What is Life is Really Like in Pharma? - These xtranormal Video Cartoons Come Close.

Sadly, the 'xtranormal' video cartoons at the following URL capture all too well what life is like in the pharmaceutical industry - buzzwords, neologisms, nouns turned into verbs, new paradigms, team players - and per the site, endless inane "initiatives" and related threats to sanity.<br /><br />I've been there; while a parody, these videos are uncomfortably close to reality.<br /><a href="http://www.youtube.com/user/ZombieSymmetry/feed"><br />http://www.youtube.com/user/ZombieSymmetry/feed</a><br /><br /><br /><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOjW3ZHtixsCfG9CBqzXYLcqBNdPxJfgRiMWhP1TfVsbPKNV6NDp0c-JUoAgxIMPsWulXxYRPYLY-gj7lra6MFhMEeztKzp0-SCnEJXtxVUCA56iMar4JHzQEluGSW11Qq3_GrgN-Rn7a9/s1600/future_of_pharma.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5704053254550054114" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOjW3ZHtixsCfG9CBqzXYLcqBNdPxJfgRiMWhP1TfVsbPKNV6NDp0c-JUoAgxIMPsWulXxYRPYLY-gj7lra6MFhMEeztKzp0-SCnEJXtxVUCA56iMar4JHzQEluGSW11Qq3_GrgN-Rn7a9/s320/future_of_pharma.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 382px; height: 260px;" /></a></div><div style="text-align: center;"><span style="font-size:85%;">"I'll have to ideate on that for awhile, Mike"</span><br /></div><br /><br />Even sadder are managers who believe their own babble.<br /><br />-- SS

What is Life is Really Like in Pharma? - These xtranormal Video Cartoons Come Close.

Sadly, the 'xtranormal' video cartoons at the following URL capture all too well what life is like in the pharmaceutical industry - buzzwords, neologisms, nouns turned into verbs, new paradigms, team …

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How the Anechoic Effect Is Institutionalized - A Hospital Policy Against Unsupervised Discussion with the Media

In a single sentence, a short, obscure <a href="http://www.wbjournal.com/news50656.html">article </a>in the Worcester (MA) Business Journal on life at a community hospital after a for-profit corporate take-over:<br /><blockquote>Several Nashoba employees, who didn't want their names used because it's <em><strong>against hospital policy to talk to the media without authorization</strong></em>, said they're happy with the new insurance plan.</blockquote><br />We have often discussed the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, how cases involving or discussions of the topics we address on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, the concentration and abuse of power in health care, fail to produce any responses, or echoes.  It was almost an aside, but the sentence above provides evidence of the existence of apparently blanket hospital policies against unsupervised discussion with the media. Here is an example of the institutionalization of the anechoic effect.<br /><br />This example raises three immediate questions. How prevalent is this? How long has it been going on? What is it meant to hide?<br /><br /><strong>Prevalence</strong> <br /><br />This article is only about a single hospital. However, the context of the article is the take-over of Nashoba Hospital by Steward Health Care. <a href="http://hcrenewal.blogspot.com/search/label/Steward%20Health%20Care">Steward Health Care</a> is a for-profit health care corporation that grew out of the take-over of the formerly not-for-profit <a href="http://hcrenewal.blogspot.com/search/label/Caritas%20Christi">Caritas Christi</a> health system by the private equity firm <a href="http://hcrenewal.blogspot.com/search/label/Cerberus">Cerberus Capital Management</a>. Steward Health Care now comprises <a href="http://www.steward.org/our-hospitals.html"> eight hospitals</a>, and also owns physician practices (apparently including over 2000 doctors based on a quick search using its <a href="http://www.stewardhealth.org/doctorfinder/search_form">"doctor finder" function</a>.) Thus it is likely that the policy at Nashoba Hospital that prevents unsupervised discussion with the media also applies at seven other hospitals, and perhaps to the practices of over 2000 doctors. Thus it is very likely that this hospital gag policy is not unique, and may be widespread. However, recursively, the existence of such gag policies will make it hard to determine their own prevalence.<br /><br />Note that we have posted a few times about confidentiality clauses mainly within physicians' contracts <a href="http://hcrenewal.blogspot.com/search/label/confidentiality%20clause">here</a>.<br /><br /><strong>Duration</strong><br /><br />This policy is likely relatively new, since the take-over of Caritas Christi by Cerberus occurred in 2010. My guess is that the rise of such policies may parallel the resurgence of for-profit hospitals and hospital systems, and perhaps the new involvement of <a href="http://hcrenewal.blogspot.com/search/label/private%20equity">private equity firms</a> in such organizations.<br /><br />In my humble experience, gag policies and confidentiality clauses at least within non-profit teaching hospitals were virtually unheard of from the time I began medical school (1974) to when I left my last full-time academic medical position (2005). <br /><br />Note that we<a href="http://hcrenewal.blogspot.com/2012/01/barbarians-at-gate-making-private.html"> recently found out</a> (because of investigative journalism about presidential candidate Mitt Romney's previous involvement with private equity firm Bain Capital) that such firms are generally rebranded leveraged buy-out firms. They have become known for their secretiveness. Therefore, maybe it should not be surprising that they have imposed such secretiveness on hospitals and health care professionals.<br /><br /><strong>Rationale</strong>  <br /><br />The big question is why should hospital employees not be allowed to talk to the media without management supervision? I can only speculate. <br /><br />In this case, perhaps such secretiveness is just the habit of the private equity executives who now run the hospital system. Even if this is the reason, they ought to reconsider. Hospitals and health care professionals due have a solemn obligation to keep confidential their patients' medical information. However, otherwise health care organizations and health care professionals ought to be as transparent as possible. <br /><br />Maintaining such a level of secrecy could lead to some suspicions, for example, that the generic managers of the organization distrust the professionals they hire who actually provide patient care; worse, that the managers fear discussion that might question their actions or abilities; worse, that the managers want to silence whistle-blowers; or even worse, that the managers have something unethical or illegal to hide. That is all speculation, of course.<br /><br />On the other hand, we have discussed again and again how the anechoic effect has stifled discussion of what is wrong with health care, and hence prevented meaningful health care reform. Gagging hospital employees is an obvious extension and institutionalization of the anechoic effect. It should not be done, because we need honest discussion of what is really wrong with health care so we can come up with some real solutions.

How the Anechoic Effect Is Institutionalized - A Hospital Policy Against Unsupervised Discussion with the Media

In a single sentence, a short, obscure article in the Worcester (MA) Business Journal on life at a community hospital after a for-profit corporate take-over:Several Nashoba employees, who didn't want …

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Can You Sue the Government? FDA Whistleblowers Sue Over Surveillance of Personal e-Mail

From the Washington Post:<br /><br /><blockquote><span style="font-size:130%;"><a style="font-weight: bold;" href="http://www.washingtonpost.com/world/national-security/fda-staffers-sue-agency-over-surveillance-of-personal-e-mail/2012/01/23/gIQAj34DbQ_story.html?sub=AR">FDA staffers sue agency over surveillance of personal e-mail</a></span><br />Ellen Nakashima and Lisa Rein<br />January 29, 2012<br /><br />The Food and Drug Administration secretly monitored the personal e-mail of a group of its own scientists and doctors after they <span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);">[the scientists - ed.] </span>warned Congress that the agency was approving medical devices that they believed posed unacceptable risks to patients, government documents show.<br /><br />The surveillance — detailed in e-mails and memos unearthed by six of the scientists and doctors, who filed a lawsuit against the FDA in U.S. District Court in Washington last week — took place over two years as the plaintiffs accessed their personal Gmail accounts from government computers.</blockquote><br />While accessing Gmail from government computers was not a wise idea, since all traffic over an institutional PC and network can be monitored, these Gmails were apparently to members of Congress.<br /><br /><a href="http://www.washingtonpost.com/wp-srv/national/documents/fda-whistleblowers-3.html#document/p1/a43233"></a><blockquote><a href="http://www.washingtonpost.com/wp-srv/national/documents/fda-whistleblowers-3.html#document/p1/a43233">Copies of the e-mails</a> show that, starting in January 2009, the FDA <span style="font-weight: bold;">intercepted communications with congressional staffers and draft versions of </span><a href="http://www.whistleblowers.org/">whistleblower complaints</a><span style="font-weight: bold;"> complete with editing notes in the margins</span>. The agency also took electronic snapshots of the computer desktops of the FDA employees and reviewed documents they saved on the hard drives of their government computers.</blockquote><br />See sample emails at link above.<br /><br /><blockquote>Information garnered this way eventually contributed to the <span style="font-weight: bold;">harassment or dismissal of all six of the FDA employees</span>, the suit alleges. All had worked in an office responsible for reviewing devices for cancer screening and other purposes.</blockquote><br />That's very unfortunate.<br /><br />It will be far more unfortunate if the warnings of the six, as in <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=lawsuit">this whistleblower case</a>, went unheeded, and patients are injured or die as a result. In that case, FDA bureaucrats might have been accessories to those injuries or deaths.<br /><br /><blockquote>“Who would have thought that they would have the nerve to be monitoring my communications to Congress?” said Robert C. Smith, one of the plaintiffs in the suit, a former radiology professor at Yale and Cornell universities who worked as a device reviewer at the FDA until his contract was not renewed in July 2010. “How dare they?”<br /></blockquote><br />I, on the other hand, would have expected it. It would have been far more prudent to send such emails from a private home computer and ISP.<br /><br /><p></p><blockquote><p>The scientists and doctors denied sharing information improperly. The HHS inspector general’s office, which oversees FDA operations, <a href="http://www.washingtonpost.com/wp-srv/national/documents/fda-whistleblowers-2.html/#document/p1/a43237">declined to pursue an investigation</a>, finding no evidence of criminal conduct. It also said that the doctors and scientists had a legal right to air their concerns to Congress or journalists.</p><p>FDA officials sought a second time that year to initiate action against the scientists and doctors. “We have obtained new information confirming the existence of information disclosures that undermine the integrity and mission of the FDA and, we believe, may be prohibited by law,” wrote Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health, on June 28, 2010.</p><p>The inspector general, after consulting with federal prosecutors, declined the second request, as well.</p></blockquote><p></p><p><br /></p><p>The IG office seemed to find the behavior legal, but FDA bureaucrats apparently did not like non-team players.</p><p><br /></p><p></p><blockquote><p>The FDA scientists and doctors, all of whom worked for the agency’s <a href="http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/CDRHOffices/ucm115879.htm">Office of Device Evaluation</a>, said they first made internal complaints beginning in 2007 that the agency had approved or was on the verge of approving at least a dozen radiological devices whose effectiveness was not proven and <span style="font-weight: bold;">that posed risks to millions of patients</span>. Frustrated, they also brought their concerns to Congress, the White House and the HHS inspector general.</p><p>Three of the devices risked missing signs of breast cancer, the scientists and doctors warned, according to documents and interviews. Another risked falsely diagnosing osteoporosis, leading to unnecessary treatments; one ultrasound device could malfunction while monitoring pregnant women in labor, risking harm to the fetus; and several devices for colon cancer screening used such heavy doses of radiation that they risked causing cancer in otherwise healthy people, the FDA scientists and doctors said.</p><p></p></blockquote><p><br /></p><p>Permit me to wonder if <a href="http://hcrenewal.blogspot.com/search/label/regulatory%20capture">regulatory capture</a> played a role in these decisions.<br /></p><p>One might also wonder if complaints about electronic health records or other clinical IT, admitted by FDA to be a medical device "<a href="http://hcrenewal.blogspot.com/2011/04/fda-decides-regulating-implantable.html">political hot potato</a>" they elected to not regulate, were also involved.<br /></p><p><br /></p><p></p><blockquote><p>... The first documented FDA interception was of an e-mail dated Jan. 29, 2009, shortly after the letter from Ferry. In it, device reviewer Paul T. Hardy asked a congressional aide, Joanne Royce, for assurances that “it is not a crime to provide information to the Congress about potential misconduct by another Agency employee.”</p><p>Royce replied: “[Y]ou and your colleagues have committed no crime. <span>. . . </span>you guys didn’t even provide confidential business information to Congress.”</p></blockquote><p></p><p><br /></p><p>The only 'crime' was apparently not being a 'team player', which on Healthcare Renewal <a href="http://hcrenewal.blogspot.com/2011/12/ehr-mission-hostile-user-experience.html">has been defined as</a> <span style="font-style: italic;">someone who is silent, or silenced, or a co-conspirator regarding managerial mediocrity, malfeasance, or madness.</span></p><p><br /></p><p></p><blockquote>Hardy, who is among the six employees who filed the suit, was fired in November after a negative performance review; an internal FDA letter obtained in separate litigation quoted managers saying <span style="font-weight: bold;">they did not “trust” him</span>. Of the other five scientists and doctors, the suit says two did not have their contracts renewed, two suffered harassment and werepassed over for promotions, and one was fired.</blockquote><p></p><p><br /></p><p>Trust him to do - <span style="font-weight: bold;">what</span>, I ask?<br /></p>Read the whole WaPo article.<br /><br />Plaintiff's lawyers need to be aware of this event, and I intend to make them aware.<br /><br />-- SS<br /><br /><span style="font-weight: bold;">Feb. 13, 2012 addendum:</span><br /><br />A link to Darrell Issa's letter to FDA Commissioner Hamburg is <a href="http://hcrenewal.blogspot.com/2012/02/congressman-darrell-issa-fdas-email.html">here</a>.<br /><br />-- SS

Can You Sue the Government? FDA Whistleblowers Sue Over Surveillance of Personal e-Mail

From the Washington Post:FDA staffers sue agency over surveillance of personal e-mailEllen Nakashima and Lisa ReinJanuary 29, 2012The Food and Drug Administration secretly monitored the personal e-mai…

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Elephants We Can Notice But Cannot Name

We have often discussed the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, how cases involving or discussions of the topics we address on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, the concentration and abuse of power in health care, fail to produce any responses, or echoes.  <br /><br />Last month, an article with the provocative title, "Elephants in Academic Medicine," by Souba et al addressed the anechoic effect, but was unable to discuss what people in academic medicine cannot discuss.(1)<br /><br /><strong>"Organizational Silence"</strong> <br /><br />In summary, the authors surveyed chairs of departments of medicine and surgery at all accredited US medical schools to ask about the "elephants in their living rooms." By this they meant the problems which people are unwilling to discuss at their medical schools.  Their goal was to assess "organizational silence" in academic medicine, as they discussed in their introduction:<br /><blockquote>Morrison and Milliken popularized the term <em>'organizational silence,' which refers to the collective-level phenomenon of doing or saying very little about the problems facing an organization.</em> Organizational silence derives both from people's fears of negative feedback and from a set of behavioral cues adopted by supervisors that lead to structures, procedures, and processes that discourage speaking up. Two common structural features of organizations that foster organizational silence are centralized decision making and a lack of formal feedback mechanisms.<br /><br />Some organizations face <em>an apparent dilemma in which employees know the truth about specific problems within the organization yet dare not speak that truth to their superiors</em>. A key factor that fosters the creation of a climate of organizational silence is senior leaders' fears of receiving criticism, especially from subordinates. The unwritten message from the top is 'No bad or unpleasant news.' Fearing retaliation or the label 'not a team player' if they speak their minds, subordinates become silent; even if they do speak up, they may discover that their feedback is disregarded. A culture of silence becomes ingrained.</blockquote><br /><strong>Methods</strong><br /><br />The investigators sought to learn from these academic leaders:<br /><blockquote>(1) What are the major elephants in your AHC [academic health center]? (2) What do you believe to be the most prevalent reasons people do not speak up? and (3) What are the consequences of remaining silent? </blockquote><br />The survey response rate was 55%. The major elephants, in the order that they were ranked by the participants, were<br />- misalignment between goals and available resources<br />- ignoring information that clearly indicates a performance problem<br />- unwillingness to give up on a failed strategy<br />- unwillingness to speak up about inequities (e.g., pay, space, favoritism, special deals)<br />- failure to deal with disruptive behavior<br /><br />The wording of these items were chosen by the investigators. The survey allowed for respondents to write in additional items, but the paper did not discuss any such responses. Its discussion of the results did not further define the nature of any elephants.<br /><br />In addition, survey results suggested that more open discussion is unlikely to be in the offing. <br /><br />- The majority of respondents thought that the <em>elephants were someone else's problem</em>:<br /><blockquote>Both chairs of surgery and of medicine believed that<em> elephants are more commonly ignored by deans and hospital leaders than by other department chairs or themselves</em>. Surgery chairs were more likely to say that hospital leaders ignore elephants, whereas medicine chairs were more likely to say that deans disregard elephants.</blockquote><br />- The majority thought that other leaders <em>did not encourage discussion of elephants</em>:<br /><blockquote>Only 52 of the chairs (37%) said that elephants are usually discussed in an appropriate venue, whereas 87 (63%) said that elephants are discussed in less constructive venues or not discussed at all.<em> Less than a quarter of the chairs (32; 23%) reported that the top leaders at their institutions actually encourage people to call out and deal with elephants</em>. More commonly, the chairs (77; 55%) reported that the <em>top leaders of their institutions say they want people to be frank about elephants, but their actions or nonverbal cues indicate otherwise</em>. A higher percentage of medicine chairs than of surgery chairs (16 of 53 [30%] versus 16 of 86 [19%]), said that top leaders pretend that elephants do not exist.</blockquote><br />- An important minority <em>did not think the elephants were a problem at all</em>:<br /><blockquote>nearly a fifth (26 of 139; 19%) agreed that, indeed, <em>some issues are best left undiscussed</em>.</blockquote><br />- While the majority favored discussing elephants, they <em>did not think it would be easy to do so</em>:<br /><blockquote>two-thirds (92 of 137; 67%) felt that <em>creating a culture in which elephants are openly discussed would be very or moderately difficult. </em></blockquote><br /><strong>Their and Our Discussion</strong><br /><br />It was particularly striking that an article about elephants in the living room did not more fully describe what sorts of elephants they were. The descriptions of elephants above, taken verbatim from the survey instrument, were vague. They were not clarified in the discussion section of the article.<br /><br />Particularly lacking were the sort of nasty elephants described by Pololi et al in a qualitative study of barriers to the advancement of primary care faculty.(2) As we summarized in our letter,(3) these elephants included academic leaders who put revenues ahead of patient care, teaching, and research; and who allegedly used deception for personal gain. Also lacking were nasty elephants we have discussed on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>. We have discussed examples of self-interested, <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicted</a>, and <a href="http://hcrenewal.blogspot.com/search/label/health%20care%20corruption">corrupt</a> leadership of health care organizations, including academic medical institutions. <br /><br />I am glad that Souba et al brought up the topic of elephants in academic medicine's living room. However, I am disappointed that these elephants were never clearly identified. It seems that while we are getting to the point of being able to say there are things we cannot say, we are not yet at the point of saying what those things are. The strength of the anechoic effect is demonstrated by cases in which we cannot talk about what we cannot talk about.<br /><br />Souba et al concluded:<br /><blockquote>We believe that AHCs are designed, often subconsciously, to <em>keep the range of conversation limited to a few voices, usually the <strong>voices of those in power</strong>.</em> The powerful silence the voices of others because they consider others' views to be either contrary to the status quo or of limited value.</blockquote><br />We would add that those in power often may value the status quo not merely because of philosophical conservatism, but because maintaining the status quo supports their self interest. In particular, it has become increasingly lucrative to be in a leadership position in a health care organization, even in a non-profit academic institution. <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">Executive compensation</a> at these institutions has been rising inexorably, driven by increasing <a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest">institutional relationships with corporate health care</a>. Individuals in leadership positions in academic medicine frequently have their own, increasingly lucrative financial relationships with the health care industry. (A study by Campbell et al showed that the majority of department chairs, like those who answered the survey above, have such relationships.[4]) Ever increasing hunger for institutional and personal revenue may lead to a variety of practices that are<a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management"> hostile to the academic and professional mission</a>.  Discussing any of these aspects of the status quo may offend and threaten those who are profiting from it.  <br /><br />However, as long as we cannot even talk about such problems, the problems will only get worse. <br /><br /><strong><span style="font-size: x-small;">References</span></strong><br /><span style="font-size: x-small;"><br /></span><br /><span style="font-size: x-small;">1. Souba W, Way D, Lucey C, Sedmak D, Notestine M. Acad Medicine 2011; 86: 1492-1499.  Link </span><a href="http://journals.lww.com/academicmedicine/Fulltext/2011/12000/Elephants_in_Academic_Medicine.9.aspx"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.</span><br /><span style="font-size: x-small;">2. Pololi L, Kern DE, Carr P, Conrad P, Knight S. The culture of academic medicine: faculty perceptions of the lack of alignment between individual and institutional values. J Gen Intern Med 2009; 24: 1289-95. Link </span><a href="http://www.med.upenn.edu/focus/user_documents/CultureofAcademicMedicine_Pololijgim.pdf"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.</span><br /><span style="font-size: x-small;">3. Poses RM, Smith WR. Faculty values. J Gen Intern Med 2010; 25: 646. Link </span><a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2881965/"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">4.  Campbell EG, Weissman JS, Ehringhaus S et al. Institutional academic-industry relationships. JAMA 2007; 298: 1779-1786, link </span><a href="http://jama.ama-assn.org/cgi/content/short/298/15/1779"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.]</span>

Elephants We Can Notice But Cannot Name

We have often discussed the anechoic effect, how cases involving or discussions of the topics we address on Health Care Renewal, the concentration and abuse of power in health care, fail to produce an…

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Wikipedia page on EHR's: ==Disadvantages== material seems to keep disappearing

<p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">It's interesting how most of the information below seems to have a hard time "staying put" on the Wikipedia page for "Electronic Health Record" at <a href="http://en.wikipedia.org/wiki/Electronic_health_record">http://en.wikipedia.org/wiki/Electronic_health_record</a><br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">The information is presented in a neutral fashion from impeccable sources. Yet several Wikipedia "editors" take issue with it and, </span><span style="font-size:100%;"><span style="font-weight: bold;">rather then editing it or refuting it </span>(and stating their rationale and sources!), </span><span style="font-size:100%;">they keep deleting it. (The most recent <a href="http://en.wikipedia.org/w/index.php?title=Electronic_health_record&action=edit">edit history comments</a> follow this "disappearing" information, at the bottom of this post):<br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;"><br /></span></p><blockquote style="font-family: arial;font-family:arial;"><p><span style="font-size:100%;">==Disadvantages==<br /><ref name="cbo2008/"></ref></span></p> <p><span style="font-size:100%;"><ref></ref></span></p><p><span style="font-size:100%;">===Software quality and usability deficiencies===<br />EHR software is unregulated, unlike computer systems used both in the development and production of, and as a part of pharmaceutical products, medical devices, food, blood establishments, tissue establishments, and clinical trials.<ref>http://en.wikipedia.org/wiki/Validation_%28drug_manufacture%29</ref> Other life-critical industries also have strict software validation and testing standards, e.g., Federal Aviation Administration, NASA.<ref>http://www.faa.gov/regulations_policies/advisory_circulars/index.cfm/go/document.information/documentID/1019261</ref><ref>http://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa.gov/20040014965_2004000657.pdf</ref>.</span></p> <p><span style="font-size:100%;">As a result, EHR software quality and usability is often suboptimal. For example, in "A study of an Enterprise Health information System", March 2011, a Medical Informatics researcher at [[University of Sydney]] in Australia found that a major EHR system for Emergency Departments slated for deployment in the public hospitals of [[New South Wales]] has serious deficiencies in software architecture and fit with clinician workflow. These deficiencies make it difficult to use and unreliable in terms of data integrity and loss, in one of the most demanding of clinical environments .<ref>http://sydney.edu.au/engineering/it/~hitru/index.php?option=com_content&task=view&id=91&Itemid=146</ref></span></p> <p><span style="font-size:100%;">The [[Healthcare Information and Management Systems Society]] (HIMSS), a very large U.S. healthcare IT industry trade group, observed that EHR adoption rates "have been slower than expected in the United States, especially in comparison to other industry sectors and other developed countries. A key reason, aside from initial costs and lost productivity during EMR implementation, is lack of efficiency and usability of EMRs currently available."<ref>http://www.himss.org/content/files/HIMSS_DefiningandTestingEMRUsability.pdf</ref><br /><br />Serious reliability and usability problems with the U.S. Department of Defense’s [[AHLTA]] EHR system have been reported to the Congress.<ref>http://www.usmedicine.com/articles/electronic-records-system-unreliable-difficult-to-use-service-officials-tell-congress.html</ref> </span></p> <p><span style="font-size:100%;">The U.S. [[National Institute of Standards and Technology]] (NIST) issued a Sept. 2011 report on deficient usability of current EHR systems, with recommendations for usability evaluation, testing and validation.<ref>http://www.nist.gov/healthcare/usability/upload/Draft_EUP_09_28_11.pdf</ref></span></p> <p><span style="font-size:100%;">===Unintended adverse consequences===<br />EHRs can introduce new unintended consequences, compared to paper records, and adverse outcomes, including patient injury and death, according to regualtory and governmental agencies, researchers, and others; for example, in an internal 2009 FDA memorandum<ref>http://www.ischool.drexel.edu/faculty/ssilverstein/Internal-FDA-Report-on-Adverse-Events-Involving-Health-Information-IT.pdf</ref> of Feb. 23, 2010 obtained and released by the Huffington Post Investigative Fund<ref>http://web.archive.org/web/20110425002322/http://huffpostfund.org/stories/2010/08/fda-obama-digital-medical-records-team-odds-over-safety-oversight</ref>, EHR-related medical errors are categorized as: errors of commission (EOC), errors of omission or transmission (EOT), errors in data analysis (EDA), and incompatibility between multi-vendor software applications or systems (ISMA). </span></p> <p><span style="font-size:100%;">The [[National Health Service]] (NHS) in the UK reports specific examples of EHR-caused patient harms in a 2009 document on guidance on the management of clinical risk relating to the deployment and use of health software, Annex A "Examples of potential harm presented by health software."<ref>http://www.isb.nhs.uk/documents/isb-0160/dscn-18-2009/0160182009specification.pdf</ref>.</span></p> <p><span style="font-size:100%;">Also, in "Research in Ambulatory Patient Safety 2000–2010: A 10-year review", Dec. 2011<ref>http://www.ama-assn.org/resources/doc/ethics/research-ambulatory-patient-safety.pdf</ref>, the American Medical Association reports: </span></p> <blockquote><span style="font-size:100%;">:While health IT may confer benefits, some research has also suggested that health IT systems can create new issues or exacerbate existing problems. Wachter noted that, “[i]n both professional and lay publications, concerns have been raised that today’s electronic health records promote the copying and pasting of clinical information, instead of its thoughtful analysis; foster a focus on completing computerized checklists and templates rather than detailed probing of the patient’s history, and support less thoughtful diagnostic reasoning and more automatic behavior on the part of caregivers." Research indicates that a great deal depends on the design of the health information technology system, with poorly designed systems contributing to instances of errors (Ash et al). Where user interface designs are cumbersome to use and do not fit into the clinician’s natural work context, some have noted the potential for “cognitive overload,” among other reactions, and ultimately the possibility of increasing errors in data entry and retrieval as well as errors in the process of communication and coordination (Ash et al, Singh et al).</span></blockquote> <p><span style="font-size:100%;"><br /></span></p><p><span style="font-size:100%;">In the U.S., FDA's MAUDE (Manufacturer and User Facility Device Experience) database<ref>http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfMAUDE/search.CFM</ref>reveals many reported EHR problems, some of which could result in patient injury or death <ref>http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html</ref>. Both FDA (in the 2010 memo referenced above) and the [[Institute of Medicine]] of the National Academies in a 2011 study <ref>http://www.modernhealthcare.com/Assets/pdf/CH76254118.PDF</ref> reveal that EHR-related injuries and deaths are real, but the true extent is likely understated, they report, due to numerous factors impeding diffusion of knowledge such as contractual gag and hold harmless clauses<ref>http://jama.ama-assn.org/content/301/12/1276.extract</ref> and lack of familiarity by users of where to report EHR-related adverse events (per aforementioned 2009 FDA internal memo). A Medical Informatics researcher in the U.S. has compiled a well-referenced teaching site that covers unintended consequences of EHRs, health IT project difficulties and failure and related issues<ref>{{cite web | last=Silverstein| first=Scot| year=2012 | url=http://www.ischool.drexel.edu/faculty/ssilverstein/cases/ | title=Contemporary Issues in Medical Informatics: Common Examples of Healthcare Information Technology Difficulties| publisher=Drexel University |accessdate=2012-01-26}}</ref>.</span></p> <p><span style="font-size:100%;">The literature is conflicting on benefits and harms of EHRs <ref>http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html</ref>, and as in the Jan. 2009 U.S. National Academies study "COMPUTATIONAL TECHNOLOGY FOR EFFECTIVE HEALTH CARE: IMMEDIATE STEPS AND STRATEGIC DIRECTIONS", EHR's ultimate success will depend upon accelerating interdisciplinary research in biomedical informatics, computer science, social science, and health care engineering.<ref>http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572</ref></span></p> <p><span style="font-size:100%;">===Regulatory controversy===<br />FDA's Jeffrey Shuren, MD JD, Director of the [[Center for Devices and Radiological Health]] (CDRH), has explicitly declared EHRs are a medical device.<ref>http://healthit.hhs.gov/portal/server.pt/gateway/PTARGS_0_11673_910717_0_0_18/3Shuren_Testimony022510.pdf</ref> So has the [[Medical Products Agency (Sweden)]]; Swedish law for medical devices is based on EU Directives.<ref>http://www.lakemedelsverket.se/upload/foretag/medicinteknik/en/Medical-Information-Systems-Report_2009-06-18.pdf</ref>. In medicine, legal and ethical standards such as the NIH Guidelines for Conduct of Research Involving Human Subjects<ref>http://ohsr.od.nih.gov/guidelines/index.html</ref> and the World Medical Association Declaration Of Helsinki<ref>http://ohsr.od.nih.gov/guidelines/helsinki.html</ref> restrict introduction of new drugs and medical devices without informed consent, and without extensive preclinical and clinical testing and post-marketing surveillance, especially when risks of the technology are unknown. As in the 2011 U.S. [[Institute of Medicine]] study "Health IT and Patient Safety: Building Safer Systems for Better Care"<ref>http://www.modernhealthcare.com/Assets/pdf/CH76254118.PDF</ref>, there are calls for formal governmental regulation of the technology.</span></p> </blockquote><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;"><br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">The edit-history comments are quite interesting, where a poster who uses the ID "Barek" keeps deleting all or most of the information on EHR disadvantages, despite indications the material is impeccably sourced and does not draw its own conclusions. Read from bottom to top:<br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;"><br /></span></p><blockquote style="font-family: arial;font-family:arial;"><span style="font-size:100%;">17:29, 27 January 2012‎ Ohnoitsjamie (talk | contribs)‎ (67,826 bytes) <span style="font-weight: bold;">(please discuss on talk page, as you are approaching WP:3RR)<br /><br /></span>17:28, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,232 bytes) <span style="font-weight: bold;">(clarifying that information comes from the cited sources.)<br /><br /></span>17:26, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,137 bytes) <span style="font-weight: bold;">(→Unintended adverse consequences)<br /><br /></span>17:24, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,151 bytes) <span style="font-weight: bold;">(If you have factual disageements, let them be known and document the source of your information.)<br /><br /></span>17:23, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,137 bytes) <span style="font-weight: bold;">(If you have factual disageements, let them be known and document the source of your information.)<br /><br /></span>17:18, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,122 bytes) <span style="font-weight: bold;">(Undid revision 473542684 by Barek (talk). Barek may have a conflict of interest regarding exposure of health IT difficulties.)<br /><br /></span>17:14, 27 January 2012‎ Barek (talk | contribs)‎ m (67,826 bytes) <span style="font-weight: bold;">(Reverted edits by InformaticsMD (talk) to last version by Barek)<br /><br /></span>17:14, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,122 bytes)<span style="font-weight: bold;"> (→Regulatory controversy)<br /><br /></span>17:12, 27 January 2012‎ InformaticsMD (talk | contribs)‎ (76,217 bytes)<span style="font-weight: bold;"> (The added information is factual, well-referenced from impeccable sources, and does not draw conclusions.)<br /><br /></span>17:08, 27 January 2012‎ Barek (talk | contribs)‎ (67,826 bytes) <span style="font-weight: bold;">(→Disadvantages: restore some content after purging WP:SYNTH material)<br /><br /></span>17:06, 27 January 2012‎ Ohnoitsjamie (talk | contribs)‎ (65,826 bytes) <span style="font-weight: bold;">(rv per WP:SYNTH)<br /><br /></span>17:01, 27 January 2012‎ 108.16.62.235 (talk)‎ (76,341 bytes) <span style="font-weight: bold;">(Undid revision 473539844 by Barek (talk))<br /><br /></span>16:57, 27 January 2012‎ Barek (talk | contribs)‎ (65,826 bytes)<span style="font-weight: bold;"> (rv - some of that content is usable - but most is pure WP:SYNTH, attempting to draw conclusions rather than simply stating what's in the sources - requires a total re-write to be encyclopedic)<br /><br />...</span><span> 20:22, 26 January 2012‎ SarekOfVulcan (talk | contribs)‎ (65,058 bytes) (<span style="font-weight: bold;">→Unintended Adverse Consequences: actually, remove whole section - BAD HANDWRITING can result in patient injury and death</span>)<br /><br />20:21, 26 January 2012‎ SarekOfVulcan (talk | contribs)‎ (65,860 bytes) (<span style="font-weight: bold;">→Unintended Adverse Consequences: If it's unknown, we don't need to report it. If it's not a RS, we don't need to report its conclusions. And "a researcher says" isn't notable enough to mention without establishing authority in the subject)</span> (undo) </span><span style="font-weight: bold;"><br /><br /></span></span></blockquote><span style="font-family: arial;font-family:arial;font-size:100%;" ><br />I note that the logically fallacious "<span style="font-weight: bold;">Bad handwriting can cause patient injury and death, so remove whole EHR Unintended Adverse Consequences section</span>" and "<span style="font-weight: bold;">if it's unknown, we don't need to report it</span>" <span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);">[regarding the referenced FDA and IOM observations that the true extent of EHR adverse consequences is unknown -- which is on its face a matter critical to public health and policy - ed.]</span>, coming from an editor who ironically calls him/herself "Sarek of Vulcan", offers a prime example of how the utopian concept of tapping "community wisdom" can fall flat on its face.<br /></span><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">WP:SYNTH is Wikipedia-talk for "</span><span class="mw-headline" id="Synthesis_of_published_material_that_advances_a_position" style="font-size:100%;">Synthesis of published material that advances a position"</span><span style="font-size:100%;">, i.e., "drawing conclusions." Apparently, when it comes to EHR, citing the work of governmental regulatory and healthcare agencies, expert researchers, etc. is "drawing conclusions."</span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">Wikipedia is essentially open to all, including the HIT industry and its pundits.<br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">It is possible that the Wikipedia editors who keep deleting the material could have some sort of conflict of interest. COI could cause them to find easily-verifiable information </span><span style="font-size:100%;">from impeccable sources </span><span style="font-size:100%;">on the Wikipedia EHR page (viewed 22924 times in the last 30 days as of this morning</span><span style="font-size:100%;">) that </span><span style="font-size:100%;">refutes common cybernetic legends</span><span style="font-size:100%;"> to be "inconvenient." We've certainly seen that type of person before <span>(</span><a style="font-weight: bold;" href="http://hcrenewal.blogspot.com/2010/01/more-on-perversity-in-hit-world.html">link</a><span>)</span>.</span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">This affair may also be another example of the "<a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>", </span>the notion we discuss often on this blog that certain topics in medicine and health care 'just aren't talked about<span style="font-size:100%;">', in action.<br /></span></p><p style="font-family: arial;font-family:arial;"><span style="font-size:100%;">The 'disadvantages' material, revised, will be re-posted again soon, after my being blocked (for 'reverting', i.e., </span><span style="font-style: italic;font-size:100%;" >restoring</span><span style="font-size:100%;"> the material</span><span style="font-style: italic;font-size:100%;" > </span><span style="font-size:100%;">three times in 24 hrs.) expires tomorrow. It will be revised to have as neutral a tone as possible, with exact page numbers where possible, in accordance with written Wikipedia examples. If the additions still disappear, that will be revelatory.<br /></span></p><p><span style="font-family: arial;font-family:arial;font-size:100%;" >-- SS</span><br /></p>

Wikipedia page on EHR's: ==Disadvantages== material seems to keep disappearing

It's interesting how most of the information below seems to have a hard time "staying put" on the Wikipedia page for "Electronic Health Record" at http://en.wikipedia.org/wiki/Electronic_health_record…

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Unequal Justice Under Law - Comparing Cases of Alleged Misbehavior by Large Health Care Organizations and Individuals

How the wealthy and powerful have become able to play by a different set of rules than those affecting ordinary people may be the defining issue of our time.  Yesterday, President Obama's State of the Union message asked for an economy in which "everyone plays by the same set of rule."  We posted about how this issue, which got national attention due to the Occupy movement, affects health care <a href="http://hcrenewal.blogspot.com/2011/11/health-care-also-needs-to-challenge.html">here</a>.<br /><br />We have previously posted again and again about how the penalties for misbehavior by large US health care organizations seem to be so minimal as to be incapable of deterring future bad behavior (e.g., see <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">posts</a> about legal settlements).  At most, corporations often pay fines that are no more than a cost of doing business.  They rarely have to admit guilt, and when they do, it is usually to a relatively trivial charge.  The people who authorized, directed, or implemented the bad behavior almost never suffer any negative consequences.  Thus, the leaders of large US health care organizations seem to have <a href="http://hcrenewal.blogspot.com/search/label/impunity">impunity</a>.<br /><br />Similar complaints have been made about the lack of accountability of the leaders of the finance firms that lead us into the global financial crisis, or great recession.  <br /><br />However, while I have reviewed now hundreds of stories about such minimal organizational punishments, I have also seen hundreds of stories discovered by my automatic news searches of much more severe penalties paid by individuals who have been accused of similar misbehavior.  I have never previously made an explicit comparison of how health care corporate and individual misbehavior are handled.<br /><br />A recent set of examples of organizational misbehavior invites such a comparison.  Here they are, in chronological order.<br /><br /><strong>KV Pharmaceutical</strong><br /><br />On December 6, 2011, the St Louis Post Dispatch <a href="http://www.stltoday.com/business/local/kv-pharmaceutical-agrees-to-million-settlement-with-doj/article_3c947aee-2054-11e1-8c50-001a4bcf6878.html">reported</a>:<br /><blockquote>KV Pharmaceutical Co. has agreed to <em>pay $17 million to federal and state authorities to settle Justice Department allegations that it defrauded federal health care programs</em>.<br /><br />The settlement resolves allegations that KV, as the Bridgeton-based parent company of now-defunct Ethex Corp., <em>misrepresented the regulatory status of two of its drugs</em> that did not qualify for coverage under federal health care programs, the Justice Department said today.<br /><br />The Justice Department alleges that <em>Ethex submitted false quarterly reports to the federal Centers for Medicare and Medicaid Services</em> related to the two drugs: nitroglycerin extended release capsules and hyoscyamine sulfate extended release capsules.</blockquote><br />Company leadership made the usual sort of comment. CEO Greg Divis said:<br /><blockquote>The closure of this matter is <em>another step forward as KV moves ahead</em> as a women's healthcare focused branded specialty pharmaceutical company.</blockquote>Corporate leaders seem to love putting such unpleasantness in the past and moving on, especially when they personally are not held accountable for the previous misbehvior.<br /><br />Note that this is just the latest settlement for KV Pharmaceutical:<br /><blockquote><em>KV shut down Ethex after the subsidiary pleaded guilty in March 2010 to two felony counts of criminal fraud</em> for failing to report to the Food and Drug Administration that it was making oversize drugs - and drew $27.6 million in fines and restitution.</blockquote><br /><strong>Catholic Healthcare West, Sutter Health</strong><br /><br />On December 8, the Sacramento Bee <a href="http://www.sacbee.com/2011/12/08/4107855/chw-sutter-pay-23-million-to-settle.html">reported</a>:<br /><blockquote>Two of Sacramento's biggest health care players <em>paid a combined $2.3 million to the federal government to settle allegations that 61 of their hospitals double-billed Medicare</em> for therapies and services, U.S. Department of Justice officials announced Wednesday.<br /><br /><em>Catholic Healthcare West paid more than $875,000 and Sutter Health nearly twice that – more than $1.43 million</em> – for alleged duplicate charges for infusion therapies and treatments to break up kidney and bladder stones, in what Lauren Horwood, a spokeswoman in the Sacramento U.S. attorney's office, called 'a significant settlement.'</blockquote><br />As usual,<br /><blockquote>Officials at the two health networks <em>admitted no wrongdoing</em> in agreeing to the settlement, Horwood said. No charges will be filed.</blockquote><br />Again, however, this was not the first such issue to affect these large non-profit organizations:<br /><blockquote>In 2006, Sutter Health agreed to grant discounts and refunds to uninsured patients the network was accused of overcharging, stemming from a 2004 class-action lawsuit.</blockquote><br /><strong>Blue Shield (California)</strong><br /><br />On December 29, 2011, the Los Angeles Times <a href="http://articles.latimes.com/2011/dec/29/local/la-me-blue-shield-20111229">reported</a>:<br /><blockquote>More than a year after the healthcare reform law sought to prevent sick patients from losing medical coverage, insurers are still paying for their alleged abuses.<br /><br /><em>Blue Shield has agreed to pay $2 million to resolve accusations that the company improperly dropped policyholders after they got sick and needed expensive treatment</em>.<br /><br />The settlement, announced Wednesday by Los Angeles City Atty. Carmen Trutanich, ends an investigation into more than 1,000 so-called rescissions by Blue Shield, a San Francisco-based not-for-profit company.</blockquote><br />As usual, there was no admission of guilt, and a company spokesperson claimed that while the company decided to pay out the money in response to the allegations, it, of course, was blameless:<br /><blockquote>Blue Shield spokesman Steve Shivinsky said the firm settled to avoid litigation.<br /><br /><em>'Our process meets or exceeds all legal and regulatory requirements</em>,' Shivinsky said in a statement. 'In every instance, we provide immediate notice, ensure multiple layers of review, involve a medical director in the decision, give members an opportunity to provide additional information before we take any action, and follow the guidance of an independent third party review.'</blockquote><br />Note that rescission is now against US federal law:<br /><blockquote>President Obama made rescission a central theme in his push for a healthcare overhaul. In September 2010, a ban on rescissions for unintentional application errors became one of the first pieces of the healthcare law to take effect.</blockquote><br /><strong>GE Healthcare</strong><br /><br />On December 29, 2011, the Detroit Free Press reported (<a href="http://www.usatoday.com/money/industries/health/story/2011-12-29/ge-healthcare-settlement-30-million-dollars/52268818/1">via</a> USA Today):<br /><blockquote>Pharmaceutical giant GE Healthcare will <em>pay $30 million to the U.S. Department of Justice to settle</em> claims in a case filed by a Michigan salesman, <em>alleging one of its companies marketed a diagnostic drug used in cardiology tests as one that could be diluted and stretched to more patients than intended.</em></blockquote><br />Not surprisingly,<br /><blockquote><em>GE admitted no wrongdoing</em> in the settlement. </blockquote><br />This was despite the fact that the actions alleged may have harmed patients as well as defrauding the government:<br /><blockquote>For patients, the diluted product <em>resulted in more false positives during cardiology tests and exposed them to additional and unnecessary testing</em>....</blockquote>We have <a href="http://hcrenewal.blogspot.com/search/label/General%20Electric">posted previously</a> about some previous questionable behavior by GE in the health care sphere.<br /><strong>Actavis</strong><br /><br />On January 3, 2012, Bloomberg <a href="http://www.businessweek.com/news/2012-01-03/actavis-to-pay-84-million-to-end-medicaid-drug-pricing-suit.html">reported</a>:<br /><blockquote>Two units of Actavis Group Hf will <em>pay $84 million to settle</em> a lawsuit over drug pricing, Texas officials said, less than half the amount an Austin jury said the company should pay.<br /><br />The state accused Actavis Mid-Atlantic LLC and Actavis Elizabeth LLC, subsidiaries of the Iceland-based company’s U.S. division, of <em>inflating billings to the Texas Medicaid program by falsely reporting drug prices. The state court jury in February ordered the units to pay the state $170 million.</em><br /><br />The settlement resolves that litigation, Texas Attorney General Greg Abbott said today in a statement.</blockquote><br />Note that Medicaid is a joint federal-state insurance program for the poor.<br /><br />The company's statement had a familiar ring to it:<br /><blockquote><em>'Actavis denies any and all wrongdoing, and denies that it has any liability</em> relating to the Texas judgment,' the company and the state said in the settlement agreement. The parties reached a settlement 'to avoid the delay, uncertainty, inconvenience and expense of continuing the litigation.'</blockquote><br />Nothing to see here, just move along.<br /><br /><strong>Denver Health Medical Center</strong><br /><br />On January 5, 2012, the Denver Post <a href="http://www.denverpost.com/breakingnews/ci_19680861">reported</a>:<br /><blockquote>Denver Health Medical Center will <em>pay $6.3 million to federal and state officials for overbilling Medicare and Medicaid,</em> state and U.S. attorneys said.<br /><br />After investigating a whistleblower's lawsuit, government officials said Denver Health was classifying patients with an "inpatient" status when it should have been listing them as 'outpatient' or under 'observation' status, which paid less under government rules.</blockquote><br />Oops, missing from this story was the pro forma denial of blame, wrongdoing, misconduct by organizational leadership. However, the Denver Business Journal was <a href="http://www.bizjournals.com/denver/news/2012/01/05/denver-health-settles-medicare.html">able to add that</a>:<br /><blockquote>Denver Health, in a statement, said it and the government agreed to the settlement <em>to avoid 'protracted litigation' over the allegations. It did not admit guilt in agreeing to the settlement</em>.</blockquote><br />Of course, again despite having to pay millions, the organization asserted that it is fine and upstanding:<br /><blockquote><em>'Denver Health has, and will continue to, strive to ensure that its billing systems are accurate,</em>' the hospital said in a statement, adding that the hospital has implemented a system to correct and improve billing accuracy.</blockquote><br />Whoever wrote the statement seemed to overlook the implication that flowed from the need to "correct" the system.<br /><br /><strong>CVS Caremark</strong><br /><br />On January 12, 2012, the Baltimore Sun <a href="http://articles.baltimoresun.com/2012-01-12/business/bal-consuming-interests-cvs-caremark-settles-deceptive-pricing-charge-for-5-million-20120112_1_cvs-caremark-drug-pricing-information-drug-plan">reported</a>:<br /><blockquote>The Federal Trade Commission announced that CVS Caremark Corp. agreed to <em>pay $5 million to settle a complaint that it misinformed seniors about the price of certain Medicare Part D prescription drugs</em> sold through CVS and Walgreens pharmacies.<br /><br />The action by the company, according to the FTC, caused seniors and consumers with disabilities to pay significantly more for drugs. It also pushed them more quickly into the so-called 'doughnut hole,' in which drug costs aren’t covered by the federal program.</blockquote><br />Despite its multimillion dollar payment, the company admitted no guilt, of course, and asserted its exemplary corporate citizenship:<br /><blockquote>CVS Caremark released a statement:<br /><br />'During the course of this two year investigation, <em>our company cooperated fully with the FTC and provided to the government millions of documents as well as access to numerous members of our management team who participated in voluntary interviews and depositions</em>,' said Douglas A. Sgarro, Executive Vice President and Chief Legal Officer of CVS Caremark.</blockquote><br />He also took comfort from the fact that there were not even more charges:<br /><blockquote>It is important to note that, at the conclusion of this comprehensive investigation, the FTC made no allegations of antitrust law violations or anti-competitive behavior associated with any of our business practices, products or service offerings.</blockquote><br /><strong>Stryker Corp</strong><br /><br />On January 18, 2012, Bloomberg <a href="http://www.bloomberg.com/news/2012-01-18/stryker-biotech-pleads-guilty-to-misbranding-charge-pays-15-million-fine.html">reported</a>:<br /><blockquote>A Stryker Corp. (SYK) unit agreed to <em>plead guilty and pay a $15 million fine while the medical-device maker was on trial on charges it marketed an unapproved mixture of products for strengthening human bone growth.</em><br /><br />The unit, Stryker Biotech, and three Stryker sales representatives were on trial in federal court in Boston on a 13-count criminal indictment claiming conspiracy and wire fraud. The trial began Jan. 9 with jury selection.<br /><br />Stryker Biotech agreed to <em>plead to one misdemeanor count of misbranding a medical device</em>, according to a letter dated yesterday from the U.S. Attorney’s Office in Boston and filed with the federal court. </blockquote><br />This did involve an admission of guilt, but to what amounts to a financial violation when there were allegations that patients may have been harmed:<br /><blockquote>The U.S. had charged Stryker Biotech with misbranding and its sales force with <em>conspiring to defraud surgeons into combining the company’s OP-1 and OP-1 Putty with the bone filler Calstrux. Some patients suffered adverse side effects and required more surgery</em>, the U.S. said.<br /><br />'That mixture was never studied clinically,' Assistant U.S. Attorney Susan Winkler told the jury in her opening statement on Jan. 12. 'They did not know if it worked. They did not know if it was safe, and they marketed it to doctors anyway.' </blockquote><br /><strong>Interval Summary</strong><br /><br />We have presented eight cases in which  major US health care organizations settled cases involving allegations of financial gain under false pretenses. Nearly all involved US federal charges, and the others included alleged misbehavior that affected a federal program or that now would be illegal under federal law. All the cases were resolved with fines over $1 million. However, while these fines may seem big to most people, they were trivial compared to the revenues of the organizations. None of the settlements involved any penalties to actual people who authorized, directed, or implemented the misbehavior. No individuals at any of the involved organizations admitted any mistakes, much less wrong doing.<br /><br />While the volume of such settlements indicates the prevalence of misbehavior by large health care organizations, it is not clear that their results, which amount to slaps on corporate wrists, have any deterrent effect.<br /><br />In comparison, see what happens when little people obtain money from the government under false pretenses. I found a convenience sample of such cases reported in the last month through a Google search.<br /><br /><strong>Vasquez</strong><br /><br />On January 9, the San Francisco Chronicle <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/01/09/state/n193158S68.DTL">reported</a>:<br /><blockquote>A Los Angeles woman who <em>pleaded guilty to committing $6.2 million in Medicare fraud has been sentenced to <strong>5 years in prison</strong></em>.<br /><br />Federal Health and Human Services officials say 47-year-old Carolyn Ann Vasquez has also been ordered to <em>pay $6.2 million in restitution</em>.<br /><br />Vasquez <em>admitted to conspiring with others to use a series of fraudulent Los Angeles-area medical clinics to defraud the federal health care insurance program for people over age 65 and the disabled.</em><br /><br />Between 2007 and 2008, Vasquez obtained a physician's personal information and Medicare provider number and used it to print prescription pads.<br /><br />She then had a physician's assistant, David Garrison, write fraudulent prescriptions for pricey medical equipment.</blockquote><br /><strong>Curtis</strong><br /><br />On January 7, 2012, the [Jacksonville] Florida Times-Union <a href="http://jacksonville.com/news/georgia/2012-01-07/story/leader-medicare-fraud-scheme-gets-3-years-6-months-prison">reported</a>:<br /><blockquote>A federal judge <em>sentenced the would-be owner of a Brunswick prosthetic business to <strong>three years and six months in prison</strong> for his organization and leadership of a scheme that defrauded Medicare of more than $250,000.</em></blockquote><br />Also,<br /><blockquote>In addition to prison, Wood sentenced <em>Curtis to repay $254,750.94</em> to Health and Human Services and serve three years’ probation. She dismissed eight other counts as part of his plea agreement.</blockquote><br />In stark contrast to the stories above about cases of fraud involving large health care organizations:<br /><blockquote>Samuel Curtis III, who had submitted false claims from Preferred Prosthetics and Orthotics in Brunswick and Team Orthotics and Prosthetics of Houston, had <em>pleaded guilty in July to conspiring to commit health care fraud.</em><br /><br /><em>Curtis, 38, apologized and asked U.S. District Judge Lisa Godbey Wood for leniency</em> during his sentencing hearing Friday.</blockquote><br /><strong>Popov</strong><br /><br />On January 12, 2012, the Sacramento Bee <a href="http://blogs.sacbee.com/crime/archives/2012/01/doctor-posing-as-sacramento-clinic-owner-sentenced-in-scam.html">reported</a>:<br /><blockquote>A Los Angeles physician who assumed the role as co-owner of a Sacramento medical clinic has been sentenced to federal prison for his participation in a Medicare fraud scam.<br /><br />Alexander Popov, 47, was <em>sentenced today by U.S. District Judge Morrison C.England Jr. to <strong>eight years and one month in prison</strong> for committing health care fraud and conspiring to commit health care fraud, </em>according to a federal Department of Justice news release. He was found guilty by a jury in July.<br /><br />In sentencing, Judge England found that Popov was responsible for more than a million dollars in fraudulent billings submitted to Medicare and more than $600,000 in payments made on false claims.<br /><br />Evidence at trial showed that Popov gave false testimony and manufactured evidence at trial, amounting to an obstruction of justice, officials said.</blockquote><br />Also,<br /><blockquote><em>Vardges Egiazarian previously pleaded guilty in the case and is serving <strong>78 months in prison</strong></em><strong>. </strong></blockquote><br /><strong>Applebaum</strong><br /><br />On January 20, 2012, Medscape <a href="http://www.medscape.com/viewarticle/757251">reported</a>:<br /><blockquote>A former Idaho psychiatrist was ordered to <em>pay nearly $95,000 in a legal judgment</em> this week, <em>adding to a <strong>prison sentence of up to 5 years</strong></em>, which he received in November for obstruction and falsifying records relating to Medicaid fraud.<br /><br />The judgment, obtained by the US Attorney's Office against Michael Applebaum, MD, of Nampa, Idaho, involved a civil lawsuit in which he was <em>accused of submitting false Medicare and Medicaid claims for undocumented and ineligible services</em> from 2004 through 2009.<br /><br />Prosecutors claimed Dr. Applebaum failed to properly document services for approximately 502 claims, including falsifying service dates on 49 claims to make them appear eligible for reimbursement under Medicaid's rule of submitting claims within 12 months of the date of service.</blockquote><br /><strong>Summary</strong><br /><br />As we noted above, if a large organization, such as a hospital system, pharmaceutical company, or health insurance company is accused of fraud against the government, the outcome is likely to be a large fine that is nonetheless small compared with the organization's revenue, no admission of guilt or responsibility, and no penalties for any individuals who authorized, directed or implemented the misbehavior. However, if an individual or small business is accused of such fraud, the results are likely to include fines sufficient to bankrupt either, admissions of guilt, and years of jail time.<br /><br />Yet such actions by large organizations are likely to be more harmful to individuals and society than those of individuals or small businesses.<br /><br />This seems like a glaring, stark example of unequal justice in health care. If an individual does something bad in a health care context, the punishment is likely to be severe and life altering. If an individual who is a leader of a large health care organization does something equally bad, he or she is likely to receive no punishment at all.<br /><br />This is an example that ought to unite the left and the right, liberals and libertarians in outrage. Liberals are supposed to believe in the rights of the individual and economic justice. Libertarians are supposed to believe in economic freedom and the economic rights of the individual. In this example, the government and large corporations seem to have gotten together to let corporate leaders play by different rules than individuals. Corporate leaders seem to be above the law, the same law that can ruin individuals who violate it. <br /><br />If we really want to reform health care, we need to make sure that its rules apply equally to all individuals, whether humble or rich, whether they are individual professionals of corporate CEOs. As long as the rich and powerful can play by different rules, we only fuel cynicism and anger. Down that road lies disaster.

Unequal Justice Under Law - Comparing Cases of Alleged Misbehavior by Large Health Care Organizations and Individuals

How the wealthy and powerful have become able to play by a different set of rules than those affecting ordinary people may be the defining issue of our time.  Yesterday, President Obama's State of the…

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London Ambulance Service: Would You Like Some Death And Mayhem With Your American Healthcare IT?

It seems American companies are good at producing really noisome commercial healthcare IT and foisting it on other countries, such as outlined at "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=granger_speaks_out">Is clinical IT mayhem good for [the IT] business? UK CfH leader Richard Granger speaks out</a>" and at "<a href="http://hcrenewal.blogspot.com/2010/08/cerners-blitzkrieg-on-london-wheres-raf.html">Cerner's Blitzkrieg on London: Where's the RAF?</a>".<br /><br />Yet another example: Software for the London Ambulance Service (LAS). From <a href="http://en.wikipedia.org/wiki/London_Ambulance_Service">Wikipedia</a>:<br /><blockquote><br />The London Ambulance Service NHS Trust (LAS) is the largest "free at the point of contact" emergency ambulance service in the world. It responds to medical emergencies in Greater London, England, with its ambulances and other response vehicles and over 5,000 staff at its disposal.<br /></blockquote><br /><span>Thanks to the U.S., </span><span style="font-weight: bold;">the inhabitants of London are now the unconsenting subjects of an American IT beta-testing experiment that could cost them their lives.</span><br /><br />From E-Health Insider.com:<br /><span style="font-weight: bold;"><br /></span><span style="font-size:100%;"><a href="http://www.ehi.co.uk/news/acute-care/7480/las-plans-for-it-go-live-and-failure"></a></span><blockquote><span style="font-size:100%;"><span style="font-size:130%;"><a style="font-weight: bold;" href="http://www.ehi.co.uk/news/acute-care/7480/las-plans-for-it-go-live-and-failure">LAS plans for IT go-live and failure</a></span><br />E-Health Insider.com<br /></span><div style=" padding-bottom: 10px;font-size:0.9em;"> <span style="font-size:100%;"><span>25 January 2012</span> <span><br />Shanna Crispin</span></span> </div> <div style="float: right; margin-top: 3px; margin-left: 15px; margin-bottom: 10px;"><br /></div> <p>London Ambulance Service NHS Trust may terminate its contract <span style="font-style: italic; color: rgb(255, 0, 0); font-weight: bold;">with American supplier Northrop Grumman</span> if a <span style="font-weight: bold;">second attempt to go-live with a new dispatch system fails.<br /></span></p> <p>The trust initially attempted to launch the CommandPoint computer aided dispatch system in early June last year.</p> <p>However, the <span style="font-weight: bold;">technical switch-over to the new system had disastrous effects</span>; with the system failing, staff having to use pen and paper, and then finally aborting the go-live by reverting to the old CTAK dispatch system.</p></blockquote><p></p><br />Health IT can kill you ever before you ever reach the hospital...<br /><br /><p></p><blockquote><p>An investigation into the incident has found the response to calls was delayed by <span style="font-weight: bold;">more than three hours in some cases.</span> One patient has lodged a legal claim for the delay he experienced, and the service has received four additional complaints.</p> <p>A patient died in one of the calls affected. <span style="font-weight: bold;">However, a separate investigation concluded that it could not be determined whether they would have survived if the response had been faster.</span></p></blockquote><p></p><br />In other words, the patient very well might have survived without long delays for the ambulance to arrive.<br /><br /><p><a target="_blank" href="http://www.londonambulance.nhs.uk/about_us/how_we_are_run/trust_board/board_papers_-__2012.aspx"></a></p><blockquote><a target="_blank" href="http://www.londonambulance.nhs.uk/about_us/how_we_are_run/trust_board/board_papers_-__2012.aspx">Board papers drawn up for a board meeting next week </a>say an investigation into the 8 June go-live attempt concluded that critical configuration issues were not identified during the testing phase.<br /><br />It also found there were no operational procedures in place in the event of a critical system failure and <span style="font-weight: bold;">that the product failed to deliver the system, technical and operational functionality expected.</span><br /></blockquote><p></p> <p><br /></p><p>At least in this case an absolution for the software itself was not made. One wonder if the vendor was "held harmless" contractually for this somber outcome.</p><p><br /></p><p></p><blockquote><p>The trust has since been working to further test the system, and is planning to go-live again on 28 March.</p> <p>However, the trust’s director of information management and technology, Peter Suter, said if that go-live failed then “the contract with Northrop Grumman would need to be reconsidered.”</p></blockquote><p></p> <p><br /></p><p>That will make two chances to get it right. In life-critical IT, I would only have given<span style="font-weight: bold;"> one. </span><span><br /></span></p><p><span>A defective </span><span>first-responder system is, on first principles, a <span style="font-weight: bold;">public health menace</span>. There is nothing to argue here, nothing to discuss on that point.<br /></span></p><p><span>I note that disrupting the first-responder system in London would be the envy of terrorists, especially at the time of the</span><span class="st"> <a href="http://en.wikipedia.org/wiki/2012_Summer_Olympics">London 2012 Olympic Games</a></span><span>. However, who needs them when you have U.S. IT personnel who create a system as described?<br /></span></p><p><br /><span></span></p><p></p><blockquote><p>The trust completed testing the software prior to Christmas, when it began training staff. Leading up the March go-live, the software will be subjected to four separate live runs, with the system staying live for progressively longer periods of time.</p> <p>If the system fails to go live in March, the trust will abandon any further attempts to go-live <span style="font-weight: bold;">before the Olympics in July.</span></p></blockquote><p></p> <p><br /></p><p>That's still very tight timing to discover all the bugs in an IT system, in preparation for expected increased need during the Olympics...</p><p><br /></p><p></p><blockquote><p>Instead, it will keep operating the current CTAK system. However, the trust decided to procure a new system in 2007 because CTAK was deemed ‘unstable’ and in need of replacement.</p> <p>An analysis of the CTAK system has now determined it is stable enough to handle the increased pressure during the Olympics, which is estimated to be an increase of 5.6% to 8.9% on top of the usual volume for this time of year.</p></blockquote><p></p><br />One wonders if the "new system" was not needed at all, but was instead sold as vaporware by impressively attired, good-haired, shiny-toothed, fast-talking salespeople to hapless decision-makers with all sorts of promises of cybernetic and financial miracles.<br /><br />(I've been in that game before from both sides - as a potential customer, and as part of a health IT sales team.)<br /><br />One also wonders if, should the system be dismantled due to a second failure, the British taxpayers who paid for it will get their tax dollars refunded.<br /><br />-- SS

London Ambulance Service: Would You Like Some Death And Mayhem With Your American Healthcare IT?

It seems American companies are good at producing really noisome commercial healthcare IT and foisting it on other countries, such as outlined at "Is clinical IT mayhem good for [the IT] business? UK…

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"Conspiracy Theory" Proven - Taking UCSF Private

Students and faculty at the University of California have come up with a vivid, and prescient example of how the hired executives and bureaucrats have taken over higher and health care education.  <br /><br /><strong>"Run in the Interests of the Administration"</strong><br /><br />Two weeks ago, the Orange County Register <a href="http://www.ocregister.com/news/faculty-334335-tuition-system.html">reported</a>:<br /><blockquote>Over the past few months, the University of California has <em>raised undergraduate tuition by 18 percent, awarded raises of as much as 23 percent to a dozen high-ranking administrators and announced a possible 81 percent tuition increase </em>over the next three years.<br /><br />Students haven't taken the news well.<br /><br />At campus rallies across the state, thousands of students and their faculty supporters have decried the actions, staging raucous rallies and 'Occupy'-style sit-ins that in some cases have ended in clashes with law enforcement. They've also descended en masse on UC regents' meetings, disrupting proceedings and even forcing officials to retreat to a private room.<br /><br />Behind the angry chanting and acts of civil disobedience is <em>a growing sense that the 10-campus UC system is no longer a public institution accessible to the middle class, but rather a sprawling bureaucracy of hospitals and auxiliary research institutions buffeted by an ever-expanding roster of administrators.</em><br /><br />The problem, as the student activists see it, is that <em>none of these functions translates directly into expanded course offerings or improved student-to-faculty ratios, even as their tuition dollars help sustain the system.</em><br /><br /><em><strong>'The university is now being run in the interest of the administration,'</strong></em> said UC Irvine student activist Anne Kelly, a Ph.D. candidate in earth system science. 'They're promoting their own internal growth, asking us to sacrifice with higher tuition – but administrators have had raises.'</blockquote><br />In higher education, as well as in health care education and in health care in general, the pattern is the same: rising costs without any obvious increase in quality or quantity of services. As in health care, however, the pain never seems to extend to administrators/ managers/ bureaucrats/ executives. Worse, as their numbers grow, these insiders seem to run organizations more for their own benefit, and less for the mission.<br /><br /><strong>One Manager Per Faculty Member </strong><br /><br />Furthermore, UC faculty have data:<br /><blockquote>The students' growing frustration is fueled by UC employment data that show that <em>almost three-fourths of UC's 152,500 employees last year were designated 'non-academic personnel,'</em> according to an annual UC employment report.<br /><br />In the report, UC characterizes the growth in its non-academic staff as the inevitable byproduct of 'an increasingly complex university system that 'requires greater professionalization of its staff, who must meet higher technical and competency standards.' Non-academic personnel includes everyone from custodians and food-service workers to accountants and plant operators. [The question begged is whether it was the managers and executives that caused this complexity - Ed.]<br /><br />UC Davis horticulture researcher Richard Evans, who has independently analyzed UC personnel data, offered a different take on the data, publishing a tongue-in-cheek piece for UC faculty in 2010 entitled <em>'Soon every faculty member will have a personal senior manager: Is this a good way to spend money?'</em><br /><br />'Data available from the UC Office of the President shows that there were <em>2.5 faculty members for each senior manager in the UC system in 1993,' Evans wrote in his piece. <strong>'Now there are as many senior managers as faculty.</strong> </em>Just think: Each professor could have his or her personal senior manager.'<br /><br />In his analysis, Evans compared the number of UC employees classified as either 'senior management' or 'managers and senior professionals' with the number of tenure-track UC faculty members.<br /><br />As of spring 2011, UC employed 8,144 senior managers, managers and senior professionals, and 8,521 tenure-track faculty members, according to the latest available UC data.</blockquote><br />This pattern is similar to that seen in some data we discussed a long time ago about the ever rising numbers of administrators/ managers/ bureaucrats/ executives in health care.  In 1988, Alain Enthoven advocated in <a href="http://www.amazon.com/gp/product/0444703594/102-6581115-0444916?n=283155">Theory and Practice of Managed Competition in Health Care Finance</a>, a book published in the Netherlands, that to decrease health care costs it would be necessary to break up the "physicians' guild" and replace leadership by clinicians with leadership by managers (see 2006 post <a href="http://hcrenewal.blogspot.com/2006/03/consequences-of-breaking-physicians.html">here</a>). Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post <a href="http://hcrenewal.blogspot.com/2005/04/growing-proliferation-of-managers.html">here</a>). Health care went from being controlled by clinicians to controlled by a growing volume of managers.  Most of these managers were generic, in that they had little if any knowledge of, experience in, or sympathy to the values of health care. These generic managers have used the same techniques advocated for the management of supermarkets or automobile manufacturers to manage health care organizations, despite all the obvious differences in context, goals, values, and people involved. <br /><br /><strong>A "Conspiracy Theory" About the Privatization of the University</strong><br /><br />At the University of California, the Register reported that there is a "conspiracy theory" about the next step to increase the domination of the managers:<br /><blockquote><em>The salaries and size of UC's administrative staff, in particular, have fueled <strong>conspiracy theories among students and faculty that the system has deliberately sought to 'privatize'</strong> <strong>itself</strong></em> – in other words, to compete with private universities on all fronts, from the scope of its non-instructional programs to executive compensation to the amount of tuition that students pay.<br /><br />Three years ago, the head of a UC faculty group advanced the privatization theory in a multi-part series called 'They Pledged Your Tuition.'</blockquote><br />Of course, the administrators denied, sort of, anything so far-fetched:<br /><blockquote>For its part, <em>UC denies all such allegations</em>, saying that while the university has arguably become privatized, outside influences beyond its control are entirely to blame.<br /><br />"It is not something we advocate, not something we want,' Klein said. But, 'he added, 'times have changed; the economic model has changed.'</blockquote><br /><strong>Not Just a "Conspiracy Theory" - UCSF Chancellor Advocates Privatization </strong><br /><br />It only took two weeks, however, for the notion of administrators taking the university private to go from "conspiracy theory" to official plan. Yesterday, the San Francisco Chronicle <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/19/MNF11MR2KE.DTL">reported</a>,<br /><blockquote>UCSF Chancellor Susan Desmond-Hellmann told the regents, delicately, that <em><strong>she wants out</strong></em>.<br /><br />Under her proposal, UCSF's medical school, hospital, clinics and research facilities would remain a public university connected to UC, the chancellor assured the regents. But <em>the tendrils connecting the two entities should be thinner than they are today.</em><br /><br />Desmond-Hellmann said she envisions a relationship like those of UC Hastings College of the Law, Lawrence Livermore National Laboratory and Lawrence Berkeley National Laboratory, which contract with UC for health and pension services. While ultimately accountable to the regents, <em>they are autonomous with their own boards of directors</em>.<br /><br /><em>Referring to 'alternative governance models'</em> and 'examining UCSF's financial relationship with UC,' <em>the chancellor and campus executives talked of their ambition to become the world's leading innovator in the health field - a goal better achieved, they hinted, <strong>without the rest of the university weighing it down</strong></em><strong>.</strong></blockquote><br />To <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a> readers, that UCSF would be proposed as the first part of the University of California to privatize should not come as a shock. After all, Chancellor Desmond Hellmann came not from academia, but from the world of for-profit biotechnology. She was a former president for drug development for Genentech. <br /><br />Two and one half years ago I <a href="http://hcrenewal.blogspot.com/2009/05/bio-tech-u.html">suggested</a> that "hiring a lavishly compensated top executive from a biotech firm known for its high drug prices to run a public health sciences university <em>does considerably blur the line between academic medicine and the health care industry</em>." Furthermore, three months ago I <a href="http://hcrenewal.blogspot.com/2011/10/logical-fallacies-to-support-putting.html">noted</a> that Dr Desmond Hellmann seemed be advocating that the university's focus turn to product development, so that it would start to emulate a contract research organization. Now it appears that Dr Desmond Hellmann wants to traverse the line between government and the private sector, so that the organization could "make a ton of money," and "focus on spinning innovations into business deals," according to the San Francisco Chronicle.<br /><br />What any of this has to do with the university's fundamental mission to discover and disseminate knowledge, and with this health care university's mission to take the best possible care of its patients is not clear. <br /><br /><strong>Summary</strong><br /><br />Turning UCSF into a private, quasi contract research organization might conceivably yield some good research and drug development. Why a formerly academic organization would be better at this than a purpose-built CRO is hardly proven. Whether UCSF recast as a CRO would yield better research, leading to better patient outcomes than would have resulted if it continued as a state government sponsored health care university is also hardly proven.<br /><br />Turning UCSF into a quasi CRO, however, would likely be very much in the self-interest of its administrators/ managers/ bureaucrats/ executives who would be freed from any constraints on their incomes, and the disclosure of same that were previously obligated by the messy representative democracy to which they formerly had to answer. <br /><br />On the other hand, it is hard to conceive of how such a privatization would be good for students or patients. In fact, it is not the least bit clear why a medical, nursing, or other health professional student would want to study within what would basically be a contract research organization. It is also unclear whether patients seeking care from such an organization could trust it to put their interests, rather than the organization's revenue and the self-interest of its administrators/ managers/ bureaucrats/ executives first.<br /><br />We are now a good 30+ years into our ill-fated American experiment about the effects of turning medicine commercial and making health care a commodity. So far, it has yielded the highest costs in the world, but declining access, mediocre quality, and demoralized professionals. Turning one of our once proud and  prestigious state government sponsored academic medical institutions into a private contract research organization would be a powerful symbol of our final national health care decline. <br /><br />Let us hope that the students and faculty whose "conspiracy theory" about privatization proved true will now mount a more effective protest before UCSF falls into the muck.

"Conspiracy Theory" Proven - Taking UCSF Private

Students and faculty at the University of California have come up with a vivid, and prescient example of how the hired executives and bureaucrats have taken over higher and health care education.  "Ru…

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Hospital IT Department Attitudes on Clinicians

A quasi-satirical but actually quite serious post:<br /><br />As exemplified by my posts at my 12-year-old HIT difficulties site <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/">at this link</a>, and much feedback from clinicians, informaticists, and others, the picture below speaks for itself about the apparent attitudes of health IT vendor and hospital IT departments towards clinicians. (And, by implication, towards patients - you - and patient safety):<br /><br /><br /><br /><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBD3OdNVKfSsaVqW9CkRirE26GDd06ANwXoz2nTaoS2jb_As6nepM9SR1z6im9xreGRt91Vh2gYFrUrqHklJ1Mpz2TIWM69mM2SIKmyq4ebbGZIZjZmf85IabF6n6srbk6yL0TUMvR0DBW/s1600/outhouse.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5699847522730845202" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBD3OdNVKfSsaVqW9CkRirE26GDd06ANwXoz2nTaoS2jb_As6nepM9SR1z6im9xreGRt91Vh2gYFrUrqHklJ1Mpz2TIWM69mM2SIKmyq4ebbGZIZjZmf85IabF6n6srbk6yL0TUMvR0DBW/s320/outhouse.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 257px; height: 393px;" /></a></div><div style="text-align: center;"><span style="font-size:85%;">(Click to enlarge)<br /></span></div><br /><br />Enough said.<br /><br />-- SS

Hospital IT Department Attitudes on Clinicians

A quasi-satirical but actually quite serious post:As exemplified by my posts at my 12-year-old HIT difficulties site at this link, and much feedback from clinicians, informaticists, and others, the pi…

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The Very Latest Health IT "Glitch" - British MP Says No to Cerner

It's just a glitch:<br /><br /><a href="http://www.ehi.co.uk/news/acute-care/7471/bacon-calls-for-halt-on-millennium"></a><br /><blockquote><span style="font-size: 130%; font-weight: bold;"><a href="http://www.ehi.co.uk/news/acute-care/7471/bacon-calls-for-halt-on-millennium">Bacon calls for halt on Millennium</a></span><br />e-Health Insider.com<br />19 January 2012<br /><br />Conservative MP Richard Bacon has called for a halt to all Cerner Millennium deployments following appointment problems and delays at the latest trusts to go-live with the system - North Bristol and Oxford.<br /><br />Bacon, who has followed the progress of the National Programme for IT in the NHS [NPfIT - ed.] for many years, said the two hospitals <span style="font-weight: bold;">had been “brought to their knees” by the implementation of the new electronic patient record system.</span><br /><br />“These deployments need to be stopped until we are sure that they can be managed safely,” he said; adding that<span style="font-weight: bold;"> the system should be "switched off" if it was not working for patients.</span><br /><br />North Bristol NHS Trust and Oxford University Hospitals NHS Trust said they are working through some deployment issues, but <span style="font-style: italic; font-weight: bold;">denied that patient safety has been compromised.</span><br /><br /><span style="color: red; font-style: italic; font-weight: bold;">[There's that 'safety has not been compromised by major IT system disruptions' line again - </span><span style="font-style: italic; font-weight: bold;"><span style="color: red;">see</span> </span><a href="http://hcrenewal.blogspot.com/2012/01/another-our-crappy-computers-screwed-up.html" style="font-style: italic; font-weight: bold;">here</a> - <span style="color: red; font-style: italic; font-weight: bold;">ed.]</span><br /><br />However, Oxford University Hospitals told eHealth Insider that it has had to bring in extra staff to help it overcome some “temporary problems while the new system beds in.”<br /><br />Bacon said local news reports indicated that the trust was having serious difficulties booking patients in for treatment.<br /><br />The Oxford Mail has reported that problems were so bad before Christmas that the trust had to suspend its parking charges as clinics over-ran by hours.<br /><br />... Bacon, who was instrumental in triggering last year’s National Audit Office and Commons’ public accounts committee inquiries into the programme, said the NHS <span style="font-weight: bold;">should never have been locked into buying software that was “unreliable”</span> and <span style="font-weight: bold;">“unreasonably expensive."</span><br /><br />“Effective, affordable and robust IT systems are vital to the future of the NHS, but it <span style="font-weight: bold;">is clear that the fiasco that is the national programme cannot deliver them</span>,” he said this morning.<br /><br />He called for “a halt” to new Cerner Millennium deployments, including that at Imperial College Healthcare NHS Trust, which is being undertaken by BT as the local service provider for London, and that at Royal Berkshire NHS Foundation Trust, which went outside the national programme more than two years ago.<br /><br />[More typical hospital executive-style excuses and spin control follow]</blockquote><br />Readers, I won't bore you with the rest of the excuses, pleadings for special accommodation, etc. You've heard them all already on this blog.<br /><br />However you can read them at the link above if you so desire.<br /><br />-- SS

The Very Latest Health IT "Glitch" - British MP Says No to Cerner

It's just a glitch:Bacon calls for halt on Millenniume-Health Insider.com19 January 2012Conservative MP Richard Bacon has called for a halt to all Cerner Millennium deployments following appointment p…

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Harvard Psychiatry Fails Again

HARVARD PSYCHIATRY FAILS AGAIN <br /><br />About a year ago I remarked upon the ethical tone deafness that characterizes Harvard psychiatry. It is bad enough that Harvard-MGH is the home of Joseph Biederman, MD, with whom Senator Grassley had so much fun a while back. Biederman is still <a href="http://www.margaretsoltan.com/?p=34605">in the news</a>. It is also the home of Andrew Nierenberg, MD, who was rash enough to take on <a href="http://www.nybooks.com/articles/archives/2011/jun/23/epidemic-mental-illness-why/?pagination=false">Marcia Angell</a> in the New York Review over her well founded criticisms of the hyping and misuse of psychiatric drugs. In <a href="http://www.nybooks.com/articles/archives/2011/aug/18/illusions-psychiatry-exchange/">response</a>, Dr. Angell handed Dr. Nierenberg his head. <br /><br />Biederman and Nierenberg are not the only ones. When I <a href="http://hcrenewal.blogspot.com/2010/12/impeachment-its-about-institution-not.html">called</a> one of the senior Harvard professors, Carl Salzman, MD, to task for signing up a pair of compromised key opinion leaders as speakers in his annual Psychopharmacology Master Class last spring, I hoped the ensuing negative publicity would persuade him to go in a different direction next time. <br /><br />No such luck! Today I saw the <a href="http://cme.hms.harvard.edu/index.asp?SECTION=CLASSES&ID=03224280&SO=N">flyer</a> for the 2012 Harvard Psychopharmacology Master Class. The list of speakers is virtually unchanged from a year ago. There is Charles Nemeroff. There is Alan Schatzberg. Both were outed by Senator Grassley’s investigation in 2008, and both were subjected to major administrative sanctions, by Emory University and by Stanford University. Other people now occupy the departmental leadership chairs they held in 2008. There also is a group of other <a href="http://cme.hms.harvard.edu/index.asp?SECTION=CLASSES&ID=03224280&SO=N">key opinion leaders</a> who appear content to endure the taint of sharing the podium with the compromised Nemeroff and the compromised Schatzberg. What are they thinking? <br /><br />For that matter, what is the course director Carl Salzman thinking? A year back he said Nemeroff and Schatzberg would give great talks and that he would ensure they were objective and impartial. That’s not the point. The point is that they brought dishonor on our field, and for Harvard Medical School to give them this platform amounts to compartmentalizing information in service of their public rehabilitation. To repeat what I said a year ago, Adolph Hitler also gave a lot of speeches that received rave reviews, and compartmentalized information was widespread in the nation of Germany between 1928 and 1945. The best one can say about the upcoming course is that Biederman and Nierenberg are not on the program. <br /><br />The Augean stables of psychiatry, at Harvard and nationwide, will not be flushed clean by the Carl Salzmans of our field, quibbling over legal technicalities while failing to see the ethical elephant in the living room. <br /><br />For how long will the grownups at Harvard Medical School allow this farce to continue?

Harvard Psychiatry Fails Again

HARVARD PSYCHIATRY FAILS AGAIN About a year ago I remarked upon the ethical tone deafness that characterizes Harvard psychiatry. It is bad enough that Harvard-MGH is the home of Joseph Biederman, MD, …

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EHR Lowers Costs By 33% ... Oh ... Wait A Minute ... We Retract That Statement

There's this:<br /><blockquote><br /><a href="http://www.beckershospitalreview.com/healthcare-information-technology/blue-cross-blue-shield-of-ri-pilot-lowered-monthly-costs-by-up-to-33-through-ehrs.html">Blue Cross Blue Shield of RI Pilot Lowered Monthly Costs By Up to 33% Through EHRs</a><br />December 13, 2011<br />Becker's Hospital Review.com<br />Sabrina Rodak<br /><br />Health plan members that received care from physician practices using electronic health records had an average of 17-33 percent lower monthly healthcare costs compared to members receiving care at non-EHR physician practices, according to a news release by Blue Cross & Blue Shield of Rhode Island.<br /><br />BCBSRI conducted a three-year pilot program that partially funded 79 primary care physicians to purchase and use EHRs. </blockquote><br />Then, there's this:<br /><br /><a href="http://www.fierceemr.com/story/blue-cross-backtracks-claim-ehrs-lower-care-costs/2011-12-22"></a><blockquote><a href="http://www.fierceemr.com/story/blue-cross-backtracks-claim-ehrs-lower-care-costs/2011-12-22">Blue Cross backtracks on claim that EHRs lower care costs</a><br />December 22, 2011<br />FierceEMR.com<br />Dan Bowman<br /><br />A week after reporting that use of electronic health records <a href="http://www.beckershospitalreview.com/healthcare-information-technology/blue-cross-blue-shield-of-ri-pilot-lowered-monthly-costs-by-up-to-33-through-ehrs.html" target="_blank">lowered the cost of care for its customers</a> between 17 and 33 percent, Blue Cross Blue Shield of Rhode Island has backtracked on those claims. In an email sent to <em>FierceEMR</em>, BCBS/RI says that while the program significantly improved healthcare quality,<span style="font-weight: bold;"> its cost data had not been risk adjusted and did not include costs related to infrastructure spending. </span>"At this time we are unable to accurately ascertain the cost implications of the pilot and are retracting the news release," the email reads. BCBSRI updated its announcement, which can be found <a href="http://www.fiercehealthit.com/press-releases/blue-cross-blue-shield-rhode-island-electronic-health-record-program" target="_blank">here</a>.<br /></blockquote><br />I note the following:<br /><br /><ul><li>Healthcare organizations, HIT pundits and vendors seem happy to promote EHR's as saving a great deal of money. I do not believe they ever will. (I have company, such as at <a href="http://hcrenewal.blogspot.com/2009/06/wharton-on-healthcare-it-can-i-go-home.html">Wharton</a>.)</li></ul><ul><li>One can only wonder what led to the retraction of a press release based on a curbstone data analysis, as cited above. Internal dissent, perhaps?</li></ul><ul><li>Healthcare IT, as in this pilot study, can improve healthcare quality metrics (outcomes is another matter as yet undecided as illustrated by <a href="http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html">this reading list</a>) - but only if <span style="font-weight: bold;">done well</span>, a remarkably complex undertaking. That undertaking starts at conception and design, to production, to implementation, to customization, to maintenance of software and hardware during the system lifecycle. See <a href="http://www.nlm.nih.gov/pubs/reports/comptech_prepub.pdf">this report</a> by the U.S. National Research Council.</li></ul><ul><li>When healthcare IT is done poorly, it will neither reduce costs, nor improve outcomes, and will <span style="font-weight: bold;">increase risk to patients.</span></li></ul><span style=" font-weight: bold;"></span><ul><li>The current <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=ecosystem">ecosystem of commercial health IT</a> and its lack of true regulatory framework for these experimental devices <span style="font-weight: bold;">can be</span> <span style="font-weight: bold;">counted upon to "do health IT poorly."</span><br /></li></ul>-- SS

EHR Lowers Costs By 33% ... Oh ... Wait A Minute ... We Retract That Statement

There's this:Blue Cross Blue Shield of RI Pilot Lowered Monthly Costs By Up to 33% Through EHRsDecember 13, 2011Becker's Hospital Review.comSabrina RodakHealth plan members that received care from phy…

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"Barbarians at the Gate" - Making Private Equity Less Private, and Understanding Its Effects on Health Care

One good byproduct of the tumultuous everlasting 2012 campaign for the US presidency has been to shed light on a number of political and economic issues that had previously been ignored, especially those relating to the global financial crisis or great recession.  In turn, many of these issues may be relevant to our understanding of our ongoing health care dysfunction.  <br /><br />The latest issue to achieve prominence was the nature of private equity firms.  Current presidential contender Mitt Romney used to work for Bain Capital, a private equity group.  As we discussed <a href="http://hcrenewal.blogspot.com/2012/01/us-presidential-candidates-financial.html">here</a>, Bain Capital owned a variety of companies, including some important health care corporations.  More importantly, attacks on Mr Romney's record at Bain by other candidates have lead to a broader discussion of the nature of private equity.  This discussion is very relevant to health care, since private equity firms have taken over a number of important health care corporations, and more recently, have begun to take over formerly non-profit health care organizations.<br /><br />Therefore, we will summarize what has become known about private equity, and then consider its implications for health care.<br /><br /><strong>Understanding Private Equity as Re-Branded Leveraged Buy-Out Firms</strong><br /><br />- <u>Private Equity Firms are Just Re-Branded Leveraged Buyout Firms</u><br /><br />The first good statement to this effect I found was by Merrill Goozner in the Fiscal Times(1):<br /><blockquote>Private equity is actually a misnomer, since <em><strong>the modus operandi of those investors is no different than the leveraged buyout firms that pioneered junk-bond financing in the 1980s</strong></em>. </blockquote><br />As reported by the Los Angeles Times(2):<br /><blockquote>'Being known as a leveraged-buyout-deal shop wasn't the most attractive label out there,' said Colin Blaydon, director of the Center for Private Equity and Entrepreneurship at Dartmouth's Tuck School of Business. 'Private equity has a much nicer ring to it.'</blockquote><br />In fact, according to Forbes columnist Robert Lenzer,(3) the famed investor Warren Buffet called this re-branding<br /><blockquote>'Orwellian': Buffett wrote that 'private equity' is a <em>'name that turns facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure </em>compared to that previously existing.'</blockquote><br />I must admit I always thought private equity firms simply collected large amounts of capital from investors, then used the pooled capital to buy out troubled firms. I assumed that because these investors therefore had a large personal stake in these firms, they would want to increase at least their financial value. I also thought that leveraged buy-out firms ceased to exist after all the bad press they got in the 1980s. It turns out I was wrong on all counts. Probably, a lot of other peoples' beliefs about private equity were similarly wrong.<br /><br />Once the equation of private equity and leveraged buyout firms is made, understanding what they do and its implications are easier.<br /><br />- <u>Leveraging the Buy-Out</u><br /><br />The modus operandi of leveraged buyout firms is to make their purchases of troubled corporations mainly with borrowed money. As Merrill Goozner put it(1),<br /><blockquote>Private equity firms generally finance anywhere from 60 to 90 percent of their purchases with borrowed cash. </blockquote><br />Note that,<br /><blockquote>Interest payments on those debts are treated just like any other expense, and are therefore deductible from earnings.</blockquote><br />- <u>Then Leveraging the Acquired Company</u><br /><br />If this leveraging were the only leveraging done in a leveraged buy-out, the implications might not be that big, except for the acquiring firm. After all, when the leveraged buy-out firm borrows the money, it then becomes obligated to pay it back. However, then comes the tricks.<br /><br />One important trick was described in the following example by economist Dean Baker on the Beat the Press blog(4),<br /><blockquote>To take a simple example, suppose a public company (let's call it Gingrich Inc.), has $1 billion a year in profits. If Gingrich Inc. paid taxes at the full 35 percent rate (fat chance), it would have $650 million [thanks Robert] a year to either keep as retained earnings or to pay out as dividends to its shareholders.<br /><br />Now suppose that a PE company (we'll call it Romney Capital) steps in. The current price to earnings ratio in the stock market is around 14, so Gingrich Inc. would have a pre-takeover market value of approximately $9.2 billion (14*$650 million). <em>Romney Capital then arranges for Gingrich Inc. to borrow $6 billion which it pays out as a dividend to itself. This means that the Romney Capital has just gotten back almost two-thirds of its investment</em>.</blockquote><br />A somewhat less vivid description of the process appeared in a post by Robert K Lifton on the Huffington Post(5):<br /><blockquote>Most often, in order to increase the return on capital invested by the fund, <em>the fund will borrow a significant portion of the purchase price of the business. And sometimes, if it can, the fund will take back as a distribution immediately upon closing the purchase of the business, a portion of its investment in the purchase price, reducing its own investment and enhancing its return on the investment left in the business. This distribution may come from the company's existing cashable assets or <strong>from money that the company is caused to borrow</strong></em><strong>.</strong></blockquote><br />Thus, it appears that while the leveraged buy-out (or private equity) firm borrowed money to finance the purchase of a company, it can almost immediately get out of its obligation to pay off that loan, by making the acquired company its own loan, and using proceeds from that to end the LBO firm's debt. The leverage, and the obligation to pay back a debt has almost magically been transferred from the LBO or private equity firm to the acquired company. That has big implications, as Lifton wrote(5):<br /><blockquote><em>This additional leverage also creates additional risk</em>; if things don't go right the business will not be able to pay the carrying costs of the debt, the lender will take over the business and the fund will lose its investment. <em>Sometimes, that results in the acquired company placed in bankruptcy proceedings </em>either to liquidate its assets to pay off the debt or to restructure, a process Bain also experienced. </blockquote><br />- <u>Selling Assets to Further Reduce the Private Equity Firm's Debt</u><br /><br />LBO firms have another trick up their collective sleeves. As Dean Baker continued his example(4),<br /><blockquote>Now suppose that the Romney Capital<em> arranges to sell off some of Gingrich Inc.'s assets, such as real estate or a highly profitable subsidiary, and then uses the proceeds to make a payment to the Romney Capital </em>rather than leaving the money under the control of Gingrich Inc. Such sales may allow Romney Capital to recoup the rest of its investment and possibly more.</blockquote><br />Of course, the result is<br /><blockquote>Gingrich Inc. is then <em>left as a highly indebted company with few assets</em>.<br /><br />In this story, Romney Capital may have earned a substantial profit on a limited investment (it recouped most of its money almost immediately when it loaded Gingrich Inc. with debt), without doing anything to improve the operation of Gingrich Inc. If Gingrich Inc. manages to stay in business and generate profits, then this will increase the return. Romney Capital may be able to resell the company and treat the whole sale price as profit.<br /><br />On the other hand, if Gingrich Inc. goes bankrupt, this will primarily be a problem for creditors, since Romney Capital has already gotten its investment back. In effect, <em>Romney Capital might have secured large gains entirely by financial engineering, while creating no value whatsoever</em>.</blockquote><br />Let me underscore that. The LBO model (now also the private equity model) enables the acquiring LBO firm to avoid any losses, by shifting all the risk and obligations to the acquired firms. This puts these firms at considerable jeopardy.<br /><br />- <u>Tactics to Prepare Acquired Firms for Sale</u><br /><br />Of course, LBO/ private equity firms want to do more than not lose money. To make real money, they must be able to sell off the firms they acquire. To do so, they must make these firms, or their components, seem attractive, at least in the short term. To do this, they employ a standard set of tactics out of the generic management playbook. <br /><br />So, per the LA Times(2),<br /><blockquote><em>layoffs are part of the playbook</em> that elite investment firms use to squeeze cash out of struggling companies. </blockquote><br />Also, per Lifton(5),<br /><blockquote>To increase the profits of the acquired company, the fund may<em> reduce the number of employees, reduce pay levels or curtail work time.</em></blockquote><em><br /></em><br />In addition, per Josh Barro writing for the Forbe blog(6), other tactics can include<br /><blockquote><em>downsizing, increased automation, offshoring</em>, and the like. </blockquote><br />- <u>The Private Equity/ Leveraged Buy-Out Version of the Anechoic Effect</u><br /><br />It is striking that while Mitt Romney worked at Bain Capital in the last century, and private equity has been around, if not growing, since then, the current presidential campaign seems to be the first occasion which prompted any real public discussion about the nature of private equity, and its significance for the larger political economy. Thus private equity/ LBO seem to have been anechoic for a very long time (like much about how our current health care system operates seems to be <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>.) <br /><br />This version of the anechoic effect seems to have been deliberately created by the private equity/ LBO firms.<br /><br />A Washington Post commentary(7) quoted Mitt Romney,<br /><blockquote>You know I think it's fine to <em>talk about those things in quiet rooms</em>,...</blockquote><br />As a New York Times story(8) put it, these firms are lead by <br /><blockquote>a group of Wall Street executives who <em>prefer to operate out of the spotlight</em></blockquote><br />A story in Politico(9) called private equity/ leveraged buy-out firms<br /><blockquote>one of the most <em>secretive redoubts</em> of the American economy</blockquote><br />The article went on to suggest that these firms may well have something to hide:<br /><blockquote>Josh Kosman, author of 'The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy.' [said] 'Most private equity firms are because once you look behind the numbers, <em>there is much they don’t want you to see</em>.'</blockquote><br />Furthermore,<br /><blockquote>Private equity companies often tend to have <em>confidentiality agreements with their investors</em> (Bain would not comment on what agreements it has). Several equity experts interviewed for this story thought any disclosures from Bain were likely to spook its investors.<br /><br />The private equity business model is based on taking companies out of the public markets, where reporting requirements are strict and investors punishing, making changes that will hopefully make them more profitable and then selling them or taking them public through an IPO.<br /><br /><em>The part that happens behind the curtain is not always pretty</em>, and private equity firms have learned over the years that it’s hard to tell a complicated story in the media. The goal of private equity is to keep things private.<br /><br />'It’s had very little consciousness in the political realm until Romney came along because these guys are smart enough not to try to become Treasury secretaries,' said Bill Cohan, a former Wall Street banker-turned-investigative journalist who wrote 'Money and Power: How Goldman Sachs Came To Rule The World.'</blockquote><br />In addition, Dean Baker suggested that the confidentiality is used to hide how private equity/ leveraged buy-out firms remove capital from acquired companies(4),<br /><blockquote>The sort of asset stripping described here, which harms creditors by taking away potential collateral for their loans, <em>violates the law. However it is extremely difficult to prevent, especially with private equity companies that have to make few public disclosures</em>.</blockquote><br />Thus secrecy/ confidentiality/ deception should be regarded as one of the main tactics used by private equity/ leveraged buy-out firms.<br /><br /><strong>Implications for Health Care</strong><br /><br />Mitt Romney's candidacy has generated a surprising amount of discussion about the effects of private equity/ leveraged buy-out firms on the political economy. Many are worried that despite his claims, such firms cause more job loss than job creation. In the Huffington Post(10), Robert Creamer wrote that private equity/ LBOs have contributed to the sense that ordinary people who play by the rules suffer while well-connected insiders prosper:<br /><blockquote>It just doesn't make sense to them that a relatively tiny number of people -- who don't build a product or create a service -- can make massive amounts of money, while ordinary people who work hard and play by the rules see their incomes flat-line.<br /><br />Their view is simple. They create cars, or food, or houses or computers -- or they provide police protection, or care for sick people, or teach our kids. Why should they be asked to sacrifice when guys who basically gamble for a living -- as Wall Street speculators -- make incomprehensibly large sums of money?</blockquote><br />There seems to be a good argument that the tactics used by private equity/ leveraged buy-out firms might be bad for the general political economy.<br /><br />Moreover, these firms often take over health care corporations, drug and device companies, health care information technology companies, health insurance companies, for-profit hospital chains, etc. There is reason to think that their standard tactics used on such targets are likely to be particularly bad for health care.<br /><br />Many health care corporations depend on a long-term view to be successes. To develop new products, drug, device, and health care IT companies must pursue research and development projects that take years. All health care companies depend on highly trained, specialized workers and professionals. To sustain these sorts of employees requires a long-term attention to their development. So private equity/ leveraged buy-out firms' short-term focus, transfer of debt and risk to the acquired companies, and emphasis on short-term generic management cutting costs techniques including lay-offs, outsourcing, etc clash with the sophisticated long-term focus these companies require. <br /><br />These health care organizations often require the complex interplay of many components. Private equity/ leveraged buy-out firms' efforts to sequester and sell particular assets may disturb this complex system. <br /><br />Health care quality, and successful research and development require transparency. Extreme emphasis on secrecy by private equity/ leveraged buy-out firms threatens such transparency.<br /><br />Even more pointed concerns may arise when private equity/ leveraged buy-out firms endeavor to take over non-profit health care organizations. We plan to discuss these in a subsequent post.<br /><br />The NY Times(g) noted that in the 1980s, leveraged buy-out firms <br /><blockquote>were branded as 'barbarians at the gate' - the title of a book [by Burrough and Helyar, link <a href="http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357">here</a>] about the takeover of RJR Nabisco by Kohlberg Kravis Roberts.</blockquote><br />Now 30 years later we are finally having a conversation about the role of these firms in the greater political economy. We in health care should be having a parallel discusion about their role in our sphere. I submit that their role was not likely productive. Since health care should not merely be looked upon as a means to make money, but as a public good, we ought to be talking about how to restrain private equity/ leveraged buy-out firms from doing it more damage. <br /><br /><strong><span style="font-size: x-small;">References</span></strong><br /><br /><span style="font-size: x-small;">1. Goozner M. Private equity's edge: buy now, deduct taxes later.  Fiscal Times, Jan 9, 2012.  Link </span><a href="http://www.thefiscaltimes.com/Articles/2012/01/09/Private-Equitys-Edge-Buy-Now-Deduct-Taxes-Later.aspx"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.</span><br /><span style="font-size: x-small;">2, Hamilton W. Private equity industry: a bad rep, but is it deserved. Los Angeles Times, Jan 12, 2012. Link </span><a href="http://articles.latimes.com/2012/jan/12/business/la-fi-private-equity-20120112"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.</span><br /><span style="font-size: x-small;">3. Lenzer R. Why Warren Buffet disdains the private equity crowd. Forbes, Jan 14, 2012. Link </span><a href="http://www.forbes.com/sites/robertlenzner/2012/01/14/why-warren-buffett-loathes-the-private-equity-crowd"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">4. Baker D. NPR does fluff piece for private equity. Beat the Press, Jan 13, 2012. Link </span><a href="http://www.cepr.net/index.php/blogs/beat-the-press/npr-does-fluff-piece-for-private-equity"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">5. Lifton RK. Mitt Romney and Bain Capital: understanding the reality. Huffington Post, Jan 13, 2012. Link </span><a href="http://www.huffingtonpost.com/robert-k-lifton/mitt-romney-bain-capital_b_1205157.html"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">6. Barro J. The discussion we should be having about Bain. Forbes, Jan 12, 2012. Link </span><a href="http://www.forbes.com/sites/joshbarro/2012/01/12/the-discussion-we-should-be-having-about-bain"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">7, Robinson E. Reexamining the myth of no-fault capitalism. Washington Post, Jan 16, 2012. Link </span><a href="http://www.washingtonpost.com/opinions/reexamining-the-myth-of-no-fault-capitalism/2012/01/16/gIQAvKO13P_story.html"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">8. Lattman P, Lowrey A. As Romney advances, private equity becomes part of the debate. New York Times, Jan 10, 2012. Link </span><a href="http://www.nytimes.com/2012/01/11/business/as-romney-campaign-advances-private-equity-becomes-part-of-the-debate.html"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">9. Hagey K. Mitt Romney's Bain Capital days: a black box. Politico, Jan 11, 2012. Link </span><a href="http://www.politico.com/news/stories/0112/71344.html"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">. </span><br /><span style="font-size: x-small;">10 Creamer R. Why the Bain Capital controversy is so damaging to GOP chances this fall. Huffington Post, Jan 16, 2012. Link </span><a href="http://www.huffingtonpost.com/robert-creamer/why-the-bain-capital-cont_b_1208678.html"><span style="font-size: x-small;">here</span></a><span style="font-size: x-small;">.</span>

"Barbarians at the Gate" - Making Private Equity Less Private, and Understanding Its Effects on Health Care

One good byproduct of the tumultuous everlasting 2012 campaign for the US presidency has been to shed light on a number of political and economic issues that had previously been ignored, especially th…

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