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Executive Summary

AMERICAN HOSPITAL SUPPLY CHAIRMAN BAYS' VISIT TO THE WHITE HOUSE on Oct. 16 came during a week in which the Administration began interviews of a short list of candidates to become HHS Secty. Bays, a willing candidate for the job, met with Chief of Staff Donald Regan and other White House officials as one of a reported six finalists for the position being vacated by Margaret Heckler who is leaving to become Ambassador to Ireland. Bays' proven ability to successfully manage a large corporation could be one qualification Regan, whose background is also in the business community, is looking for. One of the key factors leading to Heckler's forced resignation was the belief by Regan and the White House staff that Heckler did not have the management skills needed to effectively run the dept. Bays' corporate management experience plus his knowledge of the health system may make him one of the favorites among the final candidates to become secretary. However, Bays' affiliation with a corporation that is directly affected by HHS policies could complicate his candidacy. While he would bring to the job an insider's knowledge of health care issues, Bays would have to be careful that policy decisions have no appearance of conflict of interest. This could lead him to distance himself from some industry-supported initiatives, which might under another Secty. have a good chance of succeeding. Among the other candidates on the final list, former Indiana Governor Otis Bowen followed Bays to the White House for interviews on Oct. 17. Bowen is being strongly supported by the Indiana congressional delegation, particularly GOP Sen. Quayle ("The Pink Sheet" Oct. 14, T&G-11. Bowen, an MD, is also said to have the support of the American Medical Assn. Former California Health & Welfare Dept. Secty. David Swoap, one of the early favorites to succeed Heckler, informed the White House during the week that he is not interested in the position. Swoap is setting up a private consulting firm in California and Washington, and decided that his business plans took priority over further govt. service. Other candidates considered to be among the final group include: Los Angeles physician Tirso del Junco, who is also supported by AMA; SmithKline Pharmaceuticals Div. President James Cavanaugh, who has close ties to the administration and worked with the Reagan health transition team in 1980; Rita Ricardo Campbell, PhD, of California's Hoover Institute, who was considered for the top HHS job when Richard Schweiker was selected; and Project HOPE Director William Walsh.

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