RESOLVED, that the American Medical Association deplores
2 the lack of integrity and financial responsibility reflected
3 by a small group of physicians who fail to repay their govern-
4 ' ment loans and/or service obligations and that the American
5 Medical Association encourage the use of every legal method to
6 see that the obligations are met in timely fashion, and be it
7 further

RESOLVED, that this resolution should not be construed as
indicating any lack of support for these financial assistance
programs, but to the contrary, that we support them and their
implementation to the fullest extent.

Kemerer:

Continuing Testimony

12 April 1984

Senator Percy, you have just concluded the finest example of a Kangaroo Court ever seen. It is extremely difficult for me to believe that you are a novice in such matters. You packed the jury with PHS scholarship bureaucrats who are obviuosly biased against me. Your summary statement was filled with gross inaccuracies, and you denied me any opportunity for a summary statement before calling for a voice vote. Lucky for me, no rope or rifles were available, else I would have summarily executed, given the mood of the mob.

After answering your summary charges, I will give the statement for which you obstensibly invited me, which details the problems in the scholarship office which have resulted in a 23% default rate and delayed debt collection.

With respect to your summary statements:

1) my daughter is not "in a boarding prep school". She is enrolled

in a church boarding academy. The penultimate paragraph on
Page 2 of the Waiver which you have in your hand clearly states that
our children are in church school. The fourth paragraph of Page 7
again refers to church school. In other correspondence such as
the letter to Mr. Joseph Brown, dated 28 March 84, the term parochial
school is used. Never have I used the phrase "prep school" in any
correspondence with the scholarship office, since it misrepresents
the fact. Although your children probably did attend prep school,
mine are in church school. This right to educate children in a
religious manner is guaranteed under the free exercise of religion
provision of the First Amendment. Would you, Senator Percy, abolish
the Constitution?

2) you indict me for an "expensive house", which in the context of

earlier testimony this day refers to $250,000 homes. Again the
waiver from which you are nominally quoting, Page 5, Paragraph 5,
clearly states that we are in the market for a $100,000 house. This
is the average price of single unit housing in the several areas
of this nation with which I am familiar including Gallup, N.M.
Although $100,000 is a large sum of money, this hardly constitutes
an expensive house, let alone an extravagant house as implied in
the context of your summary statement. A new house is needed because
we must leave the area in order to obtain a job which will allow
us to approach the repayment schedule which the scholarship office
has decreed.

3) Juxtaposing 2 cars next to "expensive house" in your statement gives

a sense of urgency to their purchase. With all the discussion of
Mercedes earlier, it also conjures the picture of very expensive

Page 5, Paragraph 1 of the Appeal for Waiver documents the
need to replace vehicles of 9 and 14 years service with 96,000 and
124,000 miles respectively. The budget in Table 1, Page 6, allows
$3,600 in car payments for the first year. Clearly this is predicated
on the purchase of one modest car during my first year of practice.
Page 7, Paragraph 3, discusses replacement of the newer vehicle during
the second year of practice.

Kemerer: Continuing Testimony

2

12 April 1984

4) lastly you castigate me for proposing to spend $2,000 on a

family vacation during my first year of practice. This would
be our first vacation in 3 years. The last vacation consisted
of staying with an aunt in Florida for one eek. Since graduating
from high schoo1 20 years ago, I have worked an average of 100 hours
per week and have had 3 or 4 vacations. I realize that vacations
are of little concern to you, since you are able to travel for free
anywhere in the world as frequently as you desire on Congressional
junkets financed by your lowly taxpayers. Finally, you failed to
notice on Page 8, Table II, the Balance Sheet, which shows a negative
net worth of almost $50,000.

For the record, this Kangaroo Court was made possible by premediated collusion with PHS officials, notably Dr. Martin and Mr. Brown. Your aide, Mr. Mertz, called on 6 April 1984 and offered me the opportunity to testify with respect to why so many people are in default. Prior to this, on 28 Mar 1984, I wrote Mr. Brown a letter requesting complete, accurate accounting of my debt including interest and penalties because i wanted to settle. On 2 Apr 1984 my wife called him to make an appointment for him to see me as soon as possible to settle this debt.

He was unable to see me until 10 Apr 84 at 1430 h. I wanted an appointment early in the day so that any typing or last minute comuptations could be performed.

I came with checkbook and calculator and expected to leave with a signed agreement having made the first payment. Despite 8 days notice, Mr. Brown did not even have my file in his office, nor was it readily accessible to him. I reiterated my desire to settle this debt that day and waited for an hour while he was supposedly preparing the draft. After an hour he said it would be impossible to complete the ageement that day, but that it would be done first thing in the morning. One of his aides called me at 1630 h yesterday (Wed) to say this document still was not ready.

So the trap was set on your sting operation and all systems were go for your Kangaroo Court. Had I been allowed to sign an agreement and begin repayment you would not have had your sport today. Sir, you owe me an apology, for you have grievously harmed my reputation. This display was great theater and could conceivably cost me a job whose contract is under preparation and prevent me from finding any substitute. I believe you are clever enough to realize the adverse effect this could have on my ability to repay you may have killed the goose that laid the golden egg.

Your Kangaroo Court epitimizes the shabby treatment which the PHS has accorded

Never have they responded to specific questions nor shown any willingness to sit with me face to face and work out an agreement. They have always hidden behind bureaucratic barriers, saying "that is not my department". It's amazing how compartmentalized a really simple problem has become in the federal bureaucracy.

I came to your hearing today to explain the terribly adverse, devastating effect the manner in which the scholarship office deals with many receipients has had on their lives. The issue is more complex than "pay up now", but you, Sir, have badgered me and not allowed me to speak. Perhaps now you will listen.

me.

Kemerer:

Continuing Testimony

3

12 April 1984

I, for one, have never sought to avoid my PHS obligation. Perhaps I have been placed here for public ridicule because of my inherent honesty and decency. I have not skipped town nor avoided contact with the PHS. In fact Dr. Martin feels that I've had too much contact.

Even before I was graduated from medical school, I approached the PHS with regard to a deferment for a radiology residency. At that time I was told to file an appeal with the Secretary of DHHS for de ferment. Over the next year many other specialties, even Emergency Medicine, the antithesis of Primary Care, were deferred. Not Radiology. Yet modern radiology is the most cost-effective specialty, and the government has a marginal interest in reducing the cost of health care.

Out of context you claim I am equating myself with the various frauds and cheats who plague the federal government. Perhaps the analogy is beyond a politician's keen. Simply stated, if the government is willing to ignore outright fraud, graft and profiteering, why is it so vindictive when it comes to settling honest differences of opinion between honorable people? The fact that 1700 physicians, approximately 23% of all recipients, are in default should suggest that something is terribly amiss with the program. That level of default would not even be predicted if the grants had been given to politicians. The simple reason for this rate is the inflexibility of the PHS for any reasonable accomodation, either in placement or repayment. The full force and fury of the US government has been focused on a few impoverished physicians. You, Sir, examine salaries attained after several years of practice post residency. You conveniently ignore the absence of salary during medical school, the substandard salary during residency and a salary which is approximately that of other highly-trained professionals of similar age -- for example, executive level civil servants -- in the early years of practice when these sums must be repaid.

PHS recipients are indeed impoverished. No one in his right mind would sign such an adverse contract with treble damages and maximal interest rates unless he had no other alternative. More than half of my class spent summer vacation in Europe or Israel and winter vacation in Colorado or Switzerland. I spent mine working for extra money.

Now, after 20 years of working more than 100 hours per week, a PhD in a field overcrowded by poor government planning, a change of career into another profession, recently overcrowded by poor government planning, you ask that I pay a large, but yet unspecified sum, post haste.

Major problems exist in the administration of the scholarship program.
These may be summarized as:

1) misguided personnel policies with respect to scholarship recipients
2) poor internal office management

Regarding the first catagory, every shcolarship recipient I know, regardless of payback status, is displeased with the rough-shod treatment accorded him or her. Horror stories abound, such as that of Dr. Eshelman. Designated health manpower shortage areas are constantly changing, often a recipient is lead to believe until the very last minute that he will serve in the location of his

Kemerer:

Continuing Testimony

4

12 April 1984

choice, only to find himself across country, away from wife and children. The policy of the scholarship office forces people into default. Default generates money for the program which can be used to support other recipients in the National Health Service Corps. Several years ago the previous secretary stated that it cost $100,000 annually to place a scholarship recipient in the field,

In addition the PHS personnel policies toward recipients are a throwback to the '50s. Modern day personnel policies require the involvement of employees in the decision-making process. This is true even of factory workers, but even more necessary when dealing with more highly educated people. For instance, nurses would revolt if treated with such disrespect. Even the Army has stopped reading the Articles of War on a weekly basis to enforce discipline. If there exists genuine concern about the high default rate, a more modern approach than the club would be useful in dealing with scholarship obligates. Fewer would be in default and those in default would begin payback earlier.

manner.

One of the most ingratiating aspects is bureaucratic doublespeak. Direct questions are answered infrequently and when answered, the reply is usually disingenious. The initial contract which I signed with the PHS, a contract which you, Senator Percy, have failed to acknowledge several times today, allowed repayment of obligated service via training in a PHS facility. Recipients prior to my year (1977) were allowed to repay 2 years of obligated service in this

I was allowed 1 year since the program was being phased out, and the new scholarship program with primary care emphasis would begin 1978-79. Clearly, receiving post-graduate training in a PHS facility had nothing to do with service in a health manpower designated shortage area.

My request to repay 1 year of obligated service in a fellowship program at NIH was rejected. In the initial telephone rejection, NIH was disallowed because it was not a PHS facility. "What then is it," I asked "since the sign in front of the campus says 'Public Health Service' as does the stationery." I was told "NIH is a facilty of the Public Health Service, not a Public Health Service facility." I must admit that this line of reasoning left me cold and totally unimpressed with the prep school of the bureaucrat who made the statement. Later, Mr. Joseph Brown in a letter of 3 Nov 1983 stated, "your contractural agreement when you accepted scholarship support was to serve in the full-time clinical practice of your profession in a Health Manpower Shortage Area (HMSA)... The NIH is not a designated HMSA." All so true with respect to the second contract, but totally false with respect to the initial contract.

The second PHS Scholarship Law as stated in 42 CFR 62.12 provides for determination of Waiver of Service and Financial Obligation based upon 'extreme hardship and against equity and good conscience by the Secretary of DHHS. I had not realized that Dr. Martin had become a cabinet officer. When the Waiver was rejected I inquired about a higher appeal and was told to submit any new facts to this same appeal board headed by Dr. Martin, who has made his personal disdain for me all too apparent by private statements made to me today witnessed by my wife. The accepted practice is for a judge to disqualify himself from a case when he is biased against one of the parties. The PHS goes one better by