Since 2007, we have been writing about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians. The RUC has been accused of setting up incentives that strongly favor invasive, high technology procedures while disfavoring primary care and other "cognitive medicine." Despite the central role of (perverse) incentives in raising health care costs while limiting access and degrading quality, there was surprisingly little discussion about the pivotal role played by the RUC until the formation of the "Replace the RUC" movement (see post here).
Recently, the leaders of Replace the RUC scored a journalistic coup by putting the current list of RUC members publicly on-line. As we have discussed, previously the membership of this committee was kept very obscure, although the committee argued it was not exactly secret.
Some Google searching suggests one possible reason that the RUC was in no hurry to disclose its own membership. It appears that many of the RUC members have significant conflicts of interest with respect to their roles as de facto setters of the rates at which physicians are paid by the government.
The RUC Members and Their Financial Relationships
Below is the list of the current RUC membership (from this link), and relevant conflicts of interest obtained by Google searching. Note that for each member, I first give the name, affiliation relevant to the RUC, location, and first year of membership as provided by the link above. Then I list relevant financial relationships that appear to present conflicts of interest.
- Barbara Levy, MD
Chair, RVS Update Committee
Federal Way, WA 2000
Consultant/Advisory Boards: Conceptus; AMS; Covidien; Halt Medical; Gynesonics; Idoman Medical (hysteroscopic surgery and sterilization, endometrial ablation, electrosurgery, vaginal hysterectomy) per UptoDate
- Bibb Allen, Jr., MD
American College of Radiology (ACR)
Birmingham, AL 2006
- Michael D. Bishop, MD
American College of Emergency Physicians (ACEP)
Bloomington, IN 2003
- James Blankenship, MD
American College of Cardiology (ACC)
Danville, PA 2000
Lecture fees from Sanofi-Aventis per New England Journal of Medicine
- Robert Dale Blasier, MD
American Academy of Orthopaedic Surgeons (AAOS)
Little Rock, AK 2008
- Joel Bradley, MD
American Academy of Pediatrics (AAP)
Brentwood, TN 2008
Medical Director, Americhoice by UnitedHealthcare, per AAP conference brochure
- Ronald Burd, MD
American Psychiatric Association (APA)
Fargo, ND 2006
- William F. Gee, MD
American Urological Association (AUA)
Lexington, KY 2010
Member, Physician Advisory Board, Aetna per Aetna
- John O. Gage, MD
American College of Surgeons (ACS)
Pensacola, FL 1991
- David F. Hitzeman, DO
American Osteopathic Association (AOA)
Tulsa, OK 1996
- Peter A. Hollmann, MD
CPT Editorial Panel (AMA/CPT)
Providence, RI 2003
Medical Director, Blue Cross and Blue Shield of Rhode Island, per RI Medical Society
- Charles F. Koopmann, Jr., MD
American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS)
Ann Arbor, MI 1996
- Robert Kossmann, MD
Renal Physicians Association (RPA)
Santa Fe, NM 2009
Member of Advanced Renal Technologies Advisory Board, Network 15 Medical Advisory Board, Baxter Home Dialysis Advisory Board, Fresenius Medical Advisory Board per Renal Physicians Association
- Walter Larimore, MD
American Academy of Family Physicians (AAFP)
Colorado Springs, CO 2009
- Brenda Lewis, DO
American Society of Anesthesiologists (ASA)
Cleveland, OH 2009
- J. Leonard Lichtenfeld, MD
American College of Physicians (ACP)
Atlanta, GA 1994
Member, Physician Advisory Board, Aetna per Aetna
- Scott Manaker, MD, PhD
American College of Chest Physicians (ACCP)
Philadelphia, PA 2010
Consultant to Pfizer and Johnson and Johnson. Owns stock in Neose Technologies, Pfizer, Johnson & Johnson, and Rohm and Haas per Chest
- Bill Moran, MD
Practice Expense Review Committee
Oklahoma City, OK 2000
- Guy Orangio, MD
American Society of Colon & Rectal Surgeons (ASCRS)
Atlanta, GA 2009
- Gregory Przybylski, MD
American Association of Neurological Surgeons (AANS)
Edison, NJ 2001
Stock Ownership: United Healthcare (300 shares); ... Scientific Advisory Board: United Health Group (B, Spine Advisory Board) per NASS meeting
- Marc Raphaelson, MD
American Academy of Neurology (AAN)
Leesburg, VA 2009
personal compensation for activities with Jazz Pharmaceuticals and Medtronics as a speakers bureau member or consultant per AAN
- Sandra Reed, MD
American College of Obstetricians and Gynecologists (ACOG)
Thomasville, GA 2009
GlaxoSmithKline Consulting, $1750 in 2009, $1500 in 2010 per ProPublica Dollars for Docs search through here
- Daniel Mark Siegel, MD
American Academy of Dermatology (AAD)
Brooklyn, NY 2003
Vivacare Dermatology Advisory Board, 2006 – present. Photomedex Scientific Advisory Board, 2006-present, Ad Hoc consultant to ClickDiagnostics, per Encite CV
DermFirst-Shareholder, Logical Image – Consultant, Vivacare - Consultant per MOHS Surgery
- Lloyd S. Smith, DPM
Health Care Professionals Advisory Committee
Bethesda, MD 2007
- Peter Smith, MD
Society of Thoracic Surgeons (STS)
Durham, NC 2006
Eli Lilly, Consulting, $1500 in 2009, $1990 in 2010 per Pro Publica Dollars for Docs search through here
Advisor or consultant to Bayer per Medscape
- Susan Spires, MD
College of American Pathologists (CAP)
Lexington, KY 2007
- Arthur Traugott, MD
American Medical Association (AMA)
Champaign, IL 2006
- James Waldorf, MD
American Society of Plastic Surgeons (ASPS)
Jacksonville, FL 2008
- George Williams, MD
American Academy of Ophthalmology (AAO)
Royal Oak, MI 2009
Advisory Team, RetroSense Therapeutics
Shareholder and consultant for ThromboGenics Ltd. and holds intellectual property on the use of plasmin per Review of Opthamology
Alcon Laboratories, consultant, lecturer; Allergan, consultant, lecturer; Macusight, consultant, equity owner; Neurotech, consultant; Nu-Vue Technologies, equity owner, patent/ royalties; OMIC- Ophthalmic Mutual Insurance Company, employee; Optimedica, consultant, equity owner; Thrombogenics, consultant, equity owner per AAO meeting
Pfizer, “Professional Advising,” $5534 in 2009 per Pro Publica Dollars for Docs search through here
Summary
There you have it. A substantial proportion, almost half, 14 of 29 members of the RUC have financial relationships with pharmaceutical companies, biotechnology companies, device companies, companies that directly provide health care, and health care insurance companies.
As we have noted in our previous discussions of the RUC, that committee has been accused of being the de facto controller of how the US government pays physicians. In that role, it has been accused of favoring procedural care rather than cognitive or primary care by increasing the relative financial incentives for the former over the latter. This may be one of the most important reasons for the expensive, high-technology, procedural-heavy style of care in the US, which has likely been a major driver for increasing costs, declining access and stagnant quality.
It seemed obvious that a committee dominated by a majority of physicians who perform procedures would tend to favor bigger financial incentives for procedures. But now it appears the committee also includes a substantial number of people who work part-time or have ownership interests in companies that also stand to benefit from increasing use of procedures. Procedures drive increased consumption of drugs, supplies and devices, and lead to larger revenue for hospitals and clinics. Thus these financial relationships could reasonably be suspected of even further distorting the committee's decision-making in favor of procedures.
I was surprised how many RUC members have financial ties to health care insurance companies. Such companies are not usually thought of as beneficiaries of high-technology, procedural care. However, if one conceives of their revenue as a percentage of health care costs, perhaps they are. Furthermore, one can only wonder if the links between the RUC and health care insurance companies have anything to do with how such companies have apparently unquestioningly adapted the RBRVS system controlled by the RUC?
The prevalence of conflicts of interest among RUC members highlight the need for a more accountable, transparent and honest system to manage how the government pays physicians, and a need for more transparency and accountability in the relationship among the government, health care insurance, and physicians.
As we have previously noted, there are still many unanswered questions about the RUC:
- How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.
- Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?
- How did the RUC become de facto in charge of this process?
- Why does the AMA [keep the membership of the RUC so opaque, and] give no input into the RUC process to its general membership?
- Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?
- Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?
Stay tuned, maybe these will be answered in our life-times....
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Why Would Directors of Health Care Corporations Push for Bigger Pensions for Academic Administrators?
We recently posted about 36 well-paid top executives in the University of California system, including leaders of medical schools, academic medical centers, and public health, who threatened a lawsuit if their pensions were not increased according to what they claim was a promise made to them in 1999.
Riddle me this: why would a group of directors of for-profit corporations that provide health care goods and services. plus a director of a leading biotechnology trade group, and the director of a leading mutual fund family band together to support this demand, thus to push for bigger pensions for these top managers of the University of California system?
Here is a list of the directors, and their corporations:
- Mark R Laret, director of Varian Medical Systems and Nuance Communications Inc, which provides numerous health care products
- Dr David Feinberg, director of OSI Systems, whose Spacelabs Healthcare subsidiary manufactures medical devices
- Steven C Currall, director of Leadership in Medicine Inc, which claims to be a leading provider of intelligence about key opinion leaders (KOLs) in medicine and health care. Its web-site asserts, "IF YOU NEED TO KNOW who are the most prominent, admired, and influential actors in healthcare, how they are interconnected, and why, you need our expertise. Given how vastly complex are the relationships among providers, researchers, and other significant actors in healthcare, it is vital to focus on key opinion leaders (KOLs) at local, regional, and global levels, and to understand the ties among them." (Note that we have often discussed how KOLs function as stealth marketers for pharmaceuticals and devices.)
They joined:
- Robert S Sullivan, PhD - director of BIOCOM, whose web-site asserts it is the" largest regional life science association in the world, representing more than 550 member companies in Southern California."
- Richard K Lyons, director of iShares, a leading provider of mutual funds.
The answer is simple. All the corporate directors listed above are also members of the group of 36 litigious executives. See their name on the list of 36 here in the San Francisco Chronicle.
- Mark R Laret, director of Varian Medical Systems and Nuance Communications Inc, which provides numerous health care products, is also CEO of UCSF Medical Center.
- Dr David Feinberg, director of OSI Systems, whose Spacelabs Healthcare subsidiary manufactures medical devices, is also CEO of the UCLA Hospital System
- Steven C Currall, director of Leadership in Medicine Inc, which claims to be a leading provider of intelligence about key opinion leaders (KOLs) in medicine and health care, is also Dean, and Professor of Management of the University of California - Davis Graduate School of Management.
Robert S Sullivan, PhD - director of BIOCOM, whose web-site asserts it is the" largest regional life science association in the world, representing more than 550 member companies in Southern California, is also Dean of the University of California - San Diego Rady School of Management.
- Richard K Lyons, director of iShares, a leading provider of mutual funds, is also Bank of America Dean and Professor of Business, University of California - Berkeley Haas School of Business.
Their inclusion within the larger group seems ironic, at best. As corporate directors, they have outside income and have accumulated assets that will likely keep them out of poverty in their old age. For example, Mr Laret had accumulated the equivalent of 37,168 shares of Varian, and was paid $267,300 a year for his services according to the company's 2010 proxy statement.
Furthermore, for those who directly lead health care institutions, Mr Laret and Dr Feinberg, their memberships on the boards of health care corporations, which imply fiduciary responsibilities to the companies and their stock-holders, conflict with their duties as leaders of academic health care to uphold teaching, research and patient care. Dean Currall's responsibilities to an organization which seems entirely dedicated to helping drug, device, and biotechnology companies turn health care professionals and academics into stealth marketers at least seems unseemly given that his school is part of a university which also includes a medical school and academic medical center.
Since our earlier post, it appears that the University of California president will not accede to the demands of the 36, as noted in the San Francisco Chronicle. Their demands have continued to provoke outrage. A recent discussion in Inside Higher Ed interviewed Emeritus Professor Helen Henry, a member of the University's Academic Senate, who posited:
Five of the university leaders demanding higher pensions for themselves have responsibilities as directors of corporations that may conflict with their academic institutions' missions, while these corporate positions ought to insulate them from financial concerns about their retirement. This corroborates Prof Henry's notion that they see themselves as businesspeople whose role is separate from, and not necessarily supportive of the university mission.
I disagree, however, with Prof Henry's implication that the University has to live with such a split among its leadership. People who lead academic institutions have a primary responsibility to support the academic mission. Their goals should not be to maximize profits, much less to enrich themselves. Letting academia, and academic medicine be lead by leaders out to make money and line their own pockets will lead to just that, but hardly better teaching, research, and patient care.
Riddle me this: why would a group of directors of for-profit corporations that provide health care goods and services. plus a director of a leading biotechnology trade group, and the director of a leading mutual fund family band together to support this demand, thus to push for bigger pensions for these top managers of the University of California system?
Here is a list of the directors, and their corporations:
- Mark R Laret, director of Varian Medical Systems and Nuance Communications Inc, which provides numerous health care products
- Dr David Feinberg, director of OSI Systems, whose Spacelabs Healthcare subsidiary manufactures medical devices
- Steven C Currall, director of Leadership in Medicine Inc, which claims to be a leading provider of intelligence about key opinion leaders (KOLs) in medicine and health care. Its web-site asserts, "IF YOU NEED TO KNOW who are the most prominent, admired, and influential actors in healthcare, how they are interconnected, and why, you need our expertise. Given how vastly complex are the relationships among providers, researchers, and other significant actors in healthcare, it is vital to focus on key opinion leaders (KOLs) at local, regional, and global levels, and to understand the ties among them." (Note that we have often discussed how KOLs function as stealth marketers for pharmaceuticals and devices.)
They joined:
- Robert S Sullivan, PhD - director of BIOCOM, whose web-site asserts it is the" largest regional life science association in the world, representing more than 550 member companies in Southern California."
- Richard K Lyons, director of iShares, a leading provider of mutual funds.
The answer is simple. All the corporate directors listed above are also members of the group of 36 litigious executives. See their name on the list of 36 here in the San Francisco Chronicle.
- Mark R Laret, director of Varian Medical Systems and Nuance Communications Inc, which provides numerous health care products, is also CEO of UCSF Medical Center.
- Dr David Feinberg, director of OSI Systems, whose Spacelabs Healthcare subsidiary manufactures medical devices, is also CEO of the UCLA Hospital System
- Steven C Currall, director of Leadership in Medicine Inc, which claims to be a leading provider of intelligence about key opinion leaders (KOLs) in medicine and health care, is also Dean, and Professor of Management of the University of California - Davis Graduate School of Management.
Robert S Sullivan, PhD - director of BIOCOM, whose web-site asserts it is the" largest regional life science association in the world, representing more than 550 member companies in Southern California, is also Dean of the University of California - San Diego Rady School of Management.
- Richard K Lyons, director of iShares, a leading provider of mutual funds, is also Bank of America Dean and Professor of Business, University of California - Berkeley Haas School of Business.
Their inclusion within the larger group seems ironic, at best. As corporate directors, they have outside income and have accumulated assets that will likely keep them out of poverty in their old age. For example, Mr Laret had accumulated the equivalent of 37,168 shares of Varian, and was paid $267,300 a year for his services according to the company's 2010 proxy statement.
Furthermore, for those who directly lead health care institutions, Mr Laret and Dr Feinberg, their memberships on the boards of health care corporations, which imply fiduciary responsibilities to the companies and their stock-holders, conflict with their duties as leaders of academic health care to uphold teaching, research and patient care. Dean Currall's responsibilities to an organization which seems entirely dedicated to helping drug, device, and biotechnology companies turn health care professionals and academics into stealth marketers at least seems unseemly given that his school is part of a university which also includes a medical school and academic medical center.
Since our earlier post, it appears that the University of California president will not accede to the demands of the 36, as noted in the San Francisco Chronicle. Their demands have continued to provoke outrage. A recent discussion in Inside Higher Ed interviewed Emeritus Professor Helen Henry, a member of the University's Academic Senate, who posited:
the debate as part of a fundamental philosophical disagreement within the university. The signatories to the letter, many of whom are based in medicine or management, have a different view of the university than faculty from other disciplines, she said.
'I don’t think there’s any question but that there are these two different mindsets that are fighting for what the university should be. It’s transparent in this letter,' said Henry, a professor emeritus of biochemistry at the Riverside campus. 'They are running businesses. But there are those of us that don’t feel this is what the university should be.'
'This is absolutely a manifestation of that clash between the people who see UC as their business … and the people who see UC’s mission as teaching, and research and service to the state. That’s a dual personality that the university always has to live with.'
Five of the university leaders demanding higher pensions for themselves have responsibilities as directors of corporations that may conflict with their academic institutions' missions, while these corporate positions ought to insulate them from financial concerns about their retirement. This corroborates Prof Henry's notion that they see themselves as businesspeople whose role is separate from, and not necessarily supportive of the university mission.
I disagree, however, with Prof Henry's implication that the University has to live with such a split among its leadership. People who lead academic institutions have a primary responsibility to support the academic mission. Their goals should not be to maximize profits, much less to enrich themselves. Letting academia, and academic medicine be lead by leaders out to make money and line their own pockets will lead to just that, but hardly better teaching, research, and patient care.
Exactech Settles, Its Regional Sales Director Pleads Guilty
The march of legal settlements by health care organizations continues. Here is a curious story in two parts. The first part was reported in the most detail by the Gainesville (FL) Sun:
What did Exactech do to wind up in this pickle? It is not really clear. The article noted:
One can get a little better idea of what was going on by seeing what changes the company agreed to make:
The article went out of its way to say:
Meanwhile, however, a short article appeared in the Parsipanny (NJ) Daily Record:
So, while Exactech did not admit to any wrong-doing, one of its mid-level managers admitted to apparently just the sort of wrong-doing of which the company was accused. If that manager was only a lone loose cannon, why would the company have been pushed to change how it uses surgeon consultants, and why would it need "support" for "a corporate culture that will not tolerate kickbacks as business as usual?"
Nonetheless, only that one mid-level manager admits he did anything wrong. If anyone else did anything wrong, who they were, and what they did remains unclear, hidden within a swirl of legalese. Maybe unethical practices occurred, and maybe the new deferred prosecution agreement will prevent further unethical practices, but who can tell?
If anything unethical did happen, there seems to no longer be any mechanism in health care to find out and do something about it.
This case appears to be a good example of how language can be tortured by legalistic parsing that avoids the fundamental ethical problems that now plague health care. As Dr Bernard Carroll posted recently, "legalistic charges and defenses are not the right way to go in exposing and ejecting bad actors from our field," because this approach "favors the bad actors, who flaunt their constitutional protections with the taunt, prove it." Instead, as Dr Carroll implied, the standard in health care should require more than just avoiding felony convictions.
Even though the current case is small in monetary terms, it is a marker of unethical behavior. The ongoing parade of legal settlements and criminal pleadings and convictions involving health care organizations, when viewed in its entirety, should convince professionals and policy-makers that health care is undergoing an ethical meltdown.
The fines imposed by the settlements have never been large enough to be more than costs of doing business, and hence are unlikely to change behavior. The legalistic approach has not resulted in more than a few people who authorized, directed, or implemented the bad behavior that lead to the settlements paying any personal penalties. If we want the bad behavior to stop, we clearly need some other way to deter it. Until we come up with one, expect it to continue, and to continue driving up costs, driving down access, and making patients' outcomes worse.
Gainesville-based Exactech must pay $3 million and submit to a year of federal monitoring under a settlement to avoid prosecution on charges that resulted from an investigation into whether orthopedic implant manufacturers were paying kickbacks to surgeons to use their products.
The company announced the deferred prosecution agreement Tuesday after three years of an expanded federal probe.
The U.S. Attorney's Office for the District of New Jersey agrees not to prosecute charges of conspiracy to violate federal anti-kickback laws if the company avoids any violations for a year.
What did Exactech do to wind up in this pickle? It is not really clear. The article noted:
What the U.S. Attorney calls kickbacks Exactech calls consulting fees to surgeons to help develop better products — a common practice in the medical product field.
One can get a little better idea of what was going on by seeing what changes the company agreed to make:
Exactech will continue using surgeons as consultants, but under a more rigorous process that verifies that the work is needed, tracks the surgeons' work and pays them fairly.
The article went out of its way to say:
In accepting the agreement, Exactech does not admit to any wrongdoing and the U.S. Attorney acknowledges that the company's conduct did not hurt patient health or patient care.
Meanwhile, however, a short article appeared in the Parsipanny (NJ) Daily Record:
A salesman from Chester pleaded guilty to conspiring to violate a federal anti-kickback statute by entering into illegal financial deals to get surgeons to use his company's products, the US Attorney's Office said Tuesday.Note that probably because this case was small in monetary terms, reporting about it was fragmented and brief, making it very difficult to get a sense of what really was going on.
Douglass Donofrio, 45, director of sales for Exactech Inc.'s northeast region, entered his guilty plea Tuesday before District Judge Garrett E. Brown in Trenton.
Exactech, a publicly traded, Gainesville, Fla.-based national manufacturer and distributor of orthopedic implant devices and supplies, simultaneously agreed to 12-month deal with the justice department to federal monitoring.
'This is a reasonable resolution, giving Exactech credit for positive steps it has taken while requiring continued reform and compliance to avoid more serious consequences,' acting U.S. Attorney Gilmore Childers said in a statement released by his office. 'The agreement does not erase the past, but supports a future corporate culture that will not tolerate kickbacks as business as usual. Unlawful consulting relationships compromise the integrity of our healthcare system, and we will continue to hold institutions and individuals accountable who are willing to put profits over patients.'
Exactech is charged in a criminal court complaint with conspiring to violate the federal anti-kickback statute.
The complaint alleges that from 2002 through late 2008, Exactech entered into consulting agreements with certain orthopedic surgeons — deals which were designed and implemented, in part, to induce the surgeons to use, and cause the purchase of, Exactech's hip and knee reconstruction and replacement products, according to Childers' office.
So, while Exactech did not admit to any wrong-doing, one of its mid-level managers admitted to apparently just the sort of wrong-doing of which the company was accused. If that manager was only a lone loose cannon, why would the company have been pushed to change how it uses surgeon consultants, and why would it need "support" for "a corporate culture that will not tolerate kickbacks as business as usual?"
Nonetheless, only that one mid-level manager admits he did anything wrong. If anyone else did anything wrong, who they were, and what they did remains unclear, hidden within a swirl of legalese. Maybe unethical practices occurred, and maybe the new deferred prosecution agreement will prevent further unethical practices, but who can tell?
If anything unethical did happen, there seems to no longer be any mechanism in health care to find out and do something about it.
This case appears to be a good example of how language can be tortured by legalistic parsing that avoids the fundamental ethical problems that now plague health care. As Dr Bernard Carroll posted recently, "legalistic charges and defenses are not the right way to go in exposing and ejecting bad actors from our field," because this approach "favors the bad actors, who flaunt their constitutional protections with the taunt, prove it." Instead, as Dr Carroll implied, the standard in health care should require more than just avoiding felony convictions.
Even though the current case is small in monetary terms, it is a marker of unethical behavior. The ongoing parade of legal settlements and criminal pleadings and convictions involving health care organizations, when viewed in its entirety, should convince professionals and policy-makers that health care is undergoing an ethical meltdown.
The fines imposed by the settlements have never been large enough to be more than costs of doing business, and hence are unlikely to change behavior. The legalistic approach has not resulted in more than a few people who authorized, directed, or implemented the bad behavior that lead to the settlements paying any personal penalties. If we want the bad behavior to stop, we clearly need some other way to deter it. Until we come up with one, expect it to continue, and to continue driving up costs, driving down access, and making patients' outcomes worse.
BLOGSCAN - Medtronic's Multi-Million Dollar Payments to Spine Surgeons
Starting in 2007, we discussed the huge payments made by four medical device companies to orthopedic surgeons and medical organizations related to the use of hip and knee prostheses. (See post here with links backward.) Payments, in the millions of dollars per year range, went to surgeons including noted academics, and leaders of the main orthopedic physicians' society. Payments went to medical schools, teaching hospitals, and professional societies. Many of these financial relationships were not disclosed, and the disclosures that were made rarely indicated the amounts involved.
Now the Wall Street Journal reports millions being paid to spine surgeons by Medtronic in connection with devices used in spinal fusion. See Dr Howard Brody's discussion here on the Hooked: Ethics, Medicine, and Pharma blog, and also Felix Salmon's discussion here on the Felix Salmon blog.
What seems lacking is a clear rationale for any payments, much less for payments of the sizes listed. The WSJ article cited a Medtronic spokesperson, "surgeons' device-development work goes beyond mere consulting when the company deems that they are contributing valuable intellectual property to a product. But that intellectual property doesn't necessarily have to be patented." The reporters found, "search of spine-device patents awarded to the Norton surgeons turned up about a dozen total for Drs. Puno, Johnson, Campbell and Dimar, most owned by companies other than Medtronic. The search turned up no patents for Dr. Glassman." So what intellectual property that was not or could not be patented could be worth millions a year?
Now the Wall Street Journal reports millions being paid to spine surgeons by Medtronic in connection with devices used in spinal fusion. See Dr Howard Brody's discussion here on the Hooked: Ethics, Medicine, and Pharma blog, and also Felix Salmon's discussion here on the Felix Salmon blog.
What seems lacking is a clear rationale for any payments, much less for payments of the sizes listed. The WSJ article cited a Medtronic spokesperson, "surgeons' device-development work goes beyond mere consulting when the company deems that they are contributing valuable intellectual property to a product. But that intellectual property doesn't necessarily have to be patented." The reporters found, "search of spine-device patents awarded to the Norton surgeons turned up about a dozen total for Drs. Puno, Johnson, Campbell and Dimar, most owned by companies other than Medtronic. The search turned up no patents for Dr. Glassman." So what intellectual property that was not or could not be patented could be worth millions a year?
The Boards Who Ought to be Accountable for the Misbehavior of Health Care Corporations
I recently posted about the multiple conflicts of interest affecting a university health sciences leader. While he was supposed to be running a medical school and an academic medical center, he was also responsible for the stewardship, as a board member, of three health major health care corporations, and a food and beverage corporation (whose products have bearing on nutrition and public health.) .
This one case suggested how pervasive are conflicts of interest affecting the people at the top of health care leadership in the US, and also how such conflicts may be associated with problems for all the organizations involved. The story originally came to my attention because students were demonstrating against the lavish compensation given the health sciences leader at a time of university cutbacks, suggesting that university leaders were paying more attention to their own enrichment than to the mission of the university. At the same time, one of the corporations which he was stewarding (Genzyme) had to shut down a factory because the extremely expensive drug it was producing was found to be impure and adulterated, while its CEO continued to be compensated lavishly. The other corporation (Medtronic) had to settle litigation accusing it of manufacturing defective products for hundreds of millions of dollars, while its CEO again continued to be compensated lavishly.
So I thought it might be interesting to see who are the other stewards of these troubled corporations. I consulted the official biographies of their board members from their 2010 proxy statements (Genzyme here, Medtronic here). I looked for board members who also held leadership positions in other health care organizations whose interests may not be aligned with the two corporations of interest. I also looked for those who held leadership positions in the discredited financial services corporation who helped usher in the global financial collapse.
The specifics of what I found follow.
Genzyme
Genzyme had 10 directors in 2010. The following directors had relationships of interest:
- Douglas A Berthiaume is "Chairman of the Children's Hospital (Boston) Trust Board, a member of the Children's Hospital board of trustees, and a Trustee of the University of Massachusetts Amherst Foundation." Children's Hospital is a teaching hospital. The University of Massachusetts includes a medical school.
- Robert J Bertolini "retired from Schering-Plough Corp following its merger with Merck & Co in November, 2009." Schering-Plough was a large pharmaceutical company now combined with Merck to form an even larger company.
- Gail K Boudreaux "has served since May 2008 as an Executive Vice President of United Health Group Incorporated." Also, "she serves on the board of directors of America's Health Insurance Plans...." UnitedHealth is one of the US' largest health insurance/ managed care corporations. Incidentally,it has frequently misbehaved, as can be seen in this set of posts. AHIP is the health insurance corporations' trade associations.
- Robert J Carpenter "is Chairman of Hydra Biosciences Inc... He is also a trustee of the Immune Disease Institute, a non-profit institute affiliated with Children's Hospital in Boston...."
- Charles L Cooney "is a director of India-based Biocon Limited, a biotechnology healthcare company."
- Victor J Dzau MD (discussed in the earlier post) is "Chancellor for Health Affairs and President and Chief Executive Officer of Duke University Health System...." He "sits on the board of directors of Pepsico Inc, Anylam Inc, Medtronic Inc, and the Duke University Health System."
- Senator Connie Mack III is "Chairman Emeritus of the parent board of the H. Lee Moffitt Cancer Center and Research Institute...." He also is director of "EXACT Sciences Corporation and Moody's Corp." EXACT Sciences is a biotechnology company that develops diagnostic test technology. Moody's Corp is a financial ratings agency whose lax ratings of financial derivatives, perhaps arising from conflicts of interest produced by payments from the producers of the derivatives, have been implicated as a major cause of the global financial collapse.
- Richard E Syron was from "January 2004 to September 8, 2008 ... Chairman and Chief Executive Officer of the Federal Home Loan Mortgage Corporation, commonly referred to as Freddie Mac...." Freddie Mac as bailed out and taken over by the US government when he departed, or was forced out. Freddie Mac, was a "government-sponsored enterprise," (GSE) one of another group of companies whose enthusiastic participation in securitizing dubious mortgages was implicated as a major cause of the global financial collapse.
- Henri A Termeer (CEO of Genzyme) is a "director of Massachusetts General Hospital, a board member of Partners HealthCare, and a member of the board of fellows of Harvard Medical School."
So the box score for Genzyme's 10 directors: six have leadership positions at teaching hospitals, academic medical centers, medical schools or their parent universities (some such institutions are lead by more than one Genzyme director). Seven have leadership positions in other drug, device or biotechnology corporations. One have leadership positions in health insurance/ managed care corporations. Two had or have leadership positions in discredited financial services corporations that were implicated in the global financial collapse.
Medtronic
Medtronic had 11 directors in 2010. The following directors had relationships of interest:
- Richard H Anderson "was Executive Vice President of UnitedHealth Group Incorporated." As above, UnitedHealth is a health insurance/ managed care corporation.
- Victor J Dzau (see above) is "Chancellor for Health Affairs at Duke University and President and Chief Executive Officer of the Duke University Health System." He is "a director of Alnylam Pharmaceuticals Inc, ... PepsiCo Inc, and Genzyme Corporation." (See discussion above.)
- James T Lenahan "served as President of Johnson & Johnson from 2002 until June 2004...." He is "director of Telecris Biotherapeutics Inc, Alton Pharma Inc and Imacor Inc." Johnson & Johnson is a large drug, device, and biotechnology company. Telecris, and Alton Pharma are biotechnology pharmaceutical companies. Imacor is a medical device company.
- Denise M O'Leary "is a director of Lucille Packard Children's Hospital and Stanford Hospitals and Clinics." Also, "she was a member of the Stanford University Board of Trustees from 1996 through 2006, where she chaired the Committee of the Medical Center...."
- Robert C Pozen is "an advisor to Gelesis Inc." Gelesis is a biotechnology company.
- Jack W Schuler "has been a director of Stericycle Inc since March 1990...." He is a "director of Quidel Corporation and Elan Corporation plc...." Stericycle company disposes of medical waste, including that produced by medical devices. Quidel is a biotechnology and (medical diagnostic) device company. Elan is an multinational biotechnology and pharmaceutical company.
So the box score for Genzyme's 11 directors is: Two have leadership positions at teaching hospitals, academic medical centers, medical schools or their parent universities (some such institutions are lead by more than one Genzyme director). Ten have leadership positions in other drug, device or biotechnology corporations. One has a leadership position in health insurance/ managed care corporations. None had or have leadership positions in discredited financial services corporations that were implicated in the global financial collapse.
Summary
Just to summarize the sorts of conflicting interests these relationships suggest.
Teaching hospitals and medical schools are supposed to provide unbiased teaching, including about issues relevant to drug and device corporations, such as choice of diagnostic strategies and treatments, and relevant health policy. They are supposed to perform unbiased research, including research that evaluates drugs and devices. They are supposed to provide the best possible patient care at a reasonable cost, which relates to choices of and prices paid for drugs and devices.
Other drug, device, and biotechnology corporations may be producing, or developing products that compete with those of the index corporations.
Health insurance companies ostensibly try to control costs and improve quality in part by reducing excess utilization and bargaining down prices of drugs and devices.
So this limited case study of the boards of directors, that is, the ostensible stewards of two health care corporations, selected because they have a common member who is the leader of a large medical school and academic medical center, and which both have histories of poor management or ethical missteps showed - that the leadership of health care organizations is incredibly interrelated, interlocked, incestuous.
This gave an example of how pervasive are the conflicts of interest that affect all kinds of health care organizations. Companies that ought to be competing have interlocked directors. Companies that ought to be negotiating at arms length have interlocked directors. Not-for-profit academic medical institutions have leaders who are also directors of companies whose drugs their patients may take, whose devices their patients may receive, whose insurance their patients may buy, and whose products and services they may teach about and evaluate through clinical research and policy research.
This also gives an example of how the failed culture of finance may be linked to the culture of medicine and health care. Some of the stewards of health care organizations were also the stewards of financial services corporations whose reckless, if not arrogant, greedy and amoral leadership is widely believed to have caused the global financial collapse and our ongoing economic problems.
Finally, this suggests how top leaders of various health care organizations may be more familiar with and identify more with each other than with their organizations, their organizations' missions, and their organizations' professionals, staff, students, clients, and patients.
What is to be done?
I strongly believe that there needs to be much more investigation, academic, journalistic, and perhaps legal, of the identity, nature, and culture of the leaders of health care, and their relationships. A few bloggers cannot do it all. Obviously, the anechoic effect mitigates against medical and health care academics looking into their own leaders. However, failing to understand who is leading our march to the brink of health care failure ought not to be something such academics would want on their conscience.
Finally, and obviously, health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research.
If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.
This one case suggested how pervasive are conflicts of interest affecting the people at the top of health care leadership in the US, and also how such conflicts may be associated with problems for all the organizations involved. The story originally came to my attention because students were demonstrating against the lavish compensation given the health sciences leader at a time of university cutbacks, suggesting that university leaders were paying more attention to their own enrichment than to the mission of the university. At the same time, one of the corporations which he was stewarding (Genzyme) had to shut down a factory because the extremely expensive drug it was producing was found to be impure and adulterated, while its CEO continued to be compensated lavishly. The other corporation (Medtronic) had to settle litigation accusing it of manufacturing defective products for hundreds of millions of dollars, while its CEO again continued to be compensated lavishly.
So I thought it might be interesting to see who are the other stewards of these troubled corporations. I consulted the official biographies of their board members from their 2010 proxy statements (Genzyme here, Medtronic here). I looked for board members who also held leadership positions in other health care organizations whose interests may not be aligned with the two corporations of interest. I also looked for those who held leadership positions in the discredited financial services corporation who helped usher in the global financial collapse.
The specifics of what I found follow.
Genzyme
Genzyme had 10 directors in 2010. The following directors had relationships of interest:
- Douglas A Berthiaume is "Chairman of the Children's Hospital (Boston) Trust Board, a member of the Children's Hospital board of trustees, and a Trustee of the University of Massachusetts Amherst Foundation." Children's Hospital is a teaching hospital. The University of Massachusetts includes a medical school.
- Robert J Bertolini "retired from Schering-Plough Corp following its merger with Merck & Co in November, 2009." Schering-Plough was a large pharmaceutical company now combined with Merck to form an even larger company.
- Gail K Boudreaux "has served since May 2008 as an Executive Vice President of United Health Group Incorporated." Also, "she serves on the board of directors of America's Health Insurance Plans...." UnitedHealth is one of the US' largest health insurance/ managed care corporations. Incidentally,it has frequently misbehaved, as can be seen in this set of posts. AHIP is the health insurance corporations' trade associations.
- Robert J Carpenter "is Chairman of Hydra Biosciences Inc... He is also a trustee of the Immune Disease Institute, a non-profit institute affiliated with Children's Hospital in Boston...."
- Charles L Cooney "is a director of India-based Biocon Limited, a biotechnology healthcare company."
- Victor J Dzau MD (discussed in the earlier post) is "Chancellor for Health Affairs and President and Chief Executive Officer of Duke University Health System...." He "sits on the board of directors of Pepsico Inc, Anylam Inc, Medtronic Inc, and the Duke University Health System."
- Senator Connie Mack III is "Chairman Emeritus of the parent board of the H. Lee Moffitt Cancer Center and Research Institute...." He also is director of "EXACT Sciences Corporation and Moody's Corp." EXACT Sciences is a biotechnology company that develops diagnostic test technology. Moody's Corp is a financial ratings agency whose lax ratings of financial derivatives, perhaps arising from conflicts of interest produced by payments from the producers of the derivatives, have been implicated as a major cause of the global financial collapse.
- Richard E Syron was from "January 2004 to September 8, 2008 ... Chairman and Chief Executive Officer of the Federal Home Loan Mortgage Corporation, commonly referred to as Freddie Mac...." Freddie Mac as bailed out and taken over by the US government when he departed, or was forced out. Freddie Mac, was a "government-sponsored enterprise," (GSE) one of another group of companies whose enthusiastic participation in securitizing dubious mortgages was implicated as a major cause of the global financial collapse.
- Henri A Termeer (CEO of Genzyme) is a "director of Massachusetts General Hospital, a board member of Partners HealthCare, and a member of the board of fellows of Harvard Medical School."
So the box score for Genzyme's 10 directors: six have leadership positions at teaching hospitals, academic medical centers, medical schools or their parent universities (some such institutions are lead by more than one Genzyme director). Seven have leadership positions in other drug, device or biotechnology corporations. One have leadership positions in health insurance/ managed care corporations. Two had or have leadership positions in discredited financial services corporations that were implicated in the global financial collapse.
Medtronic
Medtronic had 11 directors in 2010. The following directors had relationships of interest:
- Richard H Anderson "was Executive Vice President of UnitedHealth Group Incorporated." As above, UnitedHealth is a health insurance/ managed care corporation.
- Victor J Dzau (see above) is "Chancellor for Health Affairs at Duke University and President and Chief Executive Officer of the Duke University Health System." He is "a director of Alnylam Pharmaceuticals Inc, ... PepsiCo Inc, and Genzyme Corporation." (See discussion above.)
- James T Lenahan "served as President of Johnson & Johnson from 2002 until June 2004...." He is "director of Telecris Biotherapeutics Inc, Alton Pharma Inc and Imacor Inc." Johnson & Johnson is a large drug, device, and biotechnology company. Telecris, and Alton Pharma are biotechnology pharmaceutical companies. Imacor is a medical device company.
- Denise M O'Leary "is a director of Lucille Packard Children's Hospital and Stanford Hospitals and Clinics." Also, "she was a member of the Stanford University Board of Trustees from 1996 through 2006, where she chaired the Committee of the Medical Center...."
- Robert C Pozen is "an advisor to Gelesis Inc." Gelesis is a biotechnology company.
- Jack W Schuler "has been a director of Stericycle Inc since March 1990...." He is a "director of Quidel Corporation and Elan Corporation plc...." Stericycle company disposes of medical waste, including that produced by medical devices. Quidel is a biotechnology and (medical diagnostic) device company. Elan is an multinational biotechnology and pharmaceutical company.
So the box score for Genzyme's 11 directors is: Two have leadership positions at teaching hospitals, academic medical centers, medical schools or their parent universities (some such institutions are lead by more than one Genzyme director). Ten have leadership positions in other drug, device or biotechnology corporations. One has a leadership position in health insurance/ managed care corporations. None had or have leadership positions in discredited financial services corporations that were implicated in the global financial collapse.
Summary
Just to summarize the sorts of conflicting interests these relationships suggest.
Teaching hospitals and medical schools are supposed to provide unbiased teaching, including about issues relevant to drug and device corporations, such as choice of diagnostic strategies and treatments, and relevant health policy. They are supposed to perform unbiased research, including research that evaluates drugs and devices. They are supposed to provide the best possible patient care at a reasonable cost, which relates to choices of and prices paid for drugs and devices.
Other drug, device, and biotechnology corporations may be producing, or developing products that compete with those of the index corporations.
Health insurance companies ostensibly try to control costs and improve quality in part by reducing excess utilization and bargaining down prices of drugs and devices.
So this limited case study of the boards of directors, that is, the ostensible stewards of two health care corporations, selected because they have a common member who is the leader of a large medical school and academic medical center, and which both have histories of poor management or ethical missteps showed - that the leadership of health care organizations is incredibly interrelated, interlocked, incestuous.
This gave an example of how pervasive are the conflicts of interest that affect all kinds of health care organizations. Companies that ought to be competing have interlocked directors. Companies that ought to be negotiating at arms length have interlocked directors. Not-for-profit academic medical institutions have leaders who are also directors of companies whose drugs their patients may take, whose devices their patients may receive, whose insurance their patients may buy, and whose products and services they may teach about and evaluate through clinical research and policy research.
This also gives an example of how the failed culture of finance may be linked to the culture of medicine and health care. Some of the stewards of health care organizations were also the stewards of financial services corporations whose reckless, if not arrogant, greedy and amoral leadership is widely believed to have caused the global financial collapse and our ongoing economic problems.
Finally, this suggests how top leaders of various health care organizations may be more familiar with and identify more with each other than with their organizations, their organizations' missions, and their organizations' professionals, staff, students, clients, and patients.
What is to be done?
I strongly believe that there needs to be much more investigation, academic, journalistic, and perhaps legal, of the identity, nature, and culture of the leaders of health care, and their relationships. A few bloggers cannot do it all. Obviously, the anechoic effect mitigates against medical and health care academics looking into their own leaders. However, failing to understand who is leading our march to the brink of health care failure ought not to be something such academics would want on their conscience.
Finally, and obviously, health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research.
If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.
Ela Medical (Now the Sorin Group) Settles
And we return to the parade of legal settlements, which is still marching along. The next entrant to the parade was described by the Miami Herald:
The details of the allegations were:
Of course, the company's statement had all the expected elements:
I leave it to my dear readers to decide on how ethically the company's previous business operations were, based on the above.
I would note that not only did the company want to put this case behind it, it seemed to want to put its old name behind it too. Ela Medical is now apparently known only by the name of its Italian parent company, the Sorin Group.
To add a final disturbing note, this case illustrates why people who see what appears to be unethical, or even illegal behavior are not rushing to report it:
One would hardly have expected Ms Lee to have kept her job at Ela once she reported what was going on there. However, it was worse than that. Being known as a whistle-blower may make one radioactive enough to preclude any employment in a segment of health care that is at all related to the one in which one blew the whistle.
The Herald article did note that Ms Lee stands to get part of the settlement. Yet this will come at least four years after the case began, as her lawyer said:
As we just noted, in health care, the incentives are strongly tilted to favor financial productivity , or "making the numbers," and to disfavor ethical conduct, especially when it requires dissenting with top managers. If we really want accessible, affordable, high-quality health care, we will have to get rid of these sorts of perverse incentives.
So the march of legal settlements continues. As in many previous cases, note that the monetary cost of the above settlement, while it seems large to normal humans, would be just slightly more than round-up error for a large multi-national company. As I have said repeatedly, penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.
In a four-year-old case with nationwide implications, Ela Medical has agreed to pay $9.2 million to settle a whistle-blower case brought by a former Miami technician who charged the company used several schemes to pay kickbacks to South Florida doctors.
The details of the allegations were:
In the Miami case, brought by May and Ben Kuehne, Lee alleged that Ela gave money to doctors for questionable studies, had Ela techs do work on patients that doctors later billed Medicare for, gave doctors free trips and helped doctors get monitoring equipment that to led to more Medicare billing.
The moves were made by the company to boost sales in the multibillion-dollar field of cardiac devices, where pacemakers can cost up to $7,000 and defibrillators up to $18,000.
These devices have batteries that run down in about three years, the lawsuit said, and patients need to be monitored to see how much battery life their devices have left. An Ela tech performed the tests in doctors' office.
'Although Medicare required a physician to be present during the battery test, physicians never attended these battery check appointments,' the lawsuit alleged. Doctors then billed Medicare for the techs' work.
Other times, doctors were paid $2,500 to $4,000 for each Ela patient enrolled in a study, even though patients were never informed and never gave the required permission, the lawsuit said. 'The physicians had no role and in fact did nothing in furtherance of the study,' the lawsuit stated. 'However, Medicare was billed each time the study was conducted, as if the physician had participated.'
Of course, the company's statement had all the expected elements:
Closure of this investigation places this legacy issue firmly behind us and clearly enhances our ability to execute on our plans for CRM [cardiac rhythm management] in the United States. Our commitment to provide patients and healthcare providers with life-saving and life-enhancing innovation, and to conduct our business in a highly ethical manner is stronger than ever.
I leave it to my dear readers to decide on how ethically the company's previous business operations were, based on the above.
I would note that not only did the company want to put this case behind it, it seemed to want to put its old name behind it too. Ela Medical is now apparently known only by the name of its Italian parent company, the Sorin Group.
To add a final disturbing note, this case illustrates why people who see what appears to be unethical, or even illegal behavior are not rushing to report it:
On Monday, May, the attorney, said Lee 'is not talking to anybody. This has been a difficult experience.' She quit Ela when, after complaining about the company's questionable practices, she was told to transfer to California. She took a job with a competitor, but was dropped when the industry learned she had filed the lawsuit.
'She was blackballed,' May said. 'She's basically gone from $100,000 a year to minimum wage.'
One would hardly have expected Ms Lee to have kept her job at Ela once she reported what was going on there. However, it was worse than that. Being known as a whistle-blower may make one radioactive enough to preclude any employment in a segment of health care that is at all related to the one in which one blew the whistle.
The Herald article did note that Ms Lee stands to get part of the settlement. Yet this will come at least four years after the case began, as her lawyer said:
the 'money will allow her basically to start over.' If she had kept her mouth shut, 'she would have made far more money in her lifetime than she will get as a percentage of the settlement.'
As we just noted, in health care, the incentives are strongly tilted to favor financial productivity , or "making the numbers," and to disfavor ethical conduct, especially when it requires dissenting with top managers. If we really want accessible, affordable, high-quality health care, we will have to get rid of these sorts of perverse incentives.
So the march of legal settlements continues. As in many previous cases, note that the monetary cost of the above settlement, while it seems large to normal humans, would be just slightly more than round-up error for a large multi-national company. As I have said repeatedly, penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.
"Toxic and Dangerous?" - The Watchdog vs Medtronic's Man at the VA
An odd story that appeared earlier this month linked several people we have discussed on Health Care Renewal.
On one hand, we posted about how Dr David Polly, a spine surgeon at the University of Minnesota, testified before the US Congress in support of research on treatments of bone injuries afflicting US soldiers. He did not then reveal that he had been paid more than one million dollars for consulting by Medtronic, the manufacturer of a bone growth product used to treat such injuries, also the source of payments of his expenses for the trip to Washington. At the time, we suggested this case was a reminder to be skeptical about academics who are really stealth health policy advocates for industry.
On the other hand, in a post about renewed payments by makers of artificial joints to orthopedic surgeons after the US government advocated a series of deferred prosecution agreements as a cure for such apparent conflicts of interest, we quoted Dr Charles Rosen, "Nothing will change until someone goes to jail. It’s a big game."
The link between them appeared in two related articles. First, the Minneapolis Star-Tribune reported on the appointment of another Medtronic consultant to a top leadership post in the US Department of Veterans Affairs:
A post on Pharmalot explains what Dr Ondra's first priority was once he got his government job:
The Pharmalot post concluded with this opinion:
This convoluted story suggests the urgent need for full disclosure of all relationships between physicians and others who make decisions and wield influence in health care on one hand, and health care organizations on the other hand. If physicians want their health policy efforts to be met with anything other than guffaws and cynical eye rolls, they need to seriously consider swearing off the sorts of cushy corporate relationships that Dr Ondra and Dr Polly embraced.
On one hand, we posted about how Dr David Polly, a spine surgeon at the University of Minnesota, testified before the US Congress in support of research on treatments of bone injuries afflicting US soldiers. He did not then reveal that he had been paid more than one million dollars for consulting by Medtronic, the manufacturer of a bone growth product used to treat such injuries, also the source of payments of his expenses for the trip to Washington. At the time, we suggested this case was a reminder to be skeptical about academics who are really stealth health policy advocates for industry.
On the other hand, in a post about renewed payments by makers of artificial joints to orthopedic surgeons after the US government advocated a series of deferred prosecution agreements as a cure for such apparent conflicts of interest, we quoted Dr Charles Rosen, "Nothing will change until someone goes to jail. It’s a big game."
The link between them appeared in two related articles. First, the Minneapolis Star-Tribune reported on the appointment of another Medtronic consultant to a top leadership post in the US Department of Veterans Affairs:
In a Sept. 28 letter to Veterans Affairs Secretary Eric Shinseki, Sen. Charles Grassley asks whether Dr. Stephen Ondra's 'policy advice and decisions at the VA are vulnerable to potential conflicts of financial interest' given his prior relationship with the Fridley-based medical technology giant.It appears that Medtronic lobbied hard for the appointment of its former consultant:
Ondra and Medtronic mutually severed their financial relationship in July 2008. But just prior to that, Medtronic paid him $3.6 million in royalties related to spine-surgery instruments, according to financial disclosure forms he submitted to the VA.
While noting that Ondra is not a Medtronic employee, Grassley characterized the surgeon's relationship with the company as 'unambiguous and substantial.' Further, Grassley notes that Ondra 'was able to penetrate the political establishment at its highest level to obtain a senior position at the VA' because of his previous ties to the company.The details are:
Ondra's candidacy for his current post was supported by Medtronic Chief Executive William Hawkins III, who wrote a letter of recommendation to Secretary of Defense Robert Gates on his behalf. This was at the suggestion of Dr. S. Ward Casscells III, who was then assistant secretary of defense for health affairs, according to a series of internal e-mails obtained by the Star Tribune.(It is not clear whether the last sentence above is meant to be an ironic pun about regulatory capture.)
'I have known Dr. Casscells for many years and was comfortable in approaching him on this topic,' Hawkins wrote in a Jan. 16, 2009 e-mail to the then-head of Medtronic's $3.5 billion spine device business, Steve La Neve. (La Neve left that position earlier this year in a corporate reorganization.)
La Neve replied a day later that Ondra wanted to meet with him or with Hawkins before a reference letter was sent, 'so that it can capture his work on appropriate industry-physician relationships and transparency.'
A post on Pharmalot explains what Dr Ondra's first priority was once he got his government job:
Within a few days, however, Ondra objected to the proposed nomination of another spine surgeon, Charles Rosen, as US Surgeon General. Why? As founder of the Association of Medical Ethics, Rosen publicly questioned consulting ties between doctors and device makers and, for his trouble, allegedly suffered retaliation by members of the American Academy of Orthopaedic Surgeons (see this). In a January 21, 2009 email exchange with Davd Polly, a University of Minnesota professor who was another Medtronic consultant, Ondra acknowledged never having heard of Rosen, but reacts viscerally to a recent story in The Orange County Register that details Rosen’s self-appointed role as a watchdog.Got that? Medtronic pays Dr Ondra millions. Medtronic pushes for Dr Ondra's appointment to a top VA leadership position. Once in that position, Dr Ondra confers with another million dollar Medtronic consultant, and then works to block the appointment as Surgeon General of a known foe of the cozy web of conflicts of interest that afflicts medicine. Thus do conflicts of interest work to promote the capture of government by special interests.
'Since this individual is toxic and dangerous I would leave nothing to chance,' he responds to Polly, who had forwarded the newspaper story to Ondra. Polly, by the way, is a nationally known spine surgeon who came under congressional scrutiny for his work several years ago for the device maker, something that Rosen had criticized (look here). 'This moment in history is too important to our country to let such a disreputable and dangerous person continue his self-promotion crusade,' Ondra continues. 'I would encourage you and any other physicians and citizens to weigh in on this to HHS and public health.'
The Pharmalot post concluded with this opinion:
'It’s obvious that Dr. Ondra benefited from his relationship with Medtronic. And since he worked to kill off the nomination of Chuck Rosen, Medtronic’s main critic, I can see how Medtronic benefited from Dr. Ondra,' says Paul Thacker, a former Grassley staff investigator and US Army specialist. 'What I don’t understand is how I and other veterans have benefited from all this back-door dealing. What’s in it for us?'That is a good question. It appears that nothing was in it for veterans, or the US public. But everything was in it for Medtronic and the doctors it pays so well. I would submit that it is the readiness of big health care corporations to create conflicts of interest that seduce physicians to put their loyalties to their corporate sponsors ahead of the public interest that is toxic and dangerous.
This convoluted story suggests the urgent need for full disclosure of all relationships between physicians and others who make decisions and wield influence in health care on one hand, and health care organizations on the other hand. If physicians want their health policy efforts to be met with anything other than guffaws and cynical eye rolls, they need to seriously consider swearing off the sorts of cushy corporate relationships that Dr Ondra and Dr Polly embraced.
Synthes and its Subsidiary Plead Guilty, Boss Remains Billionaire.
In December, 2009, we updated the story of Swiss-based medical device company Synthes and the marketing by its Norian division of a bone cement. At that time, US authorities charged the company with use of an unapproved product in about 200 patients, three of whom suffered untimely deaths. At that point, four US based Synthes executives had pleaded guilty to charges related to this affair.
Last week, another shoe dropped. As reported by the Associated Press,
The results are:
Imposing divestiture of the offending subsidiary was unusual, according to the Philadelphia Inquirer:
So does this case signal a new toughness by US authorities in cases of bad behavior by health care corporations?
According to the Wall Street Journal, Synthes officials were not exactly quaking in their boots because of these penalties, as their spokesperson said Synthes "does not expect this settlement to have any significant financial impact." Synthes would only be liable for fines of "about $24.3 million in total." That pales in comparison to the "company['s] posted total sales of $3.4 billion last year." As for the divestiture of Norian, the WSJ reported, "a spokesman said Monday that the Norian unit is mostly active in product development and isn't actively selling products. That business has fewer than 100 employees,...."
In fact, company leadership did not seem to realize that they did anything wrong, despite the company and four executives pleading guilty to crimes, actions involving the death of three patients,
So although this case has some unusual wrinkles, and may yet yield some negative consequences for some of the people involved in the direction and implementation of the wrong-doing, it would appear to leave unscathed the person who has personally profited the most from the company, and its actions, including its less savory actions. There is progress here, but only a little.
Once again, it appears that in the eyes of the law, top corporate leaders are different from you and me. They appear immune from the penalties that lesser individuals may suffer. They have impunity to continue to amass wealth even wealth that results from actions that were deemed illegal. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
Last week, another shoe dropped. As reported by the Associated Press,
A medical devices company will admit criminality and pay the maximum $23 million fine for illegally testing bone cement on about 200 spinal patients, three of whom died in surgery, U.S. prosecutors said Monday.
Norian Corp. trained surgeons to conduct unapproved clinical tests of its bone cement from 2002 to 2004, subverting U.S. Food and Drug Administration safeguards, prosecutors said. The trials were stopped after the third patient death, they said.
The cement, which is used to fill in bone defects, is approved for use in the arm but not the load-bearing spine, authorities said. The surgeries often involved older patients with compression fractures, they said.
The results are:
Norian will plead guilty to conspiracy to impede FDA functions, a felony, and 110 misdemeanor counts of interstate shipping of misbranded Norian XR. Synthes will plead guilty to the same misdemeanor shipping count.
As part of the agreement, Norian will be sold to an outside buyer, the parent company said.
Imposing divestiture of the offending subsidiary was unusual, according to the Philadelphia Inquirer:
Forcing a divestiture of a business unit in a plea agreement was precedent-setting for the U.S. Attorney General's Office in the Philadelphia area, spokeswoman Patricia Hartman said Monday.
Officials with the Office of the Inspector General in DHHS said the divestiture should send a message to other health-care companies that Synthes' behavior had grave consequences.
'Criminal conduct can result in a company getting rid of part of their business,' Greg Demske, a top official with the Inspector General, said Monday. 'This is an egregious case, and it made us firm in our belief that we should draw a line here,' he said.
If it remained a subsidiary of Synthes, Norian would be excluded from participating in Medicare and other government-funded health care programs, which would be potentially devastating to its business. According to a divestiture agreement released Monday by the U.S. Attorney in Philadelphia, Synthes has to sell Norian by May 24.
The assets of Norian would not be allowed to be transferred to another part of the Synthes 'corporate family' as part of the divestiture, Demske said.
Synthes will update the government monthly on its plans to divest Norian, and if it fails to sell the company by the May deadline, it can be fined $10,000 a day.
So does this case signal a new toughness by US authorities in cases of bad behavior by health care corporations?
According to the Wall Street Journal, Synthes officials were not exactly quaking in their boots because of these penalties, as their spokesperson said Synthes "does not expect this settlement to have any significant financial impact." Synthes would only be liable for fines of "about $24.3 million in total." That pales in comparison to the "company['s] posted total sales of $3.4 billion last year." As for the divestiture of Norian, the WSJ reported, "a spokesman said Monday that the Norian unit is mostly active in product development and isn't actively selling products. That business has fewer than 100 employees,...."
In fact, company leadership did not seem to realize that they did anything wrong, despite the company and four executives pleading guilty to crimes, actions involving the death of three patients,
'Synthes remains committed to operating in accordance with the highest legal and ethical standards, and bringing closure to this matter will permit the company to focus on its mission to improve patient care,' the company said.Furthermore, while this is one of the few cases in which some company executives actually may have to pay penalties (after pleading guilty to at least misdemeanors), the big fish appeared to get away. As we discussed last year, an unindicted "person no. 7" was alleged to have set up the scheme to "test" the bone cement in a clinical series. Person No. 7 was at that time identified as the company CEO. That CEO, according to the Philadelphia Inquirer last year, was one Mr Hansjorg Wyss, noted to have a fortune estimated at $5.7 billion, making him the richest man in Philadelphia, and the 83rd richest man in the world, according to Forbes magazine. (See this post.) The settlement of this case would apparently have no impact on his immense wealth.
So although this case has some unusual wrinkles, and may yet yield some negative consequences for some of the people involved in the direction and implementation of the wrong-doing, it would appear to leave unscathed the person who has personally profited the most from the company, and its actions, including its less savory actions. There is progress here, but only a little.
Once again, it appears that in the eyes of the law, top corporate leaders are different from you and me. They appear immune from the penalties that lesser individuals may suffer. They have impunity to continue to amass wealth even wealth that results from actions that were deemed illegal. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
Wright Medical Settles, ... But Wait, There is Less
Everyone loves a parade, and so the parade of legal settlements by prominent health care organizations continues. The latest to march into view is Wright Medical Group, as reported by Bloomberg:
Here we go again. A company is accused of giving kickbacks, aka bribes, to individual doctors, in this case orthopedic surgeons, to get them to use the company's products. Such payments clearly violate medical ethics (especially doctors' obligations to put the interests of patients ahead of their personal financial interests), leading to decision making not in the best interests of the patients. However, the penalty to the company itself is minuscule, only a fraction of the company's revenue, according to Google Finance, in 2009, just under $500 million. As we have noted endlessly before, financial penalties to corporations are diffused among all shareholders and employees, and possibly customers and patients.
Do we really expect that this penalty will change anything, or deter future bad behavior by this or any other company?
But our government continues to treat the corporate employees who authorize, direct, or implement bad behavior like this as essentially above the law. In this case, like in many others we have discussed previously, no one who authorized, directed or implemented the bad behavior will have to pay any sort of penalty or suffer any sort of negative consequences. Does anyone in their right mind believe that Wright Medical really is
That was a quote from Wright Medical CEO Gary D Henley. He may be pleased to announce the agreements, since they really amount to such a tiny pinprick of a penalty. After all, Mr Henley will be able to to continue to use Wright Medical's revenues, virtually unaffected by this penalty, to justify his compensation (per the 2009 proxy statement, $2,036,517 in 2009, and his continuing accumulation of wealth, e.g., 436,601 shares of stock, currently valued at $13.86/ share according to Google Financial.)
I leave an assessment of what the company's previous commitment to "the highest standard of ethical and legal conduct" was to our dear readers.
We will not have true health care reform until we end the unholy alliance between big government and big health care organizations, that is, health care corporatism. Then, maybe, we can make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
Wright Medical Technology Inc. agreed to pay $7.9 million to resolve U.S. criminal and civil investigations into whether it paid kickbacks to induce doctors to use its hip and knee devices.
Prosecutors in Newark, New Jersey, today charged Wright with conspiring to violate a federal anti-kickback statue through consulting contracts with orthopedic surgeons. The U.S. agreed to drop the case in 12 months if a monitor agrees that Wright has reformed the way it hires consultants.
Wright, based in Arlington, Tennessee, also agreed to a $7.9 million civil settlement with the Justice Department and inspector general of the Health and Human Services Department to resolve fraudulent-marketing claims. The company entered into a five-year corporate integrity agreement.
Here we go again. A company is accused of giving kickbacks, aka bribes, to individual doctors, in this case orthopedic surgeons, to get them to use the company's products. Such payments clearly violate medical ethics (especially doctors' obligations to put the interests of patients ahead of their personal financial interests), leading to decision making not in the best interests of the patients. However, the penalty to the company itself is minuscule, only a fraction of the company's revenue, according to Google Finance, in 2009, just under $500 million. As we have noted endlessly before, financial penalties to corporations are diffused among all shareholders and employees, and possibly customers and patients.
Do we really expect that this penalty will change anything, or deter future bad behavior by this or any other company?
But our government continues to treat the corporate employees who authorize, direct, or implement bad behavior like this as essentially above the law. In this case, like in many others we have discussed previously, no one who authorized, directed or implemented the bad behavior will have to pay any sort of penalty or suffer any sort of negative consequences. Does anyone in their right mind believe that Wright Medical really is
pleased to announce these agreements and look[ing] forward to working with the independent monitor as we continue our commitment to the highest standards of ethical and legal conduct
That was a quote from Wright Medical CEO Gary D Henley. He may be pleased to announce the agreements, since they really amount to such a tiny pinprick of a penalty. After all, Mr Henley will be able to to continue to use Wright Medical's revenues, virtually unaffected by this penalty, to justify his compensation (per the 2009 proxy statement, $2,036,517 in 2009, and his continuing accumulation of wealth, e.g., 436,601 shares of stock, currently valued at $13.86/ share according to Google Financial.)
I leave an assessment of what the company's previous commitment to "the highest standard of ethical and legal conduct" was to our dear readers.
We will not have true health care reform until we end the unholy alliance between big government and big health care organizations, that is, health care corporatism. Then, maybe, we can make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
"Trouble Coming Every Day" as Discussed by our Fellow Health Care Skeptics
With apologies to the late Frank Zappa... even though we are going through the dog days of summer, the parade of health care troubles in the news is never ending, so I thought I would recap some of the more interesting issues discussed by some of my fellow health care skeptic bloggers.
We have discussed the ongoing decline of primary care. On DB's Medical Rants, Dr Robert Centor takes on the topic: "The system has, without consciously meaning to, held primary care in contempt." The result is a "quiet rebellion: of primary doctors.
We have discussed whether the currently fashionable idea of "accountable care organizations" (ACOs) might turn out to be a cover for health care oligopolies. See what Paul Levy, CEO of the Beth Israel/ Deaconess Medical Center said about them in his blog, Running a Hospital.
We frequently talk about the manipulation or suppression of clinical research studies by those with vested interests in the results pointing in a particular direction. On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody wondered why the FDA will not even reveal the identities of the clinical researchers who did the studies on which it based its decision to approve the Infuse bone growth enhancement device.
Prof Carl Elliott has done an outstanding job investigating commercially funded and implemented clinical research. Dr Brody reviewed his new book, White Coat, Black Hat. In the Carlat Psychiatry Blog, Dr Daniel Carlat reviewed Prof Elliott's new article in Mother Jones on how a pharmaceutical company sponsored drug trial went badly awry.
We asked whether the former CEO of a for-profit hospital chain who resigned after the company paid a > $1.7 billion penalty to settle charges of fraud would be a proper candidate to be governor of Florida. After Rick Scott won the Florida Republican primary, Maggie Maher, writing in the Health Beat blog, took on Scott's dubious past as prologue to a worrisome future.
Well I'm about to get sick
From watchin' my TV
Been checkin' out the news
Until my eyeballs fail to see
I mean to say that every day
Is just another rotten mess
And when it's gonna change, my friend
Is anybody's guess
So I'm watchin' and I'm waitin'
Hopin' for the best
Even think I'll go to prayin'
Every time I hear 'em sayin'
That there's no way to delay
That trouble comin' every day
No way to delay
That trouble comin' every day
- Frank Zappa
We have discussed the ongoing decline of primary care. On DB's Medical Rants, Dr Robert Centor takes on the topic: "The system has, without consciously meaning to, held primary care in contempt." The result is a "quiet rebellion: of primary doctors.
We have discussed whether the currently fashionable idea of "accountable care organizations" (ACOs) might turn out to be a cover for health care oligopolies. See what Paul Levy, CEO of the Beth Israel/ Deaconess Medical Center said about them in his blog, Running a Hospital.
We frequently talk about the manipulation or suppression of clinical research studies by those with vested interests in the results pointing in a particular direction. On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody wondered why the FDA will not even reveal the identities of the clinical researchers who did the studies on which it based its decision to approve the Infuse bone growth enhancement device.
Prof Carl Elliott has done an outstanding job investigating commercially funded and implemented clinical research. Dr Brody reviewed his new book, White Coat, Black Hat. In the Carlat Psychiatry Blog, Dr Daniel Carlat reviewed Prof Elliott's new article in Mother Jones on how a pharmaceutical company sponsored drug trial went badly awry.
We asked whether the former CEO of a for-profit hospital chain who resigned after the company paid a > $1.7 billion penalty to settle charges of fraud would be a proper candidate to be governor of Florida. After Rick Scott won the Florida Republican primary, Maggie Maher, writing in the Health Beat blog, took on Scott's dubious past as prologue to a worrisome future.
Well I'm about to get sick
From watchin' my TV
Been checkin' out the news
Until my eyeballs fail to see
I mean to say that every day
Is just another rotten mess
And when it's gonna change, my friend
Is anybody's guess
So I'm watchin' and I'm waitin'
Hopin' for the best
Even think I'll go to prayin'
Every time I hear 'em sayin'
That there's no way to delay
That trouble comin' every day
No way to delay
That trouble comin' every day
- Frank Zappa
GE: Don't Know Much About Radiation Safety, Don't Know Much About Physics
Don't know much about history
Don't know much biology
Don't know much about a science book
Don't know much about the french I took.
(Wonderful World, sung by Sam Cook)
This is becoming the theme song for executives of health care corporations. We have posted about a series of cases in which major health care corporations suddenly seemed unable to carry out their core business functions, a phenomenon I am going to start calling "core business incompetence." Some recent examples:
- Baxter International apparently failed to check the purity of heparin it bought from a foreign supplier; the contaminated heparin resulted in approximately 81 deaths. (See post here.)
- A major Genzyme manufacturing facility had multiple quality problems, resulting in the production of a very expensive, but contaminated biologic medication. (See post here.)
- Three Johnson and Johnson manufacturing facilities had multiple quality problems, resulting in the production of contaminated batches of over-the-counter medications for children. (See post here.)
- Aetna made mathematical errors in computing the rates it proposed charging; WellPoint made computer errors that exposed sensitive policy-holder information. (See blog post here.)
Manufacturing pure, unadulterated medicines is a core function of a drug company. Correctly calculating policy-costs and correctly handling patient data are core functions of health insurance companies. But in the above cases, three large pharmaceutical companies and two large insurance companies could not perform these core functions competently.
Radiation Sickness from CT Scans
In the last few days, more details of what appears to be another example of core incompetency afflicting a major health care organization has surfaced. The details were reported by Walt Bogdanich in the New York Times. Here is the summary:
So not to mince words, in this sad case, many patients seem to have been subject to radiation poisoning from a diagnostic x-ray procedure (not from radiation therapy for cancer.) Most people (and physicians) may have not previously thought that radiation poisoning was a possible harm from a single diagnostic CT scan.
A Design Failure?
Moreover, it appears that the radiation poisoning did not result from some freak accidents or malfunction:
Also,
In particular,
Summary: Core Incompetence
To summarize, GE diagnostic CT scan machines apparently were designed so that they could deliver so much radiation that their use could cause radiation sickness. The machines had no built in safeguards to limit the dose of radiation. Users, that is, X-ray technicians, could program the machine so as to deliver dangerous radiation doses, but GE did not warn them that this was the case, nor provide a machine feature that would give a real-time warning of incipient overdose.
Thus it appears that GE, which has been described as "the world’s biggest maker of health care imaging and information technology systems," failed in its core function of designing and manufacturing safe diagnostic x-ray machines. (Presumably the same might be said of Toshiba, but the NY Times report does not include so much detail about problems with its machines.)
A straightforward explanation of the magnitude of the core incompetence was provided by one of the patients who got radiation sickness:
It really seems like we are seeing an epidemic of core incompetence by major US health care corporations.
I can only speculate about why this occurring. One explanation is that the organizations may be lead by people who do not understand the health care context, and do not understand the scientific, engineering, and technical issues involved with core competence. Many health care corporations have come to be lead by people with no experience or background in relevant areas.
For example, the current, and often acclaimed CEO of GE is Jeffrey Immelt, who "earned a B.A. degree in applied mathematics from Dartmouth College in 1978 and an M.B.A. from Harvard University in 1982." The leader of GE Healthcare is John Dineen, who "is a graduate of the University of Vermont where he earned Bachelor's degrees in biology/genetics and computer science," and "joined GE in 1986 as a telecommunications engineer."
Another, even more speculative explanation is that many major US and global health care organizations seem to have been infected with the virus of putting short-term financial results ahead of everything else, leading to cutting of costs and particularly human expertise in the areas most core to the organizations' functions, and pushing for hurried results even at the expense of clear thinking, carefully engineering, and consideration of the effects on patients and other humans of the resulting mistakes.
Hopefully, further investigation will reveal more about what went wrong in this case. Meanwhile, I say again, again, again,...
As long as "imperial CEOs" can continue to get extremely rich while presiding over incompetence and stupidity, if not worse), we can expect the foolishness to continue. Meanwhile, the foolishness drives up costs and drives down quality of health care for the poor suffering patients, let alone the physicians and other health care professionals who must deal with it.
To really reform health care, we need to provide incentives for competent, honest leadership, and make that leadership accountable for its shortcomings.
Postscript - Why the Rush to Aggressive Treatment?
The NY Times article described the rush to get one of the afflicted patients to the CT scan:
However, there is no clear evidence that such a rapid and drastic approach is really that good for patients. A recently updated Cochrane review concluded: "In patients with acute ischaemic stroke, immediate anticoagulant therapy is not associated with net short or long-term benefit. Treatment with anticoagulants reduced recurrent stroke, deep vein thrombosis and pulmonary embolism, but increased bleeding risk. The data do not support the routine use of any the currently available anticoagulants in acute ischaemic stroke." However, many physicians seem to advocate the drastic approach based on some controlled trials that showed at best small improvements in average neurological function for patients receiving rapid anti-coagulation (and which were done before anyone thought about radiation sickness as a possible harm of the approach.) Once again, an aggressive, technological, expensive approach, possibly advocated by people who stood to gain financially from it, may not be as advantageous as it appears.
Don't know much biology
Don't know much about a science book
Don't know much about the french I took.
(Wonderful World, sung by Sam Cook)
This is becoming the theme song for executives of health care corporations. We have posted about a series of cases in which major health care corporations suddenly seemed unable to carry out their core business functions, a phenomenon I am going to start calling "core business incompetence." Some recent examples:
- Baxter International apparently failed to check the purity of heparin it bought from a foreign supplier; the contaminated heparin resulted in approximately 81 deaths. (See post here.)
- A major Genzyme manufacturing facility had multiple quality problems, resulting in the production of a very expensive, but contaminated biologic medication. (See post here.)
- Three Johnson and Johnson manufacturing facilities had multiple quality problems, resulting in the production of contaminated batches of over-the-counter medications for children. (See post here.)
- Aetna made mathematical errors in computing the rates it proposed charging; WellPoint made computer errors that exposed sensitive policy-holder information. (See blog post here.)
Manufacturing pure, unadulterated medicines is a core function of a drug company. Correctly calculating policy-costs and correctly handling patient data are core functions of health insurance companies. But in the above cases, three large pharmaceutical companies and two large insurance companies could not perform these core functions competently.
Radiation Sickness from CT Scans
In the last few days, more details of what appears to be another example of core incompetency afflicting a major health care organization has surfaced. The details were reported by Walt Bogdanich in the New York Times. Here is the summary:
When Alain Reyes’s hair suddenly fell out in a freakish band circling his head, he was not the only one worried about his health. His co-workers at a shipping company avoided him, and his boss sent him home, fearing he had a contagious disease.
Only later would Mr. Reyes learn what had caused him so much physical and emotional grief: he had received a radiation overdose during a test for a stroke at a hospital in Glendale, Calif.
Other patients getting the procedure, called a CT brain perfusion scan, were being overdosed, too — 37 of them just up the freeway at Providence Saint Joseph Medical Center in Burbank, 269 more at the renowned Cedars-Sinai Medical Center in Los Angeles and dozens more at a hospital in Huntsville, Ala.
The overdoses, which began to emerge late last summer, set off an investigation by the Food and Drug Administration into why patients tested with this complex yet lightly regulated technology were bombarded with excessive radiation. After 10 months, the agency has yet to provide a final report on what it found.
But an examination by The New York Times has found that radiation overdoses were larger and more widespread than previously known, that patients have reported symptoms considerably more serious than losing their hair, and that experts say they may face long-term risks of cancer and brain damage.
So not to mince words, in this sad case, many patients seem to have been subject to radiation poisoning from a diagnostic x-ray procedure (not from radiation therapy for cancer.) Most people (and physicians) may have not previously thought that radiation poisoning was a possible harm from a single diagnostic CT scan.
A Design Failure?
Moreover, it appears that the radiation poisoning did not result from some freak accidents or malfunction:
The review also offers insight into the way many of the overdoses occurred. While in some cases technicians did not know how to properly administer the test, interviews with hospital officials and a review of public records raise new questions about the role of manufacturers, including how well they design their software and equipment and train those who use them.
Also,
None of the overdoses can be attributed to malfunctions of the CT scanners, government officials say.
At Glendale Adventist Medical Center, where Mr. Reyes and nine others were overdosed, employees told state investigators that they consulted with GE last year when instituting a new procedure to get quicker images of blood flow, state records show. But employees still made mistakes.
As a result, hospital officials said, a feature that technicians thought would lower radiation levels actually raised them. Cedars-Sinai gave a similar explanation.
'There was a lot of trust in the manufacturers and trust in the technology that this type of equipment in this day and age would not allow you to get more radiation than was absolutely necessary,' said Robert Marchuck, the Glendale hospital’s vice president of ancillary services.
A GE spokesman, Arvind Gopalratnam, said the way scanners were programmed was 'determined by the user and not the manufacturer.' GE, he added, has no record of Glendale seeking its help setting up the new procedure in 2009.
Most of the known overdoses, including the biggest, occurred on scanners made by GE Healthcare. At two hospitals that use Toshiba scanners — Los Angeles County-U.S.C. and South Lake in Florida — officials said the manufacturer suggested machine settings that ultimately produced too much radiation. Representatives of Toshiba agreed to be interviewed in their California office but abruptly canceled.
In particular,
To this day, no one at Cedars-Sinai knows who programmed the scanners that delivered the overdoses, officials there say. But in written statements to The Times, hospital officials said they had figured out how they might have occurred.
Normally, the more radiation a CT scan uses, the better the image. But amid concerns that patients are getting more radiation than necessary, the medical community has embraced the idea of using only enough to obtain an image sufficient for diagnosis.
To do that, GE offers a feature on its CT scanner that can automatically adjust the dose according to a patient’s size and body part. It is, a GE manual says, 'a technical innovation that significantly reduces radiation dose.'
At Cedars-Sinai and Glendale Adventist, technicians used the automatic feature — rather than a fixed, predetermined radiation level — for their brain perfusion scans.
But a surprise awaited them: when used with certain machine settings that govern image clarity, the automatic feature did not reduce the dose — it raised it.
As a result, patients at Cedars-Sinai received up to eight times as much radiation as necessary, while the 10 overradiated at Glendale received four times as much, state records show.
GE says the hospitals should have known how to safely use the automatic feature. Besides, GE said, the feature had 'limited utility' for a perfusion scan because the test targets one specific area of the brain, rather than body parts of varying thickness. In addition, experts say high-clarity images are not needed to track blood flow in the brain.
GE further faulted hospital technologists for failing to notice dosing levels on their treatment screens.
But representatives of both hospitals said GE trainers never fully explained the automatic feature.
In a statement, Cedars-Sinai said that during multiple training visits, GE never mentioned the 'counterintuitive' nature of a feature that promises to lower radiation but ends up raising it. The hospital also said user manuals never pointed out that the automatic feature was of limited value for perfusion scans.
A better-designed CT scanner, safety experts say, might have prevented the overdoses by alerting operators, or simply shutting down, when doses reached dangerous levels.
Summary: Core Incompetence
To summarize, GE diagnostic CT scan machines apparently were designed so that they could deliver so much radiation that their use could cause radiation sickness. The machines had no built in safeguards to limit the dose of radiation. Users, that is, X-ray technicians, could program the machine so as to deliver dangerous radiation doses, but GE did not warn them that this was the case, nor provide a machine feature that would give a real-time warning of incipient overdose.
Thus it appears that GE, which has been described as "the world’s biggest maker of health care imaging and information technology systems," failed in its core function of designing and manufacturing safe diagnostic x-ray machines. (Presumably the same might be said of Toshiba, but the NY Times report does not include so much detail about problems with its machines.)
A straightforward explanation of the magnitude of the core incompetence was provided by one of the patients who got radiation sickness:
To Mr. Heuser, it is unconscionable that equipment able to deliver such high radiation doses lacks stronger safety features.
'When you are in a car and it backs up, it goes beep, beep, beep,' he said. 'If you fill the washing machine up too much, it won’t work. There is no red light that says you are overradiating.'
It really seems like we are seeing an epidemic of core incompetence by major US health care corporations.
I can only speculate about why this occurring. One explanation is that the organizations may be lead by people who do not understand the health care context, and do not understand the scientific, engineering, and technical issues involved with core competence. Many health care corporations have come to be lead by people with no experience or background in relevant areas.
For example, the current, and often acclaimed CEO of GE is Jeffrey Immelt, who "earned a B.A. degree in applied mathematics from Dartmouth College in 1978 and an M.B.A. from Harvard University in 1982." The leader of GE Healthcare is John Dineen, who "is a graduate of the University of Vermont where he earned Bachelor's degrees in biology/genetics and computer science," and "joined GE in 1986 as a telecommunications engineer."
Another, even more speculative explanation is that many major US and global health care organizations seem to have been infected with the virus of putting short-term financial results ahead of everything else, leading to cutting of costs and particularly human expertise in the areas most core to the organizations' functions, and pushing for hurried results even at the expense of clear thinking, carefully engineering, and consideration of the effects on patients and other humans of the resulting mistakes.
Hopefully, further investigation will reveal more about what went wrong in this case. Meanwhile, I say again, again, again,...
As long as "imperial CEOs" can continue to get extremely rich while presiding over incompetence and stupidity, if not worse), we can expect the foolishness to continue. Meanwhile, the foolishness drives up costs and drives down quality of health care for the poor suffering patients, let alone the physicians and other health care professionals who must deal with it.
To really reform health care, we need to provide incentives for competent, honest leadership, and make that leadership accountable for its shortcomings.
Postscript - Why the Rush to Aggressive Treatment?
The NY Times article described the rush to get one of the afflicted patients to the CT scan:
on the morning of July 4, when a 52-year-old executive producer of films, H. Michael Heuser, arrived in the emergency department with stroke symptoms.
A 'code brain' was immediately called, signaling a life-or-death situation. A blood clot in the brain can be dissolved with medicine, but doctors must do it within several hours, before brain cells die from a lack of oxygen. So Mr. Heuser was rushed into a room with several CT scanners, where he underwent one brain perfusion study and at least one more later. A CT perfusion scan, which lasts about 45 seconds, can identify a stroke through a series of blood flow images.
Mr. Heuser did have a stroke, from which he would recover. But other parts of his body inexplicably began to break down.
However, there is no clear evidence that such a rapid and drastic approach is really that good for patients. A recently updated Cochrane review concluded: "In patients with acute ischaemic stroke, immediate anticoagulant therapy is not associated with net short or long-term benefit. Treatment with anticoagulants reduced recurrent stroke, deep vein thrombosis and pulmonary embolism, but increased bleeding risk. The data do not support the routine use of any the currently available anticoagulants in acute ischaemic stroke." However, many physicians seem to advocate the drastic approach based on some controlled trials that showed at best small improvements in average neurological function for patients receiving rapid anti-coagulation (and which were done before anyone thought about radiation sickness as a possible harm of the approach.) Once again, an aggressive, technological, expensive approach, possibly advocated by people who stood to gain financially from it, may not be as advantageous as it appears.
Deferred Prosecution Agreements End, So Let the Payments Grow
Starting in 2007, we posted (here, here, here, here and here) about the payments, often huge, that five manufacturers of prosthetic joints (Biomet, DePuy Orthopaedics (a unit of Johnson & Johnson), Stryker Orthopedics,a unit of Stryker Inc, Zimmer Holdings, and Smith & Nephew) revealed they made to orthopedic surgeons and various academic and other organizations. These revelations were the results of deferred prosecution agreements made in 2007 between four of the companies and the US Department of Justice after the latter charged Biomet, DePuy, Zimmer, and Smith and Nephew with giving surgeons kickbacks, disguised as consulting fees, to promote their products. Stryker entered into a voluntary compliance agreement (see post here).
We also noted that some of the leadership of the major orthopedic societies have received substantial amounts from these companies, as have the societies themselves. A 2008 post on this subject noted the minimal disclosure some of the surgeons receiving these huge payments made when writing scholarly articles on related topics.
Now in 2010, Bloomberg News reported on the results, such as they were, of these ballyhooed agreements:
Apparently, while during the course of the agreements the companies decreased payments to surgeons, they made up for it later:
Also,
Attempts by Bloomberg reporters to find out more did not reveal much:
We have repeated often (e.g., here) the argument that limiting punishments of health care organizations for wrong-doing to corporate fines and deferred prosecution agreements has not deterred further wrong-doing. Most of the cases which we have discussed involved pharmaceutical and biotechnology companies, and sometimes health insurers. It seems that the argument also applies to device manufacturers.
To underline the lack of a deterrence effect, others payments by other device companies to other surgeons have also recently come to light. In 2008, we discussed payments made by Medtronic revealed in various court filings. Medtronic just started voluntarily revealing more information. For example, as reported by the St. Louis Business Journal, Dr Larry Lenke helped Medtronic develop a spinal surgery system, so
Dr Lenke's official web-page at Washington University does not reveal financial ties to, much less multi-million dollar royalties from Medtronic. A quick review of a few of Dr Lenke's published articles reveal such vague disclosures as:
The most specific disclosure I could find was:
So the more things change, the more they stay the same. Device companies are still paying royalties, sometimes enormous sums, to the surgeons who helped them develop lucrative devices. Many of these surgeons are in practice, and some are prominent academics. The surgeons, and their academic institutions when applicable, do not seem to be going out of their way to reveal these sometimes massive financial relationships to patients, many of whom end up implanted with the very devices that generate these enormous payments. While some of the surgeons and influential academicians and prolific authors, they do not seem to go out of their way to reveal these sometimes massive financial relationships to their audiences and readers, even while touting aggressive, procedure-oriented, device-centric approaches to manage orthopedic problems.
So although the "Sunshine Act" was made part of the US health reform legislation, there is not yet much sunshine out there. In my humble opinion, at a minimum, physicians should reveal, in detail, all financial relationships that might appear to have a probability of influencing their clinical decision making to the patients for whom such decisions are made. Physicians should also reveal, in detail, all financial relationships that might appear to have a probability of influencing any related teaching or research.
Furthermore, as an Institute of Medicine's report on conflicts of interest, which as received strikingly little attention, recommended:
Also, the report said we need
These idealistic recommendations seem a long way from the reality of our currently money-focused system of medical education and research.
We also noted that some of the leadership of the major orthopedic societies have received substantial amounts from these companies, as have the societies themselves. A 2008 post on this subject noted the minimal disclosure some of the surgeons receiving these huge payments made when writing scholarly articles on related topics.
Now in 2010, Bloomberg News reported on the results, such as they were, of these ballyhooed agreements:
The government declared last year that it had overhauled the financial relationships between surgeons and the biggest makers of knees and hips, saying the threat of criminal prosecution for 'kickbacks' had forced them to slash payments to physicians. Results of the crackdown were 'truly extraordinary,' said Christopher Christie, a former U.S. attorney for New Jersey who is now governor, in testimony to Congress in June 2009.
It was too good to be true. Compensation ended up being higher after the September 2007 deferred prosecution agreement because payments were postponed, according to data compiled by Bloomberg and interviews with seven surgeons.
'It’s back to business as usual' says Charles D. Rosen, president of the Association for Medical Ethics, who is a spine surgeon in Irvine, California. 'Nothing will change until someone goes to jail. It’s a big game.'
Apparently, while during the course of the agreements the companies decreased payments to surgeons, they made up for it later:
Prosecutors in the New Jersey U.S. Attorney’s Office, which headed the case, reported a 'satisfactory completion' in March 2009 of the probe of Biomet Corp., Johnson & Johnson’s DePuy unit, Smith & Nephew PLC, Zimmer Holdings Inc. and Stryker Corp. Payments in 2008 fell to $105 million from $272 million the year before, the Justice Department lawyers said.
The companies increased doctor compensation for 2008 to about $300 million, according to the data compiled by Bloomberg from reports posted on the device makers’ websites. Fees for 2008 were delivered in 2009, the surgeons say.
Payment delays were 'a common happenstance,' says Teresa Ford, a Seattle attorney who represents 150 doctors who have consulting or royalty agreements with orthopedic device makers. “None of them had significant changes in their relationships.”
Also,
A month after the government closed its case, Zimmer CEO David Dvorak told analysts on a conference call that the action didn’t result in a 'material change' to what it pays surgeons.
Attempts by Bloomberg reporters to find out more did not reveal much:
Since the agreement, payments to surgeons have been appropriate and for legitimate purposes, according to spokespeople for the five companies. Wright says on its website that it adheres to industry ethical standards in its dealings with consultants.
As for 2008 fees that weren’t delivered until 2009, three of the companies say they froze payments while monitors were reviewing contracts with surgeons to ensure they were proper. Spokesmen for Stryker and Smith & Nephew declined to comment. Three of the court-appointed monitors say they’re barred from talking about the details of their work. The two others, including former U.S. Attorney General John Ashcroft, didn’t return telephone calls. The department declined to release reports the monitors filed.
We have repeated often (e.g., here) the argument that limiting punishments of health care organizations for wrong-doing to corporate fines and deferred prosecution agreements has not deterred further wrong-doing. Most of the cases which we have discussed involved pharmaceutical and biotechnology companies, and sometimes health insurers. It seems that the argument also applies to device manufacturers.
To underline the lack of a deterrence effect, others payments by other device companies to other surgeons have also recently come to light. In 2008, we discussed payments made by Medtronic revealed in various court filings. Medtronic just started voluntarily revealing more information. For example, as reported by the St. Louis Business Journal, Dr Larry Lenke helped Medtronic develop a spinal surgery system, so
In the first three months of 2010, Lenke earned $832,000 in royalties from Medtronic, putting him on track to top $3 million in royalties this year.Like the surgeons we discussed in 2008, neither Dr Lenke nor Washington University seemed to make an effort to reveal his multi-million dollar relationship with Medtronic.
Lenke received between .5 percent and 1 percent of sales of the system in royalties.
'The royalties are very small, but the sales are large,' he said. Lenke is cho-chief of adult and pediatric spinal, scoliosis and reconstructive surgery and the Jerome J. Gliden professor of orthopedic surgery at the Washington University School of Medicine, the director of spinal surgery at Shriners Hospital for Children, and a spine consultant to the St. Louis Rams and Blues.
Dr Lenke's official web-page at Washington University does not reveal financial ties to, much less multi-million dollar royalties from Medtronic. A quick review of a few of Dr Lenke's published articles reveal such vague disclosures as:
One or more of the author(s) has/have received or will receive benefits for personal or professional use from a commercial party related directly or indirectly to the subject of this manuscript: e.g., honoraria, gifts, consultancies, royalties, stocks, stock options, decision making position.[Bridwell KH, Glassman S, Horton W, Shaffrey C, Schwab F, Zebala LP, Lenke LG, et al. Does treatment (nonoperative and operative) improve the two-year quality of life in patients with adult symptomatic lubmar scoliosis: a prospective multicenter evidence-based study. Spine 2009; 34: 2171-78.]
The most specific disclosure I could find was:
Dr Lenke was a consultant for Medtronic until January, 2009, and is a patent holder with Medtronic.[Silva FE, Lenke LG. Adult degenerative scoliosis: evaluation and management. Neurosurg Focus 2010; 28: 1-10.]
So the more things change, the more they stay the same. Device companies are still paying royalties, sometimes enormous sums, to the surgeons who helped them develop lucrative devices. Many of these surgeons are in practice, and some are prominent academics. The surgeons, and their academic institutions when applicable, do not seem to be going out of their way to reveal these sometimes massive financial relationships to patients, many of whom end up implanted with the very devices that generate these enormous payments. While some of the surgeons and influential academicians and prolific authors, they do not seem to go out of their way to reveal these sometimes massive financial relationships to their audiences and readers, even while touting aggressive, procedure-oriented, device-centric approaches to manage orthopedic problems.
So although the "Sunshine Act" was made part of the US health reform legislation, there is not yet much sunshine out there. In my humble opinion, at a minimum, physicians should reveal, in detail, all financial relationships that might appear to have a probability of influencing their clinical decision making to the patients for whom such decisions are made. Physicians should also reveal, in detail, all financial relationships that might appear to have a probability of influencing any related teaching or research.
Furthermore, as an Institute of Medicine's report on conflicts of interest, which as received strikingly little attention, recommended:
researchers should not conduct research involving human participants if they have a financial interest in the outcome of the research, for example, if they hold a patent on an intervention being tested in a clinical trial.
Also, the report said we need
to develop a new system for funding high-quality accredited continuing medical education that is free of industry influence.
These idealistic recommendations seem a long way from the reality of our currently money-focused system of medical education and research.
Sequenom Executive Pleads Guilty, Banned from Leading Any Public Company (for Misleading Investors About the Performance of a Diagnostic Test?)
We have frequently noted how health care organizations accused of kickbacks, fraud, and other unethical and sometimes potentially illegal behavior involving how they produce or market health care products or services often are allowed to settle the charges only with a fines to the companies, and sometimes with corporate integrity agreements.
This report from Bloomberg describes a case in which a health care corporation was accused of lying to investors about the performance of a product which it hoped to market. The product was a diagnostic test, and so exaggerating its performance could have affected medical decisions, and hence patients' outcomes, as well as affecting investors' finances. Note how this case was handled.
Here was how the SEC summed it up:
And how did it respond to the latest news?
We have discussed multiple new entrants to the parade of legal settlements by health care organizations. We posted about the most recent entrant here.
It is instructive to compare what happened to the company and personnel involved in that settlement (which happened to be St. Jude Medical) to the events of the current case. As we noted above, when accusations are made about how a company produced or marketed health care products or services, the worst result for the company is usually a fine, rarely amounting to more than a small fraction of the sales of the product or service in question, and sometimes a corporate integrity agreement. Often meanwhile the company may make a statement that it did nothing wrong, and merely settled the case to get on with things.
In the Sequenom case, however, the accusation was of misleading investors (by statements that perhaps just coincidentally could have also misled doctors and patients were the product to have been marketed). The results, however, were that the executives who seemed to be responsible were fired as soon as the government investigation was made known, and a later guilty plea by the executive who seemed most immediately responsible, accompanied by her banning from future service as an "officer or director of a[ny] public company."
It is striking that misleading investors, and thereby potentially endangering their financial health, may result in severe penalties to the individuals involved. However, up to now, misleading doctors or patients, and thereby potentially endangering the former's reputations, and more importantly, the latter's health and even survival, rarely has resulted in any penalties to the individuals involved.
What is wrong with this picture?
If executives who endanger investors' finances can lose their jobs, and be barred from leadership positions in any public company, why can't executives who endanger patients also lose their jobs, and be barred from leadership positions in health care? Inquiring minds would really like to know.
As we have repeated endlessly, the usual sorts of legal settlements we have described do not seem to be an effective way to deter future unethical behavior by health care organizations. Even large fines can be regarded just as a cost of doing business. Furthermore, the fine's impact may be diffused over the whole company, and ultimately comes out of the pockets of stockholders, employees, and customers alike. It provides no negative incentives for those who authorized, directed, or implemented the behavior in question. My refrain has been: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
This report from Bloomberg describes a case in which a health care corporation was accused of lying to investors about the performance of a product which it hoped to market. The product was a diagnostic test, and so exaggerating its performance could have affected medical decisions, and hence patients' outcomes, as well as affecting investors' finances. Note how this case was handled.
Elizabeth A. Dragon, former senior vice president of research and development at Sequenom Inc., pleaded guilty today in federal court to conspiracy to commit securities fraud for lying to investors about the company’s prenatal test for Down syndrome, U.S. officials said.
Dragon admitted to making false claims to investors and analysts about the effectiveness of the San Diego-based company’s test as well as attempting to 'inflate and sustain' the price of Sequenom’s shares, said Laura E. Duffy, the U.S. Attorney for the Southern District of California in San Diego, in a statement. Dragon said in a court appearance before U.S. Magistrate Judge Barbara Major that she and others manipulated data to make the Down syndrome test appear more accurate than it was, Duffy said.
Dragon also was accused of lying to investors in a civil complaint filed today in San Diego by the U.S. Securities and Exchange Commission. Dragon settled the claims without admitting or denying wrongdoing and agreed to be barred from serving as an officer or director of a public company, according to the agency’s statement.
Here was how the SEC summed it up:
'Elizabeth Dragon knew the truth about Sequenom’s Down syndrome test, yet she told the public it was a near-perfect success,' Rosalind Tyson, director of the SEC’s Los Angeles office, said in a statement. 'Her actions misled investors with exaggerated information about a significant new product that never materialized.'What had the company done about this in the past?
In June 2009, the company announced an SEC investigation, and, in September, Sequenom said it dismissed Dragon and Chief Executive Officer Harry Stylli and couldn’t rely on the earlier test results.
And how did it respond to the latest news?
'At this time the company has no comment to make other than we continue to cooperate fully with the government agencies and their investigations,' said Ian Clements, Sequenom’s senior director of corporate communications, in an e-mail.
We have discussed multiple new entrants to the parade of legal settlements by health care organizations. We posted about the most recent entrant here.
It is instructive to compare what happened to the company and personnel involved in that settlement (which happened to be St. Jude Medical) to the events of the current case. As we noted above, when accusations are made about how a company produced or marketed health care products or services, the worst result for the company is usually a fine, rarely amounting to more than a small fraction of the sales of the product or service in question, and sometimes a corporate integrity agreement. Often meanwhile the company may make a statement that it did nothing wrong, and merely settled the case to get on with things.
In the Sequenom case, however, the accusation was of misleading investors (by statements that perhaps just coincidentally could have also misled doctors and patients were the product to have been marketed). The results, however, were that the executives who seemed to be responsible were fired as soon as the government investigation was made known, and a later guilty plea by the executive who seemed most immediately responsible, accompanied by her banning from future service as an "officer or director of a[ny] public company."
It is striking that misleading investors, and thereby potentially endangering their financial health, may result in severe penalties to the individuals involved. However, up to now, misleading doctors or patients, and thereby potentially endangering the former's reputations, and more importantly, the latter's health and even survival, rarely has resulted in any penalties to the individuals involved.
What is wrong with this picture?
If executives who endanger investors' finances can lose their jobs, and be barred from leadership positions in any public company, why can't executives who endanger patients also lose their jobs, and be barred from leadership positions in health care? Inquiring minds would really like to know.
As we have repeated endlessly, the usual sorts of legal settlements we have described do not seem to be an effective way to deter future unethical behavior by health care organizations. Even large fines can be regarded just as a cost of doing business. Furthermore, the fine's impact may be diffused over the whole company, and ultimately comes out of the pockets of stockholders, employees, and customers alike. It provides no negative incentives for those who authorized, directed, or implemented the behavior in question. My refrain has been: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
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