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More Hospital CEOs Join the Millionaire's Club, This Time in Baltimore

As we predicted, more stringent requirements by the US Internal Revenue Service for financial reporting by not-for-profit organizations, including hospitals and hospital systems, have produced an enlarging parade of revelations of obese pay packages for hospital leaders.  The latest report came out <a href="http://www.baltimoresun.com/health/bs-bz-hospital-ceo-salary-20100826,0,7954079.story?page=1">courtesy the Baltimore Sun</a>: <blockquote>Baltimore-area hospital CEOs and presidents boast seven-figure salaries, club and gym memberships, and paid financial planning and tax services as part of compensation packages from their nonprofit employers. According to a survey of Baltimore-area hospitals, the highest-ranking executives were often the recipients of financial payouts and perquisites that many private-sector companies have abandoned in the face of intense public debate about excessive CEO pay. The heads of hospital systems, which oversee many facilities, tended to make the biggest salaries and incentives. Eight top executives made more than $1 million, and the largest CEO pay package totaled $7.8 million.</blockquote> The article described some of the more corpulent compensation packages. St Joseph Medical Center One was from St Joseph Medical Center, already under fire for for the lavish use of cardiac procedures by one of its staff doctors: <blockquote>St. Joseph Medical Center, a member of Catholic Health Initiatives, said in a statement that it offers a level of compensation that allows it to compete for talent. The hospital paid former CEO John K. Tolmie $846,128 in salary, bonus and other pay, the latest IRS filing shows. 'Hospital CEOs have one of the most demanding, high-pressure jobs in the nation, dealing on a daily basis with everything from ever-changing regulations to workforce shortages and lower reimbursement for services,' the hospital statement said. Tolmie resigned in May 2009 after being on administrative leave to avoid a conflict of interest during a federal investigation. Since then, one of the hospital's cardiologists, Dr. Mark G. Midei, has been accused of performing hundreds of unnecessary heart procedures. </blockquote> Mercy Medical Center: <blockquote>Mercy Medical Center head Thomas Mullen made $1.08 million in compensation during fiscal 2009. The hospital said in a statement that it 'believes this compensation to be appropriate given the responsibilities of serving as a president and CEO of a $520 million health system.'</blockquote> Johns Hopkins One might expect the CEO of the Johns Hopkins hospital system to be paid well, but he was paid particularly well since he also seemed to have the full-time, separately paid position of dean of the medical school: <blockquote>Edward Miller, CEO of Johns Hopkins Medicine, made $729,297. He also gets paid separately for his position as dean of the School of Medicine at Johns Hopkins University. The fiscal 2009 filing for the medical school was not yet available. But Miller collected $1.4 million for that job the year before.</blockquote>Summary A chart of the compensation of all CEOs is <a href="http://www.baltimoresun.com/health/bal-hospital-ceo-pay-data,0,373861.htmlpage">here</a>. As noted in the article, eight CEOs got more than $1 million, and another three got over $900,000. A Baltimore Sun commentator <a href="http://www.baltimoresun.com/health/bs-bz-hancock-hospital-pay-20100829,0,3121681.column">noted</a> that not only did the CEOs get large salaries, but: <blockquote>Close to a dozen had personal dues for 'social clubs' financed by your charitable donations, tax dollars and health insurance premiums. Many enjoy lavish and opaque executive retirement plans that also put upward pressure on the medical costs that threaten government budgets and the economy.</blockquote> As we have noted before, he pointed out that it is unseemly for not-for-profit hospitals, which are supposed to be devoted to the mission of caring for patients, usually explicitly including poor patients, and which are funded to a great extent by government programs and the income from donations, to make millionaires out of their top hired executives: <blockquote>Hospitals aren't Goldman Sachs. They're not Stanley Black & Decker or Microsoft, either. They're nonprofits, getting charitable donations and huge government subsidies beyond all the loot they rake in from Medicare and Medicaid. If the newly required disclosures on the IRS 'Form 990' put pressure on hospital boards and CEOs to tone it down, it's about time.</blockquote> People who donate to hospitals, thinking they are doing so to provide better health care, or to help out the less fortunate, may be surprised to hear about the hospital CEO as millionaire: <blockquote>For some hospital donors, the revelations are transparently shocking. 'Donors are completely outraged,' says Ken Berger, president of Charity Navigator, an organization that helps people make smart giving choices. 'Donors tell us more than anything that they're just blown away by the fact that an organization that is a charity basically is creating millionaires in its leadership.' 'The most common remark we get is this: 'I've been giving to this organization for years, and I can't believe what the CEO is making, and I will never support this organization again.' '</blockquote> I am glad that newspaper commentators are getting even more wound up on this issue than I have: <blockquote>Why any hospital executive should need a company-paid club membership is a deep mystery. It can't be to woo potential donors. No donor with half a brain wants to endow an institution so employees can play golf with her money. It shouldn't be to wine and dine business prospects. A hospital's business is collecting revenue for medical care. To be frank, there's too much of that going on already for the good of the country's wallet. Hospitals are far too focused on sales and marketing and not enough on delivering quality, efficient care. Hospital trustees on any compensation committee can deliver a windy treatise about how pay for senior executives is ethical, carefully considered and worth every penny. It's all a crock. The 'independent' compensation consultants that boards rely on are often referred by the CEO himself. The consultants know they can't make waves, or they won't get hired to rubber-stamp executive pay at other hospitals. To justify high pay, boards and consultants often use unrealistic comparisons from much bigger institutions or from the for-profit sector. It doesn't take $1 million to get a great boss.</blockquote> But it gets worse. People who love to play golf on company money, and feel entitled to make a million or more are not the right people to lead organizations that are supposed to focus first on health care, including health care for the less fortunate. Moreover, people who get used to the pay and perks are likely to focus on keeping them coming, rather than the mission, even if they started out with some devotion to the mission.  Furthermore, the excessive pay and perks are perverse incentives, telling the CEOs that they are wonderful people, they can do no wrong, and should stand for no criticism, all further diverting them from what they really are supposed to be doing: upholding the mission. As we have said many times before, true health care reform would encourage leadership of health care who understand health care and care about its mission, rather than those who see a quick way to make a small fortune.

More Hospital CEOs Join the Millionaire's Club, This Time in Baltimore

As we predicted, more stringent requirements by the US Internal Revenue Service for financial reporting by not-for-profit organizations, inc...

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"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 <a href="http://hcrenewal.blogspot.com/search/label/primary%20care">primary care</a>. On DB's Medical Rants, Dr Robert Centor <a href="http://www.medrants.com/archives/5776">takes on </a>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 <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">discussed</a> 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 <a href="http://runningahospital.blogspot.com/2010/08/aco-global-payments-market-dominance.html">said</a> about them in his blog, Running a Hospital. We frequently talk about the <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulation</a> or <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppression </a>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 <a href="http://brodyhooked.blogspot.com/2010/08/spinal-fusion-devices-whats-fda-hiding.html">wondered</a> 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 <a href="http://brodyhooked.blogspot.com/2010/08/more-tidbits-from-white-coat-black-hat.html">reviewed</a> his new book, White Coat, Black Hat.  In the Carlat Psychiatry Blog, Dr Daniel Carlat <a href="http://carlatpsychiatry.blogspot.com/2010/08/making-killing-new-carl-elliott-article.html">reviewed</a> Prof Elliott's new article in Mother Jones on how a pharmaceutical company sponsored drug trial went badly awry. We <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">asked </a>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, <a href="http://www.healthbeatblog.com/2010/08/i-remember-rick-scott-a-great-makeover-but-still-the-same-guy-part1.html">took on </a>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

"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...

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Health IT Personnel - Aliens in Healthcare?

-------------------------------- Sept. 1 Important note - it appears the survey results referenced below were contaminated by activists who could not allow this survey to occur unmolested. From <a href="http://histalk2.com/2010/08/31/news-9110/">HIStalk</a>, the source of the survey, a site ordinarily read by a relatively narrow health IT-involved audience: <blockquote style="font-style: italic;">If you’ve been following the current poll and comments on Ed Marx’s <a href="http://histalk2.com/2010/08/25/cio-unplugged-82510/" target="_blank">Blessing of the Hands</a> post, you may wonder why the comments suddenly turned ugly. An <a href="http://en.wikipedia.org/wiki/PZ_Myers" target="_blank">atheist blogger</a> linked to it and his followers dropped by to vote and opine. Since the point was to find out what industry people think, here’s the stat that counts: the poll was running 50-50 when it was just real readers voting. </blockquote> The Aug. 30 post below may reflect sabotage of the poll. -- SS -------------------------------- It is commonly accepted that respect for patient's cultural, ethical and religious views must be taken into account in their care. In fact, that understanding and respect for those values are critical. I think it also fair to say that many if not most practitioners of medicine also believe in a force higher than themselves, even if not formally involved in organized religion. I, in fact, minored in the history of religion in college. One of the most valuable pre-med courses I participated in concerned religious beliefs about illness, death and dying. In a remarkable survey at the anonymous <a href="http://www.histalk.com/">HIStalk</a> health IT industry/rumor blog site, however, these views seem alien to many of the HIT personnel who frequent that site. As of this time (8/3/2010, 10:15 AM EST) the tally of responses to this<a href="http://histalk2.com/2010/08/28/monday-morning-update-83010/"> sidebar question at that site</a> in part created after reactions to a CIO essay on religious values <a href="http://histalk2.com/2010/08/25/cio-unplugged-82510/">here</a>: <blockquote style="font-weight: bold; color: rgb(255, 0, 0);">Should hospital IT employees be expected to have a higher level of compassion and spiritual beliefs than their counterparts in other industries?</blockquote> are as follows: <blockquote style="font-weight: bold;">No - 90% (519 votes) Yes - 10% (59 votes)</blockquote> While informal, I'd say a red flag is raised. These results go against mainstream values in medicine, and the values of our American culture and heritage at large. Some of the <a href="http://polldaddy.com/poll/3686153">comments</a> in particular were revealing of contempt for these values and arrogant certitude typical of the IT field in general: Example 1: <blockquote>Higher level of compassion and sense of responsibility yes, spiritual beliefs - no. Relying on belief in many cases may cause more harm than good. Of course, some types of spiritual beliefs lead to heightened sense of responsibility (like the one Ed Marx has demonstrated), but not all, and heightened sense of responsibility is not dependent on one's spiritual beliefs.</blockquote> Example 2: <blockquote>I understand the meaning of the word COMPASSION, as the expression of sympathy for a separate person in different circucmstances. I expect that understanding is the common on. I have some ideas on how it works conceptually, and I expect I could find common ground with a great many people on that subject. I understand the meaning of the term SPIRITUAL BELIEFS, as the holding of a baseless conviction as to the existence of disembodied consciousness. I am confident that those who have them would express them as convictions or the equivalent of convictions, that they are unable to point to evidence supporting their convictions, would agree their beliefs entail disembodied consciousness, but would prefer to put it some other way. I have no understanding at all of how a disembodied consciousness would be able to exert influence on embodied third parties, or how a person who believes in the existence of disembodied consciousness might explain it. Perhaps I am missing something obvious. If so, I would appreciate someone explaining it here.</blockquote> Example 3: <blockquote>I agree ... I'm very tired of this idea that only religious people can be moral or compassionate or sensitive. It's simply not true. And competence, the most important quality in an IT person, has absolutely no connection to religiosity.</blockquote> Example 4: <blockquote>Good grief, I hope I don't get sick and then have to go to a hospital full of staff that think that their religious bend can help heal people. Annointing oil? What a bunch of mumbo-jumbo.</blockquote> Example 5: <blockquote><div class="img"> <a href="http://polldaddy.com/poll/3686153#"> </a> </div> <div class="text">Lol, this ceremony probably makes the chaplains maintain a sense of importance. Sorry to puncture the bubble, but your magic oil and mumbo jumbo belong to the first century desert tribes, not a 21rst century hospital.</div></blockquote><div class="text"></div> While people in healthcare and anywhere else in this country are free to believe in God or not, people in healthcare should be sympathetic to those who do, no matter what their own personal feelings. These comments and the survey results in general, I fear, show contempt for religious values and for those who hold them. There's a comment about these folks actually having a cybernetic religion of sorts: <div class="text"></div><blockquote><div class="text">You folks *do* have a religion. You worship machines.</div></blockquote> I agree with that assessment. Others in a <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/medinformatic1/saudi.htm">Middle Eastern oil-producing country I once visite</a><a href="http://www.ischool.drexel.edu/faculty/ssilverstein/medinformatic1/saudi.htm">d</a> to implement IT for care improvement of children with birth defects, in part out of interest in personally living by example and promoting cultural and religious reconciliation, have a different term for that particular religion: idolatry. I can't say I disagree with that, either. "Compassion" and "contempt" may both begin with the letter "c", but are essentially incompatible. Those with contempt for common patient values such as religious beliefs should not be working on tools critical for safe care delivery, in my opinion. In fact, I'd rather have this type of arrogant, contemptuous healthcare facilitator not working in healthcare at all. -- SS

Health IT Personnel - Aliens in Healthcare?

-------------------------------- Sept. 1 Important note - it appears the survey results referenced below were contaminated by activists who ...

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Similar Conclusions on Health IT Via Observation and Via Research: Is HIT 'Mission Impossible'?

The Wall Street Journal reported on a study in Health Affairs entitled "<a href="http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0502">A Progress Report On Electronic Health Records In U.S. Hospitals</a>" by Harvard researcher Ashish Jha and colleagues. An Aug. 27 WSJ Health Blog post was entitled "<a href="http://blogs.wsj.com/health/2010/08/27/only-2-of-hospitals-could-have-met-meaningful-use-in-2009/">Only 2% of Hospitals Could Have Met ‘Meaningful Use’ in 2009.</a>" While the topic of this Healthcare Renewal post is not about Jha's new article per se, I will provide the article's summary: <blockquote>Despite all the talk about digitizing the health-care world, only 11.9% of U.S. hospitals had adopted at least basic electronic medical records by last year, and only about 2% had done enough to qualify for future government financial incentives, a study finds. The study, <a href="http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0502" target="_blank" modo="false">published online in Health Affairs</a>, covers responses from 3,101 hospitals surveyed by the American Hospital Association ... It’s actually not surprising that hospitals were slow to adopt new systems in 2009, given the horrible economic conditions, difficulty of raising money for capital investments and uncertainty over what the final government requirements would be. “I’d be shocked if we didn’t see an uptick in 2010 and an even bigger one in 2011,” Jha tells the Health Blog. “But are we going from 2% to 40%? No. We might go from 2% to 5% [in 2010] to 15% or 20% in 2011.”</blockquote> No surprises there. Jha has previously published research articles I've mentioned on Healthcare renewal such as at<a href="http://hcrenewal.blogspot.com/2010/07/new-england-journal-on-meaningful-use.html"> "Science or Politics? The New England Journal and "The 'Meaningful Use' Regulation for Electronic Health Records"</a> and <a href="http://hcrenewal.blogspot.com/2010/03/hospitals-under-knife-sacrificing.html">"Hospitals Under the Knife: Sacrificing Hospital Jobs for the Extravagance of Healthcare IT?</a>": <blockquote>... Ashish Jha’s research at the Harvard School of Public Health that compared 3,000 hospitals at various stages in the adoption of computerized health records and found little difference in the cost and quality of care. A New York Times story "Little Benefit Seen, So Far, in Electronic Patient Records" on those findings is <a href="http://www.nytimes.com/2009/11/16/business/16records.html?_r=1">here</a>. </blockquote>What is of interest to me are statements made by Jha in response to questions asked by the WSJ reporter Katherine Hobson. Hobson: "We hear from a lot of physicians and others who are doubtful about the benefits of electronic records, and we asked Jha about the evidence supporting quality and safety improvements." Jha's response was quite interesting. There are a number of issues he raises: <blockquote>[Jha] "There are really two sides of the coin. I can point to about 400 studies done really well that show electronic health records can have a substantial impact on improving quality and safety. [But] we had a <a href="http://content.healthaffairs.org/cgi/content/abstract/29/4/639" target="_blank" modo="false">paper published earlier this year</a> [Electronic Health Records’ Limited Successes Suggest More Targeted Uses - ed.] showing that when hospitals adopted EHRs, there was no impact on quality. So how to reconcile that?" [Hobson] Jha says we have evidence that “when high-performance hospitals develop their own systems, implement them and tweak them, they can work wonders.” But the benefits gained from purchasing an off-the-shelf product and failing to implement or tweak it to meet an institution’s particular needs are likely to be “far less pronounced,” he says. “If you adopt a new technology, and do it badly, you can end up making productivity worse” or causing harm, he says. [There must be a lot of organizations meeting that description for such low impacts on quality to be the norm - ed.] “This is not a plug and play.” </blockquote> I find this interesting for several reasons. First point of interest: On doing health IT badly, and on health IT not being "plug and play": I came to the same industry-challenging conclusions a decade ago observationally that Jha came to through empirical research and review of the literature. On "doing health IT badly", in the late 1990's I'd written the following (now at my academic health IT site <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/">here</a>): <blockquote>... While clinical IT is now potentially capable of achieving many of the benefits long claimed for it such as improved medical quality and efficiency, reduced costs, better medical research and drugs, earlier disease detection, and so forth, there is a major caveat and essential precondition: the benefits will be realized only if clinical IT is done well. For if clinical IT is not done well, as often occurs in today’s environment of medical quick fixes and seemingly unquestioning exuberance about IT, the technology can be injurious to medical practice and biomedical R&D, and highly wasteful of scarce healthcare capital and resources. Those two short words “done well” mask an underlying, profound, and, as yet, largely unrecognized (or ignored) complexity. This website is about the meaning of "done well" in the context of clinical computing, a computing subspecialty with issues and required expertise quite distinct from traditional MIS (management information systems, or business-related) computing.</blockquote> I'd also made the observation, to the consternation of health IT marketing departments I'm sure, that health IT was not plug-and-play in an essay entitled "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=Cultures%20of%20mismanagement%20toxic%20to%20healthcare%20quality">Cultures of mismanagement: toxic to healthcare quality</a>" about my experiences as a CMIO: <blockquote>... To make matters worse [in an ongoing EPR project], the executive team then gave a key EPR staff member, a Senior Resident who'd done an excellent job writing and programming custom templates for the EPR system, a difficult time on promised payment for his services. They believed such a customization function was trivial and wasteful, and essentially reneged on their agreements with the Resident. When challenged by the informaticist and others that this person's services were essential, the views were met with indifference, if not disdain, for facts and logic. In fact, the executive team clung persistently to a mind-numbing leap of logic: they seemed to believe that just as home computers were "plug and play", so was [or should be - ed.] clinical IT. Their attitudes seemed to reflect a belief that the EPR team and resident were basically deceiving them. ... Unfortunately, healthcare IT is never plug-and-play, and in IT a person is either part of the solution or part of the problem.</blockquote> Second point of interest: Jha did mention two systematic reviews as describing hundreds of articles in the literature supporting potential benefits of health IT, one in May 2006 by Chaudhry et. al in the Annals of Internal Medicine (<a href="http://www.annals.org/content/144/10/742.abstract">link</a>), and one by Goldzweig et. al in Jan. 2009 in Health Affairs (<a href="http://content.healthaffairs.org/cgi/content/abstract/28/2/w282">link</a>). These reviews were rather weak on substance, though, in terms of robustness that could support spending hundreds of billions of dollars on health IT as national policy. The former article concluded: <blockquote>Limitations: Available quantitative research was limited and was done by a small number of institutions. Systems were heterogeneous and sometimes incompletely described. Available financial and contextual data were limited. Conclusions: Four benchmark institutions have demonstrated the efficacy of health information technologies in improving quality and efficiency. Whether and how other institutions can achieve similar benefits, and at what costs, are unclear. </blockquote> The articles' conclusions matched my own writings from observation and critical thought about what I was seeing personally and hearing from Medical Informaticists in the field. Third point of interest: In the WSJ blog post comment section, several commenters including Dr. Jha opined on the issue of lack of regulation of health IT as a factor in its limited diffusion and benefit to date. In a comment of 8:06 am August 29, 2010 Jha wrote: <blockquote>... On the issue of FDA approval [of HIT devices - ed.] — this is a tricky issue on which reasonable people can disagree. FDA regulates devices that are used on patients (not on doctors and nurses) traditionally so you could make a very reasonable argument that this is out of their scope.</blockquote> This argument goes back to the customary notion of the clinician as "learned intermediary" thus providing a shield from liability for the vendors of commercial HIT systems. Here I disagree with Jha. I would argue, again from observation, that this notion is obsolete. For example, in an item from the HIStalk blog site news of 8/30/10 (<a href="http://histalk2.com/2010/08/28/monday-morning-update-83010/">lin</a><a href="http://histalk2.com/2010/08/28/monday-morning-update-83010/">k</a>): <blockquote>... [a reader] sent a UPMC internal document describing a quality improvement project at Shadyside [Shadyside Hospital, Pittsburgh - ed.]. Before Cerner was implemented, the ED stocked 95% of the meds they used in their automated dispensing cabinet and the other 5% were requested by tubing the paper order to pharmacy, resulting in a pretty good turnaround time of 28 minutes. With CPOE, the ED had no good way to alert pharmacy about those 5% of meds, so turnaround time shot up to over two hours. An ED nurse came up with a solution: tubing a yellow “Stat ED Med” card to pharmacy along with an index card listing the patient and med needed, dropping TAT back to six minutes. </blockquote>From the medical informatics perspective, the lesson here is that the physician is effectively no longer a “learned intermediary” between computer and patient when a complete system of EMR, CPOE, decision support etc. linked to Pyxis medication dispensing and other machines is constructed. This model from the earlier days of simple advice-giving and-records keeping health IT no longer holds (arrows represent interaction): <blockquote>[Computer] <---> [Clinician] <---> [Patient] </blockquote>Rather, the computer has become a cybernetic governor of care, as in a programmatic intermediary between clinician and patient regulating care operations: <blockquote>[Clinician] <---> [Computer] ---> [Patient] (note one way arrow). </blockquote>The fact that a “workaround” a.k.a. an “override around the cybernetic regulator of care” had to be created in order for appropriate care to be delivered in a critical care environment supports the latter conceptual and legal model. You should not have to work around something that is not in the way. In other words, the computer is now the intermediary. There only way around it are workarounds. Articles by Koppel on CPOE and barcoding workarounds are other examples of how the health IT system is now the intermediary between clinician and patient, not the clinician as learned intermediary between IT and patient. One might also ask - what is the cognitive impact of continually devoting intellectual power to create work arounds, which add to the already complex multi-tasking of clinicians? It likely is not a positive contributor to the best care. These and many other issue contribute to the low diffusion of health IT in 2010. It is interesting that much of this was known to people in Medical Informatics (at least those without industry conflicts of interest) through in situ observation of health IT projects, going back many years, in fact decades with regards to the pioneers (as mentioned in my post "<a href="http://hcrenewal.blogspot.com/2009/03/health-it-industry-out-of-control.html">Healthcare IT: How Much More Out of Control Can An Industry Be?</a>"). Finally: The question should be asked: will health IT ever achieve the benefits claimed for it? Will it ever "revolutionize", or even make substantial contributions to medicine in a cost effective, non negatively-disruptive fashion? Will we ever stop "doing it badly" (per Jha) and start consistently "doing it well" (per me?) I am beginning to believe that health IT will never be successful without a major revolution in the IT field itself. Currently, its culture is one of cavalier practices regarding talent management, and it lacks a culture of safety. In 1969, EMR and Medical Informatics pioneer Donald A. B. Lindberg, M.D., now Director of the U.S. National Library of Medicine at NIH, made the observation that <blockquote>"... computer engineering experts per se have virtually no idea of the real problems of medical or even hospital practice, and furthermore have consistently underestimated the complexity of the problems…in no cases can [building appropriate clinical information systems] be done, simply because they have not been defined with the physician as the continuing major contributor and user of the information" (Lindberg DAB: Computer Failures and Successes, Southern Medical Bulletin 1969;57:18-21).</blockquote> I believe the problem was -- and is -- not "computer engineering experts" but "business computing personnel." First, there's the issue of the customs and traditions of business IT. As I've written before, these rigid traditions are antithetical to the poorly bounded, rapidly changing, improvisation-rich world of clinical medicine. Second, the current status quo is highly profitable to the vendors, resulting in reactionary mindsets and conduct. Third, there is a lack of appropriate intellectual capital in leadership roles in health IT. Medicine is a largely scientific field. Automation in the field is a highly scientific endeavor. Yet the field is dominated by business computing personnel (usually of a management information systems background), instead of true computer scientists and engineers, human factors scientists, safety and risk management experts, information scientists, and the like. If my observations of who went into science/medicine/perhaps law vs. who went into business-related fields when I graduated high school and college are indicators, the very best scientific minds are poorly represented in healthcare IT leadership circles. In summary, both observations of health IT and research on health IT show many stumbling blocks towards achieving major, unequivocal, reproducible benefit with a robustness that could support spending tens or hundreds of billions of dollars on the technology in ambitious national-scale implementations. I fear that under the current culture of IT, achieving effective national health IT is Mission Impossible. <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-imfifVmqF1bRrF7kLtg-nUaCmMISSg7h-uXxtwDLeOFDAty9YXeqUBv6wGjrfq1giGtBJB-vO-d7OUYt1LvVDOMu3AveeQCt1uu1A1xXm3vyPdIEM13ZVg7sVWXpCHD5m5JrD0X89g8k/s1600/mission-impossible-66-tv-02-g.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5511040463156536722" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-imfifVmqF1bRrF7kLtg-nUaCmMISSg7h-uXxtwDLeOFDAty9YXeqUBv6wGjrfq1giGtBJB-vO-d7OUYt1LvVDOMu3AveeQCt1uu1A1xXm3vyPdIEM13ZVg7sVWXpCHD5m5JrD0X89g8k/s320/mission-impossible-66-tv-02-g.jpg" style="text-align: center; margin: 0px auto 10px; width: 203px; display: block; height: 258px; cursor: pointer;" /></a>Your mission, Mr. Phelps, should you choose to accept it... A vast body of new, critical thinking about the technology and its industry is needed. Aug. 30 note: As a result of a rather underhanded complaint to the blog owner (not to me, curiously) that I am not providing answers to the problems I write about, that the blog owner informed me of without naming names ... <blockquote style="font-style: italic;">... his long screed ends with "national Health IT is mission impossible"... and while he says "new, critical thinking is needed", he doesn't say what that is. His next post is even more out there. </blockquote> ... I will add this: I do not have all the answers (if I did, I'd sell them). This is a serious social problem. The best I can do, and have done, is point out <a href="http://www.tinyurl.com/hitfailurecases">what not to do</a> - and even that has not had much of an effect despite ten years of public writing in numerous venues. I do know that believing there's a major problem is the first and most important step to solving these vexing issues. We as a country and culture have not yet reached that point; irrational exuberance prevails. Thinking about health IT requires a reboot, but denial of the problems must stop before that can occur. I exert my efforts largely in an attempt to bring the health IT patient out of denial. Final addendum 8/31: On reconsideration, it's not as if I haven't offered advice on "what to do" as well; see for example my post "<a href="http://hcrenewal.blogspot.com/2010/07/new-england-journal-on-meaningful-use.html">Science or Politics? The New England Journal and The 'Meaningful Use' Regulation for Electronic Health Records</a>." -- SS

Similar Conclusions on Health IT Via Observation and Via Research: Is HIT 'Mission Impossible'?

The Wall Street Journal reported on a study in Health Affairs entitled " A Progress Report On Electronic Health Records In U.S. Hospita...

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Can a $1 Billion Group of Babies Provide Fair Value in Health Care?

The issue of executive compensation in health care seems to be attracting more media attention. A St Louis Post-Dispatch <a href="http://www.stltoday.com/news/opinion/columns/the-platform/article_7c8df848-aca4-11df-9b5b-0017a4a78c22.html">editorial</a> noted how executive compensation for for-profit health insurance CEOs has grown. It started with a quote from Steven Hemsley, the CEO of UnitedHealth: <blockquote>Today the American people are questioning whether or not we receive fair value for the $2.6 trillion we, as a society, are expecting to spend this year on our health care system. The vast majority, including those of us at UnitedHealth Group, believe the answer is, 'No.'</blockquote> Here is a summary of the compensation information: <blockquote>Modern Healthcare, a leading health industry trade journal, published its annual executive compensation survey this week. Topping the list is Stephen Hemsley, quoted above, who gave a speech to the Detroit Economic Club last year questioning the value Americans receive for all that health spending. [Note: We discussed Hemsley's compensation <a href="http://hcrenewal.blogspot.com/2010/06/how-can-101-million-year-ceo-help.html">here</a>.] His take for 2009: $106 million — $7.5 million in salary and benefits and $98.5 million in stock options. Mr. Hemsley is not alone. The CEOs at insurance giants Cigna, Humana, Aetna, Coventry Health Systems and WellPoint all took home between $10 million and about $18 million. Many of those companies already have announced double-digit premium increases for next year. In all, the CEOs of America’s 10 largest health insurance companies made $228.1 million in salary and stock options during 2009, according to the liberal advocacy group Health Care For America Now. (That's enough to buy health insurance for at least 47,284 people, based on figured cited in this Kaiser Family Foundation survey on average premiums.) Since 2000, those CEOs have received slightly less than $1 billion in compensation, the group said.</blockquote> As an aside, the article noted how the compensation received by CEOs of the larger US health care corporations of all types, not just health insurance companies, has grown: <blockquote>Researchers analyzed pay and benefits for 342 CEOs of corporations in the Standard & Poor’s 500 index. They found that health care CEOs received an average compensation of $10.5 million last year. That’s 40 percent more than the average for all S&P 500 companies — 77 percent higher than chief executives at financial services companies.</blockquote> Even the CEOs of not-for-profit hospital systems have become million dollar babies: <blockquote>Last year, the average compensation for hospital system CEOs was $1 million. That’s enough to hire five new primary care doctors.</blockquote> However, the editorial was a bit vague about why paying CEOs of health care organizations so much was a bad idea, although it did imply that it was unseemly given that much of health care is funded by government programs, and not-for-profit health care organizations receive tax breaks that give "the public an even larger stake in their efficient operation" In my humble opinion, there are other big problems with the massive compensation that hired managers of health care organizations now command. Paying them so much instantly vaults them into the upper class, and the CEOs of larger health care corporations now live a life style more reminiscent of aristocracy than of that of the patients who depend on them. Such riches isolate those who receive them in their own bubbles. Can one really expect a million, or ten million, or hundred million dollar CEO to really care about the health of individual patients? Furthermore, paying them so much, usually regardless of their performance, their companies' performance, or the health effects of their products and services gives them perverse incentives to maintain their position at any cost, even at the cost of the patients they are supposed to serve. So, we do not receive "fair value for the $2.6 trillion we, as a society, are expecting to spend on our health care system." But we cannot really expect a billion dollar group of babies to fix that. True health care reform would decrease perverse incentives throughout the systems, spread the power in organizations more broadly, and make leaders accountable.

Can a $1 Billion Group of Babies Provide Fair Value in Health Care?

The issue of executive compensation in health care seems to be attracting more media attention. A St Louis Post-Dispatch editorial noted ho...

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More Examples of US Hospital Market Consolidation: Connecticut and Florida

Two recent stories from two different parts of the US continue the theme of ever increasing concentration of power in our health care system. Connecticut The Hartford Business Journal <a href="http://www.hartfordbusiness.com/news14474.html">reported </a>on growing interest in mergers among small Connecticut hospitals. <blockquote>Rising costs and reductions in government reimbursements related to health care reform could lead to consolidation among the state’s 29 acute care hospitals in the coming months and years, industry experts said. Indeed signs of consolidation in Connecticut are already taking shape. Danbury and New Milford hospitals, for example, recently signed an affiliation agreement that will put both organizations under the control of a single corporate parent. Meanwhile, the Central Connecticut Health Alliance, which is the parent company of the Hospital of Central Connecticut, has signed a memorandum of understanding to affiliate with Hartford Healthcare. If that deal gets federal regulatory approval, the two organizations would be integrated under the Hartford Healthcare umbrella. </blockquote> Note that this story suggests the rationale has everything to do with financial issues, and little to do with patient care issues. <blockquote>In some cases, deals could be fueled by the needs of cash-strapped, independent hospitals to find larger, more stable partners. In other cases, independent hospitals that have remained financially stable may look to form partnerships to gain greater access to capital markets. 'There are a lot of hospitals that are struggling financially and I think the changes that health care reform is going to bring with reimbursements could be the straw that breaks the camel’s back,' said Vincent Capece, the senior vice president and chief operating officer of Middletown-based Middlesex Hospital, which has nearly 300 beds. 'It will force hospitals to either go out of business, or find a partner.' Mergers or partnerships allow smaller, independent hospitals to leverage the purchasing power of larger institutions — especially with insurance companies — and consolidate backroom or administrative services, among other benefits. </blockquote> Note also that the recent US attempt at health care reform, later characterized as health insurance reform, is seen as driving, not preventing mergers. <blockquote>Hospital officials say talks of mergers, or other types of partnerships, are likely to continue as the economy remains on shaky ground and health reform changes the landscape of how the industry does business. Officials say reform will lead to reduced Medicare reimbursements from the federal government and require significant capital investments as hospitals prepare for larger patient loads and acquire new technology to provide more efficient care. </blockquote> Florida The Orlando Sentinel <a href="http://www.orlandosentinel.com/health/os-bert-fish-folo-20100820,0,1901555.story">reported</a> on increasing merger hospital merger activity in central Florida. <blockquote>In health-care circles, the summer of 2010 may be remembered as the end of small, independent hospitals in Central Florida. Three community facilities here have set their course toward consolidation by joining — or announcing plans to join — large systems. This month, Health Central, the last independent hospital in Orange County, voiced its intention to partner with a hospital chain. In July, the Wuesthoff hospital system in Brevard County was purchased by a for-profit corporation in Naples that owns 60 hospitals across the country. And on July 1, a partnership between Bert Fish Medical Center and Florida Hospital took effect, giving the system the option to buy the New Smyrna Beach facility.</blockquote> The latter case could apparently lead to quite a substantial local concentration of power: <blockquote>In Orlando, two major hospital chains dominate: Orlando Health, which owns all or part of eight hospitals, and Florida Hospital, which owns or operates 13 hospitals in Central Florida and 18 throughout the state. Both are likely suitors for Health Central, which operates a 171-bed hospital, a nursing home and other health-care services in west Orange County. Officials from Orlando Health did not respond to requests for interviews. Florida Hospital system already is involved in a partnership with Bert Fish Medical Center that could lead to a purchase of the facility in 2015. As part of the agreement, Florida Hospital, which is owned by Winter Park-based Adventist Health System, would provide $24 million in capital improvements for Bert Fish in the next five years, pay off the hospital's debt and prop up an underfunded pension plan. In addition, residents in the hospital's taxing district were told their tax rates would go down. The partnership cements Florida Hospital's dominance in Volusia and Flagler counties, where it already owns hospitals in DeLand, Orange City, Daytona Beach, Ormond Beach and Palm Coast. Its sole remaining competitor is Halifax Health, which owns hospitals in Daytona Beach and Port Orange.</blockquote> This story contained some protestations from hospital leaders that it is all about the patients: <blockquote>Florida Hospital officials say their goal is not to create health-care monopolies. 'We're a church-sponsored, church-related organization,' said Florida Hospital Vice President Richard Morrison. 'It's our mission to serve people — and if we can come to other communities and bring what we think is a distinctive approach to health care, then we'll do that.'</blockquote> On the other hand, <blockquote>'Hospitals today are like mom-and-pop grocery stores were 40 years ago,' said Dr. Kevin Schulman of Duke University's Fuqua School of Business. Before there was a Publix in every neighborhood, there were small grocery stores. Today, like the grocers, hospitals are joining forces or selling out to regional chains. For the hospitals, there's strength in numbers, Schulman said. A large hospital system has more leverage when negotiating with insurance companies. Likewise, there's power in purchasing. But these widespread hospital mergers 'have led to more market power for hospitals. Another word for that is 'monopoly,'' Schulman said.</blockquote> Furthermore, just as history tells us, monopoly may be good for monopolists but not for everyone else. <blockquote>A single small hospital doesn't have much clout to bargain with insurance companies. On the other hand, a hospital system that dominates a market is more likely to be able to charge higher rates to insurers — and their customers, say experts. 'There may be some efficiencies in being larger,' said Dr. Robert Berenson, a health-policy expert at the Urban Institute, a think tank in Washington. 'More to the point, however, it gives a hospital much more leverage in negotiating with health plans.' And although there are many forces driving hospitals to join larger systems, Berenson says the results have been clear to health-care economists. 'There's some theory that [consolidation] improves quality,' he said, 'but the reality is, it drives up prices.'</blockquote> While at least the folk wisdom among doctors is that the federal authorities will jump on any two doctors who informally discuss their prices, in the laissez faire, let the good times roll era of the 1980s through 2000s, there seemed to be little governmental concern about hospital (or health care in general) consolidation of power: <blockquote>'Because many hospitals are not-for-profit entities, we seem to have given them a lot more latitude from an antitrust perspective, [Dr Kevin] Schulman said. 'Yet they act like the worst of the for-profit monopolies.'</blockquote> Summary As we just <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">noted</a>, advocates of laissez faire commercialized health care often trumpet the advantages of competitive markets as a rationale for deregulation. While there are theoretic, and possibly empiric reasons to think that competitive markets are the optimal way to distribute goods and services, we recently <a href="http://hcrenewal.blogspot.com/2010/08/how-fallacy-of-perfect-health-care.html">discussed</a> aspects of health care that make it extremely hard for health care markets to be ideally competitive. In the 1960s, it became recognized that physicians' professionalism, hospitals' devotion to their missions, and sometimes even (gasp) government regulation might partially compensate for distortions in the health care market. However, as supposed free market advocates became more powerful, they pushed for the commercialization of medicine and hospitals, reducing professionalism and mission support, and the hollowing out government regulation. (However, why did the people who attacked medical societies' codes of ethics as monopolistic have no interest in attacking market domination by insurers or hospital systems? Inquiring minds want to know.) As we <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">said last time</a>, true health care reform would help physicians and other health care professionals uphold their traditional values, including, as the AMA once stated, "the practice of medicine should not be commercialized, nor treated as a commodity in trade." True health care reform would put health care "delivery" back in the hands of mission-focused, not-for-profit organizations, which put patients' health, safety and welfare first.

More Examples of US Hospital Market Consolidation: Connecticut and Florida

Two recent stories from two different parts of the US continue the theme of ever increasing concentration of power in our health care system...

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Cerner's Blitzkrieg on London: Where's the RAF?

In the Battle of Britain in WW2, the Royal Air Force (RAF) heroically repelled a foreign invasion of the UK. <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizR_go2zr4sQFQkowMyPGGpPF6jiKJlJL8sweAt_lnAj3Uba7-wnTtBHcjSHXOtavGZPVY204_-NDWb7wjSSJ8Fv9W1YrCisP9sMGe5ZCzObGPr3S7ebzSF7ElJM3ddAbOPVeYTVztZ-tv/s1600/Spitfire.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5510095258323492338" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizR_go2zr4sQFQkowMyPGGpPF6jiKJlJL8sweAt_lnAj3Uba7-wnTtBHcjSHXOtavGZPVY204_-NDWb7wjSSJ8Fv9W1YrCisP9sMGe5ZCzObGPr3S7ebzSF7ElJM3ddAbOPVeYTVztZ-tv/s320/Spitfire.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 269px; height: 162px;" /></a>The <a href="http://en.wikipedia.org/wiki/Supermarine_Spitfire">Supermarine Spitfire</a>, key defense tool in the Battle of Britain. (Worked without major glitches.) </div>Now, the invasion is American, and the battlefield is healthcare... I have often said health IT remains an experimental technology. However, the technology is being inexplicably force-fed with a vengeance to hospitals by IT companies and governments, force-fed with respect to the <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=2009">actual evidence</a> of benefit. In the case of the NPfIT in the UK, we have items such as those below from a 2009 government report "<a href="http://www.publications.parliament.uk/pa/cm200809/cmselect/cmpubacc/153/15304.htm">The National Programme for IT in the NHS: Progress since 2006 - Public Accounts Committee</a>." Emphases in italics mine: <blockquote> The termination of Fujitsu's contract has caused uncertainty among Trusts in the South and new deployments have stopped. One option being considered for new deployments is for Trusts to have a choice of either Lorenzo provided through CSC or the [Cerner, an American company - ed.] Millennium system provided through BT. There are, however, considerable problems with existing deployments of Millennium and serious concerns about the prospects for future deployments of Lorenzo. Before the new arrangements for the South are finalised, the Department should assess whether it would be wise for Trusts in the South to adopt these systems. Should either of the Local Service Providers take on additional commitments relating to the South, the Department should take particular care to assess the implications of the extra workload for the quality of services to Trusts in the Local Service Providers' existing areas of responsibility. The Programme is not providing value for money at present because there have been few successful deployments of the [Cerner] Millennium system and none of Lorenzo in any Acute Trust. Trusts cannot be expected to take on the burden of deploying care records systems that do not work effectively. Unless the position on care records system deployments improves appreciably in the very near future (i.e. within the next six months), the Department should assess the financial case for allowing Trusts to put forward applications for central funding for alternative systems compatible with the objectives of the Programme. </blockquote> In 2010 Londoners continue to be used as cannon fodder for the health IT experiment, which continues to rain IT bombs down upon them. The result? Mayhem: <blockquote><a style="font-weight: bold;" href="http://www.e-health-insider.com/news/6191/st_george">St George’s suffers Cerner teething pain</a> E-Health Insider Jon Hoeksma 26 Aug 2010 St George’s Healthcare NHS Trust is facing teething problems with its installation of a Cerner Millennium hospital information system.</blockquote> "Teething" problems? As if to imply problems with health IT are as minor as an infant's dental discomfort? That's some spin: <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzfIwatpfd5gOsr60TnpDo4YAAmqqf6dxfY2oYpuO0slDPgZNnZ7zLmX9yym54sddTRIv4Wa8OEw5QpQ2ukMOO8enAPs_agf2tsSnth0USiXRBmQ_hzYyo2YnJw1GDckS4KBJ7aMgR9bO/s1600/teething-baby.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5510080538269543506" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzfIwatpfd5gOsr60TnpDo4YAAmqqf6dxfY2oYpuO0slDPgZNnZ7zLmX9yym54sddTRIv4Wa8OEw5QpQ2ukMOO8enAPs_agf2tsSnth0USiXRBmQ_hzYyo2YnJw1GDckS4KBJ7aMgR9bO/s320/teething-baby.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 164px; height: 172px;" /></a>Health IT problems? Just baby issues; nothing a good cry can't solve ... </div> (The health IT baby must have serious endocrinological problems. Even after decades, it never seems to grow up, and is forever teething.) The spin and excuses surrounding the health IT industry are simply nauseating, considering it's people's lives that are being tampered with and put at risk. Let's translate to everyday language: the project has been a disaster. <blockquote>... The trust went live with the Millennium in March, under a new local delivery model from local service provider BT. Five months later, the trust, which is one of the largest in London, has had to second additional senior management expertise into the project team and institute an additional programme of workflow changes and training. The trust says the new system is creating difficulties in tracking patient notes in some areas and in managing outpatient appointments; creating backlogs of work that have required extra staff to deal with.</blockquote> Health IT is touted as improving clinician-clinician communication. Allow me to translate "difficulties in tracking patient notes." In King's English (as opposed to health IT political-ese and other mumbo-jumbo), this translates to "patient notes are getting lost." That means that health IT is obstructing patient care. I'm sure the patients didn't consent to the use of unproven technology that could get them killed. Health IT is also the supposed cure to healthcare's financial and staffing woes: <blockquote>They have also had a knock-on effect on the trust’s ability to meet and report on activity. Sources familiar with the implementation say the trust was fortunate that the coalition government dropped the national requirement to meet 18-week referral to treatment time targets in the revised NHS operating framework. The problems are understood to mainly relate to staff finding it difficult to adjust to new processes and to using the unfamiliar Cerner system. ...“Since the programme deployed some staff have found it challenging to follow the new workflows. Therefore, where appropriate, we are simplifying processes by modifying workflows and administrative procedures.”</blockquote> Translation: staff are finding it difficult to perform clinical-related work according to the capricious diktats of non-clinician health IT developers. In other words, they have difficulty being coerced to work for the computer, instead of the computer working for them. <blockquote>The south London trust told E-Health Insider this week that the implementation was just the beginning of a major change programme; a project it calls iCLIP.</blockquote> Only the beginning? God save the King.... <blockquote>“Although we successfully avoided some of the major pitfalls of other deployments, the new systems have presented some challenges to staff, particularly in relation to outpatient clinics and the tracking of case notes,” said chief operating officer Patrick Mitchell in a statement.</blockquote> How major could those "major pitfalls" have been? Perhaps he means, the software actually runs and no longer crashes? <blockquote>He added: “We have allocated additional temporary support while the new system and processes fully embed in these areas. A further programme of training and workflow changes are also underway as we continue to support staff and prepare for the next stages of the programme.”</blockquote> "Temporary?" We'll see about that. Per the recent article "<a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1475-6773.2010.01110.x/abstract">Electronic Medical Records, Nurse Staffing, and Nurse-Sensitive Patient Outcomes: Evidence from California Hospitals, 1998–2007</a>" (Health Services Research, 9 APR 2010, DOI: 10.1111/j.1475-6773.2010.01110.x), on a longitudinal analysis of 326 short-term, general acute care hospitals in California: <blockquote>... Our results suggest that advanced EMR applications may increase hospital costs and nurse staffing levels, as well as increase complications and decrease mortality for some conditions. Contrary to expectation [I'm not sure whose expectation, and on what basis - ed.], we found no support for the proposition that EMR reduced length of stay or decreased the demand for nurses.</blockquote> On to the issues of skills: <blockquote>Julia Crawshaw, the general manager for maternity services, has now been seconded into the project team “to lead on the work looking at optimisation of workflows, operational procedures and further training.”</blockquote> Will this GM for maternity be looking at workflows in, for example, neurosurgery? <blockquote>The problems now being addressed occurred despite 1,600 staff being comprehensively trained prior to go-live.</blockquote> "Comprehensively?" What does that mean, exactly? The results seem to belie that assertion. Or are these systems and their user experience so ill conceived, tedious, cryptic and complex that no amount of "training" is adequate? (I believe the latter.) <blockquote>However, Mitchell stressed that thanks to the hard work of staff, the new information system is delivering benefits, including “real-time reporting in the A&E department and more complete monitoring of bed occupancy.”</blockquote> How many millions of pounds and person-years were spent to achieve these startling results, I wonder? <blockquote>Mitchell said: “Reporting in real-time requires that staff report more promptly and accurately so additional training needs are also being identified to help individual staff become more comfortable with the system.”</blockquote> Perhaps the system - and its designers - should be "trained" to be more comfortable with the users? <blockquote>A spokesperson for BT told EHI: “Obviously these are operational issues the trust is dealing with. It is not for BT to comment. But you would expect that on a major deployment programme of this scale there would be issues.”</blockquote> This is a classic <a href="http://www.nizkor.org/features/fallacies/appeal-to-common-practice.html">appeal to common practice</a>. Such "issues" might be tolerable for inventory systems of widgets (perhaps <a href="http://hcrenewal.blogspot.com/2010/03/national-program-for-healthcare-it-in.html">Cadbury Schweppes products</a>?), but no, in mission critical areas I would not "expect" problems such as lost clinical notes. <blockquote>In the most recent trust newsletter, the chief executive said: “I do fully appreciate that iCLIP has been far from smooth sailing. However, all major projects have their ups and downs and I know that many colleagues are focused on the long-term success of this important project.”</blockquote> More spin and appeal to common practice. <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPCMDYMcrFET6vCcWoI6tNi2Zm2fT0R4ozWwm1AMW4tB3eOnx42-OSWo_p61Kp65sVEWj2h6wq4QkIrqv9xvYYK34RmHVnbjqcaeSWF0HO0tSGZLL5QimPBqyEbpXB3E8LtLGMo_sVhwSf/s1600/titanic_sinking_atlantic.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5510078179017119714" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPCMDYMcrFET6vCcWoI6tNi2Zm2fT0R4ozWwm1AMW4tB3eOnx42-OSWo_p61Kp65sVEWj2h6wq4QkIrqv9xvYYK34RmHVnbjqcaeSWF0HO0tSGZLL5QimPBqyEbpXB3E8LtLGMo_sVhwSf/s320/titanic_sinking_atlantic.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 264px; height: 216px;" /></a>This voyage was smooth sailing, until a little glitch was encountered... </div> "Far from smooth sailing?" Why does the HMS Titanic come to mind? <blockquote>... The next trust due to go live with Millennium in London is meant to be Imperial, scheduled to take the system in 2011, under Cerner’s Method M delivery model.</blockquote> "Method M delivery model"? How many "models" does it take to implement information systems in mission critical healthcare environments? In summary, the NPfIT, already by the government's admission a <a href="http://www.computerweekly.com/blogs/tony_collins/2009/06/16-key-points-in-gateway-revie.html">multi-billion pound debacle</a>, continues to drag on. Patients and hospital workers are the fodder for this experiment, spearheaded this time by an American invasion. The Blitz is on. Unfortunately, this time there's no RAF in sight to repel the foreign invasion. <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDRcjCjbTYZBYGAHdUNxrd77xJ2cCTyeFFAL73iWVwp7cYMFjYgzMQApeMUu1SdGDmW6nrKgci32VkqV2UBMXc0EInK1pK4ab3Htii7Yhwg7mTi4TFbVk1DgtPtVilAHR61yM12ahF2U_N/s1600/spitfire_crash1.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5510093962146400242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDRcjCjbTYZBYGAHdUNxrd77xJ2cCTyeFFAL73iWVwp7cYMFjYgzMQApeMUu1SdGDmW6nrKgci32VkqV2UBMXc0EInK1pK4ab3Htii7Yhwg7mTi4TFbVk1DgtPtVilAHR61yM12ahF2U_N/s320/spitfire_crash1.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 320px; height: 214px;" /></a>The upside down world of commercial health IT. Is healthcare in St. George's Trust being incernerated? </div> -- SS

Cerner's Blitzkrieg on London: Where's the RAF?

In the Battle of Britain in WW2, the Royal Air Force (RAF) heroically repelled a foreign invasion of the UK. The Supermarine Spitfire , key...

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Healthcare IT a Sacred Calling?

At my post <a href="http://hcrenewal.blogspot.com/2010/08/are-computers-in-medicine-narcotic-why.html">Are computers in medicine narcotic? "Why did the National Programme for IT fail?"</a> I observed that the healthcare IT mania/bubble is being driven in part by non-clinical hysterics who believe they will somehow "revolutionize" medicine with information technology tools that are barely able to show improvements at this point in time. (I first heard this hysterical claim of "revolutionizing medicine" being proffered verbatim by CEO's of several large HIT vendors at a Microsoft Healthcare Users Group Meeting ca. 1997). It may be worse. While written with good intentions, I'm sure, now we have an evangelical article by a major medical center CIO promoting the idea that IT workers are on a holy mission (<a href="http://histalk2.com/2010/08/25/cio-unplugged-82510/">link</a>). <blockquote>... Whether we give direct care or support someone who does, we are fulfilling a sacred calling — touching human lives. Don’t discount information technology because it’s only computer stuff and nobody really knows where cyberspace is anyway. You could’ve practiced IT in any industry, yet you chose healthcare. Or perhaps healthcare chose you. Sacred callings come in various forms. Although healthcare IT is nothing unique in itself, the element of sanctity is why I stay. If we want to live a life of significance, we must understand the depth of our calling and then perform as if our work matters. Grasp the privilege of serving humanity with your skills and talents. That is sacred.</blockquote> A noble premise. Unfortunately, the the piece then goes off the rails with extravagant commendation regarding the role of IT work in healthcare. While I agree with the overall premise, unfortunately the writer goes on to imply health IT personnel might somehow in their contributions be equal to, or even more important than clinicians: <blockquote>... It is not unusual for hospitals to conduct non-denominational “Blessing of the Hands” ceremonies ... I had seen this done for clinicians at one of our hospitals and it got me thinking. What about IT? What we do is no less critical to the healing process. [Puffery and braggadocio in the extreme? Healing has been going on for quite awhile before computers, and still goes on in the current majority of healthcare settings that don't use healthcare IT - ed.] Our hands may not touch patients, but they do touch their lives in ways unseen. Arguably, IT is the only segment that touches the entire healthcare continuum. </blockquote>As I've written many times before about healthcare IT professionals, there seems to be a blur about who are enablers of healthcare, and who are facilitators of healthcare. Self-adulatory hysterics make an otherwise good message less credible, at least outside of health IT circles. Finally, if health IT is a holy calling, it would be holy indeed for the health IT industry to pay less attention to the holy greenness of crisp banknotes, and heed the increasing corpus of literature showing health IT might in its present form might be devolutionary, not revolutionary. And act accordingly. -- SS

Healthcare IT a Sacred Calling?

At my post Are computers in medicine narcotic? "Why did the National Programme for IT fail?" I observed that the healthcare I...

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Making a Community Health Agency into the Leaders' Private Sand-Box

As we <a href="http://hcrenewal.blogspot.com/2010/06/more-hospitals-hiring-ceos-children.html">predicted</a>, it seems that the US Internal Revenue Service's (IRS) increased reporting requirements for not-for-profit organizations are leading to more examples of the coziness now prevalent among the top leaders of such organizations.  The latest entry in this new parade comes from a <a href="http://www.bradenton.com/2010/08/23/2520884/rural-health-execs-pay-tops-in.html">story</a> in the Bradenton (Florida) Herald about a not-for-profit community health agency whose mission is to provide health care to the poor and disenfranchised: <blockquote>Providing medical services to the indigent and uninsured in Manatee and Sarasota counties has financially benefitted some of Manatee County Rural Health Services Inc.’s officers, board members and their families, records show. The nonprofit agency has paid nearly $2 million in recent years to businesses owned by board members, officers, employees or their relatives, according to tax documents obtained by the Bradenton Herald. And its chief executive officer, Walter “Mickey” Presha Sr., has long been the highest-paid CEO of any such agency in Florida: His salary last year was $433,000 — $140,000 more than that of his closest counterpart, records show.</blockquote> The article listed multiple examples self-dealing by the top leaders of Rural Health Services. <blockquote>According to tax returns filed since 2004, Rural Health has paid: - $558,121 to John Lewis, a board member, for optometry services. - $536,591 to The Pinnacle Group of West Coast Florida Inc. for construction, maintenance and repair work. One of its principals is Trina Presha-Rosier, Presha’s daughter. - $344,766 to The Lawn Authority of Manatee County Inc. for lawn care maintenance at the agency’s facilities. Wardell Jackson, the agency’s vice president of support services, is a principal in the business. - $387,673 to A to Z Complete Property Management Inc. for janitorial cleaning and maintenance services. It is owned by Chris Mullinex, the agency’s facilities director. - $96,000 to R & L Healthcare Advisors, whose principals include Marc Lazarus, a board member, for consulting services. - $44,242 to More Power Properties and Investments LLC, co-owned by board Chairman J. Garry Lowe, for storage of agency files and equipment and the purchase of a modular building.</blockquote> Leaders of rural health offered mostly the usual explanations: >>As long as we say it is not a conflict, it is not a conflict<< <blockquote>According to a conflict of interest statement that board members are required to sign, Rural Health prohibits them, management and their families from having any 'beneficial interest or substantial obligation to' any entity engaged in business with the agency. But some have been able to bypass that prohibition because of this loophole: 'Unless it has been determined by the board, on the basis of full disclosure of facts, that such interest does not give rise to a conflict of interest.'</blockquote> >>We, our relatives, and our firms are the best possible source of the services<< <blockquote>Jackson, Mullinex and Presha-Rosier’s businesses won competitive bids, which are reviewed by a board committee and approved by the full board, Lazarus said. Presha said he is not involved in reviewing bids for construction projects that his daughter might seek. The agency chose to do business with the three board members’ companies because of special circumstances, agency officials said. Lewis is one of Manatee Rural Health’s founders and has overseen its optometry services since the beginning. Lowe offered the storage space for less than what commercial storage facilities charged, then sold one of the storage buildings to Manatee Rural Health for a reduced price. And Lazarus has 36 years’ experience in the health care field, including as an executive at Sarasota Memorial Hospital. They were hired because they provide needed services at a lower cost, thus allowing the agency to spend more money on patient care, officials said.</blockquote> >>Trust us, because we are wonderful people<< <blockquote>'It’s always disclosed to the board, so we always have the opportunity to not do it,' said Juanine Lowery, a board member since 1984. 'It hasn’t been a problem. It’s always been competitive.'</blockquote> And a slightly more coherent version of that: <blockquote>'Everything’s checked out and vetted,' Lazarus said. 'The arrangements are as good as or better than what we could get on the open market.'</blockquote> The explanation for the CEO's out-sized salary should come as no surprise. He got that high salary because >>I am a wonderful CEO and I deserve it<< <blockquote>Rural Health board members also defend Presha’s $433,000 salary, which makes him the highest-paid chief executive officer of any federally qualified community health center in Florida. His job performance, managerial skills and the organization’s complexity and size are all reasons he makes the top salary, board members say.</blockquote> Of course, the CEO himself thinks he is a wonderful CEO and deserves it: <blockquote>'I know what I do,' said Presha, who said he took a pay cut to take the Manatee Rural Health job in 1984 and has turned down job offers with higher salaries since then. 'If I could do it for free, I would do it for free. But I earn my keep.'</blockquote> So here we have another case of the cozy leadership of a not-for-profit health care organization, who all think they are doing just a wonderful job, who never seem to question their own actions, and who all believe all their buddies are also doing just a wonderful job. So naturally, since they are all such wonderful people doing a wonderful job, we should not begrudge them a few dollars here and there. Of course, if they were the leaders of a privately held company that made widgets, it would be their own money that they are spending, and maybe no on else should care. Even if the amounts involved seem relatively small relative to some of the cases that appear on Health Care Renewal, we should care particularly about how the leaders of Manatee County Rural Health Care Services throw around money (to each other), because of the nature of the organization's mission, as <a href="http://www.mcrhs.org/presidents_message.php">described</a> by CEO Presha himself: <blockquote>MCRHS has served the poor and underserved in our communities with the mentality of a 'provider of choice.' Our group is not only compassionate, but also innovative,....</blockquote> It is truly unseemly for a not-for-profit community health care organization dedicated to serving "the poor and undeserved" lead by people so complacent about their own entitlement. So to repeat what I have written before, in my humble opinion, this sort of coziness, this sort of fuzziness at the boundaries of institutional duties and personal interests, may be a fundamental reason that our current health care system has become so solicitous of the interests and prerogatives of its leaders, and so cold to the needs of patients and the values of professionals. The need for more transparent, accountable leadership of health care who explicitly are subject to clear ethical rules was never more apparent. Stay tuned as more and more cases like this appear....

Making a Community Health Agency into the Leaders' Private Sand-Box

As we predicted , it seems that the US Internal Revenue Service's (IRS) increased reporting requirements for not-for-profit organization...

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Are computers in medicine narcotic? "Why did the National Programme for IT fail?"

I noted an article <a href="http://www.smarthealthcare.com/patient-npfit-fail-consultants-it-staff-18aug10">Why did the National Programme for IT fail?</a> by an "ex-IT person" at the site Smart Healthcare.com in a series entitled "Patient from Hell." Aside from the intoxicant qualities of crisp bank notes, I am beginning to suspect that computers exert a narcotic effect, like Kool Aid laced with morphine or alcohol, on many in the population. Many people who should know better of the challenges, dangers and myths surrounding these tools are drawn in to comparisons and analogies that I would charitably call magical thinking and puerile - and absurdist and stupid when not so charitable. <style title="owaParaStyle">P { MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px } BODY { SCROLLBAR-HIGHLIGHT-COLOR: #cecfce; SCROLLBAR-ARROW-COLOR: #3f52b8; SCROLLBAR-TRACK-COLOR: #fffbff; SCROLLBAR-DARKSHADOW-COLOR: #fafafa; SCROLLBAR-BASE-COLOR: #f7f7f7 } </style>This article shows the muddled thinking behind the health IT mania. My observation: when you see the word "revolutionary" in the same paragraph as health IT you're dealing with hysterics. The "patient from hell" asks: <blockquote>Why is the road to electronic healthcare so much more rocky than computerising other bits of the economy? Other professions, including bankers, accountants and lawyers, have made the jump, some 30 years after the advent of personal computers. Even musicians, poets, journalists, artists, philosophers and MPs have got up to speed. </blockquote> "Even?" Yes, and you can train a dog to fetch a stick, therefore you can train a potato to dance. Why is the road to HIT more rocky than the road to computer poetry or art? Perhaps because the endeavors of clinicians are not like those of a musician or poet or lawyer or banker, but just a bit more informationally, operationally, cognitively, scientifically, and socially complex? <blockquote style="font-style: italic;">I was amazed at the time by the irresponsibility, primarily of the consultants [i.e., physicians - ed.], who were effectively opting out of the planning process. They showed no interest in playing a part in designing a new way of working – for themselves, for nurses and all others involved in the revolutionary changes which digitalisation would bring to their working practices.</blockquote> In fact, they were showing responsibility - to patients - in not being so eager to "change to new ways of working" according to the diktats of computer geeks, government and other bureaucrats and myriad non-clinicians running around like drunks, hysterically screaming "revolution!" <blockquote style="font-style: italic;"> I fear that communication between clinician and IT has now got so contaminated that crazy solutions will come out of the deliberations of the coalition government on the future of IT in the health service. All I ask is that clinicians and IT people talk to each other. Is that so hard?</blockquote> If you have the right tools on your kitchen table, shouldn't it be easy to generate nuclear fission at home? Due to factors such as the asymmetry in responsibilities, obligations and liabilities between the two fields, of differences in knowledge and expertise, and in mindset and qualifications to attain privileges to intervene in people's lives (who qualifies IT personnel to be involved in clinical affairs?), yes, idealistic "let's all play nice in the sandbox together" dreams are "so hard." Unfortunately, these types of comparisons and sentiments are extremely common in the Healthcare-IT-industrial complex. The reality is: The NPfIT failed because its purveyors and promoters hadn't a clue about the complexities and <a href="http://en.wikipedia.org/wiki/Wicked_problem">wicked problems</a> involved in such an endeavor, problems known and described in the Medical Informatics and Social Informatics literature, among others, for decades. It also failed because of collective ignorance of these domains among its leaders, and among those who chose the leaders. For instance, as I wrote <a href="http://hcrenewal.blogspot.com/2009/12/uk-mp.html">here</a>: <blockquote>The Department of Health has announced the two long-awaited senior management appointments for the National Programme for IT ... The Department announced in February that it was recruiting the two positions as part of a revised governance structure for handling informatics in the Department of Health. Christine Connelly will be the first Chief Information Officer for Health and will focus on developing and delivering the Department's overall information strategy and integrating leadership across the NHS and associated bodies including NHS Connecting for Health and the NHS Information Centre for Health and Social Care.Christine Connelly was previously Chief Information Officer at Cadbury Schweppes with direct control of all IT operations and projects. She also spent over 20 years at BP where her roles included Chief of Staff for Gas, Power and Renewables, and Head of IT for both the upstream and downstream business. Martin Bellamy will be the Director of Programme and System Delivery. He will lead NHS Connecting for Health and focus on enhancing partnerships with and within the NHS. Martin Bellamy has worked for the Department for Work and Pensions since 2003. His main role has been as CIO of the Pension Service.</blockquote> Excuse me. Cadbury Schweppes (candy and drink?) The Pension Service? As national leaders for healthcare IT? Instead of sobriety, attitudes about health IT seem to universally be "sure, the experts think you shouldn’t ride a bicycle into the eye of a hurricane, but we have our own theories." (See <a href="http://hcrenewal.blogspot.com/2008/12/open-letter-to-president-barack-obama.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/05/htrea-parallel-world-of-hit.html">here</a>.) The domain of health IT needs a very stiff period of detox and rock-solid sobriety before it can achieve the (non-revolutionary) benefits of which it is capable. -- SS

Are computers in medicine narcotic? "Why did the National Programme for IT fail?"

I noted an article Why did the National Programme for IT fail? by an "ex-IT person" at the site Smart Healthcare.com in a series...

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Where There's Smoke? ... A University President Who Simultaneously Lead a Failed Financial Company and a Tobacco Company Which Apologized for International Bribery

A long time ago, in 2006, we first blogged about a "<a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">new species of conflict of interest</a>" which we thought might prove to be even more important than those afflicting health care that were then starting to be discussed.  This involved health care organizational leaders who were simultaneously members of the boards of directors of for-profit health care corporations.  We posited these conflicts would be particularly important because being on the board of directors entails not just a financial incentive.  It ostensibly requires board members to "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. <a href="http://www.amazon.com/Corporate-Governance-Robert-G-Monks/dp/1405116986">Corporate Governance</a>, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]   Thus, for example, the conflict posed by the president of a university, to whom a medical school and academic medical center report, who also is the director of a pharmaceutical company, would be extreme. Since then, we<a href="http://hcrenewal.blogspot.com/2010/02/university-president-but-no-longer.html"> noted</a> yet another variant on this theme, university presidents who were supposedly the top leaders of failed financial firms, and then who did various dances to try to avoid accountability for these firms' fates.  That theme recently made it to the big time, a <a href="http://www.nytimes.com/2010/08/01/business/01prez.html">front page article</a> on the Sunday Business section of the New York Times. The most extreme version was the case of that of Eugene Trani, the former President of Virginia Commonwealth University ( full disclosure: I spent 7 years on the faculty of its medical school, and am still an adjunct faculty member).  Trani turned out to be on the board of a tobacco company, and soon after this was revealed, retired from the presidency (see most recent blog post <a href="http://hcrenewal.blogspot.com/2008/08/after-controversy-over-tobacco-money.html">here</a>). Now a Washington Post blogger has yet another <a href="http://voices.washingtonpost.com/local-opinions/2010/08/why_are_college_heads_doing_on.html">twist</a> on this case: <blockquote>Eugene P. Trani left the presidency of Virginia Commonwealth University in 2009 after improving the school and expanding its presence in downtown Richmond. But Trani was also a director of LandAmerica Financial Group, a Richmond-area title insurer that went belly-up in 2008, taking with it millions in investors' money. Today, Trani is on the board of Richmond-based Universal Corporation, a global tobacco marketer. Universal's subsidiaries have just agreed to pay $8.98 million in a tobacco bribery scandal that stretches from Brazil to Thailand to Africa. The firm has issued a public apology. Trani received $159,032 in total compensation for his board service.</blockquote> So Trani was not only on the board of directors of a tobacco company, he was on the board of directors of a tobacco company that was forced to settle charges of international bribery and issue apologies for same, and just to ice the cake, was on the board of a failed financial company whose failure affected residents of the locality which his university served. As the saying goes, "the fish rots from the head down."  How can academic leaders expect integrity from their faculty when they willingly take on such grotesque conflicts?  Leaders who thus try to serve two, or many masters are likely to run health care organizations that do not serve their primary constituents, patients who expect good care, learners who expect honest, competent teaching, and the public who expects important, unbiased research, well.  If we really want to reform health care, we need leaders who put the mission, not their own pocketbooks, prestige, and cronies, first.

Where There's Smoke? ... A University President Who Simultaneously Lead a Failed Financial Company and a Tobacco Company Which Apologized for International Bribery

A long time ago, in 2006, we first blogged about a " new species of conflict of interest " which we thought might prove to be even...

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How Oligopolists Rationalize Their Market Domination: the Examples of Sutter Health and the Carilion Clinic

Advocates of laissez faire commercialized health care often trumpet the advantages of competitive markets as a rationale for deregulation.  While there are theoretic, and possibly empiric reasons to think that competitive markets are the optimal way to distribute goods and services, we recently <a href="http://hcrenewal.blogspot.com/2010/08/how-fallacy-of-perfect-health-care.html">discussed</a> aspects of health care that make it extremely hard for health care markets to be ideally competitive.  Meanwhile, two news articles gave some case-based evidence about how current health care markets are hardly competitive.   Sutter Health A Bloomberg <a href="http://www.bloomberg.com/news/2010-08-20/hospital-monopolies-ruin-mri-bill-as-sutter-gets-price-it-wants.html">article</a> focused on Sutter Health in northern and central California. Sutter Health commands a substantial part of a very large market: <blockquote>Sutter Health Co., the nonprofit that owns Sutter Davis, has market power that commands prices 40 to 70 percent higher than its rivals per typical procedure -- and pacts with insurers that keep those prices secret. Sutter can charge these prices because it has acquired more than a third of the market in the San Francisco-to-Sacramento region through more than 20 hospital takeovers in the last 30 years, according to executives of Aetna Inc., Health Net Inc. and Blue Shield of California, who asked not to be named because their agreements with Sutter ban disclosure of prices. </blockquote> Also, <blockquote>Operating as a nonprofit, it has $8.8 billion in revenues, 24 hospitals, 17 outpatient surgery clinics and a 3,500-doctor network, making it the largest health-care provider in an 11- county region -- from San Francisco Bay to the Sierra Nevada mountains -- where 10 million people live. Sutter has 35 percent of the revenue and 36 percent of beds that compete for patients in the region, according to a state hospital database, including 100 percent of beds the state tracks in Placer and Amador counties east of Sacramento.</blockquote> Sutter care seems to cost a lot more than care from other doctors and hospitals: <blockquote>After Mark Logsdon tore a ligament in his knee skiing at Lake Tahoe in March, he returned home to suburban Sacramento and had an MRI scan at Sutter Davis Hospital. Sutter’s price for the knee scan was $1,271, payable by Logsdon and his insurer. Exactly the same MRI at one of the local imaging centers owned by Radiological Associates of Sacramento would have cost $696 -- 45 percent less. </blockquote> A few other examples of Sutter's prices compared to others; <blockquote>'Instead of leveraging its system to be more cost- effective, we’ve seen Sutter leveraging its system for monopoly pricing,' said Peter V. Lee, who in June became director of health-care delivery system reform for the U.S. Department of Health and Human Services. Lee was interviewed while he worked at the Pacific Business Group on Health, a coalition that includes Chevron Corp., Walt Disney Co., General Electric Co., and Wells Fargo & Co. In San Francisco, Aetna pays Sutter’s California Pacific Medical Center in a range with a midpoint of $4,700 for an abdominal CT scan, compared to $3,200 at St. Francis Memorial Hospital, owned by Catholic Health Care West. For colonoscopies, Aetna’s midpoint price is $3,200 at Sutter’s flagship CPMC and $2,800 at St. Francis Memorial. In Palo Alto, Aetna pays Sutter $349 per visit for new patients to see Manju Deshpande, a family doctor in Sutter’s Palo Alto Medical Foundation clinic. Three miles away, Paul Ford’s Stanford Medical Group receives $222. If the patient needs an immunization, Aetna pays Palo Alto Medical $85, and Stanford Medical, $16. Deshpande removes wax from the ear for $175. Ford scoops it out for $104. Down the road in Silicon Valley, when obstetrician Sarah Azad, a solo practitioner, delivers a baby for a patient covered by Aetna, the insurer pays her $2,052. When Nicole Wilcox of Sutter’s Palo Alto Medical Foundation does the same job, Aetna pays Sutter $5,890. The doctors practice blocks apart in Mountain View, California. Performance isn’t an issue -- Azad has Aetna’s top rating for quality of care and trained Wilcox during residency. </blockquote> The Sutter CEO, of course, denies there is a problem: <blockquote>Sutter operates in a competitive market, Chief Executive Officer Patrick Fry, 53, said in an interview. 'I don’t see Sutter Health as having market power, given the choices that employers can make,' Fry said. 'The market has a lot of room to make a lot of decisions.' </blockquote>The people who most praise competitive markets often seem to be those who have done the most to reduce the competitiveness of these markets.  The CEO also trotted out another old saw, that his organization has grown not to charge more, but to be more efficient. <blockquote>While Sutter may have higher 'unit' prices than its competitors, Fry said, it is not the most costly for patients over the long run because its integration of hospitals and doctor groups allows it to provide more efficient care, cutting down on the number of procedures. 'Our mission isn’t to maximize profits,' Fry added. 'Our mission, to the extent we can, is to optimize services.' Insurers and patients have many alternatives to Sutter, according to Fry. </blockquote>That is a tune would-be monopolists have been singing at least since the days of the "robber barons" and their monopolies such as Standard Oil. Of course, he is likely to defend a system that makes so much money and pays him and his buddies in top management so much, (and, contrary to his statement above, seems to have maximized profits): <blockquote>Sutter, with 48,000 employees, was among the most profitable hospital groups in the U.S. in 2009, with income of $697 million, up more than three-fold from 2008 due to large investment gains, on revenue that grew 6 percent to $8.8 billion. Its 5.2 percent operating margin -- or operating income as a percentage of revenue -- was 73 percent higher than the median for all nonprofit hospital systems in 2009, according to Standard & Poor’s. As of Dec. 31, Sutter had a $2.63 billion investment portfolio. Sutter paid Fry $2.8 million in 2008, according to its latest Internal Revenue Service filing. His top 14 lieutenants made between $830,000 and $1.8 million each. </blockquote> The article on Sutter emphasized how the strategic use of secrecy has helped Sutter maintain its remunerative ways: <blockquote>Sutter doesn’t allow its prices to be disclosed on insurers’ websites because it believes the information is often misleading and doesn’t reflect the variables of each patient’s case, [Sutter spokesman William] Gleeson said. </blockquote> Of course, keeping prices secret just makes the market even less like an ideally competitive one: <blockquote>As Sutter’s confidentiality terms show, the actual prices that hospitals receive are often kept secret by insurers. Patients in need of hospital care, especially in emergencies, often can’t travel very far, restricting competition. And if they have health insurance, they have little incentive to price shop. </blockquote> Finally, the article reminds us that the latest fad from health policy and health management circles (which seem increasingly to overlap), "accountable care organizations," may just be a pretext for even more market consolidation: <blockquote>The federal Patient Protection and Affordable Care Act is looking for $500 billion in savings over the next decade to help pay for extending coverage to 32 million uninsured Americans. Yet it doesn’t address the problem of market concentration -- and may make it worse, said Robert Berenson, a physician and policy analyst at the Urban Institute in Washington D.C. The 'unchecked' clout of hospital and physician groups in California is a 'cautionary tale for national health reform,' Berenson said in a February article in the journal Health Affairs. He warned that incentives in the new legislation to improve treatment by promoting doctor-hospital alliances -- called 'accountable care organizations' -- could backfire by strengthening providers’ bargaining leverage. </blockquote>Carilion Clinic A Washington Post <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/08/15/AR2010081503201.html">article</a> discussed the example of Carilion Clinic in Virginia, whose increasing market power we had <a href="http://hcrenewal.blogspot.com/2008/08/merger-mania-redux-case-of-carilion.html">blogged about</a> in 2008: <blockquote>Railroads put this city on the map, but the king of the domain is now health care -- or rather, the Carilion Clinic. Carilion owns the two hospitals in town and six others in the region, employs 550 doctors and has set off a bitter local debate: Is its dominance a new model for health care or a blatant attempt to corner the market? </blockquote> The Carilion story emphasized again how the "accountable care organization" meme is being used to justify market consolidation, allowing health care oligopolies to appear politically correct: <blockquote>Carilion says it represents an ideal envisioned by the nation's new health-care law: a network that increases efficiency by bringing more doctors and hospitals onto one team, integrating care from the doctor's office to the operating room. The name for such networks, which the new law strongly promotes with pilot programs, is accountable care organizations, or ACOs -- providers joining together to be 'accountable' for the total care of patients, with incentives from insurers to keep people healthy and costs down. </blockquote> Note that this political correctness is also used to justify further consolidation of power by limiting outside referrals: <blockquote>Independent doctors say Carilion is urging its employees to refer patients only to providers within the Carilion network, cloaking its expansion in the lingo of health-care reform. </blockquote> Of course, the Carilion CEO also denies anything but the most altruistic intent, but he too is making a lot of money from the current system: <blockquote>[Edward] Murphy, Carilion's chief executive who earned $2.3 million in 2008, acknowledges that providers holding excessive leverage over insurers is cause for concern but argues that ACOs can be a corrective. </blockquote> Summary We <a href="http://hcrenewal.blogspot.com/2010/08/how-fallacy-of-perfect-health-care.html">noted</a> earlier this week that multiple kinds of uncertainty (e.g., about diagnosis, prognosis, and the effects of treatment), and information asymmetry make it theoretically difficult for the health care market to be truly competitive. Meanwhile, there is increasing evidence that the market is actually uncompetitive. Although there are many hospitals and health insurers across the US, in many areas there are very few insurers and very few hospitals or hospital systems from which to choose. We have <a href="http://hcrenewal.blogspot.com/2009/01/to-whom-did-scorpions-in-bottle-owe.html">previously blogged</a> about how market dominant hospital systems seem to be able to charge more than any others. In the 1960s, it became recognized that physicians' professionalism, hospitals' devotion to their missions, and sometimes even (gasp) government regulation might partially compensate for distortions in the health care market. However, as supposed free market advocates became more powerful, they pushed for the commercialization of medicine and hospitals, reducing professionalism and mission support, and the hollowing out government regulation. (However, why did the people who attacked medical societies' codes of ethics as monopolistic have no interest in attacking market domination by insurers or hospital systems?  Inquiring minds want to know.) As we said last time, true health care reform would help physicians and other health care professionals uphold their traditional values, including, as the AMA once stated, "the practice of medicine should not be commercialized, nor treated as a commodity in trade." True health care reform would put health care "delivery" back in the hands of mission-focused, not-for-profit organizations, which put patients' health, safety and welfare first. Meanwhile, these latest stories about market dominating hospital systems suggest some additional lessons. Secrecy is the would-be monopolist's best friend. However, it is hard to think of very many kinds of information that hospitals really ought to be able to keep as proprietary secrets. As usual, sunshine is the best disinfectant. There seems to be a strange and increasing alliance between politically- correct academic theorists and proponents of raw economic power. The theorists' notion of "accountable care organizations" seems to have become a great foil for would-be monopolists, yet the theorists have done nothing to show how their creation would really bring "power to the people." Meanwhile, maybe "ACO" should stand for "aggressive care oligopoly." Meanwhile, be extremely skeptical of the latest health care fad, especially when it is supported both by academics and CEOs.

How Oligopolists Rationalize Their Market Domination: the Examples of Sutter Health and the Carilion Clinic

Advocates of laissez faire commercialized health care often trumpet the advantages of competitive markets as a rationale for deregulation. ...

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