium bicarbonate and an
acid to give a salt and carbonic acid, which readily decomposes to carbon dioxide and
water:
NaHCO3 + HCl → NaCl + H2CO3

H2CO3 → H2O + CO2 (gas)
Reaction of sodium bicarbonate and acetic acid:
NaHCO3 + CH3COOH → CH3COONa + H2O + CO2 (gas)
Sodium bicarbonate reacts with bases:
NaHCO3 + NaOH → Na2CO3 + H2O
Thermal decomposition
Above 60 °C, it gradually decomposes into sodium carbonate, water and carbon dioxide.
The conversion is fast at 250 °C:[citation needed]
2NaHCO3 → Na2CO3 + H2O + CO2
Most bicarbonates undergo this dehydration reaction. Further heating converts the
carbonate into the oxide (at around 1000 °C):
Na2CO3 → Na2O + CO2
These conversions are relevant to the use of NaHCO3 as a fire-suppression agent ("BC
powder") in some dry powder fire extinguishers.
Applications
Cooking
Sodium bicarbonate is primarily used in cooking (baking) where it reacts with other
components to release carbon dioxide, that helps dough "rise". The acidic compounds
that induce this reaction include phosphates, cream of tartar, lemon juice, yogurt,
buttermilk, cocoa, vinegar, etc. Hence, sodium bicarbonate can be substituted for baking
powder provided sufficient acid reagent is also added to the recipe.[3] Many forms of
baking powder contain sodium bicarbonate combined with one or more acidic phosphates
or cream of tartar.
Neutralization of acids and bases
Many laboratories keep a bottle of sodium bicarbonate powder within easy reach,
because sodium bicarbonate is amphoteric, reacting with acids and bases. Furthermore, as
it is relatively innocuous in most situations, there is no harm in using excess sodium
bicarbonate. Lastly, sodium bicarbonate powder may be used to smother a small fire.
A wide variety of applications follows from its neutralization properties, including

ameliorating the effects of white phosphorus in incendiary bullets from spreading inside
an afflicted soldier's wounds.[4] Sodium bicarbonate can be added as a simple solution for
raising the pH balance of water that has a high level of chlorine, such as in swimming
pools and aquariums.[5]
Medical uses
Sodium bicarbonate is used as an antacid to treat acid indigestion and heartburn[6] An

aqueous solution is administered intravenously for cases of acidosis, or when there is
insufficient sodium or bicarbonate ions in the blood.[7] This compound has also been used
as for patients who have had a ureterosigmoidostomy.
Adverse reactions to emergency administration include congestive heart failure, with
edema secondary to sodium overload, and the metabolic complication of
hyperosmolarity, metabolic alkalosis, and hypernatremia.
Sodium bicarbonate may also be used as an anti-fungal for dandruff caused by fungus.[8]
As a cleaning agent
• A paste from baking soda can be very effective when used in cleaning and
scrubbing.
• For cleaning of aluminium objects it is to be discouraged as it attacks the thin
unreactive protective oxide layer of this otherwise very reactive metal.
• A solution in warm water will remove the tarnish from silver when the silver is in
contact with a piece of aluminium foil[1].
• Has been used for many years informally as a tooth whitening agent.
Miscellaneous
• Sodium bicarbonate is used in BC Dry Chemical fire extinguishers as an

alternative to the more corrosive ammonium phosphate in ABC extinguishers.
The alkali nature of sodium bicarbonate makes it the only dry chemical agent,
besides Purple-K, that was allowed for use on commercial deep fat fryers. The
agent has a mild saponification effect on the grease, which forms a smothering
soapy foam. Dry Chemicals have since fallen out of favor for kitchen fires as they
have no cooling effect compared to the extremely effective wet chemical agents
specifically designed for such hazards.[citation needed]
• It is used in a process for cleaning paint called sodablasting.
• It can be used as a carbon sequestration agent to trap carbon dioxide greenhouse
gas emissions in solid form, as one potential tool against global warming.[9]
• It can be administered to spas and garden ponds to raise pH levels.
• It can be used to remove odors from books. It is a tried-and-true method of used
booksellers. The baking soda will absorb the musty smell, leaving the books less
odorous.[10]
References
1. ^ "Company History". Church & Dwight Co..
2. ^ Holleman, A. F.; Wiberg, E. "Inorganic Chemistry" Academic Press: San Diego, 2001.
ISBN 0-12-352651-5.
3. ^ Radiation Cookery Book 45th Edition, Radiation Group Sales Ltd 1954
4. ^ "White Phosphorus". GlobalSecurity.org. Retrieved on 2007-09-26.
5. ^ "Outdoor Fun: Pool Care". Arm & Hammer Baking Soda (2003). Retrieved on 2007-
09-26.
6. ^ "Sodium Bicarbonate". Jackson Siegelbaum Gastroenterology (1998).
7. ^ "Sodium Bicarbonate Intravenous Infusion". Consumer Medicine Information. Better
Health Channel (2004-07-13).
8. ^ Use of Baking Soda as a Fungicide, By George Kuepper, Raeven Thomas, and Richard
Earles, © NCAT November 2001
9. ^ "Can baking soda curb global warming?". CNet News (2007). Retrieved on 2007-12-
30.
10. ^ Gail Altman (2006-05-22). Book Repair for BookThinkers: How To Remove Odors
From Books, http://www.bookthink.com/0069/69alt.htm.
Further reading
1. Bishop, D., J. Edge, C. Davis, and C. Goodman. "Induced Metabolic Alkalosis
Affects Muscle Metabolism and Muscle Metabolism and Repeated-Sprint
Ability". Medicine and Science in Sports Exercise, Vol. 36, No. 5, pp. 807-813,
2004.
External links
• Free to read Baking Soda Book

• Differences between Baking Soda and Baking Powder
Retrieved from "http://en.wikipedia.org/wiki/Sodium_bicarbonate"

Silicofluorides Nominated for Toxicological Study 10/05/2005 09:45 AM
National Toxicology Program

Web site: http://cerhr.niehs.nih.gov/news/fr8_19_02.html
Notice of a Meeting of the NTP Board of Scientific Counselors
CCEC Recommendations for Substances Nominated for Future NTP Studies
Information about substances nominated to the NTP for toxicology and carcinogenesis studies and the
ICCEC's recommendations was published in the Federal Register on June 12, 2002 (Vol. 67, No. 113, p.
40329-33). This notice is available on the web (http://ntp-
server.niehs.nih.gov/htdocs/Liason/ICCECFinal02JuneFR.html) along with supporting documents for each
nomination (http://ntp-server.niehs.nih.gov/htdocs/liason/BkgrSum02June.html) or by contacting the NTP
Executive Secretary (contact information below).
This meeting provides an additional opportunity for the public to provide comment on these nominations
and study recommendations to the Board and NTP staff. Comments submitted to the NTP in response to the
June 2002 Federal Register notice are under consideration and do not need to be resubmitted or readdressed.
Substances recommended for study:
Abrasive blasting agents - 5 different industrial materials used as alternatives to sand

5-Amino-o-cresol - permanent hair dye ingredient
tert-Butyl hydroperoxide - high production volume industrial catalyst
Chloramine-T and p-Toluenesulfonamide - active ingredient and metabolite of therapeutant used in
aquaculture to control bacterial infections
Cobalt metal dust - important industrial material linked to lung problems in workers
Ephedrine alkaloid dietary supplements - widely used in herbal dietary supplements with numerous
reports of adverse effects
Ethanone, 1-(1,2,3,4,5,6,7,8-octahydro-2,3,8,8-tetramethyl-2-naphthalenyl)-(Iso-E-Super) - high-
production-volume fragrance material
Hexafluorosilicic acid and Sodium hexafluorosilicate - primary agents used to fluoridate public
drinking water system
Ketamine hydrochloride - approved anesthetic drug that causes brain lesions in developing rats
Mercury, ((o-carboxyphenyl)thio)ethyl-, sodium salt (Thimerosal) - organomercuryl-based
preservative used in vaccines and other biological products
Nitrogen trifluoride - cleaning and etching agent in the semiconductor industry
Sodium metasilicate - industrial cleaning agent
Turpentine - high-production-volume industrial solvent and raw material
Welding fumes - variable composition mixture responsible for respiratory and other adverse effects in
exposed workers
BELOW IS RELEVANT EXCERPT FROM FED. REG. (NOTE: IN ORIGINAL, NOMINATION IS IN A

TABLE WITH COLUMNS WHICH IS REPRODUCED IN DIFFERENT FORMAT BELOW FOR
SILICOFLUORIDES ONLY)
file:///Users/nark/Documents/rmasters/OldSite/SilToxStudy.html Page 1 of 4
[Federal Register: June 12, 2002 (Vol. 67, No. 113)] [Notices] [Pages 40329 - 40333]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Public Health Service
Announcement of and Request for Public Comments on Substances Nominated to the National Toxicology
Program (NTP) for Toxicological Studies and on Study Recommendations Made by the NTP Interagency
Committee for Chemical Evaluation and Coordination (ICCEC)
Summary
The NTP continuously solicits and accepts nominations for toxicological studies to be undertaken by the
program. Nominations of substances of potential human health concern are received from Federal agencies,
the public, and other interested parties. These nominations undergo several levels of review before
selections for testing are made and toxicological studies are designed and implemented. Evaluation by the
NTP ICCEC is the initial external review step in the NTP's formal selection process for NTP study
nominations. On April 17, 2002 the ICCEC met to review 19 new nominations and make study
recommendations. This announcement (1) provides brief background information regarding the substances
nominated to NTP for study, (2) presents the ICCEC's study recommendations from its April 17, 2002
meeting, (3) solicits public comment on the nominations themselves and on the study recommendations by
the ICCEC, and (4) requests the submission of additional relevant information for consideration by the NTP
in its continued evaluation of these nominations.
Review of Study Nominations
At it meeting on April 17, 2002, the ICCEC reviewed 19 new nominations for NTP studies. For 14 of these
nominations, one or more types of toxicological studies were recommended, and for 5 nominations, no
studies were recommended at this time. The nominated substances with CAS numbers, nomination source,
nomination rationale, specific study recommendations, and other pertinent information are given in the
attached tables.
Evaluation by the NTP Interagency Committee for Chemical Evaluation and Coordination (ICCEC) is the
initial external review step in the NTP's formal selection process for NTP study nominations. The ICCEC is
composed of representatives from the Agency for Toxic Substances and Disease Registry, U.S. Consumer
Product Safety Commission, Department of Defense, U.S. Environmental Protection Agency, U.S. Food and
Drug Administration's National Center for Toxicological Research, National Cancer Institute, National
Center for Environmental Health, National Institute of Environmental Health Sciences, National Institute for
Occupational Safety and Health, National Library of Medicine, and the Occupational Safety and Health
Administration. The ICCEC meets once or twice annually to evaluate groups of new study nominations and
to make recommendations with respect to both specific types of studies and testing priorities.
Request for Public Comments
Interested parties are invited to submit comments or supplementary information on the nominated
substances and study recommendations that appear in the attached tables. The NTP welcomes toxicology
and carcinogenesis information from completed, ongoing, or planned studies, as well as information on
current production levels, use patterns, human exposure, environmental occurrence, or public health
concerns for any of the nominated substances. The NTP is also interested in identifying appropriate new
animal models for mechanistic based research, including transgenic or knockout mice, and welcomes
comments regarding the use of specific animal models to address scientific questions relevant to the
nominated substances and studies under consideration. All information received will be considered by the
NTP in its continued review of these nominations. Comments or information should be sent to Dr. Scott
Masten by August 12, 2002. Persons responding to this request should include their name, affiliation,
mailing address, phone, fax, e-mail address and sponsoring organization (if any) with the submission.
Written submissions will be made available electronically on the NTP's web site as they are received.
An electronic copy of this announcement, internet links to electronic versions of supporting documents for
each nomination, and further information on the NTP and the NTP Chemical Nomination and Selection
Process can be accessed through the NTP web site: http://ntp-server.niehs.nih.gov.
Send comments or information to Dr. Scott A. Masten, Office of Chemical Nomination and Selection,
NIEHS/NTP, P. O. Box 12233, MD A3-07, Research Triangle Park, North Carolina 27709; telephone: (919)
541-5710; FAX: (919) 541-3647; email: masten@niehs.nih.gov.
Background
The NTP actively seeks to identify and select for study chemicals and other agents for which sufficient
information is not available to adequately evaluate potential human health hazards. The NTP accomplishes
this goal through a formal open nomination and selection process. Substances considered appropriate for
study generally fall into two broad yet overlapping categories: (1) those substances of greatest concern for
public health based on the extent of human exposure and/or suspicion of toxicity; and (2) substances for
which toxicological data gaps exist and additional studies would aid in assessing potential human health
risks, e.g. by facilitating cross-species extrapolation or evaluating dose-response relationships. Input is also
solicited regarding the nomination of studies that permit the testing of hypotheses to enhance the predictive
ability of future NTP studies, address mechanisms of toxicity, or fill significant gaps in the knowledge of
the toxicity of classes of chemical, biological, or physical substances. Substances may be studied to evaluate
a variety of health-related effects, including but not limited to reproductive and developmental toxicity,
genotoxicity, immunotoxicity, neurotoxicity, metabolism and disposition, and carcinogenicity. In reviewing
and selecting nominated substances, the NTP also considers legislative mandates that require responsible
private sector commercial organizations to evaluate their products for health and environmental effects. The
possible human health consequences of anticipated or known human exposure, however, remain the over-
riding factor in the NTP's decision to study a particular substance.
The review and selection of substances nominated for study is a multi-step process. A broad range of
concerns are addressed during this process through the participation of representatives from the National
Institute of Environmental Health Sciences, other Federal agencies, the NTP Board of Scientific Counselors
- an external scientific advisory body, the NTP Executive Committee - the NTP Federal interagency policy
body, and the public. This process is described in further detail in a March 2, 2000 Federal Register
announcement (Volume 65, Number 42, pages 11329-11331). This multi-step evaluative process provides
the NTP with direction and guidance to ensure that its testing program addresses toxicological concerns
relative to all areas of public health, and furthermore, that there is balance among the types of substances
selected for study (e.g., industrial chemicals, consumer products, therapeutic agents). As such, it should be
recognized that at any given time, the new study nominations under consideration do not necessarily reflect
the overall balance of substances historically or currently being evaluated by the NTP in its testing program.
For further information on NTP toxicology studies (previous or in progress) visit the NTP web site at
http://ntp-server.niehs.nih.gov.
Dated: June 5, 2002
Samuel Wilson, M.D.

Deputy Director
[Billing Code 4140-01-P]
Attachment Substances Nominated to the NTP for Toxicological Studies and Recommendations Made by
the ICCEC on April 17, 2002
Table 1. -- Substances Recommended for Study
Substance [CAS No.] Hexafluorosilicic acid [16961-83-4] and Sodium hexafluorosilicate [16893-85-9]
Nominated by: Private Individuals (multiple nominations)
Nominated for: Chemical characterization- Toxicological characterization including chronic toxicity,

carcinogenicity, neurotoxicity, and toxicokinetics| -Mechanistic studies related to cholinesterase inhibition
and lead bioavailability
Rationale for Nomination: Primary agents used to fluoridate public drinking water systems;lack of toxicity
information; assumed complete dissociation to free fluoride under normal conditions of use not supported by
experimental evidence
ICCEC Recommendations: - Chemical characterization studies to assess chemical fate under aqueous
conditions -Toxicological studies may be considered when results of chemical characterization studies are
available for review.
Water
http://en.wikipedia.org/wiki/Water
Water is a common chemical substance that is essential for the survival of all known
forms of life. In typical usage, water refers only to its liquid form or state, but the
substance also has a solid state, ice, and a gaseous state, water vapor or steam. About
1.460 petatonnes (Pt) (1021kilograms) of water covers 71% of the Earth's surface, mostly
in oceans and other large water bodies, with 1.6% of water below ground in aquifers and
0.001% in the air as vapor, clouds (formed of solid and liquid water particles suspended
in air), and precipitation.[1] Saltwater oceans hold 97% of surface water, glaciers and
polar ice caps 2.4%, and other land surface water such as rivers, lakes and ponds 0.6%. A
very small amount of the Earth's water is contained within water towers, biological
bodies, manufactured products, and food stores. Other water is trapped in ice caps,
glaciers, aquifers, or in lakes, sometimes providing fresh water for life on land.
Water moves continually through a cycle of evaporation or transpiration

(evapotranspiration), precipitation, and runoff, usually reaching the sea. Winds carry
water vapor over land at the same rate as runoff into the sea, about 36 Tt (1012kilograms)
per year. Over land, evaporation and transpiration contribute another 71 Tt per year to the
precipitation of 107 Tt per year over land. Clean, fresh drinking water is essential to
human and other life. However, in many parts of the world—especially developing
countries—there is a water crisis, and it is estimated that by 2025 more than half of the
world population will be facing water-based vulnerability.[2] Water plays an important
role in the world economy, as it functions as a solvent for a wide variety of chemical
substances and facilitates industrial cooling and transportation. Approximately 70% of
freshwater is consumed by agriculture.[3]
Types of water
Water can appear in three states; it is one of the very few substances to be found naturally
in all three states on earth. Water takes many different forms on Earth: water vapor and
clouds in the sky; seawater and rarely icebergs in the ocean; glaciers and rivers in the
mountains; and the liquid in aquifers in the ground.
Water can dissolve many different substances, giving it different tastes and odors. In fact,
humans and other animals have developed senses which are, to a degree, able to evaluate
the potability of water, avoiding water that is too salty or putrid. Humans also tend to
prefer cold water to lukewarm; cold water is likely to contain fewer microbes. The taste
advertised in spring water or mineral water derives from the minerals dissolved in it, as
pure H2O is tasteless. As such, purity in spring and mineral water refers to purity from
toxins, pollutants, and microbes.
Different names are given to water's various forms:
• according to state
o solid - ice
o liquid - water
o gaseous - water vapor
• according to meteorology:
o hydrometeor
precipitation
precipitation according to moves precipitation according to state

• vertical (falling) • liquid precipitation
precipitation o rain
o rain o freezing rain
o freezing rain o drizzle
o drizzle o freezing drizzle
o freezing drizzle o dew
o snow • solid precipitation
o snow pellets o snow
o snow grains o snow pellets
o ice pellets o snow grains
o frozen rain o ice pellets
o hail o frozen rain
o ice crystals o hail
• horizontal (seated) o ice crystals
precipitation o hoarfrost
o dew o atmospheric icing
o hoarfrost o glaze ice
o atmospheric icing • mixed precipitation
o glaze ice o in temperatures around
0 °C
•
o levitating particles
clouds
fog
mist
o ascending particles (drifted by wind)
spindrift
stirred snow
• according to occurrence
o groundwater
o meltwater
o meteoric water
o connate water
o fresh water
o surface water
o mineral water – contains much minerals
o brackish water
o dead water – strange phenomenon which can occur when a layer of fresh
or brackish water rests on top of more dense salt water, without the two
layers mixing. It is dangerous for ship traveling.
o seawater
o brine
• according to uses
o tap water
o bottled water
o drinking water or potable water – useful for everyday drinking, without
fouling, it contains balanced minerals that are not harmful to health (see
below)
o purified water, laboratory-grade, analytical-grade or reagent-grade water –
water which has been highly purified for specific uses in science or
engineering. Often broadly classified as Type I, Type II, or Type III, this
category of water includes, but is not limited to the following:
distilled water
double distilled water
deionized water
• according to other features

o soft water – contains less minerals
o hard water – from underground, contains more minerals
o distilled water, double distilled water, deionized water - contains no
minerals
o Water of crystallization — water incorporated into crystalline structures
o Hydrates — water bound into other chemical substances
o heavy water – made from heavy atoms of hydrogen - deuterium. It is in
nature in normal water in very low concentration. It was used in
construction of first nuclear reactors.
o tritiated water
• according to microbiology
o drinking water
o wastewater
o stormwater or surface water
• according to religion
o holy water
Chemical and physical properties
Water is the chemical substance with chemical formula H2O: one molecule of water has
two hydrogen atoms covalently bonded to a single oxygen atom.
The major chemical and physical properties of water are:
• Water is a tasteless, odorless liquid at ambient temperature and pressure. The

color of water and ice is, intrinsically, a very light blue hue, although water
appears colorless in small quantities. Ice also appears colorless, and water vapor is
essentially invisible as a gas.[4]
• Water is transparent, and thus aquatic plants can live within the water because
sunlight can reach them. Only strong UV light is slightly absorbed.
• Since oxygen has a higher electronegativity than hydrogen, water is a polar

molecule. The oxygen has a slight negative charge while the hydrogens have a
slight positive charge giving the article a strong effective dipole moment. The
interactions between the different dipoles of each molecule cause a net attraction
force associated with water's high amount of surface tension.
• Another very important force that causes the water molecules to stick to one
another is the hydrogen bond.[5]
• The boiling point of water (and all other liquids) is directly related to the
barometric pressure. For example, on the top of Mt. Everest water boils at about
68 °C (154 °F), compared to 100 °C (212 °F) at sea level. Conversely, water deep
in the ocean near geothermal vents can reach temperatures of hundreds of degrees
and remain liquid.
• Water has a high surface tension caused by the weak interactions, (Van Der Waals
Force) between water molecules because it is polar. The apparent elasticity caused
by surface tension drives the capillary waves.
• Water also has high adhesion properties because of its polar nature.
• Capillary action refers to the tendency of water to move up a narrow tube against
the force of gravity. This property is relied upon by all vascular plants, such as
trees.
• Water is a very strong solvent, referred to as the universal solvent, dissolving

many types of substances. Substances that will mix well and dissolve in water,
e.g. salts, sugars, acids, alkalis, and some gases: especially oxygen, carbon
dioxide (carbonation), are known as "hydrophilic" (water-loving) substances,
while those that do not mix well with water (e.g. fats and oils), are known as
"hydrophobic" (water-fearing) substances.
• All the major components in cells (proteins, DNA and polysaccharides) are also
dissolved in water.
• Pure water has a low electrical conductivity, but this increases significantly upon
solvation of a small amount of ionic material such as sodium chloride.
• Water has the second highest specific heat capacity of any known chemical
compound, after ammonia, as well as a high heat of vaporization (40.65 kJ mol−1),
both of which are a result of the extensive hydrogen bonding between its
molecules. These two unusual properties allow water to moderate Earth's climate
by buffering large fluctuations in temperature.
• The maximum density of water is at 3.98 °C (39.16 °F).[6] Water becomes even
less dense upon freezing, expanding 9%. This causes an unusual phenomenon: ice
floats upon water, and so water organisms can live inside a partly frozen pond
because the water on the bottom has a temperature of around 4 °C (39 °F).
• Water is miscible with many liquids, for example ethanol, in all proportions,
forming a single homogeneous liquid. On the other hand, water and most oils are
immiscible usually forming layers according to increasing density from the top.
As a gas, water vapor is completely miscible with air.
• Water forms an azeotrope with many other solvents.
• Water can be split by electrolysis into hydrogen and oxygen.
• As an oxide of hydrogen, water is formed when hydrogen or hydrogen-containing

compounds burn or react with oxygen or oxygen-containing compounds. Water is
not a fuel, it is an end-product of the combustion of hydrogen. The energy
required to split water into hydrogen and oxygen by electrolysis or any other
means is greater than the energy released when the hydrogen and oxygen
recombine.[7]
• Elements which are more electropositive than hydrogen such as lithium, sodium,
calcium, potassium and caesium displace hydrogen from water, forming
hydroxides. Being a flammable gas, the hydrogen given off is dangerous and the
reaction of water with the more electropositive of these elements is violently
explosive.
Distribution of water in nature
Water in the Universe
Much of the universe's water may be produced as a byproduct of star formation. When
stars are born, their birth is accompanied by a strong outward wind of gas and dust. When
this outflow of material eventually impacts the surrounding gas, the shock waves that are
created compress and heat the gas. The water observed is quickly produced in this warm
dense gas.[8]
Water has been detected in interstellar clouds within our galaxy, the Milky Way. It is
believed[who?] that water exists in abundance in other galaxies too, because its
components, hydrogen and oxygen, are among the most abundant elements in the
universe. Interstellar clouds eventually condense into solar nebulae and solar systems,
such as ours.
Water vapor is present on:
• Mercury - 3.4% in the atmosphere, and large amounts of water in Mercury's

exosphere[9]
• Venus - 0.002% in the atmosphere
• Earth - trace in the atmosphere (varies with climate)
• Mars - 0.03% in the atmosphere
• Jupiter - 0.0004% in the atmosphere
• Saturn - in ices only
• Enceladus (moon of Saturn) - 91% in the atmosphere
• exoplanets known as HD 189733 b[10] and HD 209458 b.[11]
Liquid water is present on:
• Earth - 71% of surface

• Moon - small amounts of water have been found (in 2008) in the inside of
volcanic pearls brought from Moon to Earth by the Apollo 15 crew in 1971.[12]
Strong evidence suggests that liquid water is present just under the surface of Saturn's
moon Enceladus. Probably some liquid water is on Europa.
Water ice is present on:
• Earth - mainly on ice sheets

• polar ice caps on Mars
• Titan
• Europa
• Enceladus
Probability or possibility of distribution of water ice is at: lunar ice on the Moon, Ceres
(dwarf planet), Tethys (moon). Ice is probably in internal structure of Uranus, Neptune,
and Pluto and on comets.
Water and habitable zone
The Solar System along center row range of possible habitable zones of varying size
stars.
The existence of liquid water, and to a lesser extent its gaseous and solid forms, on Earth
is vital to the existence of life on Earth as we know it. The Earth is located in the
habitable zone of the solar system; if it were slightly closer to or further from the Sun
(about 5%, or about 8 million kilometres), the conditions which allow the three forms to
be present simultaneously would be far less likely to exist.[13]
Earth's mass allows gravity to hold an atmosphere. Water vapor and carbon dioxide in the
atmosphere provide a greenhouse effect which helps maintain a relatively steady surface
temperature. If Earth were smaller, a thinner atmosphere would cause temperature
extremes preventing the accumulation of water except in polar ice caps (as on Mars).
It has been proposed that life itself may maintain the conditions that have allowed its
continued existence. The surface temperature of Earth has been relatively constant
through geologic time despite varying levels of incoming solar radiation (insolation),
indicating that a dynamic process governs Earth's temperature via a combination of
greenhouse gases and surface or atmospheric albedo. This proposal is known as the Gaia
hypothesis.
The state of water also depends on a planet's gravity. If a planet is sufficiently massive,
the water on it may be solid even at high temperatures, because of the high pressure
caused by gravity.
There are various theories about origin of water on Earth.

Water on Earth
Hydrology is the study of the movement, distribution, and quality of water throughout the
Earth. The study of the distribution of water is hydrography. The study of the distribution
and movement of groundwater is hydrogeology, of glaciers is glaciology, of inland
waters is limnology and distribution of oceans is oceanography. Ecological processes
with hydrology are in focus of ecohydrology.
The collective mass of water found on, under, and over the surface of a planet is called
hydrosphere. Earth's approximate water volume (the total water supply of the world) is
1 360 000 000 km³ (326 000 000 mi³). Of this volume:
• 1 320 000 000 km³ (316 900 000 mi³ or 97.2%) is in the oceans.
• 25 000 000 km³ (6 000 000 mi³ or 1.8%) is in glaciers, ice caps and ice sheets.
• 13 000 000 km³ (3,000,000 mi³ or 0.9%) is groundwater.
• 250 000 km³ (60,000 mi³ or 0.02%) is fresh water in lakes, inland seas, and rivers.
• 13 000 km³ (3,100 mi³ or 0.001%) is atmospheric water vapor at any given time.
Groundwater and fresh water are useful or potentially useful to humans as water
resources.
Liquid water is found in bodies of water, such as an ocean, sea, lake, river, stream, canal,
pond, or puddle. The majority of water on Earth is sea water. Water is also present in the
atmosphere in solid, liquid, and vapor states. It also exists as groundwater in aquifers.
The most important geological processes caused by water are: chemical weathering,
water erosion, water sediment transport and sedimentation, mudflows, ice erosion and
sedimentation by glacier.
Water cycle
The water cycle (known scientifically as the hydrologic cycle) refers to the continuous
exchange of water within the hydrosphere, between the atmosphere, soil water, surface
water, groundwater, and plants.
Water moves perpetually through each of these regions in the water cycle consisting of
following transfer processes:
• evaporation from oceans and other water bodies into the air and transpiration from
land plants and animals into air.
• precipitation, from water vapor condensing from the air and falling to earth or
ocean.
• runoff from the land usually reaching the sea.
Most water vapor over the oceans returns to the oceans, but winds carry water vapor over
land at the same rate as runoff into the sea, about 36 Tt per year. Over land, evaporation
and transpiration contribute another 71 Tt per year. Precipitation, at a rate of 107 Tt per
year over land, has several forms: most commonly rain, snow, and hail, with some
contribution from fog and dew. Condensed water in the air may also refract sunlight to
produce rainbows.
Water runoff often collects over watersheds flowing into rivers. A mathematical model
used to simulate river or stream flow and calculate water quality parameters is
hydrological transport model. Some of water is diverted to irrigation for agriculture.
Rivers and seas offer opportunity for travel and commerce. Through erosion, runoff
shapes the environment creating river valleys and deltas which provide rich soil and level
ground for the establishment of population centers. A flood occurs when an area of land,
usually low-lying, is covered with water. It is when a river overflows its banks or flood
from the sea. A drought is an extended period of months or years when a region notes a
deficiency in its water supply. This occurs when a region receives consistently below
average precipitation.
Fresh water storage
Some runoff water is trapped for periods, for example in lakes. At high altitude, during
winter, and in the far north and south, snow collects in ice caps, snow pack and glaciers.
Water also infiltrates the ground and goes into aquifers. This groundwater later flows
back to the surface in springs, or more spectacularly in hot springs and geysers.
Groundwater is also extracted artificially in wells. This water storage is important, since
clean, fresh water is essential to human and other land-based life. In many parts of the
world, it is in short supply.
Tides
Tides are the cyclic rising and falling of Earth's ocean surface caused by the tidal forces
of the Moon and the Sun acting on the oceans. Tides cause changes in the depth of the
marine and estuarine water bodies and produce oscillating currents known as tidal
streams. The changing tide produced at a given location is the result of the changing
positions of the Moon and Sun relative to the Earth coupled with the effects of Earth
rotation and the local bathymetry. The strip of seashore that is submerged at high tide and
exposed at low tide, the intertidal zone, is an important ecological product of ocean tides.
Effects on life
From a biological standpoint, water has many distinct properties that are critical for the
proliferation of life that set it apart from other substances. It carries out this role by
allowing organic compounds to react in ways that ultimately allow replication. All known
forms of life depend on water. Water is vital both as a solvent in which many of the
body's solutes dissolve and as an essential part of many metabolic processes within the
body. Metabolism is the sum total of anabolism and catabolism. In anabolism, water is
removed from molecules (through energy requiring enzymatic chemical reactions) in
order to grow larger molecules (e.g. starches, triglycerides and proteins for storage of
fuels and information). In catabolism, water is used to break bonds in order to generate
smaller molecules (e.g. glucose, fatty acids and amino acids to be used for fuels for
energy use or other purposes). Water is thus essential and central to these metabolic
processes. Therefore, without water, these metabolic processes would cease to exist,
leaving us to muse about what processes would be in its place, such as gas absorption,
dust collection, etc.
Water is also central to photosynthesis and respiration. Photosynthetic cells use the sun's
energy to split off water's hydrogen from oxygen. Hydrogen is combined with CO2
(absorbed from air or water) to form glucose and release oxygen. All living cells use such
fuels and oxidize the hydrogen and carbon to capture the sun's energy and reform water
and CO2 in the process (cellular respiration).
Water is also central to acid-base neutrality and enzyme function. An acid, a hydrogen
ion (H+, that is, a proton) donor, can be neutralized by a base, a proton acceptor such as
hydroxide ion (OH−) to form water. Water is considered to be neutral, with a pH (the
negative log of the hydrogen ion concentration) of 7. Acids have pH values less than 7
while bases have values greater than 7. Stomach acid (HCl) is useful to digestion.
However, its corrosive effect on the esophagus during reflux can temporarily be
neutralized by ingestion of a base such as aluminum hydroxide to produce the neutral
molecules water and the salt aluminum chloride. Human biochemistry that involves
enzymes usually performs optimally around a biologically neutral pH of 7.4.
For example a cell of Escherichia coli contains 70% of water, a human body 60–70%,
plant body up to 90% and the body of an adult jellyfish is made up of 94–98% water.
Aquatic life forms
Earth's waters are filled with life. The earliest life forms appeared in water; nearly all fish
live exclusively in water, and there are many types of marine mammals, such as dolphins
and whales that also live in the water. Some kinds of animals, such as amphibians, spend
portions of their lives in water and portions on land. Plants such as kelp and algae grow in
the water and are the basis for some underwater ecosystems. Plankton is generally the
foundation of the ocean food chain.
Aquatic animals must obtain oxygen to survive, and they do so in various ways. Fish
have gills instead of lungs, although some species of fish, such as the lungfish, have both.
Marine mammals, such as dolphins, whales, otters, and seals need to surface periodically
to breathe air. Smaller life forms are able to absorb oxygen through their skin.
Effects on human civilization
Civilization has historically flourished around rivers and major waterways; Mesopotamia,
the so-called cradle of civilization, was situated between the major rivers Tigris and
Euphrates; the ancient society of the Egyptians depended entirely upon the Nile. Large
metropolises like Rotterdam, London, Montreal, Paris, New York City, Shanghai, Tokyo,
Chicago, and Hong Kong owe their success in part to their easy accessibility via water
and the resultant expansion of trade. Islands with safe water ports, like Singapore, have
flourished for the same reason. In places such as North Africa and the Middle East, where
water is more scarce, access to clean drinking water was and is a major factor in human
development.
Health and pollution
Water fit for human consumption is called drinking water or potable water. Water that is
not potable can be made potable by filtration or distillation (heating it until it becomes
water vapor, and then capturing the vapor without any of the impurities it leaves behind),
or by other methods (chemical or heat treatment that kills bacteria). Sometimes the term
safe water is applied to potable water of a lower quality threshold (i.e., it is used
effectively for nutrition in humans that have weak access to water cleaning processes, and
does more good than harm). Water that is not fit for drinking but is not harmful for
humans when used for swimming or bathing is called by various names other than
potable or drinking water, and is sometimes called safe water, or "safe for bathing".
Chlorine is a skin and mucous membrane irritant that is used to make water safe for
bathing or drinking. Its use is highly technical and is usually monitored by government
regulations (typically 1 part per million (ppm) for drinking water, and 1–2 ppm of
chlorine not yet reacted with impurities for bathing water).
This natural resource is becoming scarcer in certain places, and its availability is a major
social and economic concern. Currently, about 1 billion people around the world
routinely drink unhealthy water. Most countries accepted the goal of halving by 2015 the
number of people worldwide who do not have access to safe water and sanitation during
the 2003 G8 Evian summit.[14] Even if this difficult goal is met, it will still leave more
than an estimated half a billion people without access to safe drinking water and over
1 billion without access to adequate sanitation. Poor water quality and bad sanitation are
deadly; some 5 million deaths a year are caused by polluted drinking water. The World
Health Organization estimates that safe water could prevent 1.4 million child deaths from
diarrhea each year.[15] Water, however, is not a finite resource, but rather re-circulated as
potable water in precipitation in quantities many degrees of magnitude higher than human
consumption. Therefore, it is the relatively small quantity of water in reserve in the earth
(about 1% of our drinking water supply, which is replenished in aquifers around every 1
to 10 years), that is a non-renewable resource, and it is, rather, the distribution of potable
and irrigation water which is scarce, rather than the actual amount of it that exists on the
earth. Water-poor countries use importation of goods as the primary method of importing
water (to leave enough for local human consumption), since the manufacturing process
uses around 10 to 100 times products' masses in water.
In the developing world, 90% of all wastewater still goes untreated into local rivers and
streams.[16] Some 50 countries, with roughly a third of the world’s population, also suffer
from medium or high water stress, and 17 of these extract more water annually than is
recharged through their natural water cycles.[17] The strain not only affects surface
freshwater bodies like rivers and lakes, but it also degrades groundwater resources.
Human uses
Agriculture
The most important use of water in agriculture is for an irrigation and irrigation is key
component to produce enough food. Irrigation takes up to 90% of water withdrawn in
some developing countries.[18]
As a scientific standard
On 7 April 1795, the gram was defined in France to be equal to "the absolute weight of a
volume of pure water equal to a cube of one hundredth of a meter, and to the temperature
of the melting ice."[19] For practical purposes though, a metallic reference standard was
required, one thousand times more massive, the kilogram. Work was therefore
commissioned to determine precisely how massive one liter of water was. In spite of the
fact that the decreed definition of the gram specified water at 0 °C—a highly stable
temperature point—the scientists chose to redefine the standard and to perform their
measurements at the most stable density point: the temperature at which water reaches
maximum density, which was measured at the time as 4 °C.[20]
The Kelvin temperature scale of the SI system is based on the triple point of water,
defined as exactly 273.16 K or 0.01 °C. The scale is a more accurate development of the
Celsius temperature scale, which is defined by the boiling point (100 °C) and melting
point (0 °C) of water.
Natural water consists mainly of the isotopes hydrogen-1 and oxygen-16, but there is also
small quantity of heavier isotopes such as hydrogen-2 (deuterium). The amount of
deuterium oxides or heavy water is very small, but it still affects the properties of water.
Water from rivers and lakes tends to contain less deuterium than seawater. Therefore, a
standard water called Vienna Standard Mean Ocean Water is defined as the standard
water.
For drinking
The human body is anywhere from 55% to 78% water depending on body size.[21] To
function properly, the body requires between one and seven liters of water per day to
avoid dehydration; the precise amount depends on the level of activity, temperature,
humidity, and other factors. Most of this is ingested through foods or beverages other
than drinking straight water. It is not clear how much water intake is needed by healthy
people, though most advocates agree that 6–7 glasses of water (approximately 2 litres)
daily is the minimum to maintain proper hydration.[22] Medical literature favors a lower
consumption, typically 1 liter of water for an average male, excluding extra requirements
due to fluid loss from exercise or warm weather.[23] For those who have healthy kidneys,
it is rather difficult to drink too much water, but (especially in warm humid weather and
while exercising) it is dangerous to drink too little. People can drink far more water than
necessary while exercising, however, putting them at risk of water intoxication
(hyperhydration), which can be fatal. The "fact" that a person should consume eight
glasses of water per day cannot be traced back to a scientific source.[24] There are other
myths such as the effect of water on weight loss and constipation that have been
dispelled.[25]
An original recommendation for water intake in 1945 by the Food and Nutrition Board of
the National Research Council read: "An ordinary standard for diverse persons is 1
milliliter for each calorie of food. Most of this quantity is contained in prepared
foods."[26] The latest dietary reference intake report by the United States National
Research Council in general recommended (including food sources): 2.7 liters of water
total for women and 3.7 liters for men.[27] Specifically, pregnant and breastfeeding
women need additional fluids to stay hydrated. According to the Institute of Medicine—
who recommend that, on average, women consume 2.2 litres and men 3.0 litres—this is
recommended to be 2.4 litres (approx. 9 cups) for pregnant women and 3 litres (approx.
12.5 cups) for breastfeeding women since an especially large amount of fluid is lost
during nursing.[28] Also noted is that normally, about 20 percent of water intake comes
from food, while the rest comes from drinking water and beverages (caffeinated
included). Water is excreted from the body in multiple forms; through urine and feces,
through sweating, and by exhalation of water vapor in the breath. With physical exertion
and heat exposure, water loss will increase and daily fluid needs may increase as well.
Humans require water that does not contain too many impurities. Common impurities
include metal salts and/or harmful bacteria, such as Vibrio. Some solutes are acceptable
and even desirable for taste enhancement and to provide needed electrolytes.[29]
The single largest freshwater resource suitable for drinking is Lake Baikal in Siberia,
which has a very low salt and calcium content and is very clean.
As a dissolving agent or solvent

Dissolving (or suspending) is used to wash everyday items such as the human body,
clothes, floors, cars, food, and pets. Also, human wastes are carried by water in the
sewage system. Its use as a cleaning solvent consumes most of water in industrialized
countries.
Water can facilitate the chemical processing of wastewater. An aqueous environment can
be favourable to the breakdown of pollutants, due to the ability to gain an homogenous
solution that is pumpable and flexible to treat. Aerobic treatment can be used by applying
oxygen or air to a solution reduce the reactivity of substances within it.
Water also facilitates biological processing of waste that have been dissolved within it.
Microorganisms that live within water can access dissolved wastes and can feed upon
them breaking them down into less polluting substances. Reedbeds and anaerobic
digesters are both examples of biological systems that are particularly suited to the
treatment of effluents.
Typically from both chemical and biological treatment of wastes, there is often a solid
residue or cake that is left over from the treatment process. Depending upon its
constituent parts, this 'cake' may be dried and spread on land as a fertilizer if it has
beneficial properties, or alternatively disposed of in landfill or incinerated.
As a heat transfer fluid

Water and steam are used as heat transfer fluids in diverse heat exchange systems, due to
its availability and high heat capacity, both as a coolant and for heating. Cool water may
even be naturally available from a lake or the sea. Condensing steam is a particularly
efficient heating fluid because of the large heat of vaporization. A disadvantage is that
water and steam are somewhat corrosive. In almost all electric power plants, water is the
coolant, which vaporizes and drives steam turbines to drive generators.
In the nuclear industry, water can also be used as a neutron moderator. In a pressurized
water reactor, water is both a coolant and a moderator. This provides a passive safety
measure, as removing the water from the reactor also slows the nuclear reaction down.
Extinguishing fires
Water has a high heat of vaporization and is relatively inert, which makes it a good fire
extinguishing fluid. The evaporation of water carries heat away from the fire. However,
water cannot be used to fight fires of electric equipment, because impure water is
electrically conductive, or of oils and organic solvents, because they float on water and
the explosive boiling of water tends to spread the burning liquid.
Use of water in fire fighting should also take into account the hazards of a steam
explosion, which may occur when water is used on very hot fires in confined spaces, and
of a hydrogen explosion, when substances which react with water, such as certain metals
or hot graphite, decompose the water, producing hydrogen gas.
The power of such explosions was seen in the Chernobyl disaster, although the water
involved did not come from fire-fighting at that time but the reactor's own water cooling
system. A steam explosion occurred when the extreme over-heating of the core caused
water to flash into steam. A hydrogen explosion may have occurred as a result of reaction
between steam and hot zirconium.
Chemical uses
Organic reactions are usually quenched with water or a water solution of a suitable acid,
base or buffer. Water is generally effective in removing inorganic salts. In inorganic
reactions, water is a common solvent. In organic reactions, it is usually not used as a
reaction solvent, because it does not dissolve the reactants well and is amphoteric (acidic
and basic) and nucleophilic. Nevertheless, these properties are sometimes desirable. Also,
acceleration of Diels-Alder reactions by water has been observed. Supercritical water has
recently been a topic of research. Oxygen-saturated supercritical water combusts organic
pollutants efficiently.
Recreation
Main article: Water sport (recreation)
Humans use water for many recreational purposes, as well as for exercising and for
sports. Some of these include swimming, waterskiing, boating, and diving. In addition,
some sports, like ice hockey and ice skating, are played on ice. Lakesides, beaches and
waterparks are popular places for people to go to relax and enjoy recreation. Many find
the sound of flowing water to be calming, too. Some keep fish and other life in aquariums
or ponds for show, fun, and companionship. Humans also use water for snow sports i.e.
skiing or snowboarding, which requires the water to be frozen. People may also use water
for play fighting such as with snowballs, water guns or water balloons. They may also
make fountains and use water in their public or private decorations.
Water industry
The water industry provides drinking water and wastewater services (including sewage
treatment) to households and industry.
Water supply facilities includes for example water wells cisterns for rainwater harvesting,
water supply network, water purification facilities, water tanks, water towers, water pipes
including old aqueducts. Atmospheric water generator is in development.
Drinking water is often collected at springs, extracted from artificial borings in the
ground, or wells. Building more wells in adequate places is thus a possible way to
produce more water, assuming the aquifers can supply an adequate flow. Other water
sources are rainwater and river or lake water. This surface water, however, must be
purified for human consumption. This may involve removal of undissolved substances,
dissolved substances and harmful microbes. Popular methods are filtering with sand
which only removes undissolved material, while chlorination and boiling kill harmful
microbes. Distillation does all three functions. More advanced techniques exist, such as
reverse osmosis. Desalination of abundant ocean or seawater is a more expensive solution
used in coastal arid climates.
The distribution of drinking water is done through municipal water systems or as bottled
water. Governments in many countries have programs to distribute water to the needy at
no charge. Others argue that the market mechanism and free enterprise are best to
manage this rare resource and to finance the boring of wells or the construction of dams
and reservoirs.
Reducing waste by using drinking water only for human consumption is another option.
In some cities such as Hong Kong, sea water is extensively used for flushing toilets
citywide in order to conserve fresh water resources.
Polluting water may be the biggest single misuse of water; to the extent that a pollutant
limits other uses of the water, it becomes a waste of the resource, regardless of benefits to
the polluter. Like other types of pollution, this does not enter standard accounting of
market costs, being conceived as externalities for which the market cannot account. Thus
other people pay the price of water pollution, while the private firms' profits are not
redistributed to the local population victim of this pollution. Pharmaceuticals consumed
by humans often end up in the waterways and can have detrimental effects on aquatic life
if they bioaccumulate and if they are not biodegradable.
Wastewater facilities are sewers and wastewater treatment plants. Another way to remove
pollution from surface runoff water is bioswale.
Industrial applications
Water is used in power generation. Hydroelectricity is electricity obtained from
hydropower. Hydroelectric power comes from water driving a water turbine connected to
a generator. Hydroelectricity is a low-cost, non-polluting, renewable energy source. The
energy is supplied by the sun. Heat from the sun evaporates water, which condenses as
rain in higher altitudes, from where it flows down.
Pressurized water is used in water blasting and water jet cutters. Also, very high pressure
water guns are used for precise cutting. It works very well, is relatively safe, and is not
harmful to the environment. It is also used in the cooling of machinery to prevent over-
heating, or prevent saw blades from over-heating.
Water is also used in many industrial processes and machines, such as the steam turbine
and heat exchanger, in addition to its use as a chemical solvent. Discharge of untreated
water from industrial uses is pollution. Pollution includes discharged solutes (chemical
pollution) and discharged coolant water (thermal pollution). Industry requires pure water
for many applications and utilizes a variety of purification techniques both in water
supply and discharge.
Food processing
Water plays many critical roles within the field of food science. It is important for a food
scientist to understand the roles that water plays within food processing to ensure the
success of their products.
Solutes such as salts and sugars found in water affect the physical properties of water.
The boiling and freezing points of water is affected by solutes. One mole of sucrose
(sugar) raises the boiling point of water by 0.52 °C, and one mole of salt raises the
boiling point by 1.04 °C while lowering the freezing point of water in a similar way.[30]
Solutes in water also affect water activity which affects many chemical reactions and the
growth of microbes in food.[31] Water activity can be described as a ratio of the vapor
pressure of water in a solution to the vapor pressure of pure water.[30] Solutes in water
lower water activity. This is important to know because most bacterial growth ceases at
low levels of water activity.[31] Not only does microbial growth affect the safety of food
but also the preservation and shelf life of food.
Water hardness is also a critical factor in food processing. It can dramatically affect the
quality of a product as well as playing a role in sanitation. Water hardness is classified
based on the amounts of removable calcium carbonate salt it contains per gallon. Water
hardness is measured in grains; 0.064 g calcium carbonate is equivalent to one grain of
hardness.[30] Water is classified as soft if it contains 1 to 4 grains, medium if it contains 5
to 10 grains and hard if it contains 11 to 20 grains.[vague] [30] The hardness of water may be
altered or treated by using a chemical ion exchange system. The hardness of water also
affects its pH balance which plays a critical role in food processing. For example, hard
water prevents successful production of clear beverages. Water hardness also affects
sanitation; with increasing hardness, there is a loss of effectiveness for its use as a
sanitizer.[30]
Boiling, steaming, and simmering are popular cooking methods that often require
immersing food in water or its gaseous state, steam. While cooking water is used for
dishwashing too.
Water politics and water crisis

Main articles: Water politics and Water crisis
See also: Water resources, Water law, and Water right
Water politics is politics affected by water and water resources. Because of

overpopulation, mass consumption, misuse, and water pollution, the availability of
drinking water per capita is inadequate and shrinking as of the year 2006. For this reason,
water is a strategic resource in the globe and an important element in many political
conflicts. It causes health impacts and damage to biodiversity. The serious worldwide
water situation is called water crisis.
UNESCO's World Water Development Report (WWDR, 2003) from its World Water
Assessment Program indicates that, in the next 20 years, the quantity of water available to
everyone is predicted to decrease by 30%. 40% of the world's inhabitants currently have
insufficient fresh water for minimal hygiene. More than 2.2 million people died in 2000
from waterborne diseases (related to the consumption of contaminated water) or drought.
In 2004, the UK charity WaterAid reported that a child dies every 15 seconds from easily
preventable water-related diseases; often this means lack of sewage disposal; see toilet.
To halve, by 2015, the proportion of people without sustainable access to safe drinking
water is one of the Millennium Development Goals.
Fresh water — now more precious than ever in our history for its extensive use in
agriculture, high-tech manufacturing, and energy production — is increasingly receiving
attention as a resource requiring better water management and sustainable use.
Organizations concerned in water protection include International Water Association

(IWA), WaterAid, Water 1st, American Water Resources Association. Water related
conventions are United Nations Convention to Combat Desertification (UNCCD),
International Convention for the Prevention of Pollution from Ships, United Nations
Convention on the Law of the Sea and Ramsar Convention. World Day for Water takes
place at March 22 and World Ocean Day at June 8.
Water used in the production of a good or service is virtual water.
Religion, philosophy, and literature

Water is considered a purifier in most religions. Major faiths that incorporate ritual
washing (ablution) include Christianity, Hinduism, Rastafarianism, Islam, Shinto,
Taoism, and Judaism. Immersion (or aspersion or affusion) of a person in water is a
central sacrament of Christianity (where it is called baptism); it is also a part of the
practice of other religions, including Judaism (mikvah) and Sikhism (Amrit Sanskar). In
addition, a ritual bath in pure water is performed for the dead in many religions including
Judaism and Islam. In Islam, the five daily prayers can be done in most cases after
completing washing certain parts of the body using clean water (wudu). In Shinto, water
is used in almost all rituals to cleanse a person or an area (e.g., in the ritual of misogi).
Water is mentioned in the Bible 442 times in the New International Version and 363
times in the King James Version: 2 Peter 3:5(b) states, "The earth was formed out of
water and by water" (NIV).
Some faiths use water especially prepared for religious purposes (holy water in some
Christian denominations, Amrita in Sikhism and Hinduism). Many religions also consider
particular sources or bodies of water to be sacred or at least auspicious; examples include
Lourdes in Roman Catholicism, the Jordan River (at least symbolically) in some
Christian churches, the Zamzam Well in Islam and the River Ganges (among many
others) in Hinduism.
Water is often believed to have spiritual powers. In Celtic mythology, Sulis is the local
goddess of thermal springs; in Hinduism, the Ganges is also personified as a goddess,
while Saraswati have been referred to as goddess in Vedas. Also water is one of the
"panch-tatva"s (basic 5 elements, others including fire, earth, space, air). Alternatively,
gods can be patrons of particular springs, rivers, or lakes: for example in Greek and
Roman mythology, Peneus was a river god, one of the three thousand Oceanids. In Islam,
not only does water give life, but every life is itself made of water: "We made from water
every living thing".[32]
The Ancient Greek philosopher Empedocles held that water is one of the four classical
elements along with fire, earth and air, and was regarded as the ylem, or basic substance
of the universe. Water was considered cold and moist. In the theory of the four bodily
humors, water was associated with phlegm. Water was also one of the five elements in
traditional Chinese philosophy, along with earth, fire, wood, and metal.
Water also plays an important role in literature as a symbol of purification. Examples

include the critical importance of a river in As I Lay Dying by William Faulkner and the
drowning of Ophelia in Hamlet.
Water portal
Sherlock Holmes held that "From a drop of water, a logician could infer the possibility of
an Atlantic or a Niagara without having seen or heard of one or the other."[33]
References
1. ^ Water Vapor in the Climate System, Special Report, [AGU], December 1995
(linked 4/2007). Vital Water UNEP.
2. ^ Kulshreshtha, S.N (1998). "[Scholar?hl=en&lr=&ie=UTF-
8&sa=G&oi=qs&q=%2210.1023+a+1007957229865%22+author:s-kulshreshtha
A Global Outlook for Water Resources to the Year 2025]". Water Resources
Management 12 (3): 167–184. doi:10.1023/A:1007957229865,
Scholar?hl=en&lr=&ie=UTF-
8&sa=G&oi=qs&q=%2210.1023+a+1007957229865%22+author:s-kulshreshtha.
Retrieved on 9 June 2008.
3. ^ Baroni, L.; Cenci, L.; Tettamanti, M.; Berati, M. (2007). "Evaluating the
environmental impact of various dietary patterns combined with different food
production systems". European Journal of Clinical Nutrition 61: 279–286.
doi:10.1038/sj.ejcn.1602522.
4. ^ Braun, Charles L.; Sergei N. Smirnov (1993). "Why is water blue?" (HTML). J.
Chem. Educ. 70 (8): 612, http://www.dartmouth.edu/~etrnsfer/water.htm.
5. ^ Campbell, Neil A.; Brad Williamson; Robin J. Heyden (2006). Biology:
Exploring Life. Boston, Massachusetts: Pearson Prentice Hall. ISBN 0-13-
250882-6.
6. ^ Kotz, J. C., Treichel, P., & Weaver, G. C. (2005). Chemistry & Chemical
Reactivity. Thomson Brooks/Cole.
7. ^ Ball, Philip (September 14, 2007). "Burning water and other myths". Nature
News. Retrieved on 2007-09-14.
8. ^ Gary Melnick, Harvard-Smithsonian Center for Astrophysics and David
Neufeld, Johns Hopkins University quoted in: "Discover of Water Vapor Near
Orion Nebula Suggests Possible Origin of H20 in Solar System (sic)", The
Harvard University Gazette (April 23, 1998). "Space Cloud Holds Enough Water
to Fill Earth's Oceans 1 Million Times", Headlines@Hopkins, JHU (April 9,
1998). "Water, Water Everywhere: Radio telescope finds water is common in
universe", The Harvard University Gazette (February 25, 1999).(linked 4/2007)
9. ^ "MESSENGER Scientists 'Astonished' to Find Water in Mercury's Thin
Atmosphere". Planetary Society (2008-07-03). Retrieved on 2008-07-05.
10. ^ Water Found on Distant Planet July 12, 2007 By Laura Blue, Time
11. ^ Water Found in Extrasolar Planet's Atmosphere - Space.com
12. ^ Versteckt in Glasperlen: Auf dem Mond gibt es Wasser - Wissenschaft -
SPIEGEL ONLINE - Nachrichten
13. ^ J. C. I. Dooge. "Integrated Management of Water Resources". in E. Ehlers, T.
Krafft. (eds.) Understanding the Earth System: compartments, processes, and
interactions. Springer, 2001, p. 116. More references are at the end of the article
"Habitable Zone" at The Encyclopedia of Astrobiology, Astronomy and
Spaceflight.
14. ^ G8 "Action plan" decided upon at the 2003 Evian summit
15. ^ World Health Organization. Safe Water and Global Health.
16. ^ UNEP International Environment (2002). Environmentally Sound Technology
for Wastewater and Stormwater Management: An International Source Book.
IWA Publishing. ISBN 1843390086. OCLC 49204666.
17. ^ Ravindranath, Nijavalli H.; Jayant A. Sathaye (2002). Climate Change and
Developing Countries. Springer. ISBN 1402001045. OCLC 231965991.
18. ^ WBCSD Water Faacts & Trends
19. ^ Decree relating to the weights and measurements
20. ^ here L'Histoire Du Mètre, La Détermination De L'Unité De Poids
21. ^ Re: What percentage of the human body is composed of water? Jeffrey Utz,
M.D., The MadSci Network
22. ^ "Healthy Water Living". Retrieved on 2007-02-01.
23. ^ Rhoades RA, Tanner GA (2003). Medical Physiology, 2nd ed., Baltimore:
Lippincott Williams & Wilkins. ISBN 0781719364. OCLC 50554808.
24. ^ "Drink at least eight glasses of water a day." Really? Is there scientific evidence
for "8 × 8"? by Heinz Valdin, Department of Physiology, Dartmouth Medical
School, Lebanon, New Hampshire
25. ^ Drinking Water - How Much?, Factsmart.org web site and references within
26. ^ Food and Nutrition Board, National Academy of Sciences. Recommended
Dietary Allowances, revised 1945. National Research Council, Reprint and
Circular Series, No. 122, 1945 (Aug), p. 3–18.
27. ^ Dietary Reference Intakes: Water, Potassium, Sodium, Chloride, and Sulfate,
Food and Nutrition Board
28. ^ Water: How much should you drink every day? - MayoClinic.com
29. ^ Maton, Anthea; Jean Hopkins, Charles William McLaughlin, Susan Johnson,
Maryanna Quon Warner, David LaHart, Jill D. Wright (1993). Human Biology
and Health. Englewood Cliffs, New Jersey, USA: Prentice Hall. ISBN 0-13-
981176-1. OCLC 32308337.
30. ^ a b c d e Vaclacik and Christian, 2003
31. ^ a b DeMan, 1999
32. ^ Sura of Al-Anbiya 21:30
33. ^ Arthur Conan Doyle, A Study in Scarlet, Chapter 2, "The Science of Deduction"
Drinking water quality and health1
Pat Kendall2
no. 9.307
from underground water tables (groundwater) and one-

Quick Facts half from surface water in rivers, lakes and reservoirs.
Water is our most essential nutrient. Hard vs. Soft Water

Water contains different amounts of dissolved
inorganic and organic compounds. The hardness of water relates to the amount of
The Environmental Protection Agency regulates calcium, magnesium and sometimes iron in the water.
public water systems. The more minerals present, the harder the water. Soft
The Colorado Department of Health regulates water may contain sodium and other minerals or
bottled or vended water if the water does not chemicals; however, it contains very little calcium,
leave Colorado. The Food and Drug magnesium or iron. Many people prefer soft water
Administration regulates if the water is because it makes soap lather better, gets clothes cleaner
involved in interstate commerce. and leaves less of a ring around the tub. Some
municipalities and individuals remove calcium and
magnesium, both essential nutrients, and add sodium in
an ion-exchange process to soften their water. The harder
Introduction the water, the more sodium that must be added in
exchange for calcium and magnesium ions to soften the
People can survive days, weeks or months without water. This process has drawbacks from a nutritional
food, but only about four days without water. The body standpoint.
uses water for digestion, absorption, circulation,
transporting nutrients, building tissues, carrying away
waste and maintaining body temperature. This information provided by:
The average adult consumes and excretes about 10
cups of water daily. Adults should drink six to eight cups
of liquids per day. Although most of this liquid should
come from beverages, food supplies some water. Our
bodies make water as a by-product in the breakdown of
fats, sugars and proteins to energy.
Water is always two parts hydrogen to one part
oxygen. Beyond that, its composition depends on where it
comes from, how it is processed and handled. Water can
be hard or soft, natural or modified, bottled or tap,
carbonated or still. About one-half of our water comes
1. Service in Action 9.307, Cooperative Extension, Colorado State University. Published May 1991. Revised October 1992. Copyright 1992. For more information,
contact your county Cooperative Extension office.
2. Colorado State University Cooperative Extension food science and human nutrition specialist and professor, food science and human nutrition.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department
of Agriculture, Milan Rewerts, interim director of Cooperative Extension, Colorado State University, Fort Collins, Colorado.
Cooperative Extension programs are available to all without discrimination. No endorsement of products named is intended nor
is criticism implied of products not mentioned.
Drinking water quality and health Page 2
First, soft water is more likely to dissolve certain percent of the respondents had ingested stream or lake
metals from pipes than hard water. These metals include water in the three weeks prior to the onset of symptoms.
cadmium and lead, which are potentially toxic. Second, Prevention is the best solution. Always wash your
soft water may be a significant source of sodium for hands after changing diapers and performing other
those who need to restrict their sodium intake for health hygiene activities. Wash children’s hands frequently.
reasons. Approximately 75 milligrams of sodium is added Thoroughly clean change surfaces after diapering.
to each quart of water per 10 g.p.g. (grains per gallon) It’s best to carry your own water on camping or
hardness. Finally, there is epidemiological evidence to backpacking trips. If this is not practical, the next best
suggest a lower incidence of heart disease in communities solution is to boil the water. Although giardia cysts are
with hard water. The Environmental Protection Agency killed at temperatures of 131 degrees F, boiling for one
(EPA) doesn’t set a mandatory upper limit for sodium in minute at sea level and up to five minutes at 10,000 feet
water, but suggests an upper limit of 20 milligrams per is recommended to eliminate other microorganisms that
liter (quart) to protect individuals on sodium-restricted might be more heat resistant than giardia. Giardia also
diets. will not survive in water held at 59 degrees F for 30
If you use a water softener, two ways to avoid excess minutes if one iodine tablet has been added per quart.
sodium in drinking water are: 1) use low sodium bottled Filters are available, but are expensive and inconvenient.
water, and 2) install a separate faucet in the kitchen for Furthermore, many products marketed for backpackers
unsoftened water. are not effective in filtering out the tiny giardia cysts.
Protection is the key to the control of giardiasis.
Giardia and Other Microorganisms Since feces can contain the organism, bury waste 8
inches deep and at least 100 feet away from natural
Along with differences in mineral composition, water waters. Dogs, like people, can get infected with giardia.
contains different levels of microorganisms. Unless carefully controlled, dogs can contaminate the
Bacteriological tests are available to determine if water is water and continue the chain of infection from animals to
bacteriologically safe for human consumption. Contact humans.
the county health department for information on how and
where such tests are performed. Chlorination and Fluoride
filtration are effective controls for most bacteria.
However, a tiny one-celled parasite not readily killed by Fluoride is found naturally in Colorado water
chlorination, Giardia lamblia, deserves special discussion. supplies in different amounts. The dental benefits of
Over the past several years, giardia has become an fluoridated water are well documented. Fluoride
increasingly common problem in rural and mountain concentrations of 1.0 milligrams per liter or greater will
communities with inadequate filtration systems. Giardia is reduce the incidence of dental cavities. However,
mostly found in surface waters such as mountain streams concentrations over 2.0 milligrams per liter can darken
and lakes, not groundwater. Because one cannot see, tooth enamel causing fluorosis.
taste, or smell giardia, it is best not to drink water The American Dental Association and the American
directly from mountain streams or lakes. Medical Association endorse fluoridation. Yet, after more
Once ingested, the giardia cyst develops into a than 40 years of fluoridation, nearly 40 percent of tap
trophozoite that attaches to the wall of the small intestine. water remains unfluoridated. Opponents have long argued
Disease symptoms usually include diarrhea with cramping that fluoridation violates individual rights, certain
and gas, dehydration, weakness and loss of appetite. religious beliefs that ban medications, and does not
Symptoms may take seven to 10 days to appear and last prevent tooth decay. They also claim it promotes a
up to six weeks. Most people are unaware at the time of variety of ills. A recent study in which male (but not
ingestion that they have been infected. female) rats given water with high levels of sodium
Laboratory identification can confirm the disease by fluoride developed a rare bone cancer, added fuel to their
diagnosis of the organism in the stool. The disease is concerns. Proponents counter that fluoridation is not a
curable with prescribed medication. If untreated, the form of medication, but an adjustment of an essential
symptoms may disappear on their own and reoccur nutrient to a level favorable to health. What that level is
intermittently over a period of months. and whether or not it should come from fluoridated
Treatment also can help prevent spread of the disease drinking water will be at the crux of the next round of
between people and between pets and people. For debates.
example, in a Colorado Department of Health study, Tooth decay is on the decline in the United States
person-to-person contacts within families or between (50 percent decline in the last 20 years). The decline is
small children in day care centers were responsible for 46 occuring in fluoridated and to a lesser extent in non-
percent of the 360 cases investigated. In fact, only 15 fluoridated areas. Fluoride treatments, fluoridated
toothpaste, better diets and improved oral hygiene are all more than 10 percent of collected samples from a water
factors. system exceed 15 parts-per-billion lead. Water systems
Like most elements, fluoride appears to be both that exceed such levels will be required to implement
beneficial to health and potentially toxic. The goal is to corrosion control measures to reduce leaching of lead into
determine the optimum level and then decide how best to water. Techniques such as adding lime (calcium oxide)
achieve that level. The EPA currently sets the maximum to reduce water acidity can greatly reduce lead levels at
allowable level of sodium fluoride in drinking water the tap. A number of other simple practices also can help
(natural or added) at 4 milligrams per liter (4 parts per reduce the level of lead at the tap.
million) and the maximum recommended level at 2
milligrams per liter. The EPA reviews drinking water 1. Cook with and drink only cold water. Hot water
standards every three years. tends to dissolve more lead from pipes.
2. Don’t drink the first water out of your tap in the
Lead morning. Let the water run for about one minute until
a change in temperature occurs.
Lead is a toxic heavy metal known to turn up in 3. For private wells, consider water treatment devices
drinking water. Recent data indicate that levels formerly such as calcite filters that reduce acidity and make
safe may threaten health, especially among infants and water less corrosive. Certain point-of-purchase
children. In an 1986 EPA survey, an estimated 40 million treatment devices (e.g., some ion-exchange filters,
Americans (one in five) were using drinking water that reverse osmosis devices and distillation units) also
contained potentially hazardous levels of lead. can remove lead.
Acute lead poisoning can cause severe brain damage 4. If lead levels remain high, consider bottled water for
and death. The effects of chronic, low-level exposure, drinking and cooking purposes.
however, are more subtle. The developing nervous
systems of fetuses, infants, and children are particularly Nitrate
vulnerable. Recent studies show that lead exposure at a
young age can cause permanent learning disabilities and Nitrates may be found naturally in water or may
hyperactive behavior. Low-level lead exposure also is enter water supplies through a number of sources
associated with elevated blood pressure, chronic anemia, (fertilizers, animal wastes, septic systems). High nitrate-
and peripheral nerve damage. containing water is a serious health concern for pregnant
Natural water usually contains very little lead. women and infants under the age of 6 months. Bacteria
Contamination generally occurs in the water distribution in the infants’ digestive tracts may convert the relatively
system or in the pipes of a home or facility. Lead pipes, harmless nitrate to nitrite. In turn, the nitrite combines
brass faucets and lead solder used to join copper pipes with some of the hemoglobin in blood to form
are the culprits. If your home was built before 1986 when methemoglobin that cannot transport oxygen. To protect
a nation-wide ban on lead pipes and lead solder went into those at risk, the Maximum Contaminant Level (MCL)
effect, it is likely to have lead-soldered plumbing. for nitrate in water is 45 mg/l as nitrate (NO3) or 10 mg/l
The severity of lead contamination depends in part on as nitrogen (N). The MCL for nitrite is 1 mg/l.
how "corrosive" your water is. Soft or acidic water is
more likely to corrode plumbing and fixtures, leaching Sulfate
out lead. According to the EPA, about 80 percent of
public water utilities deliver water that is moderately or Sulfates occur naturally in groundwater combined
highly corrosive. with calcium, magnesium and sodium as sulfate salts.
The EPA is changing the focus of its lead regulation Sulfate content in excess of 250 to 500 ppm (mg/l) may
from a maximum contaminant level of 50 parts-per- give water a bitter taste and have a laxative effect on
billion at the tap to imposed treatment if individuals not adapted to the water.
Water that smells like rotten eggs has a high level of
hydrogen sulfide gas. The gas may occur naturally in
water near oil or gas fields or as the result of bacterial
contamination. To test for bacterial contamination contact
the county health department or a commercial testing lab.
Organic Chemicals radon in water contributes roughly 1 pCi/l of airborne

radon throughout the house. EPA currently advises
The term "organic chemical" includes such products consumers to take action at total household air levels of 4
as pesticides, herbicides, petroleum products and pCi/l. For waterborne radon, a simple step is to make
industrial solvents. Although most have not been sure your bathroom, laundry and kitchen are well
routinely monitored, hundreds of different organic ventilated. At moderate levels, this may adequately
chemicals have been found in drinking water from reduce your exposure to waterborne radon. However if
accidental spills, improper disposal or non-point you use a private well that has high levels of radon,
movement through soils to groundwater. Today, water treatment devices such as granular activated carbon
municipalities are required to monitor an increasing list units and home aerators may be warranted.
of organic chemicals under the Safe-Drinking-Water Act.
As with other contaminants, the danger from organic Improving Water Quality
chemicals in water is hard to assess. In high doses and
pure form some of these chemicals may promote cancer, The growing uneasiness over the purity of tap water
impair the nervous system or damage the heart. In low has led many Americans to install waste treatment
doses, organic chemicals may have cumulative effects, devices, such as filters or distillers. See Service in Action
but so far not much is known about their nature or 9.728 Drinking water treatment devices: filters and 9.729
magnitude. Drinking water treatment devices: distillers.
Once groundwater is contaminated, cleanup of that
groundwater is extremely difficult. If the water is Bottled vs Tap Water
unsuitable for human use, it also may be unsuitable for
agricultural uses and alternative sources of water may Sales of bottled water have increased dramatically
need to be found. Organic chemicals and groundwater over the last few years. Bottled-water companies and
contamination is an area where much research is needed. public water systems often battle over the relative merits
In the meantime, the prudent use and disposal of all of their products. EPA regulates public water systems.
chemicals (agricultural, industrial, home and garden) can FDA regulates bottled water that crosses state lines.
go a long way to protect the environment and Bottled or vended water that stays in Colorado falls under
groundwater from contamination. the jurisdiction of the Colorado State Department of
Health.
Radon Public water systems generally are disinfected with
chlorine. Bottled water is commonly disinfected by ozone
Radon is a radioactive gas, a decay product of treatment. Ozone is a high-strength oxygen that quickly
uranium, that can dissolve into water supplies. The gas reverts to normal oxygen. It is a strong oxidant, like
also is found in rocks and soils that contain granite, chlorine, but does not add taste like chlorine does. The
shale, phosphate, and pitchblende. It is odorless, colorless length of time chlorine and ozone remain active in water
and tasteless. depends on many factors, including temperature. Chlorine
The EPA considers radon to be a major potential usually provides residual disinfection throughout the
health threat, causing an estimated 10,000 to 40,000 lung- public-water distribution system. Ozone provides a
cancer deaths each year. While most deaths are from residual disinfection for a limited time. However, bottled
radon accumulated in houses from seepage through cracks water may be in distribution for several weeks and
and holes in the foundation, 30 to 1,800 deaths per year storage conditions, especially temperature, may adversely
are attributed to radon from household water. Showering, affect quality. In terms of bacterial content, it is
dish-washing and laundering agitate water and release questionable as to whether bottled water is better than
radon into the air. The EPA estimates that at least 8 most municipal tap water.
million people may have high radon levels in their water Bottled water often is purchased for its good taste.
supply. Radon is most likely to be present in water from However, taste does not always indicate safeness. At the
private wells or from small community systems. Large concentrations present in drinking water, most harmful
systems usually provide some kind of water treatment substances (including some disease-causing
that aerates the water and disperses any radon gas that microorganisms, nitrates, trace amounts of lead and
may be present. mercury, and some pesticides and organic materials) have
Before you test your water for radon, test the air. If no taste. Differences in taste among bottled waters
your indoor radon level is high and you use groundwater, generally are due to differing amounts of carbon dioxide,
test your water. If the air level is low, there is no need to calcium, iron compounds, sodium, and other minerals and
test your water. Test results are expressed in picocuries of mineral salts. Differences also may be due to the amount
radon per liter of water (pCi/l). In general 10,000 pCi/l of and type of processing.
Mineral-free water or distilled water is treated to used for comparison purposes. If you do purchase bottled
remove the minerals that occur naturally in water. Almost or vended water, purchase from a quality retailer who
all sodium is removed by these processes. The resulting handles enough volume to rotate stock. If you have
water is rather flat and tasteless for drinking because of concerns about locally vended water, contact your county
the lack of minerals. health department or the Colorado Department of Health,
Drinking water comes from municipal water (303) 692-2000.
systems, wells or springs. It often is treated by reverse
osmosis to remove bacteria and other pathogens and most References
pesticides. The resulting water is purified but still
contains some dissolved solids. E.P.A. Lead in Drinking Water: Should you be
Natural water comes from unprotected well or concerned? Environmental Protection Agency, Public
spring systems and is bottled without extensive treatment. Information Center, Waterside Mall, 410 M St., SW,
Because it is almost exclusively groundwater, it usually Washington D.C.
contains a range of minerals and is, therefore, quite Follett, R.H. and J.R. Self. Domestic water quality
flavorful. Spring water is ground water that has risen criteria. Colorado State University Cooperative
naturally to the surface. Artesian spring water also rises Extension, Service in Action, .513, Fort Collins, CO
under its own pressure, but only after it has been reached 1989.
by drilling. Fundingsland, S. and D. Lundstrom. Drinking Water and
Mineral water is simply water that contains minerals Health. Pub. 27, HEA, NDSU Extension Service,
- which is true of virtually all water except distilled North Dakota State University, Fargo, ND 58105,
water. Natural mineral water contains just the minerals June, 1988.
present in the water as it comes from the ground. Mineral Shelton, T. Interpreting Drinking Water Quality Analysis
water can be still or sparkling. The carbon dioxide that - What Do the Numbers Mean? Pub. E127, Rutgers
causes carbonation also can be natural or added during Cooperative Extension, Cook College, Rutgers
bottling. University, New Brunswick, NJ 08903, 1989.
As for contaminants, bottled water generally rates as Stewart, J., A. Lemley, S. Hogan, R. Weismiller. Health
good as but no better than municipal water supplies Effects of Drinking Water Contaminants. Water
Quality Fact Sheet 2, Cornell University and
University of Maryland, Rev. 1988-89.
The Pollutants that Matter Most: Lead, Radon, Nitrate.
Consumer Reports, p. 30-32, January, 1990.
Toothbrush
http://en.wikipedia.org/wiki/Toothbrush
The toothbrush is an instrument consisting of a small brush on a handle used to clean

teeth through tooth brushing. Toothpaste, often containing fluoride, is commonly added
to a toothbrush to aid in cleaning. Toothbrushes are offered with varying textures of
bristles, and come in many different sizes and forms. Most dentists recommend using a
toothbrush labelled "Soft", since firmer bristled toothbrushes can damage tooth enamel
and irritate gums as indicated by the American Dental Association[1]. Toothbrushes are
often made from synthetic fibers, although natural toothbrushes are also known in many
parts of the world.
History
A variety of oral hygiene measures have been used since before recorded history. This
has been verified by various excavations done all over the world, in which chewsticks,
tree twigs, bird feathers, animal bones and porcupine quills were recovered.
Many peoples used different forms of toothbrushes. Indian medicine (Ayurveda) has used
the neem tree (a.k.a. daatun) and its products to create toothbrushes and similar products
for millennia. A person chews one end of the neem twig until it somewhat resembles the
bristles of a toothbrush, and then uses it to brush the teeth. In the Muslim world, the
miswak, or siwak, made from a twig or root with antiseptic properties has been widely
used since the Islamic Golden Age. Rubbing baking soda or chalk against the teeth was
also common.
The first toothbrush to resemble the modern toothbrush is believed to have been invented
in China in the late 1400s, which used the stiff hairs from a hog's neck, attached to a
bamboo stick.
William Addis of England is credited with creating the first mass-produced toothbrush in
1780. In 1770 he had been placed in jail for causing a riot. While in prison, he decided
that the method for teeth brushing of the time – rubbing a rag on one's teeth with soot and
salt – could be improved. So he took a small animal bone, drilled small holes in it,
obtained some bristles from a guard, tied them in tufts, then passed the bristles through
the holes on the bone and glued them. He soon became very wealthy. He died in the year
1808 and left the business to his eldest son, William II.
The first patent for a toothbrush was by H. N. Wadsworth in 1857 (US Patent No.
18,653) in the United States, but mass production of the product in America only started
in 1885. The rather advanced design had a bone handle with holes bored into it for the
Siberian Boar hair bristles. Boar wasn't an ideal material; it retained bacteria, it didn't dry
well, and the bristles would often fall out of the brush. It wasn't until World War II,
however, that the concept of brushing teeth really caught on in the U.S., in part because it
was part of American soldiers' regular daily duty to clean their teeth. It was a practice that
they brought back to their home life after the conclusion of the war.
Natural bristles (from animal hair) were replaced by synthetic fibers, usually nylon, by
DuPont in 1938. The first nylon bristle toothbrush, made with nylon yarn, went on sale
on February 24, 1938. The first electric toothbrush, the Broxodent, was introduced by the
Bristol-Myers Company (now Bristol-Myers Squibb) at the centennial of the American
Dental Association in 1959.
In January 2003, the toothbrush was selected as the number one invention Americans
could not live without, beating out the automobile, computer, cell phone, and microwave
oven, according to the Lemelson-MIT Invention Index.
Electric toothbrushes
The first electric toothbrush was developed in 1939 in Scotland, but did not appear on the
open market until the 1960s, when it was marketed as the Broxodent in the United States
by Squibb. In 1961, General Electric introduced a rechargeable cordless toothbrush that
moved up and down when activated.
In 1987, the first rotary action toothbrush for home use, the Interplak, appeared in shops
for the general public. There are currently many different varieties of model that use this
mechanism.
Use
1. squeeze paste on toothbrush

2. Use short, back-and-forth brushing motions to clean the outside and inside
surfaces of the teeth, as well as the chewing surfaces. Follow with up-and-down
motions to clean the inside surfaces of the front teeth.
3. Brush along the gum line. This is extremely important, as gum disease starts here.
Brush gently to avoid damaging gums.
4. Make sure to brush the back molars, where bacteria like to hide.
5. Brush the teeth at least 60 seconds (30 seconds is not long enough).
6. Brush the tongue to remove bacteria that cause bad breath.
7. Spit out the toothpaste and rinse with water or mouthwash.
8. Dentists recommend flossing before or after brushing. Adults should try to floss at
least once a day, since most adult cavities occur between teeth. The most
important time to floss is before going to bed. Guide the floss between the teeth
and use it to gently rub the side of each tooth.
FLUORIDES, HYDROGEN FLUORIDE, AND FLUORINE 193
5. PRODUCTION, IMPORT/EXPORT, USE, AND DISPOSAL
5.1 PRODUCTION
The most important natural starting material for the production of fluorine chemicals, including fluorine,
hydrogen fluoride, and sodium fluoride, is the mineral fluorite (calcium fluoride [CaF2]), commonly
called fluorspar. Other important fluorine minerals are fluorapatite (Ca5(PO4)3F) and cryolite (Na3AlF6).
There has been no fluorspar mine production in the United States since 1996; supplies were imported or
purchased from the National Defense Stockpile. In addition, some byproduct calcium fluoride was
recovered from industrial waste streams. An estimated 8,000–10,000 metric tons of fluorspar are
recovered each year from uranium enrichment, stainless steel pickling, and petroleum alkylation. To
supplement fluorspar supplies, fluorosilicic acid is recovered from phosphoric acid plants processing
phosphate rock. In 2001, the main fluorspar-producing countries, in order of importance, were China,
Mexico, South Africa, Russia, Spain, and France (USGS 2002b). The apparent consumption of fluorspar
(excluding fluorspar equivalents of fluorosilicic acid, hydrofluoric acid, and cryolite) in the United States
was 601,000 metric tons in 2000 and was estimated to be 636,000 metric tons in 2001 (USGS 2002a).
Approximately 60–65% of the fluorspar consumed goes into the production of hydrogen fluoride. Large
amounts are also used as a flux in steel production.
In 2001, 65,200 tons of byproduct fluorosilicic acid (equivalent to 104,000 tons of fluorspar) were
produced by 10 plants owned by 6 companies. Fluorosilicic acid was used primarily in water
fluoridation, either directly or after processing into sodium silicofluoride. Fluorosilicic acid is also used
to make aluminum fluoride for the aluminum industry. About 41,200, 4,700, and 13,200 tons of
byproduct fluorosilicic acid were sold for water fluoridation, AlF3 production for the aluminum industry,
and for other uses, such as sodium silicofluoride production, respectively. Domestic production data for
fluorosilicic acid for 2001 were developed by the U.S. Geological Survey from voluntary surveys of U.S.
operations. Of the 11 fluorosilicic acid operations surveyed, 10 respondents reported production and
1 respondent reported zero production (USGS 2002b).
Anhydrous hydrogen fluoride is manufactured by the action of sulfuric on calcium fluoride. Powdered
acid-grade fluorspar (≥97% CaF2) is distilled with concentrated sulfuric acid; the gaseous hydrogen
fluoride that leaves the reactor is condensed and purified by distillation (Smith 1994). The U.S. capacity
for hydrogen fluoride production was 208,000 metric tons in 2001 (SRI 2002). The demand for
hydrofluoric acid, which was 350,000 metric tons in 2001, is expected to increase to 364,000 metric tons
in 2005 (CMR 2002).
Sodium fluoride is manufactured by the reaction of hydrofluoric acid with sodium carbonate or sodium
hydroxide. The salt is centrifuged and dried (Mueller 1994). Information concerning the amount of
sodium fluoride produced is not available. Fluorosilicic acid is a byproduct of the action of sulfuric acid
on phosphate rock containing fluorides and silica or silicates. Hydrogen fluoride acts on silica to produce
silicon tetrafluoride, which reacts with water to form fluorosilicic acid (Lewis 1997).
Fluorine is produced commercially by electrolyzing anhydrous hydrogen fluoride containing dissolved

potassium fluoride to achieve adequate conductivity (Jaccaud and Faron 1988; Shia 1994). Potassium
fluoride and hydrogen fluoride form potassium bifluoride (KHF2 or KF·HF). Fluoride is oxidized at the
anode, producing fluorine, and the hydrogen ion is reduced at the cathode, producing hydrogen gas.
Information concerning the amount of fluorine produced is not available. The commercial fluorine
production capacity of the United States and Canada is over 5,000 tons/year (Shia 1994).
Current U.S. manufacturers of fluorine, hydrogen fluoride, sodium fluoride, fluorosilicic acid, and sodium
silicofluoride are given in Table 5-1. Tables 5-2 and 5-3 list the number of facilities in each state that
manufacture, process, or use hydrogen fluoride and fluorine, respectively, their intended uses, and the
range of maximum amounts of these substances that are stored on-site. In 2000, there were, respectively,
1,031 and 15 reporting facilities that produced, processed, or used hydrogen fluoride or fluorine in the
United States. The data listed in Tables 5-2 and 5-3 are derived from the Toxics Release Inventory
(TRI01 2003). Only certain types of facilities were required to report. Therefore, this is not an
exhaustive list. Sodium fluoride or other fluoride salts are not listed on TRI.
5.2 IMPORT/EXPORT
In 2000, the United States imported 484,000 metric tons of acid grade (>97%) fluorspar and
39,000 metric tons of metallurgical-grade (<97%) fluorspar (USGS 2002a). This importation was
supplemented by the fluorspar equivalent of 208,000 metric tons from hydrofluoric acid plus cryolite.
The estimated imports of fluorspar for 2001 were 530,000 metric tons of acid-grade, 33,000 of
metallurgical-grade, and 181,000 tons from hydrofluoric acid plus cryolite. Between 1997 and 2000, 63%
of fluorspar imports came from China, 26% from South Africa, and 11% from Mexico. Exports of
Table 5-1. U.S. Manufacturers of Hydrogen Fluoride, Fluorine, Sodium Fluoride,

Fluosilicic Acid, and Sodium Silicofluoridea
Company Location
b,c
Hydrogen Fluoride
Dupont La Porte, Texas
Honeywelld Geismar, Louisiana
Fluorine
Honeywelld Metropolis, Illinois
Sodium fluoride
Mallinckrodt Baker, Inc. Phillipsburg, New Jersey
Ozark Fluorine Specialties, Inc. Tulsa, Oklahoma
Solvay Fluorides, Inc. Alorton, Illinois
Sodium silicofluoride
IMC Phosphates Company, IMC-Agrico Phosphates Faustina, Louisiana
Kaiser Aluminum and Chemical Corporation Mulberry, Florida
Fluosilicic acid
Cargill Fertilizer, Inc. Riverview, Florida
Farmland Hydro, L.P. Bartow, Florida
IMC Phosphates Company, IMC-Agrico Phosphates Faustina, Louisiana; Nichols, Florida; South
Pierce, Florida; Uncle Sam, Louisiana
PCS Phosphate Co. Inc. Aurora, North Carolina
Royster-Clark Inc. Americus, Georgia; Chesapeake, Virginia;
Florence, Alabama; Hartsville, South Carolina
U.S. Agri-Chemicals Corporation Fort Meade, Florida
a
Derived from SRI 2002
b
Plant capacity was available only for hydrogen fluoride, and was reported as 80,000 and 120,000 metric tons for
DuPont and Honeywell, respectively.
c
Merchant producers. Alcoa produces hydrogen fluoride as a nonisolatable product.
d
Formally General Electric
Table 5-2. Facilities that Produce, Process, or Use Hydrogen Fluoride
Number of Minimum amount on Maximum amount on

Statea facilities site in poundsb site in poundsb Activities and usesc
AK 2 0 99,999 1, 5, 13
AL 28 0 9,999,999 1, 5, 6, 11, 12, 13
AR 13 0 9,999,999 1, 5, 6, 7, 8, 11, 12, 13
AZ 23 0 999,999 1, 4, 5, 6, 7, 9, 10, 11, 12, 13
CA 34 0 49,999,999 1, 3, 4, 5, 6, 7, 9, 10, 11, 12, 14
CO 16 0 999,999 1, 5, 7, 9, 11, 12
CT 5 100 99,999 1, 5, 10, 11, 12
DE 3 0 999,999 1, 5, 6
FL 24 0 999,999 1, 2, 3, 5, 6, 7, 9, 10, 11, 12, 13, 14
GA 26 0 999,999 1, 5, 7, 11, 12, 13
IA 15 0 99,999 1, 5, 7, 12
ID 5 100 99,999 1, 5, 10, 11, 12, 13, 14
IL 41 0 9,999,999 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13
IN 36 0 999,999 1, 5, 7, 10, 11, 12, 13, 14
KS 14 0 9,999,999 1, 2, 3, 5, 6, 7, 8, 9, 10, 13
KY 29 0 9,999,999 1, 2, 3, 5, 6, 9, 10, 11, 12
LA 19 0 9,999,999 1, 3, 4, 5, 6, 10, 12
MA 11 0 99,999 1, 5, 10, 11, 12
MD 12 0 9,999 1, 5, 11, 13
ME 3 0 9,999 1, 11, 13
MI 25 0 99,999 1, 2, 3, 5, 6, 7, 10, 11, 12, 13
MN 14 0 99,999 1, 5, 6, 10, 11, 12, 13
MO 27 0 99,999 1, 5, 7, 11, 12
MS 9 0 999,999 1, 5, 8, 11, 13
MT 6 0 999,999 1, 5, 10
NC 37 0 999,999 1, 5, 11, 12, 13
ND 8 0 999,999 1, 5, 10, 12, 13
NE 8 0 999,999 1, 3, 5, 9, 13
NH 4 0 99,999 1, 5, 12
NJ 15 0 9,999,999 1, 5, 6, 10, 12
NM 7 0 999,999 1, 5, 10, 11, 13
NV 2 0 999,999 1, 5
NY 29 0 99,999 1, 5, 6, 10, 11, 12
OH 62 0 999,999 1, 5, 6, 7, 8, 9, 10, 11, 12, 13
OK 17 0 999,999 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13
OR 20 0 999,999 1, 3, 4, 5, 7, 9, 10, 11, 12
PA 67 0 9,999,999 1, 2, 3, 5, 6, 7, 9, 10, 11, 12, 13
PR 1 100,000 999,999 6
RI 3 100 99,999 6, 10, 11
SC 30 0 999,999 1, 3, 5, 6, 10, 11, 12, 14
Table 5-2. Facilities that Produce, Process, or Use Hydrogen Fluoride
Number of Minimum amount on Maximum amount on

Statea facilities site in poundsb site in poundsb Activities and usesc
SD 1 0 99 1, 13
TN 19 0 999,999 1, 2, 5, 6, 10, 11, 13
TX 82 0 49,999,999 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14
UT 14 0 999,999 1, 5, 6, 10, 11, 12, 13
VA 23 0 99,999 1, 5, 10, 11, 12
VT 2 1,000 99,999 11
WA 18 0 999,999 1, 5, 10, 11, 12
WI 24 0 99,999 1, 5, 7, 10, 11, 12, 13
WV 20 0 999,999 1, 5, 10, 11, 12
WY 9 0 99,999 1, 2, 3, 5, 10, 13
Source: TRI01 2003

a
Post office state abbreviations used
b
Amounts on site reported by facilities in each state
c
Activities/Uses:
1. Produce 6. Impurity 11. Chemical Processing Aid
2. Import 7. Reactant 12. Manufacturing Aid
3. Onsite use/processing 8. Formulation Component 13. Ancillary/Other Uses
4. Sale/Distribution 9. Article Component 14. Process Impurity
5. Byproduct 10. Repackaging
Table 5-3. Facilities that Produce, Process, or Use Fluorine
Number of Minimum amount Maximum amount on

Statea facilities on site in poundsb site in poundsb Activities and usesc
AL 1 0 99 1, 13
IL 1 10,000 99,999 1, 3, 6, 7
KS 1 0 99 1, 5, 12
LA 1 1,000 9,999 1, 3, 6, 12
OK 1 1,000 9,999 8
PA 2 1,000 999,999 1, 3, 4, 6, 9, 10
PR 1 1,000 9,999 10
TX 1 1,000 9,999 12
Source: TRI01 2003

a
Post office state abbreviations used
b
Amounts on site reported by facilities in each state
c
Activities/Uses:
1. Produce 6. Impurity 11. Chemical Processing Aid
2. Import 7. Reactant 12. Manufacturing Aid
3. Onsite use/processing 8. Formulation Component 13. Ancillary/Other Uses
4. Sale/Distribution 9. Article Component 14. Process Impurity
5. Byproduct 10. Repackaging
fluorspar for 2000 were 40,000 metric tons and are estimated to be 21,000 in 2001 (USGS 2002a).
Exports consist of imported material that was reexported or material obtained from the National Defense
Stockpile. In 2001, no disposal of metalurgical-grade fluorspar from the stockpile was reported. In 2001,
most of the exports were to Canada and Taiwan (USGS 2002a, 2002b).
U.S. imports for consumption are available for three other fluorides: hydrofluoric acid, cryolite, and
aluminum fluoride. For 2001, these were 112,000, 6,750, and 17,400 metric tons, respectively. For
hydrofluoric acid, 74% of imports came from Mexico and 23% from Canada (USGS 2002b).
5.3 USE
Hydrogen fluoride is the most important compound of fluorine. Anhydrous hydrogen fluoride is used in
the production of most fluorine-containing chemicals. It is used in the production of refrigerants,
herbicides, pharmaceuticals, high-octane gasoline, aluminum, plastics, electrical components, and
fluorescent light bulbs. Aqueous hydrofluoric acid is used in stainless steel pickling, glass etching, metal
coatings, exotic metal extraction, and quartz purification (Hance et al. 1997). The most important use of
hydrogen fluoride is in the production of fluorocarbon chemicals, including hydrofluorocarbons, hydro-
fluorochlorocarbons, and fluoropolymers; 60% of production is used for this purpose. Demand for
hydrogen fluoride for fluorocarbons, broadly used as refrigerants, is increasing as a nonchlorinated
alternative to ozone-depleting chlorofluorocarbons. (Production of fluorocarbons uses more hydrogen
fluoride than production of chlorofluorocarbons.) The next most important uses of hydrogen fluoride are:
chemical derivatives, 18%; aluminum manufacturing, 6%; stainless steel pickling, 5%; petroleum
alkylation catalysts, 4%; and uranium chemicals production, 3%. Miscellaneous other uses include glass
etching, herbicides, and rare metals (CMR 2002). Generally, the aluminum industry consumes 10–40 kg
of fluoride per metric ton of aluminum produced. The AlF3 used in aluminum reduction cells may be
produced directly from acid-grade fluorspar or byproduct fluorosilicic acid, rather than from hydrogen
fluoride. Anhydrous hydrogen fluoride is used as a catalyst in the petroleum alkylation, a process that
increases the octane rating of petroleum. In uranium chemicals production, hydrogen fluoride is used to
convert uranium oxide (yellow cake, U3O8) to UF4 before further fluorination to UF6.
Fluorine gas is used captively for the production of various inorganic fluorides. The preparation of
fluorides of an element in its highest oxidation state makes use of fluorine’s oxidizing and fluorinating
ability. The most important product is uranium hexafluoride (UF6), which is used in the gaseous diffusion
process for producing enriched uranium-235 for the nuclear industry. This use consumes 70–80% of
fluorine production. The second most important product is sulfur hexafluoride (SF6), which is used as a
gaseous dielectric for electrical and electronic equipment and a tracer gas for determining ventilation rates
and air movements in buildings. Other uses of fluorine include: the treatment of polyolefin containers to
reduce their permeability to organic liquids; the treatment of a polymer surface for the application of an
adhesive or coating; and the production of some fluorinated organic compounds (Guo et al. 2001; Shia
1994).
The chemicals most commonly used by American waterworks for water fluoridation are fluorosilicic acid,
sodium silicofluoride, and sodium fluoride (Urbansky 2002). Generally, 1.5–2.2 mg of sodium fluoride is
added per liter of water (0.7–1.0 mg/L as fluoride) (Mueller 1994). Data from the Centers for Disease
Control’s (CDC) 1992 Fluoridation Census indicate that 25% of utilities reported using sodium fluoride;
however, this corresponds to 9.2% of the U.S. population drinking fluoride-supplemented tap water
(Urbansky 2002). Sodium fluoride may also be applied topically to teeth as a 2% solution to prevent
tooth decay. It is also used as a flux for deoxidizing rimmed steel, as a component of laundry sours
(removal of iron stains), and in the re-smelting of aluminum, manufacture of vitreous enamels, pickling of
stainless steel, wood preservative compounds, casein glues, manufacture of coated papers, and heat-
treating salts (Mueller 1994). Fluorosilicic acid, as a 1–2% solution, is used widely for sterilizing
equipment in brewing and bottling. Other concentrations of fluorosilicic acid solutions are used in
electrolytic refining of lead, in electroplating, for hardening cement, for crumbling lime or brick work, for
removal of lime from hides during the tanning process, for removals of molds, and as a preservative for
timber. Sodium fluorosilicate is also used in enamels for china and porcelain, in the manufacturing of
opal glass, as an insecticide, as a rodentcide, and for mothproofing of wool. It is also an intermediate in
the production of synthetic cryolite (Budavari 2001).
5.4 DISPOSAL
According to the TRI, in 2001, an estimated 2.5 million pounds of hydrogen fluoride were transferred off-
site, including to publicly owned-treatment works (POTWs), by 991 reporting facilities presumably for
disposal (TRI01 2003). In 2001, 240,196 pounds of fluorine were transferred off-site by 9 reporting
facilities. According to the TRI, in 2001, 77% of hydrogen fluoride that was recycled or treated was
performed on-site (TRI01 2003). Of the hydrogen fluoride recycled in 2001, 23.8 million pounds were
recycled on-site and 251,203 pounds were recycled off-site. Of the hydrogen fluoride that was treated,
234 million pounds were treated on-site and 2 million pounds were treated off-site (TRI01 2003). No
information was found concerning how hydrogen fluoride is generally treated for disposal.
Fluorine gas can be disposed of by conversion to perfluorocarbons or fluoride salts. Because of the long
atmospheric lifetimes of perfluorocarbons, conversion to fluoride salts is preferable. Industrially, the
waste stream is scrubbed with a caustic solution, KOH or NaOH, and for dilute streams, allowed to react
with limestone (Shia 1994). Adequate contact and residence time is essential in the scrubber to ensure
complete neutralization of the intermediate oxygen difluoride to prevent it from leaving the scrub tower.
According to the TRI, in 2001, 18,973 pounds of fluorine were treated on-site and 240,196 pounds were
treated off-site (TRI01 2003).
No information was found regarding the disposal of sodium fluoride. It would appear from its use that
most of it is disposed of in municipal landfills or POTWs.
USDA National Fluoride Database of Selected
Beverages and Foods
Prepared by
Nutrient Data Laboratory

Beltsville Human Nutrition Research Center
Agricultural Research Service
U.S. Department of Agriculture
in collaboration with
University of Minnesota, Nutrition Coordinating Center (NCC)
University of Iowa, College of Dentistry
Virginia Polytechnic Institute and State University, Food Analysis

Laboratory Control Center
National Agricultural Statistics Service (NASS), CSREES, USDA and
Food Composition Laboratory (FCL), Beltsville Human Nutrition Research Center

Agricultural Research Service, U.S. Department of Agriculture
October 2004
U.S. Department of Agriculture

Agricultural Research Service
Beltsville Human Nutrition Research Center
Nutrient Data Laboratory
10300 Baltimore Avenue
Building 005, Room 107, BARC-West
Beltsville, Maryland 20705
Tel. 301-504-0630, FAX: 301-504-0632
E-Mail: ndlinfo@rbhnrc.usda.gov
Web site: http://www/nal/usda/gov/fnic/foodcomp
i
Table of Contents
Acknowledgements .......................................................................................................... i
Disclaimers....................................................................................................................... i
Introduction ..................................................................................................................... 1
Methods and procedures................................................................................................. 2
Data Generation .............................................................................................................. 2
Data evaluation ............................................................................................................... 4
Format of the table .......................................................................................................... 4
Data dissemination.......................................................................................................... 6
References cited in the documentation ........................................................................... 6
References cited in the database.................................................................................... 8
USDA National Fluoride Database ................................................................................ 10
Acknowledgements
This study was conducted as part of an Interagency Agreement between the U.S.
Department of Agriculture, Nutrient Data Laboratory and The National Institute of Dental
& Craniofacial Research and the National Heart, Lung, and Blood Institute of the
National Institutes of Health, NIH Agreement No. Y3-HV-8839
The authors wish to thank Dr. Nancy Miller-Ihli, FCL, USDA for her work on pilot studies
with drinking water and brewed tea, and development of NFDIAS quality control
materials. The authors also wish to thank the 144 participants nationwide who supplied
residential drinking water samples for this study.
Disclaimers
Mention of tradenames, commercial products, or companies in this publication is solely

for the purpose of providing specific information and does not imply recommendation or
endorsement by the U.S. Department of Agriculture over others not mentioned.
1
Documentation: USDA National Fluoride Database of Selected

Beverages and Foods
Introduction
Assessment of fluoride intake is paramount in understanding the mechanisms of

fluoride metabolism specifically the prevention of dental caries, dental fluorosis, and
skeletal fluorosis. The Institute of Medicine (IOM, 1997) specified Adequate Intakes (AI)
of 0.01 mg/day for infants through 6 months, 0.05 mg/kg/day beyond 6 months of age,
and 3 mg/day and 4 mg/day for adult women and men (respectively), to prevent dental
caries. Upper limits (UL) of 0.10 mg/kg/day in children less than 8 years and 10 mg/day
for those older than 8 years are recommended for prevention of dental fluorosis. Similar
levels have been endorsed by the American Dental Association (ADA, 1994) and the
American Dietetic Association (ADA, 2000). Fluoride works primarily via topical
mechanisms to inhibit demineralization, to enhance remineralization, and to inhibit
bacteria associated with tooth decay (Featherstone, 2000). Fluoride has an affinity for
calcified tissues. Studies of exposure and bone mineral density, fractures and
osteoporosis would benefit from a national fluoride database coupled with an intake
assessment tool (Phipps, 1995; Phipps et al., 2000). Therefore, a database for fluoride
is needed for epidemiologists and health researchers to estimate the intakes and to
investigate the relationships between intakes and human health.
The Nutrient Data Laboratory (NDL), Agriculture Research Service, US Department of

Agriculture (USDA) coordinated the development of this USDA National Fluoride
Database of Selected Beverages and Foods subsequently described as the National
Fluoride Database--a critical element of the comprehensive multi-center National
Fluoride Database and Intake Study (NFDIAS). The National Fluoride Database will be
incorporated into a computer-based fluoride assessment tool being developed by the
University of Minnesota, Nutrition Coordinating Center (NCC), as a module of the
Nutrition Data System for Research (NDS-R) software.
The National Fluoride Database is a comprehensive, nationally representative database

of the fluoride concentration in foods and beverages consumed in the United States. It
contains fluoride values for beverages, water, and foods that are major fluoride
contributors. Water and water-based beverages are the chief source of dietary fluoride
intake (Singer and Ophaug, 1984). Conventional estimates are that about 75% of
dietary fluoride comes from water and water-based beverages. According to the 1992
Fluoridation Census (CDC, 1993), about 63% of the population on U.S. public water
systems are receiving water that is fluoridated naturally or by adding fluoride. Drinking
water fluoride distributions may vary widely over geographical and geo-political
boundaries (CDC, 1993). Variations occur with soil composition and with local political
decisions to fluoridate water. The use of wells of varying depths, commercial water
products, home water purifiers, and filtration systems also increase variability of fluoride
in drinking water and complicate estimates of intake (Brown and Aaron, 1991; Robinson
et al.1991; Van Winkle et al., 1995). These variations in fluoride in commercial foods
and beverages have been addressed in this National Fluoride Database.
2
Methods and procedures
Data Generation
The fluoride contents of the chief contributors to fluoride intake have been determined
through a national sampling and analytical program developed by NDL under the
National Food and Nutrient Analysis Program (NFNAP, Pehrsson et al., 2000). In this
database, mean values for fluoride in a particular beverage or food come from different
data sources. Analytical data for US samples from the scientific literature and
unpublished analytical data from Jackson et al., 2002; Kingman, 1984; Levy et al.,
1992-2003; and Ophaug, 1983-1987 have been included as well as analytical data for
126 items developed specifically for this National Fluoride Database. NDL used the Key
Foods approach (Haytowitz et al., 2000) giving consideration to the previously published
fluoride data for foods, beverages, and drinking water as well as the respective patterns
of consumption of these dietary items to identify and prioritize sampling and analysis of
the key food and beverage contributors of dietary fluoride. Consumption data from the
1994-96 USDA Continuing Survey of Food Intakes by Individuals and a preliminary
fluoride database developed by the NCC provided the values for the initial evaluation.
Mean estimates of fluoride concentration and variability in drinking water, beverages
and foods that are the chief contributors to dietary fluoride in the United States have
been developed from analysis of representative samplings.
High priority beverages which collectively contribute up to 80% of dietary fluoride

consumed in the United States, including municipal (tap)/drinking and bottled waters,
teas, carbonated beverages, beers, and ready-to drink juices and drinks were analyzed.
Samples were collected according to a self-weighting, nationally representative
sampling approach (Bellow et al., 2002). Samples were collected in up to 144 locations
across the country, depending on the level of contribution to fluoride intake. Since
drinking water accounts for approximately 75% of dietary fluoride intake, sampling of
drinking water was conducted, with Office of Management and Budget approval, in 144
nationally representative private residential locations nationwide (Pehrsson et al., 2004).
The distribution of fluoride does vary due to naturally occurring fluoride levels and local
fluoridation practices. The use of well water, commercial bottled waters, home purifiers
and filter systems also affects variability in fluoride content of drinking water and
impacts on estimates of daily intakes for individuals. NDL contacted water suppliers
about their fluoridation practices and these were compared to participant responses
(Wilger et al., 2004). Differences in geographical location have been incorporated into
the National Fluoride Database for drinking water, brewed tea, and carbonated sodas.
Retail samples of fruit juices, fruit-flavored beverages, carbonated beverages, bottled

water, and a limited number of foods were picked up in 12 to 36 locations. The author’s
assumption that the fluoride variability would be lower in processed beverages and
foods than that of municipal water was made based on existing data and the results of
the water pilot study (Miller-Ihli et al., 2003), and hence fewer samples.
3
The procurement and sample preparation of the foods and beverages that are the chief
contributors of fluoride were handled through NFNAP supervised contracts and
agreements. Sample units were purchased at retail sites, following detailed instruction
from NDL. Sample preparation was handled by Virginia Polytechnic Institute and State
University, Food Analysis Laboratory Control Center (FALCC). A quality control (QC)
oversight program was established by the NFDIAS Laboratory Methods/Quality Control
Working Group with representation from NDL, the University of Iowa, and FALCC.
NFDIAS quality control materials were prepared by the USDA, Food Composition
Laboratory (FCL) and by the NDL and characterized by three cooperating laboratories.
The laboratory analysis of fluoride was conducted by the University of Iowa, College of
Dentistry. Samples were analyzed using a fluoride ion-specific electrode direct read
method for clear liquids and a micro-diffusion method for other food samples. The
direct reading method was validated using Certified Reference Material (National
Institute of Standards and Technology (NIST), a Standard Reference Material (SRM)
2671a, Fluoride in Freeze-Dried Urine) and by a comparison of results for several
beverage samples between University of Iowa and FCL (Patterson et al., 2004). The
micro-diffusion method was validated by analysis of a Certified Reference Material
(National Research Centre for Certified Reference Materials, Beijing, China, GBW
08572 Prawns) and other reference materials that have reference values for the fluoride
content (for example: NIST, SRM 8436), prior to sample analysis. Methodological
procedures for analyzing carbonated beverages were developed at the University of
Iowa and presented at the March 2004 International Association for Dental Research
(IADR) Meeting (Heilman et al., 2004).
Values in the database are reported on a 100 g basis, and on the edible portion of a
food. For some foods, no standard error was available from the literature source. Much
of the literature data as well as the analytical data reported by the University of Iowa
were reported on a fluid (ppm) basis. Specific gravities needed for fluoride data
conversion and migrations were obtained from VPI. Specific gravities for literature data
were based on the specific gravities obtained from VPI, from other sources
(manufacturer), or were determined by NDL. Values for beverages other than water,
coffee and tea were adjusted by their respective specific gravities and are reported as
served.
Fluoride analytical results were submitted to the NFDIAS Quality Control (QC) Panel for
review. These data included beer, wine, drinking water, brewed tea (considered
significant contributors to total intake of fluoride) and miscellaneous lower priority foods.
The fluoride value for unsweetened instant tea powder seems high when reported at
89,772 mcgs/100 grams because this product is extremely concentrated. However
when one teaspoon of the unsweetened tea powder weighing 0.7 g is added to an eight
ounce cup of tap water, the value for prepared instant tea is 335 mcg/100 g. This
prepared unsweetened instant tea value compares well with the analytical values
reported for regular brewed tea.
4
Data evaluation
Analytical data approved by the NFDIAS QC panel, unpublished data generated by the
University of Iowa, and data gathered from the published literature by NCC and NDL
were entered into the USDA National Nutrient Databank System (NDBS) for further
evaluation and compilation. The data were evaluated for quality using procedures
developed by scientists at the NDL as part of the Nutrient Databank System (Holden, et
al., 2002). These procedures were based on categories and criteria described earlier
by Holden, et al. 1987 and Mangels, et al. 1993 with some modifications. Categories
evaluated include: sampling plan, sample handling, number of samples, analytical
method and analytical quality control. The evaluation process was modified making it
specific to fluoride analytical methods. Evaluation of the analytical method has two
facets: the method itself (processing of samples, analysis and quantitation method) and
validation and quality control of the method by the laboratory (accuracy and precision).
Both the NFNAP analytical data and data from each manuscript were evaluated for
each category, which then received a rating ranging from 0 to 20 points. The ratings for
each of the five categories were summed to yield a Quality Index or QI-the maximum
possible score is 100 points. The Confidence Code (CC) was derived from the QI and
is an indicator of relative quality of the data and the reliability of a given mean. The CC
is assigned as follows:
QI CC
75-100 A
74-50 B
49-25 C
< 25 D
Format of the table
The table contains fluoride values for 400 foods across 23 food groups. The data were
aggregated where possible to match the foods in the USDA National Nutrient Database
for Standard Reference (SR). Food groups are presented in alphabetical order with
beverages and foods arranged in alphabetical order within a food group. Whenever
possible, a NDB Number (No.) (a five digit numerical code used in the SR) is provided.
This NDB No. provides the link between values for foods in this database and SR. As
the data come from a variety of sources or are presented with specificity not used in SR,
there are a number of beverages and foods which are included without a NDB No. In
these cases, we assigned a temporary NDB No. which begins with “975.” These
temporary NDB Nos. are not unique to these beverages and foods and may be used in
other special interest databases produced by NDL.
5
The fields are as follows:
Field Name Description
Food Group Description of food group

Item Description of food or beverage
Mean Amount in 100 grams, edible portion
Std Error Standard error of the mean. Null, if could not be calculated
N Number of data points (samples analyzed). The N=1 on
NFNAP data represents a composite of 12 samples
Min Minimum value
Max Maximum value
Lower EB Lower 95% error bound
Upper EB Upper 95% error bound
CC Confidence code indicating data quality based on
evaluations of sample plan, sample handling, analytical
method, analytical quality control, and number of samples
analyzed
Derivation Code Code giving specific information on how the value was
determined:
A = Analytical data
RPA = Recipe; Known formulation; No adjustments
applied, combination of source codes 1, 12 and/or
6
RPI = Recipe; Known formulation; No adjustments
applied, combination of source codes which
includes codes other than 1, 12 or 6
Source Code Code indicating type of data
1 = Analytical or derived from analytical
6 = Aggregated data involving combinations of source
codes 1 & 12
12 = Manufacturer's analytical; partial documentation
Statistical 1. The displayed summary statistics were computed
Comments from data containing some less-than values. Less-
than, trace, and not detected values were calculated
2. The displayed degrees of freedom were computed
using Satterthwaite’s approximation (Korz and
Johnson, 1988)
3. The procedure used to estimate the reliability of the
generic mean requires that the data associated with
each study be a simple random sample from all the
products associated with the given data source (for
example, manufacturer, variety, cultivar, and species)
4. For this nutrient, one or more data sources had only
6
one observation. Therefore, the standard errors,

degrees of freedom and error bounds were computed
from the between-group standard deviation of the
weighted groups having only one study observation.
NDB No. 5-Digit Nutrient Databank number that uniquely identifies a
food item. In a number of cases, where the descriptions
provided in the literature were not as specific as those in SR,
we have provided multiple NDB numbers, for which the
fluoride values are also applicable.
No. of Studies Number of studies
References Unique descriptions of the references/sources
Data dissemination
The USDA National Fluoride Database of Selected Beverages and Foods is presented
as a pdf file. The Adobe Reader® is needed to view the report of the database. A
Microsoft Excel spreadsheet is also available (fluoride.xls). The user can download the
database, free of charge, from NDL’s web site (http://www.nal.usda.gov/fnic/foodcomp)
onto his/her own computer for use with other programs.
References cited in the documentation
American Dental Association (ADA). 1994. New fluoride schedule adopted. ADA News.
25: 12-14.
American Dental Association(ADA). 2000. Position of the American Dietetic Association:

The impact of fluoride on health. J. Am. Diet. Assoc. 100: 1208-1213.
Bellow ME, Perry CR, and Pehrsson PR. 2002. Sampling and Analysis Plan for a
National Fluoride Study. Proceedings of the American Statistical Association, Section
on Survey Research Methods [CD-ROM], Alexandria, VA: American Statistical
Association. (Presentation and publication)
Brown MD and Aaron G. 1991. The effect of point-of-use conditioning systems on

community fluoridated water. Pediatr. Dent. 13: 35-38.
CDC. 1993. Fluoridation Census 1992. USDHHS.
Featherstone JD. 2000. The science and practice of caries prevention. J. Am. Dent.
Assoc. 131: 887-899.
Haytowitz DB, Pehrsson PR, and Holden JM. 2002. Identification of Key Foods for
Food Composition Research. J. Food Comp. Anal. 15(2): 183-194.
7
Heilman JR, Levy SM, Wefel JS, Cutrufelli R, Pehrsson PR, Patterson KY, Phillips K,
Razor AS, and Whalen AB. 2004. "Fluoride Levels of Carbonated Sodas and Beers"
March 2004, International Association of Dental Research, Honolulu, HI. (Presentation)
Holden JM, Bhagwat SA, and Patterson KY. 2002. Development of a Multi-
Nutrient Data Quality Evaluation System. J. Food Comp. Anal. 15(4): 339-348.
Holden JM, Schubert A, Wolf WR, and Beecher GR. 1987. A system for evaluating the
quality of published nutrient data: selenium, a test case. Food Nutr. Bull. 9(Suppl.): 177-
193.
IOM (Institute of Medicine). 1997. Dietary Reference Intakes for Calcium, Phosphorus,
Magnesium, Vitamin D, and Fluoride. National Academy Press, Washington, D.C.
Jackson RD, Brizendine EJ, Kelly SA, Hinesley R, Stookey GK, Dunipace AJ. 2002.
The fluoride content of foods and beverages from negligibly and optimally fluoridated
communities. Community Dent. Oral Epidemiol. 30: 382-391 and unpublished fluoride
data.
Kingman A. 1984. Unpublished data. NIDR/NIH.
Korz S and Johnson NL. 1988. Encyclopedia of Statistical Sciences. 8: 261-262, John
Wiley and Son, New York, NY.
Levy SM, Heilman JR, and Wefel JS. 1992-2003. Unpublished fluoride data.
Mangels AR, Holden JM, Beecher GR, Forman MR, and Lanza E. 1993. Carotenoid
content of fruits and vegetables: an evaluation of analytic data. J. Am. Diet. Assoc. 93:
284-296.
Miller-Ihli NJ, Pehrsson PR, Cutrufelli R, and Holden JM. 2003. Fluoride content of
municipal water in the United States: What percentage is fluoridated? J. Food Comp.
Anal. 16(5): 621-628.
Ophaug RH. 1983-1987. Unpublished fluoride data.
Patterson KY, Levy SM, Wefel JS, Heilman JR, Cutrufelli R, Pehrsson PR, Harnack L,
and Holden JM. 2004. A Quality Assurance Program for the National Fluoride
Database and Intake Assessment Study [Presentation abstract] 28th US National
Databank Conference, June 24-26, 2004, Iowa City, Iowa.
Pehrsson PR, Haytowitz DB, Holden JM, Perry CR, and Beckler DG. 2000. USDA’s
National Food and Nutrient Analysis Program: Food Sampling. J. Food Comp. Anal. 12:
379-89.
Pehrsson PR, Cutrufelli R, Patterson KY, Perry C, Holden JM, Banerjee S, Himes JH,
Levy SM, and Heilman JR. 2004. Fluoride Concentration and Variability in U.S.
8
Drinking Water [Presentation abstract] 28th US National Databank Conference, June

24-26, 2004, Iowa City, Iowa.
Phipps K. 1995. Fluoride and bone health. J. Public Health Dent. 55: 53-56.
Phipps KR, Orwell ES, Mason JD, and Cauley JA. 2000. Community water fluoridation,
bone mineral density, and fractures: Prospective study of effects in older women. B. M.
J. 321: 860-864.
Robinson SN, Davies EH, and Williams B. 1991. Domestic water treatment appliances
and the fluoride ion. Br. Dent. J. 171: 91-93.
Singer L and Ophaug RH. 1984. Present knowledge in nutrition: Fluoride. The Nutrition
Foundation, Inc. Washington, D.C. 538-547.
Van Winkle S, Levy SM, Kiritsy MC, Heilman JR, Wefel JS, and Marshall T. 1995.
Water and formula fluoride concentrations: significance for infants fed formula. Pediatr.
Dent. 17: 305-310.
Wilger J, Cutrufelli R, Pehrsson PR, Patterson KY, and Holden JM. 2004. Participant
Knowledge of Fluoride in Drinking Water Based on a National Survey [Poster abstract]
37th Annual Meeting Society for Nutrition Education, July 17-21, 2004, Salt Lake City,
Utah.
References cited in the database
Adair S, Leverett D, Shields C, and McKnight-Hanes C. 1991. Fluoride Content of

School Lunches from an Optimally Fluoridated and a Fluoride-Deficient Community. J.
Food Comp. Anal. 4: 216-226.
Featherstone JDB and Shields CP. 1988. A study of fluoride intake in New York state
residents. New York State Department of Health Report. December 1, 1988.
Jackson RD, Brizendine EJ, Kelly SA, Hinesley R, Stookey GK, Dunipace AJ. 2002.
The fluoride content of foods and beverages from negligibly and optimally fluoridated
communities. Community Dent. Oral Epidemiol. 30: 382-391 and unpublished fluoride
data.
Kingman A. 1984. Unpublished data. NIDR/NIH.
Kiritsy MC, Levy SM, Warren JJ, Guha Chowdhury N, Heilman JR, and Marshall T.
1996. Assessing Fluoride Concentrations of Juices and Juice Flavored Drinks. J. Am.
Dent. Assoc. 127: 895-902.
Levy SM, Heilman JR, and Wefel JS. 1992-2003. Unpublished fluoride data.
9
Ophaug RH. 1983-1987. Unpublished fluoride data.
Schulz EM, Epstein JS, and Forrester DJ. 1976. Fluoride Content of Popular
Carbonated Beverages, J. of Prev. Dent. 3(1): 27-29.
Stannard J, Rovero J, Tsamtsouris A, and Gavris V. 1990. Fluoride content of some

bottled waters and recommendations for fluoride supplementation. J. Pedodontics
14(2): 103-107.
Stannard JG, Shim YS, Kritsineli M, Labropoulou P, and Tsamtsouris A. 1991. Fluoride
levels and fluoride contamination of fruit juices. J. of Clin. Pediatr. Dent. 16(1): 38-40.
Taves DR. (1983). 1983. Dietary intake of fluoride ashed (total fluoride) vs. unashed
(inorganic fluoride) analysis of individual foods, Br. J. Nutr. 49: 295-301.
USDA National Fluoride Database Page 10
Food Group Item Mean Std Num Min Max Lower Upper Confidence Derv. Source Statistical NDB No. No. of References
mcg/100g ** Error datapts Value Value 95% EB 95% EB Code Code Code Comments Studies
Baby Foods:
Cereal, mixed, with applesauce and bananas, junior 1 0.1 3 1 1 C A 1 03188 1 Levy 1992-2003
Cereal, oatmeal, with applesauce and bananas, junior 8 2 2 14 C A 1 03192 1 Levy 1992-2003
Cereal, rice, with applesauce and bananas, strained 16 2 2 31 C A 1 03195 1 Levy 1992-2003
Cereal, rice, with mixed fruit, junior 3 1 3 3 C A 1 03210 1 Levy 1992-2003
Dessert, custard pudding, vanilla, junior 4 2 4 4 C A 1 03246 1 Levy 1992-2003
Dessert, dutch apple, junior 2 0.3 3 1 2 0 3 C A 1 03221 1 Levy 1992-2003
Dessert, fruit dessert, junior 18 9.7 5 2 45 0 45 C A 1 03236 1 Levy 1992-2003
Dessert, peach cobbler, junior 8 6.4 4 2 28 0 48 C A 1 03228 1 Levy 1992-2003
Dinner, chicken noodle, junior 29 9.8 5 11 60 C A 1 03069 1 Levy 1992-2003
Dinner, macaroni and cheese, junior 6 2 5 7 C A 1 03090 1 Levy 1992-2003
Dinner, spaghetti, tomato, meat, junior 2 1 2 2 C A 1 03050 1 Levy 1992-2003
Dinner, turkey and rice, junior 20 8.7 4 9 46 6 16 C A 1 03083 1 Levy 1992-2003
Dinner, vegetables and beef, junior 21 11.4 4 2 45 0 57 C A 1 03054 1 Levy 1992-2003
Dinner, vegetables and ham, junior 14 9.6 4 0 42 0 44 C A 1 03062 1 Levy 1992-2003
Dinner, vegetables and turkey, junior 8 2.6 3 5 13 0 19 C A 1 03085 1 Levy 1992-2003
Fruit, apple and blueberry, junior 1 2 1 2 C A 1 03165 1 Levy 1992-2003
Fruit, applesauce, junior 2 1.4 3 1 5 0 8 C A 1 03117 1 Levy 1992-2003
Fruit, applesauce, strained 1 2 1 1 C A 1 03116 1 Levy 1992-2003
Fruit, apricot with tapioca, junior 0 1 0 0 C A 1 03128 1 Levy 1992-2003
Fruit, bananas, pineapple with tapioca, junior 16 2 2 29 C A 1 03156 1 Levy 1992-2003
Fruit, bananas with tapioca, junior 36 2 33 40 C A 1 03280 1 Levy 1992-2003
Fruit, mango with tapioca, strained 12 1 12 12 C A 1 03140 1 Levy 1992-2003
Fruit, peaches with sugar, strained 0 2 0 1 C A 1 03130 1 Levy 1992-2003
Fruit, peaches, junior 3 1.2 4 1 6 0 6 C A 1 03131 1 Levy 1992-2003
Fruit, pears and pineapple, junior 1 2 1 2 C A 1 03159 1 Levy 1992-2003
Fruit, pears, junior 9 4.7 4 0 17 0 29 C A 1 03133 1 Levy 1992-2003
Fruit, pears, strained 1 2 1 1 C A 1 03132 1 Levy 1992-2003
Fruit, plums with tapioca, junior 34 2 20 49 C A 1 03135 1 Levy 1992-2003
Fruit, prunes, without Vitamin C, strained 2 2 2 2 C A 1 03139 1 Levy 1992-2003
Juice, apple 12 2.9 6 5 22 0 55 C A 1 03166 1 Levy 1992-2003
Juice, apple and cherry 67 16.1 8 11 133 0 170 B A 1 03268 1 Levy 1992-2003
Juice, apple and grape 45 13.1 4 27 83 0 122 C A 1 03265 1 Levy 1992-2003
Juice, apple and peach 19 9.4 8 4 69 B A 1 03168 1 Levy 1992-2003
Juice, apple and prune 13 2 12 14 C A 1 03171 1 Levy 1992-2003
Juice, apple-cranberry 10 1 10 10 C A 1 03169 1 Levy 1992-2003
Meat, beef, junior 2 1.0 3 0 3 0 6 C A 1 03003 1 Levy 1992-2003
Meat, ham, junior 3 2 1 5 C A 1 03009 1 Levy 1992-2003
Meat, lamb, junior 10 2 5 14 C A 1 03011 1 Levy 1992-2003
Meat, turkey, junior 44 2 21 66 C A 1 03016 1 Levy 1992-2003
Vegetables and bacon, junior 3 1 3 3 C A 1 03060 1 Levy 1992-2003
Vegetables, carrots, strained 1 2 1 1 C A 1 03099 1 Levy 1992-2003
Vegetables, carrots, junior 12 6.9 5 1 35 0 31 C A 1 03100 1 Levy 1992-2003
Vegetables, corn, creamed, junior 32 2 32 32 C A 1 03120 1 Levy 1992-2003
Vegetables, green beans, junior 12 3.1 5 4 21 0 17 C A 1 03092 1 Levy 1992-2003
Vegetables, green beans, strained 16 2 15 16 C A 1 03091 1 Levy 1992-2003
Vegetables, peas, strained 25 2 23 28 C A 1 03121 1 Levy 1992-2003
Vegetables, squash, junior 5 2.2 4 1 11 0 12 C A 1 03105 1 Levy 1992-2003
Vegetables, squash, strained 1 2 1 1 C A 1 03104 1 Levy 1992-2003
Vgetables, sweetpotatoes, junior 10 4.0 5 1 22 0 39 C A 1 03109 1 Levy 1992-2003
Vegetables, sweetpotatoes, strained 1 2 1 1 C A 1 03108 1 Levy 1992-2003
Baked products:
Biscuits, refrigerated dough, baked 26 9 C A 1 18013 1 Ophaug 1983-1987
18015
Bread, all (white and whole wheat) 39 4.6 34 11 57 29 49 C A 1 4 18069 4 Featherstone 1988
18075 Kingman 1984
Ophaug 1983-1987
Taves 1983
Bread, rye 51 9 C A 1 18060 1 Ophaug 1983-1987
Bread stuffing, prepared, baked 51 2 D A 1 4 18082 1 Taves 1983
Brownie, with nuts 38 2 33.3 43.1 D A 1 4 97500 1 Jackson 2002
Cake, all 22 1.9 29 18 26 16 28 C A 1 4 97501 2 Ophaug 1983-1987
Taves 1983
Cookies, without raisins, all 16 2.1 42 5 29 12 21 C A 1 4 97502 5 Adair 1991
Featherstone 1988
Kingman 1984
Ophaug 1983-1987
Taves 1983
Cookies, oatmeal raisin 69 2 D A 1 18184 1 Kingman 1984
Cornbread 11 9 C A 1 18023 1 Ophaug 1983-1987
Crackers, all 24 4.0 27 9 38 14 33 C A 1 4 97503 4 Featherstone 1988
Kingman 1984
Ophaug 1983-1987
Taves 1983
Doughnuts 30 4.5 11 C A 1 4 97504 2 Kingman 1984
Ophaug 1983-1987
Éclair, chocolate 13 2 D A 1 18257 1 Taves 1983
Muffin, blueberry 39 9 C A 1 18274 1 Ophaug 1983-1987
Pancakes, buttermilk, frozen 20 1 C A 1 18288 1 NFNAP
Pie, apple, frozen, heated 13 9 C A 1 18301 1 Ophaug 1983-1987
Pie, pumpkin, frozen, heated 32 9 C A 1 18326 1 Ophaug 1983-1987
Rolls, hamburger and hot dog 25 3 23 30 C A 1 2 3 18350 1 NFNAP
Snack type, cake roll 49 2 47 51 D A 1 4 97505 1 Jackson 2002
Snack type, chocolate cup cake, cream filled 38 2 37 40 D A 1 4 97506 1 Jackson 2002
Snack type, oatmeal cream pie 41 2 33 48 D A 1 4 97507 1 Jackson 2002
Tortillas, flour 33 1 C A 1 18364 1 NFNAP
Waffles, frozen, KELLOGG'S EGGO 35 11.0 3 23 57 0 83 D A 1 4 18505 1 Jackson 2002
Beef products:
Beef, cooked and raw 22 5.2 57 4 72 11 34 C A 1 4 97508 4 Featherstone 1988
Kingman 1984
Ophaug 1983-1987
Taves 1983
Beef, liver, pan cooked with added fat 5 9 C A 1 13327 1 Ophaug 1983-1987
Beverages:
Alcoholic beverage, beer, light 45 2.3 142 7 92 41 50 A A 1 2 3 14006 1 NFNAP
Alcoholic beverage, beer, regular 44 2.5 102 6 80 39 49 A A 1 2 3 14003 1 NFNAP
Alcoholic beverage, distilled, all (gin, rum, vodka, whiskey), 80 9 9 C A 1 14037 1 Ophaug 1983-1987
proof 14050
14051
Alcoholic beverage, wine, red 105 3.3 14 86 119 98 112 A A 1 2 3 14096 1 NFNAP
Alcoholic beverage, wine, white 202 6.3 17 152 239 189 215 A A 1 2 3 14106 1 NFNAP
Carbonated, cola, diet, fast food type, without ice 78 2 67 89 C A 1 2 3 97509 1 NFNAP
Carbonated, cola, fast food type, without ice 65 2 58 72 C A 1 2 3 97510 1 NFNAP
Carbonated, cola, PEPSI, all regions 32 2.9 70 1 90 26 38 A A 1 2 3 97511 1 NFNAP
Carbonated, cola, PEPSI, Mid-West 36 6.9 16 2 90 22 51 A A 1 2 3 97512 1 NFNAP
Carbonated, cola, PEPSI, Northeast 27 7.0 14 5 74 11 42 A A 1 2 3 97513 1 NFNAP

Carbonated, cola, PEPSI, South 45 3.9 24 5 65 37 53 A A 1 2 3 97514 1 NFNAP
Carbonated, cola, PEPSI, West 13 2.1 16 1 32 8 17 A A 1 2 3 97515 1 NFNAP
Carbonated, cola, COCA-COLA, all regions 49 2.7 72 5 83 44 54 A A 1 2 3 97516 1 NFNAP
Carbonated, cola, COCA-COLA, Mid-West 46 5.7 16 9 79 34 58 A A 1 2 3 97517 1 NFNAP
Carbonated, cola, COCA-COLA, Northeast 53 7.3 14 5 83 39 69 A A 1 2 3 97518 1 NFNAP
Carbonated, cola, COCA-COLA, South 57 2.8 26 20 77 51 63 A A 1 2 3 97519 1 NFNAP
Carbonated, cola, COCA-COLA, West 36 6.6 16 11 82 22 50 A A 1 2 3 97520 1 NFNAP
Carbonated, cola, DIET PEPSI, all regions 48 4.0 70 5 121 39 56 A A 1 2 3 97521 1 NFNAP
Carbonated, cola, DIET PEPSI, Mid-West 46 9.2 16 7 121 26 65 A A 1 2 3 97522 1 NFNAP
Carbonated, cola, DIET PEPSI, Northeast 46 11.0 14 7 107 22 70 A A 1 2 3 97523 1 NFNAP
Carbonated, cola, DIET PEPSI, South 66 5.1 24 9 104 55 77 A A 1 2 3 97524 1 NFNAP
Carbonated, cola, DIET PEPSI, West 25 4.6 16 5 78 15 35 A A 1 2 3 97525 1 NFNAP
Carbonated, cola, DIET COKE, all regions 60 5.2 36 1 99 49 71 A A 1 2 3 97526 1 NFNAP
Carbonated, cola, DIET COKE, Mid-West 69 9.9 8 10 99 45 92 A A 1 2 3 97527 1 NFNAP
Carbonated, cola, DIET COKE, Northeast 58 14.7 7 1 96 22 93 A A 1 2 3 97528 1 NFNAP
Carbonated, cola, DIET COKE, South 72 5.0 13 32 91 61 83 A A 1 2 3 97529 1 NFNAP
Carbonated, cola, DIET COKE, West 33 11.4 8 8 97 6 60 A A 1 2 3 97530 1 NFNAP
Carbonated, cola, PEPSI ONE, all regions 40 5.4 34 0 87 29 51 A A 1 2 3 97531 1 NFNAP
Carbonated, cola, PEPSI ONE, Mid-West 47 11.2 8 0 80 21 74 A A 1 2 3 97532 1 NFNAP
Carbonated, cola, PEPSI ONE, Northeast 31 13.0 7 2 87 0 63 A A 1 2 3 97533 1 NFNAP
Carbonated, cola, PEPSI ONE, South 56 9.1 11 0 82 36 77 A A 1 2 3 97534 1 NFNAP
Carbonated, cola, PEPSI ONE, West 18 4.4 8 5 37 7 28 A A 1 2 3 97535 1 NFNAP
Carbonated, ginger ale 80 3.9 6 73 91 68 93 C A 1 4 14136 2 Schultz 1976
Taves 1983
Carbonated, grape soda 93 4.2 12 83 109 81 105 C A 1 4 14142 2 Schultz 1976
Stannard 1991
Carbonated, lemon-lime, fast food type, without ice 64 2 59 69 C A 1 2 3 97536 NFNAP
Carbonated, lemon-lime, SPRITE, all regions 48 4.0 36 4 81 39 56 A A 1 2 3 14145 1 NFNAP
Carbonated, lemon-lime, SPRITE, Mid-West 47 8.2 8 7 77 27 66 A A 1 2 3 97537 1 NFNAP
Carbonated, lemon-lime, SPRITE, Northeast 48 11.8 7 4 81 19 77 A A 1 2 3 97538 1 NFNAP
Carbonated, lemon-lime, SPRITE, South 59 3.6 13 35 76 52 67 A A 1 2 3 97539 1 NFNAP
Carbonated, lemon-lime, SPRITE, West 29 8.9 8 9 82 8 50 A A 1 2 3 97540 1 NFNAP
Carbonated, orange soda 84 3.6 28 65 101 76 92 C A 1 4 14150 3 Featherstone 1988
Heilman 1999
Schultz 1976
Carbonated, root beer 83 16.6 8 6 122 40 125 C A 1 4 14157 1 Schultz 1976
Carbonated, water, fruit-flavored 105 4.5 8 89 121 94 115 C A 1 4 97541 1 Levy 1992-2003
Chocolate-flavor beverage, mix for milk, powder 5 2 D A 1 14175 1 Kingman 1984
14557
Coffee, brewed 91 3 81 110 B A 1 2 3 14209 1 NFNAP #
Cranberry juice cocktail and blends, light, ready-to-drink 70 10.1 11 13 102 48 93 C A 1 4 97542 1 Levy 1992-2003
Fruit drink, CAPRI-SUN, ready-to-drink 71 2.5 129 12 110 66 76 A A 1 2 3 14272 1 NFNAP
Fruit drink, HAWAIIAN PUNCH, ready-to-drink 44 10.1 15 4 98 23 66 B A 1 4 97543 1 Levy 1992-2003
Fruit drink, HI-C, ready-to-drink 22 2.0 58 4 76 18 26 A A 1 1 2 3 97544 1 NFNAP
Fruit drink, MINUTE MAID punch, ready-to-drink 17 2.0 9 8 27 13 22 C A 1 4 97545 1 Levy 1992-2003
Fruit drink, other brands, ready-to-drink 54 5.4 30 10 108 43 65 B A 1 4 14264 1 Levy 1992-2003
Fruit flavored drinks, prepared from powder 42 17.3 10 2 93 0 90 C A 1 4 14541 1 Featherstone 1988
Fruit flavored drinks, KOOL-AID, ready-to-drink 43 9.8 18 3 103 22 63 B A 1 4 14178 1 Levy 1992-2003
14276
Fruit flavored drink, SUNNY DELIGHT, ready-to-drink 68 2.5 11 56 83 63 74 C A 1 4 14435 1 Levy 1992-2003
Fruit juice drink, apple, ready-to-drink 104 1 D A 1 97546 1 Stannard 1991
Fruit juice drink, blends (not cranberry), ready-to-drink 49 7.5 8 22 80 31 67 C A 1 4 14122 1 Levy 1992-2003
14327
14334
14341
Fruit juice drink, FIVE ALIVE, ready-to-drink 8 0.3 3 8 9 7 10 C A 1 4 97547 1 Levy 1992-2003
Fruit juice drink, grape, ready-to-drink 32 21.2 3 9 74 0 123 C A 1 4 14282 1 Levy 1992-2003
Fruit juice drink, orange, ready-to-drink 55 2 19 90 C A 1 4 42270 2 Levy 1992-2003
Stannard 1991
Lemonade, ready to drink 25 7.5 13 3 80 8 41 B A 1 4 97548 1 Levy 1992-2003
Tea, brewed, microwave, all 322 4.9 36 260 383 312 332 A A 1 2 3 97549 1 NFNAP #
Tea, brewed, microwave, Mid-West 319 10.1 8 272 358 295 343 B A 1 2 3 97550 1 NFNAP #
Tea, brewed, microwave, Northeast 309 13.0 7 264 374 277 340 B A 1 2 3 97551 1 NFNAP #
Tea, brewed, microwave, South 322 4.9 13 260 383 312 332 A A 1 2 3 97552 1 NFNAP #
Tea, brewed, microwave, West 310 10.4 8 260 354 285 335 B A 1 2 3 97553 1 NFNAP #
Tea, brewed, decaffeinated, all 269 8.0 33 159 355 253 286 A A 1 2 3 14352 1 NFNAP #
Tea, brewed, decaffeinated, Mid-West 293 17.2 7 220 355 251 335 B A 1 2 3 97554 1 NFNAP #
Tea, brewed, decaffeinated, Northeast 279 15.9 7 237 342 240 318 B A 1 2 3 97555 1 NFNAP #
Tea, brewed, decaffeinated, South 264 11.5 11 217 331 239 290 B A 1 2 3 97556 1 NFNAP #
Tea, brewed, decaffeinated, West 247 19.7 8 159 312 200 293 B A 1 2 3 97557 1 NFNAP #
Tea, brewed, regular, all 373 6.2 63 257 533 360 385 A A 1 2 3 14355 1 NFNAP #
Tea, brewed, regular, Mid-West 393 16.8 13 312 533 357 430 A A 1 2 3 97558 1 NFNAP #
Tea, brewed, regular, Northeast 357 13.9 14 294 466 327 387 A A 1 2 3 97559 1 NFNAP #
Tea, brewed, regular, South 381 7.2 23 324 445 366 396 A A 1 2 3 97560 1 NFNAP #
Tea, brewed, regular, West 355 14.1 13 257 466 324 386 A A 1 2 3 97561 1 NFNAP #
Tea, iced, ARIZONA, ready-to-drink 123 6.3 21 84 191 110 136 A A 1 2 3 97562 1 NFNAP
Tea, iced, COOL NESTEA Natural Lemon, ready-to-drink 90 3.5 31 62 133 83 97 A A 1 2 3 14137 1 NFNAP
Tea, iced, LIPTON BRISK Lemon, ready-to-drink 72 4.8 63 38 207 63 82 A A 1 2 3 97563 1 NFNAP
Tea, instant, powder, unsweetened 89772 1 C A 1 14366 1 NFNAP
Tea, instant, powder, unsweetened, prepared with tap water 335 RPA 6 14367
Tea, instant, powder, with lemon and sugar 584 1 C A 1 14370 1 NFNAP
Tea, instant, powder, with lemon and sugar, prepared with tap 116 RPA 6 14371
water
Thirst quencher (sport drink), GATORADE, ready-to-drink 34 1 A 1 14382 1 NFNAP
Thirst quencher (sport drink), POWERADE, ready-to-drink 62 1 A 1 14382 1 NFNAP
Water, bottled, AQUAFINA 5 0.6 16 1 9 4 6 A A 1 2 3 97564 1 NFNAP
Water, bottled, CALISTOGA 7 2 D A 1 97565 1 NFNAP
Water, bottled, CRYSTAL GEYSER 24 4 D A 1 14556 1 NFNAP
Water, bottled, DANNON 11 1.3 12 5 20 8 14 A A 1 2 3 97566 1 NFNAP
Water, bottled, DANNON FLUORIDE TO GO 78 1 A 1 97567 1 NFNAP
Water, bottled, DASANI 7 1.2 20 2 19 4 9 A A 1 2 3 97568 1 NFNAP
Water, bottled, EVIAN 10 0.6 16 7 15 9 12 A A 1 2 3 97569 1 NFNAP
Water, bottled, NAYA 14 4 D A 1 97570 1 NFNAP
Water, bottled, PERRIER 31 1 D A 1 14384 1 Stannard 1990
Water, bottled, POLAND SPRINGS 10 1 D A 1 14385 1 Stannard 1990
Water, bottled, PROPEL FITNESS WATER 2 2 A 1 97571 1 NFNAP
Water, bottled, SARATOGA 20 1 D A 1 97572 1 Stannard 1990
Water, bottled, VERYFINE FRUIT2O Water 6 2 A 1 97573 1 NFNAP
Water, bottled, VOLVIC 34 1 D A 1 97574 1 Stannard 1990
Water, bottled, store brand 16 11 C A 1 97575 1 NFNAP
Water, frozen (ice) 11 3 B A 1 2 3 97576 1 NFNAP
Waters, tap, all regions, all (includes municipal and well) 71 2.8 288 1 193 66 77 A A 1 1 2 3 97577 1 NFNAP
Waters, tap, all regions, municipal $ 81 2.9 238 2 193 75 86 A A 1 1 2 3 14429 1 NFNAP
Waters, tap, all regions, well 26 4.8 50 1 162 17 36 A A 1 1 2 3 97578 1 NFNAP
Waters, tap, Mid-West, all (includes municipal and well) 88 5.1 68 4 167 78 98 A A 1 1 2 3 97579 1 NFNAP
Waters, tap, Mid-West, municipal 99 4.6 52 4 167 89 108 A A 1 1 2 3 97580 1 NFNAP

Waters, tap, Mid-West, well 53 12.2 16 5 162 27 79 A A 1 1 2 3 97581 1 NFNAP
Waters, tap, Northeast, all (includes municipal and well) 69 7.5 56 2 193 54 84 A A 1 1 2 3 97582 1 NFNAP
Waters, tap, Northeast, municipal 74 7.7 52 2 193 58 89 A A 1 1 2 3 97583 1 NFNAP
Waters, tap, Northeast, well 9 3.0 4 4 17 4 17 B A 1 1 2 3 97584 1 NFNAP
Waters, tap, South, all (includes municipal and well) 76 4.6 100 1 191 67 86 A A 1 1 2 3 97585 1 NFNAP
Waters, tap, South, municipal 93 4.0 80 9 191 85 101 A A 1 2 3 97586 1 NFNAP
Waters, tap, South, well 10 1.6 20 1 30 6 13 A A 1 1 2 3 97587 1 NFNAP
Waters, tap, West, all (includes municipal and well) 47 4.8 64 3 135 38 57 A A 1 1 2 3 97588 1 NFNAP
Waters, tap, West, municipal 51 5.5 54 3 135 40 62 A A 1 1 2 3 97589 1 NFNAP
Waters, tap, West, well 24 4.3 10 5 48 14 34 B A 1 1 2 3 97590 1 NFNAP
Breakfast cereals:
Corn flakes 17 3.3 15 8 22 6 27 C A 1 4 08020 3 Kingman 1984
08022 Ophaug 1983-1987
08076 Taves 1983
08246
08269
Farina, enriched, cooked 51 22.8 19 3 134 0 109 C A 1 4 08113 2 Featherstone 1988 #
08173 Ophaug 1983-1987 *
Granola, with raisins 33 9 C A 1 08220 1 Ophaug 1983-1987
08275
08284
Grits, cooked 56 18.2 21 5 113 12 101 C A 1 4 08091 3 Featherstone 1988 #
08161 Ophaug 1983-1987 *
Taves 1983 #
Oatmeal, cooked 72 27.5 21 4 201 4 139 C A 1 4 08121 3 Featherstone 1988 #
08180 Ophaug 1983-1987 *
Taves 1983 #
Oatmeal, instant, flavored, prepared 50 10.4 9 16 88 26 74 C A 1 4 97591 1 Jackson 2002 #
Oat rings 50 4.5 11 45 54 0 107 C A 1 4 08013 2 Kingman 1984
Ophaug 1983-1987
Presweetened, ready-to-eat 24 6.1 17 8 46 7 41 C A 1 4 97592 3 Kingman 1984
Ophaug 1983-1987
Taves 1983
Raisin bran 65 16.4 13 34 91 0 133 C A 1 4 08026 3 Kingman 1984
08060 Ophaug 1983-1987
08061 Taves 1983
Rice, ready-to-eat 17 0.9 15 14 18 14 19 C A 1 4 08015 3 Kingman 1984
08025 Ophaug 1983-1987
08065 Taves 1983
08066
08156
08348
08378
Rice and corn, lightly sweetened, ready-to-eat 31 2 31 32 D A 1 4 08259 1 Jackson 2002
Wheat, ready-to-eat 27 8.0 17 8 53 5 50 C A 1 4 08089 3 Kingman 1984
08147 Ophaug 1983-1987
08148 Taves 1983
08157
08379
08384
Cereal grains and pastas:

Macaroni and spaghetti, cooked 7 9 7 7 C A 1 4 20100 1 Ophaug 1983-1987 *
20121
Macaroni and spaghetti, uncooked 18 6.0 6 6 25 0 44 C A 1 4 20099 1 Kingman 1984
20120
Noodles, egg, cooked 6 9 C A 1 4 20110 1 Ophaug 1983-1987 *
Rice, cooked 41 12.8 21 3 79 10 72 C A 1 4 20045 3 Featherstone 1988 #
Ophaug 1983-1987 *
Taves 1983 #
Dairy and egg products:
Butter 3 0.7 19 1 4 0 6 C A 1 4 01001 3 Kingman 1984
01002 Ophaug 1983-1987
01145 Taves 1983
Buttermilk 4 9 C A 1 01088 1 Ophaug 1983-1987
01176
Cheese, American, processed 35 9 C A 1 01042 1 Ophaug 1983-1987
01046
01048
01147
01149
01150
Cheese, cheddar 35 1 C A 1 01009 1 NFNAP
01168
01169
Cheese, cottage 32 9.4 21 6 82 9 55 C A 1 4 01012 3 Featherstone 1988
01013 Ophaug 1983-1987
01014 Taves 1983
01015
01016
Cream, fluid, half and half 3 9 3 3 C A 1 4 01049 1 Ophaug 1983-1987
01050
01051
01052
01053
01054
01199
Cream substitute, powdered 112 9 C A 1 4 01069 1 Ophaug 1983-1987
Egg, cooked 5 0.7 63 2 12 3 6 C A 1 4 01128 3 Featherstone 1988
01129 Ophaug 1983-1987
01130 Taves 1983
01131
01132
Egg, raw 1 2 D A 1 01123 1 Kingman 1984
Milk, chocolate 5 0.8 11 5 6 0 15 C A 1 4 01102 2 Kingman 1984
01103 Ophaug 1983-1987
01104
Milk, evaporated 8 1.1 19 4 12 6 11 C A 1 4 01096 2 Featherstone 1988
01097 Ophaug 1983-1987
01153
01177
Milk, 1% 3 0.4 4 2 4 1 4 B A 1 2 3 01182 1 NFNAP
Milk, 2% 3 0.4 4 3 5 2 5 B A 1 2 3 01079 1 NFNAP
Milk, skim 3 0.1 5 3 3 3 3 C A 1 2 3 01085 1 NFNAP
Yogurt, fruit, strawberry 9 9 C A 1 4 01120 1 Ophaug 1983-1987

01121
01122
Yogurt, plain, low-fat 12 9 12 12 C A 1 4 01116 1 Ophaug 1983-1987
01117
01118
01119
01184
01187
Fast foods:
Chicken McNUGGETS, McDONALD'S 16 2 14 18 D A 1 4 21229 1 Jackson 2002
Coleslaw 11 1.4 4 8 14 6 15 D A 1 4 21127 1 Jackson 2002
Dessert, DAIRY QUEEN, BLIZZARD 13 0.9 6 10 16 10 15 C A 1 4 97593 1 Jackson 2002
Dessert, WENDY'S, FROSTY 19 2 19 19 D A 1 4 97594 1 Jackson 2002
French fries, McDONALD'S 115 2 38 193 D A 1 4 21238 1 Jackson 2002
Hamburger on roll, quarter pound patty, with condiments 28 9 C A 1 21202 1 Ophaug 1983-1987
Pizza 31 8.1 11 20 47 0 66 C A 1 4 21224 2 Adair 1991
Ophaug 1983-1987
Shake 14 9 C A 1 14347 1 Ophaug 1983-1987
Steak and cheese sandwich 37 1 D A 1 4 21123 1 Adair 1991
Fats and oils:
Mayonnaise 9 9 C A 1 4 04025 1 Ophaug 1983-1987
04026
Margarine 5 3.6 11 2 9 0 51 C A 1 4 04610 2 Ophaug 1983-1987
Taves 1983
Margarine-like spread 25 9.1 6 5 62 1 48 C A 1 4 04128 1 Jackson 2002
Salad dressing, mayonnaise type 4 0.4 4 3 4 0 9 C A 1 4 04018 1 Kingman 1984
Salad dressings 27 5.9 15 16 44 8 46 C A 1 4 97595 2 Ophaug 1983-1987
Taves 1983
Vegetable oil, corn 1 9 C A 1 4 04518 1 Ophaug 1983-1987
Finfish and shellfish products:
Crab, canned 210 1 C A 1 15141 1 NFNAP
Fish, cooked (includes broiled and fried) 18 2.9 4 15 21 0 54 D A 1 4 97596 1 Taves 1983
Fish sticks, baked 134 9 C A 1 15027 1 Ophaug 1983-1987
Shrimp, canned 201 1 C A 1 15152 1 NFNAP
Shrimp, fried 166 9 C A 1 15150 1 Ophaug 1983-1987
Tuna, light, canned in water 19 1 C A 1 15121 1 NFNAP
5184
Tuna, canned in oil, drained 31 9 C A 1 15119 1 Ophaug 1983-1987
15124
15183
15185
Fruits and fruit products:
Apple juice, DOLE, ready-to-drink 58 6.9 22 15 127 43 72 A A 1 2 3 09400 1 NFNAP
Apple juice, JUICY JUICE, ready-to-drink 48 6.5 30 9 145 34 61 A A 1 2 3 09400 1 NFNAP
Apple juice, MINUTE MAID, ready-to-drink 28 2.8 32 8 81 22 33 A A 1 2 3 09400 1 NFNAP
Apple juice, MOTT'S, ready-to-drink 28 3.3 28 8 60 22 35 A A 1 2 3 09400 1 NFNAP
Apple, raw, with peel 3 1 C A 1 09003 1 NFNAP
Applesauce, sweetened 5 0.7 19 3 8 3 7 C A 1 4 09020 2 Featherstone 1988
Ophaug 1983-1987
Avocado, raw 7 9 C A 1 09037 1 Ophaug 1983-1987
Bananas, raw 2 1 C A 1 09040 1 NFNAP
Cantaloupe, raw 1 9 C A 1 09181 1 Ophaug 1983-1987
Cherries, sweet, raw 2 9 C A 1 4 09070 1 Ophaug 1983-1987
Cranberry sauce 2 2 D A 1 09081 1 Taves 1983

Fruit cocktail, canned 9 3.0 12 5 15 0 22 C A 1 4 09351 3 Adair 1991
Ophaug 1983-1987
Taves 1983
Grapefruit, raw 1 9 C A 1 09111 1 Ophaug 1983-1987
Grapefruit juice 45 5.9 40 1 115 33 57 B A 1 4 09123 2 Levy 1992-2003
Taves 1983
Grape juice blend (apple and grape), JUICY JUICE, ready-to-drink 102 8.9 27 53 184 84 121 A A 1 2 3 97597 1 NFNAP
Grape juice blend (apple, grape and pear), MINUTE MAID, ready- 43 4.4 25 10 100 34 52 A A 1 2 3 97598 1 NFNAP
to-drink
Grape juice blend (apple and grape), MOTT'S, ready-to-drink 27 3.2 18 10 60 20 33 A A 1 2 3 97599 1 NFNAP
Grape juice, WELCH'S, ready-to-drink 72 3.4 20 50 95 65 79 A A 1 2 3 09135 1 NFNAP
Grape juice, white 204 45.7 12 139 287 16 392 C A 1 4 97600 2 Kiritsy 1996
Stannard 1991
Grapes, raw 49 22.0 10 27 71 0 329 C A 1 4 09132 2 Adair 1991
Ophaug 1983-1987
Nectar, fruit 12 2.3 11 5 26 7 17 C A 1 4 09403 1 Levy 1992-2003
09407
09408
Orange, juice, frozen, concentrate 20 1 C A 1 09214 1 NFNAP
Orange, juice, frozen, concentrate, prepared with tap water 58 RPI 6 09215
Orange juice, DEAN, ready-to-drink 52 9.8 22 4 145 32 72 A A 1 1 2 3 09207 1 NFNAP
Orange juice, MINUTE MAID, ready-to-drink 31 2.8 51 3 72 26 37 A A 1 1 2 3 09207 1 NFNAP
Peaches, canned 7 0.4 28 4 8 6 8 C A 1 4 09241 5 Adair 1991
09370 Featherstone 1988
Kingman 1984
Ophaug 1983-1987
Taves 1983
Peaches, raw 4 9 C A 1 4 09236 1 Ophaug 1983-1987
Pears, raw 2 0.2 20 1 3 2 3 C A 1 4 09252 3 Adair 1991
Featherstone 1988
Ophaug 1983-1987
Pears, canned 8 1.3 20 2 11 4 11 C A 1 4 09257 3 Adair 1991
Ophaug 1983-1987
Pineapple, canned, juice pack 2 9 C A 1 4 09268 1 Ophaug 1983-1987
Pinapple juice, canned 6 1.4 24 1 15 3 9 B A 1 4 09409 4 Adair 1991
Featherstone 1988
Levy 1992-2003
Ophaug 1983-1987
Plums, dried (prunes), uncooked 4 9 C A 1 4 09291 1 Ophaug 1983-1987
Plums, purple, raw 2 9 C A 1 4 09279 1 Ophaug 1983-1987
Prune juice 60 23.5 21 17 115 0 135 C A 1 4 09294 3 Kiritsy 1996
Ophaug 1983-1987
Stannard 1991
Raisins 234 1 C A 1 09298 1 NFNAP
Strawberries, raw 4 9 C A 1 4 09316 1 Ophaug 1983-1987
Watermelon, raw 1 9 C A 1 4 09326 1 Ophaug 1983-1987
Lamb, veal and game:
Lamb chop, pan cooked with added fat 32 9 C A 1 17227 1 Ophaug 1983-1987
Veal cutlet, breaded, pan cooked with added fat 21 15.1 11 6 36 0 212 C A 1 4 17096 2 Ophaug 1983-1987
Taves 1983
Veal, liver, pan cooked with added fat 5 9 C A 1 17204 1 Ophaug 1983-1987
Legumes and legume products:

Beans, baked, canned, with pork 54 13.0 11 41 67 0 219 C A 1 4 16009 2 Kingman 1984
Ophaug 1983-1987
Beans, mature, boiled 2 0.3 36 2 3 1 3 C A 1 4 16032 1 Ophaug 1983-1987 *
16043
16072
16038
Cowpeas common (blackeyes), boiled 3 9 C A 1 4 16363 1 Ophaug 1983-1987 *
Peanut butter, creamy 3 1 C A 1 16098 1 NFNAP
Peanuts, dry roasted, salted 16 9 C A 1 4 16090 1 Ophaug 1983-1987
Meals, entrees and sidedishes:
Beef stew 57 3.7 10 47 68 46 67 D A 1 4 22905 1 Featherstone 1988
Casserole, beef, tomato and pasta 67 2 D A 1 4 97601 1 Taves 1983
Chicken potpie 75 9 C A 1 22906 1 Ophaug 1983-1987
Chicken and noodle casserole, homemade 16 9 16 16 C A 1 97602 1 Ophaug 1983-1987
Chili con carni, beef and beans, canned 45 9 C A 1 4 22904 1 Ophaug 1983-1987
Frozen meal, fried chicken, mashed potatoes, cornbread, and/or 48 9 C A 1 97603 1 Ophaug 1983-1987
vegetable
Lasagna, homemade 18 9 C A 1 4 97604 1 Ophaug 1983-1987
Macaroni and cheese, prepared from mix 33 5.8 23 11 51 18 47 C A 1 4 97605 3 Featherstone 1988
Ophaug 1983-1987
Taves 1983
Mashed potato and gravy 84 1 D A 1 4 97606 1 Adair 1991
Meatloaf 30 3.4 19 18 40 21 38 C A 1 4 97607 2 Featherstone 1988
Ophaug 1983-1987
Spaghetti, with meat sauce 38 9.3 19 10 76 14 62 C A 1 4 22401 2 Featherstone 1988
Ophaug 1983-1987
Spaghetti, with sauce, no meat, canned 24 6.7 21 5 59 8 40 C A 1 4 22914 3 Featherstone 1988
Ophaug 1983-1987
Taves 1983
Ravioli, CHEF BOYARDEE, beef, with meat sauce, canned 13 2 12 15 D A 1 4 22515 1 Jackson 2002
Turkey, broccoli, cheese bake 28 2 D A 1 4 97608 1 Taves 1983
Turkey potpie 166 1 D A 1 22528 1 Adair 1991
Nut and seed products:
Pecans, packaged, unsalted 10 9 C A 1 4 12142 1 Ophaug 1983-1987
Pork products:
Bacon, cooked 22 6.9 11 15 29 0 110 C A 1 4 10124 2 Ophaug 1983-1987
Taves 1983
Bacon, raw 4 2 D A 1 10123 1 Kingman 1984
Ham, cured, baked 20 6.0 16 4 30 1 39 C A 1 4 10151 3 Kingman 1984
Ophaug 1983-1987
Taves 1983
Pork, chop, baked 38 2 19 57 D A 1 4 97609 1 Jackson 2002
Pork, chop, pan cooked, with added fat 129 9 C A 1 10178 1 Ophaug 1983-1987
10179
10180
10186
10197
Pork, roast, cooked 42 0.6 11 42 43 35 50 C A 1 4 10188 2 Taves 1983
Ophaug 1983-1987
Poultry products:
Chicken, cooked (includes fried and roasted) 15 2.3 36 4 25 10 20 C A 1 4 97610 2 Featherstone 1988
Ophaug 1983-1987
Turkey, roast 21 2 D A 1 05166 1 Taves 1983
05200
05232
05256
Sausages and luncheon meats:
Bologna 29 4.0 11 25 33 0 80 C A 1 4 07007 2 Kingman 1984
07008 Ophaug 1983-1987
07960
07937
07959
07952
07010
07011
Ham and cheese loaf 36 2 34 38 D A 1 4 07032 1 Jackson 2002
Hot dogs, beef 48 1 C A 1 07022 1 NFNAP
Sausage, pork 18 9 18 18 C A 1 4 07064 1 Ophaug 1983-1987
Sausage (includes salami, not hard) 41 10.2 11 31 51 0 170 C A 1 4 97611 2 Ophaug 1983-1987
Taves 1983
Snacks:
Chips, corn and tortilla 50 4.7 13 43 59 30 70 C A 1 4 19056 2 Kingman 1984
Ophaug 1983-1987
Popcorn, oil popped 6 2.3 11 4 9 0 35 C A 1 4 19035 2 Kingman 1984
Ophaug 1983-1987
Potato chip 65 7.1 7 30 86 47 82 C A 1 4 19411 1 Jackson 2002
Potato chip, baked 106 15.5 4 60 131 56 155 D A 1 4 42283 1 Jackson 2002
Soups, sauces, and gravies:
Sauce, cheese 29 2 D A 1 06930 1 Kingman 1984
Sauce, spaghetti, canned 37 2 16 58 D A 1 4 06931 1 Jackson 2002
Sauce, tartar 30 2 D A 1 4 97612 1 Taves 1983
Sauce, white 4 9 C A 1 4 06166 1 Ophaug 1983-1987
Gravy, beef 99 1 C A 1 06116 1 NFNAP
Gravy, brown, prepared from mix 57 20.9 19 10 120 3 111 C A 1 4 97613 2 Featherstone 1988 #
Ophaug 1983-1987 *
Soup, beef bouillon, canned, reconstituted 29 9 C A 1 4 97614 1 Ophaug 1983-1987 *
Soup, chicken broth 61 1 C A 1 4 06413 1 NFNAP
Soup, chicken noodle, canned, reconstituted 35 7.0 19 14 55 17 53 C A 1 4 06419 2 Featherstone 1988 #
Ophaug 1983-1987 *
Soup, clam chowder 36 2 D A 1 4 97615 1 Taves 1983
Soup, corn chowder 132 1 D A 1 4 06725 1 Adair 1991
Soup, minestrone 86 2 D A 1 97616 1 Taves 1983
Soup, pea 76 4 D A 1 97617 1 Taves 1983
Soup, tomato, canned reconstituted, with milk 7 0.8 10 4 8 4 9 D A 1 4 06359 1 Featherstone 1988
Soup, vegetable beef, canned, reconstituted 43 12.3 19 12 89 11 74 C A 1 4 06741 2 Featherstone 1988 #
Ophaug 1983-1987 *
Spices and herbs:
Pepper, black 34 8 C A 1 4 02030 1 Taves 1983
Salt, iodized 2 1 C A 1 02047 1 NFNAP
Sweets:
Candies, caramels 27 9 C A 1 19074 1 Ophaug 1983-1987
Candies, milk chocolate 5 9 C A 1 19120 1 Ophaug 1983-1987
Candies, M&M MARS, "M&M's" Milk Chocolate Candies 17 2 15 20 D A 1 4 19141 1 Jackson 2002
Candies, REESE'S Peanut Butter Cups 9 2 7 11 D A 1 4 19150 1 Jackson 2002
Candies, M&M MARS, SNICKERS Bar 36 2 27 46 D A 1 4 19155 1 Jackson 2002
Gum 5 2 D A 1 4 19163 1 Kingman 1984
Frozen novelties, ice type, regular, all flavors 74 11.1 3 57 95 26 122 C 19283 1 NFNAP
19717
Frozen novelties, ice type, sugar free, all flavors 89 1.7 3 86 91 82 96 C A 1 2 3 43514 1 NFNAP
Frozen novelties, juice type 77 1 43346 1 NFNAP
Frozen novelties, ice cream sandwich 27 9 C A 1 4 19887 1 Ophaug 1983-1987
19888
19889
Frozen yogurts, chocolate 40 1 D A 1 42186 1 Jackson 2002
Frozen yogurts, vanilla 26 1 D A 1 42187 1 Jackson 2002
Gelatin desserts, strawberry, prepared 69 14.3 24 18 137 36 102 C A 1 4 19173 4 Adair 1991 #
Featherstone 1988 #
Ophaug 1983-1987 *
Taves 1983 #
Honey, bottled 7 9 C A 1 4 19296 1 Ophaug 1983-1987
Jam, strawberry 19 2 D A 1 19297 1 Taves 1983
Jellies 73 8.7 13 64 90 35 110 C A 1 4 19300 2 Kingman 1984
Ophaug 1983-1987
Ice creams, chocolate 23 2.6 3 19 28 12 34 B A 1 2 3 19270 1 NFNAP
Ice creams, vanilla 15 1.1 4 14 19 12 19 B A 1 2 3 19095 1 NFNAP
Bread pudding 74 2 D A 1 19167 1 Taves 1983
Puddings, instant, prepared with whole milk 22 7.7 23 4 65 4 40 C A 1 4 19185 3 Featherstone 1988
19203 Ophaug 1983-1987
19319 Taves 1983
19331
Sugar, granulated 1 0.5 15 1 2 0 7 C A 1 4 19335 2 Ophaug 1983-1987
Taves 1983
Syrup, pancake 44 16.0 11 28 60 0 247 C A 1 4 19129 2 Kingman 1984
Ophaug 1983-1987
Vegetables and vegetable products:
Asparagus, cooked 22 18.0 13 4 40 0 250 C A 1 4 11012 2 Ophaug 1983-1987 *
Taves 1983 #
Beans, snap (includes cooked, canned, frozen) 19 6.6 36 4 62 4 34 D A 1 4 11052 4 Featherstone 1988 #
Kingman 1984 %
Ophaug 1893 - 1987 *
Taves 1983 #
Beets, canned 26 0.3 11 26 27 22 30 C A 1 4 11082 2 Ophaug 1983-1987 *
11084 Taves 1983 #
Broccoli, boiled 4 9 4 4 C A 1 4 11091 1 Ophaug 1983-1987 *
Cabbage, boiled 1 9 C A 1 11110 1 Ophaug 1983-1987 *
Carrots, cooked 47 2 D A 1 4 11125 1 Taves 1983 #
Carrots, raw 3 0.5 21 2 6 2 4 C A 1 4 11124 3 Featherstone 1988
Kingman 1984
Ophaug 1983-1987
Catsup 12 4.7 15 5 25 0 27 C A 1 4 11935 3 Kingman 1984
Ophaug 1983-1987
Taves 1983
Cauliflower, boiled 1 9 C A 1 11135 1 Ophaug 1983-1987 *
Celery, raw 4 9 C A 1 11143 1 Ophaug 1983-1987

Coleslaw 10 9 C A 1 11159 1 Ophaug 1983-1987
Collard greens, boiled 27 9 C A 1 97618 1 Ophaug 1983-1987 *
Corn, frozen, kernels cut off cob, unprepared 15 12.2 6 1 39 0 67 C A 1 4 11178 1 Kingman 1984
11910
Corn, canned 18 9 C A 1 4 11170 1 Ophaug 1983-1987
11903
Corn, cream style, canned 28 9 C A 1 4 11174 1 Ophaug 1983-1987
11906
Cucumber, raw 1 0.7 11 1 2 0 10 C A 1 4 11205 2 Kingman 1984 Ophaug
11206 1983-1987
Lettuce 5 4.2 14 0 13 0 23 C A 1 4 97619 3 Kingman 1984
Ophaug 1983-1987
Taves 1983
Lima beans, immature seeds, frozen, boiled 7 9 C A 1 4 11038 1 Ophaug 1983-1987 *
Mixed vegetables, canned 37 6.5 10 24 57 19 55 C A 1 4 11579 1 Featherstone 1988 #
11581
43312
Mushrooms, canned 10 9 C A 1 4 11262 1 Ophaug 1983-1987
Onion rings, breaded, fried, frozen, heated 55 9 C A 1 11295 1 Ophaug 1983-1987
Onions, raw 1 0.1 12 1 1 0 2 C A 1 4 11282 2 Kingman 1984
Ophaug 1983-1987
Peas, green (includes cooked and canned) 29 5.0 36 8 57 18 40 C A 1 4 97620 5 Adair 1991 #
Featherstone 1988 #
Kingman 1984 %
Ophaug 1983-1987 *
Taves 1983 #
Peppers, sweet, green, raw 2 9 C A 1 4 11333 1 Ophaug 1983-1987
Pickles, cucumber, dill 24 20.3 12 4 44 0 281 C A 1 4 11937 2 Kingman 1984
Ophaug 1983-1987
Potatoes, boiled 49 2 D A 1 11365 1 Taves 1983 #
Potatoes, french fried, frozen, heated 26 4.1 21 6 41 16 35 C A 1 4 11403 3 Adair 1991
11838 Ophaug 1983-1987
11840
Potatoes, hashed brown 44 2 D A 1 11390 1 Taves 1983
Potatoes, mashed 39 11.0 23 9 84 12 66 C A 1 4 11371 3 Featherstone 1988
Ophaug 1983-1987
Taves 1983
Potatoes, puffs, frozen, prepared 6 2 6 6 D A 1 4 11399 1 Jackson 2002
Potatoes, russet, baked 45 1 C A 1 11356 1 NFNAP
Potatoes, scalloped 31 10.1 19 4 62 6 57 C A 1 4 11372 2 Featherstone 1988
11844 Ophaug 1983-1987
Radishes, raw 6 9 C A 1 4 11429 1 Ophaug 1983-1987
Sauerkraut, canned 7 9 C A 1 11439 1 Ophaug 1983-1987
Spinach, cooked 38 16.3 20 20 70 0 108 C A 1 4 11458 2 Ophaug 1983-1987 *
Taves 1983 #
Squash, cooked (includes summer and winter) 2 0.0 20 2 2 2 2 C A 1 4 97621 2 Ophaug 1983-1987 *
Taves 1983 #
Sweet potatoes 14 7.0 11 7 21 0 102 C A 1 4 97622 2 Ophaug 1983-1987
Taves 1983
Sweet potatoes, candied, home prepared 8 9 C A 1 11659 1 Ophaug 1983-1987
Tomatoes, canned 6 1.9 3 3 9 0 14 D A 1 4 11531 1 Jackson 2002

11535
11885
Tomatoes, raw 2 1 C A 1 11529 1 NFNAP
Tomato juice, canned 7 3.1 11 4 10 0 46 C A 1 4 11540 2 Ophaug 1983-1987
Taves 1983
Tomato sauce, canned 35 1 C A 1 11549 1 NFNAP
Tossed salad 5 2 3 8 D A 1 4 97623 1 Adair 1991
**mcg/100g = ppm * 100 (beverages corrected for specific gravity)
$ Municipal water is not well water.
* Cooked in deionized water.
# Cooked/brewed in tap water.
% Unprepared.

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Fluoride: The Ultimate Cluster-Flux

And the Players Involved

A Compilation of Documents and Articles

If you are sickened and appalled by the approved use of fluoride in

I would like to thank (or curse) Christopher Bryson whose excellent

For more information on fluoride, I would recommend the Fluoride Action

1 FEDERAL TRADE COMMISSION

4 JOINT FTC/DEPARTMENT OF JUSTICE HEARING

5 ON HEALTH CARE AND COMPETITION LAW AND POLICY

11 Thursday, June 12, 2003

18 601 New Jersey Avenue, N.W.

For The Record, Inc.

1 FEDERAL TRADE COMMISSION

5 Newt Gingrich, The Gingrich Group 5

6 Warren Greenberg, George Washington University 26

7 Helen Darling, Washington Business Group on Health 31

8 Greg Kelly, Coalition Against Guaranteed Issue 36

9 Michael Young, Aon Consulting 40

10 David Lansky, Foundation for Accountability 49

11 Marcia L. Comstock, J.D., Wye River Group on Health care 55

12 Helen Darling, Washington Business Group on Health 99

13 Bernie Dana, American Health Care Association 149

14 Laura Carabello, CPRi Communications 161

15 Thomas Henry Lee, Jr., M.D., Partners Health care 179

16 Douglas D. Koch, M.D., Baylor College of Medicine 190

17 Richard Kelly, Federal Trade Commission 200

18 Peter M. Sfikas, American Dental Association 210

19 John E. Gebhart, III, DoctorQuality.com 219

For The Record, Inc.

2 DR. HYMAN: I'm David Hyman, special counsel here

3 at the Federal Trade Commission. Let me welcome you all to

4 the reconvening of the Hearings on Health Care and

5 Competition Law and Policy jointly sponsored by the Federal

6 Trade Commission and the Department of Justice.

7 This is the latest in a series of hearings that

8 started in February and are going to last through September,

9 perhaps October, unless I can make it September, and

10 represent an ongoing investigation of the performance of

11 differing parts of the health care market with regard to the

12 cost of the services that are provided, the quality of those

13 services, and the extent to which ordinary Americans can

14 access information about those services and obtain those

15 services at a time and in a fashion that is desirable to

17 This morning we have a very distinguished panel and

18 extensive bios for each of the speakers, not all of whom,

19 unfortunately, are here just yet, and are published in this

20 beautiful book that's available outside. Our rule is,

21 accordingly, short introductions because you can read about

22 the people in the book.

23 The format we're going to follow this morning is

24 our first speaker, Newt Gingrich, is going to make somewhat

25 extended remarks. And then there will be a panel discussion

For The Record, Inc.

1 of those remarks, and we'll include, as time allows, members

2 of the audience in that discussion if they have questions or

3 comments that they'd like to make.

4 And then following the time that we've allotted for

5 that portion of the program, we will then move into

6 presentations by individual speakers. At the end of that

7 time, we will then have a moderated panel discussion among

8 the speakers about the issues that we'll be discussing today.

9 The focus of our discussion today is financing

10 options and consumer information. It's essentially a

11 constellation of subjects relating to how Americans get their