healthy4u: government

Long After the Start of the "War on Terror," a Conflict of Interest about an Anthrax Scare Comes to Light

In May, David Willman writing for the Los Angeles Times broke a <a href="http://www.latimes.com/news/nationworld/nation/la-na-anthrax-resistant-20130519-dto,0,3192936.htmlstory">story</a> of a somewhat new variant on the conflict of interest theme, one that has not gotten a lot of attention, but should. The issue was medical, with a twist, - how to best treat a bioterror attack with anthrax engineered to be resistant to multiple drugs, an event that luckily is not known to ever have occurred.  The story came from the bad old days of the "war on terror," but only has now come to light years later. The Alarm Raiser The story opened thus, <blockquote class="tr_bq">Over the last decade, former Navy Secretary Richard J. Danzig, a prominent lawyer, presidential advisor and biowarfare consultant to the Pentagon and the Department of Homeland Security, has urged the government to counter what he called a major threat to national security. Terrorists, he warned, could easily engineer a devastating killer germ: a form of anthrax resistant to common antibiotics.</blockquote> In particular, <blockquote class="tr_bq">Danzig began warning about antibiotic-resistant anthrax after the terrorist attacks of Sept. 11, 2001, and the mailings of anthrax-laced letters that fall. The powdered anthrax in the letters killed five people but was not resistant to common antibiotics. Asked what gave rise to his concern about resistant strains, Danzig cited conversations with 'people whose technical skills exceed mine.' One of them, Dr. Robert P. Kadlec, a bioterrorism advisor in the Bush White House, said he and others were concerned that terrorists could develop such a weapon. Danzig has sounded the alarm in published papers and in private briefings and seminars for biodefense and intelligence officials. In a 2003 report funded by the Pentagon, "<a href="http://documents.latimes.com/catastrophic-bioterrorism-what-be-done/" target="_blank">Catastrophic Bioterrorism — What Is To Be Done?</a>" he wrote that it would be 'quite easy' for terrorists to produce antibiotic-resistant anthrax. He has expanded on that theme over the years, including in a 2009 paper for the Pentagon. In the 2003 report, published while raxi [raxibacumab, an anthrax anti-toxin] was in development at Human Genome, Danzig said a drug to combat resistant strains of anthrax should be produced 'as soon as possible' and that stockpiling such a treatment, 'even if expensive and in limited supply' would deter an attack. John Vitko Jr., a top Homeland Security official during the Bush and Obama administrations, said he turned frequently to Danzig for advice on biodefense matters — and read and 'paid attention to' his 'Catastrophic Bioterrorism' report.</blockquote> Note that while Danzig is a lawyer, and certainly not a physician or biomedical researcher, he had major credibility in the defense field, particularly in anti-terrorism, so his recommendations had great influence. <blockquote class="tr_bq">He served as a Pentagon appointee during the Carter administration and as undersecretary and then secretary of the Navy under President Clinton. He has a long-standing interest in biowarfare. During the 2008 presidential campaign, Danzig advised then-Sen. Barack Obama on national security and bioterrorism. After Obama's election, Danzig was named to the Pentagon's Defense Policy Board and the President's Intelligence Advisory Board, in addition to his consulting positions with the Defense Department and Homeland Security.</blockquote> So apparently at least partly due to Mr Danzig's persistent warnings, the government took action, <blockquote class="tr_bq"> In 2004, President Bush signed into law Project BioShield, which provided billions of dollars for biodefense drugs. The contracts are administered by the Department of Health and Human Services, based on advice from federal agencies and consultants. Homeland Security must certify the need for a drug before the government can buy it.  Danzig, through his seminars, writings and consulting duties, has helped frame the discussion over whether a given biological threat is 'material' and whether the government should stockpile medicines to defend against it.</blockquote> Also, <blockquote class="tr_bq">Speaking of Danzig's broader role as a government advisor, Vitko said: 'Richard's got incredible insights into this and I think has made major contributions' He called Danzig one of 'the major bio player' and said his views had informed a range of policy considerations, including 'how many countermeasures do you need, of what kind.' It was in response to advice from Vitko and his staff that Homeland Security Secretary Tom Ridge in 2004 declared anthrax a 'material threat,' the certification required for the government to buy drugs to fight it. The drug the government bought was raxibacumab, or raxi, an anthrax anti-toxin made by Human Genome Sciences Inc.   In 2006, the Department of Health and Human Services finalized its first order of raxi — 20,000 doses at a cost of $174 million. That year, Ridge's successor, Michael Chertoff, signed a second, more specific declaration, adding 'multi-drug-resistant' anthrax to the government's list of material threats. Asked the basis for the second declaration, Vitko said: 'I think the concern was more forward-looking, and saying, 'How could the threat evolve, and are we prepared for that?'' Since 2009, the Obama administration has ordered an additional 45,000 doses of raxi for $160 million.</blockquote> There was just one catch. The Undisclosed Conflict Mr Danzig had a largely undisclosed conflict of interest.  He was on the board of directors of Human Genome Sciences Inc, the company whose drug his constant warnings and exhortations lead the government to buy. <blockquote class="tr_bq">When Human Genome named Danzig to its board on May 24, 2001, the company's chief executive said his high-level federal experience would 'serve us well.'</blockquote> He thus was on the board on September 11, 2001, and later when the events on that day and soon after apparently induced him to start sounding the alarm about resistant anthrax, and he stayed on the board as he continued sounding alarms, and after the government started buying his company's drug. <blockquote class="tr_bq">During his 11-year tenure on the board, which ended in August, Danzig collected at least $1,054,255 in director's fees and by cashing in grants of Human Genome stock and stock options, according to Fred Whittlesey of Compensation Venture Group, who reviewed the company's Securities and Exchange Commission filings for The Times. Nearly half of Danzig's compensation came from the stock options, of which he had been granted 184,000 by the end of 2011, Whittlesey said.</blockquote> Danzig did not seem to think that serving on the board of the company which made the primary drug directed at the perhaps hypothetical disease about which Danzig was sounding the warning constituted any sort of conflict of interest. <blockquote class="tr_bq">Danzig said in an interview that he believed his position at Human Genome posed no conflict. He said he had tried to improve policymakers' understanding of biodefense issues, including the threat of antibiotic-resistant anthrax, but never lobbied the government to purchase raxi. 'My view was I'm not going to get involved in selling that,' Danzig said. 'But at the same time now, should I not say what I think is right in the government circles with regard to this? And my answer was, 'If I have occasion to comment on this, it ought to be in general, as a policy matter, not as a particular procurement.' 'I feel that I've acted very properly with regard to this'' he said.</blockquote> He also apparently did not feel he needed to disclose his board membership to most of the people he was trying to persuade to be alarmed about resistant anthrax, and to pursue a treatment, such as that made by the company on whose board he sat. <blockquote class="tr_bq"> A number of senior federal officials whom Danzig advised on the threat of bioterrorism and what to do about it said they were unaware of his role at Human Genome. Dr. Philip K. Russell, a biodefense official in the George W. Bush administration who attended invitation-only seminars on bioterrorism led by Danzig, said he did not know about Danzig's tie to the biotech company until The Times asked him about it.</blockquote> Also, <blockquote class="tr_bq"> Vitko said he knew nothing of Danzig's involvement with Human Genome until a Times reporter asked him about it. 'I'm surprised I didn't,' Vitko said. 'I'm not aware of it.' Five other present or former biodefense officials who conferred with Danzig said they, too, had been unaware of his position with the company. Danzig, they said, made no mention of it in their presence during group discussions he led or in smaller meetings.</blockquote> Furthermore, <blockquote class="tr_bq">A Times search found seven papers Danzig had written on bioterrorism since 2001. In only one of those did he disclose his tie to Human Genome. As an advisor to the federal government, Danzig is required to file confidential forms annually, revealing any outside affiliations but not his related compensation. Danzig said he had noted his position with the biotech firm on the forms. Asked whether he mentioned his corporate role during contacts with government officials, Danzig replied: 'If I thought any of it posed a potential conflict that might cause somebody who knew about it to discount my views, I would tell them.'</blockquote> Some people disagreed with Danzig's failure to perceive a conflict of interest <blockquote class="tr_bq"> 'Holy smoke—that was a horrible conflict of interest,' said Russell, a physician and retired Army major general who helped lead the government's efforts to prepare for biological attacks.</blockquote> The Take-Over by a Familiar Corporation By the way, Human Genome Science was eventually bought out by a bigger company which has had its own sets of issues regarding conflicts of interest, GlaxoSmithKline, <blockquote class="tr_bq"> Human Genome was acquired by GlaxoSmithKline in August [presumably 2012] for $3.6 billion.</blockquote> It may yet stand to make even more money from raxi, <blockquote class="tr_bq"> Because raxi loses its potency after three years in storage, the government's supply will expire as of 2015, according to federal documents and people familiar with the matter. </blockquote> Summary This appears to be a variant on the "key opinion leader" (KOL) theme writ large.  Mr Danzig clearly functioned as a very major key opinion leader about bioterrorism.  Like many KOLs we have previously discussed, he had financial interests that favored the company whose drugs his key opinion leadership seemed to be favoring.  His influence seems to have lead to huge purchases of these drugs. Like many KOLs who are physicians or health care academics, Mr Danzig seems utterly blind to the possibility that his multiple efforts to emphasize the importance of the supposed disease for which his company made a drug could somehow be viewed as a conflict of interest, or to why failure to tell his audiences about his major relationship to this company might have appeared just a small bit dishonest.  We have seen many medical/ health care KOLs who deny that somehow their opinions could have been influenced by their financial relationships, or that their audiences deserved at least to be aware of these relationships.  Yet, of course, Mr Danzig is not a doctor, and he was trying to influence government purchasers of drugs, not physician prescribers of it. It does seem that the leadership of health care organizations, particularly but certainly not limited to pharmaceutical and biotechnology companies, have no lack of imagination about how to construct financial relationships with influential people who could help sell their products, whether or not they acknowledge what amounts to their marketing roles. Given that this story involved influencing the government, it will be interesting to see at this late date whether it results in any legal action.  After all, as David Willman pointed out, <blockquote class="tr_bq"> Federal law bars U.S. officials, including consultants, from giving advice on matters in which they or a company on whose board they serve have 'a financial interest.'</blockquote>It will also be interesting to see if it gets any more attention.  Only a few blogs have noted it, but at least they included <a href="http://www.the-scientist.com/?articles.view/articleNo/35639/title/Selling-an-Anthrax-Scare-/">The Scientist</a>. Yet our country has an unfortunately very long history of corporate leaders getting close to political leaders who then may overlook the legal niceties when their friends' interests are at stake.  Nonetheless, true health care reform would require all those who have decision making power over patients, health policy, or the public health to be completely transparent about their conflicts of interest, and would ban the more serious variants of conflicts of interest, even if that might cost some already rich people a bit of money.  I am not holding my breath, however, about when this might happen.

Long After the Start of the "War on Terror," a Conflict of Interest about an Anthrax Scare Comes to Light

In May, David Willman writing for the Los Angeles Times broke a story of a somewhat new variant on the conflict of interest theme, one that...

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More Cause for Hope - After Novartis Chairman's Rescinded Golden Parachute, Swiss Voters Give Control of Hired Executives' Salaries Back to Owners

Recently, we <a href="http://hcrenewal.blogspot.com/2013/02/reason-for-hope-novartis-rescinds.html">discussed</a> the latest stupefyingly big <a href="http://hcrenewal.blogspot.com/search/label/golden%20parachutes">golden parachute</a> given to a departing pharmaceutical executive.  Former Novartis CEO and outgoing chairman Daniel Vasella was to be given more than $75 million, after making multiple millions previously, ostensibly so he would not go to work for a competitor.  After a public outcry, the company cancelled the plan, and Vasella admitted a "mistake."  This was the only instance in recent memory in which a big health care organization pulled back some huge executive pay package due to public protest. Swiss Voters Give Control of Pay of Hired Executives Back to Company Owners Now Swiss voters have approved a referendum which would actually let the owners of public companies, the stockholders, decide how much to pay hired executives.  As <a href="http://www.nytimes.com/2013/03/04/business/global/swiss-voters-tighten-countrys-limits-on-executive-pay.html">summarized</a> by the New York Times, <blockquote class="tr_bq"> Swiss citizens voted Sunday to impose some of the world’s most severe restrictions on executive compensation<a class="meta-classifier" href="http://topics.nytimes.com/top/reference/timestopics/subjects/e/executive_pay/index.html?inline=nyt-classifier" title="More articles about executive pay."></a>, ignoring a warning from the business lobby that such curbs would undermine the country’s investor-friendly image. <div itemprop="articleBody"> The vote gives shareholders of companies listed in Switzerland<a class="meta-loc" href="http://topics.nytimes.com/top/news/international/countriesandterritories/switzerland/index.html?inline=nyt-geo" title="More news and information about Switzerland."></a> a binding say on the overall pay packages for executives and directors. Pension funds holding shares in a company would be obligated to take part in votes on compensation packages. </div><div itemprop="articleBody"> </div><div itemprop="articleBody">In addition, companies would no longer be allowed to give bonuses to executives joining or leaving the business, or to executives when their company was taken over. Violations could result in fines equal to up to six years of salary and a prison sentence of up to three years. </div></blockquote><div itemprop="articleBody"> </div><div itemprop="articleBody">The new rules in Switzerland would be unprecedented in the current era.  </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Those who are Ostensibly Pro-Business Defend Hired Executives, not Owners </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Despite the fact that the new rules would give control over one type of hired employees, hired executives, back to the shareholders, the owners of companies, spokespeople for big companies, but presumably really for their top executives, claimed that the rule would be bad for shareholders.</div><div itemprop="articleBody"> </div><div itemprop="articleBody"> </div><blockquote class="tr_bq"><div itemprop="articleBody">Ahead of the vote, [the Swiss business federation] EconomieSuisse and Mr. Minder’s other opponents warned of dire consequences if the referendum passed, notably in terms of keeping Switzerland attractive to foreign companies and investors. </div><div itemprop="articleBody"> </div>But [chief proponent of the new rules] Mr. Minder argued that Switzerland would benefit if it gave shareholders control over the companies in which they invested.</blockquote> Furthermore, the Guardian <a href="http://www.guardian.co.uk/world/2013/mar/03/swiss-referendum-executive-pay">reported</a>,  <blockquote class="tr_bq">Minder says the massive sums demonstrate that company boards have lost control of pay and prefer to fork out 'astronomical' salaries rather than pay dividends to shareholders. Minder told the Swiss daily Le Temps that the only solution was to give shareholders the power to set pay.</blockquote>  A Bloomberg <a href="http://www.bloomberg.com/news/2013-03-04/angry-swiss-aren-t-done-slimming-the-fat-cats.html">article</a> suggested that driving the vote were how the Swiss are <blockquote class="tr_bq"> worried about how long they can fend off the crisis that has engulfed the rest of Europe, and dissatisfied with a feeling of being ripped off by their elites. 'It is scandalous. No one deserves to be paid such monstrously high salaries, especially when their employees get paid not much in comparison,' Marianne Lecoultre, a pensioner who lives in a modest flat on the outskirts of Geneva, told me.  </blockquote> The Germans are Thinking of Making Hired Executives More Accountable The German media outlet Deutsche Welle <a href="http://www.dw.de/swiss-referendum-fans-executive-pay-debate-in-germany/a-16643835">reported</a> that there is now more interest in returning control of hired executive pay to company owners there as well. <blockquote class="tr_bq"> After Swiss citizens voted Sunday to impose controls on executive pay, a similar debate has started in Germany. </blockquote> Furthermore, <blockquote class="tr_bq">Joachim Poß, the parliamentary leader of the opposition Social Democratic Party, told the daily Neue Osnabrücker Zeitung that the outcome of the referendum was an important step towards restricting the money-grabbing prevalent in corporate management, He noted that the referendum was encouragement for an initiative at the EU level, and added that 'people do no longer accept perverted bonus systems, neither in banks nor in the real economy.'</blockquote> Summary: Ripped Off by Health Care Elites I can start to imagine how supposedly pro-business people in the US will dismiss actions taken by European countries as anti-business and probably "job killing," even though these actions actually gave more control of publicly held business to their owners, not to government, which would seem to be fully in support of capitalism.  Again, maybe some people making the loudest pro-business noises are really sympathetic to, if not paid by, the hired managers of businesses who have put their enrichment ahead of the interests of other employees, customers, clients or patients, the business owners (stockholders, that is), and the public at large.  Enormous compensation of hired health care executives, out of all proportion, if related at all to whether their work had any positive effect on patients' or the public's health, has long been a <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">concern</a> on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.  For example, back in 2006, we posted repeatedly (look <a href="http://hcrenewal.blogspot.com/2006/10/another-really-big-one-bites-dust-ceo.html">here</a> for links) about the billion dollar plus fortune amassed by the then CEO of UnitedHealthcare which vividly contrasted with the company's avowal to "make health care more affordable."  That seemed to be an example back then of a rip off by a member of the health care elite.  Now the notion that our top elites have been generally ripping us off is becoming more widespread. In my humble opinion, the perverse incentives generated by a system that allows top executives to make almost unlimited amounts, regardless of all other considerations, has been a major reason for US and global health care dysfunction.  Making executive compensation less perverse, and ultimately making health care leaders accountable for the effects of what they do on patients' and the public's health may be an absolutely necessary step to make our health care system more functional.  Now at least there is some precedent, admittedly from Europe, for making top hired managers more accountable.  As Pierre Briancon<a href="http://blogs.reuters.com/breakingviews/2013/03/04/swiss-may-show-the-way-on-pay/"> wrote</a> in Reuters, <blockquote class="tr_bq"> Corporate boards had better take notice: public outrage at what looks like persistent and unapologetic greed in the most severe economic slump in decades is forcing governments to step in. Throughout Europe, indignation at private excess has become a policy problem for administrations trying to explain the need to cut public spending.</blockquote> In addition, <blockquote class="tr_bq">Self-moderation doesn’t work and self-interest continues to prevail. Throughout the Western world, corporate boards have paid lip service to the need to take into account public opinion, and nothing much has changed either in the banking industry – the symbol of immoderation – or in the wider corporate world. In desperation, governments are taking more forceful action – sometimes reluctantly: the Swiss referendum followed a failure by the country’s parliament to heed to public indignation. Government intervention can often be clumsy, and it is fraught with the risk of unintended consequences. But it is the right of governments to legislate on social ills – and excessive and provocative private-sector pay has become one. Meanwhile the lobbies promising economic apocalypse have failed to make their case – and to scare anyone with warnings that 'talent' – as they call it – may relocate to friendlier countries. It would be in the interest of all if they stopped turning a deaf ear to calls for decency emanating even from countries like Switzerland, which is hardly a hotbed of Soviet-style command economics.</blockquote> Even though the final impetus for the overwhelming majority vote on the Swiss referendum came from a ridiculous golden parachute from a pharmaceutical company, the discussion so far has not centered on health care.  So I get to close with something I have repeated on and on, now with a little hope that it may not be considered so extreme....  Health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior. If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.

More Cause for Hope - After Novartis Chairman's Rescinded Golden Parachute, Swiss Voters Give Control of Hired Executives' Salaries Back to Owners

Recently, we discussed the latest stupefyingly big golden parachute given to a departing pharmaceutical executive. Former Novartis CEO an...

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Another Reason for Hope? - Concern about Excessive Executive Pay in Health Care Goes Mainstream

Another recent case suggested that the problem of excess, disproportionate <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">compensation of health care executives</a> is becoming more of a mainstream concern.  The Case of Eastern Connecticut Health Network The case appeared in the Manchester (CT) Journal-Inquirer (<a href="http://www.journalinquirer.com/articles/2013/02/22/politics_and_government/doc51263d0334cdf093796210.txt">link</a> requires subscription).  Here are the basics: <blockquote class="tr_bq">ECHN Inc., which owns Mancester Memorial and Rockville General hospitals, reported to the IRS last year that the company paid its president and CEO, Peter J Karl, a total of $1,042,200 in salary and fringe benefits.  That's a 30.7 percent increase over Karl's compensation reported in the previous year,.... ECHN also reported that six other top executives were paid between $254,640 and $591,090, representing increases of as much as 20.6 percent. </blockquote> ECHN is yet another relatively small non-profit hospital system with a million dollar plus CEO. For comment on this, I turn back to the Journal-Inquirer article.  One person the reporter interviewed <blockquote class="tr_bq">says the big salaries and bonuses paid to top officials at Eastern Connecticut Health Network are part of a national scandal over executive compensation propelled by the 'pursuit of talent for short-term gains.' 'The hospital industry is emblematic of what's happened in executive compensation in the United States, where the multiple of the lowest- paid employee to get to the salary of the highest-paid employee has just exploded over the last 30 years,'....</blockquote> Furthermore, the person interviewed noted that hospital executives were bemoaning decreases in payments to their institutions by state government "while making 10 to 20 times as much money as" the state governor makes.  In this case, the CEO, Mr Karl's "compensation package was 6.9 times [Governor Daniel P] Malloy's salary of $150,000." A second person interviewed said <blockquote class="tr_bq">Salaries have gotten to the point where they have skyrocketed and are out of control.</blockquote> He also raised an issue about conflicts of interest affecting the ECHN board <blockquote class="tr_bq">he agreed with state health care advocate, Victoria Veltri, who told the Journal Inquirer last week that nearly $1 million in business deals between ECHN and five members of its board of trustees require further scrutiny</blockquote>Criticism from the Mainstream I have been coy about who the commentators were, but bear with me. So we see in this one somewhat obscure newspaper article about one small regional hospital system points that we have been raising for years about the perverse incentives generated by excess executive compensation in health care.  We have frequently discussed how such compensation is often completely untethered to the organizations' financial results, much less its positive effects on patients' and the public's health.  Compensation often rises faster than inflation, faster than revenue (and sometimes when revenue declines and deficits loom), and even when the organization is facing financial, clinical, or ethical challenges.  Thus it often seems that the primary goal of the organization has become enriching top executives (look <a href="http://hcrenewal.blogspot.com/2013/02/non-profit-hospital-executive-salaries.html">here</a> for a recent example).  As the first commentator noted above, this seems to arise out of the business school dogma that puts short-term revenue ahead of all other goals (which we discussed <a href="http://hcrenewal.blogspot.com/2012/04/health-care-dysfunction-explained-by.html">here,</a> and can be termed <a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>.) But our concerns do seem to be getting more mainstream.  The first commentator above was actually the Governor of Connecticut, Dannel P Malloy, himself.  The second commenter was Connecticut state Senator Steve Cassano.  So prominent politicians are beginning to see the perversity of excess executive compensation in health care at a time of still burgeoning health care costs and still threatened health care access and quality.  So maybe some more people will listen this time when we repeat....  Health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior. If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.

Another Reason for Hope? - Concern about Excessive Executive Pay in Health Care Goes Mainstream

Another recent case suggested that the problem of excess, disproportionate compensation of health care executives is becoming more of a mai...

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If gov't officials can't deal with bendy bananas, curvy cucumbers and water for hydration, how can they possibly consider issues with computers?

I present this story with almost no commentary except this post's title, the simple observation that keeping government out of many aspects of out lives is not a bad idea, and a few minor points: <blockquote>The Telegraph <a style="font-weight: bold;" href="http://www.telegraph.co.uk/news/worldnews/europe/eu/8897662/EU-bans-claim-that-water-can-prevent-dehydration.html">EU bans claim that water can prevent dehydration </a> Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration. By Victoria Ward and Nick Collins <div>6:20AM GMT 18 Nov 2011 </div> <div class="firstPar"> EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact. </div><div class="secondPar"> Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month. </div><div class="thirdPar"> Last night, critics claimed the EU was at odds with both science and common sense. Conservative MEP Roger Helmer said: “This is stupidity writ large. </div><div class="fourthPar"> “The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true. </div><div class="fifthPar"> “If ever there were an episode which demonstrates the folly of the great European project then this is it.” <div class="body"> NHS health guidelines state clearly that drinking water helps avoid dehydration, and that Britons should drink at least 1.2 litres per day. The Department for Health disputed the wisdom of the new law. A spokesman said: “Of course water hydrates. While we support the EU in preventing false claims about products, we need to exercise common sense as far as possible." German professors Dr Andreas Hahn and Dr Moritz Hagenmeyer, who advise food manufacturers on how to advertise their products, asked the European Commission if the claim could be made on labels. They compiled what they assumed was an uncontroversial statement in order to test new laws which allow products to claim they can reduce the risk of disease, subject to EU approval. They applied for the right to state that “regular consumption of significant amounts of water can reduce the risk of development of dehydration” as well as preventing a decrease in performance. However, last February, the European Food Standards Authority (EFSA) refused to approve the statement. A meeting of 21 scientists in Parma, Italy, concluded that reduced water content in the body was a symptom of dehydration and not something that drinking water could subsequently control. Now the EFSA verdict has been turned into an EU directive which was issued on Wednesday. Ukip MEP Paul Nuttall said the ruling made the “bendy banana law” look “positively sane”. He said: “I had to read this four or five times before I believed it. It is a perfect example of what Brussels does best. Spend three years, with 20 separate pieces of correspondence before summoning 21 professors to Parma where they decide with great solemnity that drinking water cannot be sold as a way to combat dehydration. “Then they make this judgment law and make it clear that if anybody dares sell water claiming that it is effective against dehydration they could get into serious legal bother. EU regulations, which aim to uphold food standards across member states, are frequently criticised. Rules banning bent bananas and curved cucumbers [what?? - ed.] were scrapped in 2008 after causing international ridicule. Prof Hahn, from the Institute for Food Science and Human Nutrition at Hanover Leibniz University, said the European Commission had made another mistake with its latest ruling. “What is our reaction to the outcome? Let us put it this way: We are neither surprised nor delighted. “The European Commission is wrong; it should have authorised the claim. That should be more than clear to anyone who has consumed water in the past, and who has not? We fear there is something wrong in the state of Europe.” Prof Brian Ratcliffe, spokesman for the Nutrition Society, said dehydration was usually caused by a clinical condition [like hot weather and low fluid intake? - ed.] and that one could remain adequately hydrated without drinking water. [As the study was done in Italy, perhaps they had something else in mind? - ed.] <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyLZUalU-u6gFdQV7_ahHIuCl5rKWj8ISlHwobBq2rxIG5xST8aJTc3QH-j4-PWZgv0nPRDYLKvmex6boEjJR1FvSSNCexoD0-1iH0Dp966zlA_c25nbKYEBo7svDnBcVjGANMzNZQ_I-1/s1600/wine-bottles.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5676861099366478818" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyLZUalU-u6gFdQV7_ahHIuCl5rKWj8ISlHwobBq2rxIG5xST8aJTc3QH-j4-PWZgv0nPRDYLKvmex6boEjJR1FvSSNCexoD0-1iH0Dp966zlA_c25nbKYEBo7svDnBcVjGANMzNZQ_I-1/s320/wine-bottles.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 189px; height: 189px;" /></a> Water? Where we're going, we don't need water. He said: “The EU is saying that this does not reduce the risk of dehydration and that is correct. “This claim is trying to imply that there is something special about bottled water which is not a reasonable claim.” </div></div><div class="storyHead"> </div> </blockquote>Hard as this is to believe, the ruling is no April Fool's joke. -- SS

If gov't officials can't deal with bendy bananas, curvy cucumbers and water for hydration, how can they possibly consider issues with computers?

I present this story with almost no commentary except this post's title, the simple observation that keeping government out of many aspe...

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Guest Blog: Mediator, symptom of a broken French system

Elena Pasca blogs at PharmaCritique, and is a member of the <a href="http://sciencescitoyennes.org/">Fondation Sciences Citoyennes</a>.  She discusses the pharmaceutical industry in France, and relationships among that industry and physicians and the government.  She demonstrates that the issues we discuss on Health Care Renewal are global. Introduction A few weeks ago, the French health minister proposed a new law to improve pharmacovigilance, drug evaluation and transparency issues. It will be discussed in September by the Parliament. Let’s see what the actual situation is in France. The Médiator (benfluorex) scandal raises not only pharmacovigilance issues. The first question that comes to one’s mind is how could the drugmaker Servier, who knew about its dangers, keep Médiator on the market for 30 years, despite the repeated alerts and the withdrawal of other amphetamines from the same drug class? The answer goes far behind pharmacovigilance dysfunction. Médiator is not an isolated case, but an epiphenomenon of structural failures on every organisational level of the French health care, drug evaluation and health information system. The entire system is broken, and there still are dozens of defective and too risky drugs on the French market. Most relevant for US readers is not to list all the alerts starting in the seventies with the fenfluramines. It’s to understand that the entire system was organised in order to be as industry friendly as possible. And the announced measures aren’t going far enough to change this fact. Private profits before public health In July 2009, president Nicolas Sarkozy decorated Jacques Servier with the Légion d’honneur and criticised again what he considered to be a huge amount of administrative regulations in the pharmaceutical branch. For him as the former business attorney of Servier, whose electoral program stipulated “cleaning business law”, too much regulation means less business, less competitive French drugmakers. President Sarkozy’s health policy clearly favours the pharmaceutical industry, especially Sanofi-Aventis. His choice of Alzheimer disease as the first public health issue is not naïve. Sarkozy’s brothers have multiple conflicts of interests and ties with Sanofi-Aventis, the insurance industry and the organisations and institutions involved in the health care of the elderly, as I <a href="http://pharmacritique.20minutes-blogs.fr/archive/2009/03/05/alzheimer-nouvelle-fondation-de-cooperation-scientifique-mai.html">pointed out</a> in an investigation published on Pharmacritique. And Sanofi hasn’t yet any me-too from the anticholinesterase drug class largely prescribed to Alzheimer patients, despite repeated proof of their ineffectiveness and of their side effects. As a direct result of Sarkozy’s policy, publicly funded research will be exploited through public-private partnerships to produce immediate results – and neglecting fundamental research bringing new knowledge and thus real therapeutic progress. The intellectual property policy clearly favours private profits. The European research policy has the same aims: the Innovative Medicines Initiative is clearly oriented toward “innovation” meant as competitive advantage for the pharmaceutical industry, not as an improvement in disease understanding and treatment. The exploitation of public research for private corporate profits has been <a href="http://www.helmholtz.de/fileadmin/user_upload/helmholtz_international/br%C3%BCssel/IMI_Policy_Document_Comparison_HGF.PDF">criticised </a>by the Helmholtz Gemeinschat (union of the German public research centres). A few weeks ago, 98 European NGOs and organisations wrote an <a href="http://sciencescitoyennes.org/open-letter-eu-research/">open letter</a> criticising the Common Strategic Framework for EU Research and Innovation Funding and asking for a responsible European research policy: “Public Research should benefit Society, not Big Business”. Conflicts of interests are everywhere, corrupting the entire health care system In France, except for two journals (Prescrire and Pratiques), the entire medical press is completely dependent on drugmakers and their advertising. Especially family physicians receive such journals for free. They include no disclosures, so there’s no possibility to sort out advertising from information. Most of those journals are owned by a trust whose leader is Gérard Kouchner, brother of the former health minister Dr. Bernard Kouchner. (See <a href="http://pharmacritique.20minutes-blogs.fr/archive/2008/10/06/presse-medicale-nos-generalistes-sont-en-bonnes-mains-pour-l.html">this post</a> on PharmaCritique.) To this misinformation by the sponsored press has to be added another source of bias: continuing medical education [CME] is funded up to 98% by the pharmaceutical industry. And up to 97% of self-employed physicians still receive drug reps and consider them to be a comfortable, if not reliable, information source. As long as I can go back, all health ministers have had conflicts of interest. In a hearing by the Parliament’s committee on Médiator, Gérard Kouchner was questioned about his journals’ silence about the risks of this drug and about the book written by the whistleblower Dr. Irène Frachon. He answered those journals are serious, no odd news, no sensationalism… As if informing physicians about severe side effects of a drug and experts’ conflicts of interests and drugmaker influence wouldn’t be serious enough… The state can’t control conflicts of interest and implement oversight because the medical corporation is well organised (trade unions…) and opposes every reform or measure restricting its freedom. And the medical lobby knows how to use its political influence. Commercial interests, entrepreneurship, industrial funding (research, travel, professional activities, CME…) are organised and encouraged by the Order of Physicians. Despite of the 1994 law prohibiting gifts, dining, wining and lodging continues. Daily corruption is widely accepted, since it is approved by the Order of Physicians… Organised medicine’s unusually strong influence over France’s health care system is well described by Marc Rodwin in his book “Conflicts of Interest and the Future of Medicine. The United States, France, and Japan” (Oxford University Press 2011). The French FDA – AFSSAPS - is financed up to 80% by the pharmaceutical industry, via taxes. Up to 70% of the AFSSAPS experts have conflicts of interest. But the real percentage must be higher, because the recently introduced disclosures aren’t verified, and omissions or false declarations aren’t prosecuted. In a 2007 report, AFSSAPS officials had to acknowledge their strategy of “managing” conflicts of interests wasn’t a success... The more drugs the agency approves, the more money it gets. Drugmakers exploit competition existing among European agencies to earn more money, and they also know which country will easily approve their drugs, opening the door for a homologation by the EMA (European Medicines Agency). When a drugmaker knows this or that drug is defective, approval is not even attempted in the US, but only in certain European countries. Why risk a defeat that could damage its image? For example, during the swine flu epidemics, some vaccine makers haven’t asked for approval in the USA, because their vaccines contain new technologies (MDCK cells, adjuvants such as squalen) they wanted to “test” on European people first, before submitting them to the FDA. The German independent journal <a href="http://www.arznei-telegramm.de/">Arznei-Telegramm</a> revealed the existence of a market analysis counselling this strategy (2009; 40: 85-7). None of the swine flu vaccines commercialised in Europe were approved in the US. The same laboratories produced different vaccines, and new technologies were used instead of the classical ones, in the name of the… emergency. Since then, hundreds of cases of narcolepsy were reported, especially among children and teen-agers, as a side effect of GSK’s Pandemrix (containing squalen).  (See <a href="http://pharmacritique.20minutes-blogs.fr/archive/2011/03/31/la-suede-suspend-le-pandemrix-a-cause-de-la-narcolepsie-mich.html">this post</a> on PharmaCritique.) Complete lack of information about drugs and their adverse reactions Pharmacovigilance in France is rather pharmacosomnolence: the AFSSAPS reacts late after others western countries when it comes to puttin a defective drug off the market. On the opposite, it easily accepts homologation demands. If you compare the drugs available in France and the USA, you’ll find lots of drugs rapidly withdrawn or rejected by the FDA, or even unknown in the US: etoricoxib (Arcoxia), nimesulid, rimonabant (Acomplia), lots of progestagens, veraliprid (Agréal)… After the FDA decision, it took 11 years to take Distilbene (DES) off the French market. Vioxx continued for years on the French market after its withdrawal in the US. Mediator was withdrawn 1997 in the US, 2010 in France. And so on. In a 2008 article, Donald Light highlighted “Europeans are kept in ignorance about dangerous drugs” (Rev Prescrire 2008;28(297):553). He gave several examples of drugs such as aprotinin, olanzapine, etoricoxib, sleeping drugs… where safety alerts have been made public by the FDA and relayed by the US media, and compared this information with the silence in France. Before the Médiator scandal, the French media weren’t interested in drug safety, conflicts of interest, corruption, bias in the medical research… But it’s even worse. The public has no access to the official prescribing information, reserved to physicians paying for the Vidal (equivalent of the Physicians’ Desk Reference), edited by a private company… I compared the prescribing information of lots for drugs available in the US and in France, produced by the same drug companies, approved in the same indications. The information is so different, as if they weren’t the same drugs… France has few relevant regulations and laws, so the country is a paradise for the pharmaceutical industry, and for industries, lobbies and business in general. There’s no FOIA, no way for watchdogs – even for official watchdog agencies – to get real information. In a 2007 report, the IGAS (General Inspection of Social Affairs, France’s OIG) only could give estimations, based on extrapolations, about lobbying and marketing expenses of the pharmaceutical industry. Consumers International published the results of a 2008 conducted inquiry about drugmakers’ legal obligations in the US compared to Europe. 12 drugmakers answered and all agreed the requirements aren’t at all the same, in regard of transparency and disclosures, in regard of complete information about drugs, and so on. So why would drugmakers give an information no one requires and no one wants? Pharmacovigilance is subordinated to drug approval, and until recently, patients couldn’t report side effects. A pharmacovigilance official told me that even now, adverse reaction reports without documentation and follow-up aren’t always counted. The regional pharmacovigilance centres don’t forward them to the AFSSAPS. There’s no transparency about the specific phases of the drug evaluation system, in terms of risk/benefits, and there’s no evaluation at all in terms of cost/effectiveness and economic efficiency. The Haute Autorité de Santé was created for this kind of quality and economic efficiency evaluation, like the German IQWIG and the British NICE. But everything it does is officialise drugmaker marketing claims and “assess” the improvement in the actual benefit. But it’s only a formal assessment, and I don’t remember of a drug dismissed by this agency because of insufficient improvement… In January 2011, president Sarkozy appointed Pr. Jean-Luc Harousseau as the head of the Haute Autorité de Santé, despite all the recent promises to reform the system and fight against the conflicts of interest of experts and officials. Pr. Harousseau is the perfect example of French opinion leaders with political and industrial interests that become experts and leaders of national institutions: he was politically involved in Sarkozy’s party (UMP); he and his research teams earned more than 200.000 euros in the 3 years before his nomination.  (See <a href="http://pharmacritique.20minutes-blogs.fr/archive/2011/03/13/has-presidence-de-l-ump-jean-luc-harousseau-qui-a-percu-205.html">this post</a> on PharmaCritique.) Philippe Lamoureux, the former head of INPES (National Institute for Prevention and Health Education) went over to the LEEM (French PhRMA), without any “cooling off” period. (See<a href="http://pharmacritique.20minutes-blogs.fr/archive/2008/09/20/conflits-d-interets-public-prive-au-plus-haut-niveau-de-l-et.html"> this post</a> on PharmCritique.) The revolving doors turn very easily in France, as well as in Europe. ALTER-EU (Alliance for Lobbying Transparency and Ethics Regulation) reported about EMA’s former director, Thomas Löngrenn, who took a job as a lobbyist for the pharmaceutical industry, just like other European commissioners. And Guido Rasi, the next EMA director, <a href="http://www.alter-eu.org/fr/press-releases/2011/02/25/conflict-of-interest-case-involving-ex-ema-director">said</a> at a colloquium in Bologna that an expert without conflicts of interest is not interesting, because drug companies only work with the best… Some other points in brief: - there’s no Sunshine Act or any similar obligation in France; - the 2002 law requiring a disclosure for health professionals talking publicly about a drug is not applied; - no whistleblower protection (so that libel law is used all the time against them in SLAPP’s: strategic lawsuits against public participation); - there are no specific laws (like the US False Claims Act or RICO) allowing trials for defective drugs or other abuses; no possibility for a qui tam lawsuit; - no law to prosecute corruption and its consequences (like the US Federal Anti Kickback Statute); - no law enabling class actions; - no specific qualifications for victims of defective drugs (“injury”, “aggravated deception” are those used by Médiator victims and their families…); - taxpayers pay for the victims (if ever they can get recognition and damages); - no physician liability for prescriptions and their consequences, or for conflicts of interest and corruption; - no FOIA; a minimalist law called CADA (« accès aux documents administratifs ») preserves secrecy of data and of conflicts of interests in the name of industrial property and private life protection); - no corporate integrity agreement; - no attorney general asset redistribution programs (well, without trials, there’s no need for such frameworks…); - no disclosure in scientific publications. Direct-to-consumer advertising is prohibited by law. A good point. But this prohibition is by-passed all the time. Pharmaceutical firms sponsor “health education campaigns” organised together with public institutions, medical societies and/or patient associations tied to drugmakers. For example, a public campaign whose official goal is to raise awareness about the “dangers” of cholesterol is meant to transform a risk factor in a disease, medicalise more and more people who will look for the statins commercialised by the sponsor Pfizer. Not to speak about the repeated attempts of the European Commission to impose the “pharmaceutical package” wanted by EFPIA (European Federation of Pharmaceutical Industry Associations), i.e. enable drugmakers to have a direct access to patients and provide “information”, and weaken pharmacovigilance through several regulations exposed in <a href="http://english.prescrire.org/en/79/207/46302/362/355/SubReportDetails.aspx">this text</a> by Prescrire International. Worst of both socialised medicine and market logic The French system allies the worst side of socialised medicine and of the market and competition-based system. Co-payments were introduced a few years ago, but cost reimbursement is still good. Everyone has a public insurance (“régime général”) that covers about 65% of the costs, for a quite large list of drugs and procedures. For the remaining 35%, each individual has to pay for a private insurance. There is a public “universal” insurance for people earning less than 650 euros a month. Nevertheless, about 23% give up health care, because of the costs, and especially because of excessive charges exceeding the statutory fees. This rate is much higher in dental and optical care, where public coverage is almost inexistent. So what’s the problem, compared with countries without universal health insurance? The problem is lack of organisation, poor economic efficiency and quality, in regard of the high costs. Primary care isn’t organised as it should be in a socialised system. Most of it consists of self-employed physicians working alone, and the same applies for self-employed specialists outside hospitals. They work without coordination and oversight. More and more for-profit hospitals are founded, to treat lucrative, acute diseases, leaving the chronic ones and all complications to public hospitals that still do a good job, but are chronically deficient, because of inappropriate activity-based payment model and budget distribution, and because of budgetary restrictions as a result of an irrational policy of economic management and accountable cost containment. This lack of organisation originates in organised medicine’s resistance to any restriction and oversight. It hinders every evaluation in terms of quality and leads to specific forms of conflicts of interest and global poor quality. The recent introduction of some pay-for-performance measures worsens the problem; incentives are paid by the social security for objectives that aren’t subjected to any evaluation. Family physicians get up to 9.000 euros extra a year if they obtain the wanted percentages of regular breast screening, influenza vaccines in elderly, and so on. It’s not prevention, but overmedicalisation and aggressive preventive medicine as described by David Sackett. Organised medicine dominates and shapes France’s medical economy and health care organisation. It also blocks the development of not-for-profit hospitals, created by mutual insurers, as well as any form of medical centres employing physicians. Every attempt to regulate charges exceeding the statutory fees is blocked. The Order of Physicians is the only “judge” in cases of misconduct, and it rarely forwards the proof to the public watchdogs or to prosecutors. Self-regulation through voluntary codes of conduct is the rule, for the medical corporation as well as for the pharmaceutical industry. This can’t be called “socialised medicine” and contradicts the republican principles originating in the French revolution, fought to put a stop to corporations and their influence on public decision, on politics and on economy. Medical consumerism and physician financial interests complete themselves, and “socialised medicine” isn’t appropriate anymore to describe the French system. The dangers for public health care and coverage were pointed out in a paper written by the former medical director of social security, Pr. Claude Béraud.  (See <a href="http://pharmacritique.20minutes-blogs.fr/archive/2011/07/08/menaces-sur-l-assurance-maladie-entre-fictions-et-realites.html">this post</a> on PharmaCritique.) Of course, such a system isn’t affordable in the long term. And this is exactly what ultra-capitalists and right-wing politicians want, in order to demolish socialised medicine and public health care and promote private health maintenance organisations and insurances. Passivity, no awareness, no criticism Another consequence of a deformed conception of socialised medicine is patients’ lack of health education, of healthy skepticism, of criticism and of action. Before the Médiator scandal, patients were too confident in what they thought to be state protection on every level : an approved drug was thought to be sure and useful, an opinion leader’s discourse promoting some new drug was thought to express the highest technical standards, and so on. There was no awareness at all about conflicts of interest. Physicians’ awareness wasn’t much better. For example, Arnold Relman wrote his paper about “The new medical-industrial complex” in 1980. In France, it took 25 years until Jean-Claude Salomon wrote “The medical-financial complex”… The only resistance comes from a few organisations, such as the independent medical journal Prescrire and the grassroots NGO Fondation Sciences Citoyennes, and from a few personalities such as senator François Autain, Pr. Claude Béraud and a few others, mentioned by Marc Rodwin in his book “Conflicts of Interest and the Future of Medicine. The United States, France, and Japan”. The <a href="http://sciencescitoyennes.org/projet-de-loi-lanceurs-d%E2%80%99alerte/">Fondation Sciences Citoyennes</a> and the <a href="http://www.alter-eu.org/fr">European Alliance for Lobbying Transparency and Ethic Regulation</a> regularly protest and start actions and proposals about revolving doors, lobbying, conflicts of interests and corruption in all areas, as well as law proposals about expertise deontology and whistleblower protection. Lots of reports without consequences The left-wing representatives in the two parliament chambers have put in place hearings about the Mediator scandal, but no enquiry that could enable them to investigate the structural causes of repeated drug and conflicts of interest problems and take concrete measures. Some of the representatives are members of the “Club Hippocrate”, sponsored by Glaxo Smith Kline… The congressman Bernard Debré and the former medicine professor Philippe Even, known for his longstanding criticism, have written a vehement report about the drug evaluation system. Without consequences. The Inspector General for Social Affairs (IGAS) has published a report on Médiator that clearly points out the responsibilities: every single institution has failed, from the drug agency to the political instances and the medical organisations. The <a href="http://www.ladocumentationfrancaise.fr/rapports-publics/114000331/index.shtml">last report</a> of the same IGAS, published in June, contains concrete and pragmatic proposals on how to deeply reform the entire pharmacovigilance and drug evaluation system. The assessment process initiated by the health minister Xavier Bertrand – Assises du Médicament – has nothing to do with a trial assessing facts (“assises” means a trial with jurors). The working groups were clearly dominated by LEEM (the French PhRMA) representatives and by opinion leaders tied to drugmakers. Most of the independent organisations and critiques were not allowed to participate, “in order to respect a balance” between different interests. Fondation Sciences Citoyennes was <a href="http://sciencescitoyennes.org/construisons-un-front-commun-pour-des-contre-assises-du-medicament-independantes/">excluded</a> and described the situation in this detailed press release, asking independent NGOs to organise counter-Assises.  The law proposal presented on the 1st August by Xavier Bertrand contains some long due measures, but no real progress. The pharmaceutical industry’s interests won’t be endangered by any measures and laws arising from the Médiator scandal. Elena Pasca Pharmacritique, Fondation Sciences Citoyennes ADDENDUM - Elena Pasca asked me to insert her thanks that we published her guest post.  But we owe her considerable thanks for her efforts to explain the French situation, and show how the issues we discuss on Health Care Renewal are truly global.

Guest Blog: Mediator, symptom of a broken French system

Elena Pasca blogs at PharmaCritique, and is a member of the Fondation Sciences Citoyennes . She discusses the pharmaceutical industry in Fr...

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Why Cultivate Weldon's Confidence? - CEO Goes to White House Days After His Company's Latest Guilty Plea Announced

Earlier this month, US President Barack Obama met "with eight business leaders to hunt for ideas to revive the economy," <a href="http://online.wsj.com/article/SB10001424053111904006104576504261025589134.html">according to</a> the Wall Street Journal.  At the session, the President asked "what he and his administration could do to improve their confidence...."  The reporters' White House informants emphasized that the point was "listening to the CEOs and not telling them what to do." Included amongst the eight CEOs was "Bill [William] Weldon of Johnson & Johnson."  Why would the US President want to improve Mr Weldon's confidence? Johnson and Johnson's Latest Guilty Plea After all, two days earlier, Bloomberg <a href="http://www.bloomberg.com/news/print/2011-08-09/j-j-reaches-tentative-agreement-with-u-s-on-risperdal-criminal-charge.html">noted</a> how Mr Weldon's company was ready to plead guilty, yet again. <blockquote>Johnson & Johnson (JNJ) said it reached an agreement to settle a misdemeanor criminal charge related to marketing of its antipsychotic drug Risperdal. The U.S. has been investigating its Risperdal sales practices since 2004, including allegations the company marketed the drug for unapproved uses, J&J said in its quarterly filing yesterday. The Justice Department and the U.S. attorney in Philadelphia 'are continuing to pursue both criminal and civil actions,' the company said. </blockquote> In particular, <blockquote>The agreement in principle on the criminal charge is 'pursuant to a single misdemeanor violation of the Food, Drug and Cosmetic Act,' the company said. </blockquote> Other Recent Johnson and Johnson Legal Misadventures This would be just the latest in a string of adverse legal results for Johnson and Johnson. As Bloomberg noted regarding Risperdal: <blockquote>Last year, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials for making misleading claims about the antipsychotic’s safety. J&J has appealed. [see our post <a href="http://hcrenewal.blogspot.com/2010/10/last-weeks-scandals.html">here</a>] In June, a South Carolina judge ordered J&J officials to pay $327 million in penalties for deceptively marketing the medicine. J&J has asked the judge to throw that verdict out. [see our post <a href="http://hcrenewal.blogspot.com/2011/03/jury-finds-johnson-and-johnsons.html">here</a>] 'The attorneys general of approximately 40 other states have indicated a potential interest in pursuing similar litigation against' the Janssen unit, J&J said.</blockquote> Furthermore, the company has been in legal hot water regarding how it sold other products: <blockquote>In April, in a separate case, J&J agreed to pay $70 million to resolve criminal and civil charges after admitting it bribed doctors in Europe and paid kickbacks in Iraq to win contracts and sell drugs and artificial joints. As part of a deferred prosecution agreement, J&J subsidiary DePuy was charged with conspiracy and violations of the Foreign Corrupt Practices Act. [see our post <a href="http://hcrenewal.blogspot.com/2011/04/johnson-and-johnson-runs-afoul-of.html">here</a>] In May 2010, J&J’s Ortho-McNeil Pharmaceutical LLC pleaded guilty to a misdemeanor charge of selling a misbranded drug, admitting it illegally marketed its Topamax epilepsy drug. J&J paid $81 million to resolve criminal and civil cases. [see our post <a href="http://hcrenewal.blogspot.com/2010/05/sunday-settlement-and-guilty-plea.html">here</a>]</blockquote> Johnson and Johnson's 25 Recalls And just a few days after President Obama's meeting with Mr Weldon and his fellow CEOs, just the latest in the string of recalls of apparently defective products was announced by Johnson and Johnson. Tylenol, made by the McNeil Consumer Healthcare division of Johnson and Johnson, was the recalled product this time, <a href="http://blogs.wsj.com/health/2011/08/15/jj-recall-watch-tylenol-cold-gelcaps-pulled/">per</a> the Wall Street Journal Health Blog. Note that this post was part of the blog's now long-running J+J Recall Watch feature, and the post cataloged 25 separate recalls of Johnson and Johnson products since 2009, including previous recalls of various versions of Tylenol, and a June, 2011, recall of Risperdal. We have written several times about the inability of Johnson and Johnson management to fulfill a core component of any drug company's mission, to produce pure, unadulterated products (look <a href="http://hcrenewal.blogspot.com/2011/01/why-is-johnson-and-johnson-spinning-out.html">here</a>, <a href="http://hcrenewal.blogspot.com/2010/09/should-president-of-university-of.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/07/are-ill-informed-leaders-cause-of-drug.html">here</a>). We have also noted several times (e.g., <a href="http://hcrenewal.blogspot.com/2011/04/johnson-and-johnson-runs-afoul-of.html">here,</a> <a href="http://hcrenewal.blogspot.com/2011/03/jury-finds-johnson-and-johnsons.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2011/03/despite-recalls-legal-settlements.html">here</a>) how CEO William Weldon continues to get richer and richer despite his company's guilty pleas, product recalls, and other questionable behavior (for more details about the latter, look <a href="http://hcrenewal.blogspot.com/search/label/Johnson%20and%20Johnson">here</a>). Whose Confidence to Cultivate? So again I ask, why would the US President want to cultivate William Weldon's confidence?  At best, I can only hope that Mr Weldon was invited to the White House because its staff did not do their homework, and only noted the size of the company he leads, rather than the rate of its blunders and misdeeds.  There is already too much evidence that government is excessively cozy with the leaders of big health care (and other) corporations, and gets too much of advice from them rather than from less well-heeled citizens.  At least, if the President is going to get advice from corporate CEOs, he should try to find some whose companies appear to be better lead.     Maybe the difficulty he would have finding such CEOs in the health care field would provide a clue that true health care reform requires better leadership and governance of health care organizations.

Why Cultivate Weldon's Confidence? - CEO Goes to White House Days After His Company's Latest Guilty Plea Announced

Earlier this month, US President Barack Obama met "with eight business leaders to hunt for ideas to revive the economy," according...

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A Severance Package to an Un-Severed CEO - A Manifestation of "CEO Disease?"

The latest jaw-dropping story about executive compensation in health care has been unfolding in California, but at least now I have a diagnosis for this syndrome.  A Generous Retirement Package, Paid Before Retirement In April, the Los Angeles Times <a href="http://articles.latimes.com/2011/apr/28/local/la-me-pensions-20110428">reported</a> about the generous retirement package given to an outgoing public hospital district CEO in California: <blockquote>When he turned 65 two years ago, Samuel Downing received a $3-million retirement payment from a public hospital district in Salinas, Calif., where he serves as president and chief executive. But Downing continued working at his $668,000-a-year job for another two years, and after he retires this week, he will receive another payment of nearly $900,000. That comes on top of his regular pension of $150,000 a year.</blockquote> Note that not only was this pension package large in an absolute sense, but it was provided before the CEO actually retired. This compensation was clearly out of the ordinary: <blockquote>The payments amount to one of the more generous pension packages granted to a public official in California and come amid growing debate about 'supplemental' pensions that some officials receive on top of their basic retirement benefits. Though Downing's case is extreme, it follows the disclosure of extra pension benefits received by employees in municipalities including Bell and San Diego. Earlier this year, a state watchdog group called for stricter pension rules, saying California's retirement plans are 'dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently.' Seventy percent of Californians support a cap on pensions for current and future government workers, according to a recent Los Angeles Times/USC Poll.</blockquote> Furthermore, there was a disconnect between the size of the pension payments and the hospital district's financial situation: <blockquote>But the $3.9 million in supplemental retirement payments to Downing has come during a period of cutbacks at the hospital, including the reduction of 600 positions through layoffs and attrition. Hospital representatives said the cuts were mainly a response to recent economic conditions. The hospital has faced declining revenues and patient admissions and has been burdened by construction costs of a state-mandated retrofit project, they said.</blockquote> Hospital district apologists had the usual excuses: the pensions reflected the market, and the CEO is brilliant: <blockquote>Officials at the Salinas Valley Memorial Healthcare System defended the payouts, saying they need to pay private-sector-level benefits to retain top talent. They described Downing as a gifted and experienced administrator. 'I think I've earned it,' Downing said in an interview. 'I've stayed here out of my commitment to try to build a great hospital.... I worked for this institution and gave them my heart and soul.'</blockquote> As usual, left unsaid were how the CEO's "brilliance" was justified, other than by his own assertion, and why the CEO deserved so much credit for the performance of a hospital system that employed many other people. A Generous Severance Package, Paid to Someone Still Employed  Yesterday, it turned out that there was even more to Mr Downing's compensation. As again <a href="http://www.latimes.com/news/local/la-me-05-18-pension-20110519,0,4260805.story">reported</a> by the Los Angeles Times, <blockquote>A Salinas public hospital district, already under fire for granting its outgoing chief executive $3.9 million in retirement payments, also gave him nearly $1 million as part of an unusual severance agreement, according to records obtained by The Times. The payment fattened what was already considered one of the more generous public pensions ever given in California. Its disclosure prompted the state Assembly earlier this month to order an audit of the hospital district's finances. The Salinas Valley Memorial Healthcare System board gave Samuel Downing a cash payment of $947,594 in 2008, according to a hospital report on his compensation. The money came from a special severance fund set aside for when Downing ended his employment with the agency. But the board decided to award him the money while he was still CEO. By the time Downing retired last month, he had received a series of supplemental retirement benefits totaling $3.9 million, in addition to the severance payment. He will also be paid a regular pension of $150,000 a year. He earned about $670,000 in base salary during his final years of employment, along with other benefits such as a car allowance and paid time off.</blockquote> The details of how the CEO became entitled to this severance agreement, and how a severance payment was made to someone whose employment was not severed was sketchy: <blockquote>Salinas Valley officials said the severance payment stemmed from a handshake agreement in the 1980s between Downing and a previous president of the board of directors. In 2000, the hospital's board agreed to a contract in which Downing would be paid 18 months' salary upon the end of his employment. In 2008, the board voted to give Downing that money, which totaled nearly $948,000. It's unclear exactly why the board of directors decided to grant Downing the cash-out. The five board members, who are elected at-large by residents of the hospital district, didn't return calls seeking comment.</blockquote> Mr Downing, of course, once again asserted he deserved the money: <blockquote>Downing said he felt he deserved the pay after a long and successful career at the hospital, where he started in 1972. 'It sounds like a lot of money to everybody … but I know what the industry is and I know the board did an independent study,' he said. 'The board did an excellent job. They made sure we had competitive salaries.'</blockquote> Once again, a hospital district public relations person went to bat for him, by blaming previous board members: <blockquote>A hospital district spokeswoman released a statement Wednesday saying the current hospital directors were 'obligated by a previous board' to pay out Downing's severance.</blockquote> At least no one so far is claiming that this part of Mr Downing's compensation was determined by the almighty "market." In fact, <blockquote>But several outside experts said it is unusual for an entity to award severance to someone who remains an employee. Typically, they said, severance is promised to employees only in the event that they are pushed out of their jobs. Downing's severance was also atypical because he was entitled to it even if he retired of his own accord rather than being forced to leave. 'It's absolutely outside of the industry standard to pay a severance upon retirement,' said Jeff Christenson, a compensation consultant at the firm Integrated Healthcare Strategies. 'The theory of severance pay is to protect an executive or an employee from an unforeseen termination.'</blockquote> And of course the severance was not even paid on retirement, but paid while Mr Downing was still working. Summary - A Manifestation of "CEO Disease?" Once again we see how top health care leaders are different from you and me.  Despite the fact that executives are paid employees, they seem to be entitled to special treatment far beyond that afforded other employees.  While the modern treatment of health care executives as minor deities seemed to start in the private health care sector, it seems to be extending even into government. It turns out, over 20 years ago, the BusinessWeek cover story was entitled "<a href="http://www.businessweek.com/archives/1991/b320639.arc.htm">CEO Disease</a>."  It summarized the pathology that now seems to be the major cause of health care system dysfunction.  Yet the warning still goes largely unheeded: <blockquote>Pampered, protected, and perked, the American CEO can know every indulgence. The executive who finally reaches the top of a major corporation enters an exclusive fraternity. The CEO's judgment and presence are eagerly sought by other captains of industry and policymakers. CEOs zip around the world in private jets and cash the heftiest personal paychecks in industry. They take home 85 times what the average blue-collar worker makes, unlike their counterparts in Japan, where the ratio is closer to 10 to 1 (page 60). [That was in 1991.  For larger US companies, the ratio was 343 in 2010.  See <a href="http://money.cnn.com/2011/04/19/news/economy/ceo_pay/index.htm">this link</a>. -Editor] It is a job that can easily go to one's head--and often does. 'Too many people treat CEOs as some kind of exalted, omnipotent leader,' says John Sculley, CEO of Apple Computer Inc. 'The real danger is that you start believing that stuff.' Sculley took a sabbatical in 1988 as a way of "reacquainting myself with the fact that I'm a mere mortal." Many chief executives come to believe that they are much more than that. The perquisites and deferences create a protective cocoon--if not a full-fledged fantasy world--for the chieftains of some of the nation's largest companies. 'Many CEOs take on a level of self-importance that goes way beyond reality,' says Douglas D. Danforth, former CEO of Westinghouse Electric Corp. and now a director at several large corporations. 'They view the company as their own . . . . Some people's personalities change completely. If you're not careful, you can be seduced.' Call it CEO Disease. The symptoms are all too familiar: The boss doesn't seem to understand the business anymore. Decisions come slowly, only to be abruptly changed. He (there are only two women CEOs in the BUSINESS WEEK 1000) feels he can do no wrong and refuses to concede any mistake. He begins to surround himself with sycophants in senior management and on the board. TELLTALE SIGNS. Increasingly, the boss may seem out of touch--spending too much time away from the job, playing the role of statesman for the sake of personal recognition. He may even compete with industry counterparts over how much money he makes, how big the headquarters building is, or how many corporate jets are parked on the landing strip. And when it's time to leave the job, the boss just hangs on, often by undermining potential successors.</blockquote> In 1991, the BusinessWeek article suggested some ways to prevent CEO disease. In 20 years, these suggestions have been largely ignored in health care corporations, and in the larger health care system and the surrounding economy: <blockquote>A few fairly simple reforms would go a long way toward preventing many cases of CEO Disease, at least in its most virulent form. One obvious answer is to disperse decision-making. An advantage of this approach is that it focuses attention on a group of executives, not just the CEO. The prevalence of the problem also makes an overwhelming case for more involvement at the board level. To be effective, boards must be composed of a sizable percentage of outside directors who have the time to learn enough about a company and its management to make informed decisions about its leadership. If the boss isn't receptive and problems mount, a responsible director has no choice but to press for change. On four separate occasions since he started serving on boards, Jewel's Perkins says, 'I've sat down with the CEO and said: `In my judgment, you've made the contribution you can to this organization.' Three CEOs took early retirement. Ultimately, the power to prevent, and if necessary, cure CEO Disease rests with the shareholders. They have the right, and the duty, to insist on a board of competent and aggressive outsiders. At least, they do in theory. In reality, shareholders are often either passive, indifferent, or only invested in the stock on a short-term basis.</blockquote> CEO disease would seem to be an explanation for why a public hospital district gave an outlandish retirement package and a severance payment to a CEO who was still in office. CEO disease would describe much of the bad management we have described on this blog. So, as I have said before,.... health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior. If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses. We need to launch a crash program to prevent CEO disease and cure existing cases, before it kills off our health care system.

A Severance Package to an Un-Severed CEO - A Manifestation of "CEO Disease?"

The latest jaw-dropping story about executive compensation in health care has been unfolding in California, but at least now I have a diagno...

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

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

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

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

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