Interview with Dr. Karl Yordy 
Date: August 1993 
Location: Institute of Medicine 
          National Academy of Sciences 
          Washington, DC
Interviewer: Stephen Strickland

     Interview with Dr. Karl Yordy conducted by Stephen P.
Strickland at the Institute of Medicine of the National Academy
Sciences

     August 1993

     Interview with Karl Yordy August 1993

     The interview conducted by Stephen Strickland with Karl Yordy
took place at the Institute of Medicine Georgetown Office.  Mr.
Yordy, Senior Program Officer of the Institute, earlier had been
interviewed by Dr.  Donald Lindberg prior to the December 1991
Conference on Regional Medical Programs at the National Library of
Medicine.  In this interview, he elaborated on particular aspects of
Regional Medical Programs both from his experience as one of the first
staff members of RMP when it was located, in the early days, at the
National Institutes of Health, and later from his position as Head of
Planning and Evaluation for NIH. One line of discussion was on the
relevance of the RMP experience to the rapport with the Health Care
System, particularly with respect to the role of states in
implementing federal health-related programs.

     Yordy: RMP was a product of an era when the federal government
was busy, and quite deliberately, quite intentionally bypassing the
states, saying we'll move directly to institutions.  We deliberately
bypassed the states.  There were rationales and reasons.  Certainly in
no formal way.

     Strickland: No, that's right.

     Yordy: RMP was not a program run through the states.

     Strickland: That's absolutely right.

     Yordy: Some people made the argument that it should be.

     Strickland: Sure, but at that point in history that was what the
federal government wanted to avoid, getting tangled up in the PSRO
cal
business and the state planning agencies.

     Yordy: Absolutely.  That's was though a different time, a
different era.  Since then, I think the question of the role of the
states has come back in a different kind of way; I think that's true
in health care reform.  Rather than being the sort of ogres as they
were perceived, whether correctly or incorrectly, in the middle
sixties.  Many times now the states are.  And the federal government
has a hard time getting its act together.

     Plus, the role of the state issue is often a shorthand for the
question of the role of the public sector in that the federal
government has been more comfortable with the mechanism of
governmental assistance to essentially private or nongovernmental
entities -- private is rather strong -- whereas the state's role was
typically more that of direct operator.  In other words, the whole
grant-making history of the federal government involved the federal
government saying: "We're not going to do it, but we're going to give
you money to do it.  You are some entity out there in society and not
necessarily a governmental entity."  Whereas when states do something,
they tend, in the years of my observation and experience, to do it.
"We're going to run this."

     When you deal with the state health officer and you talk about a
program, the state health officer thinks in terms of what are my
employees going to do rather than how can I cause some things to
happen in society by other means through other actors.  I think in the
past that was something that got them -- certainly the whole argument
about the CHP Versus RMP. But I think in the current situation,
there's an opportunity to actually change that.  By the way, I think
that it's a shame.

     I don't know if you're familiar with our report of The Future of
Public Health where we got into some of these issues.  one of the
things that we identified in that report is the sorting out of a
conceptual matters that have become a sort of Bible for the public
health field now.  That little conceptual model talks about the
government role in ensuring and guaranteeing the availability of
services.  And the purpose of these bars was to say you could have
assurance, that is, a hundred percent of the assurance objective being
accomplished, but you could have it being done in a variety of
different ways.  The other thing is that you could have a mixture of
things with the health agency doing some things, other government
agencies doing some things and the private sector doing things.  And
you can different ratios of relationships with that.  You can have, in
some cases, the entire thing can be done by another agency before the
health agency would be playing some kind of leadership role in seeing
to it that that happened.

     Strickland: I meant to bring a copy of the little essay that I
did, and I've been trying since April to get it published in a major
newspaper.  I got it published in the newspaper, the Houston
Chronicle, last month, on RMP and implications for the state roles in
health care.  If it true, as you say, that you might be willing to
bypass state structures.  Nonetheless, the best RMPs turned out to be
those that were carried out within state boundaries.

     Yordy: I think this society as great as its models.  In cases
with some of the successful RMPS, ones with a lot of activity, like
Missouri or the state of Washington.  The fact that those were state
medical schools at the center of them is not an accidental thing.  And
the fact that you had a difficult time getting RMP started with
private medical schools who had a different image and view of their
relationship responsibility to the rest of society.  That is not
accidental, I think.  And you're absolutely right, even though we
bypass the state government, we in fact very much use as instruments,
entities which have at least as a part of their mission the notion
that they were serving the people of the state of Washington.
Strickland: And it helped give coherence and colleagiality to it.
Yordy: Absolutely.  But it is also true that there was a time -- and I
sat down in the meetings and I heard it, I mean, this isn't something
that I've just sort of hypothesized -- that the notion of working
through the states was impossible -- remember this is 1965-1966 and
you appreciate the implications of that.

     Strickland: That if you went through conventional state channels,
you weren't going to get your mission accomplished.

     Yordy: That's right.  And so for better or for worse, that was
the way things were perceived at that time.  The sort of missing piece
of that that you were sort of implying is that there was never a
strategy -- they never sort of got around to in the early days -- for
how you would in fact re-involve the states.  I think if I was doing
it now in a different era, I would not think of not figuring out a way
to involve the states.

     Strickland: But on a whole variety of fronts, states in fact
were at that point particularly conservative.  Cities wanted to bypass
states.  They wanted to have funds to go directly to cities and not to
states.

     Yordy: In The Future of Public Health study, where we do
emphasize the role of the state, we had as a member of the committee,
Bill Ellison, who is a fine man, who is the county health officer for
Fulton County, Georgia.  I don't even know how to place him on sort of
a liberal-conservative spectrum.  He's in a very good health
department, one who has the virtue of having CDC in his backyard and
so forth.  Bill, when we got to sort of emphasizing the role of the
state, was very uncomfortable with that and said -- and not for
ideological, not for radical, but sort of pragmatic reasons --, "I
have as much competence as the State of Georgia; Health Department in
my department.  We're much more comfortable with dealing with the
federal agencies directly than I am with Georgia."

     Strickland: With over two hundred counties.

     Yordy: But we -- the social studies director and I -- with our
public administration hats on, had to give a lecture of the
Constitution to point out something, which is: functionally, you could
be absolutely right, but in legal terms, there isn't a single power
vested in Fulton County Georgia, which doesn't derive from the state
of Georgia.  There's no such thing in the U.S. Constitution as a
constitutional grant of power to local government.

     Strickland: Sure, the states created counties.

     Yordy: The states created the system of counties.  And they
created it in whatever pattern they chose to; the variations are
terrific.  The point is not should you have an effective local
activity, it is that it had to be developed in some way in
relationship to what the state of Georgia is doing.

     Strickland: We're right on the point of the future.  Let's stay
there.  How do you see, regardless of whether RMP has any lessons for
it, the role of states.  You say they're being pioneers.  There are at
least a dozen states right now that some health plan under
consideration or implementation.  Sometimes it is quite specific; that
is, it deals with Medicare or infant care here.  They're getting into
comprehensive to health in- state.

     Yordy: I think that -- based on my observations and from what
I've heard smart people who lived these things, including some
governors talk about it -- we have to figure out a model (as with many
other things that this society has done rather creatively over a long
period of time) in which we somehow mix the two; that is, the federal
and the state responsibility.  I've heard very few state people say
that they think that that's the way it ought to be.  They don't think
that the state can do the whole job without needing the federal
government.

     Strickland: But what do they see?  Federal financing and total
state implementation, federal financing and core requirements and some
state flexibility.  How do they see it?

     Yordy: I think that there are a variety of views.  For the most
part, they could see the things that the federal government needs to
do to make it possible for them to play a useful and productive role.
This gets into the old business of wavers, restrictions on Medicaid.
It gets into the question of what's the role of the Medicare program
going to be in all of this, which is after all a straightforward
federal program.  It gets into things like ARISA. It gets into all
these things where the federal government has gotten out there, and
for a variety of reasons, already got so involved that it's almost
impossible to carry out a creative state approach unless you somehow
get the federal government to undo the bonds.  on the positive end, I
think there is a question of how the federal government provides a
funding string that at least in part, and this is an old issue as you
know on federal assistance, there's some equalization of the widely-
varying fiscal capacity of the states.  And that's an old issue, and
we can wrestle with it in a great many different ways through all
sorts of different federal programs.  But it remains as a real issue.
You cannot imagine that the state of Michigan or the state of
Mississippi or South Dakota are going to being capable of doing the
same things.  So, simply saying that we're going to let the states do
this and all we're going to do is get out of the way is obviously not
sufficient.  There's got to be some kind of federal role in the
financing string.

     Secondly, it seems to me that this is pragmatic matter.  The
federal government, when you take that Medicare issue, is already such
a big actor in the funding that nobody would want to say that the
federal government ought to back off and do less in the way of dollars
than it has been doing.  So, the federal government starts off being a
major financial player.  In that case, doing it on a national basis --
meaning raising the money nationally and distributing it out to people
on the basis of their beneficiary status -- has nothing to do with
states.  As a matter of fact, as some people have pointed out, there's
a gigantic fiscal transfer that goes from northern states to Sunbelt
states, if you want to take just a very practical example.

     Strickland: Just in case anybody looking at this transcript
doesn't know what that means, you're talking about the simple fact
that retired people go south.

     Yordy: And carry their social security benefits and Medicare
benefits with them.  They may have been in fact, even if it's payroll
tax-based, paid in those benefits on the basis of their employment in
Michigan, then they retired to Florida, and they take that dollar
string, and it doesn't go back into the community in Michigan where
they lived but rather goes to the local economy in St.  Petersburg.  I
think some form of federal fiscal participation is absolutely given.
And if you just take the Medicare level alone, it's clearly going to
be substantial, the question of how much more and all sorts of
variations.  It's clearly going to be substantial.  It seems to me
that sort of having the federal government get out of the way in turns
of restrictions, some substantial dollar string.

     Now the issue gets to be what kind of incentives, terms,
conditions, goals, objectives, necessary conditions is the federal
government going to establish, which is a quid pro quo for that dollar
sign.  There again is a rich history of the federal government doing
that; Medicaid is a program that's got one version of that that people
have complained about but, nevertheless, does have the characteristic
of saying, "You're going to get this money, federal money, but in
return, you have to do certain kinds of things."  The Canadian model,
of course, in many ways, that's what it is.  The federal government
gives money to the provinces and has certain requirements and
characteristics that have to be associated with it.  And then, that's
the end of the federal role.  The argument then gets how tight to make
those.  What kind of vision do you have?  Do you have a vision that
says, "Let's deliberately use this as an opportunity to see many
different versions develop."? And with some expectation that you might
learn over time from those various experiments.  Or do you want to say
that we have a fairly tight notion of how we want it to work, and
we're going to tie the federal money to a fairly explicit model of how
we would think health care reform ought to occur?  I think that we
don't know the answer to that question.  When people talk about
Clinton's Health Care Reform Plan, which I have no inside information
on except for what you read in the newspapers, but I've always heard
that what you read in the newspapers is sort of where it is, they seem
to have equivocated something around this very issue.  Sometimes you
read about things, and they start to describe a sort of explicit model
for how they think things will work.  They would talk about
accountable health plans and some kind of hipic like arrangement.
Then at other times, it sounds like they're going to let the states
sort of do whatever they want to do, and that includes everything to
the state single-payer system.

     Strickland: I think, really, the delineation between the
essential core of federal requirements and flexibility for the states
to do additional things, or do things in a different order, is really
clear, a central issue though.  I think that's one of the big debates.

     Yordy: I think so too.  Now one of the interesting things here -
- and this gets back to some of the RMP -- one of the issues which I
don't know how the plan is going to deal with is what in public
finance terms you'd call a "public good" issue.  That is that there
are certain kinds of functions within the broad health arena that it
is difficult to see, unlikely to see, being carried out sufficiently
through the workings of a quasi-competitive health care delivery
system.  Those include some obvious ones -- the public health
functions, the population-based kinds of activities.  They include the
educational training of health personnel.  They include research,
everything from NIH research down to the AHCPR type of things.  one
observation that I've made through the years, Steve, is that the
states have been, for reasons I could theorize about, reluctant to
support that kind of thing.  You actually have some past histories of
states supporting health research, for example New York and some in
California.  It sort of withered away.  "That's a federal job."  And
so whether that's the way it has to be or not, that is the way in many
ways it has been.  So, one has to be very wary of the notion about how
these public good functions are going to get carried out.

     Strickland: Health training is a little bit different, isn't it?

     Yordy: Health training is different in which the states have
played a very substantial role.  But there again, it's a mixed bag.
They have in some cases, and they haven't in others.  it seems to me
that that series of functions needs to be thought through in the
context of health care reform very seriously because, what we called
in that little report we did on health care reform and infrastructure
issues, less attention is given to those.  They're.likely to go by the
way side because what we do know about the workings of competitive
markets is that the participants in the competitive market try to, to
the extent that they can, isolate themselves from the costs of those
kinds of functions.

     Strickland: Sure, they want to maximize profit.

     Yordy: Because they want to maximize their competitive advantage.
And the extent to which someone else is bearing those costs and
they've figured out a way to crawl out from under them, they're better
off.  And we've done a lot of internal cross- subsidy in the health
business.  And the competitive market, one of the things that the
competitive market is good at rooting out internal cross subsidies.
So, one of the things I'm going to look at the plan with great
interest is how they have dealt with those infrastructure needs.

     Strickland: And for all of us who are interested in health care
reform and the Clinton administration and plus the rising cost of
health care, we wait in anticipation of a plan.  We haven't even seen
it.  I talked to Phil Lee some weeks ago, and it's nowhere near ready
for presentation.  Yordy: When Clinton went and made his presentation
to the governors in which he said some things but not a lot beyond
what we'd sort of heard before.  Then I'd heard, not too long ago,
this notion that they're really aiming to make some sort of public
presentation the later part of September.  Then you read things like
you read in the paper the last few days of these big arguments going
on still, which seem to be around very fundamental issues.

     Strickland: Also, NAFTA is already on the agenda.  Congress is
ready to take it up, and you wonder how he can marshal all of the
resources to support the passage of any other huge proposal.

     Yordy: On the other hand, it's clear that what he's thinking
about doing -- the selling job -- because I got a call from somebody
on the staff of Ira maaaziner, wanting a list of people, sort of
health care leaders because they were going to be convening some
groups and doing the selling thing.

     Strickland: Maybe we should start at the beginning of RMP and
come back.  It is something that I want to get back to.  I don't want
to get too detailed about the origins, except anything you remember
about the federal issues, I think, would be very interesting.  As we
said, one of the ideas was to concentrate on local excellence.  One of
the ideas which was to encourage both the regional medical care,
medical education, medical review entities to cooperate without going
through state structures because they were so conservative.  I don't
want to get bogged down in the history or the debate.  I am
interested, though, in your sense of what the main objectives were and
how you were going to deal with the federal, state, local, university
medical school and medical science center entities.  Was there a
strategy?  Was it an idea that just got implemented as it went along?
Yordy: It was a strategy that, I think, sort of emerged and went
through several phases.  In my recollection, the transformation of the
ideas occurred in fairly rapid sequences.  One of the things that was
happening in those days, as you well know, was how fast things could
happen in contrast to these days.  The core of the phenomenon was the
landslide election in 1964.  The fact is that things moved with
remarkable speed.  I think about this sometimes when I listen to these
and people accuse Clinton of backsliding and so forth, Johnson did
that right and left.  And yet the image of Johnson as this powerful,
effective leader.  He was quite willing to compromise, and RMP is a
nice example of that.  Let me just remember the sequences I recall.
The DeBakey Commission projected these big sort of centers around the
country.  It was a centrifugal kind of notion.  These would be
regional centers which would have to do with heart disease, cancer and
stroke in categorical regional centers.  As some people have said, the
Commission went home and Ed Dempsy stayed around and wrote the bill --
actually Dempsy plus Bill Stewart.  What I recall is really not
engaging very much of the outlines of that but simply playing the
political game of sort of making sure that it happened.

     Strickland: And Dr.  Dempsy at that time?

     Yordy: Was in the position that subsequently became the Assistant
Secretary for Health.  It was still the staff position of special
assistant to the secretary, which went back to the origins of the
department when the AMA insisted there be such a position.  What
emerged out of that and what was presented in the Senate hearings (and
I can even go and document this by looking at the history) was a very
medical school-centered arrangement.  Dempsy actually had some big
chart that he showed in the Senate hearings.  So, rather than the
debating notion sort of categorical regional centers, it switched over
to a network and arrangement that was built around the medical
schools.  It was a very "medical school-centric" kind of view.  He had
a diagram that the medical school in the center and so forth.  In the
interval between the Senate hearings which occurred early in 1965 and
the House hearings which were some months later -- they didn't occur
until the summer -- there was a lot of fuss and fuming and anguish
about that from a variety of sources.  The AMA, of course, didn't like
that because it didn't like the medical schools moving into a broader
concern with medical care in a way that seemed to bypass all the
positions.  Some of the medical schools didn't like it because the
last thing in the world that they wanted to do was to take on that
kind of outreach responsibility.  And I think that there were other
sort of community interests; hospitals and others who were again wary
of this sort of hierarchical kind of structure where the medical
school was sort of the queen bee.  There was a lot machination that
occurred in that period of time to sort of change the orientation and
where this notion of what a law eventually cooperative arrangement.
So, the word cooperative was important.  It wasn't the hierarchical
arrangement with this group up here running everything, but rather
something where a whole set of these interests came together and put
together the RMP.

     Strickland: You were at that time working at NIH for....

     Yordy: What I was doing at that time was that I was running the
legislative office at NIH, and so I got involved with this way back to
the original bill was being written at Christmastime in 1964.  Stew
Sessoms was Deputy Director at NIH at that time.  He was the one that
Shannon sort of turned to be the lead person on this.  And of course,
we were dealing with Dempsy and Bill Stewart, but Bill Stewart was
still down in Dempsy's office.  We were dealing from an NIH
perspective.  Another thing that happened during this interval was the
argument about where the program would be located within the Public
Health Service.

     Strickland: And Shannon at first didn't want it.

     Yordy: Shannon first didn't want it.  Then, I think his basic
attitude was, "Well, this would be worrisome if it was elsewhere.  So,
it's better for us, NIH, to control it rather than have it
freewheeling out there, someplace else."  It wasn't that he really saw
this as a central part of his strategy at NIH, but rather he wanted to
make sure that it didn't go off and create nonsense.  Shannon suffered
through this poorly.  He had some image of some fellows out there in
the state health departments and will start mucking around and telling
medical schools what to do.  The simplest way to avoid that was to
have it at NIH where he could certainly have some say about what went
on.  I don't think that it was anything much more sophisticated than
that.  He said even then -- I remember in some discussion -- already
that some day the program would pass away from NIH. What subsequently
happened in 1968 was something that Shannon already knew, that RMP
would not stay forever a part of NIH. He just wanted to make sure that
it got off ont he right foot.  So NIH played hardball on that.  It was
no contest.  What was embarrassing was that -- it was almost humorous
-- Luther Terry appointed a task force to consider the question of
where should we locate RMP with the Public Health Service.  And the
task force was sort of stacked to make sure.  And it sort of came out
that the answer was NIH. And then one of the NIH people on the task
force voted the wrong way.  And it came out that it would be
elsewhere.  So, Terry had to overrule his own task force.

     Strickland: Who was that?  Yordy: He was guy who worked for Bill
Kissick later on actually.  I can't remember his name.  But anyway,
that was almost a humorous episode because it was so clear that the
political power of the day meant that it was going to be NIH. But
having done that, Shannon and certainly Stew Sessoms were interested
in being able to communicate that this wasn't going to be just another
NIH program which would only send money to the most prestigious and
most elite institutions.  In fact, this was going to be a program
which had a distributional effect.  And the anecdote which I think I
told with Shannon going out to meeting with the people from the four
states in the west that didn't have any medical school?  Who had
written in Idaho, Montana, Wyoming and Nevada.

     Strickland: Nevada has one, but....

     Yordy: The very logical question after the Senate presentation
where Ed on gave his "medical school-centric" view.

     They wrote in and said, "Gee, what does that mean for us?  We
don't have medical schools.  Does that mean that we don't participate
in this program?"  When I tried to indicate that sort of maybe this
report would have some ... we had an RMP. We tried to make sure that
the image and the model of this thing was on this sort of cooperative
distributional kind of notion rather than something which was just
more money for the medical schools who didn't have much money to begin
with.

     Strickland: The transitions in terms of organizational locus
were relatively fast you say.  In fact, if you look at the numbers of
Directors of NIH and Assistant Secretaries and Secretaries in this
brief period when the program ran -- I mean, even just looking at its
organization context it makes you think "this will never work.',
Indeed, it didn't.  And I'm not sure, but there had to be some way to
go from NIH to health services.

     Yordy: It was, of course, especially a triple whammy.  It wasn't
just an organizational shift; remember, there were other aspects to
the organization shift.  The original organization shift -- what
originally happened -- with the creation of the Health Services of
Mental Health Administration in April, 1968, was that the head of
HSMHA was'iob Marston, who took me along with him.  The initial move
was one that was seen as, I think, trying to make that shift one that
would be sort of friendly to RMP. And he told me when he was going
through the organization thoughts that devoted a fair about of
specific attention to that issue.  He was very concerned about what
would happen to RMP. There's some organizational trauma with any move
like that and if you are correct in identifying it.  But there was
evidence that this was done -- and remember this was done in a lame
duck circumstance.  For one thing, in 1968, Lyndon Johnson had
announced that he wasn't going to run again.  We assumed, as Bob
assumed, that this reorganization would not take place and were amazed
when it did.  What we didn't count on was the hyperactivity of Wilbur
Cohen.  Anybody else would have sort of sat back and sort of relaxed.
And Wilbur got in there and was just the crowning moment of his
career.  He looked around for everything to be done that could
possibly be done.  And there was this reorganization plan sitting
there, and he had it occur.  Actually, it's a quadruple whammy.  There
was the organizational shift, there was the fact that then after
having arranged this business with Bob Marston in July 1968 after he
was just getting started and getting more into it, Wilbur offered Bob
the job of being the Director of NIH. Then the third part of the
whammy was by that time you were into the new administration.
Election was taking place and this guy Richard Nixon was going to get
elected.  And the Great Society was in a questionable time, and there
was no leader.  There was acting Director of RMP and acting
Administrator of HSMHA. There was no administrator from the time that
Bob left at the end of the summer to when Joe English was appointed on
January 19, 1969.  So, you had this big period when there was no
leader at HSMHA. So, RMP had gone off into... sort of sitting there
vibrating.  Brand new organization.

     Strickland: But they had their money....

     Yordy: They had money.  They had money.  But then that's the next
item I'm going to mention, the next whammy was even before Nixon got
in office and was relatively hostile to RMP. I'll never forget it.  A
meeting when Stan Olson was recruited to be the Director of RMP, and
Stan came to town full of enthusiasm to do this important thing.  He
and I and Irv Lewis went downtown for a meeting with Jim Kelley,
Comptroller and the Assistant Secretary of the Department.  Jim, as
you know, is a very, very strong guy.  And that meeting was awful.  It
was talking about the future RMP budget.  Jim, who wasn't yet
convinced that RMP was a useful thing, was very negative.  This was
during the transition period, late November or something like that.
Jim was doing what -- and I knew him, he was a good guy, and I admired
him in a lot of ways -- was a classic role -- those were career
positions still, at that point -- which was -- and the term he used in
that meeting -- to protect the options of the new Secretary, the as
yet undesignated new Secretary.  The one way to protect his options is
to make sure that you have been stingy with regard to the budget so
that you've left budgetary room for the new secretary to have
something to do.  Stan Olson left that meeting, in my recollection, in
a state of shock because held come to town, expecting to do this
important thing, called Regional Medical Programs.  He was invited
right before the next administration.  Now, he thought of himself as
not partisan.  That's a phenomenon that you've observed a lot, as I
have, over the years.  People that come to town, all their thinking
about is the substantive job to be done.  And they're saying, "I'm not
political.  I'm not partisan.,, And then, even before held engaged in
the next administration -- that hadn't even happened yet.  Here he was
engaging with the guy who sort of controlled the purse strings of the
department in the interregnum, who clearly was hostile to RMP and was
not about to let RMP to have more money.  Strickland: Had you had any
inkling of Kelley's position before?

     Yordy: Yeah, we'd sort of known.

     Strickland: I mean, he was a comptroller....

     Yordy: It was his job to be skeptical about that kind of thing.
What he was sitting there doing -- and I can understand his point of
view -- was looking at that old Lyndon Johnson trick, which had been
true of RMP and in a lot of other things, which was that you started
programs off at a modest level.  Remember when Johnson was setting up
bills during the Great Society and it was true of original RMP
legislation.  In the outyear authorizations, it said, "such sums as
may be necessary."  So, you'd have an appropriation here of 50 million
or 75 million.  But the intention was that it would get big, but you
didn't specify that.  Kelley, was sitting there --and he knew that
kind of stuff -- and so he was saying' "By God, I'm going to hold
these things down.  I'm not going to let them expand."  Whereas our
assumption was an expansion assumption because the early years had
been the planning grants.  We'd give the first operational grants, and
we kept saying, "This is going to expand.  We're on a path that has
this getting substantially larger," which was what the original
concept was.

     Strickland: Of course.

     Yordy: What Kelley did was cut that off in midstream.

     Strickland: You didn't talk about this in your formal history,
did you?

     Yordy: I don't think I did.  I don't think I told this story.

     Strickland: This is very good.  Because one of my questions -- I
don't want to stop this discussion.  Kelley was such an interesting
guy.  And, of course, he and Shannon got along so well.  Yordy: They
jousted, but they had great admiration for each other.  Strickland:
one of my questions is.... Because some people, the enthusiastic ones,
which there are still a few of, just thought that Nixon just had it in
for RMP from the beginning and that Weinburger set out at the
beginning just to get rid of them, and not that this decision took
part in a course of analysis of what was working, of what was not
working, what was going to be good long-term, what was duplicative;
but that they just decided first off to eliminate it.  And you're
saying then in the first instance of financial restraints were put on,
not by the Nixon administration, but by the Assistant
Secretary/Comptroller in the Johnson administration.

     Strickland: Sure.

     Yordy: Irv Lewis and I, Irv was a very wise person with regard
to the general federal budget.  And one of the things that Irv
understood and taught me in an early stage before it became
fashionable -- and now it's quite normal with regard to discussions of
the federal budget, obviously -- but was the matter of the clash
between entitlement programs and those programs which you budgeted
because Irvls perspective at BOB LOGS important.  Most of us over on
the budgeted side didn't really have that.  So, we said, "There's
Medicare Medicaid over there."  We didn't really realize what was
happening in terms of the total federal expenditure and what that was
going to mean in terms of competition for those funds which were being
budgeted.

     Irv noted a speech that Wilbur Mills made in Arkansas.  I think
it was in the fall of 167.  It was a speech where Wilbur Mills clearly
indicated, a very shrewd guy, that he understood that the guns and
butter clash was really starting to heat up in '167 -- Lyndon Johnson
was not going to be able to have his cake and eat it too.  He was in
some ways progressive and was fairly conservative in some others.  It
was a way of tempering the growth of the Great Society Programs,
without having to be in the position of a frontal attack.

     In other words, the budget crunch from the growth of the
entitlement programs and the Vietnam expenditures was in fact going to
dampen the growth of the Great Society programs just purely on
budgetary grounds.  You wouldn't have to go and say that this was a
bad plan.  You wouldn't have to make that argument.  All you have to
do is say, "We don't have money."  Mills made a speech to an Arkansas
audience in which he sort of said things that sounded like he was
thinking that way.  And Irv noticed it and pointed it out to me.  I
think that Jim Kelley was doing that.  He hadn't been convinced that
RMP was a great thing, but it wasn't that as much as it was that he
really was looking at the budgetary crunch.  Part of that crunch
wasn't just Vietnam; it was those entitlement programs, the health
entitlement programs long about 1968 we were really beginning to see
what they were going to amount to.  And they'd been lowballed to begin
with.  So, from an aggregate government budget point of view, from the
point of view of someone sitting at BOB, whoever was going to be
President, if Hubert Humphrey had been elected President.  He would
have sat down and his budget advisors would have walked in and said,
"Hey, Mr.  President, we've got a hell of a problem here."

     Strickland: You've got to cut it or consolidate it.

     Yordy: We're going to have to do something because it's just not
tenable what we're doing.

     Strickland: So, you would just dismiss the notion that efforts of
Weinburger, Nixon....

     Yordy: They didn't start off being happy about Great Society
Programs.  And I think they started off with a general notion that a
lot of stuff got started loosely in the Great Society.  They were
clearly smart enough -- and they were very smart about these things --
to be aware that this camells nose under the tent in terms of the
budget was an old Lyndon Johnson technique.  You don't necessarily
talk about how much it's going to cost in the outer years.  They
clearly were aware.  By that time I was involved with the planning
process when the next administration came in and we ran this big
planning exercise which ended with a big meeting that we had up at
Camp David.  I remember watching the faces of the new Nixon crew.  By
the way, it was a fairly liberal crew as you recall in the department.
But you had Bob Finch and you had Jack Venneman, really fine people,
whose value structure I was perfectly comfortable with.  And Lew
Butler and people like that.  As the facts of the budget, just what
I've been describing, got laid out.  They were shocked.  Some of the
budgetary people from the department simply laid out.  "Here is
Medicare and Medicaid; here is what Nixon has indicated as his overall
fiscal target.  When you allocate that back to HEW and you subtract
this, there's not any left."  I remember their looking at this in
shock.  They were not unsophisticated people.  But the full magnitude
of what that meant really came home and was one of the inputs into
that statement in the summer of 169 about the health care crisis.

     So, I think those broad fiscal issues are at least as important
as any animus about the programs, although this was a Lyndon Johnson
program.  He was clearly identified with it.  And you can't imagine
that a Republican administration would sit around and be perfectly
happy about it.  They had the same attitude about Hill-Burton.  They
were very negative on Hill-Burton.  It wasn't a Lyndon Johnson
program.  After all, it was passed in 1946, and one of the major
people that got it through the Senate was a guy by the name of Robert
Taft.  It was basically that they did want in a sense modify the
federal role.  They looked askance at the expansionary implications of
what had been in the 160s, but they also had to look at the realities
of the budget.  They could have arrived at any of the same conclusions
even if they hadn't been ideologically, philosophically opposed.
Strickland: Did the same thinking affect their enthusiasm for health
planning, for example?

     Yordy: They were down on health planning.

     Strickland: They were?

     Yordy: Initially.  But then you get to what happened in 174,
which they did participate in.  The administration was involved, and
even though people on the Hill were very instrumental in the Health
Planning Act in 174, which got rid of CHP and RMP and consolidated all
of that into a new program.  There what they did -- if you go back and
look at the history of what happened there -- is turn CHP around from
a part of the social philosophy of the 160s, which was expansionary.
In the new approach, CHPs were, going to go out and define what the
community's health needs were, and then devise ways to meet those
needs.  They turned into much more of a cost- cutting program where
delinquit there had to be a certificate of need in every instance.
What these health agencies were going to do was to make sure that we
didn't have excessive expansion of the capital base.

     Strickland: And peak hospitals six blocks from each other.

     Yordy: It was really a fundamental change in the philosophic
background.

     Strickland: Not an assessment and planning in order to meet
additional needs.

     Yordy: That's right....

     Strickland: To make sure, instead, that you're conserving
resources.

     Yordy: Absolutely.  So that was where the Administration went
with regard to this activity.  And by that time, health care cost were
starting to rise as an issue and that had been what had been the
health strategy notions in 170 and 171.  That's what lead to the
revision of the health planning program in 1974, because Medicare and
Medicaid were starting to eat the budget alive.  Those are factors
that would have had to have been dealt with in some way regardless of
the philosophic bent.  The fact that they didn't much like the Johnson
programs was just an extra little thing.  I think the notion that some
of the RMP people had, that somehow they were out to get it, I think
is an oversimplification of what was going on.

     Strickland: The Californians were particularly upset about
that....

     Yordy: And Paul Ward, of course, to some extent personalized that
to the extent that it made it different that was probably justified.
That is, to the extent that Paul was doing some arguing on the other
side clearly would have been an irritant to Cap Weinburger, let along
Richard Nixon.  Because after all, Paul knew both of them, had jousted
with both of them.  Paul was the coordinator of the California RMP. He
was or either became available to become the coordinator because his
boss, namely Pat Brown, had gone undefeated.  He was the Head of the
Department of the Health of Welfare for the State of California, the
creator of that super department.  Prior to that time, when Pat Brown
was first elected Governor he was Pat Brown's principal legislative
assistant, he was the principal imagant for Pat Brown in the state
legislature.  And Paul was an organizer for the teacher's union in
California in prior years.  He was a political activist for Pat Brown.
Paul could regale you -- and indeed, he did - - with great stories
about encounters with Nixon and encounters with Weinburger.  I heard
those stories from Paul in the late sixties and early seventies before
the demise of RMP became such an issue.

     Strickland: Even after Elliot Richardson became Secretary and
was basically sympathetic there were problems.  He certainly didn't
bring in any particular ideological bias to his view of RMP. It wasn't
very big, and he kept getting asked it.  And he kept getting asked
first by OMB to justify the additional request for funds.  He had a
hard time.... After six or eight years of effort there was nothing
that he could cling to with assurance that.had really changed anything
fundamental or anything big or anything.... There were no statistics.
Heart disease hadn't really come down.  A few emergency medical funds.
But there was not corpus of accomplishment that permitted him to, that
made it even sensible to try to wage a battle internally within the
administration.  This was when Elliot was Secretary, and Cap, I guess,
was still Director of OMB. So, maybe Cap, again, didn't have a
personal animosity.

     Yordy: My only comments about Paul were that -- to the extent --
as indeed, happened -- Paul was leading the charge to save RMP, that
was not a neutral fact with Cap Weinburger who clearly identified Paul
as a political enemy of past years in California.  And Nixon did too.
And Paul knew this.  And he had had many a political battle with
Nixon.  He was a political operative of Pat Brown.  And I'm a great
admirer of Paul.  He's a great guy.  But I know all these stories
because I heard him tell them.

     Strickland: Do you know where he is by the way?  I've read
everything that he's written about it, but he's somebody I should talk
to.

     Yordy: He is, I think, in very poor health....

     Strickland: Did you keep up with RMP after the early events of
the Nixon Administration?

     Yordy: I was there through the creation.  Then, my role in 168,
obviously, changed.  But I stayed concerned because then I was aware
from another vantage point.  The comments I made about the perceptions
of the Nixon administration.  I was the Head of Planning and
Evaluation for HSMHA for four years, 168-172.  In those years, I had
oversight over RMP as well as CHP as well as a zillion other things
that were HSMHA. And my boss for the first part of that was Joe
English.  Joe, of course, came from a very different environment.  He
looked on RMP, I think, with a -- you could ask Joe himself what he
thought about it.  I always thought that he recognized --Joe was
politically fairly astute -- that RMP as linked to a series of forces
that he didn't want to gratuitously irritate.  It was not the kind of
thing that was close to his heart, community activist stuff.  He was
certainly not an antagonist to RMP.

     Strickland: I did ask him about that.  He tends to think of RMP
as another vehicle to do things for people.

     Yordy: And he did.  He talked that way, and I think he meant it.
I think what he liked about RMP was that it did established linkage
between the great power of the academic medical center and the broader
health needs of the community.  If you go back in the history of
health centers, that's actually the way health centers began.  They
actually sprang off of universities.  Watts was started by USC.
Columbia Point was started by Tufts.  A lot of that neighborhood
health center activity sprang off of people who were university based.
So, I think Joe had an instinctive notion that anything you could do
to get these lead institutions more engaged with the community was a
good thing.  And RMP was the only sort of mechanism he had around to
do that.  I don't think Joe had finely developed conceptional sense of
where all of this was heading.  It was a very pragmatic matter.

     Strickland: Your experience dates from the very beginning,
wrapped in the legislation to 172.  So, by 172, did you have a sense
of which programs were really working and which ones were struggling?
Everybody said, beginning with Don Lindberg, "Missouri was a great
program."  People say, "Washington State was a good program."  Which
ones would you offer?

     Yordy: I think that the ones that tended to be the most
successful were those they really did view this as an opportunity, as
contrasted with those who said, "Here's a bunch of money and we'd
better get in here an grab it.  We'd better do something because if we
don't someone else will."  They tended to be state medical schools,
typically when they were the only state medical school or, at least,
dominant in that particular sphere.  ones which had some or another
prior indication that they really were trying to think about what they
would do for the broader community.  It didn't make them suddenly
think about that; they'd already been thinking about how they could do
that.  And then they said, "Gee, here's this thing.  We ought to
figure out how that can help us.11 So schools like Missouri and like
Washington were places that really did try to think about, "Well, what
are we doing to the people of the State of Washington."

     Strickland: North Carolina seems to be....

     Yordy: North Carolina was one of those.  In North Carolina,
there was more of a cooperative effort among several different
schools, which is a more complex model that the ones that I've
described elsewhere.

     Strickland: Well, what about California?  I mean, Roger Burns
says, "Good program in southern California."

     Yordy: I think California was a mixed bag.  It partially was
mixed because it had....

     Strickland: Well, California is a mixed bag.

     Yordy: ... it had a very complex structure.  As you know, you
could have thought in the concept of what we originally talked about
in terms of regions which were sort of natural medical care regions
and not necessarily geopolitical boundaries.  You would have logically
thought of California as several.  California made a great point of
not wanting it to be totally fractionated, and therefore, came up with
a complex scheme.  They had a sort of experimental attitude that we
had in the early stages of the program we went along with which was
they divide the state into these areas so that you would have a
conglomerate RMP which had a state overarching structure.  Then you
had these areas doing their thing within that.  I think that -- they
clearly, what could be true of a lot of places -- a lot of good things
got done.  What makes it difficult to make the kind of case that
somebody like Elliot tries to think in sort of conceptual terms about
things is that what happened is extremely discord.  You had Jack
Weinburg sitting out at the Bermadda RMP thinking the thoughts that
eventually became the famous Jack Weinburg work on small area
variation analysis which has been one of the forces that's been a
powerful force for changing the way people thought about the American
outcare system.  Jack began that when he was the RMP coordinator.

     Strickland: on the other hand, you have the State of Florida
with RMP money, implementing its first emergency medical service
program throughout the state.  Totally different.

     Yordy: One of the difficulties of making of some of these
coherent experiences is that what you had in RMPs was essentially an
activating force which allowed whatever interests and motivations were
there to pursue those.  It didn't really emerge as something with a
kind of clear, targeted focus that would make it possible to go out
and do a classic evaluation.  So what did you do about this?  The
other thing was that in some sense and I think that I said some of
this on my earlier tape we never really did find out what RMP could do
because this budget crunch that I was describing began early in the
program.  During those whole four years that I was around at the HSMHA
level, we had the budget crunch.  It got more intense as the years
went by so that the idea that RMP would be a very substantial, major,
national force was never realized budgetarily.  People had started
plans, assuming that's what it would become.  In a sense, it was an
attenuated.

     Strickland: No one had a chance.

     Yordy: No one had a chance.  Not to say that it wouldn't have
been a good thing, but we will never know whether it would have been
or not.  Then, in addition to the budget being attenuated, they began
to do this business with flailing around with its mission and adding
these very specific things.  Somebody would say, "There's something we
would like to do.  Well, we don't know quite what to do with RMP.
Let's give that to RMP." It was sort of helter-skelter, adding these
bits and pieces, and these signals kept going to RMPS. So, there was
this inchoate strategy where -- it was big enough to begin with -- but
then rather than clarifying as it went along, which was the idea that
Bob Marston had at the beginning.  It went in the opposite direction.
This was to merge with greater clarity as we refined it with
experience.  Instead, it kept getting more splintered and always under
a budget constraint and fighting at the barricades.  From 1970 on,
there was really this sense that it might be our last year.  I tend to
view it as -- in sort of a grander sense -- a grander effort where it
got this brave beginning, and before it could ever start to get its
feet under it, all of these other kinds of things happened.  And from
then on, it was essentially a rear-guard action.  Yet in the midst of
this, a lot of good things got done.

     Strickland: I guess what's remarkable about it to me is that, in
fact, in some cases, there were really truly regional cooperative
arrangements.  That's amazing.

     Yordy: It seems to me that that's where it begins to see some
current meaning.  And that is, in fact, one of the challenges of
health care reform.  How essentially the public good functions get
carried out relate to that.  The delivery of the specific personal
service to somebody is essentially a local activity; you're going to
get it financed by whatever scheme we decided to finance it.  That is
not what I'm talking about.  That's going to go on one way or another.
But the question of how the infrastructure is arranged before that
takes place, it seems to me, is a big issue.  When you have a system
that has some of the characteristics that this one has, the notion of
the classic pre-market model operating just doesn't apply.