More Stories of Million Dollar Plus Hospital Executives, but Now the NY Times Challenges the Talking Points

It is spring, time for birds to sing, flowers to bloom, and hospital executives to get more money.  As we do periodically, we have amassed a series of media accounts of the big to enormous compensation paid to top non-profit hospital leaders.  These reports follow a certain pattern, but this year's spring crop included something different.<br /><br /><b>The Pattern</b><br /><br />In the groundbreaking science fiction series "Fringe," "The Pattern" was a series of apparently inexplicable events which eventually pointed to the existence of a parallel universe.<br /><br /><br /><iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/i8DqLs7254E" width="560"></iframe> <br /><br />In non-profit hospitals, The Pattern of the discussion of executive compensation is this.  Nearly all non-profit hospitals must release minimal data on the total compensation of a few of the highest paid executives.  When these reports come out, sometimes the local media take a look, either at an individual hospital or hospital system, or at a number of local hospitals.  They almost inevitably find that some, usually most executives make what appears to be lots of money.  This could be hundreds of thousands of dollars at small community hospitals, or millions of dollars at larger hospitals and hospital systems.  Sometimes the reports end there.  Sometimes the reporters ask hospital representatives or local experts to explain the apparently exalted compensation figures.  The explanations are usually very similar, and so we have called this part of The Pattern The Talking Points. <br /><br /><b>The Talking Points </b><br /><br />It seems nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same arguments, thus suggesting they are talking points, possibly crafted as a public relations ploy.   We first listed the talking points <a href="http://hcrenewal.blogspot.com/2011/09/talking-points-sans-original-thought-to.html">here</a>, and then provided additional examples of their use <a href="http://hcrenewal.blogspot.com/2011/09/more-repeats-of-talking-points.html">here</a>, <a href="http://hcrenewal.blogspot.com/2012/03/example-of-how-complex-takes-control.html">here</a> <a href="http://hcrenewal.blogspot.com/2012/12/health-care-hired-managers-not-playing.html">here,</a> <a href="http://hcrenewal.blogspot.com/2013/05/executive-compensation-as-legal.html">here</a>, <a href="http://hcrenewal.blogspot.com/2013/06/no-blues-but-lots-of-green-for-st-louis.html">here,</a> and <a href="http://hcrenewal.blogspot.com/2013/08/should-we-cry-for-non-profit-hospital.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2013/08/the-long-con-charitable-hospitals-make.html">here</a>.  <br /><br />They are:<br />- We have to pay competitive rates<br />- We have to pay enough to retain at least competent executives, given how hard it is to be an executive<br />- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).<br /><br />The talking points are usually supplied by hospital public relations personnel, sometimes by hospital trustees or executives, sometime by various health care consultants.  The talking points are rarely questioned. <br /><br />So let us look at some recent media articles for The Pattern, grouped in chronological order, to illustrate.<br /><br /><b>Jersey Boys</b><br /><br />On April 6, 2014, Crain's New York Business<a href="http://www.crainsnewyork.com/article/20140406/HEALTH_CARE/140409916/hospital-execs-receive-sky-high-payouts"> reported</a> some of the biggest yearly compensation figures seen for non-profit hospital CEOs.   <br /><br /><blockquote class="tr_bq"><i>Ronald Del Mauro, the former president and chief executive of Barnabas Health, pulled in almost <b>$22 million</b> in 2012</i>, the year after he retired from New Jersey's largest health system. Joseph Trunfio, president and chief executive at Atlantic Health, made $10 million.<br /><br />Never before have such outsized compensation packages appeared on <i>Crain's</i> <a href="http://www.crainsnewyork.com/data-lists/business-lists/details/30/2962924" target="_blank" title="Crain's list of top-paid health care executives">annual list of top-paid hospital executives</a></blockquote><br />The explanations fit the pattern.  First from a Barnabas spokesperson,<br /><br /><blockquote class="tr_bq">'When Mr. Del Mauro began his career, Saint Barnabas Medical Center was a stand-alone community hospital,' she said, adding that Barnabas is 'well positioned both financially and operationally, despite significant industry challenges. His retirement package is a function of over four decades of service ... and reflects his <i>exceptional legacy</i>.'</blockquote><br />He was just another brilliant executive, in other words.<br /><br />Then about Mr Trunfio,<br /><br /><blockquote class="tr_bq">In a statement, Karen Kessler, board chair of Atlantic Health System, said that while Mr. Trunfio's 'current agreement does not have these bonus provisions, his compensation is performance-based, <i>aligned with industry standards</i> and intended to <i>assure we retain top executive talent</i> to provide the best quality of care to the communities we serve.'</blockquote><br />There in italics were the competitive market rates and retention arguments, and a repeat ("top talent") of the brilliance argument.<br /><br />Meanwhile, on April 28, 2014, NJBiz had its own <a href="http://www.njbiz.com/article/20140428/NJBIZ01/304259991/What%27s-fair-pay-at-nonprofits?-When-it-comes-to-hospitals-a-proper-diagnosis-is-difficult">report</a> on non-profit executive compensation in the state.   Their summary included,<br /><br /><span id="highlighter_target"></span><br /><blockquote class="tr_bq">Heading up the list is Robert C. Garrett, CEO of the Hackensack University Health Network at<b><i> $2.12 million</i></b>, followed by Richard P. Miller, Virtua Health (<b><i>$1.99 million</i></b>); John K. Lloyd, Meridian Health System (<i><b>$1.68 million</b></i>); Barry H. Ostrowsky, Barnabas Health (<b><i>$1.67 million</i></b>); and Stephen K. Jones, Robert Wood Johnson Health System (<b><i>$1.55 million</i></b>).<br /><br />Several New Jersey multi-hospital systems paid several top executives more than $1 million in 2012. Hackensack, for instance, has two executives over the million-dollar mark.</blockquote><br />[It is not clear why the two different reports listed two different people from Barnabas - Ed] <br /><br /><br />Then came The Talking Points, for example, from Hackensack Hospital,<br /><br /><blockquote class="tr_bq"><span id="highlighter_target">'The pay for HackensackUMC's executives <i>reflects its complexity</i> and is <i>consistent with those levels paid to executives </i>in other similarly situated not-for-profit academic and integrated health systems,' Hackensack said in a statement. "The compensation philosophy is to provide market-competitive base salaries....</span></blockquote><br /><span id="highlighter_target"> The bit about complexity implies the brilliance argument, since only a brilliant CEO could cope with such complexity.  Then we had two versions of the competitive market based payment argument.  </span><br /><span id="highlighter_target"><br /></span><span id="highlighter_target">Here is another version of the same thing, this time from one "</span><span id="highlighter_target">Joel Cantor, director of the Center for State Health Policy at Rutgers University,"</span><br /><br /><blockquote class="tr_bq"><span id="highlighter_target"><span id="highlighter_target">On the other hand, hospital systems are <i>large, complex organizations</i>. Ultimately, CEO compensation is <i>driven by the market </i>for senior talent.  </span></span></blockquote><br /><span id="highlighter_target"><span id="highlighter_target">My favorite version of the brilliance argument came from one Ms Betsy Ryan, president of the New Jersey Hospital Association,</span></span><br /><span id="highlighter_target"><span id="highlighter_target"><br /></span></span><br /><blockquote class="tr_bq"><span id="highlighter_target">They literally are on call 24/7, 365 days a year and they are running an institution where lives are at stake</span></blockquote><span id="highlighter_target"><span id="highlighter_target"> </span></span><span id="highlighter_target"><span id="highlighter_target"> </span></span><br /><span id="highlighter_target">More on that later.....</span><br /><span id="highlighter_target"><br /></span><b><span id="highlighter_target">Smatterings of Data from Connecticut and Pennsylvania </span></b><br /><span id="highlighter_target"><br /></span><span id="highlighter_target">There were a series of reports that simply noted large amounts, but did not look for explanations.  </span><br /><span id="highlighter_target"><br /></span><span id="highlighter_target">HartfordBusiness.com<a href="http://www.hartfordbusiness.com/article/20140512/PRINTEDITION/305099967/15-ct-hospital-execs-paychecks-top-1m"> recounted</a> a state report of the top 10 most highly paid executives of individual hospitals (but did not account for the pay given to executives of hospital system).  The figures started at <b><i>$3.26 million</i></b> for the CEO of Yale-New Haven Hospital, and finished with <b><i>$1.48 million</i></b> for the senior vice-president and chief of staff at the same institution.</span><br /><br /><span id="highlighter_target">The Pittsburgh Post-Gazette <a href="http://www.post-gazette.com/business/businessnews/2014/05/15/Former-president-CEO-was-highest-paid-West-Penn-Allegheny-Health-System-employee-in-2012/stories/201405150395">reported</a> pay at the West Penn Allegheny Health System, including that given to a former CEO, <b><i>$1.89 million</i></b>, and to a former chief administrative officer, <b><i>$1.29 million</i></b>.    </span><br /><span id="highlighter_target"><br /></span><span id="highlighter_target">Then the Pittsburgh Tribune <a href="http://triblive.com/business/headlines/6100989-74/million-2012-upmc">noted</a> even bigger compensation given out at competitor UPMC.</span><br /><blockquote class="tr_bq"><br /><div class="News-body-text">UPMC CEO Jeffrey Romoff got an 8 percent raise two years ago, placing his generous compensation package near the top of the nonprofit hospital industry. </div><div class="News-body-text"><br /></div><div class="News-body-text">The 68-year-old Romoff, who leads the largest integrated health system in Western Pennsylvania and one of the biggest in the nation, <i>brought in <b>$6.6 million</b> in 2012, up from $6.1 million in 2011</i>, according to tax documents UPMC made public on Friday. </div></blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">Also,</div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /></div><blockquote class="tr_bq"><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">UPMC paid 30 other executives and doctors <i>more than $1 million each in 2012</i>, up from 21 employees who were in the $1 million club the year before.</div></blockquote><br /><br /><b>Wake Forest Baptist</b><br /><br />The Winston-Salem Journal <a href="http://www.journalnow.com/news/local/wake-forest-baptist-releases-annual-regulatory-filing/article_f0db42e0-dc9e-11e3-a040-0017a43b2370.html">reported</a> details of executive compensation at Wake Forest Baptist on May 16, 2014.  Its CEO, Dr John McConnell, had "total compensation [which] rose 0.8 percent to <b><i>$2.06 million</i></b> in 2012."  Then, however, "Donny Lambeth, the former president of N.C. Baptist, had a 52 percent drop in total compensation to <b><i>$1.18 million</i></b>."  Also, "Dr. Thomas E. Sibert, president of Wake Forest Baptist Health and chief operating officer, received a 10 percent drop in total compensation to <b><i>$1.02 million</i></b>."  Then, "Edward Chadwick, chief financial officer, had a 2.3 percent drop in total compensation to <b><i>$956,465</i></b>."  It is interesting that some executives actually saw small decreases.  Then again, the system lost $4.5 million for fiscal 2012-2013.<br /><br />The article also offered up the usual explanations, first provided by the hospital system itself,<br /><br /><blockquote class="tr_bq">there are <i>few executives with the required skill set </i>to manage and provide leadership for an integrated (center) such as ours</blockquote><br />There goes another version of the brilliance argument.  Then,<br /><br /><blockquote class="tr_bq">Its executive compensation packages, it said, 'are fiscally responsible, <i>appropriate for the marketplace</i> and an <i>essential part of the effort to recruit and retain skilled executives and visionary leaders </i>for the medical center.'</blockquote><br />Those included the competitive market rates and the retention arguments, plus the ante for brilliance was upped to the visionary level.<br /><br />The article ladled on one another version, this time supplied by "John Challenger, chief executive of outplacement consultancy Challenger, Gray & Christmas,"<br /><br /><blockquote class="tr_bq"> 'Communities who want the best health-care system they can get should support paying the compensation levels required to <i>attract top talent</i>,' Challenger said.<br /><br />'Cutting salaries will result in an <i>exodus of top talent to systems that will pay it</i>,...'</blockquote><br />So "top talent" = brilliance argument, threatening an "exodus" = retention argument. <br /><br />So there they go again, again.<br /><br /><br /><b>Something Different: the New York Times Challenges the Pattern </b><br /><br />We have previously challenged the talking points.  For example, in August, 2013 we <a href="http://hcrenewal.blogspot.com/2013/08/the-long-con-charitable-hospitals-make.html">wrote</a>,<br /><br /><blockquote class="tr_bq">As we have <a href="http://hcrenewal.blogspot.com/2013/08/should-we-cry-for-non-profit-hospital.html">noted before</a>, there is little evidence in support of these talking points.  What evidence there is on the topic suggests there is no real free market in interchangeable CEOs, and that CEOs are not very mobile, especially not across different kinds of organizations (look <a href="http://hcrenewal.blogspot.com/2012/10/more-reasons-to-doubt-how-ceos-are.html">here</a>).  There is little evidence that hospital (or other health care) executives are particularly brilliant, or any more brilliant than multitudes of physicians, nurses, and other health care professionals who work hard to make their institutions run.</blockquote>Yet most discussions of executive compensation in hospitals, and indeed in health care, follow The Pattern.<br /><br />So it was refreshing in this season of outsized compensation reports is that the New York Times ran an <a href="http://www.nytimes.com/2014/05/18/sunday-review/doctors-salaries-are-not-the-big-cost.html">article</a> that challenged The Pattern, albeit with limitations.  The most obvious problem with the pattern is that the arguments are out of context, and not challenged in context.  However, in the NY Times,<br /><br /><blockquote class="tr_bq">Physicians,<i> the most highly trained members in the industry’s work force, are on average right in the middle of the compensation pack.</i><br /><br /><div class="story-body-text story-content" data-para-count="134" data-total-count="471" itemprop="articleBody">That is because<i> the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine</i>.</div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><i>The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries</i>, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.</div></blockquote><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">Note that this comparison only refers to salaries, not total compensation, so</div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><blockquote class="tr_bq"><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation.</div></blockquote><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">We just saw examples of non-profit hospital CEOs making over $1 million to over $6 million in total compensation.  That would imply that non-profit CEOs may make from three times to over thirty times the total compensation of a surgeon, and from over five times to over thirty-five times the compensation of a general internist.  (And the ratio for such outliers as Mr Del Mauro above would be even higher.)  </div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">So is a hospital CEO thirty times more brilliant than a general internist?  </div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">That suggests also that we go back to another version of the brilliance argument found in one article above.  In the NJBiz article, the NJ Hospital Association President said, about CEOs, not physicians,</div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><blockquote class="tr_bq"><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">They are literally on call 24/7, 365 days a year and they are running an institution where lives are at stake.</div></blockquote><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">They may be on call in a sense, but they are never on first call.  Their decisions may ultimately affect lives, and perhaps put lives at risk.  But they never have to make a decision about a patient that could literally cost that patient his or her life.  And they almost never have to be accountable for what happens to individual patients.  </div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">It is easy to argue that physicians' responsibilities for life and death decisions are much more direct.  Explain, then, those pay ratios again.  </div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody">Actually, in an <a href="http://www.fiercehealthfinance.com/story/could-watson-replace-high-paid-hospital-execs/2014-04-21">opinion piece</a> about executive compensation in FierceHealthFinance, Ron Shinkman described the life of a typical seven-figure a year hospital executive,</div><div class="story-body-text story-content" data-para-count="418" data-total-count="889" itemprop="articleBody"><br /></div><blockquote class="tr_bq">While the days of seven-figure club members are long, they are also predictable--check the census and cash flow reports, confer with the medical staff, get updates on supplies, negotiate with payers, have some meetings on long-term planning. If it is a large hospital in a large market, those meetings are likely focused on site expansion and acquisition. If it is a medium-sized facility, tI expect they spend their time focused on finding a larger partner. Breakfast and dinner meetings and events switch focus to development and fundraising.<br /><br />There may also be some meetings on quality initiatives, but they are of nominal consequence. Members of the seven-figure club enjoy little to no accountability from their customers.</blockquote><br />So is executive compensation in hospitals, or other parts of the health care system, based on executives' brilliance.  Or is it based on their ability to be rentiers, rent-seekers, who can control the choke points of money flow, and make sure they get more than their share before what is left can go to real health care?  <br /><br /><br />Of course, hospital executives and their ubiquitous spokespeople do not discuss what they do day to day.  Maybe they need to, and also need to address the implications of these statements in the NY Times article, given that the US has the highest health care costs of any developed country, but nowhere near the best results,<br /><br /><blockquote class="tr_bq"><div class="story-body-text story-content" data-para-count="372" data-total-count="4255" id="story-continues-3" itemprop="articleBody">And studies suggest that <i>administrative costs make up 20 to 30 percent of the United States health care bill, far higher than in any other country</i>. American insurers, meanwhile, spent $606 per person on administrative costs, more than twice as much as in any other developed country and more than three times as much as many, according to <a href="http://www.commonwealthfund.org/%7E/media/Files/Publications/In%20the%20Literature/2013/Nov/PDF_Schoen_2013_IHP_survey_chartpack_final.pdf">a study by the Commonwealth Fund</a>.</div><div class="story-body-text story-content" data-para-count="372" data-total-count="4255" id="story-continues-3" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="274" data-total-count="4529" itemprop="articleBody"><i>As a result of the system’s complexity, there are many jobs descriptions for positions that often don’t exist elsewhere</i>: medical coders, claims adjusters, medical device brokers, drug purchasers — not to mention the 'navigators' created by the Affordable Care Act.</div><div class="story-body-text story-content" data-para-count="189" data-total-count="4718" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="189" data-total-count="4718" itemprop="articleBody">Among doctors, there is growing frustration over the<i> army of businesspeople around them and the impact of administrative costs, which are reflected in inflated charges for medical services.</i></div></blockquote><div class="story-body-text story-content" data-para-count="189" data-total-count="4718" itemprop="articleBody"><br /></div><div class="story-body-text story-content" data-para-count="189" data-total-count="4718" itemprop="articleBody">We had <a href="http://hcrenewal.blogspot.com/2013/08/the-long-con-charitable-hospitals-make.html">previously argued</a> (see above) against the talking points, and specifically that there is nothing to suggest that hospital executives are any more, much less an order of magnitude more brilliant than physicians or other health care professionals. But I confess as a physician I did not have the courage to extend that argument to a direct comparison of executive versus health care professional pay. The Times article, written by someone who is not a physician, did not have to worry about appearing self-serving.  I am glad, for it is high time to discuss the degree that the incentives produced by executive pay in health care have become perverse, and how to change these incentives to make health care leaders more accountable for health, and less focused on their own riches.  </div><div class="story-body-text story-content" data-para-count="189" data-total-count="4718" itemprop="articleBody"><br /></div>

More Stories of Million Dollar Plus Hospital Executives, but Now the NY Times Challenges the Talking Points

It is spring, time for birds to sing, flowers to bloom, and hospital executives to get more money.  As we do periodically, we have amassed a...

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Presto Chango - UPMC Tries to Make its Employees All Disappear

This story is just in time for Halloween. <br /><br /><b>The Lawsuit Challenging the Non-Profit Status of UPMC </b><br /><br />Back in March, 2013, we <a href="http://hcrenewal.blogspot.com/2013/03/the-push-back-continues-mayor-of.html">discussed</a> a lawsuit initiated by the then Mayor of Pittsburgh that challenged the tax-exempt, non-profit status of giant hospital system UPMC.  The suit charged that UPMC functions more like a for-profit corporation based on its large surplus (recently $1 billion), larger reserves ($3 billion), minimal commitment to charitable care, and generous executive pay (recently $5.9 million  to CEO Jeffrey Romoff, 19 executives paid more than $1 million, and ownership of a jet aircraft).  By the way, Romoff's latest total compensation was said to be $6.1 million (look <a href="http://hcrenewal.blogspot.com/2013/08/should-we-cry-for-non-profit-hospital.html">here</a>), and UPMC just bought an even fancier corporate jet, a Bombardier Global Express worth $51 million (look <a href="http://www.post-gazette.com/business/2013/10/25/New-jet-to-fly-UPMC-corporate-flag/stories/201310250134">here</a>).<br /><br /><b>The Employees Vanish </b><br /><br />The Pittsburgh Post-Gazette just <a href="http://www.post-gazette.com/business/2013/10/22/UPMC-says-it-does-not-have-employees-1/stories/20131022033">described</a> UPMC's remarkable response to the lawsuit.<br /><br /><blockquote class="tr_bq"> For purposes of the city's payroll taxes, [an attorney representing UPMC] Mr. [William] Pietragallo explained, UPMC's subsidiaries -- like UPMC Shadyside and Western Psychiatric Institute and Clinic -- file separate forms. Employees work for those legal subsidiaries. But UPMC itself?<br /> <br />'<i>We don't have employees</i>,' Mr. Pietragallo said.<br /><br /> The question is central to the city's suit to strip UPMC of its status as a purely public charity. UPMC argues the city can't challenge its exemption from payroll taxes because it technically has no employees. It's a case where the legal reality may differ significantly from the one that <i>UPMC, which on its website claims to have 55,000 employees, markets on a regular basis.</i><br /> <br />'You can't pay employment taxes unless you have employees,' Mr. Pietragallo said.</blockquote><br />This is not the first time UPMC has made this claim in response to a legal action,<br /><br /><blockquote class="tr_bq">Earlier this year, <i>when UPMC faced 80 complaints of unfair labor practices, it argued that it was only a holding company and did not technically employ those in the complaints.</i> The complaints alleged, among other things, that UPMC employees were being punished for attempting to unionize. UPMC ultimately settled.</blockquote><br /><b>Obvious Contradictions </b><br /><br />These claims of invisible employees appear to be contradicted by UPMC's own public relations,<br /><br /><blockquote class="tr_bq"> UPMC <i>touts it large workforce</i>. Its 2012 annual report, for example: 'The economic impact of UPMC is more substantial than most people realize. The organization is the <i>largest nongovernmental employer </i>in the Commonwealth of Pennsylvania, and <i>more than $6.2 billion in total labor income </i>can be attributed directly or indirectly to UPMC.'<br /><br />UPMC's website and media releases say the hospital giant <i>employs in the range of 55,000 people.</i> And when UPMC made the top rankings of U.S. News & World Report's Best Hospitals, it did so as a conglomeration of several facilities attorneys are now arguing are separate subsidiaries.</blockquote><br />Also,<br /><br /><blockquote class="tr_bq">[An attorney representing the city of Pittsburgh, Ronald]   Barber argued that even for tax purposes, UPMC has documented having employees. <i>In a Form 990 filed for the 'UPMC Group,' the hospital network said it employed around 52,000 people.</i></blockquote><br />A few days later, the Post-Gazette <a href="http://www.post-gazette.com/business/2013/10/28/City-of-Pittsburgh-fires-back-against-UPMC-claim-of-not-having-employees.print">reported</a> that the city responded to these UPMC claims in matter-of-fact way,<br /><br /><blockquote class="tr_bq"> On its website, in its annual report and in some tax filings, UPMC purports to have employees -- sometimes tens of thousands of them, the city of Pittsburgh's attorneys said in a court filing.</blockquote><br />Furthermore,<br /><br /><blockquote class="tr_bq"> The city also argued that those working for subsidiaries are UPMC employees as well, pointing to UPMC's 2012 Annual Report and website, which tout the hospital system as one of the state's largest employers. Attorneys also pointed to a lawsuit in which UPMC claimed to 'extend offers of employment.'</blockquote><br /><b>How Complexity Benefits Bureaucrats and Managers</b><br /><br />It is Halloween coming up, not April Fool's Day, and the claims made on behalf of UPMC do not appear to be jokes.  Instead, I believe they underline two serious problems with how large health care organizations are currently lead.<br /><br />The first is that health care organizations often have exceedingly complex structures for reasons that have nothing to do with fulfilling their health care mission.  One reason may be that the complexity creates options for plausible deniability.  In particular, when such organizations are accused of bad behavior, as they now often are, subsidiaries may be set up to "take the rap."  For example, we <a href="http://hcrenewal.blogspot.com/2013/06/pfizer-may-no-longer-be-able-to-delay.html">discussed</a> how Pfizer Inc has been using the bankruptcy filing of its Quigley subsidiary made as if that subsidiary were independent to delay resolution of claims that the subsidiary sold hazardous asbestos products.    <br /><br />This tactic of having the subsidiary take the rap may be particularly useful when taking the rap may lead to a severe penalty for the organization, such as disbarring it from being paid by the government.  A disbarred subsidiary may simply be dissolved and its work transferred to other parts of the organization.  For example, in May, 2013 we <a href="http://hcrenewal.blogspot.com/2013/05/ghosts-in-criminal-machine-how-drug.html">discussed</a> a settlement in which Baush and Lomb subsidiary Ista Pharmaceutical would be disbarred from participation in government programs.  However, Baush and Lomb itself would not be disbarred, and would be able to "wind down" Ista's operations and transfer its products to other parts of the larger company.  <br /><br />The current example appears to be a more creative use of subsidiaries to claim deniability, although whether the arguments about disappearing employess above are even plausible is open to question.<br /><br /><br />Complex organizations also offer many opportunities to employ and enrich administrators, bureaucrats and managers, and to justify ever larger <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">compensation for the top executives</a> who purport to run the whole thing.  That such proliferation of management and management compensation may detract from the mission does not appear to be a big concern of the sorts of people who now run health care.<br /><br /><b>Contempt for Truth </b><br /><br />The second problem is that the leadership of large organizations seem to have little use for the truth.  Instead, they may put lots of faith in their marketers, public relations people, and legal staff to obfuscate the truth in pursuit of ever more revenue and executive enrichment.  As management becomes less and less reality-based, however, it may be less likely to be able to respond to the very reality-based needs of patients and the public.<br /><br /><b>Conclusion</b><br /><br />I hope that the outlandish claims now being sanctioned by UPMC leadership may raise awareness of what is going wrong with the leadership of health care organizations in general.  As we have been saying for years, health care leadership that puts its self-interest ahead of patients and the public, and which disregards the truth in service of self-interest may be the biggest cause for ever increasing health care costs, and ever declining access and regard for the health of patients and the public.  True health care reform would encourage leadership that puts the mission ahead of self-interest, and values honesty more than personal profit. It would promote regulation that holds top leadership of organizations accountable for their organizations' actions and not allow the leadership to hide behind complex organizational structures.   

Presto Chango - UPMC Tries to Make its Employees All Disappear

This story is just in time for Halloween.  The Lawsuit Challenging the Non-Profit Status of UPMC Back in March, 2013, we discussed a lawsui...

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Should We Cry for Non-Profit Hospital System CEOs Paid Less than For-Profit CEOs?

Two recent articles (<a href="http://www.modernhealthcare.com/article/20130810/MAGAZINE/308109991">here</a> and <a href="http://www.modernhealthcare.com/article/20130810/MAGAZINE/308109954/pay-for-value">here</a>) in Modern Healthcare providing an update on the compensation of CEOs of non-profit hospital systems raised new questions.<br /><br /><b>The CEOs' Compensation </b><br /><br /><a href="http://www.modernhealthcare.com/article/20130810/MAGAZINE/308109991">The first article</a> documented the rich compensation of the top paid CEOs of non-profit US hospital systems.  A summary of their total compensation:<br /><br />-  Donald Faulk (now retired), Central Georgia Health System - <b><i>$8 million</i></b> <br />-  George Halvorson, Kaiser Permanente - <b><i>$7.9 million</i></b><br />-  Jeffrey Romoff, UPMC - <b><i>$6.1 million</i></b><br /> -  Pat Fry, Sutter Health - <b><i>$5.2 million</i></b><br />-  Gregory Beier (retired), Novant Health  - <b><i>$5.1 million</i></b><br />-  Dr Steve Safyer, Montefiore Medical Center - <b><i>$5 million</i></b><br />-  David Bernd, Sentara - <b><i>$4.6 million</i></b><br /><br /><b>The Usual Talking Points </b><br /><br />The articles in combination provided the usual talking points as justification for this compensation.   We have noted that nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same talking points.   We first listed the talking points <a href="http://hcrenewal.blogspot.com/2011/09/talking-points-sans-original-thought-to.html">here</a>, and then provided additional examples of their use <a href="http://hcrenewal.blogspot.com/2011/09/more-repeats-of-talking-points.html">here</a>, <a href="http://hcrenewal.blogspot.com/2012/03/example-of-how-complex-takes-control.html">here</a> <a href="http://hcrenewal.blogspot.com/2012/12/health-care-hired-managers-not-playing.html">here,</a> <a href="http://hcrenewal.blogspot.com/2013/05/executive-compensation-as-legal.html">here</a> and <a href="http://hcrenewal.blogspot.com/2013/06/no-blues-but-lots-of-green-for-st-louis.html">here</a>.   They are:<br />- We have to pay competitive rates<br />- We have to pay enough to retain at least competent executives, given how hard it is to be an executive<br />- Our executives are not merely competitive, but brilliant.<br /><br />So true to form, we found in the Modern Healthcare articles these justifications of the executives multimillion dollar pay.<br /><br /><u>Competition</u><br /><br />In general, <br /><br /><blockquote class="tr_bq">In interviews, health system directors and executives at the systems where these top-paid executives work defended the compensation packages as <i>necessary to remain competitive</i>....</blockquote><br />Re UPMC<br /><br /><blockquote class="tr_bq">UPMC spokeswoman Susan Manko described his [that is, Romoff's] pay as <i>competitive</i> for an institution of UPMC's size and complexity.  </blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br />Re Novant</div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><blockquote class="tr_bq">Novant spokeswoman Kati Everett said Novant follows IRS rules that call for pay to be <i>compared against the market</i>.... </blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br />Re Sutter</div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /></div><blockquote class="tr_bq"><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">[Sutter Health board of trustees member and chair of the compensation committee Andy] Pansini said the Sutter board set the CEO's salary <i>halfway between the lowest and the highest amount he could earn elsewhere.</i></div></blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">Also,</div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><blockquote class="tr_bq"><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">He said Sutter's board relies heavily on consultants to <i>compare Fry's compensation against the market</i>. </div></blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /></div></div></div><br /><u>Retention</u><br /><br /> Re Sentara<br /><br /><blockquote class="tr_bq">'Mr Bernd's compensation takes into account his <i>40-year tenure of leadership</i> at Sentara, with nearly 20 serving as the organization's top executives.</blockquote><br /><u>Brilliance</u><br /><br />Re Novant<br /><br /><blockquote class="tr_bq">[Novant spokeswoman Kati Everett said] 'At Novant Health, we recognize (that) our responsibility to serve our community depends on the <i>caliber of talent </i>in our workforce, <i>our leadership group</i>....'</blockquote><br />Re Sentara<br /><br /><blockquote class="tr_bq">[CEO Bernd's] 'pay reflects his <i>experience, expertise</i>....'</blockquote><br />Re Sutter<br /><br /><blockquote class="tr_bq">[Pansini] defended [CEO] Fry's compensation as reasonable and necessary to meet Sutter's strategic goals by hiring a<i> skilled executive team.</i>  </blockquote><br /><u>Explicit Comparison to For-Profit Corporations </u><br /><br />The articles also introduced one new element.  Some defenders of non-profit hospital CEO compensation explicitly argued that should take into account compensation of for-profit CEOs.<br /><br />This argument was made by "Jill Horwitz, a law professor at the University of California at Los Angeles,' who had "defended paying not-for-profit healthcare executives market rates." <br /><br /><blockquote class="tr_bq">She also noted that not-for-profit systems have to <i>compete with the for-profit sector</i> for top talent. 'This idea that people should be donating their labor is a misunderstanding of charity.'</blockquote><br />Defenders of CEO compensation at specific health systems also made similar points.  For example, a Kaiser Permanente spokesman explicitly compared his CEO's pay to that given to CEOs of for-profit health plans, <br /><br /><blockquote class="tr_bq">Kaiser spokesman Won Ha, in a written statement, said Halvorson's pay <i>falls short of the average compensation of $14 million, not including option exercises, earned by CEOs of the 12 largest for-profit healthcare systems</i>, which had average 2011 revenue of $37 billion. <br /><br />'Compensation paid to senior management is <i>substantially less than that of many for-profit health (plans),</i>...'</blockquote><br />Also, re Sutter,<br /><br /><blockquote class="tr_bq">[board committee chair Pansini noted that when comparing his CEO's pay against the market] That comparison includes other executives of similar not-for-profit health systems, and to a lesser degree, of <i>for-profit systems</i>.</blockquote><br /> <b>Summary: An Extension, but Still no Clear Justification for the Talking Points</b><br /><br /><br />The talking points to explain executive compensation in health care are used again and again.  They never seem to be publicly challenged.  However, they should raise some obvious questions.<br /><br />The argument about competition raises several obvious questions.  Why should the top hired managers' pay be only compared to other top managers, and not explicitly to other employees?  Even if the comparison is restricted to other top managers, how can they be used for those at the top of the pay scale for non-profit hospital system CEOs?  How these CEOs' compensation could be dubbed merely competitive, much less "halfway between the lowest and highest amount he could earn elsewhere," is not clear.<br /><br />The retention argument begs the questions of whether any of these managers is really likely to leave, whether they really would be attractive to other organizations at the same or even higher pay, and whether it would really be difficult to find replacements.<br /><br />The brilliance argument raises the question of how brilliance is defined.  Given that it is almost unheard of for a fan of current compensation practices to dub any top manager anything less than brilliant, the obvious question is how can CEOs, like the children of Lake Woebegone, all be above average?  <br /><br /> Furthermore, the talking points seem to be in the process of extension, which should raise even more questions.<br /><br />Defenders of CEO pay, usually "spokespeople" or members of boards of trustees, often cite the need for "competitive" pay.  They usually are not clear about with whom they are competing.  Now it seems to be more popular to say that non-profit health care organizations are competing with for-profit corporations, despite the ostensible difference in their natures.  Non-profits are supposed to have a charitable nature and function, to have some sort of mission that serves the greater good.  To support that apparently benevolent purpose, in the US they are exempt from certain taxes, are are able to receive charitable contributions which in turn earn deductions for their givers.  For-profit corporations are in business ostensibly for their owners.  <br /><br /><br />In addition, by now asserting that the non-profit CEOs should be likened to the CEOs of for-profit corporations, the expanded talking points highlight questions that have been raised about how these hired managers are paid. We have previously discussed some pithy critiques of American practices of executive compensation (look <a href="http://hcrenewal.blogspot.com/2013/05/executive-compensation-as-legal.html">here</a> and <a href="http://hcrenewal.blogspot.com/2012/10/more-reasons-to-doubt-how-ceos-are.html">here</a>.) <br /><br />CEO compensation as a multiple of the pay of the average worker has risen 10-fold since the 1960s (see <a href="http://stateofworkingamerica.org/chart/swa-wages-figure-4-ceo-worker-compensation/">this chart</a>). As a consequence, the top 1% and 0.1% of the US income distribution is increasingly and disproportionately made up of executives, that is hired managers, (see the <a href="http://www.epi.org/publication/pay-corporate-executives-financial-professionals/">recent article</a> by Bivens and Mishel[1] for a summary).  Per the article, the income of top corporate executives has grown even faster than that of other members of the top 0.1%.  It seems evident that these rates of growth cannot be explained by increases in the financial performance of their companies.  Furthermore, while it appears that compensation of US health care corporate executives has grown as fast as their brethren, there is no data that US health care has improved at anything like a similar rate.  It may have hardly improved at all.  A recent JAMA article is just the latest example of studies showing that US health is lagging that of other developed countries, although the US spends far more per capita on health care.(2)      <br /><br />Furthermore, there is more and more criticism about how the compensation of top hired managers is set.  Steve Denning's <a href="http://www.forbes.com/sites/stevedenning/2012/02/22/hbr-blows-the-lid-off-c-suite-over-compensation/">blog  post</a> in Forbes summarized a 2012 Harvard Business Review article(3) suggesting that "market-based" compensation schemes mistake top managers for innovative entrepreneurs, when they are mainly simply "bureaucrats"; reward managers for luck rather than skill; and is "inversely related to shareholder returns."<br /><br />Finally, Elson and Ferrere <a href="http://www.thefreelibrary.com/What+is+a+CEO+worth%3F+Don%27t+look+to+peers%3A+peer+group+comparisons+skew...-a0272184752">critiqued </a>the mechanics of how compensation is set.  In particular, while boards of directors may attend to data on compensation of CEOs at other, supposedly comparable corporations, they almost always "choose a package that is in the 50th, 75th, or 90th percentile of their target peer group.  Targeting levels below the 50th percentile is rarely, if ever done."  Thus, boards nearly always act as if their CEO is above average, while by definition, most CEOs cannot be above average.  Why do boards commit this folly?  The authors postulated that suggesting the CEO is less than average "may raise concerns over the executive's position within the company...."  Perhaps boards also fear that labeling the CEO below average may be an admission of below average governance. <br /><br />Desai suggested that the perverse incentives created by current schemes to compensate managers were a major cause of the 2008 financial meltdown.  As Dennings wrote,<br /><br /><blockquote class="tr_bq">despite the constraints to change, the overcompensation of the C-suite and the financial sector is not sustainable. It causes serious misallocation of capital and talent, repeated governance crises, rising income inequality and an overall decline of the US economy. It obviously cannot continue, if only because, as Margaret Thatcher used to say in a different context, 'Sooner or later you run out of other people’s money'</blockquote><br />Clearly, in the health care context, the results could be even worse.  Perverse executive compensation could not only lead to misallocation of capital and talent in health care, it could lead to bad health care decisions that could harm patients' and the public's health.  However, there seems to be almost no discussion of, much less research about, much less policy changes addressing perverse incentives for health care managers and their likely ruinously bad effects on people and patients.<br /><br />Such discussion and research is a prerequisite to true health care reform, which would require such policy changes.<br /><br />Meanwhile, I hope at least the next time huge compensation of some health care managers is announced, someone asks the next set of questions after the usual talking points are made.   <br /><br />Roy M. Poses MD in Health Care Renewal <br /><br /><b>References</b><br />1.  Bivens J, Mishel L. The pay of corporate executives and financial professionals as evidence of rents in top 1 percent incomes.  J Econ Perspect 2013; 27: 57-78.<br />2. US Burden of Disease Collaborative.  The state of US health, 1990-2010 burden of diseases, injuries, and risk factors.  JAMA 2013; 310: 591-608.  Link <a href="http://jama.jamanetwork.com/article.aspx?articleid=1710486">here</a>. <br />3. Desai M. The incentive bubble.  Harvard Business Review, March 2012.  <br /><br />

Should We Cry for Non-Profit Hospital System CEOs Paid Less than For-Profit CEOs?

Two recent articles ( here and here ) in Modern Healthcare providing an update on the compensation of CEOs of non-profit hospital systems r...

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Monetary losses and layoffs from EHR expenses and EHR mismanagement

More on monetary losses and layoffs from EHR expenses and EHR mismanagement:<br /><br />1.  <b>Layoffs to balance the budget...</b><br /><br /><a href="http://www.news-record.com/news/local_news/article_da765340-d912-11e2-9eac-001a4bcf6878.html">http://www.news-record.com/news/local_news/article_da765340-d912-11e2-9eac-001a4bcf6878.html</a><br /><br /><blockquote class="tr_bq">... <a href="http://www.wakehealth.edu/">Wake Forest University Baptist Medical Center</a> [Winston-Salem, NC] said in November 2012, that it would cut 950 jobs — <b>6 percent of its total staff</b>.<br /><br />Electronic records programs continue to push costs higher. The Winston-Salem Journal reported that Wake Forest’s <b><a href="http://www.epic.com/">Epic</a> </b>[EHR]<b> program caused $8 million in work interruptions </b>during the 2012-2013 year alone. Wake Forest is cutting costs at least through June 30 <b>to make up for some of Epic’s expense.</b> Its efforts include furloughs, wage reductions and other cuts.</blockquote><br /><br />2.  <b>Cerner EHR Project Loses U.K. Hospital 18 Million Pounds</b><br /><br /><a href="http://www.informationweek.com/healthcare/electronic-medical-records/ehr-project-loses-uk-hospital-18-million/240157036">http://www.informationweek.com/healthcare/electronic-medical-records/ehr-project-loses-uk-hospital-18-million/240157036</a><br /><br /><blockquote class="tr_bq">... Royal Berkshire Foundation Trust's implementation of Cerner Millennium electronic health record system is costly to maintain and hard to use, causing patient backlogs ... British hospital's attempt to implement an electronic health record (EHR) system has been so disastrous that it has had to write off £18 million ($28 million).<br /><br /><span id="articleBody"></span><br />... "Unfortunately, implementing the [EHR] system <b>has at times been a difficult process</b> and <b>we acknowledge that <i>we did not fully appreciate the challenges and resources required in a number of areas</i></b>," said the hospital's chief executive, Ed Donald.  </blockquote><br />In 2013, I find the statement "<b><i>we did not fully appreciate the challenges and resources required in a number of areas</i><i>" </i></b>remarkable.<br /><br />Dear Mr. Donald, please allow me to introduce you to a novel concept:<br /><br /><b>A Google search.  (Free, no less.)</b><br /><br />Try this, for example:  <a href="https://www.google.com/search?q=healthcare%20IT%20failure">https://www.google.com/search?q=healthcare%20IT%20failure</a><br /><br />(I note that competent experts in my field, Medical Informatics, given appropriate executive presence - including hiring and firing authority, instead of the usual 'internal consultant' roles - could have prevented your organization's mistakes, and for a <i>mere fraction</i> of the £18 million.) <br /><blockquote class="tr_bq"><br />A campaign against public sector waste in Britain, The Taxpayer's Alliance, has seized on the hobbled project as an especially <a href="http://www.taxpayersalliance.com/waste/2013/06/nhs-trust-loses-18-million-system.html#more-51005">egregious example of bad procurement</a>. "[NHS] trusts must work a lot harder to get a good deal for the taxpayers footing the bill," it warned.  <span style="color: red;"><i><b>[I guess money doesn't grow on trees in the UK as it seems to in the US -ed.]</b></i></span><br /><br />The row comes in the same week British Parliament members expressed frustration that the funding scheme that supported other British hospitals' investment in EHRs, the controversial £9.8 billion ($15.2 billion) National Program for IT cancelled in 2011, <a href="http://www.informationweek.co.uk/healthcare/electronic-medical-records/zombie-it-contract-refuses-to-die/240156793">continues to cost the country millions</a>, with contracts in some cases not set to expire for 12 more years. <span style="color: red;"><i><b>[NPfIT in the NHS - see query link </b></i></span><i><a href="http://hcrenewal.blogspot.com/search/label/NPfIT">http://hcrenewal.blogspot.com/search/label/NPfIT</a></i><span style="color: red;"><i><b> - ed.]</b></i></span><br /><br />Berkshire, however, opted out of that program in 2008 and had instead linked with the <b>University of Pittsburgh Medical Center to help it implement Millennium</b>. </blockquote><br />I am merely the messenger here...<br /><br />-- SS

Monetary losses and layoffs from EHR expenses and EHR mismanagement

More on monetary losses and layoffs from EHR expenses and EHR mismanagement: 1.  Layoffs to balance the budget... http://www.news-record.com...

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The Push Back Continues: the Mayor of Pittsburgh Sues UPMC Claiming it is No "Public Charity"

There is another indication that push back against the power of large health care organizations is getting more significant.<br /><br />In February, 2013, we <a href="http://hcrenewal.blogspot.com/2013/02/another-reason-for-hope-concern-about.html">noted</a> that the Governor of the state of Connecticut publicly criticized lavish executive compensation at a small regional hospital system, compensation partially fueled by government funded health insurance payments, and in contrast to hospitals' claims that insufficient reimbursement was driving them to poverty.    <br /><br /><b>The Suit Challenging the Charitable Status of UPMC</b><br /><br />Now the outgoing Mayor of Pittsburgh has launched a lawsuit challenging the status of huge, nominally non-profit health system UPMC as a public charity.  A summary of the arguments comes from an <a href="http://www.post-gazette.com/stories/local/neighborhoods-city/upmc-pittsburgh-stake-positions-for-court-fight-on-nonprofit-status-680393/">article</a> in the Pittsburgh Post-Gazette.  First, in the state of Pennsylvania, a Supreme Court description set out a test to determine if a particular organization is a public charity, the status the UPMC currently claims:<br /><br /><blockquote class="tr_bq">The Supreme Court's 1985 ruling involving the Hospital Utilization Project (or HUP) set out a test that requires that a purely public charity must fulfill all five of the test's points that it: advances a charitable purpose; donates or renders gratuitously a substantial portion of its services; benefits a substantial and indefinite class of persons who are legitimate subjects of charity; relieves the government of some of its burden; and operates entirely free from private profit motive.<br /><br />That ruling was reaffirmed by the Supreme Court in April in a case involving an Orthodox Jewish summer camp in Pike County that was found to not deserve its property tax exemption.</blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br />The city's lawyer, E.J. Strassburger of Strassburge Mckenna Gutnick & Gefsky, argued that UPMC does not pass that test:</div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><a href="http://www.post-gazette.com/stories/local/neighborhoods-city/upmc-pittsburgh-stake-positions-for-court-fight-on-nonprofit-status-680393/#ixzz2OezY8Lbc" style="color: #003399;"></a><br /></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br /><blockquote class="tr_bq">Mr. Strassburger wrote, first and most strongly, that 'it seems virtually certain that<i> UPMC would fail to carry its burden of proving that it satisfies the fifth prong of the HUP test by 'operating entirely free from profit motive</i>.''<br /><br />He cited <i>UPMC's nearly $1 billion surplus</i> over the last two years and <i>$3 billion in reserves</i> as evidence of this, and that UPMC 'is <i>carefully structuring its operations to prioritize profits-generation over charity</i>.'</blockquote><br />Also,  <br /><br /><blockquote class="tr_bq">In addition, Mr. Strassburger wrote that UPMC <i>does not 'advance a charitable purpose' in part because UPMC 'maintains an 'open admissions policy' in name only' and it does not make all of its health care available to everyone, regardless of ability to pay</i>.</blockquote><br />Furthermore,<br /><br /><blockquote class="tr_bq">the review says UPMC <i>fails to provide sufficient charity care, operates far-flung international operations that are losing money, and has closed operations in poor communities only to open or expand into richer ones.</i><br /><br />But it also cites what it terms <i>'excessive' benefits of UPMC executives, including CEO Jeffrey Romoff's <b>$5.9 million</b> salary; the fact that more than 20 employees are paid more than <b>$1 million</b>; UPMC's corporate jet; Mr. Romoff's 'lavish'  Downtown headquarters (which it claims includes a private chef, chauffeur and private dining room).</i></blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div></div><br /><br />The Post-Gazette also sought the advice of experts,<br /><br /><br /><blockquote class="tr_bq">Nicholas Cafardi, dean emeritus and professor at Duquesne University's Law School, said he believes the argument that UPMC is not free from a private profit motive is the strongest one in Mr. Strassburger's review, in part because of how far-flung UPMC has become.<br /><br />'<i>The more they do that gets them away from their core purpose, the more they open themselves up to the argument that they aren't doing charity,</i>' he said.<br /><br />In addition, Mr. Cafardi said, <i>UPMC's extensive advertising campaign --sometimes directly against rival Highmark -- makes it look like the organization is operating for profit</i>.<br /><br />'A lot of things like that make them look like they're operating for a private profit,' he said. 'You advertise because you're in competition. That's the private profit motive.'<br /><br />Gary M. Grobman, former head of the nonprofit Pennsylvania Jewish Coalition and author of 'The Pennsylvania Nonprofit Handbook,' said UPMC would have a fight on its hands.<br /><br />'Based on what [Mr. Strassburger] has written, which may or may not be true, it seems some staff at the hospital are paid quite well and <i>some decisions are made based on achieving as much revenue as possible instead of providing as much charity as possible</i>,' he said. 'And if all of that is true, they don't deserve their not-for-profit status.'</blockquote><br /><br />So the main issues brought up by the city are similar to issues we have raised about numerous nominally non-profit health care organizations.  We have shown that many particular organizations appear not to act like charities when they appear to put short-term revenue ahead of the organization's mission, a process sometimes called <a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>, and put <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">lavish compensation of top hired managers </a>ahead of the organization's general financial well-being; and when their leadership appears to <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">subvert the organization's mission</a>.<br /><br /><b>The UPMC Response versus Anger in the Community</b><br /><br />Of course, UPMC public relations disagreed with the premises of the lawsuit: <br /><br /><blockquote class="tr_bq">'We think the 13-page memo that a local law firm wrote for the City is very weak and reaches its conclusions entirely based on opinion, not fact,' UPMC spokesman Paul Wood wrote. 'Rather than responding to <i>partisan politics and blatant union pandering</i> by the Mayor, UPMC looks forward to demonstrating in a court of law that we meet all five prongs of the HUP test and that our hospitals easily qualify for the tax-exempt status they unquestionably deserve. Interestingly, by hiring an outside law firm the City is prepared to waste millions of dollars of taxpayer funds on an unsuccessful attempt to pursue this case.'</blockquote><br />Note that the unsubstantiated allusions to "partisan politics" and "pandering" appear to be an <a href="http://www.nizkor.org/features/fallacies/appeal-to-ridicule.html">appeal to ridicule</a>, "a fallacy in which ridicule or mockery is substituted for evidence in an 'argument.'"  We have noted before how public relations flacks working for top executives of health care organizations seem to be very good at using such <a href="http://hcrenewal.blogspot.com/search/label/logical%20fallacies">logical fallacies</a>.<br /><br />Mr Wood also scoffed at the naive notion that having a $1 billion surplus and $3 billion in reserves means the organization operates like a business:<br />  <br /><blockquote class="tr_bq">Mr. Wood wrote that 'numerous people have tried to distort the meaning of that component to attain a political result.'<br /><br />'It does not mean a nonprofit shouldn't strive to have a positive operating margin -- organizations that don't do that go out of business,' he added.</blockquote><br />Note that Mr Wood seems to be arguing that the only alternative to a very large surplus and a very large reserve is a deficit.  By ignoring another obvious alternative, having a small surplus and a small reserve, his argument thus is derived from the logical fallacy known as the <a href="http://www.nizkor.org/features/fallacies/false-dilemma.html">false dilemma</a>.  He also seemed to be arguing that a deficit inevitably leads to bankruptcy.  Of course prolonged deficits might lead to bankruptcy, but a single deficit would not necessarily do so.  Thus he also employed the logical fallacy known as the <a href="http://www.nizkor.org/features/fallacies/slippery-slope.html">slippery slope</a>.  <br /><br />On the other hand, a Post-Gazette columnist <a href="http://www.post-gazette.com/stories/opinion/sally-kalson/mayor-v-moneybags-upmc-could-be-beloved-if-it-put-patients-over-profits-and-perks-680646/">showed</a> the depth of community concern over the role of UPMC:<br /><br /><blockquote class="tr_bq">Someone in power is taking official action against <i>the biggest corporate bully in town</i>. Can I get an Amen?<br /><br />In fact, I can get many Amens, and that says a lot about the behavior of the region's dominant hospital system.<br /><br /><i>Has there ever been a 'charity' so disliked and mistrusted by the people it's supposed to serve and the people it employs? </i>You rarely hear anyone say 'I cannot stand CARE,' or 'I despise Doctors Without Borders.' But you hear it all the time about UPMC, notwithstanding the jobs it creates, the medical innovations it advances, the life-saving care its doctors deliver and its commitment of $100 million for the Pittsburgh Promise scholarship fund. With all that to its credit it should be beloved, but the opposite is true.<br /><br />Not helping matters is its <i>corporate public relations, which is increasingly tone deaf.</i> In an emailed response to the mayor's announcement, UPMC spokesman Paul Wood said the lawsuit 'appears to be based on the mistaken impression that a non-profit organization must conduct its affairs in a way that pleases certain labor unions, certain favored businesses, or particular political constituencies.'<br /><br />No, Mr. Wood. It's based on the correct impression that a nonprofit hospital's top priority should be the patients, not building a monopoly. And that a $10 billion system with a billion-dollar surplus and $2 billion to $3 billion in reserves should be taking care of many more indigent sick people than UPMC has been treating -- especially when it owns land that a Post-Gazette investigation valued at $1.6 billion, even as it enjoys a $20-million tax break every year, underwritten by the good citizens of Pittsburgh and Allegheny County. You can try blaming the SEIU organizing campaign or your arch-enemy, Highmark the insurer, or politics, but this is so much bigger than any of those things. And the public knows it.</blockquote><br /><br />Keep in mind that the current discussion of UPMC in the media focuses on very recent events.  On Health Care Renewal, we have <a href="http://hcrenewal.blogspot.com/search/label/UPMC">posted frequently</a> over the last eight years about problems with the leadership of UPMC.  We <a href="http://hcrenewal.blogspot.com/2005/05/guilty-pleas-in-another-hospital.html">started </a>in 2005 with their inability to prevent a fraud  perpetrated by some UPMC middle managers. In 2008, we <a href="http://hcrenewal.blogspot.com/2008/11/questions-of-benefits-vs-risks-for-upmc.html">discussed </a>the apparent mismanagement of the highly touted UPMC liver transplant program.    <a href="http://hcrenewal.blogspot.com/2009/02/healthcare-it-blamed-in-patient-death.html">Starting in 2009</a>, and continuing <a href="http://hcrenewal.blogspot.com/2013/03/when-human-error-causes-ehr-downtime.html">through 2013</a>, InformaticsMD chronicled how the leadership has presided over health care information technology so problematic that it has been <a href="http://hcrenewal.blogspot.com/2009/02/healthcare-it-blamed-in-patient-death.html">blamed for patient deaths</a>.  In 2009, we<a href="http://hcrenewal.blogspot.com/2009/09/upmc-fouls-another-one-off.html"> noted</a> sanctions against UPMC's public relations.   In 2010, we <a href="http://hcrenewal.blogspot.com/2010/05/at-upmc-dealings-with-board-members.html">noted</a> conflicts of interest and apparent self-dealing and nepotism affecting the UPMC board of trustees and UPMC executives.  <br /><br /><b>Summary</b><br /><br />For at least a generation, health care leaders and health policy makers have been pushing for consolidation of health care organizations in the name of efficiency.  We now have a health care system dominated by fewer, larger organizations, and whatever efficiencies have been produced mainly seem to have benefited organizational insiders.  Maybe now, though, some are beginning to remember that monopolists - starting at least with John D Rockefeller, I believe - have historically touted their ability to improve efficiency and rationality.  The results, however, have been higher prices and poorer results for everyone else. <br /><br />Hospitals and hospital systems have been particularly good at getting away with the efficiency argument despite the fact that health care prices in the US have been soaring ever since the "vertical integration" craze in the early 1990s.  I believe such organizations have been getting away with this nonsense because of their revered status within their communities.  Now, however, as huge hospital systems drive up prices and make their top executives rich, maybe we will remember Theodore Roosevelt's warnings about trusts and malefactors of great wealth.<br /><br />There is no good evidence that large hospitals and even larger hospital systems take better care of patients, or provide better teaching and research.  Not only should we question whether huge hospital systems like UPMC are public charities, we should wonder how we ever let them get so big, and proceed to break up these new sorts of "trusts."<br /><br /><br />

The Push Back Continues: the Mayor of Pittsburgh Sues UPMC Claiming it is No "Public Charity"

There is another indication that push back against the power of large health care organizations is getting more significant. In February, 20...

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When "Human Error" Causes EHR Downtime, Who is Liable For Patient Injuries That Result?

In the Pittsburgh Post-Gazette was this story of yet another EHR "<a href="http://hcrenewal.blogspot.com/search/label/glitch" target="_blank">glitch</a>":<br /><br /><blockquote class="tr_bq">March 9, 2013 12:17 am<b> </b><br /><br /><b><a href="http://www.post-gazette.com/stories/business/news/business-news-briefs-human-error-the-cause-of-upmc-electronic-issue-678572/" target="_blank">Human error the cause of UPMC electronic issue</a></b><br /><br />A <b>systemwide</b> problem with UPMC's information systems Wednesday left electronic patient records and other data inaccessible for about three hours. A UPMC spokeswoman said the hospitals "immediately went to manual backup systems, and we quickly identified and fixed the problem." <b>She said there was no indication that patient care was compromised by the incident, which was due to human error.</b></blockquote><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br />I will presume the "human error" was not a physician or nurse pressing the wrong button, but a "human error" involving the servers or IT infrastructure such as a botched system upgrade, action that caused a server room power fault, etc.<br /><br />UMPC is a very large system as their webpage shows, showing approximately <a href="http://www.upmc.com/locations/hospitals/pages/default.aspx" target="_blank">fifteen major facilities</a>.<br /><br />The now-expected "<i>patient care has not been compromised</i>" line was provided to the Gazette, a line so commonly heard after EHR outages that I  use it as a Healthcare Renewal <b>indexing tag</b> (see this <a href="http://hcrenewal.blogspot.com/search/label/Patient%20care%20has%20not%20been%20compromised" target="_blank">query link</a>).<br /><br />The following questions arise:<br /><br /><ul><li>What, exactly, was the "human error" and why was there no fault tolerance built into these mission-critical systems to account and compensate for it, such as via redundancy? </li></ul><ul><li>If paper is so bad as a record-keeping medium that hundreds of billions of dollars are being spent to replace it, then how can patient care not be compromised, especially when multiple hospitals unexpectedly and without warning have to return to its use? </li></ul><ul><li>How can a very large hospital system rapidly declare that "patient care was not compromised" without a thorough and comprehensive patient review, accounting for possible delayed negative outcomes (by way of just a few simple examples, due to medication or imaging delays?)</li></ul><ul><li> Who is liable for any adverse patient outcomes that occurred related to the sudden unavailability of past records:  the clinicians?  The "human" who committed the computer-related error?  The corporation, either for direct negligence in implementing and mandating use of a system prone to mass outage by human error, or vicariously for the negligence and/or misconduct of its information technology employees and/or agents?</li></ul><ul><li> How many "outages" will it take before some patient is outright, no-doubt-about-it harmed or killed?  Do we want to find out, or is a priority to have redundancies so these systems don't crash?</li></ul>I, for one, would not want to have a family member be "crashing" at the time of a sudden, unexpected system-wide EHR outage.<br /><br />-- SS </div>

When "Human Error" Causes EHR Downtime, Who is Liable For Patient Injuries That Result?

In the Pittsburgh Post-Gazette was this story of yet another EHR " glitch ": March 9, 2013 12:17 am   Human error the cause of UPM...

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The Pittsburgh Experiment - II - Another Echo of the Fall of AHERF

We recently <a href="http://hcrenewal.blogspot.com/2012/04/pittsburgh-experiment-i-caught-in.html">started</a> a series of posts about the battle for domination of health care in western Pennsylvania.  The contenders are the UPMC hospital system, the dominant hospital system in the region, and Highmark, the dominant health insurer in the region.  While these two health care behemoths fight, patients, health care professionals, and the public seem to be caught in the <a href="http://hcrenewal.blogspot.com/search/label/cross%20fire">crossfire</a>.<br /><br />There is something of history repeating itself in this battle.<br /><br />The biggest bone of contention in it is Highmark's attempt to purchase the struggling West Penn Allegheny hospital system.  UPMC leadership seemed to feel that this would put the insurer in direct competition with it, even though UPMC already provides a health insurance product, the <a href="http://www.upmchealthplan.com/">UPMC Health Plan</a>.<br /><br />West Penn Allegheny, in turn, is struggling because it is a remnant of a previous attempt by a single organization to dominate the health care system in this area.  As we <a href="http://hcrenewal.blogspot.com/2011/07/restless-shade-of-aherf-and-return-of.html">wrote</a> in 2011,  West Penn Allegheny was formed from some components of what used to the be the Allegheny Health Education and Research Foundation, AHERF.   AHERF was a large integrated health care system formed out of multiple mergers.  AHERF went bankrupt in 1998, leading to massive layoffs, hospital closures, and the near dissolution of a medical school (which ended up taken over by Drexel University). <br /><br />As we <a href="http://hcrenewal.blogspot.com/2008/07/10-years-later-eerie-echo-of-fall-of.html">noted</a> in 2008, although the AHERF bankruptcy appears to be the largest failure of a not-for-profit health care corporation in US history, its story has produced remarkably few echoes for doctors, other health care professionals, health care researchers, and health policy makers. I often use the fall of AHERF as major example in talks, at least the few talks I am allowed to give on such unpleasant subjects. Rarely have more than a few people in the audience heard of AHERF prior to my discussion of it. I only could locate <a href="http://content.healthaffairs.org/cgi/reprint/19/1/7.pdf">one article </a>in a medical or health care journal that discussed the case in detail, albeit incompletely since it was written before Abdelhak's guilty plea [Burns LR, Cacciamani J, Clement J, Aquino W. The fall of the house of AHERF: the Allegheny bankruptcy. Health Aff (Millwood) 2000; 19: 7-41.] I doubt the case is used for teaching in most medical or public health schools. (There is a new book out about the case, Merger Games, by Judith Swazey, available <a href="http://muse.jhu.edu/books/9781439907191">here</a> as  a set of PDF files from Project Muse for those with the proper password, but it has not yet had much of an impact, and I confess I have not yet read it.)  The lack of discussion of such a significant case is a prime example of the <a href="http://hcrenewal.blogspot.com/2007/08/bling-bling-poltical-correctness-and.html">anechoic effect</a>.<br /><br />Therefore, let me summarize some of important points about AHERF not found above (see also <a href="http://www.acponline.org/chapters/ri/nl-fall04.pdf">this narrative</a>, starting on page 5):<br /><br /><br /><ul><li>AHERF, one of the largest health care systems of its day, was built by the poster-boy for health care imperial CEOs, Sherif Abdelhak.</li><li>Abdelhak, who <a href="http://www.post-gazette.com/aherf/part2.asp">started as food services purchasing manager </a>at Allegeheny General Hospital, was repeatedly hailed as a "<em>visionary</em>" (<a href="http://www.acponline.org/journals/news/mar97/phillymc.htm">in the March, 1997, ACP Observer</a>) a "genius," and the like. His plans to create a huge integrated health care system were part of the wave of the future. Abdelhak was even invited to give the prestigious John D Cooper lecture at the annual meeting of the American Association of Medical Colleges (AAMC), which was published in Academic Medicine [Abdelhak SS. How one academic health center is successfully facing the future. Acad Med 1996; 71: 329-336.] He proclaimed that "we will need to create new forms of organization that are more flexible, more adaptive, and more agile than ever before." And he announced that "my aim as chief executive has been to unleash the creativity and productive potential of every individual and to provide an environment that encourages teamwork" </li><li>While Abdelhak was making these grandiose promises, he paid himself and his associates very well. For example, he received $1.2 million in the mid-1990s, more than three times the average then for a hospital system CEO. He lived in a hospital supplied mansion worth almost $900,000 in 1989. Five of AHERF's top executives were in the top 10 best paid hospital executives in Philadelphia.</li><li>Although Abdelhak talked of teamwork, he warned the combined faculty of the new Allegheny University of the Health Sciences (AUHS): <a href="http://www.post-gazette.com/aherf/part6.asp">"Don’t cross me or you will live to regret it."</a></li><li>As AHERF was hemorrhaging money, Abdelhak continued to pay himself and his cronies lavishly.</li><li>After the AHERF bankruptcy, which was at the time the second largest bankruptcy recorded in the US, Abdelhak was charged with numerous felonies involving receiving charitable assets. In a plea bargain, <a href="http://www.post-gazette.com/localnews/20020830abdelhak0830p4.asp">he pleaded no contest </a>to misusing charitable funds, a misdemeanor, and was sentenced to more than 11 months in county prison.</li></ul>The story of AHERF is not merely that of an unlucky bankruptcy. It shows what can go wrong when health care adopts business practices such as jumping the latest management band-wagons and genuflecting before imperial CEOs.  It also shows what happens when a single health care organization, and the person who leads it, becomes too powerful.<br /><br />If either UPMC or Highmark definitively wins their current battle, the winner will become at least as locally dominant as AHERF.  As we shall see in the posts to come in this series, the leadership of both organizations has already demonstrated a certain arrogance.  Yet since 2008 we have not progressed to the point of controlling the tendency of a laissez faire health care system to approach monopoly, nor the monopolist's tendency to put his self-interest ahead of all else.  <br /><br />If nothing else, maybe the messiness of the fight between UPMC and Highmark will remind more people of AHERF, hence the need not to let our health care leadership and governance problems remain anechoic, hence the need for true health care reform that would constrain health care leaders to put patients' and the public's health before their narrow self-interest. 

The Pittsburgh Experiment - II - Another Echo of the Fall of AHERF

We recently started a series of posts about the battle for domination of health care in western Pennsylvania.  The contenders are the UPMC ...

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The Pittsburgh Experiment - I - Caught in the Crossfire

In our increasingly dysfunctional health care system, patients, health care professionals and the public are often caught in the crossfire between big health care organizations.  Such organizations are often led by people who do not seem to put the interests of patients and the public, and the values of professionals first.  (Note that we have been writing about this since at least 2003, when the concept appeared in my article: Poses RM. A cautionary tale: the dysfunction of the American health care system. Eur J Int Med 2003; 14: 123-130. Link <a href="http://www.ejinme.com/article/S0953-6205%2803%2900029-3/abstract">here</a>.)<br /><br />Last week, Anna Wilde Matthews and John W Miller <a href="http://online.wsj.com/article/SB10001424052702303812904577295901619123904.html">wrote in the Wall Street Journal</a> about an amazing example of such a crossfire that pitted the two dominant health care organizations in Western Pennsylvania against each other.  The case turns out to touch on many of the most dysfunctional aspects of US health care.  So rather than try to cram it into an overly long blog post, I plan to periodically discuss it over the next few weeks, starting now with an overview of the grappling titans.<br /><br /><strong>The Basic Conflict</strong><br /><br />Per the Wall Street Journal article, <br /><blockquote>In Pittsburgh, <em>the acrimonious battle between </em><a href="http://hcrenewal.blogspot.com/search/label/Highmark"><em>Highmark</em></a><em>, the region's most powerful health insurer, and </em><a href="http://hcrenewal.blogspot.com/search/label/UPMC"><em>UPMC</em></a><em>, the dominant health-care provider, is drawing national attention</em> as a test case on the impact of consolidation in the health-care industry.<br /><br />At the heart of the dispute is <em>Highmark's effort to acquire a financially troubled local hospital group, West Penn Allegheny Health System, as the centerpiece of what it says will be a lower-cost and more efficient health-care operation. UPMC, which has its own insurance arm as well as 19 area hospitals and 3,240 doctors, says it doesn't want to bolster a company it now considers a direct rival. It has vowed not to sign a new contract to treat patients covered by Highmark,</em> which would mean those patients generally would pay high out-of-network rates to use UPMC hospitals and doctors.</blockquote><br />As we will see, the dispute is between a dominant hospital system that is trying to muscle into the insurance business, and a dominant insurer that is trying to muscle into the hospital business. If either were to succeed, it would become the dominant health care organization in the Pittsburgh area.<br /><br /><strong>A Personal Fight Amongst Two CEOs</strong><br /><br />However, the fight soon seemed to be more among the CEOs of the two organizations. Per the WSJ,<br /><blockquote>In Pittsburgh,<em> the battle has become unusually bitter, spearheaded by the two companies' chief executives, UPMC's Jeffrey A. Romoff, 66, and Highmark's Kenneth Melani, 58.</em> Mr. Romoff, who has built UPMC into a $9 billion juggernaut and put its initials on the tallest skyscraper in the city, <em>calls Highmark a 'monopoly.'</em> Dr. Melani <em>uses the same term</em> in warnings about UPMC's power and referred to Mr. Romoff in a local newspaper as <em>'trying to rape the commercial marketplace to build his empire.'</em>  (A spokesman for Mr. Romoff said the comment 'lacked both substance and dignity.')</blockquote><br />An <a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_771458.html">article</a> from December, 2011 in the Pittsburgh Tribune-Review had illustrated other aspects of the bitterness about and between the CEOs.<br /><blockquote>UPMC CEO Jeffrey Romoff's satiric, fake Twitter profile lists his favorite games as Monopoly and Risk.<br /><br />In recent tweets, the anonymous author wrote under his name, 'New York State, here we come!' and said he wants to take Highmark CEO Dr. Kenneth Melani 'outside to settle things -- but it would be unfair competition if (we) could BOTH use our fists.'<br /><br />The month-old Fake Jeffrey Romoff persona, whose author declined to be interviewed but said it's 'no laughing matter,' <em>depicts the head of Western Pennsylvania's dominant health care system as a greedy tyrant</em> with an angry avatar. It counts fewer than 40 followers, but its existence points to a public relations failure for UPMC in its fight with Highmark Inc., media experts say.<br /><br /><em>'Nobody feels sorry for Romoff,'</em> said Andrea Fitting, president of Downtown marketing firm Fitting Group. 'If you ask anyone on the street, they'll say <em>Romoff is a monster</em>. There's no person who's trustworthy and sympathetic who they've enlisted as a spokesman.'<br /><br />Romoff could not be reached for comment.<br /><br />UPMC spokesman Paul Wood said he is not concerned about the profile's effect on the hospital network's image.<br /><br />'Not something that has virtually no followers,' he said.<br /><br />There's no fake Twitter handle lampooning Melani, but experts say <em>the state's largest insurer is not doing a great job of managing its public image either.</em></blockquote><br />As found in the WSJ article,<br /><blockquote>'There's no white hat here,' says Don White, a Republican who chairs the state Senate committee overseeing insurance. <em>'They're both concerned about their self-preservation and domination.' </em></blockquote><br />Neither CEO seems satisfied that his organization has become dominant in its field, and both seem to resent the success of the other organization in another field. Let us briefly review the backgrounds of both systems.<br /><br /><strong>UPMC as Dominant Hospital System</strong><br /><br />The WSJ article started to probe the complexity of the situation:<br /><blockquote>The struggle in Pittsburgh has roots that <em>go back decades</em>. UPMC, led since 1992 by Bronx native Mr. Romoff, has grown on his watch to $9 billion in annual revenue from $797 million when he took over. Today, <em>UPMC has around 58% inpatient market share</em> in Allegheny County and a brand buoyed by its identification with nationally known research and treatment centers like Hillman Cancer Center, where Ms. Wyckoff is being treated. The nonprofit system, with around $406 million in operating income in its most recent fiscal year ended June 30, is also <em>Pennsylvania's biggest private employer</em>. <br /><br />UPMC's initials dominate the Pittsburgh skyline from the top of the U.S. Steel Tower, the city's tallest building. The nonprofit leases a private jet that is used to fly executives and doctors to its facilities in Ireland and Italy. <em>Mr. Romoff has become one of the city's most prominent business leaders.</em> Poking fun at a local nickname for his boss, a staffer once presented Mr. Romoff with a Darth Vader action figure. In 2009, UPMC published a glossy history of its own expansion titled 'Beyond the Bounds.'</blockquote><br /><strong>Highmark as Dominant Insurer</strong><br /><br />On the other hand,<br /><blockquote>As UPMC grew, its main hospital rival, West Penn Allegheny, withered. The five-hospital group emerged from the ashes of a Pennsylvania hospital system that filed for bankruptcy in 1998 after piling on too much debt and acquiring money-losing assets. It struggled for years. <br /><br />By 2011, West Penn Allegheny was in the red, with heavy debt and pension obligations. To cut costs, it shut down much of its Western Pennsylvania Hospital. At one point, filmmakers took over its empty intensive-care unit to film a scene for a coming Tom Cruise movie. <br /><br />In June, Highmark's Dr. Melani unveiled his plan to acquire West Penn Allegheny for a combination of loans and grants valued at as much as $475 million. Like UPMC, <em>nonprofit Highmark was a dominant presence in its market, formed from the merger of a Blue Cross and a Blue Shield plan in 1996. By 2011, it had market share of around 60% in Allegheny County, with annual revenue of $14.8 billion, and it was sitting on reserves of about $4.1 billion.</em><br /><br />Still, it was a bold and risky stroke for Dr. Melani, a blunt-spoken internal-medicine physician who himself trained at West Penn.</blockquote><br /><strong>Marketing Rather than Substance</strong><br /><br />The two sides launched a marketing and public relations battle which did not seem to have much to do with quality of, access to, and cost of health care. As the WSJ article noted,<br /><blockquote>The spat quickly got nasty. <em>Highmark highlighted UPMC's rate request in ads, and hired a Washington lobbying firm</em> to pull together a coalition of churches, patient groups and others that would press for a deal. <em>UPMC's own ad campaign</em> urged patients to 'Keep your doctor. Check your plan.' Highmark sued, arguing the ads were misleading. <em>UPMC bought Google ads that called up its site when a user searched for 'Highmark.'</em></blockquote><br />The Pittsburgh Tribune-Review article included,<br /><blockquote>Public relations experts agree that Highmark faces a daunting challenge: People might see UPMC -- and by extension, Romoff -- as a bully, but they don't want to lose access to the system's 19 hospitals and 3,000 doctors in Western Pennsylvania.<br /><br /><em>UPMC's 'Keep Your Doc' ad campaign</em>, produced by South Side agency GatesmanMarmion+Dave, is successful because it furthers the organization's business objectives, said Dale Leibach, an associate with Prism Public Affairs in Washington. This year, for the first time, UPMC gave four national insurers full access to its facilities and doctors, an arrangement previously granted only to Highmark.<br /><br />'I would give points to UPMC for consistency and transparency, in promising more competition and then delivering on that promise by giving people in Pittsburgh and in the region many more options in terms of insurance providers,' said Leibach, who reviewed news accounts about the dispute.<br /><br />David Kosick Sr., senior associate at KMA Public Relations in Canonsburg, takes the opposite stance, saying Highmark receives greater sympathy from a public that views UPMC as an insensitive corporate titan. Mullen Advertising in the Strip District produces <em>Highmark's 'Accepted. Everywhere' ad campaign for TV, radio, publications, billboards and the Internet</em>.<br /><br />'Highmark's winning the PR battle,' Kosick said, citing threats by state lawmakers to intervene and public criticism directed at UPMC, including Allegheny County Council's refusal last month to issue $335 million in bonds for UPMC because of public opposition.<br /><br />Wood said the health system recognizes its reputation 'may have taken a bit of a short-term hit locally,' but 'UPMC is focused on the longer term.'<br /><br /><em>'We've used our PR and marketing to fundamentally change the health care market in Western Pennsylvania,' </em>Wood said.<br /><br />Gene Grabowski, senior vice president of Washington-based public relations firm Levick Strategic Communications, said that strategy could backfire.</blockquote><br />Also, <br /><blockquote><em>In addition to online social media, the public relations campaigns have ramped up on television and in other advertising</em>.<br /><br /><em>UPMC placed its TV ads on major networks and cable and estimates they will reach the average Pittsburgh viewer four times a week</em>, Wood said. He <em>declined to say how much UPMC is spending on the ad campaign or what it budgets for advertising</em>, but he said the budget has not changed since last year.<br /><br />The ads, Fitting said, target 'what people are really worried about.'<br /><br /><em>Highmark stepped up its campaign in response to UPMC's, Weinstein said. He would not say how much Highmark pays</em> Mullen Advertising or what it budgets for advertising.<br /><br /><em>'UPMC launched an aggressive, multifaceted misinformation campaign targeted at employers and consumers who subscribe to Highmark's health plans,'</em> Weinstein said.</blockquote><br /><strong>Caught in the Crossfire</strong><br /><br />Meanwhile, of course, patients and doctors are trying to avoid being stomped by the wrestling titans. The Wall Street Journal article opened with this theme,<br /><blockquote>Trish Wyckoff is struggling with stage-four breast cancer, but now the 53-year-old Pittsburgh resident has another worry: a possible divorce between the hospital system that is treating her, the University of Pittsburgh Medical Center, and Highmark Inc., the health insurer that pays for her care. <em>If the two companies can't agree, she fears she won't be able to keep seeing the doctors who she believes are keeping her alive.</em><br /><em><br /></em><br /><em>'We are absolutely stuck in the middle,' she says. This is a really scary time.'</em> </blockquote><br />Here is another anecdote,<br /><blockquote>With local newspapers chronicling each tit-for-tat, Pittsburgh residents like Dan Glasser say they have been acutely aware of the battle. Mr. Glasser, a 46-year-old lawyer, says he is <em>alarmed and annoyed at the potential split between his insurer and UPMC</em>. If forced to choose a side, he says, he would switch health plans to ensure access to UPMC. He has been seeing the same doctor there since he graduated from law school. 'That's almost my whole adult life,' he says.</blockquote><br />Doctors are equally unhappy.<br /><blockquote>For his part, Kenneth Gold, Mr. Glasser's primary care physician, says he has been telling worried patients that <em>'all of us are pawns in this fight,' </em>which he hopes gets resolved. If Highmark and UPMC do break up, <em>'it is going to be mass chaos,'</em> he says. </blockquote><br />Even employers are unhappy,<br /><blockquote>Employers, for their part, say they feel <em>trapped in the middle</em>, worried about health-care costs and also under pressure from employees to lock in access to UPMC. Cheryl Melinchak, director of benefits at Pittsburgh-based Westinghouse Electric Co., says the firm is likely to offer a new health plan this fall, in addition to Highmark and a high-deductible Aetna version, to ensure workers can use UPMC.<br /><br /><em>The standoff is 'frustrating,' she says. 'We need competition on both sides,' insurers and health providers. </em></blockquote><br /><strong>Summary</strong><br /><br />So here we have the brave new world of the US health care system, a system that some people in other countries seem to think is worthy of emulation. Increasing <a href="http://hcrenewal.blogspot.com/search/label/concentration%20of%20power">concentration of power</a> has lead to health care dominated by ever larger organizations lead by ever more egocentric executives. Organizations that are dominant in one area seek to dominate other areas. Caught in the crossfire are patients, doctors, employers, and the public. While more money goes to advertising, public relations, and lawyers, nothing about the fight seems to be about improving care or making it more accessible.<br /><br />Further considering how this particular fight came to be will reveal various interlocking facets of health care dysfunction. If we can start to address them, we may be able to accomplish real health care reform.  Clearly we need health care organizations to concentrate on health care, not on increasing their power and domination.  We need them using most of their resources for health care, not on marketing, public relations, legal services, administrative support, and executive compensation.  <br /><br />Stay tuned to <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a> as we continue this series.

The Pittsburgh Experiment - I - Caught in the Crossfire

In our increasingly dysfunctional health care system, patients, health care professionals and the public are often caught in the crossfire b...

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IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient Care Was "Not Compromised."

<span style="font-weight: bold;"> </span>At my Nov. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/11/lifespan-rhode-island-yet-another.html">Lifespan (Rhode Island): Yet another health IT glitch affecting thousands - that, of course, caused no patient harm that they know of - yet</a>" I wrote:<br /><br /><blockquote>There's been yet another health IT <span style="font-weight: bold;">"glitch"</span> that, of course, caused no patients to be harmed. See other <span style="font-weight: bold;">"glitches"</span> <a href="http://hcrenewal.blogspot.com/2011/05/twelve-hour-health-it-glitch-at.html" style="font-weight: bold;">here</a><span style="font-weight: bold;">, </span><a href="http://hcrenewal.blogspot.com/2011/01/orderless-in-seattle-software-glitch.html" style="font-weight: bold;">here</a><span style="font-weight: bold;">, </span><a href="http://hcrenewal.blogspot.com/2010/03/will-it-take-luminosity-of-dozen.html" style="font-weight: bold;">here</a> and at other posts which can be found by searching this blog on the banal term 'glitch'.</blockquote><span id="formatbar_Buttons" style="display: block;"><span class=" down" id="formatbar_CreateLink" onmousedown="CheckFormatting(event);FormatbarButton('richeditorframe', this, 8);ButtonMouseDown(this);" onmouseout="ButtonHoverOff(this);" onmouseover="ButtonHoverOn(this);" onmouseup="" style="display: block;" title="Link"><br />Add another case to the health IT glitch file, under the "do we feel lucky today?" patient risk category.</span></span><span id="formatbar_Buttons" style="display: block;"><span class=" down" id="formatbar_CreateLink" onmousedown="CheckFormatting(event);FormatbarButton('richeditorframe', this, 8);ButtonMouseDown(this);" onmouseout="ButtonHoverOff(this);" onmouseover="ButtonHoverOn(this);" onmouseup="" style="display: block;" title="Link"><br />From the Pittsburgh Post-Gazette (I am quoted):</span></span><span style="font-size: 130%;"><br /></span><br /><blockquote><span style="font-size: 130%;"><a href="http://www.post-gazette.com/pg/11358/1199140-53-0.stm?cmpid=news.xml" style="font-weight: bold;">Computer outage at UPMC called 'rare'</a></span> <span style="font-weight: bold;">Systemwide disruption potentially dangerous, expert warns</span> <span style="font-weight: bold;">Saturday, December 24, 2011</span> <span style="font-weight: bold;">By Jonathan D. Silver, Pittsburgh Post-Gazette</span><br /><br />UPMC's electronic medical records system for inpatients went offline for more than 14 hours at nearly all its hospitals in the region, marking what the health system called a "rare" outage, but one that it claims did not harm patients.</blockquote><br />First, as my aforementioned Nov. 2011 post and its contained links point out, these events are not as "rare" as they should be. (The asteroid colliding with Earth that caused the extinction of the dinosaurs - now that's a "rare" event.)<br /><br />Second, as multiple posts on this blog have pointed out, the claims that "no patients were harmed" is both misleading and irrelevant:<br /><br />Such claims of 'massive EHR outage benevolence' are misleading, in that medical errors due to electronic outages <span style="font-weight: bold;">might not appear for days or weeks after the outage</span>, depending on what information was corrupted/lost/misindentified/or otherwise mishandled after it is 'backloaded' once the system is up. All it takes is one med lost to cause misery and death. (I can speak about that from unfortunate personal experience.<br /><br />Claims of 'massive EHR outage benevolence' are also irrelevant in that, even if there was no catastrophe directly coincident with the outage, their was <span style="font-weight: bold;">greatly elevated risk</span>. Sooner or later, such outages will maim and kill.<br /><br /><blockquote>The outage affected a system designed by Cerner Corp., a global electronic records company, and customized by UPMC that doctors and nurses rely on for communication about patient records, medical orders and prescriptions.<br /><br />It was unavailable from about 8:45 p.m. Thursday to 11 a.m. Friday at almost all of UPMC's hospitals except for Children's and UPMC Hamot in Erie, spokeswoman Wendy Zellner said.<br /><br />"This is rare. This kind of widespread, extensive downtime would be rare," Ms. Zellner said.<br /><br />Doctors and nurses continued to have access to patients' electronic records through backup systems, she said. <span style="font-weight: bold;">They also had to resort to using old-fashioned paper records for documentation and orders.</span><br /><br />"These things happen. They have really well spelled-out procedures for what to do when something goes down," Ms. Zellner said.<br /><br />She acknowledged that doctors and nurses <span style="font-weight: bold;">faced some challenges</span>.</blockquote><br />Faced 'some challenges?' In other words, care was <span style="font-weight: bold;">compromised</span> by the outage and the 'challenges' were to<span style="font-style: italic;"> avoid medical error </span>(and, of course, to make sure billing was unaffected):<br /><br /><a href="http://www.thefreedictionary.com/compromised" style="font-style: italic;">Compromised</a><span style="font-style: italic;"> - </span> <br /><div class="sds-list" style="font-style: italic;"><b>a. </b> To expose or make liable to danger, suspicion, or disrepute</div><div class="sds-list" style="font-style: italic;"><b>b. </b> To reduce in quality, value, or degree; weaken or lower.<br /><br /><br /></div>Thousands of patients were affected, again reinforcing my point about how IT <span style="font-weight: bold;">can and does greatly amplify the risks of paper</span> -- as in my Rhode Island post -- such as errors and confidentiality breaches.<br /><br />I cannot, for example, think of a single instance where thousands of paper records went unavailable simultaneously (unless, that is, someone lost the key to the Medical Records department), were made available to identity thieves <span style="font-style: italic;">en masse, </span>or where thousands of medical orders were scrambled or truncated in a relatively short period of time as in Rhode Island.<br /><span style="font-style: italic; font-weight: bold;"><br />These amplified risks could wipe out any advantages of EHR's over paper in a microsecond.</span><br /><br />A partial list of facilities apparently affected in this latest episode of EHR mayhem, from <a href="http://www.upmc.com/HOSPITALSFACILITIES/HOSPITALS/Pages/default.aspx">this list</a>:<br /><blockquote><ul><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Magee/Pages/Home.aspx" target="_blank" title="Visit the Magee-Womens Hospital of UPMC website in a new window.">Magee-Womens Hospital of UPMC</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/upmcbedfordmemorial/Pages/default.aspx" title="Use this link to visit the UPMC Bedford Memorial website.">UPMC Bedford Memorial</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/east/Pages/east.aspx" title="Visit the UPMC East website. ">UPMC East</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/horizon/Pages/default.aspx" title="Use this link to visit the UPMC Horizon website.">UPMC Horizon </a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/mckeesport/Pages/default.aspx" title="Use this link to visit the UPMC McKeesport website.">UPMC McKeesport</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Mercy/Pages/default.aspx" title="Use this link to visit the UPMC Mercy website.">UPMC Mercy</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/upmc-montefiore/Pages/default.aspx" title="Use this link to visit the UPMC Montefiore website.">UPMC Montefiore</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Northwest" title="Use this link to visit the UPMC Northwest website.">UPMC Northwest</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/UPMCPassavant/Pages/passavant.aspx" title="Use this link to visit the UPMC Passavant website.">UPMC Passavant </a> </li><li><a href="http://www.upmc.com/HOSPITALSFACILITIES/HOSPITALS/PRESBYTERIAN/Pages/default.aspx" title="Use this link to visit the UPMC Presbyterian website.">UPMC Presbyterian</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Shadyside/Pages/default.aspx" title="Use this link to visit the UPMC Shadyside website.">UPMC Shadyside</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/stmargaret/Pages/default.aspx" title="Use this link to visit the UPMC St. Margaret website.">UPMC St. Margaret</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/wpic/Pages/default.aspx" title="Use this link to visit the Western Psychiatric Institute and Clinic website.">Western Psychiatric Institute and Clinic of UPMC</a></li></ul></blockquote><br />That accounts for several thousand active patients, I am sure.<br /><br />(<span style="font-weight: bold;">12/28</span> <span style="font-weight: bold;">Addendum</span>: Bed counts of PA hospitals are <a href="http://www.ahd.com/states/hospital_PA.html">here</a>. Searching on "University of Pittsburgh Medical Center", it can be seen that thousands of beds were indeed involved.)<br /><br /><blockquote>"Whenever people aren't working in their native system and workflow I have to believe that is <span style="font-weight: bold;">more cumbersome for the clinicians</span>, but these folks are well-trained in what to do when these things happen."</blockquote><br />This seems at best an insensitive and perhaps even inhumane bit of P.R. More "cumbersome" for the clinicians? What about the poor patients? How would Ms. Zellner feel, I wonder, if it were her mother, child or significant other on the Operating Room table or having an acute MI when the EHR/CPOE systems went down?<br /><br /><blockquote>Ms. Zellner said UPMC's public relations staff was unaware of the outage until contacted by a reporter.</blockquote><br />It appears P.R. is not very high on the list for receiving information when a crisis arises. I may have known of the outage before they did.<br /><br /><blockquote>The outage was caused by a <span style="font-weight: bold;">"bug" or glitch</span> in software designed by a vendor affiliated with Cerner, Ms. Zellner said. She refused to identify the company.<br /><br />"We're not trying to point fingers at different vendors. <span style="font-weight: bold;">It's a database bug</span>, that's all I can tell you."</blockquote><br />(That is, it's not our fault, it's the fault of the database vendor. Hospitals, I regret to inform you - you are responsible for unapproved medical devices used in your facilities, no matter what the source.)<br /><br />And there's that word "glitch" again, accompanied by the equally banal "bug."<br /><br /><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_I5WmFxtz7xMx_bhF3SbRrbCCxpaC8XWJz9sXOCfM8T3XN2iIIW7-qLzHhpbK7TTB5cgMeauukXNEObD-6khVlq4EYm098U-ifHnCkwDhmT8DmCkdz0r9NrBbItcIjfxY8fcFvlMspf_p/s1600/happybug.bmp"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5691264547995216018" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_I5WmFxtz7xMx_bhF3SbRrbCCxpaC8XWJz9sXOCfM8T3XN2iIIW7-qLzHhpbK7TTB5cgMeauukXNEObD-6khVlq4EYm098U-ifHnCkwDhmT8DmCkdz0r9NrBbItcIjfxY8fcFvlMspf_p/s320/happybug.bmp" style="cursor: pointer; display: block; height: 94px; margin: 0px auto 10px; text-align: center; width: 76px;" /></a></div><div style="text-align: center;"><span style="font-size: 85%;">It's just a "bug." Cute little critter!</span></div><br />Me again in the Post-Gazette:<br /><br /><blockquote>Scot M. Silverstein, a doctor and assistant professor Healthcare Informatics at Drexel University in Philadelphia, <span style="font-weight: bold;">disagreed with the use of the terms "bug" and "glitch."</span><br /><br />"<span style="font-weight: bold;">What occurred here was a disruptive, potentially dangerous major malfunction of a life-critical enterprise medical device</span>," he said.</blockquote><br />Somehow, when a clinician makes a mistake, the terms "bug" and "glitch" are never used. In fact, when clinicians fail to meet accepted professional standards of healthcare practice, it is called "malpractice."<br /><br />I think we can all agree that a major near-full-day outage of an enterprise EHR affecting multiple hospitals and thousands of patients does not meet accepted professionals standard of life-critical computing practice. Yet, all this merits is the word "glitch." It seems to me that if patients are harmed by, in reality, what is (on its face) IT malpractice during such events, not only the clinicians affected should be held liable.<br /><blockquote><br />Ms. Zellner said the problem was not a "crash" of the system because there were alternate methods used to cope that prevented patient care from being compromised.</blockquote><br />The usual refrain. Let me repeat my definition of "compromised:"<br /><br /><a href="http://www.thefreedictionary.com/compromised" style="font-style: italic;">Compromised</a><span style="font-style: italic;"> - </span> <br /><div class="sds-list" style="font-style: italic;"><b>a. </b> To expose or make liable to danger, suspicion, or disrepute</div><div class="sds-list" style="font-style: italic;"><b>b. </b> To reduce in quality, value, or degree; weaken or lower.</div><br />A simple question - if extended EHR outages like this never seem to "compromise" care, then why not eliminate health IT entirely and spend the hundreds of millions saved on patient care?<br /><br /><blockquote>"This is not a crash of Cerner either," Ms. Zellner said. "I think a crash is, 'Oh my God, the sky is falling,' nobody can get anything."</blockquote><br />I leave it to the readers to ascertain the computer expertise levels and reasonableness of what Ms. Zellner thinks a "crash" is.<br /><br /><blockquote>Technicians from UPMC, Cerner <span style="font-weight: bold;">and the third company</span><span style="color: red; font-style: italic; font-weight: bold;"> [the 'mystery' database company? - ed.]</span> worked together on-site to identify and fix the problem. Ms. Zellner said she did not know why it took 14 hours to fix and the underlying cause was still unclear.<br /><br />"They know what the problem is and I believe it's been fixed, <span style="font-weight: bold;">but we really don't know what triggered it,"</span> Ms. Zellner said. "I think the next step would be some actual software upgrades."</blockquote><br />They "don't know what triggered the 'problem'" - is a proper translation that they have no idea what went wrong?<br /><br />In fact, regarding another Cerner EHR system which was extensively studied (see <span style="font-weight: bold;">"A Study of an Enterprise Information System"</span> <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">at this link</a>), Dr. Jon Patrick came to the conclusion that one of the sources of catastrophic failures is poor software engineering that has made the behavior of the studied system "non-deterministic." Further, software upgrades are not protected from incremental changes made by maintenance and customization staff, and may introduce even more instability.<br /><br />A software upgrade without clearly understanding "what triggered the problem" is simply asking for more trouble. (My bet, however, is that they attempt it anyway.)<br /><br /><blockquote>A Cerner representative could not be reached for comment.</blockquote><br />What's to say?<br /><br />How about this:<br /><br /><blockquote>Dr. Silverstein said based on what he was told about the computer outage, it means that hospital medical staff would have been unable to update patient charts and <span style="font-weight: bold;">probably would not have been able to issue any orders through the system during the time it was off line.</span><br /><br />He also questioned how up-to-date the hospital's redundant records were.</blockquote><br />Repeating UMPC's statement from the article that appeared <span style="font-weight: bold;">after </span>I gave my quotes to the reporters: "Doctors and nurses continued to have access to patients' electronic records through backup systems, [the UPMC spokesperson] said. They also had to resort to using <span style="font-style: italic;">old-fashioned paper records for documentation and orders</span>." <br /><br />My stated fears of disruption and increased risk due to compromised care seem well-grounded.<br /><blockquote><br />In May, Allegheny General Hospital had to shut its electronic medical records computer system down because of problems with the vendor's hardware.<br /><br />The hospital used backup procedures to continue care for patients, including using paper orders and record-keeping.</blockquote><br />Wait ... I thought I'd heard these events were "rare." <span style="font-style: italic; font-weight: bold;">Two in the same city within six months?</span><br /><br />---------------------------<br /><br />Truth be told:<br /><br />The primary rule in computing is: <span style="font-weight: bold;"><br /></span><br /><blockquote><span style="font-weight: bold;"><br /><span style="font-size: 130%;">Either you are in control of your information systems, or they are in control of you. </span></span> </blockquote><br />Clearly the latter was the case here.<br /><br />The following questions arise:<br /><br /><ul><li>Was the software containing the "bug" properly vetted <span style="font-style: italic; font-weight: bold;">before</span> being used on live patients? This is not just the vendor's obligation.</li><li>If it was not vetted properly, why not? </li><li>Was it an "upgrade" or patch? (If so, the same vetting rules apply.)</li></ul><br />Further, the soft-selling of these incidents must end. The use of terms such as "bug" and "glitch" must also end. What occurred here, echoing my newspaper quote, was a <span style="font-weight: bold;">disruptive, potentially catastrophic major malfunction of a life-critical enterprise medical device</span>.<br /><br />System-wide EHR crashes are not merely ‘glitches’ or ‘bugs.’ They need to be considered, as in medicine itself, as<span style="font-weight: bold;"> 'never events.' </span>From <a href="http://psnet.ahrq.gov/primer.aspx?primerID=3">AHRQ</a>:<br /><blockquote><span style="font-size: 85%;"><br /></span><span id="_ctl0_ContentPlaceHolder1_lblPrimerContent" style="font-size: 85%; width: 344px;">The term "Never Event" was first introduced in 2001 by Ken Kizer, MD, former CEO of the National Quality Forum (NQF), in reference to particularly shocking medical errors (such as wrong-site surgery) that should never occur. Over time, the list has been expanded to signify adverse events that are unambiguous (clearly identifiable and measurable), serious (resulting in death or significant disability), and usually preventable.</span></blockquote><br />Further, re: "patient care was never compromised." How do they know that? In fact, this is 'spin' and word games on its face. By definition, if CPOE and chart updating was unavailable, patient care was compromised, where "compromised" means "increased levels of risk for error were created, requiring workarounds."<br /><br />Further, as mentioned earlier, harms might not show up for some time. Lost orders, corrupted data, errors of omission or commission transcribing backup paper records into the computer ("backloading"), etc. can take their toll later. Post-outage vigilance is essential, putting even more stress on clinicians that increases likelihood of further error and that they <span style="font-weight: bold;">certainly do not need.</span> Clinicians are stressed enough already.<br /><br />Finally:<br /><br />IT personnel have <span style="font-weight: bold;">not only deliberately inserted themselves into clinical affairs </span>(e.g, via the HITECH Act of 2009), they have also done so with a stunning arrogance and unproven braggadocio about their systems "<a href="http://hcrenewal.blogspot.com/2010/01/yet-another-service-profession-to-be.html">revolutionizing</a>" medicine (whatever that means).<br /><br />Indeed, they need to accept the medical responsibility and obligations this territorial intrusion entails.<br /><br />On its face, this massive outage was the result of issues that did not meet accepted professional standards of IT practice for life-critical environments. <a href="http://en.wikipedia.org/wiki/Res_ipsa_loquitur"><span style="font-style: italic;">Res ipsa loquitur</span></a>.<br /><br />Something was not vetted properly, there was a lack of redundancy, the IT personnel were NOT in control of their systems.<br /><br />Just as when physicians don't provide care that meets accepted professional standards of healthcare, this incident and others like it are, by definition, a result of <span style="font-weight: bold;">IT malpractice</span>.<br /><br />If patients are harmed, IT personnel and their management (often non-IT C-level officers) involved in this system need to be held accountable.<br /><br />If they can't take the clinical heat (as clinicians do daily since the time they enter medical or nursing school), then they need to get out of the clinical kitchen<span style="font-style: italic;">.</span><br /><br />-- SS<br /><br />Note: see <a href="http://histalk2.com/2011/12/27/news-122811/">this take</a> on these matters at the HIStalk blog:<br /><br /><blockquote>UPMC’s Cerner systems <a href="http://www.post-gazette.com/pg/11358/1199140-53-0.stm" target="_blank">go down</a> for 14 hours at most campuses last Thursday and Friday, forcing them to go back to paper. The PR person blamed “a database bug,” which makes the <a href="http://www.oracle.com/us/corporate/press/422644">above Oracle press release</a> from this past summer a particularly fun read. Cerner and UPMC have an atypical vendor-customer relationship since they’ve invested big money together in innovation projects and UPMC runs a Cerner implementation business overseas. </blockquote><br />Now we know who the unnamed "mystery database vendor" is...<br /><br />-- SS<br /><br style="font-weight: bold;" /><span style="font-weight: bold;">Dec. 29, 2011 Addendum:</span><br /><br />Was UPMC acting as a "proving ground" for some Oracle-Cerner-UPMC experimental health IT technology that resulted in the crash? The claim of being an IT "proving ground" has been made in the past:<br /><blockquote><br style="font-weight: bold;" /><span style="font-weight: bold;">Pittsburgh Tribune<br />May 2, 2006</span><a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/s_449506.html" style="font-weight: bold;">UPMC partners with technology provider</a><br /><br />The University of Pittsburgh Medical Center is taking another step in a quest to commercialize new medical technology.<br /><br />UPMC on Monday signed a three-year deal with health care information technology provider Cerner Corp. to develop and market medicine-related technological advances. Both parties will contribute $10 million in cash, services and intellectual property to the effort.<br /><br />The deal is a smaller version of an April 2005 deal between UPMC and information technology behemoth IBM.<br /><br />As is the case in the IBM deal, UPMC will serve as a built-in <span style="font-weight: bold;">p</span><span style="font-weight: bold;">roving ground for jointly developed technologies and products</span>, with Cerner marketing the products and UPMC awarded a share of profits.</blockquote><br />As I wrote at <a href="http://hcrenewal.blogspot.com/2009/04/upmc-pioneers-in-health-it-or-pioneers.html">"Proving Ground for IT Tests On Children: Pioneers in Health IT, or Pioneers in Ignoring the Past?"</a>:<br /><br />"A hospital and patients are not a learning lab for HIT vendors. The appropriate "proving ground" for new medical technology is the <span style="font-weight: bold;">controlled clinical trial</span> where participants (in this case, patients and healthcare professionals alike) have freedom of choice whether or not to participate, and a chance to give (or deny) consent after being <span style="font-weight: bold;">fully informed of potential risk."</span>This is a fundamental human rights issue.<span style="font-weight: bold;"><br /></span>-- SS<span style="font-weight: bold;"><br /></span><i style="font-weight: bold;"><br /></i>

IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient Care Was "Not Compromised."

At my Nov. 2011 post " Lifespan (Rhode Island): Yet another health IT glitch affecting thousands - that, of course, caused no patie...

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