COMMONWEALTH OF PENNSYLVANIA
HOUSE OF REPRESENTATIVES
HEALTH AND HUMAN SERVICES COMMITTEE

Representative Dennis M. O’Brien, Majority Chairman

April 28, 1999

By Robert B. Sklaroff, MD

Regarding:

H.B. 226:  The Set Aside for Research Facilities Bill #1 *
H.B. 392:  The Set Aside for Research Facilities Bill #2 *
H.B. 445:  The Tobacco Settlement Agreement Act Bill
H.B. 758:  The Tobacco Settlement Account Bill
H.B. 812:  The Long-Term Care Fund Bill
H.B. 1172:  The Tobacco Settlement Cancer Research Act Bill *
H.B. 1326:  The Restricted Receipts Account Bill
and
H.R 115:  The Capital Restoration Trust Fund Bill
 

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“The Purpose of the Hearing is to gather testimony on ways to use the tobacco settlement toward health-related purposes.  If we do not utilize the money for health care initiatives, we risk losing a significant portion to the federal government.  Therefore, the hearing is going to focus on testimony related to health care, such as but not inclusive to:         health care services for the uninsured, medical research, health promotion, preventive health and smoking cessation programs, and improvement in health care delivery.”

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Robert B. Sklaroff, MD
Suite #130
50 East Township Line Road
Elkins Park, PA  19027-2253
(215) 663-8200
FAX:  (215) 663-8388
rsklaroff@home.com
http://members.home.net/rsklaroff/homepage.html

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I am Robert B. Sklaroff, MD and I am testifying as an individual.  I have various roles in organizations that have provided and will provide input but, to ensure there is no chance for confusion regarding my comments today, I will not formally identify them.  The issue of how to spend money that is not yet available will be discussed legally and morally, and an effort will be made to provide context regarding how you will need to prioritize the overlapping/conflicting interests presented by the “stakeholders” who testify before you.

Appended to these remarks is my filing last week with Commonwealth Court regarding the Master Settlement Agreement —the “MSA”—between the Attorney General and the Tobacco Industry that, upon activation, will yield monies to the Commonwealth that are to compensate for prior Medicaid expenses.  In the haste to acquire a financial wind-fall, however, you must not create a fiscal free-for-all that will yield a public health free-fall.  My goal is the creation of societal structures that will detoxify both the populace and the government through a process of reducing reliance upon tobacco and tobacco-tax money.

Why is the MSA tied-up in court?  Why is this legal battle, which is also being waged by Allegheny County, relevant to the decision-making you will need to bring to bear, here?  What are the implications with specific regard to the eight legislative issues before you?  And how will my comments mesh with previous ones you assume to have been correct?

I will cover these issues while focusing on bills that have been referred to this committee, but the entire tobacco-related agenda before the legislature will be invoked to provide insight regarding how you and your colleagues perceive “Public Health Enemy #1.”

Of the eight bills that relate to the MSA in the House, three are before this committee.  The Resolution (115) referred to the Rules Committee calls for a portion of these monies to be used to support continued historic preservation and restoration of the State Capitol Building because cigarette smoke has contributed to the gradual deterioration thereof.      And the Bill (445) referred to the Judiciary Committee is a spin-off of the MSA that relates specifically to antitrust concerns and lifts language that is the focus of my lawsuit.  The three Bills (758, 812 and 1326) referred to the Appropriations Committee call for creation of a separate fiscal repository for MSA-generated monies; 812 calls for funding home and community-based long-term care, and 1326 calls for a three-way funding-split among school special-education, Open Space and Greenway Trails, and cancer research facilities and substance abuse treatment facilities.  The three Bills (226, 392 and 1172) that are upon your docket represent increasingly-more-detailed incarnations of the idea that 25% of the MSA-generated monies should fund seven cancer research centers.

Senate Resolution #48, introduced and adopted on March 23rd, is intended to ensure the federal government does not interfere with state-level autonomy over MSA disbursement. One other Senate Bill (627) endorses the above-mentioned “25% tithe” and another (460) calls for divestiture of state funds in any security of a tobacco company. Two Senate Bills (396 and 448) and nine House Bills (322, 351, 397, 554, 819, 1120, 1076, 1093, 1277) call for more stringent enforcement of youth access laws, in myriad ways.  Various facets of these bills are of-interest to anti-tobacco activists, such as the stated goal of SB 396 to  reduce access to tobacco products for youth under 21 years of age (rather than 18).  Thus, in the aggregate, their essence is to move our culture towards reduced nicotine addiction.

The Coalition for a Tobacco Free Pennsylvania announced its proposal on March 8th based, substantially, upon recommendations issued by the Centers for Disease Control.    Essential is a comprehensive statewide tobacco control program using a Trust Fund and an Education Oversight Committee.  Budgeted are Community and School Programs; Partnership Grants and Law Enforcement; Counter-Marketing and Tobacco Cessation Programs; Tobacco Control Research; Surveillance and Evaluation; and Administration.

Other individuals and organizations have weighed-in, as per the appended summary.  These have been submitted by the Attorney General, the CDC, the PA. Cancer Alliance, the Hospital & Health System Alliance of PA, the PA Medical Society, the PA. Academy of Family Physicians, and the House Democratic Caucus.  A thread running through them (in addition to the aforementioned 25% tithe and Coalition guidelines) relates to the need for expansion of CHIP and other insurance programs for the needy.  The Caucus also would allocate $1.5 million for “baseline health assessment,” would support challenge grants to organizations operating youth anti-tobacco programs, and would support research at the seven Cancer Research Centers and at the six Academic Health Centers.

The PAFP, thematically, advises “the funds should be used to help eliminate the need for future payments.”  Further, it would concentrate on behavioral research, interventions, and applied research as opposed to construction projects.  The PMS advises long-term funding be provided to cessation and treatment services for tobacco-related illnesses as a priority over disbursement for services unrelated to treatment.  No proposal advises the money be spent either on programs unrelated to public health or to reduce overall taxes.

The purpose of this Hearing is to gather testimony on ways to use the tobacco money to improve the public health.  The cancer facilities have arbitrarily chosen a 25% portion, and the other bills represent pet projects that clearly are tangential to your agenda.  Thus, when deciding what to recommend, you must recall the origins of the relevant litigation.  You must then maintain the precise focus that your Chair charged for these Hearings.  You should take into account the fact that these monies were generated to recompense for expenditures that the Commonwealth has actually already made, and you must recall that these monies do not cover the great majority of the government’s tobacco-related costs.

The first unifying principle is that all of the money generated from the Tobacco litigation must be devoted to detoxify Pennsylvanians and to “detaxify” government from tobacco.  This may appear orthodox at first, but these monies will otherwise be dissipated by projects that would receive funding anyway and/or would rapidly consume the money.

The second unifying principle is that some of the money must be earmarked for covering pharmacological aids to smoking cessation, such as nicotine substitutes (gum & patch) and centrally-acting medications.  If it is to be recognized that nicotine addiction is a disease state, then it must be accepted that drugs not customarily reimbursed are needed.

The third unifying principle is that the proper utilization of these monies during the next quarter century must be guided by those who have demonstrated a long-term commitment to ending our cultural dependence on tobacco.  It cannot be controlled by the voluntaries, academics, politicians, and “Johnny-come-lately” individuals and organizations.

These three principles will be formalized after the reason for my litigation is reviewed.  Please appreciate the fact that my intent is to ensure the Commonwealth continues to be funded as it anticipates, for the Tobacco Industry has inserted language in the MSA that will undermine your intent.  Not withstanding the assertions of the Attorney General,  consider reading the MSA before you eagerly conclude it should be blindly swallowed.  Then you will encounter the Release and Offset Clauses that shut-out Public Interest suits and then you will be forced to appreciate why the Tobacco Industry has agreed to it.

In essence, the MSA capitates expenditures by the Tobacco Industry; if it loses a suit, monetary penalties are to be deducted from annual disbursements to the Commonwealth.  Further, dollar-for-dollar deductions are to be made therein if excise taxes are increased. And the ability of citizens to petition their government—even to gain injunctive relief—    is to be curtailed in ways that are admittedly unprecedented and patently unconstitutional.

How should these realizations affect your thinking?  You must redouble your efforts to be careful to devote these monies to the purpose intended, diagnosis and treatment of the raging tobacco epidemic.  You must ensure every Pennsylvanian knows that his or her health will benefit greatly as soon as he or she stops smoking.  Not just years or decades into the future, not just for some diseases, not just for some types of cigarette smokers.  For example, the Delaware Valley Health and Healthcare Council (a subset of HAP) showed that hospitalizations for lung infection (bronchitis/pneumonia) drop within a year after smokers had stopped using tobacco.  We will empty our hospitals if we get people to stop smoking.  In the absence of a “safe” cigarette, we can do no less for our patients.

To summarize, you must maintain the discipline of placing these monies into a fund that will support projects devoted exclusively to helping people stop smoking.  You must not pre-ordain how these decisions will be made, for the Advisory Board may feel it prudent to vary expenditure recommendations from year to year—contingent upon the quality of grant requests issued by therapy and research entities—while maintaining the possibility that unspent dollars could be reinvested for future use.  The legislature must scrutinize pet projects in a stand-alone fashion.  For example, the long-term care issue is profound, carrying implications far beyond the provision of health care to Medicare recipients.   This approach will yield consideration of other projects that are not encompassed by current proposals, such as recompense for tobacco farmers who switch crops.  And  separate Hearings should be held to elucidate details in the MSA, so that the legislature may discern its possible role in resolving concerns regarding Release and Offset clauses, the issues currently under suit.  There is ordinarily a tendency to avoid interfering with the courts, but the time-frame mandated by the MSA is such that legislative input need not now be limited to decisions regarding how to micro-manage expenditure of these reparations.  You have been misled if you have been led to believe there is time-urgency, inasmuch as delays occurring in New York and California, alone, are precluding the achievement of State-Specific Finality that could yield release of the first large payment.

If you have any further questions regarding my suggestions and my activities, please do not hesitate to call me.  Keep in mind how we got here, and you will do the right thing.  Pending review of additional proposals and study of testimony you are now receiving, these ideas are succinctly codified on the following page.  Thank you for your attention.

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Recommended Use of Tobacco Settlement Monies – (by Robert B. Sklaroff, MD)
1. Place all Money into Tobacco Control Trust Fund, controlled by legislature.
2. Establish Tobacco Control Advisory Board, comprised of entities and activists.
3. Expend all monies for Tobacco-Related Projects, including pharmacological aids.

Programmatic Initiatives must encompass sociologic and scientific efforts.  The former must encompass Community and School-Based Efforts, Partnership/Matching Grants and Counter-Marketing Advertising, and Enhanced Law Enforcement.  The latter must encompass Cessation Treatment and Research, Surveillance and Evaluation, and Administration/Management.  They must be integrated into a comprehensive campaign.

The Tobacco Control Advisory Board must also be empowered to issue recommendations regarding appropriate legislative interventions, to track governmental activities to ensure they are maximally effective, and to prioritize funding projects that would otherwise die.

The Legislature must study the details of the Master Settlement Agreement via Hearings.  It must draw an independent conclusion regarding the Release and Offset Language.

The goal of disbursements must be to help eliminate the need for future payments. Thus, they should concentrate on behavioral research, interventions and applied research as opposed to construction projects, and helping former tobacco-farmers is also necessary. You must help create societal structures that will detoxify both the populace and government through a process of reducing reliance upon tobacco and tobacco-tax money.