healthy4u: Harvard

Medical Malpractice Insurer CRICO Challenges "EMR Complacency" - Or Do They?

In my Feb. 28, 2014 post "Malpractice Claims Analysis Confirms Risks in EHRs" (<a href="http://hcrenewal.blogspot.com/2014/02/patient-safety-quality-healthcare.html">http://hcrenewal.blogspot.com/2014/02/patient-safety-quality-healthcare.html</a>) I pointed out that the annual medical malpractice claims related to health IT received by the insurer for the Harvard medical community, one of the world's best users of health IT, might represent a significant percentage of the annual med mal claims in the state of Massachusetts.  Many involved serious injury. I also pointed out that the claims themselves represent only a small fraction of total incidents of med mal-related harms (including due to IT), due to the economic realities of med malpractice litigation. In the press release reproduced below, CRICO writes of poor integration and "design deficiencies" - bad health IT - and that "there has been no apparent leader in this field making a concerted effort to design the next generation of EMRs with the physician in mind", and that they hear "significant frustration from physicians related to their experience with EMRs."  However, CRICO does not write of the reasons why these issues are as prevalent as they are. Their claim appears to be, in essence, that these problems will be solved through dialog and "conversation" - in other words, appeals to corporate altruism. Why this industry receives special accommodation even from those who have to pay for their mistakes is beyond me: <blockquote class="tr_bq">CRICO Challenges EMR Complacency  <a href="http://www.rmf.harvard.edu/EMR">http://www.rmf.harvard.edu/EMR</a>  February 6, 2013 In a recently released video, CRICO offers a vision of how EMRs of the future might improve health care safety for both patient and physician.  Press Release:  Cambridge, MA — CRICO, the patient safety and medical professional liability company serving the Harvard medical community, has produced a video that puts forth a future vision of how Electronic Medical Records (EMRs) might be embedded into the physician workflow in a manner that would improve health care delivery. CRICO has based the dramatization on real malpractice cases. Through combined analysis of how harm can come to patients from flawed encounters with providers, and conversations with medical and technological visionaries across the country, the video integrates various scenarios into an idealized patient/physician encounter.  Hearing significant frustration from physicians related to their experience with EMRs, CRICO was inspired to envision a way in which they might be better integrated into  the clinical workflow. This would allow the EMR to offer some relief to physicians and nurses who face seemingly insurmountable challenges of time and data management. Luke Sato, MD, chief medical officer and senior vice president for CRICO said, “The impetus behind this video was to facilitate a dialogue among health care professionals—physicians, IT, hospital administrators—about why we aren’t making better progress in the development of EMRs.  Through analysis of medical malpractice claims, we have line of sight to design deficiencies in the EMR that contribute to claims. The best technological design is one that is integrated seamlessly into one’s workflow. The current EMR is passive—the physician has to actively look for data instead of the technology anticipating what the physician needs to act on.” Opinions within the health care industry are diverse about EMRs but there has been no apparent leader in this field making a concerted effort to design the next generation of EMRs with the physician in mind. In addition to a need for standards across systems, the manual data entry of today’s EMRs adds to the burden of already time-pressed physicians. The film was created as a collaborative effort between CRICO’s Luke Sato, MD and David Ting, MD, associate medical director for information systems at Massachusetts General Physicians Organization, who acted as an expert resource for script development and video production. Ting said, “The actual purpose of the video is to ask whether we might intelligently prioritize today’s choices to move our institutions toward improved patient care and improve provider and practice work-life experience.” While most of the technology that is used in this dramatization is available today, other elements are further out. CRICO’s future vision, as depicted in the video, is meant as a launching pad to begin the conversation about how new technologies can provide a way to enable EMRs to enhance, streamline, and make safer the patient-physician encounter. Dr. Ting has encouraged his colleagues at MGH to view the video and share their feedback. The physician reaction has elicited a variety of reactions and diverse feedback ranging from “cool, efficient, saves time, and improves outcomes” to “I don’t want voices interfering with my patient interactions.”  The video is available for viewing on the CRICO website, <a href="https://exchangeweb.drexel.edu/owa/redir.aspx?C=boV17iId5ky3j-AH7i-8UbFkSFsPF9EI1dNj1bsYgpqo6Y-wxui_17h2gLlU68Tga7gAZSNP4So.&URL=https%3a%2f%2fwww.rmf.harvard.edu%2fEMR" target="_blank">www.rmf.harvard.edu/EMR</a>.  ABOUT CRICO For more than 30 years, CRICO has been the patient safety and medical professional liability company owned by and serving the Harvard medical community. CRICO is an internationally renowned leader in evidence-based risk management, proudly serving more than 12,000 physicians (including residents and fellows), 22 hospitals, and nearly 209 other health care organizations.</blockquote> They see the problems but do not engage the human reasons for the problems, including generic leadership, conflicts of interest, incompetence, territoriality, profit motive, and the other ills that we write of till our faces turn blue at Healthcare Renewal. In other words, their "challenge to EHR complacency" is about as powerful as our challenges have been to Vladimir Putin regarding Crimea and Ukraine. Perhaps when the payouts become even more severe, insurers will think it a good idea to stop 'making nice' with an intrusive and unregulated industry that has invaded clinical affairs like a bull in a china shop. <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaWP3zIvzuW2hnbvndLEoTuKD54nAHbQjth4Rgxipxag7L7yracMBpy_ofQ_pUn719eiqRvGFanSAjZ8P2B8UrlbYmkLvElRI7-rSujvgY05Q_XCD7ms5qQqwg5w0kCPUB5_MEapO7uGJn/s1600/bull.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaWP3zIvzuW2hnbvndLEoTuKD54nAHbQjth4Rgxipxag7L7yracMBpy_ofQ_pUn719eiqRvGFanSAjZ8P2B8UrlbYmkLvElRI7-rSujvgY05Q_XCD7ms5qQqwg5w0kCPUB5_MEapO7uGJn/s1600/bull.jpg" width="320" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Can we please, pretty please dialog for a bit about your breaking the dishes?</td></tr></tbody></table> -- SS

Medical Malpractice Insurer CRICO Challenges "EMR Complacency" - Or Do They?

In my Feb. 28, 2014 post "Malpractice Claims Analysis Confirms Risks in EHRs" (http://hcrenewal.blogspot.com/2014/02/patient-safety-quality-healthcare.html) I pointed out that the annual medical malpr…

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19 Mar 2014

Khadafy's Academic Mercenaries' Health Care Connections

We just <a href="http://hcrenewal.blogspot.com/2011/04/henry-kissinger-icelands-promoter.html">discussed</a> Henry Kissinger as an early example of the intellectual mercenary, and recent striking examples of academic mercenaries,particularly the Harvard University-derived Monitor Group's academically disguised public relations work for Libyan tyrant Moammar Khadafy. We concluded that academic mercenaries help foster the corporate culture in which health care is now immersed.  However, it also appears they may have direct influence on health care.  Monitor Group Leadership Consider for example the main figure in the Monitor Group - Khadafy scandal.  According to a Boston Globe <a href="http://articles.boston.com/2011-03-04/news/29342456_1_moammar-khadafy-libyan-government-consulting">article</a>, Michael Porter developed the Monitor-Khadafy connection: <blockquote>Monitor’s work in Libya began when Michael Porter, a Harvard Business School professor who is among the country’s top theorists on management strategies, received a call from Saif Khadafy around 2001, according to Porter. Saif, a Western-leaning doctoral student who US officials hoped would become the next leader of Libya, asked for his expertise to help change Libya’s battered, Soviet-style economy.</blockquote>(Saif, of course, later sided with his father in brutally putting down anti-government protesters.) According to <a href="http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=bio&facEmId=mporter">his official Harvard biography</a>, Michael Porter also has a big interest in health care: <blockquote>Since 2001, Professor Porter has devoted considerable attention to competition in the health care system, with a focus on improving health care delivery. His work with Professor Elizabeth Teisberg, including the book Redefining Health Care: Creating Value-Based Competition on Results (Harvard Business School Press, 2006), is influencing thinking and practice not only in the United States but numerous other countries.</blockquote>In fact, the New England Journal of Medicine published his four-page commentary on "value-based" health care reform in 2009 [Porter ME. A strategy for health care reform - toward a value-based system. N Engl J Med 2009; 361: 109-112. Link <a href="http://www.nejm.org/doi/full/10.1056/NEJMp0904131">here</a>.] The journal required that he disclose financial relationships with other health care organizations, including <blockquote>receiving lecture fees from the American Surgical Association, the American Medical Group Association, the World Health Care Congress, Hoag Hospital, and the Children's Hospital of Philadelphia, receiving director's fees from Thermo Fisher Scientific, and having an equity interest in Thermo Fisher Scientific, Genzyme, Zoll Medical, Merck, and Pfizer.</blockquote>The Boston Globe <a href="http://articles.boston.com/2011-03-04/news/29342456_1_moammar-khadafy-libyan-government-consulting">article</a> identified two more Monitor leaders who helped develop the Libyan connection: <blockquote>Porter brought in Monitor, a firm he had helped found, along with other associates including former Harvard professors Mark Fuller, who is now the firm’s chairman, and Joseph Fuller, who works at Monitor and also collaborates on research with some Harvard professors. </blockquote> Mark Fuller, the current CEO of the Monitor Group, who wrote to the Libyan government proposing to counter its "deficit of positive public relations" as <a href="http://motherjones.com/politics/2011/03/libya-qaddafi-monitor-group">described</a> by Mother Jones, per the New Profit Inc <a href="http://newprofit.com/cgi-bin/iowa/about/summary/41.html">web-site</a> is: <blockquote>a Member of Harvard University's Major Gifts Steering Committee, a Member of the [Harvard] Board of Overseers' Committee on University Resources,...</blockquote>Joseph Fuller was an unsuccesful candidate for the Harvard Board of Overseers in 2010. His <a href="http://www.harvard.edu/alumni/candidates_overseers.php">biography</a> for that candidacy also stated: <blockquote>He and his wife, Ruthanne Schwartz Fuller, MBA ’83, served on the HBS Board of Dean’s Advisors and Joe on the Harvard College Fund and the FAS Undergraduate Education Planning Committee.</blockquote> So of the three Monitor Group leaders who developed the stealth public relations campaign for Khadafy, the leader who set up the relationship with Libya has a professed interest in health care, published on health policy in a prominent journal, and has financial ties to multiple health care organizations. The two others have leadership roles within their own university which are likely to affect its medical and health care spheres Monitor's Hired Academics Furthermore, of the seven outside academics the Monitor Group paid to help promote the Khadafy regime per the Mother Jones <a href="http://motherjones.com/politics/2011/03/libya-qaddafi-monitor-group">article</a>, three had health care connections.  Richard Perle is on the <a href="http://www.newhealthsciences.com/Board.aspx">board of directors </a>of New Health Sciences Inc, a biotechnology company. In 2008, Francis Fukuyama was <a href="http://www.rand.org/news/press/2008/04/07.html">elected</a> a member of the Board of Trustees of the Rand Corporation, which does substantial health care research. Benjamin Barber's <a href="http://www.benjaminbarber.com/bio4.html">own biography </a>claims he has been on the National Advisory Board of American Health Decision Inc since 1992. Summary As we noted before, severe problems with the leadership and governance of health care seem not to be only due to specific deficiencies within health care, but may also be influenced by larger societal problems.  The leadership of many organizations seems to have been given over to self-serving opportunists with no fixed values or loyalties. David Halberstam described Henry Kissinger as a prototype of these "wildly ambitious agents of opportunity," also as: <blockquote>the free agent—the professional political player who brilliantly manipulated the press, played both sides of issues, and put his own agenda ahead of all others. </blockquote> We <a href="http://hcrenewal.blogspot.com/2011/04/henry-kissinger-icelands-promoter.html">discussed</a> examples of such free agents who cloaked themselves in the mantles of two formerly prestigious academic institutions, Columbia and Harvard Universities. Both universities have medical schools, teaching hospitals, and considerable influence within medicine and health care. So it seems likely that the free agency of faculty outside of medicine and health care could influence how things are done within medicine and health care. Furthermore, we have demonstrated that many free agents whose focus may not primarily be on health care and medicine may have wide-ranging activities including some that directly affect medicine and health care. The pervasive nature of free agents, or agents of opportunity within academia, government, and the rest of society shows why it has been so hard to challenge the threats to core values created by conflicts of interest in medicine and health care. The conflicted already hold much of the power within the larger society in which medicine and health care operate. They are unlikely to favor restrictions on their brother and sister free agents within the medical and health care sector. So our effort to address concentration and abuse of power in health care, and promote accountability, integrity, honesty, and ethics in health care leadership and governance must necessarily take into account these issues in society at large. The bad news is that the problems are much bigger than we first imagined. The good news is that we have potential allies facing similar problems throughout the world. But it is now really clear that to truly reform health care, we must improve the accountability, integrity, honesty and ethics of not only health care leadership and governance, but of all organizational leadership and governance. That should keep us busy for a while.

Khadafy's Academic Mercenaries' Health Care Connections

We just discussed Henry Kissinger as an early example of the intellectual mercenary, and recent striking examples of academic mercenaries,particularly the Harvard University-derived Monitor Group's ac…

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19 Apr 2011

Henry Kissinger, Iceland's Promoter, Khadafy's Apologists, and the Rise of the Academic Mercenary

In which we discuss how medical academic mercenaries (like the key opinion leaders paid to promote drugs and devices cloaked in their academic and professional credentials) now appear to be just part of a larger problem. Henry Kissinger Almost 17 years ago, an article by David Halberstam in Vanity Fair(1) should have warned us of the rise of the academic and intellectual mercenary.  However, back in those go-go years of the new gilded age, most of us were not listening.  Halberstam focused on Henry Kissinger, once a protege of New York Governor and then US Vice President Nelson Rockefeller, who became the infamous President Nixon's National Security Advisor, then Secretary of State: <blockquote>Kissinger’s capacity to be all things to all campaigns—an overt Rockefeller man, a semi-overt Humphrey man, and a covert Nixon man—reflects the emergence of the rootless operator in the modern superstate. Kissinger was the first—though there were others to follow—of the wildly ambitious agents of opportunity set loose in the wilds of Washington and other capitals. They are interchangeable men, singular in their ambitions, unhampered by traditional loyalties or affiliations. They are men so cool and detached in their geopolitical views that they sometimes seem to be part of a new international elite, readily transferable to the governments of allies and adversaries alike.</blockquote> Two recent dramatic stories show how prevalent academic mercenaries, another breed of "rootless operators," or "wildly ambitious agents of opportunity," have become. Promoting Iceland: Columbia Professors' "Inside Job" The Academy Award winning documentary film, <a href="http://www.sonyclassics.com/insidejob/">"Inside Job," </a>suggested that one cause of the Great Recession was the wrong-headed deregulation of the financial industry deceptively promoted by academics who failed to disclose they were being paid by those who stood to benefit from deregulation.  (See our post <a href="http://hcrenewal.blogspot.com/2010/10/what-conflicted-web-we-weave-academic.html">here</a>.) Reconsideration of the roles of two of the academics cited in the film who are faculty at Columbia University shed more light on how public policy was influenced by academics hired to do public relations. The Columbia Spectator just published a three- part series on the local controversy with global implications. At least a few Columbia faculty realized that it did not look good for their colleagues to do public relations while pretending they were delivering disinterested academic opinions: <blockquote>[Columbia Economics Department Chair Michael] Riordan added that it is important that Columbia protect its reputation and the public’s trust in its professors’ expert opinions. 'What does the university stand for but if not for the quality of the ideas that come out of that university?' he asked. (2)</blockquote> Also, <blockquote>Teachers College professor Kathleen O’Connell ... called the film 'appalling' and said that 'the Columbia professors were even more appalling.' She said she was especially surprised considering Hubbard and Mishkin have both had high-ranking government jobs—Hubbard was at one time a top economic adviser to former President George W. Bush, and Mishkin was a governor of the Federal Reserve. 'I was shocked at the lack of ethics that they displayed. They are in really powerful positions—they have been in powerful positions in the Federal Reserve and the President’s economic advisors,' O’Connell said.(3)</blockquote> However, there was much resistance to change. Just as we have seen in arguments about <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> affecting medical faculty, there were those who denied that being paid to consult could affect any faculty member's thinking about the source of the payment: <blockquote>But some, including Business School professor and University Senator Frank Lichtenberg, oppose the disclosure of consulting to the University. Lichtenberg said that many factors besides money can influence professors’ academic opinions. 'There are lots of other sources of bias and non-neutrality in academia anyway,' Lichtenberg said. 'People often have predispositions for or against different hypotheses, and unfortunately, those sometimes prevail.' Some professors question whether paid consulting positions influence researchers at all. Business School professor Bruce Greenwald said that the economists featured in 'Inside Job' have 'long espoused and long promoted' pro-market ideas and would have made the same arguments regardless of financial ties.(4)</blockquote> So we have economists denying the effect of economic incentives? Beyond that, there were arguments that public disclosure of conflicts of interest would violate faculty members' privacy. <blockquote>But full public disclosure is not likely to gain much traction in the debate over a University-wide policy. Steele said that it is not necessary to publicly release disclosures made privately to University officials. 'I don’t think that the public needs to have access to forms that people fill out and all the materials that go into that,' [Provost Paul] Steele said. 'That would be onerous at least, and there might be other objections … that you are invading people’s sense of privacy and freedom.'(2)</blockquote>I suppose that would have made some sense if the faculty member had not made any public pronouncements that could have been influenced by the undisclosed conflicts. However, the contention in "Inside Job" was that conflicted academic economists publicly advocated on behalf of their undisclosed clients. For example, <blockquote>In 2006, the Iceland Chamber of Commerce paid Columbia Business School professor Frederic Mishkin $134,858 to co-author a report on Iceland’s economy and banking systems. In the report, titled 'Financial Stability in Iceland,' Mishkin painted a bright picture of the country’s economic future, but he did not disclose who was paying him to write it. 'Although Iceland’s economy does have imbalances that will eventually be reversed, financial fragility is not high and the likelihood of a financial meltdown is very low,' Mishkin wrote. Two years later, Iceland’s economy collapsed. Its major banks failed, its currency lost much of its value, and thousands of its citizens lost their jobs. The New York Times wrote at the time that, to Icelanders, 'the collapse came so fast it seemed unreal, impossible.'(2) </blockquote> Harvard Professors' Paid Apologia for Moammar Khadafy Praising Iceland's economy was one thing. Praising brutal Libyan leader Moammar Khadafy as democratic was another. In March, 2011, Mother Jones disclosed(5) how a consulting group run by Harvard professors was hired in part to burnish the image of Moammar Khadafy, who since has ordered brutal attacks on protesters within his country. <blockquote>In February 2007 Harvard professor Joseph Nye Jr., who developed the concept of "soft power,' visited Libya and sipped tea for three hours with Muammar Qad'afi. Months later, he penned an elegant description of the chat for The New Republic, reporting that Qaddafi had been interested in discussing 'direct democracy.' Nye noted that 'there is no doubt that' the Libyan autocrat 'acts differently on the world stage today than he did in decades past. And the fact that he took so much time to discuss ideas—including soft power—with a visiting professor suggests that he is actively seeking a new strategy.' The article struck a hopeful tone: that there was a new Qaddafi. It also noted that Nye had gone to Libya 'at the invitation of the Monitor Group, a consulting company that is helping Libya open itself to the global economy.' Nye did not disclose all. He had actually traveled to Tripoli as a paid consultant of the Monitor Group (a relationship he disclosed in an email to Mother Jones), and the firm was working under a $3 million-per-year contract with Libya. Monitor, a Boston-based consulting firm with ties to the Harvard Business School, had been retained, according to internal documents obtained by a Libyan dissident group, not to promote economic development, but 'to enhance the profile of Libya and Muammar Qadhafi.' So The New Republic published an article sympathetic to Qaddafi that had been written by a prominent American intellectual paid by a firm that was being compensated by Libya to burnish the dictator's image.</blockquote> Monitor also sponsored trips to Libya for scholars from other universities who also later wrote positively about Khadafy's and his reign over Libya, presumably after they had received their large consulting fees. The Boston Globe reported(6) in more detail about a proposal by Monitor to write a laudatory book about Khadafy: <blockquote>It reads like Libyan government propaganda, extolling the importance of Moammar Khadafy, his theories on democracy, and his 'core ideas on individual freedom.' But the 22-page proposal for a book on Khadafy was written by Monitor Group, a Cambridge-based consultant firm founded by Harvard professors. The management consulting firm received $250,000 a month from the Libyan government from 2006 to 2008 for a wide range of services, including writing the book proposal, bringing prominent academics to Libya to meet Khadafy 'to enhance international appreciation of Libya' and trying to generate positive news coverage of the country.</blockquote> As further documented in the Globe article, it was very clear that Monitor was paid not just to provide consultation, but to do public relations work on behalf of the Khadafy regime. Yet an article in the Nation(7) made it clear that the prominent academics it hired did not disclose who paid them, or the purposes of those payments: <blockquote>Joseph Nye of Harvard’s Kennedy School wrote in The New Republic in 2007 that Muammar Qaddafi was interested in discussing 'direct democracy.' Anthony Giddens of the London School of Economics wrote in the Guardian the same year that Libya under Qaddafi could become 'the Norway of North Africa.' Benjamin Barber of Rutgers University wrote in the Washington Post, also in 2007, that Libya under Qaddafi could become 'the first Arab state to transition peacefully and without overt Western intervention to a stable, non-autocratic government. Great minds think alike? Actually, no: all were being paid by Libyan money, under a $3 million per year contract with a consulting group which promised to 'enhance the profile of Libya and Muammar Quadhafi' in Britain and the US. One more thing: none of them said in The New Republic, the Guardian, or the Washington Post that they were being paid by Libyan money.</blockquote> So here again we have the elements of what Wendell Potter (see <a href="http://hcrenewal.blogspot.com/2011/02/wendell-potters-deadly-spin.html">this post</a>) called the "third party strategy." A public relations company hires outside "experts" with veneers of academic or professional credibility to promote the interests of its clients, without disclosing that the "experts" have become paid flacks. Again, this is bad enough when it is done on behalf of health policies favorable to commercial insurance companies. It is worse when it is done on behalf of brutal dictators. More recently, the Globe discovered(8) that the Monitor Group negotiated with the head of the Libyan intelligence service who had been implicated in various violent acts, <blockquote>He is Moammar Khadafy’s brother-in-law and his most trusted aide, convicted in absentia for the 1989 bombing of a French airliner and implicated in the 1996 massacre of 1,200 Libyan political prisoners. But in 2006, Abdullah Al Sanusi was also the man who arranged the services of a noted Cambridge consulting firm in a very different project: revamping Libya’s reputation on the world stage. Sanusi, a longtime head of Libya’s intelligence services, oversaw initial negotiations with the Monitor Group, which was vying for a contract with Libya to bring prominent Americans to speak to Khadafy as part of an effort to improve ties and nudge the pariah country toward reforms. 'We believe that your commitment to creating a program of mutual education and relationship building with the Unit ed States remains of critical importance at this turning point in Libyan history. We remain privileged to be trusted with this work,' Monitor’s chief executive, Mark Fuller, and project director, Rajeev Singh-Molares, wrote to Sanusi in 2006. </blockquote> However, so far, Harvard leadership has if anything been more defensive about its faculty members' stealth public relations work for a brutal dictator than was Columbia's leadership about its faculty member's stealth public relations work for Iceland. As reported(9) again by the Boston Globe, <blockquote>A prominent Harvard professor and former university administrator urged Harvard President Drew Faust during a faculty meeting yesterday to express 'shame'’ on behalf of the university at the disclosure of financial ties between a senior academic and Libyan dictator Moammar Khadafy. Saying nothing would send the wrong message to students, giving them the impression that personal financial gain could come at the expense of ethical conduct, said Harry Lewis, a computer science professor who formerly served as undergraduate dean. 'Shouldn’t Harvard acknowledge its embarrassment, and might you remind us that when we parlay our status as Harvard professors for personal profit, we can hurt both the university and all of its members?' Lewis asked Faust at the monthly gathering of the arts and sciences faculty. Faculty meetings are closed to outside media, but Lewis provided the Globe a written transcript of his statement, which he sent to Faust several days ago. Faust — who, according to Lewis, told him she did not want to be 'scold in chief' — said she supports the wide discretion of faculty members to pursue the directions of academic inquiry and outside engagements they choose.</blockquote> How low once proud institutions have fallen was demonstrated by a Harvard President who could not bring herself to "scold" faculty who were paid to provide public relations for a brutal dictator while hiding behind their Harvard titles.  Her action was not just "a weak standard for an institution of global leadership,"(10) but failed to erase "a distinctive odor, one that emanates from the corruption of academic reputation."(11) Summary Since before we first started this blog, we wondered somewhat despairingly how medicine, and particularly academic medicine, had become so badly lead.  Since the global economic collapse/ Great Recession it belatedly became clear that health care has just been swept along by the waves that drove larger social, economic and political institutions.  In particular, when we wondered how conflicts of interest had become so pervasive in medicine, we did not realize how pervasive conflicts of interest and corruption had become throughout the world.  The fact that leaders of previously revered educational institutions like Columbia and Harvard still cannot bring themselves even to admit the need to disclose conflicts, much less "scold" people for selling out to brutal tyrants indicates how deep the rot has gone. Fixing the great problems of health care will require fixing the greater problems of society at large.  We must learn to discredit, not honor the "wildly ambitious agents of opportunity" that have been sent out to dominate the new gilded age.    References 1.  Halberstam D. The new establishment: the decline and fall of the Eastern Empire. Vanity Fair, October, 1994. Link <a href="http://www.vanityfair.com/business/features/1994/10/old-establishment-decline-199410">here</a>. 2. Poliak S. 'Inside Job' prompts new look at conflict of interest policy. Columbia Spectator, April 13, 2011. Link <a href="http://www.columbiaspectator.com/2011/04/13/inside-job-prompts-new-look-conflict-interest-policy">here</a>. 3. Poliak S. After documentary, B-school rethinking ethics. Columbia Spectator, April 15, 2011. Link <a href="http://www.columbiaspectator.com/2011/04/15/after-documentary-b-school-rethinking-ethics">here</a>. 4. Poliak S, Roth S. 'Inside Job' sparks three separate reviews of disclosure policy. Columbia Spectator, April 14, 2011. Link <a href="http://www.columbiaspectator.com/2011/04/14/inside-job-sparks-three-separate-reviews-disclosure-policy">here</a>. 5. Corn D, Mahanta S. From Libya with love. Mother Jones, March 3, 2011. Link <a href="http://motherjones.com/politics/2011/03/libya-qaddafi-monitor-group">here</a>. 6. Stockman F. Local consultants aided Khadafy. Boston Globe, March 4, 2011. Link <a href="http://articles.boston.com/2011-03-04/news/29342456_1_moammar-khadafy-libyan-government-consulting">here</a>. 7. Wiener J. Professors paid by Qaddafi: providing 'positive public relations.' The Nation, March 5, 2011. Link <a href="http://www.thenation.com/blog/159046/professors-paid-qaddafi-providing-positive-public-relations">here</a>. 8. Stockman F. Top Khadafy aide helped craft deal with local firm. Boston Globe, March 30, 2011. Link <a href="http://www.boston.com/news/local/massachusetts/articles/2011/03/30/cambridge_firm_worked_in_partnership_with_top_khadafy_aide">here</a>. 9. Jan T. Harvard leader confronted on professor's ties to Libya. Boston Globe, April 6, 2011. Link <a href="http://articles.boston.com/2011-04-06/news/29389347_1_arts-and-sciences-faculty-professor-harvard-officials">here</a>. 10. Anonymous. Yes, Harvard chief should scold profs who worked for Khadafys.  Boston Globe, April 11, 2011.  Link <a href="http://articles.boston.com/2011-04-11/bostonglobe/29407081_1_harvard-governance-academics">here</a>. 11.  Barrett PM. The professors and Qaddafi's extreme makeover.  Bloomberg BusinessWeek, April 6, 2011.  Link <a href="http://www.businessweek.com/magazine/content/11_16/b4224004951872.htm">here</a>.

Henry Kissinger, Iceland's Promoter, Khadafy's Apologists, and the Rise of the Academic Mercenary

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18 Apr 2011

IMPEACHMENT: IT’S ABOUT THE INSTITUTION, NOT THE PERSON

IMPEACHMENT: IT’S ABOUT THE INSTITUTION, NOT THE PERSON The impeachment trial of Judge G. Thomas Porteous of Louisiana this week was a lesson in civic ethics. The lessons of the Porteous trial apply to academic medical centers, professional medical societies, medical journals, and granting agencies like NIH. The Porteous trial is a straightforward case of bribes, kickbacks and corruption involving a Federal judge. The most enlightening arguments came from prosecutor Rep. Adam Schiff, D-California, laying out the case for impeachment in the Senate. He gave a lucid presentation of the logic and the historical origins of the impeachment process. The key points are these: impeachment serves to protect the dignity, honor, and credibility of the office more than to punish the wayward office holder; and impeachment is a constitutionally sanctioned way to clean the Augean stables without necessarily having to prove criminal liability. It is sufficient to demonstrate that the bad actors have brought disgrace on their offices. What this means for us in medicine is that legalistic charges and defenses are not the right way to go in exposing and ejecting bad actors from our field. In the highly publicized cases of ethical compromise over the past few years, our group disapproval, when there was any at all, generally has run on two parallel tracks. The first is legalistic, and it favors the bad actors, who flaunt their constitutional protections with the taunt, prove it. The second ground of disapproval is esthetic, based on the tackiness of the bad actors’ behaviors – regardless of technical legalities, what they do is an affront and an insult to professional standards and mores. When we look at how recent incidents in medicine actually played out, however, we see a disconnect. The bad actors have narrowed the debate to the first ground of disapproval, while forcing the second off limits. In this strategy, they have received conscious or unconscious assistance from the professional establishment. The focus has been on legal technicalities involving the bad actors rather on preserving the dignity and credibility of high offices in academic medicine. For instance, when Charles Nemeroff was exposed by Senator Grassley for conflict of interest in his NIH grants, he came up with the contrived legalistic defense that his unreported payments from GlaxoSmithKline were for ‘CME-like’ presentations, and thus somehow exempt from disclosure. Nemeroff’s obfuscations finally collapsed of their own weight and Emory University took decisive action against him, even though they had sufficient evidence dating back at least 4-5 years. In the end, Emory had to go through the wringer to discipline Nemeroff, and the institution suffered grave damage to its reputation for a number of years as the price of delay. For instance, when Thomas Insel, the Director of NIMH, assured Pascal Goldschmidt, Dean of the School of Medicine at the University of Miami, that Nemeroff was absolutely in good standing for applying for new NIH grants if he left Emory for Miami, despite a 2-year ban at Emory, he hewed to the letter of the law while disregarding its spirit in order to help his friend. Moreover, when Insel appointed Nemeroff to two new NIH Research Review Committees, he established beyond any doubt that he was intent on trying to help Nemeroff get back into circulation, and that he failed to grasp the gravity of the dishonor that Nemeroff inflicted on the field. This obtuseness on Insel’s part damaged the credibility and reputation of NIMH. To his credit, NIH director Francis Collins finally ‘got it’ and forced a review of the NIH ethics rules that had been entrusted to Insel. For instance, when Pascal Goldschmidt, Dean of the School of Medicine at the University of Miami, claimed he had done due diligence in his recruitment of Nemeroff as chair of his psychiatry department in 2009, he focused on the legalistic aspects of Emory’s review of Nemeroff, while failing to understand the degree of negative publicity associated with Nemeroff’s name. He ended up hiring someone who is an object of ridicule, and he in turn is ridiculed by association. For instance, when Stanford University learned of Alan Schatzberg’s boundary violations vis a vis his NIH-funded projects and his personal corporation, they first pushed back on legalistic technical grounds. Only later did the Stanford administration get the message by removing Schatzberg from his Principal Investigator role with NIH grants, and eventually appointing a new chair of psychiatry. Meanwhile, the public image of Stanford suffered. For instance, when the American Psychiatric Association was warned that Alan Schatzberg was a problematic candidate for election as President of the association on account of his history of ethical compromise, they went ahead anyway and they have since had opportunity to regret that decision. Here again, the professional society appears to have lost sight of the ethical forest for the legal trees. The credibility and reputation of the APA have suffered because of the taint associated with Schatzberg’s presidency. For instance, when the New York Times recently exposed the ghostwriting associated with the 1999 textbook of Charles Nemeroff and Alan Schatzberg, the so-called authors responded with typical legalistic defenses. They and the University of Miami and the American Psychiatric Association Press (the publisher) again lost sight of the ethical forest for the legal trees. This stereotyped, public relations driven response ignores the visceral and esthetic distaste most observers felt on learning about the collusion between the ‘authors,’ the professional writing company and the sponsoring pharmaceutical corporation. Even the defense that it occurred a long time ago fails. In the Porteous trial, the prosecution established that dishonorable events in an officer’s past are grounds for impeachment, whether or not they also occurred during the person’s time in office. For instance, when Harvard Medical School planned a <a href="http://cme.hms.harvard.edu/cmeups/pdf/03124280.pdf">new CME program </a>on psychopharmacology in mid-2011, they engaged a number of compromised academic speakers, including Nemeroff and Schatzberg. What the hell was Harvard thinking? I told the Course Director, Carl Salzman, that this amounts to pandering. He replied defensively that Nemeroff and Schatzberg are well regarded speakers and that he would ensure that they gave unbiased presentations. That’s not the point. The point is that they have done serious damage to our field, and for Harvard Medical School to give them top billing amounts to denial of the elephant in the living room. It’s collusion in service of their public rehabilitation. I told Dr. Salzman that his logic amounts to compartmentalized thinking. I might have added that Adolf Hitler gave a lot of great speeches that received rave reviews and that compartmentalized thinking was widespread in the nation of Germany between 1928 and 1945. Meanwhile, Harvard Medical School gets a black eye through its association with these compromised individuals. So do the other speakers who will be on the panel. Who needs this kind of taint? Dr. Salzman can defend Nemeroff and Schatzberg all he wants on specious legalistic grounds, but who cares? Harvard Medical School could use some moral clarity. So, we come back to the impeachment trial of Judge Porteous. Impeachment protects the institution. When sleazebags get into positions of authority and trust they need to be dumped, and our professional and academic institutions need to have enough spine to dump them. At the very least, we don’t need to tolerate institutions like Harvard Medical School pandering to compromised academic bad actors. For shame.

IMPEACHMENT: IT’S ABOUT THE INSTITUTION, NOT THE PERSON

IMPEACHMENT: IT’S ABOUT THE INSTITUTION, NOT THE PERSONThe impeachment trial of Judge G. Thomas Porteous of Louisiana this week was a lesson in civic ethics. The lessons of the Porteous trial apply to…

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08 Dec 2010

What a Conflicted Web We Weave: Academic Economists, Finance, the Global Economic Meltdown, and the Impending Health Care Collapse

We have been writing about <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> in health care now for a long time.  We started with a focus on academic physicians'  and leaders' financial ties to pharmaceutical/ biotechnology/ device companies, then went on to the intense conflicts generated by academic medical and other health care non-profit leader who also <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">sit on boards of directors</a> of for profit health care corporations, and to conflicts affecting various kinds of respected not-for-profit health care organizations, like medical societies and patient advocacy groups. Meanwhile, we uncovered the curious dominance of the boards of some health care organizations by leaders in the<a href="http://hcrenewal.blogspot.com/search/label/finance"> finance</a> world, including some of the leaders of the failed companies that brought us the "great recession."  This did seem like a leadership problem for health care, in terms of the dominance of health care leadership by the elite of another industry that did not exactly seem to share the values we physicians swear to uphold.  However, it did not seem to be a conflict of interest problem, until now. The Chronicle of Higher Education just published <a href="http://chronicle.com/article/Larry-Summersthe/124790/">an article</a> by the director of a soon to be released documentary on conflicts of interest and academics, but this time academic economics. Charles Ferguson, the author, used as an example the Larry Summers, the former President of Harvard University (and hence leader of the Harvard Medical School, School of Public Health, and Harvard's teaching hospitals).  We had commented <a href="http://hcrenewal.blogspot.com/2009/04/hedge-fund-u-version-2.html">here</a> about Summers' poor fit for the role of an academic medical leader, and <a href="http://hcrenewal.blogspot.com/2010/04/very-well-paid-boob-on-harvard.html">here </a>and <a href="http://hcrenewal.blogspot.com/2008/12/what-linked-parallel-declines-of.html">here</a> about the dominance of Harvard leadership by leaders of (sometimes failed) financial institutions.  Ferguson summarized (bad pun, sorry) the problem thus: <blockquote>Summers is unquestionably brilliant, as all who have dealt with him, including myself, quickly realize. And yet rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy.</blockquote> The problem is essentially one of huge conflicts of interest: <blockquote>the revolving door is now a three-way intersection. Summers's career is the result of an extraordinary and underappreciated scandal in American society: the convergence of academic economics, Wall Street, and political power.</blockquote> Summers bear huge responsibility for the current economic mess: <blockquote>Consider: As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.</blockquote> Also, <blockquote>Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency.</blockquote> Not only did Summers set up the structure that allowed reckless bets with other people' money on opaque financial derivatives by finance leaders who stood to make huge gains if they won their bets, but could foist all losses on others, but he actively attempted those who tried to warn us all of the impending economic collapse. <blockquote>Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a 'full-blown financial crisis' and a 'catastrophic meltdown.' When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a 'Luddite,' dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.) </blockquote> Amazingly, rather than ending up an economic pariah after that, Summers regained power over the economy in the last few years. <blockquote>Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations—quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.</blockquote> Summers was tightly aligned with the finance world, and benefited from the dominance of financial leaders on Harvard's board (see post here): <blockquote>After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department—where he championed the law that made Citigroup's creation legal—became both vice chairman of Citigroup and a powerful member of Harvard's governing board.</blockquote> Yet in between his government and academic leadership roles, Summers got rich from finance firms' money. <blockquote>Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)</blockquote> Ferguson went on to list several other conflicted academic economists: <blockquote>The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money. Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. [Ed: they are thus the "key opinion leaders" of economics and economic policy.]  This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department's Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates. In my film you will see many famous economists looking very uncomfortable when confronted with their financial-sector activities; others appear only on archival video, because they declined to be interviewed. You'll hear from: Martin Feldstein, a Harvard professor, a major architect of deregulation in the Reagan administration, president for 30 years of the National Bureau of Economic Research, and for 20 years on the boards of directors of both AIG, which paid him more than $6-million, and AIG Financial Products, whose derivatives deals destroyed the company. Feldstein has written several hundred papers, on many subjects; none of them address the dangers of unregulated financial derivatives or financial-industry compensation. Glenn Hubbard, chairman of the Council of Economic Advisers in the first George W. Bush administration, dean of Columbia Business School, adviser to many financial firms, on the board of Metropolitan Life ($250,000 per year), and formerly on the board of Capmark, a major commercial mortgage lender, from which he resigned shortly before its bankruptcy, in 2009. In 2004, Hubbard wrote a paper with William C. Dudley, then chief economist of Goldman Sachs, praising securitization and derivatives as improving the stability of both financial markets and the wider economy. Frederic Mishkin, a professor at the Columbia Business School, and a member of the Federal Reserve Board from 2006 to 2008. He was paid $124,000 by the Icelandic Chamber of Commerce to write a paper praising its regulatory and banking systems, two years before the Icelandic banks' Ponzi scheme collapsed, causing $100-billion in losses. His 2006 federal financial-disclosure form listed his net worth as $6-million to $17-million. Laura Tyson, a professor at Berkeley, director of the National Economic Council in the Clinton administration, and also on the Board of Directors of Morgan Stanley, which pays her $350,000 per year. Richard Portes, a professor at London Business School and founding director of the British Centre for Economic Policy Research, paid by the Icelandic Chamber of Commerce to write a report praising Iceland's financial system in 2007, only one year before it collapsed. And John Campbell, chairman of Harvard's economics department, who finds it very difficult to explain why conflicts of interest in economics should not concern us.</blockquote> I once naively thought that the primary conflict of interest problems affecting academia involved health care, the dependence of medical schools and academic medical centers on commercial research funding, the emphasis these schools placed on faculty ties to commercial firms, leading to faculty "key opinion leaders" functioning as marketers of drugs and devices operating under the cloak of academia, and the major conflicts of academic leaders who also sit on health care corporate boards. Now I wonder if all this came to pass because academic leaders already were comfortable with conflicts of interest after having profited from conflicts generated by relationships with the finance industry. This now suggests that the dominance of university boards of trustees by finance leaders is a conflict of interest issue, too. It also suggests that we in medicine should be paying more attention to how conflicts of interest shape not only the marketing of drugs and devices, but the health care policy that has lead to our currently dysfunctional system. If economists paid by finance companies could have been a major cause of the global financial meltdown, could health care policy experts paid by health care corporations be a major cause of our collapsing health care system? Hat tip to the <a href="http://www.nakedcapitalism.com/2010/10/links-10510.html">Naked Capitalism blog</a>. See additional comments on the <a href="http://www.margaretsoltan.com/?p=26680">University Diaries blog</a> and on <a href="http://blogs.reuters.com/felix-salmon/2010/10/05/inside-job/">Felix Salmon's blog</a>.

What a Conflicted Web We Weave: Academic Economists, Finance, the Global Economic Meltdown, and the Impending Health Care Collapse

We have been writing about conflicts of interest in health care now for a long time. We started with a focus on academic physicians' and leaders' financial ties to pharmaceutical/ biotechnology/ dev…

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06 Oct 2010

A "Very Well Paid Boob" on the Harvard Corporation?

The ongoing investigation of the global financial collapse may also shed some indirect light on what has gone wrong with health care.  Consider the recent testimony by two leaders of the nearly failed, then bailed out global financial giant Citigroup, as <a href="http://www.nytimes.com/2010/04/09/business/09panel.html">reported </a>by the New York Times. One of the leaders was Robert Rubin, <blockquote>Robert E. Rubin, the former Treasury secretary, faced withering questions from the panel, the Financial Crisis Inquiry Commission, for his spare expressions of remorse. Repeatedly playing down his role as chairman of the executive committee of Citigroup’s board, he was met with anger and disbelief. 'You were either pulling the levers or asleep at the switch,' Philip N. Angelides, the committee’s chairman, told him. Mr. Rubin stopped short of accepting personal responsibility. He grudgingly conceded that a few savvy investors saw the crisis coming, asserting that nearly everyone in the financial services industry had failed to see a dozen powerful forces — from excessive debt levels to trade imbalance — come together in a perfect storm. 'We all bear responsibility for not recognizing this, and I deeply regret that,' Mr. Rubin said. Mr. Rubin’s stance left several members of the panel angry. Mr. Rubin earned more than $100 million during a decade at Citigroup. Mr. Angelides, a former California state treasurer and a fellow Democrat, did not buy it. 'You were not a garden-variety board member,' he said. 'I think to most people chairman of the executive committee of the board of directors implies leadership. Certainly $15 million a year guaranteed implies leadership and responsibility.' </blockquote> Attempts by Mr Rubin (and to some extent, former Citigroup CEO Charles O Prince III) to disavow responsibility met with more derision. For example, yesterday, see a <a href="http://www.nytimes.com/2010/04/11/opinion/11sun1.html">New York Times editorial</a>: <blockquote>The latest public hearings of the Financial Crisis Inquiry Commission, held last week, made headlines for eliciting more apologies from financiers who presided over the market collapse. You may recall a similar flurry last year, when Lloyd Blankfein, the chairman and chief executive of Goldman Sachs, was widely credited for having apologized for his firm’s role in the financial crisis. We did not buy it then; Mr. Blankfein never said what he was sorry for or to whom he was apologizing. And we are not buying it now. Mr. Prince says he 'could not' foresee the impending collapse, when he could have and should have seen it coming. Certainly, others did. Mr. Rubin has said that under his employment agreement, he was not responsible for the bank’s operations. But he was a towering figure at Citi, a source of its credibility and prestige. That implies responsibility, no matter what his contract said. Add all that to the 'I wasn’t the only one' context of both men’s comments, and their regret translates as, 'We feel bad about an accident we were powerless to prevent.' Except that the financial crisis was not an accident and they were not powerless. The crisis was the result of irresponsibility and misjudgments by many people, including Mr. Prince and Mr. Rubin. Citi, under their leadership, epitomized the financial recklessness that ruined the economy. </blockquote> A <a href="http://seattletimes.nwsource.com/html/soundeconomywithjontalton/2011556819_crisis_committee_rubin_shows_w.html">Seattle Times columnist </a>was even more harsh, calling Rubin a "very well paid boob," and: <blockquote>Rubin was barely contrite and went back to his meme of 'who knew?,' adding the unintended comedic line about how leaders shouldn't be responsibility for the 'granularity' of little things -- such as $40 billion in essentially fraudulent collateralized debt obligations. Rubin was being paid more than $100 million as a senior adviser to Citi while it headed toward collapse and a $45 billion taxpayer rescue. So 'granularity' is in the eye of the beholder. Commission vice chairman Bill Thomas said, 'Apparently you get to the top without having had to experience anything the people underneath you do. You don't have a comprehension. You're not informed, but you get to make all this money on the upside, but there's no downside.' Indeed. Rubin and Citigroup epitomize the public policies and the corporate practices that brought the economy to the brink of a new depression. As Bill Clinton's Treasury Secretary, Rubin championed financial deregulation and the financialization of the economy as manufacturing was hollowed out. Among other things he helped keep derivatives from being regulated and encouraged the creation of 'too big to fail' institutions such as Citi. Rubin led the battle to dismantle Glass-Steagall, so Citi and its giant siblings could gamble in investment banking, while also doing commercial banking and insurance. An alum of Goldman Sachs, Rubin was fine with big compensation for executives, even if their leadership wrecked the bank (Prince walked away with $120 million). Funny how Rubin was offered the lucrative Citi position after he left such 'government service.'</blockquote> So what does this tell us about health care? As we<a href="http://hcrenewal.blogspot.com/2008/12/what-linked-parallel-declines-of.html"> noted before</a>, while Robert Rubin is no longer on the board of Citigroup, he has been a member of the Harvard Corporation since 2001. The Corporation is ultimately responsible for the US' oldest and most prestigious university, its equally prestigious medical school and teaching hospitals. Yet under Rubin's stewardship, Harvard's endowment has fallen a prodigious amount, and <a href="http://hcrenewal.blogspot.com/search/label/Harvard">Harvard </a>and its <a href="http://hcrenewal.blogspot.com/search/label/Partners%20Healthcare">Partners Healthcare</a> hospital system have faced charges of conflicts of interest and various sweetheart deals. Perhaps this is to be expected when the ultimate steward may be a "very well paid boob." While Rubin's impressive resume and wealth in 2001 may have provided a rationale for his appointment to the Corporation, what would be the rationale for his continuing service? As we have <a href="http://hcrenewal.blogspot.com/2010/02/university-president-but-no-longer.html">pointed out</a>, as the world economy was driven to near ruin by "masters of the universe," some of the same also became leaders of academia and academic medicine in their spare time. Maybe this made sense 10 or 20 years ago, but why does it still make sense? On the other hand, now that we understand how bad the leadership of finance really was, it is a little easier to understand why the leadership of health care has become so bad.

A "Very Well Paid Boob" on the Harvard Corporation?

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12 Apr 2010

Harvard Cut Money for Primary Care "Step-Child"

This story, about cuts in the funding for Harvard Medical School's minimal program in primary care, has received little attention in the US. I was alerted to an article about it <a href="http://www.thecrimson.com/article.aspx?ref=528576">in the Harvard Crimson </a>by a news article in the British Medical Journal that was picked up <a href="http://www.medscape.com/viewarticle/706379">by Medscape</a>. Here are the main points, from the Crimson article, <blockquote>Harvard Medical School has suspended funding for its Primary Care Division as part of a broader departmental restructuring effort, prompting students and faculty to circulate a <a href="http://www.petitiononline.com/PCHMS/petition.html">petition</a> calling on HMS Dean Jeffrey S. Flier to reaffirm the School's commitment to primary care education. According to Nancy J. Tarbell, dean for academic and clinical affairs at HMS, the School had provided roughly $200,000 in funding each year to the Division. She said that the Division, which has not been disbanded but whose structure and administration is being reviewed, will remain affiliated with HMS. The Division has always been funded exclusively by the Medical School, according to HMS spokesman David J. Cameron. 'The reorganization of this division is really a narrow administrative issue,' said HMS Dean of Medical Education Jules L. Dienstag. 'It has nothing to do with the commitment of HMS to primary care, which is unchanged, undiluted, and undiminished.' Nevertheless, as of Thursday afternoon, over 450 individuals had signed the online petition, including students, residents, faculty, and physicians from HMS and its affiliated hospitals. The petition calls for the School's administration to present a detailed plan of action for expanding institutional support despite the budget cut, expand loan forgiveness initiatives that financially enable students to pursue primary care specialties, support efforts to strengthen primary care in a reformed national health care system, and solicit and implement proposals from the HMS community to improve primary care education. The Division was previously part of the HMS-HPHC jointly administered Department of Ambulatory Care and Prevention (DACP), which Tarbell said was recently restructured and renamed as the Department of Population Medicine and placed solely under HPHC's administrative purview in order to better reflect its core research and teaching activities. Tarbell, who seemed unclear about what actual services were provided by the Division, said that the HMS administration is conducting a 'comprehensive review' of the its programs and that the Division has historically been 'relatively small.' 'When you look at [HMS's primary care initiatives] as a whole, at the big picture, you can't make the argument that funding has decreased for primary care training at HMS,' Tarbell said, adding that the school is expanding its funding this year for a required third-year medical clerkship from $600,000 to $800,000. But despite administrators' reassurances that primary care education remains a top priority at the Medical School, some students and faculty maintain that the cut sends a negative message about the School's priorities, which they say have traditionally centered on specialty medicine and research. And the petition expressed concern about the future of outreach activities previously coordinated by the Division, including a Primary Care Mentorship Program, if funding or a Divisional home were to be eliminated. 'Primary care, from the perspective of the Medical School, was sort of a stepchild [in the past], and not much was done to provide students with information about primary care careers or to connect them with role models in primary care,' said Susan Edgman-Levitan, executive director at The John D. Stoeckle Center for Primary Care Innovation. 'Harvard's goal has always been to create leaders in medicine, with regards to basic science and new developing fields. Primary care has never really been a major emphasis, although I think on a global basis, Harvard has put a major emphasis on reaching out to the rest of the world,' said Martin P. Solomon, an assistant clinical professor of medicine at the Brigham. 'People like Jim Kim and Paul Farmer are all very important and have had an enormous impact on primary care worldwide, but in our own backyard, Harvard has had very little impact. [Primary care] is not ... glamorous....' </blockquote> Indicating where the medical school's priorities lie, during the month in which the cuts were announced, Dean Flier took the time to open, and thereby endorse the meeting of ACRE (the Association of Clinical Researchers and Educators). The grandiosely named group promotes unrestricted financial relationships among medical academics and health care corporations, and dismisses those concerned with the effects of these relationships (see our posts <a href="http://hcrenewal.blogspot.com/2009/07/stossel-and-acre-wheres-beef.html">here</a> and <a href="http://hcrenewal.blogspot.com/2009/07/blogscan-reports-from-acre-meeting.html">here</a>). It is true that the cuts in primary care occurred at a time of general belt-tightening, due to the sudden decline in the value of Harvard University's endowment. However, as reported in a muck-raking<a href="http://www.vanityfair.com/politics/features/2009/08/harvard200908"> article in Vanity Fair </a>by Nina Munk, even the reduced endowment is still the largest of any university in the US. Furthermore, primary care generated relatively small costs to the university. However, as reported by Vanity Fair, the current financial crisis was generated on the University's tremendous building binge during the years the endowment seemed like it would grow forever: <blockquote>... the university is facing the onerous financial consequences of over-building. Consider this: Over the 20-year period from 1980 to 2000, Harvard University added nearly 3.2 million square feet of new space to its campus. But that’s nothing compared with the extravagance that followed. So far this decade, from 2000 through 2008, Harvard has added another 6.2 million square feet of new space, roughly equal to the total number of square feet occupied by the Pentagon. All across campus, one after another, new academic buildings have shot up. The price of these optimistic new projects: a breathtaking $4.3 billion. </blockquote> The University also rewarded the managers of the endowment with pay sufficient to make them very rich. <blockquote>By the early 2000s, Harvard’s top moneymen were making as much as $30 million to $40 million a year. Finally, in 2003, seven members of Harvard’s class of 1969 wrote a strong letter of protest to the university’s president, Larry Summers. They spoke out loudly, publicly, informing any member of the media who would listen that compensation at Harvard Management Company was 'obscene.' At other American universities, where investing money for the institution is regarded as a kind of public service, Harvard’s swagger raised deep suspicion. 'Harvard became a bunch of mercenaries,' the chief investment officer of another big private university told me. </blockquote> Most of these managers decamped, taking the money with them, before the endowment value crashed. <blockquote>By 2005, Jack Meyer had had enough. After 15 years at Harvard Management Company, frustrated by the circular fights about compensation, and sick of justifying himself to Summers and Rubin, he walked out and started his own giant hedge fund. Shamelessly, he took many of Harvard Management Company’s best people with him, about 30 portfolio managers and traders, along with the chief risk officer, chief operating officer, and chief technology officer. Harvard’s trading floor was decimated. </blockquote> No one in the current or past Harvard leadership has yet been held accountable for the overspending that seemed predicated on the absurd (at least in retrospect) assumption that the endowment would continue to grow indefinitely. <blockquote>At some point in the last five years, the men and women who run Harvard convinced themselves that the endowment would grow at double-digit rates forever. If Harvard were a publicly traded company, those people would have been fired by now. </blockquote> Because of the case of the Harvard endowment, the US Internal Revenue service is reportedly investigating how university endowments were run (e.g., see <a href="http://www.reuters.com/article/gc04/idUSTRE5711V420090802">Reuters</a>). But meanwhile, primary care, already a step-child, was cut. The case of primary care at Harvard shows how the leadership of academia, and academic medicine in particular, has become entranced by the glamorous, the glitzy, the high-tech, and the prospects of wealth to be made by their pursuit, while neglecting the core academic and health care missions that are the reasons for the existence of universities and medical schools. No wonder US health care is in a crisis. Those who want meaningful health care reform should find a way to push academic medicine to uphold its mission rather than enrich and glamorize its leaders, and to allow health care professionals to reaffirm their professionalism (regardless of <a href="http://hcrenewal.blogspot.com/2009/06/why-did-us-physicians-give-up-their.html">past interpretations </a>of US anti-trust law to the contrary). ADDENDUM (5 August, 2009) - see more comments on Harvard's failed governance <a href="http://www.goactablog.org/blog/archives/2009/08/#a000685">here</a> on the ACTA Blog.

Harvard Cut Money for Primary Care "Step-Child"

This story, about cuts in the funding for Harvard Medical School's minimal program in primary care, has received little attention in the US. I was alerted to an article about it in the Harvard Crimson…

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05 Aug 2009

BLOGSCAN - Reports from the ACRE Meeting

The proceedings at the first meeting of the benignly titled Association of Clinical Researchers and Educators (ACRE) was chronicled on the Carlat Psychiatry Blog <a href="http://carlatpsychiatry.blogspot.com/2009/07/acre-meeting-welcome-to-anger-village.html">here</a>, and on Postscript, the Prescription Project blog <a href="http://blog.prescriptionproject.org/?p=733">here</a>. ACRE, <a href="http://hcrenewal.blogspot.com/2009/07/stossel-and-acre-wheres-beef.html">founded by Dr Thomas Stossel </a>(see relevant post <a href="http://hcrenewal.blogspot.com/2007/04/can-people-with-conflicts-of-interest.html">here</a> on the sorts of arguments Dr Stossel has made), was founded to defend academics who are paid on the side by drug, biotechnology, and device companies from the complaints of the "pharmascolds." What I found most troubling was that the conference was officially opened by Dr Jeffrey Flier, the Dean of the Harvard medical school, implying a medical school endorsement of this group, and featured presentations by the presidents of the American Association of Clinical Endocrinologists, and the American Society of Hypertension, implying endorsement by these medical societies. But also see<a href="http://brodyhooked.blogspot.com/2009/07/carlats-take-on-acre-some-ruminations.html"> the comments </a>by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog that there may be a silver lining to this cloud.

BLOGSCAN - Reports from the ACRE Meeting

The proceedings at the first meeting of the benignly titled Association of Clinical Researchers and Educators (ACRE) was chronicled on the Carlat Psychiatry Blog here, and on Postscript, the Prescript…

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25 Jul 2009

"Man's Best Hospital," Run by the Boss of a MECC (Medical Education and Communications Company)?

In January, 2009 we <a href="http://hcrenewal.blogspot.com/2009/01/to-whom-did-scorpions-in-bottle-owe.html">posted</a> about how the CEO of Blue Cross Blue Shield (BCBS) of Massachusetts and of Partners HealthCare, made a secret oral agreement that BCBS would pay Partners at a higher rate than that given to other hospitals. Why BCBS would want to pay so much to this one hospital system was never clear. Partners does include some extremely prestigious hospitals, including the Brigham and Womens Hospital, and the Massachusetts General Hospital, ("Man's Best Hospital" in the House of God), but there are some other very prestigious teaching hospitals in Boston that were not blessed by BCBS' largess. We speculated about one possible cause: the leadership of the two organizations may have felt they had more in common with each other than with the constituencies of their own organizations. A few leaders of each organization had direct ties to the other. Many leaders of both organizations were simultaneously leaders of finance, the same sector that has brought us what is now called the Great Recession. Leadership of both organizations had conflicted loyalties. The organizations' CEOs at the time, and many members of their boards had divided loyalties and apparent conflicts of interest. For example, Jack Connors, the chair of the Partners HealthCare board, <a href="http://www.adclub.org/2008_Legends/jack.html">is also </a>the Chairman Emeritus of marketing communications company Hill, Holliday, Connors, Cosmopoulos Inc, whose clients include pharmaceutical and pharmacy benefits manager CVS / Caremark, and is also a member of the board of directors of Covidien, a medical device company. The Boston Globe just published <a href="http://www.boston.com/business/healthcare/articles/2009/05/31/partners_leader_questioned_on_outside_ties/">a report </a>that Mr Connors had even more intense conflicts that had not heretofore been made public. <blockquote>He's chairman of New England's largest healthcare company, and that position atop Partners HealthCare has tested the limits of Jack Connors's considerable corporate dexterity. Though he has no background in medicine, Connors has been Partners' chief overseer, champion, and its most public face for 13 years. [One board member] is the cofounder and chairman emeritus of Partners' advertising firm. That would be Jack Connors. And that potential point of conflict has been disclosed.... But to the chagrin of some former board members, never brought up for board review was Connors's stake in a leading medical education firm whose sale in 2004 made Connors a very wealthy man. Nor has the board notified public officials of Connors's ownership of a fledgling home healthcare firm that has directly solicited Partners' hospitals for business. Connors and top Partners officials defended the decision not to publicly disclose Connors's potential conflicts, saying that because Partners did not directly contract with either of Connors's firms there were no conflicts to report. Connors also defended his right to be an entrepreneur in the healthcare business while also chairing Partners' board, and strongly denied ever using his position for personal or financial advantage. The larger company, M/C Communications, grew to become the biggest commercial provider of continuing education to physicians in the decade between its inception in 1994 and when Connors sold it in 2004. It profited hugely from an exclusive commercial relationship it maintained with Harvard Medical School, whose faculty teach at seminars the company holds. Partners' signature institutions, Massachusetts General Hospital and Brigham and Women's Hospital, are major teaching affiliates of Harvard Medical School. In addition, M/C Communications benefited financially from millions of dollars in sponsorship revenue paid it from major pharmaceutical firms eager to play to this professional audience. Connors said he was under no obligation to disclose his ownership of M/C Communications to the Partners board. He said that while there is an 'affiliation' between Harvard Medical School and the two Partners hospitals, there is no formal contract between them. Connors said he informed Partners executives of his ownership of M/C Communications, and that they determined it did not warrant disclosure to the full Partners board. 'There is no contract between Partners and Harvard,' Partners said in a statement to the Globe. Connors made a name for himself as an executive with Hill, Holliday, Connors, Cosmopulos, the Boston advertising company that he helped found and guided throughout a long career. Less well known is that he made most of his fortune from M/C Communications, which he sold to Bain Capital for $450 million in 2004. The sale was the largest of a private healthcare-related company in Massachusetts that year, according to TM Capital Corp., an investment banking company. Connors, who led an investor group that bought the firm outright for $13 million in 2000, made about $250 million from its sale. After his 2004 windfall, he founded a company that helps elderly patients readjust to life at home after a hospitalization. That company, Dovetail Health, has - Connors acknowledged - solicited business from hospitals owned by Partners. And Connors confirmed that after Dovetail executives failed to convince Blue Cross Blue Shield of Massachusetts to contract with the firm, he personally spoke to the giant insurer's president, Cleve L. Killingsworth, on Dovetail's behalf. Partners and Blue Cross Blue Shield regularly negotiate over $2.5 billion worth of medical business a year. Connors acknowledged in an interview that it might have appeared 'inappropriate' to some for him to pitch Killingsworth. But he said the conversation stemmed from a shared belief that new ways must be found to reduce frequent return trips of elderly patients to the hospital. More recently, however, he said he does not believe his approach to Killingsworth was inappropriate. </blockquote>So let's try to recap this. While Jack Connors has been chairman of the board of Partners HealthCare, the largest and most prestigious hospital system in Massachusetts, he also ran an advertising agency that did business with Partners, and has been on the board of Covidien, a medical device company. Both of these relationships he disclosed to his fellow board members, although no one seemed troubled by them. However, while a Partners board member, Connors was also the founder, and ultimately profited very handsomely from the sale of M/C Communications. M/C Communications apparently begat <a href="http://www.mc-comm.com/live/MCHCGateway.html">M/C Holding Corporation</a>, which in turn owns M/C Communications and Pri-Med Institute LLC. M/C Communications now <a href="http://www.mc-comm.com/live/MC/">describes itself </a>as " established in 1994 and has become a leading provider of medical education event management solutions for health care professionals and others around the globe." M/C Communications runs <a href="http://www.pri-med.com/pmo/Home.aspx">Pri-Med</a>, which is <a href="http://www.pri-med.com/industry/">described</a> thus: "Pri-Med is a platform for science and medicine that includes meetings, resources, online, and new media tools designed to meet the information and education needs of today’s practicing physician." Pri-Med <a href="http://www.pri-med.com/industry/conference.htm">markets itself to industry</a>, presumably the pharmaceutical, biotechnology, and device industry, "Sixty percent of doctors’ offices restrict rep access, making it more challenging than ever to get in front of your customers. But with Pri-Med, you get to meet clinicians in a professional environment where they seek you out. More than 66% of attendees say they come to Pri-Med events to meet you, industry representatives." So Connors' company was a medical education and communication company (MECC), which provided what appeared to be educational programs to physicians that in fact were also sold to the health care industry as marketing opportunities. So Partners HealthCare, which includes two of the world's most prestigious teaching hospitals, has been run by the boss of a MECC? Say it ain't so. Not only did Connors own a company that had an exclusive contractual relationship (as described above) with the Harvard faculty who staff the main Partners HealthCare hospitals, that company was engaged in marketing the products of sponsoring drug and device companies disguised as education. Finally, Connors denied that this presented any kind of conflict of interest, because Partners HealthCare has no explicit contract, just an "affiliation" with Harvard Medical School. Finally, just to ice the cake, Connors' latest venture is a home health care company that did business with Partners, and tried to do business with BCBS, spearheaded by Connors' direct conversations with the BCBS CEO. Jack Connors thus seems to have just become the latest poster boy for leaders of health care organizations who put their personal financial interests ahead of their responsibilities to those organizations, and function as a power elite whose collective interests trump those of the constituents of the organizations they run. Quoting <a href="http://www.boardsource.org/Knowledge.asp?ID=3.364">from BoardSource</a>, the main duties of the leader of any US not-for-profit are: <blockquote> Duty of Care The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the duty of 'care that an ordinarily prudent person would exercise in a like position and under similar circumstances.' This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization. Duty of Loyalty The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization. Duty of Obedience The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission. </blockquote> By leading companies that did direct business with Partners and its staff, and failing to disclose that he was doing so to his fellow Partners board members, Connors appeared to have violated the Duty of Loyalty. By running a MECC that helps drug and device companies market to physicians in the guise of education, using faculty from the academic teaching hospitals that he lead, Connors seems to have mocked the mission of the academic hospitals within Partners, and thus appeared to violate the Duty of Obedience. This episode certainly does suggest that health care, and the organizations involved in this case, are lead by an "old-boy network," as one person interviewed for the Globe article suggested. More than just an old-boy network, they seem to be lead by chummy members of the power elite whose collective personal interests supersede the missions of the organizations they are supposed to steward. When this happens, is it any surprise that health care becomes less accessible, more expensive, and of lower quality? Yet challenging the power elite that are increasingly revealed as controlling much of health care seems to be something that one cannot talk about when discussing health care reform. However, failing to address this problem will likely doom any effort, no matter how well intentioned, to improve health care. Hat tip to and see <a href="http://alison-bass.blogspot.com/2009/06/fish-rots-from-top-conflicts-of.html">comments</a> by Alison Bass on the Alison Bass Blog. ADDENDUM (3 June, 2009) - See also <a href="http://carlatpsychiatry.blogspot.com/2009/06/harvard-med-school-jack-connors-and.html">comments</a> by Dr Daniel Carlat on the Carlat Psychiatry Blog.

"Man's Best Hospital," Run by the Boss of a MECC (Medical Education and Communications Company)?

In January, 2009 we posted about how the CEO of Blue Cross Blue Shield (BCBS) of Massachusetts and of Partners HealthCare, made a secret oral agreement that BCBS would pay Partners at a higher rate th…

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02 Jun 2009

WellCare Settles, Accepts Deferred Prosecution Agreement

'Tis the season for deferred prosecution agreements for health care organizations. As <a href="http://online.wsj.com/article/SB124153953103687873.html">reported by the Wall Street Journal</a>: <blockquote> WellCare Health Plans Inc. agreed to pay $80 million to settle a Florida Medicaid fraud investigation that has embroiled the company since the fall of 2007, previously prompting a management shake-up and restatement of more than three years of the company's earnings. The settlement resolves federal and state criminal probes into allegations that WellCare defrauded Florida benefits programs for low-income adults and children of about $40 million by improperly inflating what it spent on care. WellCare, based in Tampa, Fla., administers medical benefits for about 2.5 million enrollees in government-sponsored plans in several states. Under a deferred prosecution agreement, the U.S. Attorney's Office for the Middle District of Florida in Tampa filed a fraud conspiracy charge against the company but said it wouldn't prosecute the case if WellCare meets all of the deal's terms. U.S. Attorney A. Brian Albritton said in a news conference Tuesday that his office could have pursued a conviction but that it likely would have put the insurer out of business, hurting customers, innocent employees and shareholders. In penalizing the company, 'we have, at the same time, tried to avoid crushing it,' he said. Under the terms, WellCare must forfeit $40 million and pay another $40 million in restitution to Florida's Medicaid and 'Healthy Kids' plans. WellCare also has agreed 'to accept and acknowledge full responsibility for the conduct that led to the government's investigations,' according to the deferred prosecution agreement. The company declined to elaborate. In addition, the company also must retain an independent monitor to review its business operations, cooperate with the government's ongoing investigations and implement new procedures within 60 days to prevent future abuse or faulty reports to state health care programs. </blockquote> This was not the first bit of trouble WellCare got itself into. We posted <a href="http://hcrenewal.blogspot.com/2007/11/health-plans-programs-cancelled-for.html">here</a> about how the state of Connecticut stopped WellCare from running a plan for poor children after the company refused to reveal what it was paying physicians, and why it was failing to pay for particular services. So, as we have found from blogging on Health Care Renewal for a while, organizations that are found to be committing one sort of mischief often are also found to be committing another sort. We also see some other familiar patterns. While human beings authorized or committed the acts that got the organization in trouble, rarely do these people seem to suffer any negative consequences. At most, the organization may pay a seemingly large fine. This, however, may come out of dividends or the stock price, dispersing the cost to stock-holders, or out of salaries across the board. Thus, those who got the organization into trouble are unlikely to feel pain from it. Perhaps because of reverence for all organizations related to health care, and fear that the bankruptcy of any health care organization, even a health care insurance company, will leave patients in the lurch, prosecutors do not seem inclined to actually prosecute such organizations. The net effect, though, seems to be that dishonest executives of health care organizations can continue to act with impunity. Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade. By the way, one member of the <a href="http://ir.wellcare.com/phoenix.zhtml?c=176521&p=irol-govboard">WellCare board of directors </a>is Regina Herzlinger, a well known and prolific health policy expert, and holds the <a href="http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=bio&facEmId=rherzlinger">Nancy R. McPherson Professor of Business Administration Chair of the Harvard Business School</a>. As far as I know, Prof Herzlinger is one of the many health policy experts who avoids discussing the sorts of problems with the accountability, integrity, and transparency of health care leadership which is grist for the mill here at Health Care Renewal. Yet under the stewardship of such an august expert, WellCare had to "accept and acknowledge full responsibility for ... conduct" that included fraud. Perhaps, Prof Herzlinger, like many other main stream health policy experts, should learn to acknowledge that health care leadership may be unaccountable, opaque, dishonest, and sometimes flagrantly corrupt. Furthermore, Prof Herzlinger, like many other well-paid board members of health care organization, should pay a bit more attention to the mischief being committed by those who answer to her.

WellCare Settles, Accepts Deferred Prosecution Agreement

'Tis the season for deferred prosecution agreements for health care organizations. As reported by the Wall Street Journal:WellCare Health Plans Inc. agreed to pay $80 million to settle a Florida Medic…

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06 May 2009

BLOGSCAN - Accountable Academic Governance Under Threat

On The Torch blog, hosted by FIRE (Foundation for Individual Rights in Education), <a href="http://www.thefire.org/index.php/article/10538.html">this post </a>by Kyle Smeallie summarized the travails of "petition candidates" for the boards of trustees of two elite American universities (<a href="http://hcrenewal.blogspot.com/2009/04/investment-bankers-strike-back.html">Dartmouth</a> and <a href="http://hcrenewal.blogspot.com/2008/12/what-linked-parallel-declines-of.html">Harvard</a>). As we have noted, at most universities, the boards of trustees, the bodies ultimately responsible for upholding the universities' missions, are closed shops. At most universities, the boards appoint new members to replace departing ones, without input from alumni, parents, students, faculty or anyone else who might be considered constituents. Thus, at most universities, even though the boards are ultimately responsible for the stewardship of the institutions, and upholding the institutions' missions, practically, they are accountable to no one. At very few universities, there may be contested elections for a few board seats, and an opportunity for those outside the board, usually alumni, to place candidates on the ballot. However, even at those somewhat more enlightened universities, those candidates face an uphill battle. Thus, while Dartmouth and Harvard have somewhat more transparent, accountable, and representative governance than do most academic institutions, even that is under threat.

BLOGSCAN - Accountable Academic Governance Under Threat

On The Torch blog, hosted by FIRE (Foundation for Individual Rights in Education), this post by Kyle Smeallie summarized the travails of "petition candidates" for the boards of trustees of two elite A…

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30 Apr 2009

Hedge Fund U, Version 2

We have posted frequently on the governance and leadership of academic medical organizations. While one would think that health care organizations, and especially academic health care organizations ought to be held to a particularly high standard of governance, we have noted how their governance is often unrepresentative of key constituencies, opaque, unaccountable, unsupportive of the academic and health care mission, and not subject to codes of ethics. How the governance of organizations with such exemplary missions and sterling repuations got this way has been unclear. In 2007, we <a href="http://hcrenewal.blogspot.com/2007/09/oceania-in-new-hampshire.html">reported</a> on one famous institution which had a more representative, transparent, and accountable form of governance. Let me provide a <a href="http://www.thefire.org/index.php/article/10355.html">summary</a> of the background from <a href="http://www.thefire.org/">FIRE</a>, the Foundation for Individual Rights in Education, <blockquote>For over a century, <a title="http://www.thefire.org/index.php/schools/979 blocked::http://www.thefire.org/index.php/schools/979 http://www.thefire.org/index.php/schools/979" href="http://www.thefire.org/index.php/schools/979">Dartmouth College</a> provided alumni with an avenue for direct participation in selecting leadership, with eight of the 18 members of Dartmouth's Board of Trustees coming from popular vote (the other ten were appointed by the Board). Starting in 2004, petition candidates—those who had to gather alumni signatures to be nominated—<a title="http://www.thefire.org/index.php/article/5400.html blocked::http://www.thefire.org/index.php/article/5400.html http://www.thefire.org/index.php/article/5400.html" href="http://www.thefire.org/index.php/article/5400.html">challenged</a> those selected by the Association of Alumni in the annual trustee elections. Alumni <a title="http://www.thefire.org/index.php/article/5645.html blocked::http://www.thefire.org/index.php/article/5645.html http://www.thefire.org/index.php/article/5645.html" href="http://www.thefire.org/index.php/article/5645.html">responded</a> in kind: over the next four years, four petition candidates were elected to the Board of Trustees. These trustees spoke out when they perceived their alma mater as not living up to its mission, and Dartmouth students benefited. In May 2005, the college <a title="http://www.thefire.org/index.php/article/5624.html blocked::http://www.thefire.org/index.php/article/5624.html http://www.thefire.org/index.php/article/5624.html" href="http://www.thefire.org/index.php/article/5624.html">repealed</a> its speech code, and it immediately moved from FIRE's "<a title="http://www.thefire.org/pdfs/5622_3832.pdf blocked::http://www.thefire.org/pdfs/5622_3832.pdf http://www.thefire.org/pdfs/5622_3832.pdf" href="http://www.thefire.org/pdfs/5622_3832.pdf">red-light</a>" rating and became a <a title="http://www.thefire.org/index.php/codes/979 blocked::http://www.thefire.org/index.php/codes/979 http://www.thefire.org/index.php/codes/979" href="http://www.thefire.org/index.php/codes/979">'green-light</a>' institution.These developments did not please everyone, however. Some campus officials viewed the propensity of petition candidates to voice their opinions on illiberal policies as detrimental to the school's image. The Wall Street Journal <a title="http://www.opinionjournal.com/editorial/?id=110010549 blocked::http://www.opinionjournal.com/editorial/?id=110010549 http://www.opinionjournal.com/editorial/?id=110010549" href="http://www.opinionjournal.com/editorial/?id=110010549">profiled</a> T.J. Rodgers, a petition-nominated trustee, who explained the criticisms leveled at the 'divisive dissidents.'>> If 'divisive' means there are issues and we debate the issues and move forward according to a consensus, then divisive equals democracy, and democracy is good. The alternative, which I fear is what the administration and [Board of Trustees Chairman] Ed Haldeman are after right now, is a politburo-one-party rule. <<As the petition candidates <a title="http://www.thefire.org/index.php/article/5645.html/ blocked::http://www.thefire.org/index.php/article/5645.html/ http://www.thefire.org/index.php/article/5645.html/" href="http://www.thefire.org/index.php/article/5645.html/">grew in numbers</a> (including George Mason Law Professor Todd Zywicki), so too did the <a title="http://www.thefire.org/index.php/article/9462.html blocked::http://www.thefire.org/index.php/article/9462.html http://www.thefire.org/index.php/article/9462.html" href="http://www.thefire.org/index.php/article/9462.html">official criticism</a>. After Zywicki expressed disagreement with Dartmouth's leadership, the Board's chairman responded.Haldeman and his cohorts wrote in a statement on the board's Web site that Zywicki 'violated his responsibilities as a trustee of Dartmouth College, which includes acting in the best overall interests of Dartmouth and representing Dartmouth positively in words and deeds.' It was clear that a frank discussion of the issues at Dartmouth was not welcome on the governing board. The Trustees thus moved to alter the playing field. In September 2008, the Board declared that it would <a title="http://thedartmouth.com/2008/09/06/news/boardupdated/ blocked::http://thedartmouth.com/2008/09/06/news/boardupdated/ http://thedartmouth.com/2008/09/06/news/boardupdated/" href="http://thedartmouth.com/2008/09/06/news/boardupdated/">add five new positions</a>—all hand-picked by current Trustees. The century-long tradition of parity between alumni-elected Trustees and the self-perpetuating Board members was erased. It came as no surprise when the Association of Alumni <a title="http://thedartmouth.com/2009/01/27/news/aoa/ blocked::http://thedartmouth.com/2009/01/27/news/aoa/ http://thedartmouth.com/2009/01/27/news/aoa/" href="http://thedartmouth.com/2009/01/27/news/aoa/">announced</a> in January that the 2009 election would feature no petition candidates. </blockquote> In 2007, what really got our attention was the stated rationale for this push towards less representative and accountable governance. Mr Haldeman, the chairman of the board of trustees, announced a smaller proportion of elected trustees would ensure that the board "has the broad range of backgrounds, skills, expertise, and fundraising capabilities needed," and that the board members would possess "even more diverse backgrounds." Yet when we examined the backgrounds of the current charter trustees, we found that they exhibited little diversity. Remarkably, three-quarters (6/8) were in leaders of the finance sector. In 2007, they seemed not very diverse, but why the majority should be in the financial sector, and what implications that had, was then obscure. Things have changed. In the fall of 2008, the world economy descended into an unprecedented financial collapse. Many concluded that the global economic collapse was caused by arrogance, greed, and corruption within the financial sector. This suggested that leadership of academia, and academic medicine in particular, by leaders of the finance sector might not, in retrospect, have been a such a good idea. Furthermore, when we had other occasions to look, we found that Dartmouth College was not an isolated case. We <a href="http://hcrenewal.blogspot.com/2008/12/what-linked-parallel-declines-of.html">noted</a> that half of the Fellows of Harvard, the university's equivalent of a board of trustees, were from finance, and two were affiliated with corporations at the center of the global financial collapse. We recently <a href="http://hcrenewal.blogspot.com/2009/04/hedge-fund-u.html">found</a> that almost 40% of the board of Yeshiva University were from finance as of the end of 2008. One former board member was Bernie Madoff, now in jail for running a giant Ponzi scheme disguised as an unregistered hedge fund. Yeshiva lost $110 million of its investments with Madoff. Another former member was indicted, accused of fraudulently abetting Madoff's operations. One current member runs a hedge fund that had to pay $180 million to settle other fraud allegations. So we raised the hypothesis that some of the problems of academia, and particularly the problems of medical academia, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. Simultaneously, a <a href="http://chronicle.com/weekly/v55/i31/31a06001.htm">commentary </a>in the Chronicle of Higher Education put it this way, <blockquote> Most college and university boards are composed largely of wealthy people, usually from the worlds of finance, law, and private enterprise. They are sometimes alumni but are often selected for their personal capacity to give, their links to other people who might give, or their historical record of having given. Many trustees today have in fact been part of the elite sectors of finance, law, and enterprise that have proven improvident, shortsighted, and badly governed. Can they be seen as the wisest of our wise who will bring both generosity and wisdom to the academy? </blockquote> News items from last week, some generated by release of financial disclosure forms from new members of the current US administration, add insight into what now appears to be a pervasive web of entanglements among academia and the finance sector. One set of stories was about Lawrence Summers, now chief economic advisor to the US President, but president of Harvard University from 2001-2006. Just after resigning as president, and while still a <a href="http://www.hks.harvard.edu/about/faculty-staff-directory/lawrence-summers">professor at the university's Kennedy School of Government</a>, Mr Summers suddenly began lucrative relationships with multiple players in the financial sector. <a href="http://www.nytimes.com/2009/04/06/business/06summers.html">Per the New York Times,</a> Mr Summers assumed an amazingly well-paid part-time position at a hedge fund, <blockquote>Mr. Summers, the former Treasury secretary and Harvard president who is now the chief economic adviser to President Obama, earned nearly $5.2 million in just the last of his two years at one of the world’s largest funds, according to financial records released Friday by the White House. Impressive as that might sound, it is all the more considering that Mr. Summers worked there just one day a week. Much is known about Mr. Summers’s days in Washington and Cambridge, but little attention has been paid to his two years in New York, from late 2006 to late 2008, advising an elite corps of math wizards and scientists devising investment strategies for D. E. Shaw & Company. </blockquote>Mr Summers also collected prodigious speaking fees from many financial corporations, some of which subsequently failed or had to be bailed, out, as <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/04/03/AR2009040303732.html">per the Washington Post</a>, he <blockquote>was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form. Summers reported donating two fees totaling $70,000, including the payment from Merrill Lynch, to charity. </blockquote>Summers received all this money why he was still a faculty member at Harvard. As noted by the Washington Post, he did not leave his faculty position there until 2009. Although there is no evidence that Summers had financial relationships with corporations in the finance sector while president of Harvard, his sudden and very lucrative jump into that sector after leaving the presidency, and while nominally a full-time faculty member, suggests at least a major alignment of interests. Some commentators have made this point more forcefully, for example, <a href="http://www.thenation.com/doc/20090420/scheer?rel=hp_picks">Robert Scheer in the Nation</a>, <blockquote> Not surprisingly, Lawrence Summers is convinced that he deserved every penny of the $8 million that Wall Street firms paid him last year. And why shouldn't he be cut in on the loot from the loopholes in the toxic derivatives market that he pushed into law when he was Bill Clinton's treasury secretary? No one has been more persistently effective in paving the way for the financial swindles that enriched the titans of finance while impoverishing the rest of the world than the man who is now the top economic adviser to President Obama. </blockquote> Perhaps this alignment was related to charges that while president of Harvard, Summers helped stifle someone who tried to blow the whistle on excessively risky investment practices involving financial derivatives at the Harvard Management Company. <a href="http://www.thecrimson.com/article.aspx?ref=527380">Per the Harvard Crimson</a>, <blockquote> After a year-long stint at a European investment bank and another at Enron, Iris M. Mack signed on to be a quantitative analyst for Harvard Management Company in early 2002, hoping, she says, to find job security and distance from the risky trading and accounting practices that forced her last employer into bankruptcy in the company charged with managing Harvard’s endowment. But only a few months later, Mack says she was fired after she raised concerns to University officials about managers’ qualifications and possibly irresponsible usage of financial instruments that could have contributed to the recent and sudden decline in Harvard’s endowment. In an e-mail sent May 30, 2002 to Marne Levine, chief of staff for then-Harvard President Lawrence H. Summers, Mack detailed her concerns regarding what she deemed HMC’s 'frightening' usage of derivatives and statistical modeling techniques, as well as the Company’s lack of a timely and portfolio-wide risk management system, high employee turnover rate, and low level of productivity in the workplace, specifically among managers. According to documents and e-mail records, all provided by Mack, Levine had initially assured Mack that their correspondence would remain confidential. But on July 1, HMC chief Jack R. Meyer called Mack into a meeting, in which she was presented with copies of her e-mails, according to a letter sent to Levine and Summers by Mack’s attorney. The next day, Meyer dismissed Mack, pointing to 'these baseless allegations against HMC [that you sent] to individuals outside of HMC,' the letter says. Ultimately, Mack says she reached an out-of-court settlement with Harvard over her firing because her lawyers felt that the University did not want to attract media attention from the dismissal.... Now, with the economy in an unprecedented slump in part due to the widespread and unregulated use of derivative contracts, Mack says she feels 'vindicated' but also sad. 'I’m not trying to pretend I’m omniscient or anything, but a lot of people who were quantitative traders, in the back of our minds, we knew a lot of these models were just that: guestimates,' Mack says. 'I have mixed feelings, on the one hand, I wasn’t crazy, I knew what I was talking about. But maybe if more and more people had spoken up, the economy wouldn’t be the way it is now.' </blockquote> So now we wonder whether the poor governance practices, and resultant poor leadership of many academic health care institutions may have resulted from the increasing dominance of the governance of these organizations by people from the "improvident, shortsighted, and badly governed" finance sector?

Hedge Fund U, Version 2

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13 Apr 2009

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