Rolling Stone: “McCaughey's writing was influenced by Philip Morris, the world's largest tobacco company”

Philip Morris memo: “Worked off-the-record with ... McCaughey” on 1994 New Republic hit piece. Reporter Tim Dickinson quotes a Philip Morris memo from March 1994 in which the company “detailed its strategy to derail Hillarycare through an alliance with conservative think tanks, front groups and media outlets. Integral to the company's strategy, the memo observed, was an effort to 'work on the development of favorable pieces' with 'friendly contacts in the media.' The memo, prepared by a Philip Morris executive, mentions only one author by name: 'Worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part exposé in The New Republic on what the Clinton plan means to you. The first part detailed specifics of the plan.'”

From Dickinson's Rolling Stone article, “The Lie Machine: GOP operatives are running a secret campaign to kill health care reform, and it's based on Karl Rove's old playbook,” published in the magazine's October 1 edition:

For the archenemies of Obamacare, however, [Republican pollster Frank] Luntz's anti-Washington script didn't go nearly far enough. To amp up the panic, they decided to spin the “takeover” fear to its most extreme conclusion: Washington bureaucrats plan to institute “death panels” that would deny life-sustaining care to the elderly. That portion of the script was drafted by Betsy McCaughey, the former lieutenant governor of New York, who insists that her expertise as a constitutional historian enables her to decipher the 1,017 pages of legalese that comprise the House health care bill.

McCaughey first unveiled her “findings” on July 16th, during an appearance on the radio show of former GOP presidential candidate Fred Thompson. “I have just finished reading the House bill,” McCaughey declared. “I hope that people listening will protect their parents from what's intended under this bill.” Citing page 425 of HR 3200 -- a section that outlines the same kind of optional, end-of-life counseling that Republicans have voted for in the past -- McCaughey uncorked a terrifying lie. “Congress,” she said, “would make it mandatory -- absolutely require that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner.” The Obama plan, she added, is financed by “shortening your mother or father's life.”

McCaughey has run this con before. During the debate over Clinton's health care overhaul in the early 1990s, McCaughey -- then an academic at the right-wing Manhattan Institute -- wrote an article for The New Republic called “No Exit,” in which she claimed that Hillarycare would prevent even wealthy Americans from “going outside the system to purchase basic health coverage you think is better.” Even though the bill plainly stated that “nothing in this Act” would prohibit consumers from purchasing additional care, McCaughey's claim was echoed endlessly in the press, with each repetition pounding a stake further into the heart of the reform effort.

McCaughey's lies were later debunked in a 1995 post-mortem in The Atlantic, and The New Republic recanted the piece in 2006. But what has not been reported until now is that McCaughey's writing was influenced by Philip Morris, the world's largest tobacco company, as part of a secret campaign to scuttle Clinton's health care reform. (The measure would have been funded by a huge increase in tobacco taxes.) In an internal company memo from March 1994, the tobacco giant detailed its strategy to derail Hillarycare through an alliance with conservative think tanks, front groups and media outlets. Integral to the company's strategy, the memo observed, was an effort to “work on the development of favorable pieces” with “friendly contacts in the media.” The memo, prepared by a Philip Morris executive, mentions only one author by name:

“Worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part exposé in The New Republic on what the Clinton plan means to you. The first part detailed specifics of the plan.”

McCaughey did not respond to Rolling Stone's request for an interview.

McCaughey responded to Rolling Stone by distorting its article. Dickinson noted in a September 24 post to Rolling Stone's National Affairs blog that in her response to his article, McCaughey asserted that the piece “includes the outrageous and fictional accusation that I worked for a tobacco company in writing my critique of the dangers of the Clinton Plan.” But as Dickinson noted in his post, McCaughey is “distorting the facts” -- "Rolling Stone never claimed that McCaughey 'worked for a tobacco company.' "

Philip Morris budgeted $25,000 for McCaughey employer Manhattan Institute in 1995. As Media Matters Senior Fellow Jamison Foser documented, Philip Morris budgeted $25,000 for The Manhattan Institute for 1995 -- the think tank that employed McCaughey when she authored her hit piece in 1994.

Neither The New Republic nor McCaughey disclosed her reported conflict of interest

TNR presented McCaughey as an impartial expert. In McCaughey's February 7, 1994 article, “No Exit,” and February 28, 1994, article, “She's BAAACK!,” The New Republic only identified her as the “John M. Olin Fellow at the Manhattan Institute” (articles retrieved from the Nexis database). As Haynes Johnson and David S. Broder documented in The System (Little, Brown and Co., 1996), McCaughey's work was “presented as an exhaustive scholarly analysis of the Clinton health plan” (Page 271). Similarly, James Fallows noted in a January 1995 Atlantic article debunking the claims McCaughey advanced in her New Republic article, "[t]he article's working premise was that McCaughey, with no ax to grind and no preconceptions about health care, sat down for a careful reading of the whole Clinton bill. Appalled at the hidden provisions she found, she felt it her duty to warn people about what the bill might mean."

McCaughey's falsehood: Clinton bill prevents consumer choice. In her New Republic piece, McCaughey falsely claimed that the Clintons' health care bill effectively prevents consumer choices. To support that characterization, McCaughey claimed that the bill “will prevent you from going outside the system to buy basic health coverage you think is better, even after you pay the mandatory premium (see the bill, page 244),” and that "[t]he doctor can be paid only by the plan, not by you (page 236)." The New Republic also published a second article by McCaughey in which she defended those claims (articles retrieved from the Nexis database).

From McCaughey's February 7, 1994, article, “No Exit”:

If you're not worried about the Clinton health bill, keep reading. If the bill passes, you will have to settle for one of the low-budget health plans selected by the government. The law will prevent you from going outside the system to buy basic health coverage you think is better, even after you pay the mandatory premium (see the bill, page 244). The bill guarantees you a package of medical services, but you can't have them unless they are deemed " necessary" and “appropriate” (pages 90-91). That decision will be made by the government, not by you and your doctor. Escaping the system and paying out-of- pocket to see a specialist for the tests and treatment you think you need will be almost impossible. If you walk into a doctor's office and ask for treatment for an illness, you must show proof that you are enrolled in one of the health plans offered by the government (pages 139, 143). The doctor can be paid only by the plan, not by you (page 236). To keep controls tight, the bill requires the doctor to report your visit to a national data bank containing the medical histories of all Americans (page 236).

If these facts surprise you, it's because you haven't been given a straight story about the Clinton health bill. Take two examples: on November 4, Leon Panetta, the director of the Office of Management and Budget, testified to senators that the bill does not “set prices” and “draw up rules for allocating care”; a month later Hillary Rodham Clinton assured a Boston audience that the government will not limit what you can pay your doctor. The text of the bill proves these statements are untrue.

The administration also says that the bill will not lower the quality of your medical care or take away personal choices you now make. This statement goes right to the issues that matter most. How true is it? To help you decide, here is a guide to the 1,364-page Health Security Act.

From McCaughey's February 28, 1994, article, “She's BAAACK!”:

On January 31 the White House press office released a statement questioning the accuracy of my recent article in tnr (“No Exit,” February 7, 1993). I welcome this opportunity to engage in a dialogue with the White House about the content of its health bill. As I did in my original article, I will be documenting my description of the bill -- and my point-by-point rebuttal of their arguments -- with page numbers from the November 20, 1993, version. If White House representatives challenge the accuracy of my description again, I hope they will provide page numbers, too, so that tnr readers can compare the evidence and decide for themselves.

Most of the White House challenge focused on this paragraph from my article:

If the bill passes, you will have to settle for one of the low-budget health plans selected by the government. The law will prevent you from going outside the system to buy basic health coverage you think is better, even after you pay the mandatory premium (see the bill, page 244). The bill guarantees you a package of medical services, but you can't have them unless they are deemed “necessary” and “appropriate” (pages 90-91). That decision will be made by the government, not by you and your doctor. Escaping the system and paying out-of-pocket to see a specialist for the tests and treatment you think you need will be almost impossible. If you walk into a doctor's office and ask for treatment for an illness, you must show proof that you are enrolled in one of the health plans offered by the government (pages 139, 143). The doctor can be paid only by the plan, not by you (page 236). To keep controls tight, the bill requires the doctor to report your visit to a national data bank containing the medical histories of all Americans (page 236).

The White House responded:

“There is nothing in this Act to prohibit any individual from going to any doctor and paying, with their own funds, for any service.” “Under the Act, you can pay out-of-pocket sic ' for anything you want at any time, to any physician or hospital willing to treat you.” Price controls on doctors' fees? “That is wrong,” according to the White House. “There are no price controls... .”

How accurate are these statements from the White House? The text of the bill proves they are untrue.

McCaughey's Clinton-era claims have been widely debunked -- repeatedly so in TNR

Media cite bill Section 1003 explicitly providing “protection of consumer choice.” Rebutting McCaughey's claims, many media accounts have cited Section 1003, which, contrary to McCaughey's claims, makes clear that individuals can “go outside the system to buy basic health coverage” and that individuals can pay doctors out-of-pocket. This section is often referenced as “page 15” or “page 16” of the bill, the pages on which it appears. From the Clintons' bill:

SEC. 1003. PROTECTION OF CONSUMER CHOICE.

Nothing in this Act shall be construed as prohibiting the following:

(1) An individual from purchasing any health care services.

(2) An individual from purchasing supplemental insurance (offered consistent with this Act) to cover health care services not included within the comprehensive benefit package.

(3) An individual who is not an eligible individual from purchasing health insurance (other than through a regional alliance).

(4) Employers from providing coverage for benefits in addition to the comprehensive benefit package (subject to part 2 of subtitle E).

Marmor and Mashaw in TNR: Clinton “bill explicitly permits citizens to choose physicians and to pay extra for such coverage.” In a February 14, 1994, New Republic piece, “Cassandra's Law,” Theodore R. Marmor, Yale professor of public policy and management, and Jerry L. Mashaw, Yale professor of law and organization, argued against her claims, specifically citing Section 1003. From their article:

McCaughey claims the law will prevent you from going outside the system to buy basic health coverage you prefer, even after you pay the mandatory premium. But the bill explicitly permits citizens to choose physicians and to pay extra for such coverage if they so desire. McCaughey's language illustrates an extremely casual use of the rhetoric of legal compulsion when the reality is a more complex one of relative prices and their impact on the kind of insurance plan Americans might choose were the Clinton bill to be enacted.

[...]

McCaughey describes the Clinton plan as a rigid set of restrictions on the doctors Americans can consult, the scope of insurance they can purchase and the services they can receive. She builds up her specter with a continuing set of inaccuracies. Is it technically correct that the Clinton bill would force one to “settle for one of the low-budget plans selected by the government?” Well, no. In fact, the bill specifically states that “nothing in this Act shall be construed as prohibiting ... an individual from purchasing any health care services” (pages 15, 16). It is true the Clinton reform would highlight which plans are more expensive than others. In that sense, it provides incentives to choose lower-cost plans. But a good deal of the bill's complexity is designed to countervail the dangers of selective enrollment, reductions of benefits and the like that such economies entail. [Retrieved from the Nexis database]

New York Times' Weinstein: Clinton “bill unequivocally protects your right to buy out-of-pocket any treatment from any doctor at any price.” In a February 6, 1994, New York Times opinion piece, “Fear-Mongering on Health Reform,” Michael M. Weinstein pointed to McCaughey's claim that “Clinton would stop you from buying medical services you want to buy.” Contrary to her claim, he explained, the “bill unequivocally protects your right to buy out-of-pocket any treatment from any doctor at any price.” From Weinstein's column:

Thousands of Americans pronounce judgment on President Clinton's health care plan; probably fewer than a dozen have read its 1,364 turgid pages. Perhaps that is why a five-page attack by Elizabeth McCaughey in The New Republic magazine has soared to prominence. Conservatives, ranging from Senator Bob Dole to the columnist George Will, have embraced her broadside as gospel. The rule seems to be if you know you don't like the plan but do not bother to master its details, let Ms. McCaughey do your thinking.

But Ms. McCaughey's analysis is careless, misleading and wrong. Her litany of criticisms-by-page number gives the article an aura of scholarship. But true scholars are precise; Ms. McCaughey is not. The White House labels Ms. McCaughey's assertions as lies. That implies that her distortions are deliberate, which may be unfair. In any case, the issue is not her character but her fear-mongering falsehoods that threaten to warp the debate.

Start with the title, “No Exit.” Ms. McCaughey argues that Mr. Clinton would stop you from buying medical services you want to buy. You are, she says, entitled only to benefits the Government deems necessary and appropriate: “Escaping the system and paying out-of-pocket to see a specialist . . . will be almost impossible.” Wiggle word (“almost”) aside, the declaration is false. The bill unequivocally protects your right to buy out-of-pocket any treatment from any doctor at any price.

Under the bill, government would set the benefits included in the basic package that every American would be required to buy. And government would set the prices that doctors charge patients who use insurance to pay for these basic benefits. But government would not stop you from buying supplemental policies that offer additional benefits -- beyond those deemed necessary and appropriate. Nor would government set the price you pay for supplemental benefits or for any service you decide to pay for out of your own pocket (outside your own insurance policy). Yes, Ms. McCaughey, there are exits. [Retrieved from the Nexis database]

The Atlantic's Fallows: McCaughey “had apparently skipped past practically the first provision of the bill” in advancing falsehoods. In a January 1995 Atlantic piece, “A Triumph of Misinformation,” James Fallows wrote of McCaughey that "[i]n claiming that the bill would make it impossible to go outside the health plan or pay doctors on one's own, she had apparently skipped past practically the first provision of the bill (Sec. 1003), which said, 'Nothing in this Act shall be construed as prohibiting the following: (1) An individual from purchasing any health care services.' " From Fallows' article:

Much of the problem for the plan seemed, at least in Washington, to come not even from mandatory alliances but from an article by Elizabeth McCaughey, then of the Manhattan Institute, published in The New Republic last February. The article's working premise was that McCaughey, with no ax to grind and no preconceptions about health care, sat down for a careful reading of the whole Clinton bill. Appalled at the hidden provisions she found, she felt it her duty to warn people about what the bill might mean. The title of her article was “No Exit,” and the message was that Bill and Hillary Clinton had proposed a system that would lock people in to government-run care. “The law will prevent you from going outside the system to buy basic health coverage you think is better,” McCaughey wrote in the first paragraph. “The doctor can be paid only by the plan, not by you.”

George Will immediately picked up this warning, writing in Newsweek that “it would be illegal for doctors to accept money directly from patients, and there would be 15-year jail terms for people driven to bribery for care they feel they need but the government does not deem 'necessary.'” The “doctors in jail” concept soon turned up on talk shows and was echoed for the rest of the year.

These claims, McCaughey's and Will's, were simply false. McCaughey's pose of impartiality was undermined by her campaign as the Republican nominee for lieutenant governor of New York soon after her article was published. I was less impressed with her scholarly precision after I compared her article with the text of the Clinton bill. Her shocked claim that coverage would be available only for “necessary” and “appropriate” treatment suggested that she had not looked at any of today's insurance policies. In claiming that the bill would make it impossible to go outside the health plan or pay doctors on one's own, she had apparently skipped past practically the first provision of the bill (Sec. 1003), which said,

“Nothing in this Act shall be construed as prohibiting the following: (1) An individual from purchasing any health care services.”

It didn't matter. The White House issued a point-by-point rebuttal, which The New Republic did not run. Instead it published a long piece by McCaughey attacking the White House statement. The idea of health policemen stuck.

Kaus in TNR: “McCaughey misread the bill.” In a May 8, 1995, New Republic piece, “No Exegesis,” Mickey Kaus debunked McCaughey's claim that "[t]he doctor can be paid only by the plan, not by you," writing that “McCaughey misread the bill.” Kaus continued:

It did ban Doctor Welby from accepting both a payment from an insurance plan and extra payment from a patient. (The idea was to control costs by forcing doctors to accept insurance money as payment-in-full.) But if you paid Doctor Welby entirely from your own funds, you could pay him to do anything you wanted. A clause on page 16 of the bill guaranteed this. The White House press office, in its ham-handed response to McCaughey, implied that this escape hatch worked only for medical procedures “outside” the basic services covered by insurance. But the press office misread the bill, too.

[...]

You can argue that Clinton should have offered more choice, enabling the affluent to pay physicians with a mix of insurance and their own money (though we don't let a rich man pay a public school teacher extra to give his kids special attention). But McCaughey's argument wasn't that Clinton didn't offer sufficient choice. The force of her articles derived from her claim that there was “no exit” from his mandatory insurance plans. She was wrong. Clinton's plan also opened a brand new “exit” for patients trapped in health maintenance organizations, giving them the right to see doctors outside their HMO. McCaughey simply ignored this feature.

Klein for The American Prospect: "No Exit simply lied about the system." Ezra Klein, then writing for The American Prospect (he now blogs for The Washington Post), asserted in an October 11, 2007, post that "No Exit simply lied about the system, claiming it would lock you in when the first page of the legislation said it was expressly barred from doing anything of the kind. The article was a smear, not a criticism." In a subsequent October 15, 2007, post, Klein quoted Section 1003 to rebut McCaughey:

More technically, when evaluating No Exit's claim that you couldn't seek care outside the system, Mickey [Kaus]'s right, I make a big deal of the first page of the bill, where it says “Nothing in this Act shall be construed as prohibiting the following: (1) An individual from purchasing any health care services.” Mickey writes that “of course laws have sweeping introductory provisions like this all the time, only to undermine them in the fine print.” But as he himself notes, the law didn't undermine this provision in the fine print, and so it should've been the sort of glaring warning that unsettled the folks at The New Republic.

Damage done: Media amplified McCaughey's 1994 falsehoods

Weinstein points to George Will to explain how McCaughey's “misrepresentations ... spread quickly.” In his February 6, 1994, New York Times opinion piece, Weinstein wrote that “Conservatives, ranging from Senator Bob Dole to the columnist George Will, have embraced her broadside as gospel.” He added that "[h]er misrepresentations have spread quickly. George Will repeats several, and then adds a juicy one of his own." From Weinstein's opinion piece:

Thousands of Americans pronounce judgment on President Clinton's health care plan; probably fewer than a dozen have read its 1,364 turgid pages. Perhaps that is why a five-page attack by Elizabeth McCaughey in The New Republic magazine has soared to prominence. Conservatives, ranging from Senator Bob Dole to the columnist George Will, have embraced her broadside as gospel. The rule seems to be if you know you don't like the plan but do not bother to master its details, let Ms. McCaughey do your thinking.

[...]

Her misrepresentations have spread quickly. George Will repeats several, and then adds a juicy one of his own. The plan must ration care, he reasons, or why else would it need to propose 15-year jail terms for bribery? One reason is to punish patients who bribe doctors to help defraud insurance companies; another is to punish plans that bribe officials running state regulatory agencies. [Retrieved from the Nexis database]

Fallows: Will's column amplified, expanded misinformation that was “echoed for the rest of the year.” In his January 1995 Atlantic piece, Fallows wrote that Will “immediately picked up” on McCaughey's claims, “writing in Newsweek that 'it would be illegal for doctors to accept money directly from patients, and there would be 15-year jail terms for people driven to bribery for care they feel they need but the government does not deem 'necessary.'' The 'doctors in jail' concept soon turned up on talk shows and was echoed for the rest of the year.”

Klein: “Will picked up her views, as did the rest of the right wing media.” Klein noted in a February 12, 2009, American Prospect blog post that “in a policy debate, it's more important that your opinions prove convenient than accurate, and McCaughey's argument was certainly convenient: She got first one cover story in The New Republic and then a second. George Will picked up her views, as did the rest of the right wing media and legislative infrastructure.”

Will, citing McCaughey, wrote: “It would be illegal for doctors to accept money directly from patients.” In a February 7, 1994, Newsweek column, “The Clinton's Lethal Paternalism,” Will pushed McCaughey's TNR article and its falsehoods. From his column:

THE DEBATE ABOUT THE CLINTONS' HEALTH CARE PLAN IS, literally, a matter of life and death. If anything like that plan becomes law, there will be much unnecessary premature death and other suffering. The plan would reduce the quantity and quality of health care and medical technologies by vastly expanding government's coercive role. To see why support for the plan plummets as analysis of it proceeds, see the analysis in The New Republic by Elizabeth McCaughey of the Manhattan Institute.

The plan authorizes seven presidential appointees, the National Health Board, to guess the nation's health care needs and decree how much the nation may spend meeting them. Everyone would be locked into one system of low-budget health plans picked by the government. Fifteen presidential appointees, the National Quality Management Council, not you and you doctor, would define the “medically necessary” and “appropriate” care a doctor could give you. Escaping government control to choose your doctor or buy other care would be virtually impossible. Doctors could be paid only by the government-approved plans, at rates set by the government. It would be illegal for doctors to accept money directly from patients, and there would be 15-year jail terms for people driven to bribery for care they feel they need but the government does not deem “necessary.” [Retrieved from the Nexis database]

The New Republic “recanted” McCaughey's article, though then-editor Sullivan stands by his decision to publish it

Editor Foer “apologized” for McCaughey's hit piece. According to a February 12, 2009, American Prospect blog post by Klein, "[w]hen Frank Foer took over as [The New Republic's] editor, among his first acts was making amends. 'We recanted that story in the first issue and apologized for it,' he says. It was that bad."

Then-editor Sullivan: “I was aware of the piece's flaws but nonetheless was comfortable running it as a provocation to debate.” Andrew Sullivan, editor of The New Republic when it ran McCaughey's article “No Exit,” defended his decision to publish it in an October 11, 2007, post to his Atlantic blog, The Daily Dish:

My sin was to publish a major article by Elizabeth McCaughey called “No Exit” that posited that Hillarycare 2.0 would inevitably lead to the extinction of much private medicine. Ezra [Klein] wants me to be “more honest” about this.

I don't think it's fair to expose the internal editing of a piece but there was a struggle and it's fair to say I didn't win every skirmish. I was aware of the piece's flaws but nonetheless was comfortable running it as a provocation to debate. It sure was. The magazine fully aired subsequent criticism of the piece. And if the readers of TNR are incapable of making their own minds up, then we might as well give up on the notion of intelligent readers. The piece also won a National Magazine Award.

McCaughey's conflicts of interest continue in current health debate

McCaughey resigned from medical company board over “conflict of interest” concerns. Betsy McCaughey resigned from the board of directors of Cantel Medical Corp., a medical products company, to “avoid any appearance of a conflict of interest,” as reported by The Washington Independent. According to Cantel's August 21 press release:

CANTEL MEDICAL CORP. (NYSE: CMN) announced that on August 20, 2009 it received a letter of resignation from Ms. Elizabeth McCaughey as a director of the Company. Ms. McCaughey, who had served as a director since 2005, stated that she was resigning to avoid any appearance of a conflict of interest during the national debate over healthcare reform.

Despite her past conflicts of interest and falsehoods, media treat McCaughey as if she's credible

McCaughey is a serial misinformer who has perpetuated numerous falsehoods about health care reform. Most recently, McCaughey falsely claimed that the House health care reform bill would “absolutely require” end-of-life counseling for seniors on Medicare “that will tell them how to end their life sooner” -- a claim that many in the media repeated. McCaughey repeatedly falsely claimed that the Senate HELP committee's bill “basically” “pushes everyone into an HMO-style plan.” Additionally, McCaughey concocted the false claim, which was nonetheless widely repeated in the media, that a health IT provision in the economic recovery act enabled government bureaucrats to “monitor treatments” or restrict what “your doctor is doing” with regard to patient care. On multiple occasions, after being challenged on her false claims about health care legislation, McCaughey reportedly insisted that she was right about the ultimate effect of a bill despite misrepresenting what it actually said.

Media have repeatedly hosted McCaughey to discuss health reform. The Atlantic's Fallows has pointed to McCaughey as an example of someone for whom there “seems to be almost no extremity of being proven wrong which disqualifies” her from being given a platform in the media. Indeed, despite her numerous falsehoods and past conflicts of interest, throughout the health care reform debate in 2009, McCaughey has been an ever-present part of the media discussion. She has been hosted on CNN at least twice and on Fox News Channel repeatedly to weigh in on health care reform. Additionally, according to a search of the Nexis database, The Wall Street Journal and the New York Post have each published four pieces by McCaughey about health reform; Bloomberg News also published a commentary by McCaughey on health care reform provisions in the recovery act.