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EXHIBIT 3


Confidential Memorandum - Scanned Document at: http://selfincrimination.kaiserpapers.org/secretdeal.html#march9

March 9,1993

To: Nora Burgess, M.D.
Assistance Chief, Cardiovascular Surgery


From: Doug P. Grey, M.D.
Assistant Physician-in-Chief

cc: Phil Madvig, M.D. Physician-in-Chief

These are the minutes from our meeting last night. I have discussed them with Phil Madvig, M.D., who is in full agreement.
Please convey these thoughts to your fellow department members

On March 8. at 5. P.M.. I met with Drs. Burgess. Flachsbart, Richter, and Moores.  This meeting was scheduled to obtain organized feedback regarding the function of the new Cardiovascular Surgery departmental policy regarding assisting Dr. McEnany with his cases.
It was apparent that there was some misunderstanding regarding conclusions of our previous meeting (February 26) with their group Dr. Madvig, and the anesthesiologists.

The issue over which there was a difference of opinion was whether their assistance of Dr. McEnany during his scheduled operations constituted "proctoring" or "assisting", the difference being which surgeon would prevail if there were a difference of opinion regarding the conduct of the operation.

It was clarified at the meeting of March 8:

1.There is not clear departmental unanimity regarding what is required of their role: i.e., as a surgical assistant or as a proctor

2.One surgeon feels so adamant about not assisting Dr. McEnany that he will perform one of Dr. McEnany's cases as an extra          case to off load the department of this burden.

3.The balance of the cardiovascular surgeons will assist Dr.McEnany in the role of an assistant, with the exception that if an              decision occurs during the conduct of the operation that the assisting surgeon deems could jeopardize the outcome of the              operation, then the assisting surgeon may seek an opinion from a third member of his or her department as a "tie breaker" .

4.Dr. Grey will communicate this agreement with Dr. Madvig

5.This process is not an experiment of a new practice style for Dr. McEnany. but rather a temporary solution to potentially reduce      the situations where Dr. McEnany exposes himself (and subsequently, the patient) unnecessarily to problems by doing                  complex operative procedures with inadequate assistance. This process will need continual assessment and may require    
   possible refinement, but we all agree that we must allow the process to continue as expediently as possible. 
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FEB-12-1998 11:35

The Permanente Medical Group, Inc.
2200 O'Farrell Street
San Francisco, California 94115-

Douglas P. Grey, M.D. - Assistance Physician-In-Chief

James S. Breivis, M.D. - Assistance Physician-In-Chief

May 3, 1993

Summary or Format tor Assisting Dr, McEnany during Practice Review Meeting held April 21,1993 at 2200 O'Farrell, 6th floor Conference Room.

Attending were Dr. Madvig, Dr. Grey, and the members or the Department or Cardiovascular Anesthesia and Cardiovascular Surgery
(Drs. Burgess, Flachsbart, RIchter, and Moores)


1. The attending assistant surgeon is to be paged when the patient is undergoing induction of anesthesia; the operating room nurses will be asked to do thls once communication wtth Dr. McEnany has taken place.

2 The attending assistant surgeon shall be tn the hospItal buildIng (2425 Geary), tn scrubs, and available at any time once the patient has undergone induction of anesthesIa.

3. Dr. McEnany can ask at any time for the assistant attending surgeon to be paged to scrub; this is, however, to take place no later than when the patient is beIng given the heparin in preparation for cannulation. Dr.McEnany wiII initiate thIs request.

4. Dr. McEnany may cannulate the patient once the attending assistant surgeon is scrubbed and at the table. If the case is, a redo,. the attendIng assistant surgeon shall be scrubbed before the sternum split.


5. Once the patient is stable, the pacing wires and chest tubes are in place, and the operation has come to a point when the sternum will be closed, the attendIng assistant surgeon may leave. The second assistant - will then be called to help complete the closure.




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The Law Offices of Freeman And Galie

507 Polk Street, Suite 350
San Francisco, California 94102


Kenneth L. Freeman
David M. Galie

June 18, 1993

VIA FAX (510) 987-4185

W. William Petrick, Esq.
Vice President and General Counsel The Permanente Medical Group, Inc.
1950 Franklin Street --- Oakland, CA 94612-2998

Re: M. Terry McEnany, M.D.

Dear Bill:

As we recently discussed, Dr. McEnany is intending to submit his resignation from The Permanente Medical Group effective September 10, 1993. However, before he actually does so, we would like to reach agreement on a number of related details.

One issue involves a definite understanding that the practice review wiII be terminated upon submission of Dr. McEnany's resignation. Related to this is that no reports will be filed with any agencies concerning Dr. McEnany.

Another issue involves the non-disclosure of Dr. McEnany's file in the future. We are concerned about the factual content of the case summaries and some of the other information generated to date, to which Dr. McEnany has responded in writing. We need to reach an agreement that all of this information will remain confidential.

Finally, there is the matter of an agreed upon letter of reference/recommendation should one be needed at any time in the future. Dr. McEnany and I have discussed the possible language ot such a letter:

"M. Terry McEnany, M.D., was a member of The Permanente Medical Group, Inc., from July 1, 1982 through September 30, 1993. Dr. McEnany was recruited by TPMG in 1982 to begin a Regional Cardiovascular Surgical Program at the San Francisco Kaiser Permanente Medical Center. This was accomplished with,great success and the service grew steadily to expected 850 open-heart operations in 1993. For six or seven years, from 1986 through 1992, this program had the lowest surqical mortality rate for coronary artery bypass surqery in the State of Califorrnia. Dr. McEnany served as Chief of the Department ot Cardiovascular Surgery tor his entire tenure at TPMG.  Dr. McEnany left TPMG in 1993 to start up a new cardiovascular surgical program for the Mayo Clinic Regional services at the Luther Hospital in Eau Claire, Wisconsin, as a member of the Midelfort Clinic Ltd."

Based on our recent discussions, I believe that resolving these issues relates more to form than substance. I will be on vacation trom June 19 through July 5. Please consider these issues during my absence, if possible, so that we can reach an agreement when I return.

Thank you tor your courtesy and cooperation.

Sincerely,

Kenneth L. Freeman


KLF-/kmr
cc. M. Terry McEnany, M.D.

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The Permanente Medical Group, Inc.
1950 Franklin Street
Oakland, California 94612-2998
Telephone -(501) 987-2782  Telecopier (510) 987-4185

June 25, 1993  
Received: JUN 28,1993

Ken Freeman Freeman and Galle
507 Polk Street Suite 310
San Francisco. CA 94012

Re: Terry McEnany, MD

Dear Ken:

I have discussed the issues raised in your letter·with Dr. Madvig. In general, we have no problem with your suggestions except for a few minor changes. Let me address each matter specifically.

First, we feel that, in the interest of accuracy, the letter of reference for Dr. McEnany should read as follows: 

"M.Terry McEnany, MD. was a member of The Permanente Medical Group, Inc. from July 1, 1982 through September 30, 1993. Dr. McEnany was recruited by TPMG in 1982 to begin a Regional Cardiovascular Surgery program at the San Francisco Kaiser Permanente Medical Center. This was accomplished with great success and the service grew steadily to an annual volume of 850 open heart operations by 1993. The program was noted for its low overall surgical mortality, which was consistently among the lowest  of all California hospitals performing coronary artery bypass surgery.  Dr. McEnany was Chief of the department of Cardiovascular Surgery until he left TPMG in 1993 to start up a new Cardiovascular Surgical program for the Mayo Clinic Regional services at the Luther Hospital in Eau Claire, Wisconsin as a member of the Midelfort Clinic, Limited,"

Second, as I have told you, we will terminate the practice review of Dr. McEnany upon submission of Dr. McEnany's written resignation and its acceptance by the TPMG Board of Directors. We reserve the right to engage in normal quality assurance activities in the department which, by necessity, would include Dr. McEnany's practice.

Third, we agree that we will not file any report with any external agency concerning Dr.McEnany based on events that have occurred to date.

Fourth, we will agree to keep all of the quality assurance information which has been gathered to date regarding Dr. McEnany's practice confidential.  We will not include it in his personnel file and we will not disclose it to anyone outside of TPMG except as required by legal process.

Ken, I want to thank you for your cooperation in what could have turned out to be a very difficult matter.  If possible, we would like to have Dr. McEnany's letter of resignation to present for acceptance at our July 8, 1993 Board of Directors meeting.  If you have any problems concerning any of the above, please let me know.

Very truly yours, .

W. William Petrick
Vice President and Legal Counsel


cc: Phil Madvig, MD.
W. Harry Caulfield. MD, "

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