concurred, that the presentations were generally uninformative to the members because witnesses were speaking for public consumption. The lack of value of this kind of procedure discouraged them from holding additional public sessions. While labor and management members were chosen to assure that key interests in the industry would have a voice on the Committee, gradually their representative functions broadened and smaller firms and unions recognized them as representatives and informally funneled complaints, opinions and ideas through them.

For the purpose of assuring at least grudging acquiescence to the Program, it was decided to have these representatives participate in hammering out regulations in final form. This participation would lead to a greater understanding, because each regulation reflected a compromise among legitimate interests and the rules were not merely a blind attempt of naive bureaucrats to achieve unrealistic aims. The knowledge of the process and the assurance that all viewpoints were being expressed filtered down and eased the fears of the broader constituency.

Evaluating the utility of FIAC, Dr. Fedor stated that at least 50 percent of the value of the Committee was in the informal contacts it facilitated. Although CLC officials could and did consult with a variety of industry spokesmen who were not Committee members, the Committee format promoted especially good relations with members, as individuals. As a result, a rapport was built which allowed Fedor to contact members informally to obtain quick-reaction expert opinion on key price and supply issues. This cooperation included providing staff assistance from members' organizations-especially in obtaining their reaction to reporting mechanisms and selective control mechanisms such as the meat ceiling. These consultations gave the Council the opportunity to obtain reasonably accurate advice on the likely impact of regulatory changes and to take steps to close loopholes in the regulations.

One of the key problems entcountered at various stages of the Committee's life was convincing the members that their advice was being seriously considered. Because members were making a considerable investment of time and prestige in the Committee, they needed some asurance that they would not be used as "window dressing." Director Dunlop and Kenneth Fedor offered them assurance that there was no pre-existing grand scheme of food controls, and that their ideas would receive full consideration. This problem became especially acute in early 1974 when the decontrol scheme recommended by the Committee was not implemented by the CLC because the wage portion of the plan posed problems for the Food Industry Wage and Salary Committee, which was reviewing wage settlements. The failure to adopt its plan was especially important because of the efforts and interest Committee members had devoted to it; for them, decontrol was the issue. Frustration stemming from the fact that Committee members were being ignored on the decontrol issue, a lack of interest in non-decontrol matters, and the uncertainty of the legislative basis for the Program's continuation all contributed to the Committee's inactivity during the last months of Phase IV.

HEALTH INDUSTRY ADVISORY COMMITTEE

Background and Purpose

Although the Committee on Health Service Industry (CHSI) was abolished at the end of Phase II, the creation of the Health Industry Advisory Committee

(HIAC), announced as part of the Phase II program, effectively continued the Program's commitment to deal with the health sector with the advice of industry representatives. Throughout the Phase III planning effort, the plans called for a committee such as HIAC, differing from CHSI in composition and in that it could rely on a substantially stronger staff to generate policy proposals to be reacted to and evaluated by Committee members rather than depending, as did CHSI, upon member initiation of policy ideas.

The purpose of the Committee, as stated in the charter, was to "Provide advice to the Cost of Living Council on the operation of the Economic Stabilization Program in the health industry and other matters relating to health care expenses." Specifically the aim was to assist in the transformation of short-term Phase II health regulations into controls designed to work on a longer-range basis. A further concern (which because of the termination of the Program in April, 1974, was never fully addressed) was to provide advice about what the Federal government could do to change policies in the health area-e.g., regarding the operation and payments of the medicare system-and to convince the private side of the industry to focus on improved payment mechanisms. Through the implementation of such changes, it was hoped that long-term infiationary pressures could be reduced.

In choosing Committee membership, the objective was to assemble a group which could provide the Council with:

• Intellectual capability and knowledge of the issues to provide the best possible reactive sounding board for staff-generated policy proposals and to provide ideas of its own.

• Leadership to facilitate implementation of the controls porgram.

• Access to technical specialists in the health sector.

Based on these general considerations, it was felt necessary to include broad representation from the recognized industry leadership, as well as from providers of health care, payers (including insurers), and labor, doubling as consumer representatives. It was clear that not every facet of the health industry could be represented; for example, the final Committee did not include representatives of the nursing home sector or the biomedical research areas.

After a lengthy search process, James Hodgson, former Secretary of Labor during the first Nixon term, was selected to be the chairman. Among other considerations, Director Dunlop was looking for someone with no strong bias toward any particular facet of the health care system. While Hodgson's health care experience had included supervision of employee benefits at Lockheed and support of OSHA while at Labor, neither of these assignments had diminished the freshness of Hodgson's viewpoint or created a bias (or suspected bias) that would have interfered with his Committee role. Additionally, Hodgson's status as an ex-Cabinet officer made him a powerful and effective spokesman for what was to be the second stage of the Committee's work-suggestions for change within the Federal health establishment.

Committee Operation

Once the decision that the Committee be created was announced, the most sigsificant obstacle HIAC encountered was in transforming the plans for the body into a functioning reality. It was necessary to bring aboard an Executive Director for the Committee, to acquire a staff, select committee members, fill the important Chairman's slot, and obtain internal and external clearances to hold

a first meeting. As a result, the Committee, officially established in early winter, did not hold its first meeting until early summer.

While the full Committee met only eight times, a substantial portion of its detailed work was conducted by working groups functioning as subcommittees. The use of these groups had been planned by the CLC Office of Health prior to the start up of Committee operations. The initial focus was on the creation of a health controls structure that would be workable over the long-term, in order to replace the existing short-run Phase II controls. The two working groups were created to deal with the technical aspects of specific problems:

(1) Acute Institutional Care (Hospitals)

(2) Non-Institutional Care (Practitioners)

In additon to these two areas, a third topic of concern was the application of stabilization regulations to long-term institutional care-basically, nursing homes. While the Phase II CHSI had divided its Committee groups into only two parts-institutional and non-institutional-it was felt that the problems of long-term care differed from acute care issues and, in fact, were sufficiently specialized to merit independent consideration.

The purposes of these working groups were several. First they would divide the workload and focus the individual competence of members on the particular topics where their views were likely to be most useful. Second, by reducing the size of the groups (the full committee, for various reasons, having been enlarged even further), they would encourage frank, "shirt sleeves" work. A related problem in this regard was in structuring each group's membership so that they would work more closely.

Of the working groups created, the acute institutional care (hospital) group proved to be most useful in terms of the number of the options evaluated and the complexity of problems faced, and in providing feedback on how the Phase II controls had worked in practice. The issues presented to the non-institutional (physicians) group were fewer and less complicated than those faced by the acute care group. As a result, the physicians' care group met less often and completed its tasks more quickly.

In alloting places on the working groups, primary considerations were focusing the expertise of individual members, keeping the groups small, and providing for good interpersonal dynamics. As a result of the interaction of these factors, some Committee members were not assigned a subcommittee slot. One key HIAC staff member reported that some excluded members complained; however, another observer believed that no members were seriously annoyed by the situation. If the latter statement is correct, the relative informality of subcommittees operaation may have been an important moderating factor.

A substantial portion of each of the full Committee's initial sessions was open to the public. A variety of reasons were mentioned in explanation of this decision. First, there was an awareness that such procedure would be in compliance with statutory requirements. Second, openness would serve to enhance public awareness of the Committee's functions and perhaps contribute to public education on the issues which the Committee was discussing. Third, this procedure would help to allay any mistrust or suspicion aimed at a group working behind closed doors. Finally, whether the Committee meeting was open or closed, members were required by circumstances to play certain roles, because members knew their positions would be reported to their constituencies one way or another. The practical result was that the reduction in the candidness of discussion in open session was perhaps less critical than with other committees. At least one

member claimed not to have shared those inhibitions, and reported that some closed gatherings were useful in allowing ideas to be presented without being identified as the official positions of one or more of the constituencies represented. In any case, there is no evidence that members were wary of speaking freely in working group sessions.

The relative roles of Committee and health staff were substantially different in Phases III and IV from those prevailing in the Phase II Committee on Health Services Industry. The CHSI staff numbered only four or five initially with basically support roles, since, at least early in CHSI deliberations, members' staffs developed the issues and suggested options. In Phase IV, the much larger staff (approximately 25) produced numerous reports on various aspects of the health control program. But while the CLC health staff was basically the architect of the Phase IV regulations, the design of which members were expected to comment on and criticize, Committee members did, at staff invitation, present position papers suggesting alternative controls methods. Thus the Committee was not limited to a "reactive" role.

Presentation of issues over the course of its operations for Committee consideration generally followed a logical sequence. Initial papers on the scope of coverage were succeeded by more focused papers on particular control methods, and gradually narrowed down to consider the finer details in each particular option. In addition to discussion of controls methodology, background papers provided an array of data on health care inflation. Committee or sub-group reactions were solicited on every major policy issue related to controls. The Chairman would introduce each issue, and the members would provide their comments. While an attempt was made to reach consensus on each policy issue, voting to determine a majority position was avoided; members represented a variety of constituencies, some of them closely aligned, and there was no sensible way of determining the value of a single or bloc vote. Instead, the Chairman would solicit the reactions of each member to the question at hand, then categorize or summarize the group's positions.

FOOD INDUSTRY WAGE AND SALARY COMMITTEE

Background and Purpose

With food left under mandatory wage and price controls in Phase III, the Council found it necessary to review each wage settlement in the food sector. It became immediately evident that some institutional mechanism would have to be created to offer technical advice to the Director on the impact of these settlements. The ad hoc way in which the decisions had been made in Phase II by the staff, a staff which did not have the benefit of any technical advice, had disrupted traditional wage relationships in certain areas, and Dr. Dunlop believed it was necessary to assure that those distortions did not continue in Phase III. In addition, certain Phase II decisions were to be re-evaluated, and there was a backlog of undecided Phase II cases to be resolved. Further, it was decided that the Council needed advice on the development of and changes in wage policy in the food sector; and Dr. Dunlop knew from his experience with earlier programs that participation by the parties was essential in a mandatory controls situation.

The Food Industry Wage and Salary Committee's (FIWSC) charter, dated March 20, 1973, set out the following objectives:

(1) Review all food industry wage and salary cases filed before January 11,

1973, and advise on the disposition of these cases under Phase II regulations.

(2) Review all new food industry wage and salary cases filed since January 11, 1973, and advise on the disposition of these cases under existing regulations.

(3) Advise the Cost of Living Council and the Labor Management Advisory Committee relative to wage stabilization policies which are necessary to meet the special problems of the food industry (and its various branches) within the general framework of wage stabilization policies.

(4) Cooperate with labor and management organizations in the food industry which operate under collective bargaining agreements and with appropriate government agencies to facilitate the settlement of disputes in 1973 within stabilization policies and to encourage longer-run dispute settlement machinery and procedures.

(5) Work with labor and management organizations in the food industry under collective bargaining agreements to improve the structure and performance of collective bargaining in the industry.

The Committee inferred from the charter that its role encompassed consideration of both union and nonunion cases.

Another unspoken, but certainly important, reason for creation of the Committee was to involve both labor and management representation in the decisionmaking process and by their participation give the wage stabilization program a legitimacy that woud deflect criticism from the Economic Stabilization Program, minimize strikes, and provide a springboard for longer-term cooperation. As with CISC, it was hoped that the Committee's function of encouraging responsible collective bargaining in the industry could be continued by a similar body, operating under private auspices, after the termination of the Program.

Committee Operation

Dr. Albert Rees of Princeton was chosen as chairman of the Committee with the balance of the membership drawn from labor, management, and the public by Dr. Dunlop to assure that these interests were equally represented. The Committee considered mainly exceptions cases-that is, requests by employees (or sometimes by employers) to put into effect agreed wage increases that exceeded the 5.5 percent standard. In addition, the Committee considered Pay Board challenges and "party at interest" challenges to existing contracts. Actually, as initially applied, the regulations required all adjustments-even those not exceeding the standard-to be examined.

FIWSC made use of an elaborate subcommittee system to analyze, review and screen cases before they came to the full Committee. After an initial "costing" review, and later analyses by the food staff of the Office of Wage Stabilization, a case was presented to a "task force" of the Committee which was comprised of at least one management and one labor member (but often a larger number of each), together with a staff representative. Labor and management representatives were rotated periodically. If the task force made a unanimous recommendation on a particular case, the recommendation, in summary form, was sent directly to the full Committee. Almost without exception, the Committee approved the recommendations, though the vote of any one member could remand the case to the subcommittee. Over 95 percent of the cases resolved by the Committee, other than through the expedited procedure, were considered in detail only by the task force.