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American Medical Association meeting centers on defunct Sunbeam deal

December 8, 1997

DALLAS (AP) _ Doctors at an American Medical Association conference Sunday denounced an aborted AMA endorsement deal with Sunbeam Corp. and debated whether to call for an outside investigation.

At stake, many doctors said, is the future of the AMA’s reputation, which they believe has been called into question because of the deal to endorse Sunbeam’s health care products.

The organization has tried to withdraw from the deal, prompting Sunbeam to sue the AMA for $20 million.

The AMA House of Delegates consists of 475 member-physicians who represent all 50 state medical societies. They are conducting their biennial meeting in Dallas.

Thomas Reardon, the chairman of the AMA board of trustees who has been under fire since word of the Sunbeam deal became public, said the board was unaware of the deal and contended it was orchestrated at a lower level.

However, he said, ``the board has done everything in its power to correct what was a serious mistake,″ Reardon said. ``The board accepts full responsibility.″

Reardon also denied allegations that the AMA was seeking deals with private companies to make up financial shortfalls resulting from declining membership.

He told a committee at the annual meeting of the AMA House of Delegates that the board has taken steps to repair whatever damage the AMA’s reputation has suffered because of the Sunbeam controversy.

Among them, he said, are a moratorium on any new business deals until the AMA board sets clear policies to govern them, a prohibition against the use of the AMA’s name or logo in product or service endorsements, and requests for the resignations of three senior AMA executives.

Reardon identified those executives as Kenneth Monroe, chief operating officer; Larry Jellen, vice president of marketing; and James Rappel, vice president of business.

Dr. P. John Seward resigned as executive vice president Friday, accepting partial responsibility for the arrangement. It was unclear whether he was asked to step down, although Seward called the agreement with Sunbeam ``a serious mistake.″

Sunbeam officials could not be reached for comment Sunday.

The committee will submit several resolutions to the board for a vote Tuesday. Among the resolutions is a call for Reardon’s resignation.

Another resolution calls for an internal investigation, while another demands an outside company be hired to look into the matter.

``We elect officials. We should trust those officials until there is no reason not to,″ said Dr. David Holly of California. ``I have seen no evidence that the board has not tried to correct the mistake.″

But others criticized the idea that an internal investigation would be enough, especially in a time of declining AMA membership.

``How smug of us to think it can be over because we say it’s over!″ said Dr. Michael Pekas, a delegate from South Dakota.

Debate of the Sunbeam deal has dominated discussions at this week’s meeting, which usually centers on controversial medical topics.

In August, Seward announced a five-year deal with the AMA for the organization to give a ``seal of approval″ to such home health-care products as humidifiers and blood pressure monitors. Under the exclusive arrangement, the AMA was to receive millions of dollars in royalties, although it had no plans to test the products.

The AMA, which previously had steered clear of large endorsement deals and carefully protects its family-doctor image, announced a week later it would back out of the deal.

The 150-year-old AMA is the nation’s largest organization of physicians, representing just over 40 percent of the nation’s doctors.

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