American Board of Internal Medicine Quietly Discloses Some Conflicts of Interest

We recently <a href="http://hcrenewal.blogspot.com/2014/03/american-board-of-internal-medicine.html">discussed</a> the American Board of Internal Medicine's exceedingly weak conflict of interest policy.  This came to light after the board's previous president was revealed to have simultaneously served for years on the board of directors of a privately held for-profit hospital purchasing organization.<br /><br />The susceptibility of ABIM leadership to conflicts of interest is particularly important because the board, in its role as the de facto sole source of credentialing for all US internists and internal medicine sub-specialists, sets what these physicians need to know to pass the certifying examinations. Conflicts of interest raise doubts about whether the examinations may be used to further commercial agendas and similar vested interests.<br /><br />Furthermore, the ABIM has been willfully expanding its scope into "maintenance of certification," that is, into requiring physicians to engage in ABIM educational and evaluation activities to maintain their previously obtained certification.  They have been criticized in particular (e.g., <a href="http://www.medscape.com/viewarticle/822914">here</a> and <a href="http://drwes.blogspot.com/2014/03/is-maintenance-of-certification-our.html">here</a>) for pursuing maintenance of certification in the absence of clear evidence that it improves physician performance or patients' outcomes.  Conflicts of interest affecting MOC raise further doubts that this "innovation" may also be about furthering commercial interests.<br /><br /><b>ABIM Begins Conflict of Interest Disclosure</b><br /><br />Now it appears that the ABIM is beginning to disclose more about its leadership's conflicts of interest.  One of our scouts notified me that the ABIM web-site now provides disclosures for the members of its <a href="http://www.abim.org/about/governance/board-of-directors.aspx">board of directors and officer,</a> <a href="http://www.abim.org/about/governance/abim-council.aspx">council,</a> and <a href="http://www.abim.org/about/executives.aspx">executives</a>.<br /><br />There seem to be limits to these disclosures.  As far as I can tell,They do not reflect a change in the preexisting ABIM <a href="http://www.abim.org/conflict-of-interest-policies.aspx">conflict of interest policy</a>, which still calls for conflicts to be disclosed, but only to ABIM leadership, while they are otherwise kept confidential.  Nor were these disclosures accompanied by any further explanation that I can find.  The disclosures include multiple categories, consulting relationships, peer educational activities, promotional activities, grants, intellectual property, stock/option, gift/ donations, expert witness, leadership in professional organizations, and other, which are not otherwise defined.  It was not clear, however, whether the disclosures covered services on corporate advisory boards or boards of directors, or service as executives or founders of companies.  The time course of the disclosed relationships were not clear.  Finally, ttere are no disclosures about members of <a href="http://www.abim.org/about/examInfo/committee.aspx">exam writing committees of sub-specialty board members</a><br /><br />Nonetheless, the disclosures do give an idea of the scope of conflicts of interest affecting ABIM leadership.  Because the disclosures have not otherwise been publicized, I thought it would be worthwhile to summarize them here.<br /><br /><b>Prevalence of Conflicts</b><br /><br />Of the 12 officers and directors, 8 disclosed relationships with for-profit health care corporations <br /><br />Of the 15 council members (one of whom is also a director), 9 revealed conflicts.<br /><br />Of the 12 executives, 5 revealed conflicts.<br /><br />Thus, a majority of ABIM physician leadership, and nearly a majority of  ABIM executives disclosed conflicts of interest.<br /><br /><b>Nature of Conflicts</b><br /><br />The conflicts were predominantly consulting relationships, grants, holdings of patents, or of stocks or options.  The conflicts of the officers, directors and council members primarily involved pharmaceutical, biotechnology and device companies.  Several officers, directors and council members had two kinds of relationships with the same company, for example, consulting relationships and grant funding.<br /><br /><br /><br /><br />It was striking that 15 companies had multiple relationships with officers, directors and council members.  All were large pharmaceutical, biotechnology, and device companies.  They were<br /><br />AbbVie (1 consulting relationship 2 grants)<br />Amgen (1 consulting, 1 grant, 2 stock holdings)<br />AstraZeneca (3 consulting, 1 grant)<br />Bristol-Myers-Squibb (2 consutling, 2 grants, 1 stocks)<br />Celgene (2 consulting, 1 grant)<br />Gilead (1 consulting, 2 grants, 1 stocks)<br />Johnson and Johnson (1 consulting, 2 grants [one through Janssen], 2 stocks) <br />Eli Lilly (1 consulting, 1 grant)<br />Medtronic (2 consulting, 1 grant)<br />Merck (2 consulting, 2 stocks)<br />Novartis (2 grants, 1 stocks)<br />Pfizer (1 consulting, 1 grant, 2 stocks)<br />Roche (1 consulting, 2 stocks)<br />Teva (1 consulting, 1 stocks)<br />Millennium (1 consulting, 1 grant)<br /><br />The officers, directors, and council members additionally had relationships with a vast number of companies, including in attempted alphabetical order: Abbott Laboratories, Agios, Allos, AllScripts, Arrowhead, Biocontrol Medical, Cephalon, Cephied, CorAssist, Cornovus, CVRx, Covidien, Dr Redy's Labs, Emergent Biosolutions, Express Scripts, Genentech, Gen-Probe, Hologic, Human Genome Sciences, Incyte,  ION(?), miRNA Therapeutics, Peluton Therapeutics, Pharmacyclics, Regeneron, Repros Therapeutics, Research to Practice (owned by AmerisourceBergen) Prime Healthcare, Rigel, Seattle Genetics, Sunesis, TG Therapeutics, UnitedHealthcare, Value Capture, Viamet, Ventrigen, Vertex, XCenda,  and ZS Pharma.<br /><br />Thus, the conflicts of interest were extensive, and involved major health care corporations.<br /><br /><b>Summary</b><br /><br />The American Board of Internal Medicine is to be congratulated for taking steps towards more transparency and honesty about conflicts of interest affecting its leadership.  However, the steps were baby steps.  Lacking still are definitions and time courses of the relationships disclosed, assurances of the completeness of disclosure of all relevant relationships, assurances that disclosure is now the policy going forward, and disclosures for members of committees and sub-specialty boards who are also very influential in constructing examinations and maintenance of certification activities.  These ought to be addressed.<br /><br />The disclosures reveal that the conflicts of ABIM leadership were extensive.  While disclosure is good, disclosure does not assure physicians and the public that certification and now maintenance of certification are not influenced by marketing needs and other commercial interests.  In my humble opinion, the ABIM now ought to phase out, as quickly as possible conflicts of interest affecting those who make its policy, write its exams, and conduct its other activities that can influence physician behavior, decisions made for patients, and health policy.  Also, in my humble opinion, the ABIM ought to suspend its efforts to promote maintenance of certification until it has greatly reduced the conflicts of interest that may affect this effort.

American Board of Internal Medicine Quietly Discloses Some Conflicts of Interest

We recently discussed the American Board of Internal Medicine's exceedingly weak conflict of interest policy.  This came to light after the board's previous president was revealed to have simultaneous…

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Finally, An Article in a Large Circulation Medical Journal with Systematic Data about Leaders of Academic Medicine Conflicted by their Service on Health Care Corporate Boards

<b>Background - a New Species of Conflict of Interest </b><br /><br />Since <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">2006</a>, we have posted repeatedly about  what was then a new species of severe <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a>.  This occurs when leaders of academic medical institutions or other health care non-profit organizations or non-governmental organizations (NGOs) also serve as members of <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20directors">boards of directors</a> of for-profit corporations  whose products and actions have major effects on health care.<br /><br />Most recently, we <a href="http://hcrenewal.blogspot.com/2014/03/american-board-of-internal-medicine.html">discussed </a>the cases of the current CEO of the National Quality Forum and past CEO of the American Board of Internal Medicine who was found to be on the board of for-profit hospital group purchasing organization Premier Inc, and had been on the board of its privately held but for-profit predecessors.  We then <a href="http://hcrenewal.blogspot.com/2014/02/incoming-president-of-iom-outed-as.html">discussed</a> the case of the incoming president of the US Institute of Medicine and former Chancellor of Health Affairs at Duke University who was on the boards of Alnylam Pharmaceuticals, Medtronic and Pepsico.  We next <a href="http://hcrenewal.blogspot.com/2014/03/turnabout-is-fair-play-why-university.html">discussed</a> the case of the current Dean of medicine at the University of Illinois who is on the board of Novartis.  <br /><br />We also recently <a href="http://hcrenewal.blogspot.com/2014/03/better-late-than-never-jama-article.html">posted</a> about the first time these sorts of severe conflicts of interest issue have been addressed in a large circulation medical journal.  A commentary in JAMA called for many such conflicts to be banned.<br /><br /><b>A Small Study of the Prevalence of a New Species of Conflict of Interest </b><br /><br />Now JAMA has just published a research letter which examined the prevalence of board members of large, for-profit, publicly held pharmaceutical companies who also were among the leadership of academic medical centers. [Anderson TS, Dave S, Good CB et al. Academic medical center leadership on pharmaceutical company boards of directors.  JAMA 2014; 311: 1353-5.  Link <a href="http://jama.jamanetwork.com/article.aspx?articleid=1853147">here</a>.]<br /><br />The authors looked at public data about 2012 board membership of the 47 biggest publicly held companies based on global prescription drug sales. They tabulated those who were also leaders at (apparently only US) academic medical centers.  <br /><br />The most important findings were:<br />- 19/47 companies (40%) had at least one board member who was a leader of an academic medical center (AMC)<br />- 16/17 US based companies had at least one board member who was also a leader of a US AMC<br />-  pharmaceutical company board members included 2 university presidents, 6 deans of medicine, 6 hospital or health system executives, 7 clinical department chairs or center directors<br />-  28 board members were also members of boards of trustees or directors of US hospitals, medical schools, or their parent universities.<br /><br /><b>Comments </b><br /><br />We have been trying to raise awareness of this issue since 2006.  Now we have some idea of the size of the problem.<br /><br />Keep in mind that this study did not attempt to determine the prevalence of academic medical center leaders on boards of smaller pharmaceutical companies, privately held companies, biotechnology or device companies, or other health care and health care related companies (e.g., for-profit hospital systems, health insurance companies, for-profit contract research organizations, for-profit medical education and communication companies, large companies with major health care components, etc, etc, etc)  It also did not attempt to determine the prevalence of leaders of other important health care non-profit organizations (e.g., hospitals and hospital systems, insurance companies, professional societies, patient advocacy groups, accrediting boards, etc, etc, etc) on health care or related corporate boards.  It also did not address leaders of health care organizations outside of the US.  So this study likely greatly underestimates the overall prevalence of and the number of people involved in what we first called a "new species of conflict of interest." <br /><br />But it is a start.  And publishing it in JAMA will begin to make more health care professionals, policy makers, and researchers, and more of the public at large aware of the problem.<br /><br />As I said before, it is very nice to see that the issue of what we once called a new species of conflict of interest finally has made the big time.  Whether it now gets any more traction remains to be seen.  Unfortunately, since conflicts of interest can be so profitable for the directly affected parties, I fully expect they will continue to oppose any restrictions.  The money they have made will likely be used to deploy marketing and public relations personnel and legal counsel to counter any attempts to try to make this aspect of health care more honest.<br /><br />As we have said again and again, the web of conflicts of interest that is pervasive in medicine and health care is now threatening to strangle medicine and health care.  Furthermore, this web is now strong enough to have effectively transformed US health care into an oligarchy or plutocracy.  Health care is effectively run by a relatively small group of people, mainly professional managers plus a few (lapsed?) health care professionals, who simultaneously run or influence multiple corporations and organizations.<br /><br />For patients and the public to trust health care professionals and health care organizations, they need to know that these individuals and organizations are putting patients' and the public's health ahead of private gain. Health care professionals who care for patients, those who teach about medicine and health care, clinical researchers, and those who make medical and health care policy should do so free from conflicts of interest that might inhibit their abilities to put patients and the public's health first.<br /><br />Health care professionals ought to make it their highest priority to ensure that the organizations for which they work, or with which they interact also put patients' and the public's health ahead of private gain, especially the private gain of the organizations' leaders and their cronies.<br /><br />ADDENDUM (3 April, 2014) - see also comments by Paul Levy <a href="http://runningahospital.blogspot.com/2014/04/how-not-to-set-example.html">on the Not Running a Hospital blog</a>, <a href="http://1boringoldman.com/index.php/2014/04/01/at-first-glance/">on the 1BoringOldMan blog</a>, and by Ed Silverman (welcome back!) on <a href="http://blogs.wsj.com/corporate-intelligence/2014/04/01/why-people-who-influence-reseach-are-popular-in-pharma-boardrooms/">the WSJ Corporate Intelligence blog</a>. 

Finally, An Article in a Large Circulation Medical Journal with Systematic Data about Leaders of Academic Medicine Conflicted by their Service on Health Care Corporate Boards

Background - a New Species of Conflict of Interest Since 2006, we have posted repeatedly about  what was then a new species of severe conflicts of interest.  This occurs when leaders of academic med…

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Better Late than Never - JAMA Article Advocates Banning Academic Medical Leaders from Serving on Many Health Care Corporate Boards

Will wonders never cease? Eight years after we started posting about this issue, it has made it into a large circulation medical journal, albeit not completely<br /><br /><b>A JAMA Commentary Decries Leaders of Academic Medical Centers Serving on Boards of Organizations with Conflicting Priorities </b><br /><br />A recent JAMA commentary(1) noted the importance of conflicts of interest affecting top leaders of academic medicine, <br /><br /><blockquote class="tr_bq">Conflict of interest is particularly relevant for those in the upper echelons of academic health system leadership—presidents, vice presidents, provosts, deans, chief executive officers, and the senior administrators who report to them. </blockquote><br />(The article oddly omitted discussing conflicts of interest affecting the boards of trustees of such institutions, who are charged with their stewardship.)<br /><br />Anyway, the authors' rationale was that, <br /><br /><blockquote class="tr_bq">Unlike most faculty and staff, senior institutional officials are involved in financial and business decisions, including purchasing, resource allocation, and development of corporate partnerships, and have fiduciary responsibility to the entire institution. In addition, it is critical that the public, students, employees, and faculty maintain confidence in the integrity of institutional leaders. Leaders have a responsibility to set an example for others in their institution, especially for those training to be health care professionals.<br /><br />Independence and integrity of judgment are core precepts of professionalism. Every employee, faculty member, and student in an academic health system should feel confident that their leaders are making decisions based on the best interests of the institution and not driven by biases secondary to financial connections to outside corporate entities. </blockquote><br />So, <br /><br /><blockquote class="tr_bq">Having a fiduciary responsibility to 2 separate entities is at best a very difficult situation. Will the leader direct business inappropriately to the outside company on whose board he or she sits? Will the leader inappropriately use information about the institution he or she leads to influence decisions by the outside corporation? It is difficult to separate these types of activities and decisions. In addition, there are administrative costs associated with the management of this level of conflict, and such relationships might have a 'chilling effect' on other companies that could do business with the academic health system. Beyond service on fiduciary boards, undertaking any paid role (consulting, participation on advisory boards, etc) with an outside entity with interests that overlap those of the leader’s institution raises the same issues. </blockquote><br />The authors stressed that the most intense conflicts are generated by service on the boards of directors of "organizations with interests that overlap those of the academic health system."  Presumably they would have included among such organizations health care corporations that sell goods or services that might be used within academic medical centers, and/or be the subject of teaching or research by faculty at these centers, although the article did not make that explicit.<br /><br />The authors suggested such conflicts are not infrequent, noting a survey by Campbell et al of department chairs in academic medical institutions that showed a majority had some sort of relationships with industry, although they did not specify what these relationships were.  In fact, the Campbell article did report that 11% of department chairs admitted to being on the board of directors of companies that had activities that related to the chairs' academic or administrative responsibilities.(2) <br /><br />Finally, the authors called for banning most such conflicts<br /><br /><blockquote class="tr_bq"><span class="Paragraph 0" id="scm6MainContent_ucArticleContent_rptSections_lblSection_5">the fiduciary responsibilities of presidents, provosts, vice presidents, deans, chief executive officers, and those who report to them should <b><i>preclude a paid relationship with an outside entity in related and relevant areas,... </i></b></span> </blockquote><br />Note however that they did offer some loopholes.<br /><br /><blockquote class="tr_bq"><span class="Paragraph 0" id="scm6MainContent_ucArticleContent_rptSections_lblSection_5">unless a case can be made that there is a compelling institutional interest in the leader’s service in such a role, or if the role with the outside organization is outside the scope of the leader’s role at the academic health system.</span></blockquote><br />Despite the omissions and loopholes, this is a very significant article.  It is the first challenge to such severe conflicts of interest affecting academic medicine to appear as an article in a major medical journal, at least to my knowledge.  <br /><br /><b>You Heard It Here First</b><br /><br />However, on Health Care Renewal we have been attempting to challenge such conflicts for at least eight years. In 2006 we first <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">discussed</a> a newly discovered species of conflict of interest in health care, in which leaders of medical or health care organizations were simultaneously serving on boards of directors of health care corporations.<br /><br />We posited these conflicts would be particularly important because being on the board of directors entails not just a financial incentive.  It ostensibly requires board members to "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. <a href="http://www.amazon.com/Corporate-Governance-Robert-G-Monks/dp/1405116986"><i>Corporate Governance</i></a>, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]  Of course, after the global financial collapse of 2008 made us sadder and a little wiser, we realized that many board members actually seem to have unyielding loyalty to their cronies among top management.  However, in any case, the stated or actual interests of a member of the board of a health care corporation, like a pharmaceutical company or medical device company, could be very different and at odds with the mission of an academic medical institution or a non-profit ostensibly dedicated to improving health care quality.<br /><br /><b>Vivid Cases Would Strengthen the Argument</b><br /><br />It is odd that the JAMA article included very little evidence about the occurrence of such conflicts of interest.  It really is not hard to find.  Since 2006, we have discussed numerous cases of such conflicts of interest.<br /><br />The case that first attracted <a href="http://hcrenewal.blogspot.com/2006/01/california-nightmares-more-troubles-at.html">our attention</a> was that of Marye Anne Fox, the then Chancellor of the University of California - San Diego, a major campus of the state university that includes a medical school.  January, 2006 media reports noted that Chancellor Fox was simultaneously servingon 10 corporate boards, including those of two health care corporations, Boston Scientific, a medical device company, and Pharmaceutical Product Development Inc (PPDI), a for-profit contract research organization.  At the time, I wrote,<br /><br /><blockquote class="tr_bq">having ultimate leadership responsibilities for a medical school and medical center, while also having ultimate fiduciary responsibilities for the management of a medical device company and a contract medical research company amounts to the biggest conflicts of interest I have ever seen.   </blockquote><br />Nonetheless, beyond local media, the case got little attention at the time.  What attention it did get focused on the magnitude of Chancellor Fox's commitments to outside organizations, not the conflicts they apparently caused (look <a href="http://hcrenewal.blogspot.com/2006/02/academic-medical-leaders-as-corporate.html">here</a>).  Chancellor Fox apparently retired from the PPDI board in 2008 (look <a href="http://www.grace.com/about/leadership/BoardOfDirectors.aspx">here</a>) but did not retire from the Boston Scientific Board until 2011 (look <a href="http://www.massdevice.com/news/boston-scientific-co-founder-john-abele-leave-board">here</a>).  <br /><br />Since then, we found many more striking cases.<br />-  A month later, there was the <a href="http://hcrenewal.blogspot.com/2006/02/tale-of-three-ironies-university-of.html">case</a> of the president of the University of Miami, a board member of for-profit health insurance company UnitedHealth, whose lowest paid employees were on strike to protest their lack of health insurance, among other issues.<br />-  It turned out the UnitedHealth board in particular seemed to be a refuge for multiple academic leaders, at least one of whom seemed partly responsible for allowing the then UnitedHealth CEO to collect many backdated stock options (look <a href="http://hcrenewal.blogspot.com/2006/08/more-entangled-web-unitedhealth-case.html">here</a>)..<br />-  Then there was the 2008 case of the conflict of interest involving an anti-health company.  After Virginia Commonwealth University was criticized for taking money from giant tobacco company Philip Morris for medical research, it turned out that the then president of the university, Eugene Trani, was on the board of another tobacco company, Universal Corp (see post <a href="http://hcrenewal.blogspot.com/2008/05/worse-variant-of-new-species-of.html">here</a>).<br />-  Then, in 2009, some attributed the problems at George Washington University's medical school that caused it to be put on probation to the conflict of interest of its provost and vice president for health affairs, John F Williams, who also sat on the board of Universal Health Services, which owned the university hospital (look <a href="http://hcrenewal.blogspot.com/2009/02/conflicts-of-interest-and-george.html">here</a>).<br /> We posted about a number of other colorful cases since then (look <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20directors">here</a>)<br /><br /><br />Although this evidence is admittedly case based and therefore anecdotal, it could be used to highlight the importance of the problem and develop support for its solution. <br /><br /><b>A Welcome Addition to Previous Recommendations about Countering Conflicts of Interest</b><br /><br />For whatever reason, this issue somehow seemed to escape the attention of many of those who have written about conflicts of interest in health care.  Even those who advocated taking a harder line on conflicts of interest have generally avoided this issue.<br /><br />Brennan et al made recommendations about reducing conflicts of interest in 2006, but focused on students and faculty, not top leaders and executives (see post <a href="http://hcrenewal.blogspot.com/2006/02/academic-medical-leaders-as-corporate.html">here</a>).(3)  The 2009 <a href="http://www.iom.edu/Activities/Workforce/ConflictOfInterest.aspx">Institute of Medicine report</a> set relatively tough standards for managing conflicts of interest affecting clinical research and teaching, which unfortunately since have largely been ignored.  It did call for senior institutional officials to disclose their conflicts of interest, and for institutional boards of trustees to form conflicts of interest committees that would exclude conflicted individuals, but otherwise did not address conflicts of interest affecting academic leaders or institutional trustees.  The 2013 <a href="http://www.pewhealth.org/reports-analysis/reports/conflicts-of-interest-policies-for-academic-medical-centers-85899514090">Pew Charitable Trusts Conflicts-of-Interest Policies for Academic Medical Centers </a>suggested restrictions on conflicts affecting faculty, trainees, and students, but again did not mention senior institutional leaders or boards of trustees.<br /><br /><b>Conclusion </b><br /><br />So it is very nice to see that the issue of what we once called a new species of conflict of interest finally has made the big time.  Whether it now gets any traction remains to be seen.  Unfortunately, since conflicts of interest can be so profitable for the directly affected parties, I fully expect they will continue to oppose any restrictions.  The money they have made will likely be used to deploy marketing and public relations personnel and legal counsel to counter any attempts to try to make this aspect of health care more honest.<br /><br />As we have said again and again, the web of conflicts of interest that is pervasive in medicine and health care is now threatening to strangle medicine and health care.  For patients and the public to trust health care professionals and health care organizations, they need to know that these individuals and organizations are putting patients' and the public's health ahead of private gain. Health care professionals who care for patients, those who teach about medicine and health care, clinical researchers, and those who make medical and health care policy should do so free from conflicts of interest that might inhibit their abilities to put patients and the public's health first.  <br /><br /><br /><b>References</b><br /><br />1. Pisano ED, Golden RN,Schweitzer L. Conflict of interest policies for academic health system leaders who work with outside corporations.  JAMA 2014<span id="scm6MainContent_lblClientName">;311(11):1111-1112. doi:10.1001/jama.2014.788</span>  Link <a href="https://jama.jamanetwork.com/article.aspx?articleid=1841978">here</a>.<br /><br />2.  Campbell EG, Weissman JS, Ehringhaus S et al.  Institutional academic-industry relationships.  JAMA <span id="scm6MainContent_lblClientName">2007;298(15):1779-1786. doi:10.1001/jama.298.15.1779.  Link <a href="http://jama.jamanetwork.com/article.aspx?articleid=209192">here</a>.</span><br /><span id="scm6MainContent_lblClientName"></span><span id="scm6MainContent_lblClientName">3,  Brennan TA, Rothman DJ, Blank L et al.  Health industry practices that create conflicts of interest.  a policy proposal for academic medical centers.  JAMA  </span><span id="scm6MainContent_lblClientName">2006;295(4):429-433. doi:10.1001/jama.295.4.429  Link <a href="http://jama.jamanetwork.com/article.aspx?articleid=202261">here</a>.</span>

Better Late than Never - JAMA Article Advocates Banning Academic Medical Leaders from Serving on Many Health Care Corporate Boards

Will wonders never cease? Eight years after we started posting about this issue, it has made it into a large circulation medical journal, albeit not completelyA JAMA Commentary Decries Leaders of Acad…

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NYU Faculty Vote No Confidence in their President

Faculty at large American universities, in which most of the country's medical schools and teaching hospitals are embedded, are becoming increasingly concerned about the leadership and governance of their organizations, and whether the universities are putting their academic (and clinical) missions ahead of other concerns, like making money and rewarding top executives.<br /><br />In January, 2013, we <a href="http://hcrenewal.blogspot.com/2013/01/at-university-of-miami-faculty-without.html">discussed</a> a an informal, anonymous vote faculty at the University of Miami medical school expressing no confidence in their dean and his chief lieutenant.<br /><br /><b>The NYU No Confidence Vote </b><br /><br />The faculty of a major component of another big US university have just openly voted no confidence in their president, and are raising questions about their board of trustees.  The setting was New York University.  Some background comes from a New York Times <a href="http://www.nytimes.com/2013/03/10/nyregion/john-sexton-is-tested-by-nyu-faculty.html">article</a> this month:<br /><br /><blockquote class="tr_bq"> Embarking on an ambitious expansion at home, constructing a network of new campuses around the globe, wooing intellectual superstars and raising vast amounts of money, John Sexton of New York University<a class="meta-org" href="http://topics.nytimes.com/top/reference/timestopics/organizations/n/new_york_university/index.html?inline=nyt-org" title="More articles about New York University."></a> is the very model of a modern university president — the leader of a large corporation, pushing for growth on every front.<br />  <br /><div itemprop="articleBody">To some within N.Y.U., Dr. Sexton is a hero who has transformed the university. <i>The trustees have thanked him by elevating his salary to nearly <b>$1.5 million </b>from $773,000 and guaranteeing him retirement benefits of <b>$800,000 </b>a year.</i> </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">But to others, he is an autocrat who <i>treats all but a few anointed professors as hired help, ignoring their concerns, informing them of policies after the fact and otherwise running roughshod over American academic tradition, in which faculty members are partners in charting a university’s course. </i></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">'He has a very evangelical sense of purpose,' said Andrew Ross<a href="http://sca.as.nyu.edu/object/andrewross.html"></a>, a professor of social and cultural analysis, 'that does not extend beyond the concept that<i> the university should be an entity of his own making</i>.' </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">'I think,' he added, 'when other administrations see that they say, Well that’s what leadership should be. And when faculty see that they say, That is not what university leadership should be.<i> It’s the style of a maverick C.E.O</i>.'</div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">The debate over Dr. Sexton’s presidency will come to a head this week. The faculty of the university’s largest school, Arts and Science, has scheduled a five-day vote of no confidence. Given Dr. Sexton’s international stature, the vote may serve as the most important referendum yet on the direction of American higher education. </div></blockquote><div itemprop="articleBody"><br />President Sexton lost the no-confidence vote, as noted in another NY Times <a href="http://www.nytimes.com/2013/03/16/education/no-confidence-vote-for-head-of-nyu.html">article</a> a week later:<br /><br /><blockquote class="tr_bq">The vote, 298 to 224 (with 47 abstaining), took place via electronic balloting from Monday through Friday. Full-time tenured and tenure-track professors were asked to respond to the statement: 'The faculty of Arts and Science has no confidence in John Sexton’s leadership.' Voter participation was 83 percent. </blockquote><br /></div><div itemprop="articleBody"><b>Top Executives Usurp Power from Faculty </b><br /><br />An <a href="http://www.nytimes.com/2013/03/21/opinion/the-war-at-nyu.html">op-ed </a>in the NY Times by a leading dissenting faculty member further explained the issues.  He charged that the President ignored faculty concerns about an ambitious plan to expand the physical plant of the university:</div><div itemprop="articleBody"></div><div itemprop="articleBody"><br /></div><blockquote class="tr_bq"><div itemprop="articleBody">How did Dr. Sexton lose the confidence of so many faculty members? By <i>ignoring us</i>. Of course, many professors everywhere feel overlooked by today’s generation of jet-setting university presidents. But we have very specific complaints: above all, Dr. Sexton has consistently refused to address concerns about plans to expand N.Y.U. offices and dorms into the part of Greenwich Village south of Manhattan’s Washington Square Park, where many of us live. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">This expansion plan is known as N.Y.U. 2031, indicating the year in which all the building will be complete. The very name told us that we’d be living on a construction site for a couple of decades. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">Not surprisingly, this did not go over very well with many faculty members. <i>We were also concerned about where the money would come from to pay for this expansion, as no business plan for the project has been made public.</i> </div><div itemprop="articleBody">Thirty-nine departments and schools passed resolutions last year against the 2031 plan. These resolutions were typically passed unanimously or nearly unanimously. And yet <i>Dr. Sexton’s response was a deafening silence</i>. </div></blockquote><div itemprop="articleBody"><b>Academic Values, Particularly Academic Freedom and Free Speech Ignored</b><br /><br /></div><div itemprop="articleBody">Furthermore, the faculty were concerned about plans to expand the university overseas to nations not known for their vigorous support of academic freedom and free speech:</div><div itemprop="articleBody"><br /></div><blockquote class="tr_bq"><div itemprop="articleBody"> Many of us are also concerned with Dr. Sexton’s plans to expand N.Y.U. overseas, including branch campuses in Abu Dhabi and Shanghai, with inadequate faculty involvement or oversight. <i>It is doubtful that faculty members would have chosen to build campuses in countries where academic freedom, and free speech generally, are so parlous</i>. </div></blockquote><div itemprop="articleBody"><br /><b>Executives Enriching Themselves at University Expense</b><br /><br /><br /></div><div itemprop="articleBody">Finally, the faculty were concerned about top university executives immodestly enriching themselves from the coffers of a non-profit university:</div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"></div><blockquote class="tr_bq"><div itemprop="articleBody">As the faculty vote approached, more trouble arose for Dr. Sexton in the form of news reports about <i>lavish compensation for NY administrators.  The central but by no means sole figure in this scandal is Jacob J Lew, t</i>he Obama administration’s new Treasury secretary, who worked at N.Y.U. in the early 2000s for <i>a salary that eventually reached <b>$900,000,</b> larger even than Dr. Sexton’s at the time. </i></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">Mr. Lew received<i> loans to buy a nice home, which apparently were largely forgiven. He also received a severance of some <b>$700,000 </b>when he left for a well-paid position at Citigroup</i>. Severance? For someone who leaves voluntarily? </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"> Dr. Sexton himself is to receive <i>a salary of more than <b>$1.4 million</b> this year, and a 'length of service' bonus of <b>$2.5 million</b> in 2015</i>. (Full disclosure: the university gave me a set of mugs when I completed 25 years of teaching.) And <i>he will receive <b>$800,000</b> a year after he retires. </i></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"><i>Other top administrators make similarly extravagant salaries</i>. Some experts believe <i>there may even be something illegal in the way Dr. Sexton has rewarded them; </i>N.Y.U.’s chapter of the American Association of University Professors has asked New York States’s attorney general to investigate. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">All of which raises a question for many N.Y.U. faculty members: <i>Should administrators be able to enrich themselves like this at educational institutions? N.Y.U. is not a Wall Street firm, but a tax-exempt university that gets millions in taxpayer dollars, not least from student loans<a class="meta-classifier" href="http://topics.nytimes.com/top/reference/timestopics/subjects/s/student_loans/index.html?inline=nyt-classifier" title="More articles about student loans."></a>. </i>In fact, our students have the highest total debt load of any university in the country. Rather than expanding, or paying huge salaries to top administrators, why doesn’t N.Y.U. do more to help its alumni pay off their debts? </div></blockquote><div itemprop="articleBody"><br /></div><b>Forsaking the Academic Mission </b><br /><br />An <a href="http://www.insidehighered.com/news/2013/03/18/new-york-university-vote-no-confidence-raises-debate-about-ambitions-and-governance">article</a> in Inside Higher Education underlined how the dispute is really about the mission of the university in this brave new corporate era:<br /><br /><blockquote class="tr_bq">As Rebecca Karl, an associate professor of East Asian studies and history <a href="http://www.insidehighered.com/news/2005/03/16/summers3_16">recently told <i>Inside Higher Ed</i></a>, '<i>We’ve become very critical of the whole idea of ‘expand or die,’ which of course is a corporate maxim, but we don’t understand why it needs to become our maxim.</i>'</blockquote><br />Also,<br /><br /><blockquote class="tr_bq"> Mark Crispin Miller, a professor of media, culture and communication in NYU's Steinhardt School of Culture, Education and Human Development, who has been an outspoken critic of the Greenwich Village plan [said]. 'The fact is we see NYU as a school, <i>we see our mission as educational. Sexton and the trustees who support him view NYU as a bundle of assets whole value they will apparently do anything to maximize on paper. We believe that this approach is destroying this university.'</i></blockquote>By the way, maybe in retrospect the trustees' role should not be so surprising.  Back in 2011 we <a href="http://hcrenewal.blogspot.com/2011/12/they-think-we-are-imbeciles-and-they.html">posted</a> about a group of extremely rich corporate and finance leaders who attacked critics of their growing power as "imbeciles," among other terms.  Several of the individuals featured in the news article which inspired this post were trustees of New York University.  These included   Kenneth Langone and John Paulson.  A quick look at the<a href="http://www.nyu.edu/about/leadership-university-administration/board-of-trustees.html"> list of current trustees</a> shows that it includes  many top leaders of finance firms, including firms whose actions were alleged to have helped cause the great recession/ global financial collapse or have been subsequently accused of other financial shenanigans, e.g., Steven S Miller, a Vice President of JP Morgan Chase, and Maurice Greenberg (a life trustee), former leader of AIG, E John Rosenwald Jr (a life trustee), Vice Chairman Emeritus of JP Morgan Chase, and William R Salomon (a life trustee), honorary chairman of Citigroup.<br /><br /><b>Summary</b><br /><br />In summary, the issues that inspired the no-confidence vote against the President of New York University appeared to be allegations that university:<br />-  administration usurped power, particularly from the faculty<br />-  administration used this power to put corporate priorities, like expansion for its own sake, and increasing short-term revenue ahead of the academic mission<br />-  administration took advantage of their power to enrich themselves<br />-  trustees, who are supposed to exert stewardship that ensures the university upholds its mission, instead aided and abetted all this<br /><br />All of these should be very familiar issues to <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a> readers.  We have discussed the rise of <a href="http://hcrenewal.blogspot.com/search/label/generic%20managers">generic managers</a> of health care organizations, trained supposedly in general management skills, but not in health care, and indifferent at best to the values of health care professionals.  At times their power has gotten so great as to constitute a <a href="http://hcrenewal.blogspot.com/search/label/managers%27%20coup%20d%27etat">manager's coup d'etat</a>.   We have discussed how managers of health care organizations often put short-term revenue ahead of all other concerns, sometimes called <a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>.  In doing so, they may end up perpetrating <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">mission hostile- management</a>.  We have discussed how managers are able to command often outrageous levels of  <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">executive compensation</a>.   <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20trustees">Boards of trustees</a>, who are supposed to exert stewardship over the organization, and see that its leadership upholds its values, often come from management backgrounds themselves, and are at best clueless about, if not hostile to the mission.  <br /><br />It is time for university faculty to defend their institutions' mission.  Students, alumni, and patients at academic medical centers, medical school clinics, and of academic health professionals ought to be equally fervent in support of the academic and academic health care missions.  Academic medicine needs to be lead and stewarded by people who understand that mission, value it, uphold it, and are accountable for that.  These leaders and stewards should eschew management fads, cronyism, and excess personal enrichment.<br /><br />Maybe the vote of no confidence at NYU is a small step on the path back to the academic and academic medical missions.  But do not expect those who are enriching themselves in the current system to go quietly.<br /><br />ADDENDUM - see also <a href="http://www.margaretsoltan.com/?p=39339">this post</a> by Prof Margaret Soltan on the University Diary blog.

NYU Faculty Vote No Confidence in their President

Faculty at large American universities, in which most of the country's medical schools and teaching hospitals are embedded, are becoming increasingly concerned about the leadership and governance of t…

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More Hospices Pretending Patients are Terminally Ill

In the US, we have been engaged in an experiment involving handing over an ever increasing proportion of direct patient care to for-profit corporations, and non-profit organizations that act increasingly like for-profit corporations (as opposed to mission oriented non-profit organizations or individual health care professionals).  The results have been particularly striking for the care of one of the most vulnerable patient groups, the chronically ill.  <br /><br />Over the last months, a number of stories about the hospices enrolling patients who are not terminally ill have accumulated.  Keep in mind that hospices are supposed to provide compassionate palliative care to the terminally ill.  While they are supposed to make such patients as comfortable and free of pain as is possible, they are not supposed to otherwise aggressively treat other medical problems (based on the assumption that such treatment would benefit dying patients.)  However, such treatments could benefit, or even save the life of patients who are not dying.  (See posts <a href="http://hcrenewal.blogspot.com/2012/03/gentivas-odyssey-healthcare-settles.html">here</a> and <a href="http://hcrenewal.blogspot.com/2011/07/prepare-them-to-die-for-profit-hospices.html">here</a>.)<br /><br /><strong>Hospice of the Bluegrass</strong><br /><br />Back in March, there was very brief <a href="http://www.kentucky.com/2012/03/27/2128086/hospice-of-the-bluegrass-agrees.html">report</a> on Kentucky.com that the non-profit Hospice of the Bluegrass "agreed to pay the federal government $685,000 for submitting claims to Medicare to receive reimbursements for services it provided <em>patients who did not qualify for Medicare services</em>,..."  Note that the main requirement for Medicare payments for hospice services is that the patients receiving these services have no more than six months of survival expected. <br /><br />However, then in June a detailed <a href="http://www.kentucky.com/2012/06/23/2235773/hospice-of-the-bluegrass-does.html">investigative report </a>also on Kentucky.com recounted numerous conflicts of interest affecting that hospice's board,<br /><blockquote>The non-profit Hospice of the Bluegrass has spent more than $1.82 million since 2005 on business deals with several of its board members and the spouses of its executives.</blockquote><br />In particular,<br /><blockquote>On its tax returns from 2005 to 2010, Hospice reported paying at least:<br /><br />■ $540,178 for political lobbying and legal representation to the law firm of McBrayer, McGinnis, Leslie & Kirkland. One of the firm's partners and co-owners, Lisa English Hinkle, was a Hospice board member and a former board chairwoman. Hinkle rotated off the board at the end of 2011. She was preceded on the board by another partner in the firm, James Frazier.<br /><br />■ $837,999 for insurance to the firm of Powell-Walton-Milward, whose managing director, John Milward, is a Hospice board member. His brother Greg Milward, who also works at the insurance firm, previously was on the Hospice board and was board chairman in 2007.<br /><br />■ $392,042 for printing to Pat Byrne Printing, owned by the husband of Deede Byrne, Hospice's chief clinical officer.<br /><br />■ $22,506 for heating and air conditioning to Gary Merckle, husband of Carol Ruggles, Hospice's chief financial officer.<br /><br />■ $28,577 for advertising to the Lexington Herald-Leader while then-editor Marilyn Thompson sat on the board.</blockquote><br />The article also noted that the hospice CEO seems very well-paid given the context,<br /><blockquote>CEO Gretchen Marcum Brown, whose 2010 compensation was $238,650 in base pay, $10,570 in bonus pay and $84,978 in other reportable compensation. The other compensation included Hospice's payment into Brown's deferred-compensation account, from which she can draw in the future.<br /><br />Hospice also paid for a membership in Brown's name at The Club at Spindletop Hall, which offers swimming, tennis and dining.</blockquote>Such a pay package may provide incentives to maximize revenue by maximizing enrollment, regardless of whether enrolled patients really should be in hospice.<br /><strong>Hospice Family Care</strong><br /><br />As<a href="http://www.bizjournals.com/phoenix/news/2012/05/31/hospice-family-care-sold-after-37m.html"> reported</a> by the Phoenix Business Journal in May,<br /><blockquote>Hospice Family Care Inc. has agreed to pay the federal government $3.7 million to settle civil allegations that the Mesa-based company <em>violated the False Claims Act by submitting false bills to Medicare.</em></blockquote><br />Also,<br /><blockquote>The U.S. Attorney’s Office had alleged that Hospice Family Care submitted claims for payment to Medicare for <em>patients who were either completely or partially ineligible for hospice</em>,...</blockquote><br />So this settlement is partly for charges that the hospice enrolled patients who were not terminally ill.<br /><br />Note that in this particular case, the government made an effort to punish the owners of the company, who found a way to evade such punishment:<br /><blockquote>However, on the day the U.S. Attorney’s Office announced that settlement, Hospice Family Care’s owners closed on a deal to sell the company.</blockquote><br />So,<br /><blockquote>Neither the company’s attorney, Frederick Petti, nor government officials would disclose the name of the buyer.<br /><br />“Unfortunately, I can’t provide that information because it’s not in the public domain,” said Assistant U.S. Attorney Bill Solomon.<br /><br />The company’s co-owners, Nancy Smith and Nancy Turner, deferred all comments to Petti.<br /><br />'Believe me, if my clients weren’t in the process of selling this company, we would have fought this to the bitter end,' Petti said. 'We would have prevailed. This is a business decision.'<br /><br />He emphasized that the settlement agreement was not an admission of guilt.<br /><br />Smith and Turner agreed to be excluded from Medicare and Medicaid and all other federal health care programs for seven years, effective immediately. However, Petti said the company’s new owners will not be affected by that settlement agreement and will be free to accept reimbursement from government payers.</blockquote>Such maneuvers obviously reduce any deterrent effect of settlements like this on bad behavior, and particularly on the behavior of enrolling patients who are not terminally ill in hospice.<br /><strong>Harden Healthcare</strong><br /><br />Then in June the Wichita (Kansas) Eagle <a href="http://www.kansas.com/2012/06/21/2382557/whistleblower-suit-leads-to-61.html">reported</a>,<br /><blockquote>A Kansas hospice care provider and its Texas-based parent company will pay $6.1 million to resolve allegations that they <em>submitted false claims to the federal Medicare program</em>. The case arose from a whistleblower lawsuit filed by a nurse more than six years ago, the U.S. Justice Department said Thursday.<br /><br />Justice officials said in a news release that they hope the settlement with Wichita-based Hospice Care of Kansas LLC and Fort Worth-based Voyager HospiceCare Inc. will serve as a warning to other hospice providers.<br /><br />Prosecutors alleged the companies submitted false claims to the federal health care program for the elderly and disabled between 2004 and 2008 for patients who weren’t expected to die in less than six months, a requirement for the benefits in question.</blockquote><br />Note that this report makes very explicit the allegation that the hospice was enrolling patients who were not terminally ill. Further note that while the beginning of the report makes it appear that the company that owns the hospice is regional, it actually is larger<br /><blockquote>The agreement includes no admission or determination of wrongdoing, Harden Healthcare, the owner of Voyager HospiceCare and Hospice of Kansas, said in a statement.</blockquote><br />Harden Healthcare, <a href="http://www.bizjournals.com/austin/news/2012/05/25/harden-healthcare-tops-private-firms.html">according to </a>the Austin (Texas) Business Journal, is the largest private employer in that city, with over 3800 employees and revenues of over $810 million. <br /><br /><strong>Hospice of the Comforter</strong><br /><br />The Orlando Sentinel reported in late August,<br /><blockquote>The federal government is taking over a whistleblower lawsuit against the Altamonte Springs-based Hospice of the Comforter — a suit that alleges the nonprofit <em>routinely over-billed Medicare for patients who didn't qualify as terminally ill, sometimes keeping them in hospice care for as long as five years.</em></blockquote><br />These are allegations of course, but it turns out that both sides of the action agree on certain facts of interest,<br /><blockquote>Both sides agree that <em>Hospice of the Comforter officials discharged a large number of Medicare patients after the federal government began scrutinizing the ballooning number of hospice patients nationwide.</em><br /><br />In fact, Stone said, the initial sampling by government auditors showed Hospice of the Comforter had an error rate of 18 percent, just slightly over the 15-percent rate the government allowed and therefore triggering a second, more intense review.<br /><br />That phase, in January 2010, revealed a <em>troubling 77 percent denial rate</em>, Stone said — meaning that Medicare officials believed the hospice was improperly billing the government in 77 percent of the cases it reviewed. According to the government, hospice care should be limited to patients certified by a hospice physician as having six months or less to live.<br /><br />Meanwhile, though, <em>an internal hospice committee did its own review of patients, discharging more than 133 of them and noting they were, 'no longer terminally ill,</em>' the lawsuit states. Some had been designated 'FOB' for 'Friends of Bob [Wilson, the CEO of the hopsice],' and Wilson later insisted some be readmitted and their care billed to Medicare, the lawsuit says.</blockquote><br />Let me just note that for someone truly terminally ill, the way to become no longer terminally ill is to die. <br /><br />A <a href="http://articles.orlandosentinel.com/2012-09-08/news/os-scott-maxwell-hospice-adventist-medicare-fraud--20120908_1_medicare-fraud-settlement-adventist-hospitals-health-care-fraud">column</a> in the Orlando Sentinel suggested that the hospice CEO had a strong personal incentive to enroll patients who were not terminally ill,<br /><blockquote>there are facts not in dispute — such as <em>Wilson's financial incentive to keep his patient counts high: bonuses of $50,000 every three months on top of his base salary of $120,000</em>.</blockquote>Again, maintaining lucrative compensation could be an inducement for hospice executives to sanction enrollment of patients who were not really terminally ill.<br /><strong>Summary</strong><br /><br />Hospices arose to provide compassionate care for among the most vulnerable of patients, the terminally ill.  Hospices began as mission oriented non-profit organizations, often affiliated with hospitals or religious groups.  However, the generous payments for hospice care provided by Medicare and commercial insurance, and the increasingly laissez faire supposedly "market-based" health care context lead to the growth of for-profit hospices, and the emulation of their management by ostensibly non-profit organizations.  <a href="http://articles.orlandosentinel.com/2012-09-08/news/os-scott-maxwell-hospice-adventist-medicare-fraud--20120908_1_medicare-fraud-settlement-adventist-hospitals-health-care-fraud">In the Orlando Sentinel</a>, Scott Maxwell used the example of the Hospice of the Comforter to assert<br /><blockquote>you've been duped when it comes to waste, fraud and abuse in America's health-care system.<br /><br />Politicians love to rant about it. They often do so when explaining why they're about to cut your benefits.<br /><br />They're right that fraud happens. But the individual scammers they portray as the problem are nothing compared to the <em>systemic white-collar fraud perpetrated by corporations — and, yes, faith-based nonprofits.</em><br /><br /><em>This is America's dirty little health-care secret.</em><br /><br />We all know health-care costs are soaring. But <em>we have done little to address the organized fleecing — often because the fleecers are either campaign donors or nonprofits wrapped in a cloak of altruism.</em><br /><br />In this country, you can go to prison for stealing a TV. But if companies get caught stealing millions from taxpayers, the fines are simply viewed as the cost of doing business.</blockquote><br />We have made similar assertions about systemic misbehavior in the US health care system, and how failure of local through national government to impose any penalties on the individuals who authorize, direct or implement bad behavior just allow the problem to get worse. However, the consequences of increasing hospice enrollment (hence short-term revenue, and hence the compensation of top hospice executives) by enrolling patients who are not terminally ill go well beyond just increasing health care costs. As we have <a href="http://hcrenewal.blogspot.com/2012/03/gentivas-odyssey-healthcare-settles.html">said before</a>, enrolling patients into hospice who are not already really doomed to die soon denies them the possibility of treatment for new acute illnesses and worsening of chronic illnesses, which then could hasten their deaths. (Pretending those patients were terminally ill could have fooled their relatives into thinking those deaths were inevitable, instead of results of bad practice and potentially fraud.) <br /><br />So the pattern of fraud now increasingly documented to be taking place in for-profit and even non-profit hospices is particularly reprehensible. It preys on vulnerable patients, and may cost some patients their lives who otherwise might have lived for a long time. This is a prime example of what goes wrong when our main health care policy seems to be based on letting the good times roll. <br /><br />I hope that the realization that enrollment of patients who are not terminally ill into hospices can result in their untimely death may lead to some reconsideration of our experiment in lightly regulated, "market based" health care. Those who directly care for patients ought to be motivated by professional values, not short-term revenue.

More Hospices Pretending Patients are Terminally Ill

In the US, we have been engaged in an experiment involving handing over an ever increasing proportion of direct patient care to for-profit corporations, and non-profit organizations that act increasin…

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From Serving the Poor to Paying Executives Millions - Carolinas HealthCare System

A striking contrast between a large health care organization's historic mission and its current practices appeared in a series published by the Charlotte News-Observer called "<a href="http://www.newsobserver.com/prognosisprofits/">Prognosis: Profits</a>" about the Carolinas HealthCare System.<br /><br /><strong>A Historical Mission to Serve the Poor </strong><br /><br />The system evolved from a public hospital meant to serve the poor.  In particular,(1)<br /><blockquote>Only 30 years ago, it was a charity hospital called Charlotte Memorial – a crowded, dreary place that lost money every year because most of its patients couldn’t pay their bills.</blockquote>The hospital system is actually "a public, tax-exempt entity called a hospital authority". Because of this special status, it has the power of eminent domain, the ability to seize property albeit with compensation, and its employees have "more privacy protection that those of other public agencies." <br /><br />However, in the "greed is good" 1980s, the hospital began a transformation,<br /><blockquote>The board hired [Harry] Nurkin in 1981 to <em>revamp Charlotte Memorial’s image, attract paying patients and avoid the fate of struggling public hospitals</em> in Atlanta and Chicago.<br /><br />Until then, patients with insurance mostly chose Presbyterian Hospital or Mercy Hospital, with stately buildings at the edge of Myers Park.<br /><br />With <em>a vision of building one of the Southeast’s finest medical centers</em>, Nurkin paid attention to details, such as wallpaper, plants and furniture. And he put the hospital in the black by <em>improving collections from patients and insurers</em>.<br /><br />In 1983, when Nurkin unveiled the hospital’s first long-range plan, some board members sat in wonder at a slide show that accompanied his bold outline, according to 'A Great Public Compassion,' a book by writer Jerry Shinn.<br /><br />The plan called for a heart institute, a doctors’ building and an 11-story, $40 million tower that would replace a 1940s wing. All of that came true – and more.</blockquote><br /><strong>Now a Huge Hospital System</strong><br /><br />From those humble origins, Carolinas HealthCare System has now become(2)<br /><blockquote><em>a juggernaut</em>. It’s now the <em>country’s second-largest public hospital system</em>, behind only the nationwide system of Veterans Affairs hospitals.<br /><br />One of the benefits of that growth is access to quality medical care. Carolinas HealthCare offers one of five organ transplant programs in the state and operates the region’s most comprehensive trauma center, where accident victims frequently arrive via medical helicopter. Five-year-old Levine Children’s Hospital has brought new pediatric specialties to Charlotte, and Levine Cancer Institute has recruited specialists from such respected institutions as the Cleveland Clinic.<br /><br />With <em>nearly $7 billion in annual revenue</em>, Carolinas HealthCare runs about 30 hospitals and <em>owns more than $1 billion worth of property in Mecklenburg County alone</em>. It has <em>more than $2 billion in investments.</em><br /><br />In the five-year period ending in 2011, it spent $1.8 billion on capital projects.</blockquote><br /><strong>Forgetting the Mission: Suing Poor Patients</strong><br /><br />However, as the system grew, its mission seems to have been forgotten. <br /><br />In particular, Carolinas HealthCare seems to now have a penchant for suing poor patients who cannot pay its bills. A Charlotte Observer article documented that while the hospital does not refuse poor patients care, it may later pursue them if they cannot pay. The article noted the case of a woman who was assured that the hospital had funds to pay for patients like her, but who then faced a lawsuit for $34,000 and a lien on her house. In general(3)<br /><blockquote>most N.C. hospitals are tax-exempt – a distinction that saves them millions each year. In exchange, these <em>nonprofits are expected to provide financial help to those without the means to pay.</em><br /><br />But thousands of times a year, <em>hospitals are suing patients instead</em>, an investigation by the Charlotte Observer and The News & Observer of Raleigh found.<br /><br />An in-depth look at some of those cases suggests<em> most of the patients were uninsured, and that a significant number of them should have qualified for free hospital care.</em><br /><br />Critics contend those hospitals are <em>financially ruining people they could afford to help</em>. Carolinas HealthCare System, the multibillion-dollar public enterprise that owns CMC-Mercy, has generated average annual profits of more than $300 million over the past three years.<br /><br />During the five years ending in 2010, N.C. hospitals <em>filed more than 40,000 lawsuits to collect on bills.</em><br /><br /><em>Most of those suits were filed by just two entities: Carolinas HealthCare and Wilkes Regional Medical Center in North Wilkesboro. Each filed more than 12,000 suits over the five-year period,</em> according to state courts data. <em>Wilkes Regional, which is managed by Carolinas HealthCare,</em> appears to be the state’s most litigious individual hospital.</blockquote><br />In addition,<br /><blockquote>Often, the <em>lawsuits hit people who are among those paying the highest rates for hospital care: the uninsured.</em> Bills for uninsured patients are usually higher because they don’t have insurance companies to negotiate discounts on their behalf.<br /><br />It’s unclear how many of the patients sued in North Carolina lacked health insurance and substantial income or assets. But in interviews with 25 of those patients, the newspapers found 17 of them were uninsured; 10 said they were never told about the hospitals’ financial assistance programs.</blockquote><br />An editorial summarized the contrast between Carolinas HealthCare historic mission and its current practices(4)<br /><blockquote>Carolinas HealthCare, once a small, struggling operation, has become one of the top hospital systems in the country. Novant Health, owner of Presbyterian Hospital, has grown into a powerful and respected health care provider. Their successes have come thanks to an <em>aggressive philosophy of accumulation and growth,</em> which has led to patients in the Charlotte region having access to the latest in medical technology and research, as well as top doctors in a diversity of medical fields.<br /><br />But that accumulation has <em>contributed to the high cost of health care</em> in North Carolina, and that growth has caused the hospitals to <em>stray at times from their non-profit charitable mission</em>. A Charlotte Observer and News & Observer investigation that begins today details how a hunger for money and power has caused the two hospitals to sometimes <em>lose their way, contributing to the region’s health care cost woes and leaving thousands of patients with financially crippling bills.</em></blockquote><br /><strong>Opaque, Unaccountable Governance</strong><br /><br />While the Charlotte Observer did not provide opinions about the reasons that this large health care organization appears to have forgotten its raison d'etre, its reporting suggests some familiar elements. <br /><br />The governance of the organization may have been appropriate for a small, struggling public hospital, but as the system grew, lack of accountability and transparency may have become more important. It is easier to lose one's way when no one is observing one's actions.(1)<br /><blockquote><em>Most hospital business gets done quietly</em> – until there is a well-planned announcement.<br /><br />The system’s <em>self-perpetuating board includes top community and business leaders</em> whose nominations get approval from the Mecklenburg commissioners’ chairman.<br /><br />Quarterly hospital system board meetings, at 7 a.m., are <em>polite and scripted. Votes are unanimous on everything</em> from building new hospitals to borrowing millions of dollars. <em>Questions are worked out in private discussions, closed-door committee meetings or executive sessions</em>.<br /><br /><em>Meetings aren’t widely publicized</em>. Except for a couple of newspaper reporters, only board members and hospital officials attend. Future meeting dates are provided to those who attend board meetings or call the system’s main office.<br /><br />State law requires public organizations with websites to post meeting times. <em>Carolinas HealthCare had not been doing that until last week,</em> after an Observer reporter asked about it.<br /><br />The board’s agenda sets <em>no time for public comment</em>.</blockquote><br />While operating so quietly, the board appears to have become a very cozy little group,<br /><blockquote>The 1943 hospital authority law intentionally kept elected officials and politics out of operations. The link is that the commissioners’ chairman must sign off on hospital board nominees.<br /><br />It has been <em>a rubber stamp.</em><br /><br />County officials remember<em> once in 30 years that a proposed board member was rejected</em>. That was in 2008 when nominees included Gloria Pace King, who had been ousted as CEO of the United Way of the Central Carolinas because of public outcry over her $2 million pension package.<br /><br />In December 2008, the board renominated King for a new term. But hospital officials say Roberts, then commissioners’ chairwoman, objected, and King wasn’t reappointed.<br /><br />Over the years, the board has included <em>city leaders, such as bank CEOs Hugh McColl and Ed Crutchfield, and Stuart Dickson, the retired head of the company that owns Harris Teeter. His father, Rush S. Dickson, was an original board member</em> whose name is on the entrance to what is now Carolinas Medical Center.</blockquote><br /><strong>Lavish CEO Compensation</strong><br /><br />As noted earlier, not only are the actions of the hospital system's governing body kept secret, but up to recently, compensation paid to all employees, including top executives was also secret.(1)<br /><blockquote>State law gives its employees more privacy protection than those of other public agencies.<br /><br />For example, salaries of all state, county and city government employees are public. That’s not true for public hospital employees.<br /><br /><em>Until a 2009 change in state law, Carolinas HealthCare had for years refused to make public the total compensation for top executives</em>. They said state law precluded them from disclosing more than basic salary.<br /><br />As a result, the public hospital system wasn’t disclosing as much detail as its private counterpart, Novant Health, does in publicly available reports to the IRS.<br /><br />At the urging of the Observer and other state newspapers, legislators broadened the law in 2009 to require disclosure of total compensation for top executives at public hospitals.</blockquote><br />So it should not be any surprise that an opaque, unaccountable board run by a cozy group of insiders saw fit to allow its friends in the management make some money, a lot of money. The Charlotte Observer reported that there were nine hired managers with total compensation greater than $1 million in 2011.(5)<br /><blockquote>Michael Tarwater<br />CEO, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$4,236,305</strong></em><br />Percentage increase over prior year:<br />14.10%<br /><br />Joseph Piemont<br />President/Chief Operating Officer,<br />Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$2,536,792</strong></em><br />Percentage increase over prior year:<br />19.70%<br /><br />Greg Gombar<br />CFO, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,751,798</strong></em><br />Percentage increase over prior year:<br />8.90%<br /><br />Laurence Hinsdale<br />Executive Vice President, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,693,314</strong></em><br />Percentage increase over prior year:<br />44.10%<br /><br />Paul Franz<br />Executive Vice President, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,575,927</strong></em><br />Percentage increase over prior year:<br />-1.30%<br /><br />Dennis Phillips<br />Executive Vice President, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,351,138</strong></em><br />Percentage increase over prior year:<br />12.20%<br /><br />John Knox<br />Chief Administrative Officer, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,197,528</strong></em><br />Percentage increase over prior year:<br />11.80%<br /><br />Roger Ray<br />Chief Medical Officer, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,080,159</strong></em><br />Percentage increase over prior year:<br />No data for prior year<br /><br />Russ Guerin<br />Executive Vice President, Carolinas HealthCare System<br />Total 2011 compensation:<br /><em><strong>$1,060,931</strong></em><br />Percentage increase over prior year:<br />3.00%</blockquote><br />Should it be surprising that executives who can become so rich, and who are subject to so little oversight, are more interested in preserving the hospital system's operating margin which supports their wealth than in providing the care to poor people that was the hospital system's original reason to exist?<br /><br /><strong>Summary</strong><br /><br />As the local NAACP pointed out, the hospital system should better uphold its mission(6)<br /><blockquote>'The Bible says we’re not supposed to burden the poor and the sick and the afflicted. We’re supposed to lift them and help them and heal them,' NAACP President the Rev. William Barber said during the Charlotte stop of a statewide tour designed to bring attention to the struggles of low-income people. '(Carolinas HealthCare) is <em>a group with money hounding people who are just trying to make it.'</em></blockquote><br />However, I submit that restoration of this organization's mission will require more than exhortation. The governance of this organization, like that of many others we have discussed, needs to regain accountability, transparency, integrity, and ethics. It must insist that the leaders it hires uphold the mission ahead of other concerns, particularly personal enrichment. It must provide these leaders with realistic incentives based on how well they uphold this mission, not on revenue or operating margin. <br /><br />Until such changes are accomplished, expect this hospital system, like many other health care organizations, to contribute only to our ever rising prices, declining access, and stagnating health care quality.<br /><br /><strong>References</strong><br /><br />1.  Garloch K, Alexander A. Carolinas HealthCare System's evoluation: public hospital with private attitude.  Charlotte Observer, April 21, 2012.  Link <a href="http://www.charlotteobserver.com/2012/04/21/3189730/public-hospital-with-private-attitude.html">here</a>. <br />2. Alexander A, Garloch K, Neff J. Nonprofit hospitals thrive on profits. Charlotte Observer, April 21, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/21/3189821/nonprofit-hospitals-thrive-on.html">here</a>. <br />3. Alexander A, Raynor D. Hospital suits force new pain on patients. Charlotte Observer, April 23, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/23/3193509/hospital-suits-force-new-pain.html">here</a>. <br />4. Anonymous. Money over mission at non-profit hospitals. Charlotte Observer, April 22, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/22/3189118/money-over-mission-at-non-profit.html">here</a>. <br />5. Anonymous. Million-dollar hospital executives in North Carolina. Charlotte Observer, April 21, 2012. Link <a href="http://www.newsobserver.com/2012/04/22/2019568/million-dollar-hospital-executives.html">here</a>.<br />6. Alexander A. Stop suing patients, NAACP tells Carolinas HealthCare System. Charlotte Observer, May 2, 2012. Link <a href="http://www.charlotteobserver.com/2012/05/02/3211943/stop-suing-patients-naacp-tells.html">here</a>.

From Serving the Poor to Paying Executives Millions - Carolinas HealthCare System

A striking contrast between a large health care organization's historic mission and its current practices appeared in a series published by the Charlotte News-Observer called "Prognosis: Profits" abou…

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How the Anechoic Effect May Be Generated - The Chairman of a Hospital Board Buys a Newspaper

We have often noted that stories about problems with the leadership and governance of health care tend to be <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>. That is, they tend to get less notice and generate less discussion than their content would seem to warrant. We have postulated that this has to do with fear of offending the rich and powerful who now lead and govern health care organizations, and the benefits, which may be produced by conflicts of interest, of maintaining good relationships with the rich powerful.<br /><br /><strong>Did a Newspaper Delay a Story Unfavorable to its Prospective Buyer?</strong><br /><br />A story that has been emerging in bits and pieces over the last two months shows the sort of complex machinations that may generate the anechoic effect.<br /><br />In February, 2012, a New York Times <a href="http://www.nytimes.com/2012/02/16/business/media/in-philadelphia-papers-editorial-independence-at-issue.html">story</a> raised questions about how a bid to purchase a big city newspaper by a group of well-connected and wealthy buyers would affect news coverage.  The big city newspaper was the Philadelphia Inquirer.  The group bidding to buy it was:<br /><blockquote>made up of the area’s most powerful Democrats.<br /><br />Edward G. Rendell, the former Philadelphia mayor and Pennsylvania governor leads the group, which includes George E. Norcross III, a Democratic powerbroker in South New Jersey;... </blockquote><br />The Times suggested that the Inquirer's coverage was being influenced by the proposed buyers before they had completed the sale:<br /><blockquote>Last week, Gregory J. Osberg, chief executive and publisher of the Philadelphia Media Network, which publishes The Inquirer, The Daily News and Philly.com, summoned the news organization’s three most senior editors to his office. <br /><br />Over three hours, he told them <em>he would be overseeing all articles related to the newspapers’ impending sale. If any articles ran without his approval, the editors would be fired</em>, according to several editors and reporters briefed on the meeting who did not want to be identified criticizing the company’s leadership.<br /><br />In a telephone interview Wednesday morning, Mr. Osberg said the meeting did not happen. But Larry Platt, editor of The Daily News and one of the editors in attendance, said that it did. Late Wednesday, Mr. Osberg acknowledged that the meeting had taken place but denied interfering in the editorial decisions, saying he only wished to be notified of further coverage. Mr. Platt declined to comment on specifics, but said, 'We fought for what we believed in,' referring to editorial independence, 'and we didn’t get all that we wanted.' </blockquote><br /><strong>A Story About Who Benefits from How a Hospital is Lead</strong><br /><br />This is directly relevant to the anechoic effect in health care. Per the Times,<br /><blockquote><em>An investigation about conflicts of interest among board members of the Cooper University Hospital in nearby Camden, N.J., remains unpublished after months. Mr. Norcross serves as the hospital’s chairman</em>.<br /><br />In an e-mail Mr. Norcross, who has called The Inquirer and The Daily News in the last week to discuss other coverage, said the reporter’s research 'contained significant factual errors and incomplete data about the hospital and health care industry.' </blockquote><br />The allegedly suppressed <a href="http://www.philly.com/philly/news/new_jersey/20120325_Powerful_Medicine.html">story</a> finally came out in late March. In its published form it implied that Mr Norcross had an outsized influence on hospital operations, the hospital had business relationships with people who donated to political causes and organizations favored by Norcross, the hospital seemed to disproportionately benefit from government money and actions, and the hospital's board was afflicted by numerous conflicts of interest. <br /><br /><u>Norcross' Influence on Hospital Management</u><br /><br />Per the Inquirer,<br /><blockquote>With Cooper suffering from record deficits, Norcross, then a top executive at Commerce Bank, helped bring the hospital back from the brink in 1999 when he arranged for the bank to lend it $8 million.<br /><br />Since then, <em>Norcross has put his imprint all over Cooper, from its lavish marketing, to its competitive fight to lure doctors, to its recent $450 million construction boom, to the political figures who work at Cooper and serve on its board</em>.<br /><br />Just as he was one of the first pols to spend heavily on television ads for lowly county races, <em>Norcross was among the first to sell a hospital on TV</em>, deploying Kelly Ripa as Cooper's pitchwoman. As it happens, she's the daughter of Joseph Ripa, the Democratic Camden County Clerk.<br /><br />The milestones have been coming faster. The medical school, a must-have for any hospital with big ambitions, is finally gearing up. This year, work began on a $100 million cancer center.</blockquote><br />The concern is that Mr Norcross was influencing operations in ways that happened to benefit his interests. Note that this contrasts with a number of cases we have discussed in which health care organizations' boards often seen too deferential to the organizations' hired leaders.<br /><br /><br /><u>Hospital's Relationships with Political Donors</u><br /><br />The Inquirer reported these instances,<br /><blockquote>With its heavy capital spending and big operating budget, Cooper has become an economic powerhouse. It throws off millions in fees and contracts.<br /><br />Consider Cooper's heavy borrowing to pay for all that expansion. In the last decade, Cooper's bond sales have generated $5.1 million in fees to a variety of law firms, title companies, and financial advisers. On top of that, the hospital has handed out big-ticket contracts for other legal work, such as malpractice defense, its public disclosures show.<br /><br /><em>Many of those who received work via Cooper are major political donors, giving across the state to both parties. But they have been especially generous in Camden County, Norcross' home base.</em><br /><br />During the last decade, <em>firms involved with Cooper have given more than $1.5 million to Camden County Democrats.</em><br /><br />As an example, lawyers at Cozen O'Connor, a Philadelphia firm that worked on four Cooper bond issues, have given Camden Democrats $115,060 since 2002. That represented more than 70 percent of its local political contributions in New Jersey. A Cozen spokeswoman said all donations reflected candidates' merits.<br /><br />In interviews, <em>Norcross conceded he had input into who was selected to work on hospital bond issues,</em> managed by state and local authorities.<br /><br />'Have I made recommendations of quality firms?' he said. 'Absolutely.'<br /><br />But he insists that firms are selected solely on ability and that political donations were irrelevant.<br /><br />"These people have been making major, sizable donations to the Democratic Party in this region long before any bond issue," he said.<br /><br />Lawyers offer varying explanations for their giving.<br /><br />Attorney Steven Weinstein, formerly with the Philadelphia firm of Blank Rome, has given steadily to South Jersey Democrats over the years, public records show. His giving hit a peak, in 2004 when he gave $30,000 to the Camden County Democratic Committee.<br /><br />The following year, Blank Rome was named one of four law firms to work on a $135 million Cooper bond issue, representing the investment firm Goldman Sachs.<br /><br />In the six years since, Weinstein's donations to Camden County Democrats came only to $2,850.<br /><br />Weinstein said his donations had no connection to Blank Rome.<br /><br />But David Lebor, another former Blank Rome partner who joined Weinstein in making Camden County donations in 2004, said <em>the firm would sometimes request that lawyers make specific contributions. </em>Lebor said he didn't know the firm's motives for making requests. 'I don't ask those questions,' he said.</blockquote><br />The implication is that Mr Norcross was using his control over the hospital to fulfill his political agenda.<br /><br /><u>Favorable Relationships with Government</u><br /><br />The Inquirer documented instances which seemed to show that the hospital seemed to be treated disproportionately well by government, for example,<br /><blockquote>Late last year, the Delaware River Port Authority, its once-vast development kitty finally running dry, approved its last round of project spending. Among the lucky few recipients: Cooper University Hospital. It got $6 million for the cancer center.<br /><br /><em>No other hospital in New Jersey or Pennsylvania has ever received DRPA assistance</em>, the authority says.<br /><br />The DRPA money was one of many ways in which Cooper has benefited from government action during the Norcross era. This year, <em>Cooper received $52 million in state funding, more than any hospital in South Jersey</em> - and in the top five for all 72 New Jersey hospitals.<br /><br />And U.S. Rep. Rob Andrews (D., Camden) has set aside $640,000 in federal earmarks for Cooper over the last decade, the most of any hospital in his district. Another Camden hospital, Our Lady of Lourdes, received nothing.</blockquote><br /><u>The Board's Conflicts of Interest</u><br /><br />The Inquirer article noted,<br /><blockquote>[Cooper Health System CEO John P] Sheridan's old law firm, Riker Danzig Scherer Hyland & Perretti L.L.P., has been a paid lobbyist for Cooper for at least a decade. More recently, the hospital put another firm on its roster.<br /><br />It didn't look far to make the hire.<br /><br />In 2010, Cooper added Republican lobbyist Jeff Michaels to the team. In another lobbying venture, he is the partner of [George] Norcross' brother Philip.<br /><br />The hospital has paid the firm solely operated by Michaels $180,000 over the last two years.</blockquote><br />Beyond that,<br /><blockquote>As Cooper has spent its millions, hospital insiders have frequently been on the receiving end.<br /><br /><em>From 2008 to 2010 Cooper paid more than $40 million to companies tied to the hospital's board of trustees</em>, according to public-disclosure documents the hospital filed with the IRS.<br /><br />The payments included:<br /><br />$1.6 million to Norcross' Marlton insurance brokerage, Conner Strong and Buckelew.<br /><br />$1.8 million to the Parker McKay law firm, where Philip Norcross is the firm's chief executive.<br /><br />$4.6 million to the former Commerce Bank and its successor, TD Bank. Norcross and a former Cooper board member were top executives at Commerce.<br /><br />$277,000 to Riker Danzig, where Sheridan was once a law partner.<br /><br />But of the millions in payments, the largest share - $33 million - went to a joint venture between international construction giant Turner Construction and HSC Construction and Builders in Exton.<br /><br />Former board member Edward Viner's son, Jim, serves as president of HSC.<br /><br />Most of the money was passed through to subcontractors and the joint venture was paid $2.8 million in fees, Cooper said.<br /><br />In 2008 and 2009, the last years for which regional data were available, Cooper initially reported more of what the IRS calls 'Interested Persons' transactions than any hospital in the Philadelphia area.</blockquote><br />This again suggests that the hospital may be run such that board members' financial interests are put ahead of other concerns.<br /><br /><strong>Summary</strong><br /><br /><a href="http://www.boardsource.org/Knowledge.asp?ID=3.364">According to BoardSource</a>, the duties of boards of trustees of non-profit organizations include:<br /><blockquote>- Duty of Care<br /><br />The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the duty of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.<br /><br />-Duty of Loyalty<br /><br />The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.<br /><br />-Duty of Obedience<br /><br />The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission. </blockquote><br />The delayed Inquirer story suggests that instead, those who are supposed to steward large health care organizations may be putting their own interests, political or financial, ahead of the mission, potentially violating their duties of loyalty and obedience. This story corroborates questions we have been raising about who now are the stewards of health care organizations, and to what ends. <br /><br />However, this particular story appears to have been delayed, and perhaps diluted, because of the power wielded by the sorts of people who now are supposed to be stewards of health care organizations. This shows how powerful insiders not only are distorting health care to fit their own agendas, but that they may be smothering the discussion of this vitally important issue. <br /><br />We will not be able to truly reform health care until we can freely discuss what has gone wrong with it.

How the Anechoic Effect May Be Generated - The Chairman of a Hospital Board Buys a Newspaper

We have often noted that stories about problems with the leadership and governance of health care tend to be anechoic. That is, they tend to get less notice and generate less discussion than their con…

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Another Cautionary Tale about Conflicts of Interest: the CEO's Stretch Limousine, Golden Parachute, and Slush Fund

It remains fashionable in academic medicine to tolerate, if not celebrate conflicts of interest as necessary to support the "collaboration" needed for "innovation," while minimizing their risks (e.g., look <a href="http://hcrenewal.blogspot.com/2012/03/logical-fallacies-in-defense-of.html">here</a>).  <br /><br />Recently, another cautionary tale about how conflicts of interest signal the risk of all sorts of unpleasantness has appeared in the media.<br /><br /><strong>A Sentinel Event: the First Conflicts Uncovered</strong><br /><br />In 2009, we <a href="http://hcrenewal.blogspot.com/2009/03/some-conflicts-grow-in-brooklyn.html">wrote</a> about some conflicts of interest at Wyckoff Heights Medical Center in my hometown of Brooklyn, NY.  The New York Daily News had reported that Dr. Addagada Rao, the hospital's chief of surgery was simultaneously the president and part-owner of a Caribbean medical school that funneled medical students to clerkships at Wyckoff.  The hospital's CEO, Rajiv Garg, was an investor in the same school.  At the time, I wrote, <br /><blockquote>This story illustrates another twist on conflicts of interest affecting the leaders of not-for-profit health care organizations. Many of the smaller not-for-profit hospitals, of which there are thousands in the US, may have minimal conflict of interest policies, which may be minimally enforced, without much transparency or accountability. <em>The coziness of the leadership culture of such smaller institutions may preclude anyone within the culture from asking tough questions. The results may be total confusion as to whose interests particular leaders are serving. In particular, the interests of each hospital's patients may get lost in the shuffle</em>. In this case, the interests of medical students may also get lost in the shuffle. Although the institutions involved may be small, and hence the conflicts may seem small in terms of their monetary value, they aggregate to contribute to the moral miasma that now is the atmosphere of health care. </blockquote>You heard it here first.<br /><br /><strong>The CEO's Golden Parachute</strong><br /><br />Fast forward to 2012. In January, the Daily News again <a href="http://articles.nydailynews.com/2012-01-31/news/31007403_1_brooklyn-hospital-center-state-advisory-panel-severance-payout">reported</a> that CEO Garg had been ousted, but that<br /><blockquote>Trustees at Wyckoff Heights Medical Center asked to consider <em>a whopping $875,000 severance payout for its former CEO </em>are balking at the package....</blockquote><br />It seems that Garg's attorney claimed<br /><blockquote>They were on the verge of bankruptcy when he arrived. He reduced the debt by tens of millions of dollars.</blockquote>However,<br /><blockquote>the hospital’s financial situation remains grim. According to the work group’s final report, <em>Wyckoff’s liabilities are $91 million greater than its assets and it is saddled with $114 million in long-term debt.</em></blockquote>So here is yet another example of a CEO personally profiting while his or her organization's finances fester.<br /><br /><strong>The Chauffeured Cars, the Stretch Limousine</strong><br /><br />The the Daily News began <a href="http://articles.nydailynews.com/2012-02-10/news/31048142_1_security-guards-limo-beleaguered-hospital">chipping away </a>at the other ways CEO Garg benefited from his leadership of the fiscally troubled hospital. A notable symbol of these benefits was a stretch limousine:<br /><blockquote>The ousted CEO of a debt-riddled Brooklyn hospital <em>had his security guards ferry friends to the U.S. Open and his wife around town in a stretch limo,</em> the Daily News has learned.<br /><br />Rajiv Garg, the disgraced honcho of Wyckoff Heights Medical Center, also enjoyed his own commutes in the hospital-issued ride — a sleek, black $33,000 Lincoln Royale.</blockquote>Garg rolled in style,<br /><blockquote>The beleaguered hospital bought the fancy car — <em>equipped with a mini-bar, four champagne flutes and a fridge for chilling Dom Pérignon </em>— last summer for Garg It also owned two other cars for his use, sources said.<br /><br />Several times a week, the limo was dispatched to take Garg’s wife from her job near the hospital to the couple’s midtown apartment, said an employee.<br /><br />Sometimes, it picked her up and then swung by the hospital to get Garg and whisk them to dinner before dropping them home, sources said. Two or three times a month, the limo picked her up at home and took her shopping.<br /><br />'I haven’t had a raise in seven years,' said the employee. 'They always tell us they don’t have any money. They spent it on cars.'<br /><br />The limo has comfy leather seats with room to spare for six passengers and a stereo system capable of drowning out highway noise when Garg and his wife were driven in it to Washington.</blockquote><strong>More Conflicts of Interest Discovered</strong><br /><br />Then the Daily News <a href="http://articles.nydailynews.com/2012-02-08/news/31039487_1_trustees-garg-hospital">started to reveal </a>conflicts of interest beyond the ones we discussed in 2009:<br /><blockquote><em>Then-trustee Frank Chiarello was in a partnership that loaned money to hospital entities</em>, according to a list of board members’ conflicts the Daily News eyeballed. The $2.5 million loan had <em>an 18% interest rate</em>, sources said, costing the hospital hundreds of thousands of dollars.<br /><br />Chiarello, a real estate exec, resigned from the board last week.<br /><br /><em>Another trustee who quit the board last week, attorney John Rucigay, serves as a lawyer for other trustees, owns real estate with other trustees, and rents space to the Polish and Slavic Federal Credit Union — whose head of operations is yet another Wyckoff trustee, Agnieszka Poslednik.</em><br /><br />Additional trustees on the conflicts list first reported by Crain’s New York Business, include <em>Andrew Boiselle, whose Cebco Check Cashing Corp. does check-cashing business with hospital employees, and attorney Fred Haller, who provides legal services to Wyckoff employees about issues not related to the hospital.</em></blockquote><strong>Slush Funds and Bribes</strong><br /><br />Last week, the Daily News <a href="http://articles.nydailynews.com/2012-03-19/news/31212038_1_bank-account-upstate-judge-bribes">reported </a>about findings by a judge that the CEO kept slush funds used to pay bribes:<br /><blockquote><em>Wyckoff Heights Medical Center kept a secret bank account that a former CEO used to bribe a disgraced state assemblyman, an upstate judge said in a court decision.</em><br /><br />Orange County Supreme Court Judge Elaine Slobod’s decisionk brought to light new details about the Bushwick hospital’s alleged dealings with Tony Seminerio (D-Far Rockaway), who died in a North Carolina prison last year.<br /><br />The bank account used for the Stockholm St. hospital’s payoffs to the corrupt pol belonged to 397 Himrod Corporation.<br /><br />Former Wyckoff board chairman Emil Rucigay originally set up the company to buy real estate for the hospital to turn into a parking lot, the judge’s order said.<br /><br />The bank account was kept active — though the corporation was dissolved in 2001. The bank account still had approximately $130,000 in it in 2008.<br /><br />“[Wyckoff’s] CEO was using monies in the Himrod account to bribe Seminerio,” Slobad wrote in her decision last week, referring to Dominick Gio, who was the hospital’s head honcho at the time.<br /><br />Gio refused to talk a reporter last week. Wcykoff’s interim CEO Ramon Rodriguez also declined to comment.<br /><br />Money from the Himrod account was used to make payments totaling $15,000 to Seminerio, other court filings charge.</blockquote><strong>A Lexus, a Bentley, Oh My</strong><br /><br />Then the story really hit the big time when the New York Times <a href="http://www.nytimes.com/2012/03/26/nyregion/at-ailing-brooklyn-hospital-insider-deals-and-lavish-perks.html">picked it up yesterday</a>. That report added some colorful details about how magnificently the CEO traveled:<br /><blockquote>In August 2009, Mr. Garg said, he fell asleep at the wheel and <em>crashed his Lexus</em> into a truck. He then lost his license. Asked why in the interview, he said he was not certain, though he offered several explanations, including unpaid tickets and previous accidents. <br /><br /><em>He then used the hospital’s cars — a Lincoln Town Car and a Cadillac Escalade — for himself and his family around the clock. They were driven by two security guards on overtime</em>, a hospital official said. <br /><br /><em>He parked his other car, the $160,000 Bentley, at Wyckoff</em> and had the hospital put the vehicle on its own insurance policy. </blockquote><br />The limo only came later,<br /><blockquote>Mr. Garg said in the interview that he suspected that the drivers of the Town Car and the Escalade were eavesdropping on his conversations. <em>So he had the hospital purchase a used stretch limousine for about $33,000. </em></blockquote><strong>Yet More Conflicts of Interest Discovered</strong><br /><br />The Times story also found more conflicts of interest. Some involved CEO Garg:<br /><blockquote><em>Mr. Garg introduced hospital officials to Skyscape, a provider of mobile medical references, in which he had a financial interest. Wyckoff signed a contract with the company worth at least $38,700</em>, hospital records show, though the deal eventually fell through.</blockquote><br />Others involved hospital trustees. This example might have affected patient care at the hospital:<br /><blockquote>Dr. Theophine Abakporo arrived at Wyckoff in 1996 from Harlem Hospital to work in emergency medicine. Originally from Nigeria, he said <em>he found his way to the top blocked by what he believed was a clique of doctors at Wyckoff. </em><br /><br />In 2009, according to data provided by MapLight.org, <em>Dr. Abakporo, an American citizen, began donating money to the campaign of Representative Edolphus Towns, the Democrat who represents a nearby area. Mr. Towns, a longtime board member of Wyckoff, had by then been replaced by his chief of staff, Albert Wiltshire, on the board. </em><br /><br />Dr. Abakporo gave $1,000 to the Towns campaign, then $750, according to election records. <br /><br /><em>With Mr. Wiltshire’s support, Dr. Abakporo became chairman of emergency medical services</em>. </blockquote><br />This example might also have affected patient care:<br /><blockquote>With his solicitous manner and tailored sport jackets, <em>Gary Goffner, a pharmacist who serves on Wyckoff’s board, has long endeared himself to customers and doctors alike</em>. <br /><br />He inherited his pharmacy, Kraupner, from his father, a prominent Bushwick landlord as well as a pharmacist, who died recently. It is an old-fashioned store, crammed with supplies, the opposite of an orderly Rite Aid. <br /><br />It is also a half-mile walk from Wyckoff, a disadvantage Mr. Goffner overcame through a <em>contract that gave him exclusive access to Wyckoff patients as they were being discharged, and allowed him to keep an employee at the hospital to promote his business. </em></blockquote><br />In summary, the Times found,<br /><blockquote>According to internal hospital documents, <em>13 of the hospital’s 22 board members declared at least one conflict of interest. </em></blockquote><strong>Summary</strong><br /><br />So, from a single story about conflicts of interest affecting the CEO and a medical leader at the hospital, we have gone to stories about widespread conflicts of interest affecting the hospital's board and leadership, about lavish payments and benefits to the CEO while the hospital's finances suffered, and allegations (by a judge) of bribes and slush funds.  <br /><br />Recall that the Institute of Medicine's <a href="http://www.iom.edu/Reports/2009/Conflict-of-Interest-in-Medical-Research-Education-and-Practice.aspx">report on conflicts of interest in medicine and health care</a> defined conflicts of interest as “circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest.” While no particular conflict of interest is guaranteed to cause someone to abuse entrusted power, conflicts of interest create the risk of such abuse. The case of the leadership and governance of Wyckoff Heights Medical Center shows how such risks may manifest. <br /><br />Yet we have noted again and again how leaders of supposedly mission-oriented non-profit medical organizations seem to be ignoring these risks while pursuing ever more money from health care corporations. We <a href="http://hcrenewal.blogspot.com/2012/02/logical-fallacies-in-defense-of.html">noted</a> how the Chancellor of the University of California-San Francisco "has no qualms" about faculty's financial relationships with industry. Just this week at Brown University, my alma mater, while discussing a new conflicts of interest policy, we <a href="http://www.browndailyherald.com/conflict-of-interest-policy-shifts-responsibility-to-u-1.2718709#.T3HWwdnefao">heard</a>,<br /><blockquote>'People do have conflicts of interest, and<em> it’s not the end of the world</em>,' said Janet Blume, associate dean of the faculty. </blockquote>Conflicts of interest may not lead to the apocalypse. However, they certainly may lead to all sorts of unpleasantness. As Joe Collier <a href="http://bmj.bmjjournals.com/cgi/content/full/332/7555/1447">stated</a>, “people who have conflicts of interest often find giving clear advice (or opinions) particularly difficult." Conflicts of interest clearly lead to conflicted, and confused thinking, and such thinking may lead to bad decisions, and hence bad outcomes for patients' and the public's health. Worse, as the IOM asserted, conflicts of interest are a risk factor for outright corruption.<br /><br />True health care reform might start with a reasoned discussion, based as much as possible on evidence, about the risks as well as the supposed benefits of conflicts of interest affecting those who make decisions about individual patients' health care, and about public health and health care policy.

Another Cautionary Tale about Conflicts of Interest: the CEO's Stretch Limousine, Golden Parachute, and Slush Fund

It remains fashionable in academic medicine to tolerate, if not celebrate conflicts of interest as necessary to support the "collaboration" needed for "innovation," while minimizing their risks (e.g.,…

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