55 of Medtronic's Best Hospital Friends, Including HCA, Settle for $34 Million

The case of the over-marketing of Kyphon's kyphoplasty device (look <a href="http://hcrenewal.blogspot.com/2008/05/corporate-integrity-agreement-for.html">here</a>) just got more complicated, and now appears to have involved an amazing number of players.<br /><br /><b>The State of Play </b><br /><br /> As reported by the AP (<a href="http://www.washingtonpost.com/business/justice-department-55-hospitals-reach-34-million-settlement-over-medicare-fraud-claims/2013/07/02/3d3d2356-e34e-11e2-bffd-37a36ddab820_story.html">via</a> the Washington Post),<br /><br /><blockquote class="tr_bq"> <i>Fifty-five hospitals in 21 states have agreed to pay $34 million to the U.S. government to settle allegations that they used more expensive inpatient procedures rather than outpatient spinal surgeries to get bigger payments from Medicare,</i> the U.S. Justice Department said Tuesday.<br /><br />The settlement involves kyphoplasty procedures used to treat spinal fractures usually caused by osteoporosis. It can be done as an outpatient procedure, but he Justice Department said the hospitals performed the surgeries as inpatient procedures to increase Medicare billings.</blockquote><br />The current media reports provided little detail about the allegations, but did note that this case has been litigated for a while,<br /><br /><blockquote class="tr_bq"> A similar settlement was reached last year, when 14 hospitals agreed to pay a settlement of more than $12 million. And in 2008, the Justice Department agreed to a $75 million settlement with Medtronic Inc.’s spine business. The government was investigating allegations that Kyphon, a company that had been acquired by Medtronic Spine in 2007, advised hospitals to do inpatient kyphoplasties to bulk up their Medicare payments.</blockquote><br /><b>The Players</b><br /><br />Per the AP, there were quite a few<br /><br /><br /><blockquote class="tr_bq">In the latest settlement, the largest payments are being made by Atrium Medical Center of Middletown, Ohio, which will pay $4.2 million; Mount Sinai Medical Center in Miami, $1.8 million; Altru Health System of Grand Forks, N.D., $1.5 million; Cedars Sinai Medical Center in Los Angeles, $1.5 million; Wayne Memorial Hospital in Goldsboro, N.C., $1.3 million; Trover Health System of Madisonville, Ky., $1.2 million; The Queen’s Medical Center in Honolulu, $1.1 million; and Des Peres Hospital in suburban St. Louis, $900,000.<br /><br />Several multi-hospital organizations agreed to settlements, including:<br />—Twenty-three hospitals with <a href="http://hcrenewal.blogspot.com/search/label/HCA">HCA Inc</a>. of Nashville, Tenn., paying a total of $7.1 million.<br />—Six hospitals with Lifepoint Hospitals Inc. of Brentwood, Tenn., $2.5 million.<br />—Five hospitals with Trinity Health of Livonia, Mich., $3.9 million.<br />—Four hospitals with Morton Plant Mease BayCare Health System of Clearwater, Fla., $2.4 million.<br />—Three hospitals with Baptist Memorial Hospital-Golden Triangle of North Columbus, Miss., $1.8 million.<br />—Two hospitals with Bayhealth Medical Center of Newark, Del., $1.1 million.</blockquote><br /><br />A Modern Healthcare <a href="http://www.modernhealthcare.com/article/20130702/NEWS/307029967/55-more-hospitals-settle-in-kyphoplasty-overpayment-cases">report</a> noted that the leadership of HCA, the hospital system with the largest liability, made it out to all be a misunderstanding,<br /><br /><blockquote class="tr_bq">Hospital executives say the allegations are prompted by  <i>unclear Medicare rules on when spinal-surgery patients should be held overnight.</i> And they note that even though the whistle-blowers and the government are targeting hospitals, t<i>he decision to admit patients is usually dictated by the treating physician.</i><br /><br />'We are pleased to see new clarification of industry care standards, which help physicians make decisions regarding kyphoplasty patients,' HCA spokesman Ed Fishbough said in an e-mailed statement Tuesday. 'We are confident as a result that this issue has been resolved.'</blockquote><br />However, the case appears to be more complicated than that.<br /><br /><b>What Really Happened, and Who Benefited?</b><br /><br />In fact, we <a href="http://hcrenewal.blogspot.com/2008/05/corporate-integrity-agreement-for.html">discussed</a> the Medtronic settlement in 2008.  At that time, a New York Times <a href="http://www.nytimes.com/2008/05/23/business/23device.html">article</a> described the government's allegations about what went on this way,<br /><br /><blockquote class="tr_bq"><i>A unit of Medtronic defrauded Medicare of hundreds of millions of dollars</i>, according to a civil lawsuit that was unsealed Thursday and simultaneously settled with the Justice Department.<br /><br />Two insiders had said Kyphon, which Medtronic acquired in 2007, <i> improperly persuaded hospitals to keep people overnight for a simple outpatient procedure to repair small fissures of the spine. Medicare then reimbursed the hospitals much more generously than it otherwise would have </i>for the procedure, which was developed as a noninvasive approach that could usually be done in about an hour.<br /><br />By marketing its products this way, <i>Kyphon was able to artificially drive up demand among hospitals, bolstering its revenue and driving up its stock price. Medtronic subsequently bought the company, its competitor, for $3.9 billion, greatly enriching Kyphon’s senior executives. </i></blockquote><br />Furthermore,<br /><br /><blockquote class="tr_bq"> The scheme at Kyphon was <i>based on Medicare’s practice of reimbursing hospitals more for complex inpatient back surgery than for outpatient care.</i> The two whistle-blowers, Charles M. Bates and Craig Patrick, said Kyphon had <i>deliberately urged doctors to admit patients overnight, knowing the admissions were unnecessary.</i><br /><br /><i>Hospitals saw the overnight admissions as a way to raise revenue,</i> the two said, and <i>bought Kyphon’s products, even though they were expensive, starting at $3,500 to repair one spinal fissure.</i> The hospitals could recover the cost through the improper reimbursements for overnight stays.<br /><br />Kyphon sold so much equipment this way that at one point it <i>enjoyed a 90 percent profit margin,</i> according to the two insiders, both of whom worked in sales positions.<br /><br />The former employees said the <i>scheme began in 1999</i>, when Kyphon’s products first came to the market. Kyphon’s rapid sales growth and profitability eventually gave rise to a patent dispute with Medtronic, which was dropped when Medtronic acquired it. The acquisition richly rewarded Kyphon’s shareholders, particularly its top executives. <i>The company said its top 15 executives stood to receive about $145 million by cashing in their options and restricted stock.</i></blockquote><br />Note that at that time, Medtronic leadership, whose decision to purchase of Kyphon would end up so enriching Kyphon executives, seemingly had no worries,<br /><br /><blockquote class="tr_bq">A  spokeswoman for Medtronic, Marybeth Thorsgaard, said the company had <i>known Kyphon was under investigation</i> when it made the acquisition. She said it knew that Kyphon’s marketing strategy was being challenged, and took the risk of litigation into account. <i>'There were no surprises,'</i> she said.</blockquote><br />I can find no public record that any individual who authorized, directed, or implemented the arrangements above that lead to huge overcharges to Medicare, and huge revenues to Kyphon and the hospitals was subject to any negative consequences.  As noted above, it appears that the executives who lead Kyphon at the time it was acquired by Medtronic made substantial amounts of money apparently attributable to this scheme to allegedly "defraud Medicare of hundreds of millions of dollars" (as it was described above in the New York Times).  <br /><br />Using the public record available on the internet, I tried to see how the top three Kyphon executives are doing now.  It appears they are not doing badly, and remain influential in health care.  According to its <a href="http://www.sec.gov/Archives/edgar/data/1123313/000119312507096257/ddef14a.htm">2007 proxy statement</a>, just before Kyphon was bought out, its CEO was Richard W Mott.  As best as I can tell, <a href="http://people.equilar.com/bio/richard-mott-alfred-university/salary/525993#.UdRnh6zNrrI">per Equilar,</a> he currently runs a consulting firm (Walkabout Consulting LLC), and was previously chairman of <a href="http://www.linkedin.com/company/photothera">PhotoThera</a>, which just went out of business.  Kyphon's chief science officer was  Karen D Talmadge, PhD, who is now on the <a href="http://www.diabetes.org/about-us/board-of-directors/karen-d-talmadge.html">board of directors of the American Diabetes Association,</a> and is also "Chair of the Board of Directors of Gynesonics, and serves on the Boards of Directors of Amplyx Pharmaceuticals, Velocity Pharmaceutical Development and Venous Health Systems."  Kyphon's chief operating officer was Arthur T Taylor, who is now on the <a href="http://www.providencemt.com/board-directors">board of directors of Providence Medical Technology</a>.<br /><br />The CEO of Medtronic at the time it bought out Kyphon, and the CEO of HCA at the time the arrangements began appear not to be doing badly either.  The CEO of Medtronic at the time it acquired Kyphon was Arthur D Collins Jr, who is now on the boards of directors of Boeing, Alcoa, and US Bancorp, also, according to his <a href="http://www.boeing.com/boeing/corp_gov/board_directors.page?">Boeing biography,</a> he is a senior adviser to Oak Hill Capital Partners, and is on the Board of Overseers of the Wharton School.  The CEO of HCA at the time of its arrangement with Kyphon began was Dr Thomas Frist Jr, who is currently <a href="http://www.forbes.com/profile/thomas-frist-jr/">on the Forbes list of billionaires</a> at number 262 in the world, with a total worth estimated at $4.3 billion. <br /><br /><b>Summary</b><br /><br />In retrospect, this case allegedly involved arrangements between Kyphon, a device company, and multiple hospitals to increase the revenue of all parties by billing the US government for unnecessary hospitalizations occurring after the use of a device made by Kyphon.  The arrangements appeared to have been particularly lucrative for Kyphon's executives after a larger device company, Medtronic, chose to buy Kyphon. Medtronic ultimately paid a large fine and entered into a corporate integrity agreement nine years after the arrangements began.  Now fourteen years after the arrangements began, at least some of the hospitals involved have also paid fines.  The former Kyphon executives who benefited the most seemingly paid no penalties, nor seemingly did any managers of Medtronic or the hospitals who might have gotten larger compensation because of all the revenue that these arrangements generated.     <br /><br />So initially, the big losers from this complex dance were the US government, and ultimately US tax payers.  Some patients may have also paid out of pocket for unnecessary services and thus lost money too.  Whether some patients suffered due to adverse effects of unneeded procedures was not clear.  Much later, Medtronic and some of the hospitals involved did pay big fines and thus lost some money.  However, it does not appear that they paid anything like what they made from the original scheme, and their payments were delayed for years.  However, the insiders who personally made a lot of money never apparently paid anything later.  So, this case appears to be a vivid example of how such insiders can walk away with piles of money from the misbehavior of their own corporations, while others pay the price.<br /><br /><br />Many of those of us of a certain age were brought up on myths that ultimately the good guys win and the bad guys lose.  We would all like to believe that the "arc of the moral universe ... bends toward justice."  History and this recent example suggest that it may not do so without our active intervention.  <br /><br />In health care, as we have said many times (look <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">here</a> for examples), when bad behavior occurs within a large health care organization, rarely are the insiders who authorized or directed it, and who had the most to gain from the behavior ever made to suffer any negative consequences.  As long as health care leaders have such impunity, expect them to continue to personally profit from unethical behavior.  As a result, expect health care costs to continue to rise as quality and access get worse and worse.<br /><br />True health care reform.needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

55 of Medtronic's Best Hospital Friends, Including HCA, Settle for $34 Million

The case of the over-marketing of Kyphon's kyphoplasty device (look here ) just got more complicated, and now appears to have involved a...

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Broken Promises: Latest HCA Settlement Suggests Skepticism about the Next Big Thing in Health Care

A long time ago in the US, most people got care from physicians who were self-employed, or part of physician partnerships.  If they had to be hospitalized, it was at hospitals that were community or academic non-profit organizations.   If they had health insurance, it was likely from a non-profit Blue Cross Blue Shield affiliate.  However, with the rise of market fundamentalism, we have heard the promises of increased efficiency and innovation from for-profit health care.  So hospitals, insurance companies, and now increasingly physicians' practices have been bought up by for profit corporations.<br /><br />Many politicians and policy-makers seemed to believe the promises, and often joined the cheering sections for the latest and greatest for-profit conversions.  Should they have done so?  Let us look at a case that recently hit the news again and think about it..<br /><br /><b>Background - HCA Acquired Health Midwest</b><br /><br />Way back in 2002, large for-profit hospital chain HCA, formerly Columbia/HCA, acquired a sizable non-profit hospital system, Health Midwest.  As the Los Angeles Times then <a href="http://articles.latimes.com/2002/oct/17/business/fi-tenet17">reported</a>,<br /><br /><br /><blockquote class="tr_bq"><div class="area" id="area-article-first-block"><div class="mod-latarticlesarticletext mod-articletext" id="mod-a-body-first-para">In a setback for Tenet Healthcare Corp., rival hospital giant HCA Inc. said Wednesday that it has agreed to buy Health Midwest, a 14-hospital chain based in Kansas City, Mo., for $1.13 billion.<br /><br />Santa Barbara-based Tenet and HCA were the two finalists in a rare opportunity to acquire, in one swoop, a dominant hospital system in a growing urban market. The 20-member board of Health Midwest, a nonprofit company that has been struggling financially, said it voted unanimously to go with HCA.</div></div></blockquote><br />The biggest factor in the decision by the Health Midwest board to accept the HCA offer was apparently the almighty dollar.<br /><br /><blockquote class="tr_bq"> '<i>HCA's bid was much higher</i>,' [Tenet spokesperson Harry] Anderson said, noting that he could not disclose Tenet's offer because of a confidentiality agreement. </blockquote><br />But in addition to cash, HCA made some promises that sounded attractive to the board.<br /><br /><blockquote class="tr_bq"> In addition to the cash price,<i> HCA said it would spend $450 million for capital improvements over the next five years.</i></blockquote><br />That promise came from the top of HCA, as <a href="http://nashvillepost.com/news/2003/4/1/hca_closes_health_midwest_deal_finally">reported</a> by the Nashville post,<br /><br /><blockquote class="tr_bq"> HCA Chief Executive Jack Bovender said: 'This has been a comprehensive, thorough process with a lot of community participation. We are ready to get to work to <i>improve these hospitals through significant capital infusion</i> and by making long term operational improvements.'</blockquote><br /> Furthermore, as the Los Angeles Times also <a href="http://articles.latimes.com/2002/oct/17/business/fi-tenet17">reported</a><br /><br /><blockquote class="tr_bq">Health Midwest spokesman Chris Whitley said <i>price was not the only factor in the decision</i>.<br /><br />'As important to the board was to find a party that would offer <i>a strong commitment to maintain and honor the various religious, cultural and charitable traditions,</i>' he said.</blockquote>There were objections by people who did not have decision making authority, but they apparently did not carry much weight<br /><br /><blockquote class="tr_bq">Labor and community activists in Kansas City have opposed a takeover of a nonprofit health system by an investor-owned corporation, raising concerns that such a conversion would lead to cuts, hurting employees and consumers.</blockquote><br />In retrospect, why Health Midwest was so trusting of HCA at the time was unclear.  HCA, after all, did not have a track record then that should have inspired trust.  The HCA acquisition of Health Midwest was approved only a few years after what was then Columbia/ HCA settled allegations of extensive Medicare fraud.  the $1.7 billion the company paid made it the largest Medicare fraud case settled up to that time (and was larger than the amount it later spent on this acquisition.    See <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">this post</a> for some details and sources.)  This certainly could have raised a "red flag" before the deal was concluded.  But it did not. <br /><br />This deal was typical of many deals in which for-profit corporations, some backed by <a href="http://hcrenewal.blogspot.com/search/label/private%20equity">private equity firms</a>, took over sometimes struggling non-profit hospitals, while promising great things for their communities.  For example, see our posts about the take-over of a health care system called <a href="http://hcrenewal.blogspot.com/search/label/Caritas%20Christi">Caritas Christi</a>, by <a href="http://hcrenewal.blogspot.com/search/label/Cerberus">Cerberus Capital Management</a>.  Caritas Christi was given the reassuring name of <a href="http://hcrenewal.blogspot.com/search/label/Steward%20Health%20Care">Steward Health Care</a>, and then proceeded to take over, or try to take over additional hospitals. (Click the links for this long story.)   <br /><br /><b>Broken Promises - the New HCA Settlement </b><br /><br />A new legal settlement by HCA suggests that such takeovers of non-profit hospitals by for-profit corporations ought to be regarded with much greater skepticism.  This time, <a href="http://www.nytimes.com/2013/01/25/business/hca-must-pay-kansas-city-foundation-162-million.html">per the New York Times</a>, <br /><br /><blockquote class="tr_bq"><i>HCA, the nation’s largest profit-making hospital chain, was ordered on Thursday to pay $162 million after a judge in Missouri ruled that it had failed to abide by an agreement to make improvements to dilapidated hospitals</i> that it bought in the Kansas City area several years ago. </blockquote><br />Thus the new HCA settlement suggested that those fine promises made by HCA executives and their cheer leaders when HCA was seeking to take over Health Midwest were broken.<br /><br /><blockquote class="tr_bq"><div itemprop="articleBody">The trouble in the Kansas City area began a year after HCA acquired a dozen hospitals from Health Midwest in 2003 for $1.125 billion. As part of the deal, <i>HCA agreed to make $300 million in capital improvements in the first two years and an additional $150 million in the following three. The hospital chain also agreed to maintain the levels of care that had been provided to low-income individuals and families in the area for 10 years. </i></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">But when the members of the Health Care Foundation of Greater Kansas City, a nonprofit created from the proceeds of the sale of the hospital, received their first report from HCA in 2004 they discovered the hospital was already way behind. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">Of the $300 million it was supposed to spend in the first two years, its own documents showed it had spent only about $50 million, according to Mark G. Flaherty, one of the founding members of the foundation and its general counsel. </div><div itemprop="articleBody"><br /></div>HCA’s reports to the foundation also indicated that the level of charitable care it provided at the system’s large inner-city hospital had fallen while charitable care provided at the more affluent suburban hospital had risen sharply, Mr. Flaherty said. </blockquote><blockquote class="tr_bq"><div itemprop="articleBody">'That was a big red flag to us,' he said.</div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">After repeatedly asking HCA executives for explanations but receiving none, the foundation sued HCA in 2009. The case went to trial for several weeks in 2011. </div></blockquote><br /> Note that there were alleged violations of two key provisions of the original deal, improvements to existing hospitals and guarantees of charitable care.  So here is at least one case, involving the largest US for-profit hospital corporation, showing violation of the sorts of promises that those promoting for-profit take-overs tout as showing at least the goodwill of the new corporate owners.<br /><br /><b>Should the HCA Track Record Have Led to Questions About Trustworthiness? </b><br /><br />It is unclear how often anyone has bothered to check whether similar promises made in other deals were fulfilled.  It appears that such inquiries might actually involve a lot of bother.  Note that in this case it took almost six years for the community foundation to obtain enough information to conclude that HCA had not met its obligations and file a lawsuit, and another almost four years to get the case resolved.<br /><br />The New York Times hinted that there was at least one other inquiry about a contemporaneous HCA deal.  While "a judge ruled in HCA's favor, deciding that Portsmouth Regional Hospital [in New Hampshire] would remain part of HCA after community leaders tried to regain control," the court proceedings did produce<br /><br /><blockquote class="tr_bq"> testimony in a 2011 trial, [in which] a former hospital official claimed he had <i>difficulties getting HCA to pay for what he and others described as critical equipment and facility upgrades</i>. </blockquote><br />Meanwhile, there have been other recent events that should raise further questions about the trustworthiness of HCA going forward.  Last year extensive reporting suggested that HCA hospitals put short-term revenue ahead of patients' welfare through overuse of lucrative cardiac procedures and and undertreatment of poor patients in emergency departments and debilitated patients with bed sores (see <a href="http://hcrenewal.blogspot.com/2012/08/paging-doctor-ebdita-how-private-equity.html">this post</a>).   Also last year HCA settled allegations it provided kickbacks to physicians at some of its hospitals to refer patients to its hospitals (see <a href="http://hcrenewal.blogspot.com/2012/09/just-latest-legal-settlement-for-hca.html">this post</a>).      <br /><br />Moreover, the record over the long term raises a big question as to why the good people of Missouri, the "show me" state, trusted HCA sufficiently for hospital acquisition deal to go forward in 2003.  As we wrote above, HCA was only a few years out of making the biggest settlement for federal health care fraud known at that time. <br /><br /><b>Summary </b><br /><br /> In 2010, we <a href="http://hcrenewal.blogspot.com/2010/04/more-doubts-about-private-equity-taking.html">suggested</a> that the take-over of non-profit hospitals by for-profit firms owned by private equity ought to be viewed with extreme skepticism.  In 2010, in<a href="http://wendellpotter.com/deadlyspin/"> <i>Deadly Spin</i></a>, former CIGNA public relations chief Wendell Potter showed how the conversions of non-profit Blue Cross Blue Shield health insurance plans to for-profit corporations were justified by the need to gather more capital to provide services comparable to new for-profit competitors, but were really motivated by the greed of executives who "would earn bigger pay packages for managing larger businesses, and if they could convert them to for-profit companies, they stood to earn even more." <br /><br />I submit that if anyone were able to look carefully at the results of the various deals that allowed for-profit corporations to take over hospitals, other organizations that directly take care of patients, health insurance companies, and now even physicians' practices, they would likely find that a lot of fine sounding promises made were broken and assurances made were false.   <br /><br /><br />From now on, I can only hope that health care professionals, policy-makers, politicians, but mainly the public at large will be appropriately skeptical of the fluffy promises made by those who stand to personally gain from the latest big thing in health care.  In particular, we all should be acutely skeptical the next time someone promises lower costs, better care, innovation, etc, etc by converting a community non-profit hospital to a subsidiary of a big for profit corporation.  

Broken Promises: Latest HCA Settlement Suggests Skepticism about the Next Big Thing in Health Care

A long time ago in the US, most people got care from physicians who were self-employed, or part of physician partnerships.  If they had to b...

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Just the Latest Legal Settlement for HCA

Last month, we<a href="http://hcrenewal.blogspot.com/2012/08/paging-doctor-ebdita-how-private-equity.html"> posted</a> about investigative reports that suggesting that for-profit hospital chain HCAwas pushed by its private equity owners to put short-term revenue ahead of good patient care.  A legal settlement announced this week corroborates these concerns.  <br /><br />As <a href="http://www.wrcbtv.com/story/19584753/hca-to-pay-165-million-to-resolve-health-care-fraud-charges">reported</a> by television station WRCB in Chattanooga, TN, <br /><blockquote>HCA Inc., one of the nation's largest private hospital chains, has <em>agreed to pay $16.5 million to settle alleged violations of the Ethics in Patient Referrals Act (also known as the Stark law), the False Claims Act, and other federal and state laws and regulations</em> in connection with the operation of its subsidiary, Parkridge Medical Center, Inc., in Chattanooga. <br />In addition, Parkridge Medical Center has <em>entered into a comprehensive five-year Corporate Integrity Agreement </em>with the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG) to ensure its continued compliance with federal health care benefit program requirements.<br />As alleged in the settlement agreement, during 2007, HCA, through its subsidiaries Parkridge and HCA Physician Services (HCAPS), entered into a series of financial transactions with a physician group, Diagnostic Associates of Chattanooga, through which<em> it provided financial benefits intended to induce the physician members of Diagnostic to refer patients to HCA facilities.</em><br />The financial benefits included lease of office space from Diagnostic at a rental rate well in excess of fair market value to meet the mortgage obligations of the Diagnostic members and release of Diagnostic members from a separate lease obligation. These financial arrangements violated the Ethics in Patient Referrals Act and the Anti-Kickback Statute – laws designed to protect patients as well as the integrity of government-funded health care benefit programs such as Medicare, Medicaid, TRICARE, and TennCare. </blockquote>The issue here were allegations that HCA and its subsidiaries were paying physicians extra so that they would refer patients to an HCA hospital. Obviously, physicians are supposed to put each patient's interests ahead of extraneous considerations, and hence should make referral decisions based on the patients needs, and the likely benefits and harms of the referral, not the amounts the physicians might make from such payments. <br /><br />Referrals for particular services can be very lucrative for hospitals.  So this settlement seems to provide more evidence that to get profitable referrals, HCA was willing to subvert physicians' values by paying physicians to induce to make what might have been the wrong decisions for individual patients.  Of course, in this situation some physicians were hardly blameless, since they were also willing to set aside their values to receive the payments that generated those referrals.<br /><br />This fits with the thesis we advanced last month.  While hospitals are supposed to have a mission to put care of the sick ahead of all else, it appears that for-profit hospitals, and especially those owned by private equity are more likely to put short-term revenue ahead of patient care.<br /><br />As an aside, while this settlement provides useful information, do not think of it as a solution to the immediate problem.  <br /><br />As we have frequently asserted, it is doubtful that the relatively small payment and the relatively unlikely to be enforced corporate integrity agreement imposed in this settlement will change the company's behavior, in the absence of any negative consequences for the people who authorized, directed or implemented the bad behavior.  HCA once made a $1.7 billion fraud settlement, at the time the biggest such settlement ever made (see <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">this post</a>).  However, the company's CEO at the time, Rick Scott, left the firm with a golden parachute and no negative consequences, and is now Governor of Florida.  If that previous huge settlement did not deter the more recent bad behavior in the absence of any penalties for company executives, why should we expect that the current comparatively tiny settlement also in the absence of such penalties will have any effect?<br /><br />As we have now said many, many times, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.<br /><br />Furthermore, as I <a href="http://hcrenewal.blogspot.com/2012/08/paging-doctor-ebdita-how-private-equity.html">wrote</a> last month, we need to challenge the notion that direct health care should ever be provided, or that medicine ought to be practiced by for-profit corporations. Before market fundamentalism became so prominent, many stated prohibited the corporate practice of medicine, and the American Medical Association <a href="http://hcrenewal.blogspot.com/2007/12/relman-in-jama-on-threats-to-physicians.html">forbade the commercialization of medicine.</a> It is time to heed that wisdom. I submit that we will not be able to have good quality, accessible health care at an affordable price until we restore physicians as independent, ethical health care professionals, and until we restore small, independent, community responsible, non-profit hospitals as the locus for inpatient care.

Just the Latest Legal Settlement for HCA

Last month, we posted about investigative reports that suggesting that for-profit hospital chain HCAwas pushed by its private equity owner...

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Paging Doctor EBDITA - How Private Equity May Push Hospitals to Put Revenue Ahead of Patient Care

Issues raised by the increasing influence of <a href="http://hcrenewal.blogspot.com/search/label/private%20equity">private equity</a> firms in the direct care of patients were illuminated by a series of articles about the for-profit hospital chain HCA.<br /><br /><strong>Quality Problems</strong><br /><br />The articles highlighted a series of concerns about quality problems affecting the chain's patients.  <br /><br /><u>Cardiac Overtreatment</u><br /><br />First, a New York Times <a href="http://www.nytimes.com/2012/08/07/business/hospital-chain-internal-reports-found-dubious-cardiac-work.html">article</a> described problems in the care of cardiac patients.  <br /><blockquote>HCA, the largest for-profit hospital chain in the United States with 163 facilities, had uncovered evidence as far back as 2002 and as recently as late 2010 showing that <em>some cardiologists at several of its hospitals in Florida were unable to justify many of the procedures they were performing. </em>Those hospitals included the Cedars Medical Center in Miami, which the company no longer owns, and the Regional Medical Center Bayonet Point. In some cases, the doctors made misleading statements in medical records that made it appear the procedures were necessary, according to internal reports. </blockquote><br />More specifically, at one hospital, cardiac catheterizations seemed to occur to often: "about half the procedures ... were determined to have been done to patients without significant heart disease." Two patients at another hospital had severe adverse effects after cardiac procedures that seemed unnecessary in retrospect. There were "incidents at Bayonet Point where patients were treated for multiple lesions, or blockages, even when 'the second lesion (or third) did not appear to have significant disease....' [In] 'several cases'  ... patients were treated even though their arteries did not have significant blockages." Then, <br /><blockquote>HCA brought in an external company, CardioQual Associates of Franklin, Mich., in 2004 to examine medical records from Bayonet Point. In a confidential memo prepared in December 2004 and reviewed by The Times, CardioQual concluded that as many as 43 percent of 355 angioplasty cases, where doctors performed invasive procedures to open up a patient’s arteries, <em>were outside reasonable and expected medical practice</em>. Worse, the investigation revealed that some physicians had indicated in medical records that the patients had blockages of 80 to 90 percent when a later, more scientific analysis of a sampling of cases revealed the blockages had ranged from 33 to 53 percent.</blockquote><br /><u>Possible Undertreatment of Acute Illness</u><br /><br />Then, a second NY Times <a href="http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html">article</a> found that<br /><blockquote>HCA decided <em>not to treat patients who came in with nonurgent conditions</em>, like a cold or the flu or even a sprained wrist, <em>unless those patients paid in advance</em>. In a recent statement, HCA said that of the six million patients treated in its emergency rooms last year, 80,000, or about 1.3 percent, 'chose to seek alternative care options.'</blockquote><br />Of course, the problem with this approach is that it is not always possible to tell how severe an acute illness is without a more complete evaluation than can be done in emergency department triage. There is anecdotal evidence that HCA turned away some patients who actually had serious illness:<br /><blockquote>Regulators in several states have taken HCA hospitals to task over screening out patients too aggressively, including situations where the<em> screening missed serious conditions</em>.<br /><br />In early 2010, an uninsured patient who entered HCA’s TriStar Skyline Medical Center in Nashville, complaining of 'pain when breathing,' was sent away. An hour and a half later, at another hospital, the same patient was <em>found to have pneumonia</em>, according to the results of a Medicare investigation. Regulators cited Skyline for having 'failed to ensure that an appropriate medical screening examination was conducted.'<br /><br />This year, the Office of Inspector General fined HCA’s Northside Hospital in St. Petersburg, Fla., $38,000 for sending home <em>a feverish patient with an artificial heart valve</em>. Two days later, the patient reappeared with the flu and severe respiratory problems. The following day, <em>he died. </em></blockquote><br /><u>Undertreatment of Bed Sores</u><br /><br />The second Times <a href="http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html">article </a>also suggested that decreased nurse staffing at HCA hospitals lead to worse treatment of bed sores (decubitus ulcers):<br /><blockquote>Experts say there is often a direct correlation between bedsores and the quality of hospital staff levels. 'Staffing is critical,' said Courtney H. Lyder, the dean at the UCLA School of Nursing and an expert on wound care. 'When you see high levels of wounds, you usually see a high level of dysfunctional staff,' he said.<br /><br /><em>HCA owned eight of the 15 worst hospitals</em> for bedsores among 545 profit-making hospitals nationwide, each with more than 1,000 patient discharges, tracked by the Sunlight Foundation using Medicare data from October 2008 to June 2010. HCA’s West Houston Medical Center and CJW Medical Center in Richmond, Va., landed near the top of the list.<br /><br />HCA says it has increased its nursing staff at its hospitals each year over the last five years. But an examination of lawsuits shows <em>bedsore problems have been persistent at several HCA facilities.</em> In Portsmouth Regional Hospital in New Hampshire, a 60-year-old woman died in 2009 after her bedsores went untreated for three days and became infected, according to a wrongful-death lawsuit filed in the spring of 2011 in federal court against the hospital.</blockquote><br />One HCA hospital <br /><blockquote>was <em>cited twice by Florida regulators, in 2008 and 2010, for having inadequate numbers of nurses on its staff to oversee wound care</em> for patients. During the 2010 examination, regulators noted that Memorial had less than the equivalent of two full-time nurses who specialized in wound care to treat the 132 patients who required aid.<br /><br /><em>'The system of treatment for wound care places patients at risk for additional medical complications</em>,' the examiners said. </blockquote><br />So, in summary, there is reason for concern about overtreatment of cardiac disease, and undertreatment of acute illness and bedsores at HCA hospitals. However, no hospital and no doctor is perfect. Everyone makes mistakes, and many decisions can be questioned in retrospect. Instead<br /><br /><strong>Putting Money Ahead of Quality</strong><br /><br />Instead, the articles suggested they were part of a pattern in which concerns about short-term revenue trumped concerns about patient care.<br /><br /><u>Cardiac Procedures to Generate More Revenue</u><br /><br />The <a href="http://www.nytimes.com/2012/08/07/business/hospital-chain-internal-reports-found-dubious-cardiac-work.html">article</a> about cardiac care noted that one of the physicians who allegedly was doing too many cardiac procedures<br /><blockquote>was highlighted by the hospital in a 2009 business plan as being the most profitable doctor at the facility. <em><strong>'Our leading EBDITA MD,'</strong></em> the plan described him. (Ebitda, or earnings before interest, taxes, depreciation and amortization, is a measure of corporate earnings.) </blockquote><br />On the other hand, <a href="http://www.tampabay.com/news/health/medicine/scrutiny-of-cardiac-care-at-pasco-hca-hospital-latest-in-long-saga/1244719">according to the Tampa Bay Times</a>, some of the doctors whom HCA suspended for doing too many percutaneous cardiac revascularization procedures charged that the issue was that<br /><blockquote>far from concern over the cost of stents — <em>Bayonet Point was upset that stents were replacing more expensive bypass surgeries.</em></blockquote><br />The first NY Times <a href="http://www.nytimes.com/2012/08/07/business/hospital-chain-internal-reports-found-dubious-cardiac-work.html">article</a> also suggested that HCA executives did their best to keep the issue quiet so as not to affect revenue. First,<br /><blockquote>HCA declined to provide evidence that it had alerted Medicare, state Medicaid or private insurers of its findings, or reimbursed them for any of the procedures that the company later deemed unnecessary, as required by law. </blockquote><br />Also,<br /><blockquote>HCA also declined to show that it had ever notified patients, who might have been entitled to compensation from the hospital for any harm. </blockquote><br />The Times uncovered internal HCA communications suggesting that obfuscation was deliberate:<br /><blockquote>In January 2005, David Williams, who was then the chief executive of Bayonet Point, wrote in an e-mail: 'Clearly, <em>we have protected ourselves under the peer review umbrella and have released very little information</em>.' The recipients of his message included Dan Miller, who then oversaw HCA’s hospitals in western Florida, and Charles R. Evans, a Nashville executive who was president of all of HCA’s hospitals on the eastern side of the country.<br /><br />In his response, Mr. Evans thanked Mr. Williams for the update and asked for a 'summary as to the business impact.' </blockquote><br />Furthermore, as the last sentence above indicated, review of internal emails suggested that executives were more worried about revenue than quality of care or patient outcomes:<br /><blockquote>A review of those communications reveals that <em>rather than asking whether patients had been harmed or whether regulators needed to be contacted, hospital officials asked for information on <strong>how the physicians’ activities affected the hospitals’ bottom line</strong></em>. </blockquote><br /><u>Avoiding Caring for Poor Patients in the Emergency Department</u><br /><br />On the other hand, the impetus for triaging away apparently less acutely ill patients from the Emergency Department was to avoid such patients who could not pay. The <a href="http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html">second NY Times article </a>noted there was a way for supposedly less ill patient to get Emergency Department treatment,<br /><blockquote>Patients whose ailments were not deemed urgent were told to go somewhere else, like a free clinic, or that<em> they could be treated if they paid the co-payment for their insurance or around $150 in cash. </em></blockquote><br />In addition, there is reason to think that HCA management pushed health care professionals to put off increasing numbers of patients, regardless of their clinical problems,<br /><blockquote>Several former emergency department doctors at Lawnwood Regional Medical Center in Fort Pierce, Fla., said they frequently had felt compelled to override the screening system in order to treat patients. </blockquote>Also,<br /><blockquote>'Physicians had a really, really hard time with it,' said Dr. J. Patrick Pearsall, who worked for an emergency physician group based in Houston that worked in HCA hospitals. <em>When the doctors failed to meet the hospital’s goals for how many patients should be considered emergencies, 'they really started putting pressure on.'</em><br /><br />One emergency room doctor who worked at an HCA Florida hospital said <em>doctors had been told they had targets to hit.</em> The doctors’ concerns about the screening policy were acknowledged in an e-mail reviewed by The Times that was sent to the doctors at the hospital in early 2008 by an outside company that worked in the emergency room.<br /><br />The doctors were told HCA’s regional executives were 'quite intent on pursuing this program at least for the time being and fully expects us to comply. <em><strong>Their expectations are that approximately 15 percent of all patients are to be screened and of those screened no more than 35 percent overridden.' </strong></em></blockquote><br />Keep in mind that variations in patient populations over time and across geographic areas means that the proportions of more and less severely ill patients showing up at individual Emergency Departments will vary substantially. Pressuring health care professionals to turn away a minimum percentage of people will make it very likely that at some times severely acutely ill patients will not be seen. <br /><br />So it appears that at HCA, patients sometimes were overtreated, and sometimes were undertreated, and that executives trying to increase revenue may have been more responsible for both than simple human error.<br /><br />Finally, there is reason to think that the take-over of HCA by private equity (that is, leveraged buy-out) firms further increased the for-profit corporation's emphasis on short-term revenue leading to worsening quality of care. <br /><br /><strong>Private Equity Pushed for Even More Short-Term Revenue</strong><br /><br />The second NY Times <a href="http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html">article</a> first noted,<br /><blockquote>During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived. <br /><br />In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.<br /><br />The big winners have been <em>three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.</em><br /><br />HCA’s robust profit growth has raised the value of the firms’ holdings to nearly three and a half times their initial investment in the $33 billion deal.<br /><br />The financial performance has been so impressive that HCA has become a model for the industry.</blockquote><br />Note that the private equity firms extracted a considerable amount of cash from HCA at the time they turned it back into a publicly held for-profit corporation:<br /><blockquote>In 2010, buoyed by robust growth in profit, <em>HCA was able to issue billions of dollars in debt that was used to pay funds overseen by the three buyout firms nearly $1 billion in dividends — each.</em> In the spring of 2011, in one of the most closely watched public offerings since the financial crisis, HCA became a public company once again. Its three buyout owners each sold another $500 million worth of stock, allowing them to recoup all their initial investment.</blockquote>By thus increasing the new public corporation's debt load, they further increased pressure on its executives to bolster short-term revenue.<br /><br />However,<br /><blockquote>As HCA’s profits and influence grew, strains arose with doctors and nurses over whether the chain’s pursuit of profit may have, at times, come at the expense of patient care. </blockquote><br /><strong>Summary:  Why No Hospital Should be For-Profit?</strong><br /><br />Among all developed countries, I believe only the US has such a high proportion of for-profit hospitals, and physicians employed by for-profit corporations to take care of patients.<br /><br />However, in summary, this case shows there is evidence that<br />- The management of one for-profit hospital chain was pushed to focus even more on short-term revenue by a leveraged buy-out engineered by private equity firms<br />- This focus lead management to pressure health care professionals to increase revenue, even if that required over- or under-treating patients<br />- The resulting over- and under-treatment likely harmed patients. <br /><br />As a Tampa Bay Times <a href="http://www.tampabay.com/opinion/editorials/hcas-prescription-for-profits/1245248">editorial</a> put it,<br /><blockquote>the allegations suggest a disturbing pattern of endangering patients, and they again expose the <em>weaknesses of a health care system driven by volume and profit rather than efficiencies and patient outcomes</em>.</blockquote><br />In a <a href="http://www.forbes.com/sites/stevedenning/2012/08/15/private-equity-wont-fix-health-care-either/">column</a> in Forbes, Steve Denning warned,<br /><blockquote>The hospitals owned by private equity are making money in the short-term at the expense of Medicare and the economy. But when the private equity firms depart, as they plan to do, they leave the hospitals with a load of debt, dispirited doctors and nurses, and a bankrupt Medicare system, with serious questions as to whether overall care has been maintained, let alone improved.<br /><br /><em><strong>The current bonanza for private equity from milking Medicare is a bubble that cannot be sustained</strong></em>.</blockquote><br />We have <a href="http://hcrenewal.blogspot.com/2012/04/health-care-dysfunction-explained-by.html">noted</a> how health care organizations have increasingly been "financialized," lead by executives who put short-term revenue generation ahead of all other goals, including good patient care. Furthermore, hospitals are increasingly likely to be formally for-profit, and hence likely to be lead by such executives. Worse, hospitals are increasingly likely to be owned by <a href="http://hcrenewal.blogspot.com/search/label/private%20equity">private equity</a> firms, further increasing the emphasis on short-term money making. Even worse, physicians are now more frequently <a href="http://hcrenewal.blogspot.com/search/label/corporate%20physician">employed by such organizations</a>, which may pressure them to do what it takes to increase revenue, no matter what the effect on patients' and the public's health. <br /><br />The probably effects on the quality of care, access, and costs are obvious.<br /><br />In my humble opinion, before the health care bubble bursts, we need to challenge the notion that direct health care should ever be provided, or that medicine ought to be practiced by for-profit corporations. Before market fundamentalism became so prominent, many stated prohibited the corporate practice of medicine, and the American Medical Association <a href="http://hcrenewal.blogspot.com/2007/12/relman-in-jama-on-threats-to-physicians.html">forbade the commercialization of medicine.</a> It is time to heed that wisdom. I submit that we will not be able to have good quality, accessible health care at an affordable price until we restore physicians as independent, ethical health care professionals, and until we restore small, independent, community responsible, non-profit hospitals as the locus for inpatient care. <br /><br />As Todd Hixon wrote, surprisingly <a href="http://www.forbes.com/sites/toddhixon/2012/08/16/where-the-market-approach-to-health-care-completely-fails/">in Forbes</a>,<br /><blockquote>I believe a big part of the answer lies in changing the idea that health care should be a path to riches. There are professions, like university teaching and research, where a big part of the motivation is helping people and gaining respect in the community. If we could shift the balance for health care providers in that direction, solving problems like the one manifest at HCA would be a lot more possible.</blockquote><br />True health care reform will require an end to market fundamentalism in health care. <br /><br />Note - See also <a href="http://runningahospital.blogspot.com/2012/08/lets-do-numbers.html">comments</a> by Paul Levy in the Not Running a Hospital Blog.

Paging Doctor EBDITA - How Private Equity May Push Hospitals to Put Revenue Ahead of Patient Care

Issues raised by the increasing influence of private equity firms in the direct care of patients were illuminated by a series of articles a...

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To all physicians: Fools hiring amateurs, to control you and land you in court?

<p style="font-family:arial;">Health IT systems will be/are used to control you - a medical professional - in your treatment of patients, and could land you in court if they contribute to your making a medical mistake.<br /></p><p style="font-family:arial;">They could also land you in a <a href="http://hcrenewal.blogspot.com/2009/10/sham-peer-review-could-this-bad-faith.html">sham peer review</a> for being a "disruptive" physician if you complain about a poor EHR.</p> <p style="font-family:arial;">Here's an example of who gets hired to run such systems. Note the <b>"Education"</b> and "<b>Qualifications Knowledge, Skills, and Abilities Required</b>" I bolded.</p><p style="font-family:arial;">This job description is not atypical of many "clinical informatics" job descriptions:</p><p face="arial"><br /></p> <p face="arial"><span title="" id="requisitionDescriptionInterface.d98942e283.row1" class="titlepage"></span></p><blockquote style="font-family:arial;"><p><span title="" id="requisitionDescriptionInterface.d98942e283.row1" class="titlepage">HCA</span></p><p><span title="" id="requisitionDescriptionInterface.d98942e283.row1" class="titlepage">Clinical Informaticist</span><span title="" id="requisitionDescriptionInterface.d98942e284.row1" class="titlepage">(</span><span title="" style="display: inline;" id="requisitionDescriptionInterface.d98942e286.row1" class="titlepage">Job Number:</span><span class="inline"> </span><span title="" id="requisitionDescriptionInterface.d98942e289.row1" class="titlepage">25388-35620</span>)</p><p>https://hca.taleo.net/careersection/0hca/jobdetail.ftl?lang=en&job=1112401&src=JB-11444<br /></p><span title="" id="requisitionDescriptionInterface.d98942e290.row1" class="titlepage"></span><p><span title="" id="requisitionDescriptionInterface.d98942e318.row1" class="text"></span></p><div> <div><span style="color: rgb(0, 0, 128);">More About HCA.....</span></div> <ul><li><span style="color: rgb(0, 0, 128);">HCA has been Recognized in Computerworld Magazine's Top 100 Workplaces to work for Information Technology Professionals for the 3^rd consecutive year, coming in this year at #32.</span></li><li><span style="color: rgb(0, 0, 128);">HCA has been recognized by the Ethisphere Institute as one of the 2011 World's Most Ethical Companies.</span></li></ul> </div><p></p><p><span><span><b>Summary of Duties</b></span></span></p> <blockquote>The Clinical Informaticist is accountable for driving successful adoption and clinical process optimization of clinical information systems. This is done through the application Clinical Adoption Methodology, incorporating best practice and evidence-based knowledge. Utilizes the knowledge and skills of clinical practice to determine clinical functions that are suitable for computer application and to ensure the information systems are consistent with professional standards of clinical practice. Acts on behalf of the Director of Applications in absence of said director.</blockquote> <p><span><span><b><br /></b></span></span></p><p><span><span><b>Duties Include But Are Not Limited To</b></span></span></p> <ul><li>Facilitates knowledge of current state, desired state, and gap analysis of core clinical processes that are enabled by clinical information technology, being mindful of operational requirements/ constraints and conflicts. Works collaboratively with QA to evaluate outcomes, and opportunities for improvement.</li><li>Maintains a trusting and effective relationship with all customers. Assists clinical managers in identifying information systems needs and project management related to information systems.</li><li>Maintains membership or consultation to appropriate committees, work groups or task forces as needed to facilitate the ongoing process of the design, implementation, and revision of the automated and manual components of the clinical information system. Conducts meetings and presentations, effectively and professionally.</li><li>Maintains a current knowledge of a) trends and issues in health care, nursing practice, healthcare informatics, regulatory/accreditation requirements; b) organizational policies and procedures related to clinical practice and the legal implications of the clinical information system; c) structure and hierarchy of the organization.</li><li>Functionality expertise for clinical applications supporting core patient care processes and their relationship to other organizational information systems.</li><li>Works closely with counterparts in appropriate user organizations to ensure consistent and effective use of technology resources and optimization of installed applications and sustainability.</li><li>Adheres to Code of Conduct and Mission & Value Statement. Understands the personal obligation to report any activity that appears to violate applicable laws, rules regulations or the Code of Conduct itself. Maintains confidentiality, promotes system security to promote compliance.</li><li>As facility-care-area based position must learn and comply with System and facility safety policies and rules; must use appropriate safety equipment and procedures at all times; must immediately report all unsafe conditions to supervisors; must be familiar with all safety features of equipment, tools or materials encompassed by job duties; and must check with supervisors (prior to job performance) if there is a question as to the safe procedure to be used for any job function.</li><li>Participate in special projects as needed and performs other duties as assigned.</li></ul> <p><span><span> </span></span><span><span> </span></span><span style="font-weight: bold;">Qualifications<span> </span><span> Knowledge, Skills, and Abilities Required</span></span></p> <ul style="font-weight: bold;"><li><i>Membership in an appropriate organization is required (HIMSS, AMIA, for example) that is specifically targeted to informatics in healthcare</i></li><li><i>Working knowledge of Microsoft Office products (WORD, EXCEL, PowerPoint, Project Plan, and VISIO)</i></li><li><i>Strong oral, written, and interpersonal communication skills; strong analysis/problem solving and critical thinking; strong leadership, facilitation and coaching skills; current knowledge of patient care practices; clinical expertise; ability to work in multi-disciplinary teams.</i></li></ul> <blockquote style="font-weight: bold;">Preferred:</blockquote> <ul style="font-weight: bold;"><li><i>Knowledge and skill in selection, implementation, and training of clinical information systems</i></li><li><i>Project management skills</i></li><li><i>Previous experience utilizing Meditech documentation system</i></li><li><i>Previous experience with Quality Improvement initiatives and clinical process re-engineering</i></li></ul> <p style="font-weight: bold;"><span><span>Education</span></span></p> <ul style="font-weight: bold;"><li><i>BSN or Bachelors degree in other Allied Health Professional degree from an accredited college</i></li><li><i>Current (10/08) department incumbents must achieve Bachelors requirement by 12/31/2012</i></li></ul></blockquote> <p face="arial">Wow...</p> <p face="arial">BSN, allied health bachelors, or "must achieve Bachelor's by 12/31/12"?</p> <p face="arial"><b>Some (at best) MBA-level fool wrote this 'description' for the hiring of some amateur with a BS - or no degree - to perform functions that will seriously affect how you, with 4 years college, four years med school, PGY internship, residency, perhaps fellowship or other post doctoral experience, perform your profession?</b></p><p face="arial">Your kids may have more professional education and qualifications than your hospital's "health computing experts." Fantastic.<br /></p><p style="font-family: arial;">I add this:</p><p style="font-family: arial;">Health IT <span style="font-weight: bold;">cannot</span> be made to work properly - <span style="font-weight: bold;">ever</span> - when being <span style="font-style: italic;">mismanaged</span> by fools and amateurs.</p><p><span style="font-family:arial;">-- SS</span><b><br /></b></p>

To all physicians: Fools hiring amateurs, to control you and land you in court?

Health IT systems will be/are used to control you - a medical professional - in your treatment of patients, and could land you in court if...

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Blake Medical Center (Bradenton, Fla.) Ignores Health IT Warning Letter From 100 Staff Physicians

In an article in the Bradenton Herald, Bradenton, FL, I found the following passage I bolded below truly striking:<br /><br /><a href="http://www.bradenton.com/2011/09/04/3467295/digital-doctors-will-technology.html"></a><blockquote><a href="http://www.bradenton.com/2011/09/04/3467295/digital-doctors-will-technology.html">Digital doctors: Will technology help or harm?</a><br />Sept. 4, 2011<br /><span class="byline">By DAVID GULLIVER</span><br /><br />BRADENTON -- At <a href="http://blakemedicalcenter.com/home/index.dot">Blake Medical Center</a>, the prognosis for pen and paper is poor: Doctors’ traditional tools for tracking cases and ordering medications and procedures are being phased out in favor of computers.<br /><br />... Blake [Medical Center], which has been building its EHR system for years, launched a feature in April for doctors to enter their daily progress notes electronically. In June, it added a feature for ordering medications and procedures via computer. It’s part of a national push, called hCare, by Blake’s parent company HCA.<br /><br />But many doctors were reluctant to give up their pens. <span style="font-weight: bold;">More than 100 staff physicians signed a letter asking for the computerization project to be put on hold, saying the system is cumbersome and likely to induce errors.</span></blockquote><div style="border: medium none; text-align: left; background-color: transparent; color: rgb(0, 0, 0); overflow: hidden; text-decoration: none;"><p>Wow. Physicians with guts.<br /></p><p>If I were an executive at this hospital, I'd make sure I were fully insured and my assets were in my spouse's name, especially in lawsuit-happy Florida.<br /></p><p>If a patient injury or death occurs related to the EMR issues addressed in the letter from 100 staff physicians, which would/should seriously concern if not <span style="font-weight: bold; font-style: italic;">absolutely alarm</span> any reasonable person, there could be charges of negligence, including criminal negligence, against the administration.<br /></p><p><br /></p><p><i><i><a href="http://legal-dictionary.thefreedictionary.com/Criminal+Negligence"></a></i></i></p><blockquote><i><i><a href="http://legal-dictionary.thefreedictionary.com/Criminal+Negligence">Criminal negligence</a>: The failure to use reasonable care to avoid consequences that threaten or harm the safety of the public and that are the foreseeable outcome of acting in a particular manner ... Criminal negligence is negligence that is <a href="http://definitions.uslegal.com/c/criminal-negligence/">aggravated, culpable or gross</a>.<br /><br /></i></i></blockquote><p></p><p>A jury will not be happy with the letter being ignored, either.</p><p><br /></p><p></p><blockquote><p>... The project’s supporters acknowledge <span style="font-weight: bold;">doctors and nurses have made mistakes as they learn the system</span>, though they are unaware of any resulting in harm to patients. <span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);">[Is that how you want your healthcare to proceed? - ed.]</span><br /></p><br /></blockquote><span style="color: rgb(51, 0, 51);">In other words, no patient exposed to this experiment and its <span style="font-weight: bold; font-style: italic;">risks</span> (a key issue here) was known to "hit the jackpot" - yet:</span><span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);"><br /><br /></span><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJxrkTkwmZ4rUVbNMcwUGcPnqsuk5muXrpiwzPFpGyAIZPQrsk4eKnupZETpkoJ4ErpTkqK7djgYv1Kclh7hhWHfWJZRAr2OlaFa6T52CNYS7icmgYYH2NK5VyMDlhIYReUqrKRjgnAz6j/s1600/winner.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5653834695663706834" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJxrkTkwmZ4rUVbNMcwUGcPnqsuk5muXrpiwzPFpGyAIZPQrsk4eKnupZETpkoJ4ErpTkqK7djgYv1Kclh7hhWHfWJZRAr2OlaFa6T52CNYS7icmgYYH2NK5VyMDlhIYReUqrKRjgnAz6j/s320/winner.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 320px; height: 240px;" /></a><span style="font-size:85%;">The EHR Slot Machine of Risk.</span><span style="font-size:85%;"> Click to enlarge. </span><span style="font-size:85%;">(From my March 2011 post "<a href="http://hcrenewal.blogspot.com/2011/03/on-emr-forensic-evaluation-from-down.html">On an EMR Forensic Evaluation by Professor Jon Patrick from Down Under: More Thoughts</a>."</span><span style="font-size:85%;">) <span>Congratulations! You've hit the EHR mis-processing jackpot! Perhaps today is a good day to die...</span></span><br /></div><span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);"><br /><br /></span><p></p><blockquote><p>But they contend that, <span style="font-weight: bold;">in the long run, an electronic system will be safer than using paper records -- something critics grudgingly admit</span>. </p><p>Still, even as a $27 billion federal program is encouraging hospitals and doctors to launch EHR systems, no regulatory agency tests or regulates them. So a crucial question remains unanswered: Does it truly improve care? <span style="font-weight: bold; font-style: italic;"><span style="color: rgb(255, 0, 0);">[Nobody really knows - e.g., see recent post </span></span><a href="http://hcrenewal.blogspot.com/2011/09/does-highly-wired-correspond-to-best.html"><span style="font-weight: bold; font-style: italic;">here</span></a><span style="font-weight: bold; font-style: italic;"><span style="color: rgb(255, 0, 0);">, and literature list</span> <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=readinglist">here</a> <span style="color: rgb(255, 0, 0);">- ed.]</span></span><br /></p></blockquote><br />Critics readily admit health IT has the <span style="font-style: italic;">potential</span> to improve healthcare, but that the technology is not yet nearly ready to do so, especially on a national basis, and is <span style="font-style: italic;">experimental</span>. Far more work is needed. For example, according to the <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">National Research Council of the United States</a>:<br /><br /><blockquote>Current efforts aimed at the nationwide deployment of health care information technology (IT)<span style="font-weight: bold;"> will not be sufficient to achieve medical leaders' vision of health care in the 21st century and may even set back the cause</span>, says a new report from the National Research Council. The report, based partially on site visits to eight U.S. medical centers considered leaders in the field of health care IT, concludes that greater emphasis should be placed on information technology that provides health care workers and patients with cognitive support, such as assistance in decision-making and problem-solving.<br /><br />... In the long term, success will depend upon accelerating <span style="font-weight: bold;">interdisciplinary research in biomedical informatics, computer science, social science, and health care engineering</span>.</blockquote><br />Critics also readily admit that organizations experimenting with this technology without patient informed consent, on the basis of some future good, need lessons on the ethics of human experimentation.<br /><br />Risk to patients seems to be of little concern to this industry.<br /><br />It also now seems that hospital executives have become so arrogant that they fail to recognize the risks to themselves in ignoring their own medical staffs on HIT issues.<br /><br />Perhaps they think they will be able to simply blame the physicians, using clinicians as scapegoats, but with official sites like <a href="http://www.ucguide.org/">this</a> now coming online ... I think that excuse will rapidly lose traction.<br /><br /></div>-- SS<br /><br /><span style="font-weight: bold;">Sept. 19 addendum:</span><br /><br />A major motivator for ignoring the physicians' warnings at this <a href="http://hcahealthcare.com/home/index.dot">HCA</a> (Hospital Corp. of America) hospital may be financial. See my Aug. 2011 post "<a style="font-weight: bold;" href="http://hcrenewal.blogspot.com/2011/08/why-ehrs-are-mission-hostile.html">Why EHR's Are Mission Hostile</a>."<br /><br />-- SS

Blake Medical Center (Bradenton, Fla.) Ignores Health IT Warning Letter From 100 Staff Physicians

In an article in the Bradenton Herald, Bradenton, FL, I found the following passage I bolded below truly striking: Digital doctors: Will tec...

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Conflicts of Interest, Government Leaders, and Private Health Care Organizations

There seems to be a small surge of stories about conflicts of interest regarding health care affecting government leaders who can affect health care.  <br /><br />The Institute of Medicine defined conflict of interest in medicine as "circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest."  So we will summarize these stories by first showing what each leader's secondary interests are, and then show how they may influence carrying out his leadership responsibilities.  (We used "his" because all examples are of male leaders.)<br /><br /><strong>Florida: Governor Scott and Solantic</strong><br /><br />Rick Scott, the new Florida Governor, apparently still has strong ties to a for-profit chain of urgent care centers, as <a href="http://www.palmbeachpost.com/money/gov-scott-shifting-clinics-to-his-wife-raises-1317326.html">reported</a> by the Palm Beach Post:<br /><blockquote>As Florida Gov. Rick Scott reorganizes health agencies, cuts spending and pushes for new free-market health policies,<em> his ownership of Solantic, the urgent care chain, increasingly poses conflict of interest questions.</em><br /><br />Solantic co-founder Karen Bowling says Scott has taken steps to distance himself from the chain. He stopped regular business calls with her after he was elected.<br /><br />'I don't talk to him anymore. Not since November. Really not much since April,' Bowling said.<br /><br />Scott left the privately held company's board of directors in January 2010, during his campaign.<br /><br />But the most important step the governor must take to avoid a conflict of interest, some ethics experts say, is to divest his Solantic interests.<br /><br />In January, <em>Scott did transfer his Solantic stock - to his wife</em>.</blockquote><br />There were obvious questions raised whether this transfer mitigated the conflict of interest:<br /><blockquote>Scott's efforts to distance himself appear to be designed to meet the letter of Florida ethics laws, if not the spirit.<br /><br />They may not succeed if challenged, warned legal and ethics expert Marc Rodwin, a law professor at Suffolk University who is the author of several books on health care and conflicts of interest.<br /><br /><em>'Placing his ownership in the name of his wife is not an effective way to control for conflicts of interest and not generally accepted because they are personally related,' Rodwin said.</em><br /><em><br /></em><br /><em>Rodwin said Scott's blindness to Solantic's daily business decisions likewise does not relieve his conflict.</em><br /><em><br /></em><br /><em>'His family still benefits from it,</em>' he said.</blockquote><br />There are a number of issues before Florida government about which there appears to be a risk that Governor Scott's actions could be unduly influenced by his family's ownership interest in Solantic:<br /><blockquote>From the moment he was elected, <em>Scott has said government has no business providing primary care.</em><br /><em><br /></em><br /><em>His budget proposal eliminated state support for the clinics. The county's health department director warns that may leave 30,000 adults without a medical home</em>.<br /><br />Scott's decisions as governor are likely to affect Solantic in other, perhaps more significant ways.<br /><br />Scott's budget would <em>curb growth in Medicaid spending, the state-federal safety net insurance program, by requiring most recipients to join private HMOs. Solantic accepts Medicaid HMO reimbursements, but not state Medicaid, so adding clients could broaden the clinics' customer base.</em><br /><br />But the greatest benefit for Solantic could come from Scott and other Republican governors' lobbying efforts in Washington.<br /><br />They want the Obama administration to give states waivers from the Affordable Care Act, and provide them with a massive block grant to expand health coverage in the way they deem best for their states. Money slated to go to business' health insurance tax credits and lower income consumers' insurance subsidies could pay for the grants - to the tune of billions.<br /><br />Obama has said he's willing to give the states waivers on a speeded-up timetable. His administration Thursday published new rules on how states could get that waiver.<br /><br />Scott's health policy adviser Michael Cannon, an economist with the Cato Institute in Washington, favors giving consumers health vouchers that they would use either as cash for direct-pay medical care or to buy insurance.<br /><br />The possible effect on Solantic and similar clinics could be huge, said Rodwin, the legal ethics expert.<br /><br /><em>'You have a major owner-operator of a set of clinics on the state level, and a major policy figure on a state level, making major changes that affect whether that kind of business will thrive or not, what their competition will be, and really reforming the whole health sector,'  Rodwin said. That's in my view a very dangerous role</em>.'</blockquote><br />Note that this is not the first whiff of scandal regarding Rick Scott's leadership role in health care.  As the article noted, Scott:<br /><blockquote>resigned as CEO of <a href="http://hcrenewal.blogspot.com/search/label/HCA">Columbia/HCA</a> amid a federal billing fraud investigation. Columbia/HCA ultimately agreed to the <em>nation's largest Medicare fraud settlement, a $1.7 billion criminal and civil penalty.</em><br /><br />Although the company had admitted to criminal wrongdoing, Scott himself was never charged, and he has denied knowledge of the illegal activities.<br /><br />Scott left Columbia/HCA with more than $5 million in severance and $300 million worth of stock and options.</blockquote>See our most recent detailed post on Mr Scott's history <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">here</a>.<br /><br /><strong>Massachusetts: House Health Finance Committee Chair Walsh and Health Care Industry Lobbyists</strong><br /><br />The newly appointed chair of the Massachusetts House committee on health care finance has strong relationships to health care industry lobbyists, according to <a href="http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2011/02/23/with_family_ties_to_lobbyists_walsh_doesnt_fit_health_post/">an editorial </a>in the Boston Globe:<br /><blockquote>Speaker Robert DeLeo has chosen a health-finance committee chairman, Steven M. Walsh of Lynn, <em>whose family is to lobbying what the Mannings are to NFL quarterbacking. Walsh’s father-in-law represents the state’s health insurers, while his uncle’s firm blocks and tackles for <a href="http://hcrenewal.blogspot.com/search/label/Steward%20Health%20Care">Steward Health Care</a></em>, new owners of the Caritas chain of Catholic hospitals. </blockquote><br />Again, there are a number of issues before the Massachusetts legislature about which there appears to be a risk that Representative Walsh's actions could be unduly influenced by his family's lobbying work:<br /><blockquote>Next to the budget, the thorniest issue the Legislature will deal with this year will be changes in health care financing. <em>Lawmakers will consider bills that may completely change how health care providers are paid. That shift — from fee-for-service payments towards a system based more on per-capita reimbursements — will set off a free-for-all among insurers, doctors, and hospitals.</em></blockquote><br />So,<br /><blockquote>Walsh’s admirable efforts ... [to improve legistlation regarding lobbying] don’t erase the conflict of interest he faces on health care issues. Walsh can try to separate family feelings and events from his official role, but the companies paying his uncle’s firm and his father-in-law are still expecting them to use every opportunity to make the strongest possible case for their clients. And <em>it’s no exaggeration that these clients — the state’s insurers and its newest hospital chain — have hundreds of millions of dollars at risk in the new payment system Walsh will be vetting</em>.<br /><br />Perhaps if the stakes were lower or the relationships more distant, Walsh could chair the health-finance committee without risking public confidence. But as it is, he will be in a position of representing the taxpayers’ interests against those of his close relatives.</blockquote>Note that we discussed Steward Health's possibly revolutionary role in commercializing physicians' practices <a href="http://hcrenewal.blogspot.com/2011/02/send-mercenaries-guns-and-money.html">here</a>, and how a former Massachusetts government health care agency official exited via the revolving door to join Steward Health Care <a href="http://hcrenewal.blogspot.com/2011/03/those-big-doors-keep-revolving.html">here</a>. <br /><strong>New York: Governor Cuomo's Advisor and Major Hospital Systems</strong><br /><br />New York Governor Andrew Cuomo has a close advisor whom he just appointed to a "Medicaid redesign team" whose clients include large academic medical centers/ hospital systems, <a href="http://www.nytimes.com/2011/02/23/nyregion/23cuomo.html">per</a> the New York Times:<br /><blockquote>When Andrew M. Cuomo married Kerry Kennedy in 1990, Jeffrey A. Sachs served as an usher. When Mr. Cuomo’s daughter Michaela was born, he asked Mr. Sachs to be her godfather. When his marriage fell apart years later, Mr. Cuomo stayed in Mr. Sachs’s triplex near the United Nations. <br /><br />Since Mr. Cuomo’s election as governor last fall, <em>Mr. Sachs, 58, has taken on a powerful role among his health care advisers as the administration confronts crucial decisions, including how to overhaul New York’s $53 billion Medicaid program.</em> <br /><br />But at the same time, Mr. Sachs, known to many in Albany as 'Andrew’s best friend,' is <em>working as a paid consultant to some of the biggest players in the New York health care industry, including Mount Sinai Medical Center, NYU Langone Medical Center and the state’s largest association of nursing homes</em>, all of which have financial interests at stake in the coming Medicaid changes. <br /><br />Mr. Sachs, whose firm is named Sachs Consulting, has never registered as a lobbyist, which would require him to divulge his clients and fees to the state ethics commission. </blockquote><br />Again, there are a number of issues before New York government about which there appears to be a risk that Governor Cuomo's actions could be unduly influenced by his friend, advisor, and committee member's consulting relationships with major hospital systems. <br /><blockquote>Mr. Sachs was also an early advocate of the “Wisconsin model” of Medicaid, under which the governor would <em>set a target for spending reductions and then appoint a task force of industry stakeholders to apportion the cuts</em>. The approach has political appeal for the governor, in that it entices would-be opponents of spending reductions to participate in the plan rather than protest it. But it also <em>endows the unelected team members with immense power</em>. <br /><br />Mr. Sachs made <em>recommendations to Mr. Cuomo and his aides about whom to appoint to the Medicaid team</em>, which Mr. Cuomo formed through an executive order in January. During the transition, Mr. Sachs also <em>helped assemble a four-person policy team</em> to begin meeting with state agencies about the best approach to reducing Medicaid spending</blockquote><br />Moreover, the Times article recounted cases in which Mr Sachs appeared to influence policy in ways that benefited his consulting clients. For example:<br /><blockquote>While he was helping Mr. Cuomo assemble his health care staff, Mr. Sachs’s name arose in an unusual personnel matter, one that held great interest for one of his clients, NYU Langone Medical Center. <br /><br />For at least a year, NYU Langone had had strained relations with Dr. Harold S. Koplewicz, a well-known psychiatrist who founded the hospital’s child psychiatry center but left in 2009 to start a competing research and clinical center. <br /><br />Relations worsened because Dr. Koplewicz, who also served as director of the Nathan S. Kline Institute for Psychiatric Research, a state-run psychiatric center in Rockland County that also has a research affiliation with NYU, refused to allow NYU to screen those he hired at the institute, among other issues. <br /><br />During an October meeting between Mr. Sachs and Dr. Koplewicz, <em>Mr. Sachs suggested the doctor resign from the Kline Institute</em>, people briefed on the meeting said. <em>Should he lobby too aggressively to keep his job, Mr. Sachs warned, Mr. Cuomo, then widely expected to win election, might choose to close down the institute. </em><br /><br />In a later meeting in December, Michael F. Hogan, state commissioner of mental health, told Dr. Koplewicz that he had been <em>warned by Mr. Sachs that his reappointment by Mr. Cuomo would be jeopardized if Dr. Koplewicz did not resign</em>, according to the people briefed. <br /><br />Afterward, Dr. Koplewicz wrote Dr. Hogan a letter detailing his accomplishments as director of the institute and complaining of the pressure being exerted by Mr. Sachs. <br /><br />'As you explained — and I appreciate your candor — <em>you have been pressured by NYU through Jeff Sachs to have me resign as a condition</em> for your reappointment as commissioner of mental health,' Dr. Koplewicz wrote in the letter. <br /><br />In a response sent the following day, Dr. Hogan did not dispute Dr. Koplewicz’s account but suggested that he had been insufficiently cooperative with NYU and the Office of Mental Health. <br /><br />'Accordingly, your service as director, Psychiatric Research Institute, will end effective Jan. 13, 2011,' Dr. Hogan wrote. <br /><br />Dr. Koplewicz and Dr. Hogan both declined to comment, though neither disputed the authenticity of the letters. </blockquote><br />This case is particularly disquieting because of Governor Cuomo's former role as a tough state attorney general who targeted white collar crime.<br /><br /><strong>Summary</strong><br /><br />US health care is hugely complex. The interests of its increasingly large commercial players can be strongly affected by the actions of government at local, state and national levels. <br /><br />We have previously discussed the pervasiveness of conflicts of interest throughout health care. It should come as no surprise that there are important conflicts affecting government leaders who have power over health care issues. <br /><br />Although there may actually be more laws and regulations about conflicts of interest affecting government leaders than about those affecting, say, leaders of academic medical institutions, the increasingly incestuous nature of health care leadership seems to add impetus to entwine the system in ever increasing strands of conflict. <br /><br />So, I humbly suggest, as a variation on a theme I have sounded before, that governmental leaders who have power over health care should put the health of patients and the population first, and should not have relationships that risk this mission in service of private gain.  Furthermore, leaders of civilian health care organizations, especially of hospitals, hospital systems and physicians' groups whose mission is also to improve care of individuals and society, should not seek to entangle government leaders in conflicts meant to serve private financial interests. 

Conflicts of Interest, Government Leaders, and Private Health Care Organizations

There seems to be a small surge of stories about conflicts of interest regarding health care affecting government leaders who can affect hea...

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BLOGSCAN: Corporate Characteristics that Lead to Fraud

<span style="color: #38761d;">Kurt Eichenwald on the corporate characteristics that lead to fraud: 1) huge positive incentives for achieving financial targets, huge negative incentives for not achieving them; 2) a cult of personality, or a rock-star CEO; 3) a weak compliance department.  The example was for-profit hospital system Columbia/ HCA, whose former CEO just was elected governor of Florida.  See the video </span><a href="http://pharmagossip.blogspot.com/2010/11/kurt-eichenwald-discusses-how.html"><span style="color: #38761d;">on PharmaGossip</span></a><span style="color: #38761d;">.</span>

BLOGSCAN: Corporate Characteristics that Lead to Fraud

Kurt Eichenwald on the corporate characteristics that lead to fraud: 1) huge positive incentives for achieving financial targets, huge negat...

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BLOGSCAN: Florida Doctors Endorse Ex- Columbia/ HCA CEO for Governor

<span style="color: #38761d;">Rick Scott was the CEO of for-profit hospital chain Columbia/ HCA.  The company ended up settling civil and criminal charges for $1.7 billion.  Like many other examples in the march of legal settlements about which we have often posted, no individual who authorized, directed, or implemented the relevant bad behavior suffered any sort of negative consequence or paid any penalty.  Rick Scott left the company, but with a golden parachute.  Now he his running for Governor of Florida, using a substantial amount of his own money (but money that probably mostly came from Columbia / HCA). (See post </span><a href="http://www.healthbeatblog.com/2010/10/rick-scott-and-the-florida-gubernatorial-race-nurses-are-for-sink-doctors-are-for-scott-voters-still.html"><span style="color: #38761d;">here</span></a><span style="color: #38761d;">.)  He may be in the lead.  And the Florida Medical Association has just endorsed him.  </span><a href="http://www.healthbeatblog.com/2010/10/rick-scott-and-the-florida-gubernatorial-race-nurses-are-for-sink-doctors-are-for-scott-voters-still.html"><span style="color: #38761d;">In the Health Beat blog</span></a><span style="color: #38761d;">, Maggie Mahar is all over this story.  Read it and weep.  Remember another good reason for the people who lead health care organizations to be truly accountable for their actions. </span>

BLOGSCAN: Florida Doctors Endorse Ex- Columbia/ HCA CEO for Governor

Rick Scott was the CEO of for-profit hospital chain Columbia/ HCA.  The company ended up settling civil and criminal charges for $1.7 billio...

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"Trouble Coming Every Day" as Discussed by our Fellow Health Care Skeptics

With apologies to the late Frank Zappa... even though we are going through the dog days of summer, the parade of health care troubles in the news is never ending, so I thought I would recap some of the more interesting issues discussed by some of my fellow health care skeptic bloggers.<br /><br />We have discussed the ongoing decline of <a href="http://hcrenewal.blogspot.com/search/label/primary%20care">primary care</a>. On DB's Medical Rants, Dr Robert Centor <a href="http://www.medrants.com/archives/5776">takes on </a>the topic: "The system has, without consciously meaning to, held primary care in contempt." The result is a "quiet rebellion: of primary doctors.<br /><br />We have <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">discussed</a> whether the currently fashionable idea of "accountable care organizations" (ACOs) might turn out to be a cover for health care oligopolies. See what Paul Levy, CEO of the Beth Israel/ Deaconess Medical Center <a href="http://runningahospital.blogspot.com/2010/08/aco-global-payments-market-dominance.html">said</a> about them in his blog, Running a Hospital.<br /><br />We frequently talk about the <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulation</a> or <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppression </a>of clinical research studies by those with vested interests in the results pointing in a particular direction. On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody <a href="http://brodyhooked.blogspot.com/2010/08/spinal-fusion-devices-whats-fda-hiding.html">wondered</a> why the FDA will not even reveal the identities of the clinical researchers who did the studies on which it based its decision to approve the Infuse bone growth enhancement device.<br /><br />Prof Carl Elliott has done an outstanding job investigating commercially funded and implemented clinical research. Dr Brody <a href="http://brodyhooked.blogspot.com/2010/08/more-tidbits-from-white-coat-black-hat.html">reviewed</a> his new book, <em>White Coat, Black Hat</em>.  In the Carlat Psychiatry Blog, Dr Daniel Carlat <a href="http://carlatpsychiatry.blogspot.com/2010/08/making-killing-new-carl-elliott-article.html">reviewed</a> Prof Elliott's new article in Mother Jones on how a pharmaceutical company sponsored drug trial went badly awry. <br /><br />We <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">asked </a>whether the former CEO of a for-profit hospital chain who resigned after the company paid a > $1.7 billion penalty to settle charges of fraud would be a proper candidate to be governor of Florida. After Rick Scott won the Florida Republican primary, Maggie Maher, writing in the Health Beat blog, <a href="http://www.healthbeatblog.com/2010/08/i-remember-rick-scott-a-great-makeover-but-still-the-same-guy-part1.html">took on </a>Scott's dubious past as prologue to a worrisome future.<br /><br /><em><span style="font-size: x-small;">Well I'm about to get sick</span></em><br /><em><span style="font-size: x-small;">From watchin' my TV</span></em><br /><em><span style="font-size: x-small;">Been checkin' out the news</span></em><br /><em><span style="font-size: x-small;">Until my eyeballs fail to see</span></em><br /><em><span style="font-size: x-small;">I mean to say that every day</span></em><br /><em><span style="font-size: x-small;">Is just another rotten mess</span></em><br /><em><span style="font-size: x-small;">And when it's gonna change, my friend</span></em><br /><em><span style="font-size: x-small;">Is anybody's guess</span></em><br /><br /><em><span style="font-size: x-small;">So I'm watchin' and I'm waitin'</span></em><br /><em><span style="font-size: x-small;">Hopin' for the best</span></em><br /><em><span style="font-size: x-small;">Even think I'll go to prayin'</span></em><br /><em><span style="font-size: x-small;">Every time I hear 'em sayin'</span></em><br /><em><span style="font-size: x-small;">That there's no way to delay</span></em><br /><em><span style="font-size: x-small;">That trouble comin' every day</span></em><br /><em><span style="font-size: x-small;">No way to delay</span></em><br /><em><span style="font-size: x-small;">That trouble comin' every day</span></em><br /><em><span style="font-size: x-small;">- Frank Zappa</span></em>

"Trouble Coming Every Day" as Discussed by our Fellow Health Care Skeptics

With apologies to the late Frank Zappa... even though we are going through the dog days of summer, the parade of health care troubles in the...

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How Did the CEO Who Presided Over the Company that Paid a $1.7 Billion Fraud Settlement Become a Credible Candidate for a State Governorship?

This one fits in the "you just can't make this stuff up" category.  Let me provide a <a href="http://articles.sun-sentinel.com/2010-05-20/news/fl-rick-scott-governor-hca-20100520_1_medicare-fraud-case-hospitals-in-el-paso-hospital-giant-columbia">summary</a> from the Fort Lauderdale, Florida Sun-Sentinel,<br /><blockquote>It was and still is<em> the biggest Medicare fraud case in U.S. history and ended with the hospital giant Columbia/HCA paying a record <strong>$1.7 billion</strong> in fines, penalties and damages</em>.<br /><br /><em>Now the man who ran the company at the time wants to be Florida's governor.</em><br /><em><br /></em><br /><em>Rick Scott was co-founder and CEO of Columbia/HCA in the 1990s, when the FBI launched a massive, multi-state investigation that led to the company pleading guilty to criminal charges of overbilling the government.</em><br /><br /><em>Today, Scott is a Republican candidate for governor, running his campaign from an office in downtown Fort Lauderdale</em>.</blockquote><br />Here is the Sun-Sentinel's review of the Columbia/ HCA case from the end of the 20th century:<br /><blockquote>A Dallas lawyer whose clients included health care companies, Scott came from humble Midwestern roots — his father was a truck driver and his mother a JC Penney sales clerk. In 1987, at the age of 34, he started Columbia, investing $125,000 to buy two hospitals in El Paso, Texas.<br /><br />Within a decade, he was running the largest health care company in the country with more than 340 hospitals and $20 billion in annual revenue. Columbia aggressively bought other health care companies, including the Hospital Corporation of America, and became Columbia/HCA.<br /><br />The federal government began investigating in the mid 1990s with the help of whistleblowers including [Jim] Alderson and John Schilling, a Medicare reimbursement supervisor in Fort Myers.<br /><br />Among <em>the fraudulent practices uncovered: billing Medicare and Medicaid for unnecessary lab tests, creating false diagnoses to claim a higher reimbursement and charging for marketing and advertising costs that were disguised as community education. The company even billed the government for tickets to the Kentucky Derby and country club dues, according to news accounts.</em><br /><br />The government's investigation became public in 1997 and that July, the FBI raided Columbia/HCA offices in seven states, including Florida. Days later, the board of directors announced Scott was out.</blockquote><br />The St Petersburg Times/ Miami Herald Politifacts Florida <a href="http://www.politifact.com/florida/statements/2010/may/20/alex-sink/rick-scott-healthcare-ceo-faces-questions-a/">web-site </a>included more details about the nature of the offenses alleged: <br /><blockquote>* Columbia billed Medicare, Medicaid, the Defense Department's TRICARE health care program, and the Federal Employees' Health Benefits Program for lab tests that were not medically necessary or not ordered by physicians;<br />* The company attached false diagnosis codes to patient records in order to increase reimbursement to the hospitals;<br />* The company illegally claimed non-reimbursable marketing and advertising costs as community education;<br />* Columbia billed the government for home health care visits for patients who did not qualify to receive them.<br /><br /></blockquote><br />It also documented the guilty pleas resulting from the charges:<br /><blockquote>Southern District of Florida (Miami) -- Columbia Homecare Group Inc., a subsidiary of Columbia, will <em>plead guilty to one count of conspiracy to defraud the U.S. and to violate the Medicare Anti-kickback Statute involving its fraudulent business in the purchase and operation of home health agencies and fraudulent billing of Medicare for management and personnel costs</em>. The criminal fine is $3.36 million;<br /><br />Northern District of Georgia (Atlanta) -- Columbia Homecare Inc. will <em>plead guilty to one count of violating the Medicare Anti-kickback Statute related to purchase of home health agencies</em>. The criminal fine is $3.36 million;<br /><br />Department of Justice Criminal Fraud Section -- Another subsidiary, Columbia Management Companies Inc., will <em>plead guilty to one count of conspiracy to defraud the U.S. and to make and use false writings and documents in connection with its fraudulent 'upcoding' of bills to Medicare for patients diagnosed with certain types of pneumonia</em>. The criminal fine is $27.5 million. This investigation was based in Nashville, Tennessee;<br /><br />Middle District of Florida (Tampa) -- Columbia Homecare Group will <em>plead guilty to one count of conspiring to defraud the U.S. and one count of conspiracy to violate the Medicare Anti-kickback Statute in connection with the purchase and operation of home health agencies</em>. The criminal fine is $8.4 million. Also, Columbia Management Companies will <em>plead guilty to eight counts of making false statements to the U.S. in connection with the submission of false cost reports to Medicare</em>. The fine amount is $22.6 million; and,<br /><br />Western District of Texas (El Paso) -- Columbia Homecare Group <em>will plead to a conspiracy to pay kickbacks and other monetary benefits to doctors in violation of the Medicare Anti-kickback Statute</em>. The criminal fine is $30.1 million.</blockquote><br />The case was extensively dicussed in <em><a href="http://www.moneydrivenmedicine.org/">Money-Driven Medicine</a></em> by Maggie Mahar, who suggested that the business culture that Scott created lead to these crimes:<br /><blockquote>Scott was obsessed not just with winning, but with money</blockquote><br /><blockquote>He bullied his subordinates. 'My father owned and operated a millinery factory in the garment district and [even in that tough garmento environment] I never witnessed such an extent of demeaning, debasing, and devaluing behavior as I personally experienced at Columbia,' Mark E. Singer, administrative director for medicine at Michael Reese Hospital in Chicago told The New York Times.</blockquote><br /><blockquote>Internal records showed that at Columbia/ HCA, just as at many other for-profits, executive salaries hinged not on such criteria as reducing infections or lowering death rates, but on meeting financial targets like 'growth in admissions and surgery cases.'</blockquote><br /><blockquote>Scott's detractors claimed that his cost cutting threatened patient care and safety: 'Gloves come in only one size and rip easily,' complained hospital workers in Florida. In California, nurses protested 'filty conditions,' and being 'stretched to the limit'....</blockquote><br />The Sun-Sentinel article included allegations that Scott actually knew about the crimes to which Columbia/ HCA subsidiaries pleaded guilty:<br /><blockquote>Alderson thinks Scott had to know.<br /><br />The hospitals kept two sets of books: One showed the reimbursements actually submitted to Medicare and the other, marked confidential, detailed those charges that would likely be rejected if caught by federal auditors.<br /><br />The company kept funds in reserve to repay the government for those claims and once the timeframe for an audit had passed, the reserves would be reclassified as revenue, Alderson said.<br /><br />'They had $1 billion in play in these reserves,' said Alderson, who now lives in La Quinta, Calif., and speaks to college students and Rotary clubs about business ethics. 'Anywhere from 25 to 33 percent of their bottom line was these reserves, so you bet he knew about it.''</blockquote><br />Scott was never charged with a crime. Instead, he "left Columbia/HCA with $10 million in severance and stock valued at $300 million." Now, he "lives in Naples in a $9 million house on the Gulf of Mexico."<br /><br />But,<br /><blockquote>Joe Ford, the FBI agent who led the Columbia/HCA investigation and then took on corporate fraud at Enron, retired from the bureau and lives near San Francisco. He declined to comment for this story article but was quoted in a 2008 book by Schilling as saying that his biggest regret in the Columbia/HCA case was not charging corporate executives.<br /><br />'After Columbia/HCA, I realized people, individual corporate officers, had to be held ccountable for the actions of their companies,' Ford said in Schilling's book, 'Undercover: How I Went from Company Man to FBI Spy – and Exposed the Worst Healthcare Fraud in U.S. History.'<br /><br /><em>'Instead of just giving us [the government] money, people need to go to jail,'</em> Ford said in the book. 'I learn from my mistakes, and this was my first big one.'</blockquote><br />Of course, we have noted a parade of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> involving and <a href="http://hcrenewal.blogspot.com/search/label/crime">guilty pleas and criminal convictions</a> by  health care organizations, (or often just subsidiaries conveniently available to take the rap).  As we have noted, resulting fines may be just be treated as costs of doing business by health care leaders.  Almost never have the people who authorized, directed, or implemented wrong-doing almost never suffer negative consequences.<br /><br />Instead, they may just continue to haunt health care and society at large.<br /><br />Mr Scott's campaign web-site noted "mistakes were certainly made at Columbia/ HCA. As CEO I accept responsibility for what happened on my watch."<br /><br />If only....<br /><br />To conclude, as I have repeated seemingly infinitum, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.<br /><br />ADDENDUM (27 May, 2010) - see comments by Maggie Mahar <a href="http://www.healthbeatblog.com/2010/05/hca-columbias-rick-scott-the-next-governor-of-florida.html">on the Health Beat Blog</a>.

How Did the CEO Who Presided Over the Company that Paid a $1.7 Billion Fraud Settlement Become a Credible Candidate for a State Governorship?

This one fits in the "you just can't make this stuff up" category.  Let me provide a summary from the Fort Lauderdale, Florid...

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