healthy4u: Zimmer

When a Key Opinion Leader Questions the Hand That Fed Him: from "Master Teacher to Someone Who Didn't Know What He Was Doing"

We just <a href="http://hcrenewal.blogspot.com/2010/06/deferred-prosecution-agreements-end-so.html">posted an update</a> on the ongoing cozy relationship with medical device companies, in particular, those that make prosthetic hip and knee joints, and some orthopedic surgeons.  Some surgeons, including many prominent academic leaders and practitioners, have been paid huge amounts, and have often failed to make more than the most minimal disclosure to their patients, or to the audiences of their talks or the readers of their ostensibly scholarly articles.  Deferred prosecution agreements with device companies shed light on these payments, but did not curtail them.  Yet the surgeons and the companies who paid them defended the payments as legitimate consulting agreements, and royalties for worthy innovations.  Now the New York Times has <a href="http://www.nytimes.com/2010/06/20/business/20knee.html">reported </a>on a dispute between a well-paid consultant and an artificial joint manufacturer that provides new insights into these financial relationships. To summarize, <blockquote>IT was a long, fruitful medical marriage that is fast becoming an angry public divorce, one that offers a rare look at a clash between a top-shelf consultant and his corporate patron over patient safety. For years, Dr. Richard A. Berger designed surgical tools and artificial joints for Zimmer Holdings, trained hundreds of doctors to use its products and talked it up wherever he went. In return, Zimmer, an orthopedic implant maker, helped enrich Dr. Berger, portraying him as a master surgeon and paying him more than $8 million over a decade. Those days are gone. Dr. Berger started complaining to Zimmer a while back that one of its artificial-knee models was failing prematurely, and he went public recently with a study that he says proves it. Zimmer told him that the problem was not the artificial knee, but his technique, and pointed to data overseas indicating that the knee was safe. Last year, Zimmer did not give Dr. Berger a new contract. The company says it routinely rotates consultants. 'I trained hundreds of doctors for them and made them tens of millions,' Dr. Berger said in interview here, in which he also lambasted Zimmer executives as dissembling, out-of-touch bureaucrats. 'So was this just a coincidence? Maybe it was. Maybe it wasn’t.' </blockquote> In more detail, here is how Dr Berger's relationship with Zimmer began: <blockquote>The surgeon, a tall, balding man with a boyish manner, was finishing his fellowship at the Rush University Medical Center in Chicago at the time, one of the country’s top centers for joint replacement. The center has had long ties to Zimmer, whose headquarters is about two hours away, in Warsaw, Ind., and the young surgeon quickly came to the company’s attention. 'Rich has a very clever set of hands, and because of that he is enabled with the ability to innovate surgical techniques,' said Roy Crowninshield, who was Zimmer’s chief scientific officer. Dr. Berger’s skills matched Zimmer’s marketing strategy. To distinguish itself from competitors, the device maker had started promoting minimally invasive surgery, a technique that uses smaller incisions than traditional surgery. Zimmer trained doctors in the procedure, using its device. Soon, Dr. Berger, who was then pioneering a type of small-incision surgery that allowed patients to leave the hospital on the day of surgery, became a linchpin of Zimmer’s efforts. In 2002, he was prominently featured in a press release about Zimmer’s plans to build a training facility for minimally invasive surgery. 'We are clearly excited about Dr. Berger’s data,' J. Raymond Elliott, the company’s chairman and chief executive at the time, stated in the release. Over the next few years, the physician estimates, he helped train hundreds of surgeons on Zimmer’s behalf.</blockquote> And in more detail, here is how things went wrong:  <blockquote>As he tells it, his relationship with Zimmer frayed over a version of a widely used Zimmer knee, known as the NexGen. The model at issue, called the NexGen CR-Flex, is designed to provide a greater range of motion than the standard NexGen. Most surgeons implant an artificial knee using a cement-like adhesive to bond the thigh bone to the portion of the device that bends. But some specialists, like Dr. Berger, try to avoid adhesives because the cement can break down and cause device failure. So Zimmer also sells an uncemented version of the CR-Flex that relies instead on the bone naturally fusing with the implant. Dr. Berger says that he gave the device, which is supposed to last about 15 years, to about 125 patients in 2005, the first full year he used it. But by early 2006, some X-rays showed lines where the implant met the thigh bone, an indication that the device was loose and had not fused completely. Patients could walk, but they were reporting pain, apparently a result of the loose joint. He says he soon brought the problem to the attention of Zimmer officials, including the company’s new top scientist, Cheryl R. Blanchard. Zimmer executives pointed to the success of the NexGen, but the company did not have separate test data on the uncemented flexible model because the F.D.A. had not required the company to study it in patients before selling it. Later, as more patients complained about the device and Dr. Berger had to replace some of them, he spoke to Ms. Blanchard again, he said. This time, he said, she and other Zimmer officials suggested that his technique was the problem because no other surgeon had complained. 'Suddenly, I went from someone who was their master teacher to someone who didn’t know what he was doing,' he said. BY 2007, Dr. Berger, although still a Zimmer consultant, had stopped using the device and had learned, he said, that several other surgeons had also experienced problems with it. But unlike Dr. Dorr, the physician who sent out the alert about Zimmer, Dr. Berger said he initially had hoped to avoid a public showdown with the company. So he followed a more traditional route by performing a study with another Rush surgeon, Dr. Craig J. Della Valle, who was also having to replace the Zimmer knee. Dr. Berger and Dr. Della Valle first presented their study at a medical meeting last fall and again this year at a national meeting of the American Association of Orthopedic Surgeons. They found that the uncemented Zimmer knee failed early in about 9 percent of some 100 patients studied. Also, the knee exhibited signs of looseness in about half of all patients and has since been replaced in some of them, Dr. Berger said. But Zimmer was unswayed. In a filing with the Securities and Exchange Commission, Zimmer made note of the study but also pointed to the knee’s very positive results in a large database of orthopedic patients in Australia. Officials there confirmed the low failure rate. The company also said that the cement-free CR Flex accounted for only a small fraction — about 2 percent — of its overall knee sales. </blockquote> The most striking lesson of this case is that Dr Berger was only valued as a consultant as long as his work completely followed the marketing party line.  As soon as he questioned the company's product, or the executives who were promoting it, he became "someone who didn't know what he was doing."  Of course, a truly valued consultant should be respected, if not sought for honest advice, whether or not it fit  preconceived notions or marketing strategies.  Thus, how Dr Berger was finally treated suggested he really was hired to market product.  "Consultant" was just a pretty title..  We  (and many others) have discussed (e.g., <a href="http://hcrenewal.blogspot.com/2008/06/key-opinion-leaders-were-sales-people.html">here</a>) how pharmaceutical, biotechnology, and device companies cultivate "<a href="http://hcrenewal.blogspot.com/search/label/key%20opinion%20leaders">key opinion leaders</a>" who really are nothing more than salespeople with fancy academic titles or well-known practices.  The case of Dr Berger suggests that apparently distinguished academics and practitioners hired as "consultants" by such companies ought to be regarded as salespeople until proven otherwise.  Physicians who are wooed by company marketers to take on such consulting roles, often with praise for their ability to "innovate," "excite," or become a "master teacher," may want to consider whether those flattering them merely want to hire another high-profile part-time salesperson.  They may further may want to think about how they would look should this relationship be revealed for what it really is.  If something goes wrong, they should think about what it would be like to deal with "dissembling, out-of-touch bureaucrats."  Sometimes there is a price to pay for taking all that money. I hope that Dr Berger will consider donating the $8 million he made to the cause of more honest teaching and research about orthopedic devices.  Meanwhile, patients and physicians should be extremely skeptical about the pronouncements of paid consultants and key opinion leaders who work for corporations marketing health care goods and services.  We all should demand at least that those paid by such vested interests reveal such financial arrangements in detail if they expect us to listen to their spiels, take their advice, and particularly be subject to their decisions.

When a Key Opinion Leader Questions the Hand That Fed Him: from "Master Teacher to Someone Who Didn't Know What He Was Doing"

We just posted an update on the ongoing cozy relationship with medical device companies, in particular, those that make prosthetic hip and knee joints, and some orthopedic surgeons. Some surgeons, in…

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20 Jun 2010

What Me Worry? - Leaders Prosper Despite Questions About Their Organizations' Ethics and Performance

There were two examples in the recent news about how the leaders of health care organizations seem to prosper no matter what questions are raised about their organizations' ethics or performance. WellPoint It seemed that anger over a rate increase by a subsidiary of the huge insurance company/ managed care organization WellPoint was one reason for the revival of efforts in the US to enact some sort of health care reform legislation.  In our <a href="http://hcrenewal.blogspot.com/2010/02/argument-over-insurance-rate-hikes.html">comment</a> on this controversy, we noted that questions about the ethics of WellPoint's actions have appeared again and again.  Wellpoint... <ul><li>settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see post <a href="http://hcrenewal.blogspot.com/2005/07/wellpoint-settles-rico-law-suit.html">here</a>).</li><li>subsidiary New York Empire Blue Cross and Blue Shield misplaced a computer disc containing confidential information on 75,000 policy-holders (see story <a href="http://www.nytimes.com/2007/03/14/business/14insure.html">here</a>).</li><li>California Anthem Blue Cross subsidiary cancelled individual insurance policies after their owners made large claims (a practices sometimes called rescission).  The company was ordered to pay a million dollar fine in early 2007 for this (see post <a href="http://hcrenewal.blogspot.com/2007/03/wellpoint-fined-1-million-for-canceling.html">here</a>).  A state agency charged that some of these cancellations by another WellPoint subsidiary were improper (see post <a href="http://hcrenewal.blogspot.com/2007/07/more-than-half-of-wellpoints-policy.html">here</a>).  WellPoint was alleged to have pushed physicians to look for patients' medical problems that would allow rescission (see post <a href="http://hcrenewal.blogspot.com/2008/02/wellpoint-halts-attempts-to-have.html">here</a>).  It turned out that California never collected the 2007 fine noted above, allegedly because the state agency feared that WellPoint had become too powerful to take on (see post <a href="http://hcrenewal.blogspot.com/2008/07/wellpoint-settles-but-has-it-become-too.html">here</a>). But in 2008, WellPoint agreed to pay more fines for its rescission practices (see post <a href="http://hcrenewal.blogspot.com/2008/07/fines-re-statements-and-more-fines-just.html">here</a>).  In 2009, WellPoint executives were defiant about their continued intention to make rescission in hearings before the US congress (see post <a href="http://hcrenewal.blogspot.com/2009/06/managed-care-executives-will-not-limit.html">here</a>).</li><li>California Blue Cross subsidiary allegedly attempted to get physicians to sign contracts whose confidentiality provisions would have prevented them from consulting lawyers about the contract (see post <a href="http://hcrenewal.blogspot.com/2007/11/physicians-and-contracts-cautionary.html">here</a>).</li><li>formerly acclaimed CFO was fired for unclear reasons, and then allegations from numerous women of what now might be called Tiger Woods-like activities surfaced (see post <a href="http://hcrenewal.blogspot.com/2008/01/more-managed-care-management-mumbo.html">here</a>).</li><li>announced that its investment portfolio was hardly immune from the losses prevalent in late 2008 (see post <a href="http://hcrenewal.blogspot.com/2008/10/if-this-is-how-wellpoint-has-managed.html">here</a>).</li><li>was sanctioned by the US government in early 2009 for erroneously denying coverage to senior patients who subscribed to its Medicare drug plans (see post <a href="http://hcrenewal.blogspot.com/2009/01/wellpoint-sanctioned.html">here</a>).</li><li>settled charges that it had used a questionable data-base (builty by Ingenix, a subsidiary of ostensible WellPoint competitor UnitedHealth) to determine fees paid to physicians for out-of-network care (see post <a href="http://hcrenewal.blogspot.com/2009/02/wellpoint-settles.html">here</a>).  </li><li>violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, according to the California health insurance commissioner (see post <a href="http://hcrenewal.blogspot.com/2010/02/argument-over-insurance-rate-hikes.html">here</a>). </li></ul>But a few days ago, <a href="http://www.indystar.com/article/20100403/BUSINESS/4030350/1003/BUSINESS/Stock-awards-raise-WellPoint-pay">according to the Indianapolis Star</a>: <blockquote>Large stock awards helped boost total compensation to top executives at WellPoint by 51 percent to 75 percent last year over 2008. The big jumps in take-home pay are detailed in the Indianapolis health insurer's annual proxy report to shareholders filed Friday. Angela Braly, who is chair of the board, president and chief executive, saw her 2009 total compensation rise 51 percent, to $13.1 million. That compares with $8.67 million in 2008 and $14.8 million in 2007. Braly's salary of $1.14 million barely budged from 2008, but she earned a $6.2 million stock award, almost triple the award she got in 2008. Total compensation to other top executives: Wayne DeVeydt, chief financial officer, $7.25 million, up 75 percent from 2008. Ken Goulet, executive vice president, $4.43 million, up 62 percent. Dijuana Lewis, executive vice president, $4.46 million, up 64.5 percent.</blockquote> So whatever top WellPoint executives are paid for, it is not insuring that the company avoids ethical questions about its conduct, or controls health care costs or mdoerates premiums, for that matter.  Boston Scientific, and Zimmer Holdings We just <a href="http://hcrenewal.blogspot.com/2010/04/who-guards-guardians-case-of-boston.html">commented</a> on the generous compensation given the new and former CEOs of Boston Scientific, despite a series of ethical questions about that company's conduct, culminating in a guilty plea by the company to charges that it concealed information about important and potentially dangerous defects in its products. A few days ago, I found a reminder, buried in <a href="http://www.startribune.com/business/89787947.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUsZ">an article </a>in the Minneapolis Star-Tribune about a dispute between Boston Scientific and St Jude Medical, that current Boston Scientific CEO Ray Elliott has a track record of collecting generous compensation despite ethical questions about the companies he has lead. <blockquote>Elliott is certainly familiar with the potential ethical minefield surrounding the relationships between sales reps and doctors. He was CEO at orthopedic devicemaker Zimmer Holdings Inc., which paid (along with four other companies) $311 million in 2007 to settle a Department of Justice investigation into the consulting fees paid to doctors.</blockquote> As we <a href="http://hcrenewal.blogspot.com/2007/10/stryker-biomet-depuy-orthopedics-zimmer.html">discussed </a>back in 2007, Zimmer Holdings Inc was one of four medical device companies which submitted to deferred prosecution agreements in response to charges that the companies implemented criminal conspiracies to violate federal anti-kickback laws. We posted several times about one aspect of this settlement, the mandate that the companies make public the payments (often huge) to orthopedic surgeons, academic institutions, and medical associations. (See posts <a href="http://hcrenewal.blogspot.com/2007/11/orthopedic-device-makers-reveal.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/11/aaos-responds-to-disclosure-of-payments.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/11/aaos-patient-discussion-guide-regarding.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/11/more-about-surgeons-who-received-large.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/06/more-multi-million-dollar-orthopods.html">here</a>.) At the time, I did not think to look into what happened to the leadership of these companies thereafter. According to the <a href="http://files.shareholder.com/downloads/ZMH/887283368x0xS950137-08-3970/1136869/filing.pdf">2008 proxy statement by Zimmer Holdings</a>, Ray Elliott conveniently retired in 2007, just before the deferred prosecution agreement was announced. Since he had been President of Zimmer since 1997 and CEO since 2001, according to the <a href="http://files.shareholder.com/downloads/ZMH/887283368x0xS950137-07-4211/1136869/filing.pdf">2007 proxy statement</a>, he appeared to have been in the top leadership of the corporation during the time the actions were performed that resulted in the deferred prosecution agreement. Nonetheless, again according to the 2008 statement, for the part of 2007 during which he served as CEO, his total compensation was $7,987,158. For 2006, his total compensation was $11,998,121. In 2007, the present value of his two pension plans were $269,764 and $5,302,050. In 2007, he owned 1,235,859 shares of stock (now worth $72,952,757 at the <a href="http://www.google.com/finance?q=NYSE%3AZMH">current price</a> of $59.03 /share), and had the right to acquire 1,169,987 more within 60 days. And of course, as we posted earlier, Boston Scientific paid him over $30 million for working part of 2009. So Mr Elliott prospered mightily from his leadership of ethically challenged Zimmer Holdings, and was then further rewarded by ethically challenged Boston Scientific. Summary We have commented again and again that while numerous health care organizations have been charged with unethical, and sometimes illegal behavior, the people who oversaw, directed, or implemented the behavior almost never have had to suffer any negative consequences.  Now we see that while some large health care organizations have been subject to penalties for unethical and illegal behavior, the leaders of these organizations have been compensated so well as to make them rich, rich beyond the dreams of most people.  So the problem is not merely that captaining an organization onto the ethical rocks costs one nothing, but that it can make one very rich. Clearly we see examples of both profoundly perverse incentives and a complete lack of accountability and responsibility affecting the leadership of major health care organizations.  Is it any wonder that these organizations continue to act unethically, and that the costs of the goods and services they provide rise continuously? If we truly want health care that is accessible, of high quality, at a fair price, and more importantly, if we want health care that is honest and focused on patients, we need to provide health care leaders with clear, rational incentives in these directions, and make them fully accountable for their actions, and the courses of their organizations under their leadership.

What Me Worry? - Leaders Prosper Despite Questions About Their Organizations' Ethics and Performance

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08 Apr 2010

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