healthy4u: Duke University

Hospital Executives - What Will They Think of Next?

Health care organizations are now most often run by people with management, not clinical backgrounds.  It seems like business schools have taught managers to sign on to whatever the latest management fashions are.  So what are the latest fashions in hospital management?  Here are a few hot items. Retreading Pharmaceutical Representatives My jaundiced reading of the business news suggests that most executives think that marketing is the most important part of their organizations, and that clever marketing can sell any product or service. For example, the pharmaceutical industry spends about twice as much on marketing as it does on research and development (despite pharma executives' protestations that they run research driven businesses) (see <a href="http://hcrenewal.blogspot.com/2008/01/blogscan-575-billion-spent-yearly-on.html">this post</a>). So it should be no surprise that now hospitals are using "hospital representatives" to market referrals to their institutions to doctors. From <a href="http://www.usatoday.com/money/industries/health/story/2011-12-13/hospitals-sales-reps/51887938/1">last week's USA Today</a>: <blockquote>n northwest Indiana, Carrie Sota visits five or six doctors' offices every workday as part of her new sales job. But Sota isn't selling the physicians on a prescription drug or a medical device. She's promoting her hospital — the University of Chicago Medical Center. Sota, 30, is one of four employees the academic medical center has hired in recent months to make 'sales calls' on physicians in the hope that they will send more patients to the hospital. 'We are trying to build meaningful relationships,' said Sota, who was previously a saleswoman for a small medical device company. The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales reps to visit doctors' offices to persuade them to use their services over competing facilities. Rather than handing out samples of prescription drugs, the sales reps call on doctors armed with the latest information on how their facility is reducing hospital-acquired infections and improving patient-satisfaction scores. In visits that can last five to 20 minutes, reps try to win doctors' loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, such as a doctor's request for a new medical device to be available in surgery.</blockquote> The article suggested a few problems with this approach. First, the point of the marketing is not to improve the match between patients' needs and the services the hospital provides. Rather, it is to generate referrals that have the potential to provide the maximum revenue: <blockquote>While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.</blockquote> So in particular, <blockquote>Many of the physician liaisons focus on specialists, who bring in patients for services with the highest profit margins, including orthopedics, cardiac care and cancer care, [Duke University Health System physician liaison manager Christine] Perry said.</blockquote> Second, the hospital reps have incentives based on revenue, not on value to the patient: <blockquote>About two-thirds of Tenet's liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals. </blockquote> Third, across the system, the revenues generated may be much less than the costs incurred, since most of the marketing will only succeed in moving patients from one hospital to another: <blockquote>Paul Ginsburg, president of the non-partisan Center for Studying Health System Change, said, 'When you look at the health system, this is a waste of resources. It's a zero-sum game.' He added: 'The net results of changing physician-referral patterns is that one hospital gains at a cost of others, and all the hospitals burn resources to pay (sales)people who take up the doctor's time.'</blockquote> Of course, the reps could succeed in persuading doctors to refer patients to specific hospitals for services the doctors originally did not think the patients needed. That would be good were the patients to need those services, but bad if they were not. Fourth, we have discussed (for example, <a href="http://hcrenewal.blogspot.com/2007/05/fool-me-once-shame-on-you-fool-me-twice.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/04/more-about-cynical-world-of-drug-reps.html">here</a>) how pharmaceutical representatives use sophisticated psychological and emotional manipulation, despite claims that all they do is provide unbiased information and educational, to influence physicians to prescribe drugs. Again, this may result in patients getting drugs whose benefits do not outweigh their harms. It is possible that hospital representatives will do something similar: <blockquote>'These people are really good and really assertive and very sophisticated,' said Stephen Newman, Tenet's chief operating officer.</blockquote> Unbundling Payments The airlines decided a while ago that they could make more money by charging passengers for each checked bag, and even for those little meals on plastic trays. It looks like hospital executives have discovered a new way to unbundle. As reported last month by <a href="http://www.stltoday.com/business/local/outpatient-sticker-shock-for-a--minute-treatment/article_a2915e64-1499-11e1-bf45-001a4bcf6878.html">the St Louis Post-Dispatch</a>, hospitals have begun charging often hefty "facility fees" for patients seen as outpatients in hospital clinics or hospital owned practices, even for very minor procedures or just office visits, and even for Medicare patients. (Private physicians who see patients in their own offices cannot charge such fees to Medicare patients, and most private insurance companies will not cover such fees.): <blockquote>A few weeks after Allison Zaromb took her 4-year-old son Meir to see a dermatologist in an outpatient office at the SSM Cardinal Glennon Children's Medical Center campus, she received separate bills from the doctor and the hospital. The cost for a 3-minute procedure to treat Meir's warts totaled $538, which included a $220 bill for physician services - and a separate bill for a $318 hospital 'facility fee.' Zaromb, a periodontist who lives in University City, is now suing SSM Health Care Corp. and Cardinal Glennon Children's Medical Center in a proposed class action lawsuit on behalf of other patients</blockquote> More generally, <blockquote>With the proliferation of hospital-owned outpatient centers and hospital-owned physician practices, hospital 'facility fees' have become increasingly common. Such hospital facility fees often involve greater dollar amounts than the fees charged by physicians.</blockquote> Technically, it all appears to be legal: <blockquote>Under federal regulations, health systems are permitted to charge a hospital facility fee for an outpatient service if it's done in a clinic that is 'hospital-based' - meaning that the clinic is owned and operated as part of a hospital or health system, regardless of whether the clinic is physically located on the hospital grounds.</blockquote> This technique does seem to be a way to increase revenue. But one person's revenue is another person's cost, so it also seems to be a great way to further increase the already high cost of US health care. It is not obvious, however, that these increased costs will lead to increased quality of care or value for the patient: <blockquote>'From a consumer's perspective, when you go see your doctor, you go see your doctor - whether it's in an office inside a larger hospital complex or right across the street,' [Zaromb's lawyer John] Phillips said. 'The doctor's practice remains the same. ... They're making the doctor's office a ‘hospital-based' clinic for one reason: to make money by charging a facility fee, not to improve consumer service.'</blockquote> Negotiating the Costs of Medical Devices One of the favorite topics on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, at least before we found even more outrageous subjects, was the stratospheric cost of medical devices. For example, look at posts from 2005 <a href="http://hcrenewal.blogspot.com/2005/09/1600-screw-and-other-outrages.html">here</a>, <a href="http://hcrenewal.blogspot.com/2005/08/imaging-test-pre-certification-blues.html">here</a>, <a href="http://hcrenewal.blogspot.com/2005/08/wooden-headed-health-care.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2005/08/new-york-times-examines-why.html">here</a>. So last month we found out that hospital executives have come up with a revolutionary idea to combat the high cost of devices. They will actually try to see what prices the device companies charge other hospitals, and then negotiate the prices down, as <a href="http://www.reuters.com/article/2011/11/30/us-hospitals-idUSTRE7AS2ZI20111130">Reuters</a> reported as big news in late November: <blockquote>Implantable devices make up a sizable chunk of typical hospital budgets, and administrators are devising new ways to limit that cost as they brace for cuts to government reimbursement and treat more patients who can't pay for care. That means methodically working through each category of device, from heart valve replacements and stents to spinal products, to see where they can negotiate lower prices. It also means creating databases of shared information on pricing between hospitals.</blockquote> Imagine that! Of course, the notion that buyers ought to bargain with sellers to get the best price goes back a few years. However, only in 2011 did it apparently occur to hospital executives that they ought to negotiate the prices of one their most expensive purchases. This suggests that there has been something profoundly wrong with the basic assumptions underlying the commonly accepted wisdom that making the health care system more of a market will lead to more financially efficient care.  Summary 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. So these generic managers have brought us such "innovations" as the "hospital (marketing) representative," and the "facility fee" for outpatient visits, but only thought to negotiate device prices in 2011. But that is why we pay them <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">the big bucks</a>. How many more arguments do we need that health care organizations ought to be lead by people who understand the health care context, share its core values, and are accountable for how these organizations affect patients' and the public's health?

Hospital Executives - What Will They Think of Next?

Health care organizations are now most often run by people with management, not clinical backgrounds. It seems like business schools have t...

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Duke Divinity Students Protest Pay of Chancellor for Health Affairs

This may be a first.  A small group of Duke University divinity students publicly protested the compensation given to some top university leaders, specifically including the Chancellor for Health Affairs.  <a href="http://www.newsobserver.com/2010/12/03/840067/buddy-can-you-spare-729749.html">According</a> to the Raleigh-Durham News-Observer: <blockquote>Theo Luebke strolled the plaza outside Duke's Bryan Center on Thursday afternoon with a bucketful of apples and a tale of woe. 'Come on! Everyone's in this together! Get your apples!' he exhorted students passing by during the lunchtime rush. 'With all the cuts we have around here and all the bonuses we have to give to the big guys, we need to raise all the money we can.' Luebke isn't really the Depression-era fruit peddler his costume suggested. Luebke and a couple of other Duke divinity students hawked apples, ostensibly to raise money for the university, while others dressed as paperboys distributed a mock newspaper railing against bonuses paid to top officials within Duke's healthcare system and investment company. For Duke workers whose pay has been frozen of late, the bonuses appear staggering. A couple of examples: Neal Triplett, president of the management company, received a $729,749 bonus on top of his $413,603 salary; Victor Dzau, chancellor of the Duke health system, got a $983,654 bonus, bringing his total compensation to more than $2.2 million. Thursday's skit, which mostly drew befuddled looks, was the third in a series mocking executive pay.</blockquote> It turns out these munificent compensation amounts were paid at a time when Duke is in some financial difficulty: <blockquote>In recent years, Duke has frozen pay and eliminated jobs in an attempt to pare its annual operating budget by $100 million. Nearly 400 workers have accepted buyout offers since early 2009. Their jobs were then eliminated. 'During a time when the administration is saying we all needed to tighten our belts and make sacrifices...as it turns out, some of the folks who lost money for Duke were giving themselves bonuses,' said Amy Laura Hall, a tenured professor of Christian ethics. 'I think that's obscene.'</blockquote> I cannot recall a previous example of students demonstrating against the compensation of a leader of a medical school and/or university health care system.  Maybe these students have started something. In fact, we have frequently discussed executive compensation given by health care organizations that seems wildly out of proportion to the value of the health care they provide or the clinical value of their products.  Although compensation is even higher for executives of for-profit health care corporations, even leaders of not-for-profit organizations, including academic institutions, is now often in the millions per year range. Service on (Mostly Health Care) Corporate Boards Dr Dzau's compensation may appear even more extreme in the context of the money he brings in from outside work.  As Prof Margaret Soltan <a href="http://www.margaretsoltan.com/?p=27849">pointed out</a> on the University Diaries blog, Dr Dzau also serves on multiple corporate boards.  The multiplicity of his outside work is not fully acknowledged in the most complete official biography posted on the Duke web-site, <a href="http://www.dukemedicine.org/Leadership/Administration/DzauVictor">here</a>, which only notes service on the Genzyme board.  In fact, he also serves on the boards of Anylam Pharmaceuticals, Medtronic, and PepsiCo. According to the <a href="http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMDk1MDEyMy0xMC0wMzYwNjgvZG9jL0FsbnlsYW1QaGFybWFjZXV0aWNhbHNfREVGMTRBXzIwMTAwNDIwLnBkZiZ0eXBlPTImZm49QWxueWxhbVBoYXJtYWNldXRpY2Fsc19ERUYxNEFfMjAxMDA0MjAucGRm">Alnylam Pharmaceuticals 2010 Proxy Statement</a>, Dr Dzau's compensation as a director in 2009 was $234,433.  In 2009, Dr Dzau owned the equivalent of 45,000 shares, worth $424,800 at <a href="http://www.google.com/finance?q=alnylam">today's $9.44 price</a> per share.  According to the <a href="http://www.genzyme.com/corp/investors/GENZ_Proxy_2010.pdf">Genzyme 2010 Proxy Statement</a>, Dr Dzau's compensation as a director in 2009 was $412,942.  In 2009, Dr Dzau owned the equivalent of 75,137shares, worth $5,312,937 at <a href="http://www.google.com/finance?q=NASDAQ%3AGENZ">today's $70.71 price per share.</a> According to the <a href="http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMDk1MDEyMy0xMC0wNjU4NzYvZG9jL01lZHRyb25pY0luYy5wZGYmdHlwZT0yJmZuPU1lZHRyb25pY0luYy5wZGY=">Medtronic 2010 Proxy Statement</a>, Dr Dzau's compensation as a director in 2009 was $173,698.  In 2009, Dr Dzau owned the equivalent of 14,552 shares, worth $493,895 at <a href="http://www.google.com/finance?q=medtronic">today's $33.94 price</a>. According to the <a href="http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMTE5MzEyNS0xMC0wNjQ1MTYvZG9jL1BlcHNpQ29fREVGMTRBXzIwMTAwMzIzLnBkZiZ0eXBlPTImZm49UGVwc2lDb19ERUYxNEFfMjAxMDAzMjMucGRm">PepsiCo 2010 Proxy Statement</a>, Dr Dzau's compensation as a director in 2009 was $260,000.  In 2009, Dr Dzau owned the equivalent of 25,065 shares, worth $1,622,458 at <a href="http://www.google.com/finance?q=NYSE%3APEP">today's $64.73 price per share</a>. So, in summary, in 2009, Dr Dzau received  $1,081,073 in compensation to be a director of these four companies.  In 2009, Dr Dzau owned stock or equivalent in these four companies valued at $7,854,090.  He has become what most people would consider rich just from his work on these boards, in addition to the millions he has received from Duke. Conflicts of Interest and Other Questions So this raises even more questions.  The most obvious is how the good doctor has time to simultaneously fulfill his responsibilities at Duke and for the four corporations?  The next most obvious is why the university does not make a full disclosure of what appear to be severe conflicts of interest?  Anylam and Genzyme are biotechnology pharmaceutical companies.  Medtronics is a medical device company.  PepsiCo is a food and beverage company whose products affect nutrition and public health.  Dr Dzau's service on the board of each of these companies means he has fiduciary duties to each company, and is supposed to show unyielding loyalty to the companies' stockholders.  Of course, many business commentators have charged that most corporate directors are mainly chosen to be compliant with the top hired management's wishes, if not to be frank cronies of the management.  Even in the best case, showing unyielding loyalties to the stockholders of companies that make drugs, medical devices, and sugary drinks seems to be likely to influence a leader of an academic medical institution in ways that risk degrading the leader's responsibilities to uphold the institution's mission, i.e., to create severe conflicts of interest.  Dr Dzau has a fairly severe case of what we labeled as a <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">"new species of conflict of interest"</a> in 2006.  Concerns about such conflicts affecting university presidents, but not specifically chancellors or vice presidents for health affairs, appeared in the New York Times last summer (see post <a href="http://hcrenewal.blogspot.com/2010/07/new-york-times-reports-university.html">here</a>).  Maybe some day student protesters will see such conflicts as a problem. However, should Dr Dzau make the usual defense of such conflicts, that they promote collaboration with industry needed for innovation, maybe Duke students or alumni might ask questions about the other side of the coin. The Other Side of the Conflict of Interest Coin Dr Dzau is supposed to be responsible for the stewardship of Genzyme.  We have recently <a href="http://hcrenewal.blogspot.com/search/label/Genzyme">posted</a> about the company's seeming recent inability to make pure, unadulterated pharmaceuticals, and while exhibiting such inability to perform such basic functions, its payment of extremely lucrative compensation to its hired CEO.  Maybe someone could ask Dr Dzau what he thought about such actions, and whether he would take any responsibility for them? Dr Dzau is supposed to be responsible for the stewardship of Medtronic.  Medtronic recently <a href="http://hcrenewal.blogspot.com/2010/10/last-weeks-scandals.html">settled</a> thousands of patients' lawsuits that alleged injuries due to a faulty lead on one model of a Medtronic implantable cardiac defibrillator for over $200 million. Medtronic has been the source of several alleged conflicts of interest involving influential physicians (see posts about Medtronic <a href="http://hcrenewal.blogspot.com/search/label/Medtronic">here</a>).   Maybe someone could ask Dr Dzau what he thought about such actions, and whether he would take any responsibility for them. Finally, a larger question is: is it good to have a leader of a medical school and academic medical center who has presided over such ethical lapses by health care corporations?  Let's see if anyone does get to ask Dr Dzau such questions.

Duke Divinity Students Protest Pay of Chancellor for Health Affairs

This may be a first. A small group of Duke University divinity students publicly protested the compensation given to some top university le...

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Academic Medical Center Crime Wave?

Every large group or organization has a few bad apples.  My web searches constantly turn up stories of individuals working in health care who behave unethically or commit crimes.  I do not generally discuss these cases on Health Care Renewal, since they seem unavoidable, and their sporadic appearance does not necessarily have anything to do with systemic problems in health care. However, in the last week, I noted four cases of rather exceptionally bad behavior by individuals working in large hospital systems, and the severity and proximity of these cases made me wonder if they reflect some new trend. Pennsylvania State University Faculty Member Charged with Rape As <a href="http://www.pennlive.com/midstate/index.ssf/2010/11/doctor_accused_of_using_painki.html">reported</a> by PennLive.com, <blockquote>Former Derry Township, Dauphin County, doctor Dr. Robert L. Yarwood stands accused of using his position and influence to addict two of his patients to painkillers and raping them multiple times. Yarwood, 56, has been charged with more than 42 criminal counts, including rape and sexual assault, stemming from allegations made in 2008 by two women, ages 40 and 45. He is accused of giving narcotics to the women to 'exert psychological force,' said Fran Chardo, Dauphin County first assistant district attorney. 'The case, speaking abstractly, is very disturbing because of the trust relationship between the patient and the doctor,' Chardo said. 'It’s a violation of trust.' In an interview with The Patriot-News, one of the women said she had visited Yarwood several times over the course of a year. He was prescribing her pain medication, which she eventually became addicted to. Then, she said, he raped her. 'I was paralyzed. I was in shock,' she said. 'I trusted him.' At the time of the allegations, Yarwood was an obstetrician and gynecologist at the Penn State Milton S. Hershey Medical Center, which he joined in the late 1990s. In August 2008, the medical center was apprised of the investigation and immediately suspended Yarwood from having contact with patients. </blockquote> $5 Million Embezzlement from Columbia University Medical Center As <a href="http://online.wsj.com/article/SB10001424052748704584804575645152197487616.html">reported</a> by the Wall Street Journal, <blockquote>A 48-year-old Bronx man has been arrested and charged with grand larceny for allegedly stealing nearly $4.5 million from Columbia University over the course of two months, authorities said Monday. George Castro is accused of adding a TD Bank account belonging to him as a payee in the Columbia University Medical Center's accounts payable system, netting payments of $3.4 million in October and $1 million in November, authorities said. Mr. Castro, whose relationship with the university is unclear, was arrested Wednesday. A law-enforcement official familiar with the case said Mr. Castro had $200,000 in cash in his possession when he was arrested and had withdrawn $140,000 the day before his arrest. According to a criminal complaint, Mr. Castro told investigators the money 'just appeared' in his bank account and that he had gotten 'greedy.'</blockquote> Duke Surgeon and Surgical Department Business Manager Accused of Embezzlement As <a href="http://www.wral.com/news/local/story/8700929/">reported</a> by WRAL.com, <blockquote>A former Duke University surgeon and manager have been charged with stealing $267,000 from the university, police said Tuesday. Dr. Eric Joel DeMaria, 51, of 1101 Tacketts Pond Drive in Raleigh, and John William Cotton, 39, of 7228 Loblolly Pine Drive in Raleigh, were each charged with embezzlement of more than $100,000. Cotton also was charged with obtaining property by false pretense. Cotton was arrested last Wednesday, and DeMaria surrendered to police Tuesday morning. Both have been released on $25,000 bonds. DeMaria was director of Duke's bariatric surgery program, while Cotton was a business manager in the surgical department at Duke University Hospital, according to Michael Schoenfeld, Duke's vice president for public affairs.</blockquote> Office Worker Accused of Stealing $3.8 Million from Memorial Sloan-Kettering Cancer Center As <a href="http://www.nypost.com/p/news/local/manhattan/clerk_mil_rip_off_yqCRPJkkPQelySq0vY6oCO">reported</a> by the New York Post, <blockquote>A former worker at Memorial Sloan-Kettering stole nearly $4 million from the cancer center in a massive scheme that involved ordering a boatload of unnecessary printer cartridges and reselling them, authorities said. The loot from the elaborate scam was used to fund a lavish lifestyle that allowed $37,000-a-year receiving clerk Marque Gumbs to move from a Bronx housing project to a luxurious Trump high-rise in the suburbs. Gumbs, 32 -- who was arraigned yesterday in Manhattan Criminal Court on charges of grand larceny and criminal possession of stolen property -- allegedly began his scheme in 2004 by ordering extra toner cartridges and reselling them. In one astounding stretch from October 2009 through August 2010, Gumbs ordered $1.2 million worth of toner that wasn't usable for any machine at the hospital, authorities said. His alleged ruse cost the hospital $3.8 million.</blockquote> Summary So here is the box-score. Reported in one week were three alleged theft/ embezzlement schemes with values from $267,000 to $5 million, and one alleged series of multiple rapes. The alleged perpetrators included two academic physicians (one in surgery, one in obstetrics-gynecology), two hospital staff, one in management, and a person with an unclear relationship to the hospital. All involved large, prestigious academic medical centers. So, again, maybe these were just coincidences. However, it may be that there is a real trend toward bigger and more spectacular thefts and embezzlements from big, not for profit health care institutions.  The most likely explanation is simply that the increasingly huge amounts of money flowing through such institutions attracts those who go to where the money is, and that the increased complexity of the bureaucracy of ever-growing health care institutions makes it easier to hide such thefts.  At least, this odd string of cases should prompt more questions about the conventional wisdom that it is good for health care organizations to grow ever larger.  However, just to be speculative, note that three of these incidents occurred at institutions whose leadership has attracted our attention before.  We discussed conflicts of interest affecting one Columbia academic leader <a href="http://hcrenewal.blogspot.com/2006/08/more-entangled-web-unitedhealth-case.html">here</a>, and the prevalence of leaders of failed financial services companies on the New York-Presbyterian board <a href="http://hcrenewal.blogspot.com/2009/12/with-leaders-like-these.html">here</a>.  We discussed a leader of two of the firms most involved in the global financial collapse who was also the chairman of the board of Duke University<a href="http://hcrenewal.blogspot.com/2009/10/trustee-of-what-caliber-for-hospital.html"> here</a>.  A quick skim of Memorial Sloan-Kettering's Board of Overseers (in its <a href="http://www.mskcc.org/annualreport/2009/pdfs/FullReport_AR09.pdf">2009 annual report</a>) showed the presence of at least two leaders of failed financial services firms heavily involved in the global financial collapse (E Stanley O'Neal, former CEO of Merrill Lynch, and Sanford I Weill, former CEO of Citigroup).  The speculation is that as academic medical centers and hospital systems and their parent universities have increasingly been recipients of the "stewardship," and hence immersed in the culture of the financial services industry, particularly firms which contributed to the global financial collapse, the culture of health care became increasingly laissez faire, anything goes, wild, wild west, and so it got easier for the wrong people to be hired, and for the wrong people to pull off truly spectacular capers. I submit that the first criterion for being a trustee or director, and hence ostensibly a steward of an academic medical institution should be devotion to the mission of the organization, not size of one's contribution.

Academic Medical Center Crime Wave?

Every large group or organization has a few bad apples. My web searches constantly turn up stories of individuals working in health care wh...

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Duke Scientist Bringing Millions from NIH and Pharma Suspended Over Rhodes Scholar Claims

The New York Times reports that a medical researcher faked claims to being a Rhodes Scholar, and that a major scandal that has erupted. The scenario is very familiar to readers of Healthcare Renewal, with universities collecting millions from public sources and the pharmaceutical industry, turning a blind eye to credentials discrepancies of faculty "taxpayers", and the public possibly put at risk through faulty research and suspect "reviews": <blockquote><a href="http://www.nytimes.com/2010/07/21/health/research/21cancer.html">Duke Scientist Suspended Over Rhodes Scholar Claims</a> New York Times July 20, 2010 Duke University School of Medicine has suspended a researcher and stopped patient enrollment in three cancer studies upon learning of reports that the researcher had overstated his academic credentials. One of the lead investigators on the cancer studies, Dr. Anil Potti, was placed on administrative leave, said Douglas J. Stokke, a spokesman for Duke, while the university investigates allegations that Dr. Potti had falsely claimed that he was a Rhodes scholar. The controversy erupted late last week after <a style="font-weight: bold;" href="http://cancerletter.com/tcl-blog/CL36-27.pdf" title="Article in The Cancer Letter. (PDF)">an article published in The Cancer Letter</a> (PDF), a weekly publication for cancer specialists, reported that Dr. Potti, an assistant professor of medicine, had on occasion exaggerated his credentials. (A spokeswoman at Rhodes House at Oxford confirmed on Tuesday that Dr. Potti had not received the scholarship.) </blockquote> The scientist, Anil Potti, was engaged in cancer clinical trials using questionable and possbily erroneous analytical methods (prediction models). <blockquote>In addition, several dozen biostatisticians and cancer researchers at Harvard, Princeton, Johns Hopkins and other academic institutions are now questioning the methodology behind the three clinical trials, urging a halt to the Duke studies — two on lung cancer and one on breast cancer — in a letter sent to the director of the National Cancer Institute.</blockquote> He'd used the fake credentials to get American Cancer Society money: <blockquote> When questions about Dr. Potti’s credentials became public, the American Cancer Society suspended payments of a five-year, $729,000 grant awarded to Dr. Potti to study the genetics of lung cancer. The society awarded the grant based in part on a résumé from the doctor that included the Rhodes honor, said Dr. Otis W. Brawley, the chief medical officer of the cancer society. </blockquote> According to The Cancer Letter's exposé linked above: <blockquote>A high-profile cancer genomics researcher at Duke University claimed in multiple grant applications that he had been a Rhodes scholar, when, in fact, the Rhodes Trust states flatly that he was not. Documents obtained by The Cancer Letter show that in biographies submitted to NIH, Duke oncologist and genomics researcher Anil Potti claimed variously to have won the prestigious scholarship in 1995 or 1996, depending on the version of the biography. Potti also made the Rhodes claim in an application that resulted in a $729,000 grant from the American Cancer Society. “We don’t have any record that Anil Potti was a Rhodes scholar,” spokesman for the Rhodes Trust said to The Cancer Letter.</blockquote> Assuming the fabrications are proven, a number of questions arise: <ul><li>How can a Duke scientist have gotten away with exaggerated credentials on a CV used in a grant applicationa to NIH, the American Cancer Society, and perhaps other organizations, claiming to be a Rhodes Scholar? </li><li>Did he make similar exaggerations in his application to Duke itself?</li><li>Do the exaggerations made in NIH and/or other federal grant applications constitute a crime, e.g., under Title 18 of U.S. Code, Section 1001 which makes it a federal crime to make a false statement to the government, according to one contributor to The Cancer Letter article? </li><li>Will Duke act on fabrications as criminal matters? </li><li>What were the Duke grants office and/or credentials-checking staff doing during their working hours?</li><li>Why did this exaggeration come out in The Cancer Letter? </li></ul> Patients may be at risk: <blockquote> [MD Anderson Cancer Center biostatisticians] Keith Baggerly and Kevin Coombes said they devoted about 1,500 hours to checking Potti’s and Nevins’s work. These efforts—dubbed “forensic bioinformatics”—resulted in a paper in the November 2009, issue of the Annals of Applied Statistics. “Unfortunately, poor documentation can shift from an inconvenience to an active danger when it obscures not just methods but errors,” the paper stated. “Patients in clinical trials are currently being allocated to treatment arms on the basis of these results.” The two raised questions about Duke’s randomized phase II single-institution trials that used the Nevins and Potti technology to assign patients to treatment (NCT00545948, NCT00509366, and NCT00636441). Baggerly and Coombes argued that these trials “may be putting patients at risk.”</blockquote> Duke initially suspended but then restarted the trials after an "investigation" by outside scientists. However: <blockquote>Experts asked by The Cancer Letter to review these [investigation] documents [obtained under the FOIA] noted that Duke deans Cuffe and Kornbluth were inaccurate in their description of the document’s substance and conclusions when they announced completion of the investigation and resumption of the clinical trials earlier this year. “Having read the committee’s report, we must disagree with Duke’s representation of the committee’s findings,” Baggerly and Coombes said in an email after reviewing the documents released under FOIA. The committee stated that “In our review of the methods … we were unable to identify a place where the statistical methods were described in sufficient detail to independently replicate the findings of the papers,” and further noted that the Duke investigators “really need” to work on “clearly explaining the specific statistical steps used in developing the predictors and the prospective sample assignments."</blockquote> Duke has apparently now decided to stonewall: <blockquote> ... The Cancer Letter sent an email with questions to Potti, his collaborator Joseph Nevins, and Duke administration officials. The questions focused on the Rhodes claim, but also touched on other apparent discrepancies. Responding to everyone on the email CC list, including this reporter, Potti wrote: “Sounds like I need to call him to clarify ...... and probably also talk with you all to clarify. I was a nominee..... and several of the others can also be explained. –Anil.” After that email, Potti and Duke officials didn’t respond to questions seeking details that could substantiate this response. Multiple calls and emails from The Cancer Letter were not acknowledged.</blockquote> One reason is that this escapade appears to have many twists and turns regarding credentials claimed by their researcher in the past. See the full <a href="http://cancerletter.com/tcl-blog/CL36-27.pdf" title="Article in The Cancer Letter. (PDF)">article published in The Cancer Letter</a> (PDF). The tale is stunning. Another reason appears to be this: <blockquote>Genomic research led by the two scientists [Potti and senior collaborator Joseph Nevins] has brought millions of public and private dollars to Duke. The duo’s connections with the industry are considerable. According to a recent disclosure, Potti is a member of the scientific advisory boards of Eli Lilly and Co., GlaxoSmith-Kline, and CancerGuideDx.</blockquote> This also raises the questions: <ul><li>Did Potti misrepresent his credentials to these pharmas?</li></ul><ul><li>Was Nevins aware of these exaggerations himself? </li></ul> Of course this author is familiar with laxity in Duke's management and academics, and their not replying to pointed questions on their failures. Perhaps at the time of this grant application, Duke personnel were busy checking the credentials of the <a href="http://en.wikipedia.org/wiki/Duke_lacrosse_case">Duke Lacrosse team</a>, or of academics such as myself, maligned by Duke professors for having a strong sense of ethics (see link below). I then found myself "stonewalled" by Duke's President <a href="http://www.duke.edu/president/">Richard H. Brodhead</a> on the issues. (See my Jan. 2008 post "<a href="http://hcrenewal.blogspot.com/2008/01/truly-disturbing-lawsuit-against-duke.html">A Truly Appalling Lawsuit Against Duke University</a>" for more on that affair.) -- SS

Duke Scientist Bringing Millions from NIH and Pharma Suspended Over Rhodes Scholar Claims

The New York Times reports that a medical researcher faked claims to being a Rhodes Scholar, and that a major scandal that has erupted. The ...

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