The Plot of the CareFusion/ Dr Denham/ NQF/ ABIM/ Dr Cassel Case Thickens Even More - Current NQF and Previous ABIM CEO Found to be Long-Term Premier Inc Board Member, Resigns from that Board

The plot of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group case (as we previously entitled it)  just will not stop thickening.<br /><br /><b>Background </b><br /><br />To summarize the events up to our <a href="http://hcrenewal.blogspot.com/2014/02/the-carefusion-dr-denham-nqf-leapfrog.html">last post</a> on the subject:  <br /> -  The case became public with an apparently routine legal settlement between CareFusion and the US Department of Justice<br /> -  The CareFusion settlement for $40.1 million was made in response to allegations that kickbacks were made to promote <a href="http://www.carefusion.com/medical-products/carefusion-brands/chloraprep/">ChloraPrep</a>, a solution meant for preoperative and other health care skin cleaning<br />-  The Department of Justice <a href="http://www.justice.gov/opa/pr/2014/January/14-civ-021.html">news release</a> also alleged that payments were made to a corporation called Health Care Concepts to conceal kickbacks made to its owner, Dr Charles Denham<br />-  The implication was that Dr Denham was supposed to influence a standard writing committee run by the National Quality Forum, a well known organization that promotes quality improvement, issues authoritative practice standards, a form of clinical practice guidelines, and has contracts with the US government for quality of care activities<br />-  The draft of the standard to prevent surgical site infection written by the committee allegedly included the use of ChloraPrep, although mention of that specific medication was removed in a revision<br />-  The Department of Justice alleged that the standard was based on a journal article sponsored by Cardinal Health, from which CareFusion split, and which may have been manipulated by its sponsor<br />-  NQF leaders asserted that after hearing of the case from the DOJ, the organization severed ties with Dr Denham and the non-profit organization he runs,  established a policy not to accept money from funding organizations whose leaders are on its committees, reviewed all the standards set by the committee of which Dr Denham was co-chair, and twice revised its conflict of interest policy.<br />- Despite these efforts by the NQF to remove excess influence by Dr Denham, a specific recommendation to use ChloraPrep, specified by formula but not by name, did appear in another NQF standard, one for preventing central line infections; the NQF logo apparently appeared on at least one educational event run by Dr Denham that advocated the use of ChloraPrep; and CareFusion cited NQF support in at least one promotional brochure<br />-  In retrospect, people who worked with Dr Denham on various health care quality and patient safety projects acknowledged they should have realized something fishy was going on.<br />-  Senator Charles Grassley is now investigating<br />-  Dr Christine Cassel, the CEO of the NQF, who had previous been the CEO of the American Board of Internal Medicine, was reported to be on the boards of directors of Kaiser Permanente Health Plans and Hospitals, a large non-profit health maintenance organization and hospital system, and Premier Inc, a for-profit hospital group purchasing organization.  Both these organizations could be affected by the standards set by the NQF, and possibly by the certification standards set by the ABIM.<br /><br /><b>A Change in Course at NQF </b><br /><br />At the time these conflicts were <a href="http://www.propublica.org/article/payments-to-ceo-raise-new-conflicts-at-top-health-quality-group">disclosed</a> by ProPublica, , an NQF spokesperson and the NQF board chairperson suggested that the organization was well aware of these relationships, did not believe they were serious conflicts of interest, but chose to manage them by having Dr Cassel recuse herself from specific activities that could be construed as conflicts of interest.  ProPublica quoted ethics experts who suggested that nearly all of Cr Cassel's activities at NQF could be involved in such conflicts, and hence such management would be inadequate.<br /><br />Less than two weeks later, reports appeared that Dr Cassel will be resigning from the boards of Kaiser and Premier Inc.  As <a href="http://www.modernhealthcare.com/article/20140226/NEWS/302269941/national-quality-forum-ceo-cassel-cutting-ties-to-kaiser-premier">reported</a> by Joe Carlson writing in Modern Healthcare,<br /><br /><blockquote class="tr_bq">In continuing fallout from a recent conflict-of-interest scandal, <i>National Quality Forum President and CEO Dr Christine Cassel is stepping down from two outside board of directors jobs amid questions about whether they created conflicts of interest for her.</i><br /><br />Cassel, 68, has<i> worked on the board of directors at Kaiser Permanente Health Plane and Hospitals since <b>2003</b>, and has held board jobs with healthcare supplier and consultant Premier and its predecessors since <b>2008</b>. </i>She told the National Quality Forum board of directors on Wednesday that she is resigning both roles because they had become a 'distraction' for the NQF. </blockquote><br />The story was also reported by <a href="http://www.propublica.org/article/citing-distraction-quality-forum-ceo-resigns-board-seats">ProPublica</a>, and briefly with focus on California-based Kaiser, by the <a href="http://www.latimes.com/business/money/la-fi-mo-kaiser-board-member-steps-down-20140227,0,1434838.story">Los Angeles Times</a>  and the San Francisco Business Times.<br /><br />But the resignations were just to reduce "distraction," as per ProPublica,<br /><br /><br /><blockquote class="tr_bq">The Quality Forum said in a statement today that Cassel's decision to sever ties was voluntary.<br /><br />'Although serving on these boards<i>provided her with direct knowledge of many current issues in health care, as well as practices of good governance, the issue of her board involvement had become a distraction</i>,' the organization said in a prepared statement.</blockquote><br />However, <br /><br /><blockquote class="tr_bq">[NQF board of trustees chair Helen]  Darling said she believed it was <i>an asset to have Cassel aligned with such prominent organizations like Kaiser and Premier</i>. 'It’s like saying you’ve got a Ph.D. from Harvard,' Darling said. '<i>This is something you’d be proud of.</i>'</blockquote><br />Ms Darling did not explain how the issue had become so distracting as to lead to a disavowal of something of which one should be so proud. <br /><br />Modern Healthcare also <a href="http://www.modernhealthcare.com/article/20140228/NEWS/302289946/nqf-reviewing-2010-safe-practices-report-in-wake-of-kickback-claim">reported </a>that the National Quality Forum will re-review the 2010 standards that recommended use of a CareFusion product and were written by a committee that included Dr Denham, who was alleged by the US Department of Justice to have taken kickbacks from CareFusion.<br /><br /><b>What About the American Board of Internal Medicine? </b><br /><br />Before coming to the NQF in 2013, Dr Cassel was the president and CEO of the American Board of Internal Medicine (per the <a href="https://www.qualityforum.org/News_And_Resources/Press_Releases/2012/new_president_ceo.aspx">NQF press release</a> announcing her appointment). In our last post on the subject, I raised the question of whether Dr Cassel could have had a conflict of interest related to her stewardship over Premier Inc while she was running the ABIM.  However, at the time of the last post, there was nothing public about whether Dr Cassel had a role with Premier Inc or its predecessor organizations while she was the leader of the ABIM.  .<br /><br />Now, according to Joe Carlson <a href="http://www.modernhealthcare.com/article/20140226/NEWS/302269941/national-quality-forum-ceo-cassel-cutting-ties-to-kaiser-premier">writing in Modern Healthcare</a>, it seems that Dr Cassel had been on the board of the privately held but for profit predecessor of the publicly traded Premier Inc since 2008, overlapping at least five years of her leadership of ABIM.  Per that article, "Premier arranges for the purchases of products that could be affected by the NQF's patient-safety recommendations," and <a href="http://www.propublica.org/article/citing-distraction-quality-forum-ceo-resigns-board-seats">per the ProPublica article</a>, Premier has an interest in what influences "practices adopted by medical providers across the country."  As  we wrote previously, the ABIM has a very substantial influence on health care.  Physicians must pass its examinations to become certified as internal medicine specialists or sub-specialists such as cardiologists, gastroenterologists , etc.  Recently certified physicians, and soon all certified physicians will have to participate in ABIM sanctioned "maintenance of certification" activities or risk being flagged as not adequately keeping with the board's concept of medical progress.  So it would appear that Dr Cassel's long term stewardship of the predecessor of Premier Inc could have been just as important a conflict of interest for her as ABIM CEO as it appears to be for her as NQF CEO.  <br /><br /><b>Summary</b><br /><br />This case increasingly demonstrates how pervasive is the web of conflicts of interest that is now draped over all of health care.  It also shows how important health care organizations seem to be lead by an overlapping, interconnected group of insiders.  The same names appear again and again amidst the top hierarchies.  The more ingrown the leadership of health care becomes, the more isolated it may be from the realities of health care for patients and health care professionals on the ground.  <br /><br />Specifically re the extension of this case to the American Board of Internal Medicine, to update what I wrote previously, in my humble opinion the current ABIM leadership needs to consider that Dr Cassel, its previous long-term CEO, had a conflict of interest involving her membership of the board of the private for-profit predecessor to Premier Inc from 2008 to 2013.  Was this conflict disclosed to the ABIM board of trustees?  If so, was there an attempt at management, and why was it not publicly disclosed?  If the conflict was not disclosed to anyone, why not?  If what was done conforms to current ABIM policies on conflicts of interest, should these policies be strengthened?  If what was done did not conform to such policies, should their enforcement be strengthened? <br /><br /><br />To repeat,  Dr Joe Collier said, "people who have conflicts of interest often find giving clear advice (or opinions) particularly difficult."  [Collier J. The price of independence. Br Med J 2006; 332: 1447-9. Link <a href="http://bmj.bmjjournals.com/cgi/content/full/332/7555/1447">here</a>.]  To reduce further unclear thinking and its consequences, we again urge that academic medical institutions, and non-profit organizations dedicated to improving patient care and public health forthwith begin real reductions of conflicts of interest affecting all those who make clinical or policy decisions. <br /><br />

The Plot of the CareFusion/ Dr Denham/ NQF/ ABIM/ Dr Cassel Case Thickens Even More - Current NQF and Previous ABIM CEO Found to be Long-Term Premier Inc Board Member, Resigns from that Board

The plot of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group case (as we previously entitled it)  just will not stop thickening.Background To summarize the events up to our last post on the subject:   -…

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The CareFusion/ Dr Denham/ NQF /Leapfrog Goup Case that Would Not Go Away - NQF CEO Outed as Member of Premier Inc Board

<br />The story of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group case refuses to go away, even if it still has not created any echoes in the mainstream media or the medical and health care literature.  Now it appears that the NQF has an even bigger conflict of interest problem than previously reported.  <br /><br /><b>Background</b><br /><br />As of our <a href="http://hcrenewal.blogspot.com/2014/02/the-implications-of-carefusion-dr.html">last post</a> on 5 February, 2014, the background was-<br />-  The case became public with an apparently routine legal settlement between CareFusion and the US Department of Justice<br /> -  The CareFusion settlement for $40.1 million was made in response to allegations that kickbacks were made to promote <a href="http://www.carefusion.com/medical-products/carefusion-brands/chloraprep/">ChloraPrep</a>, a solution meant for preoperative and other health care skin cleaning<br />-  The Department of Justice <a href="http://www.justice.gov/opa/pr/2014/January/14-civ-021.html">news release</a> also alleged that payments were made to a corporation called Health Care Concepts to conceal kickbacks made to its owner, Dr Charles Denham<br />-  The implication was that Dr Denham was supposed to influence a standard writing committee run by the National Quality Forum, a well known organization that promotes quality improvement, issues authoritative practice standards, a form of clinical practice guidelines, and has contracts with the US government for quality of care activities<br />-  The draft of the standard to prevent surgical site infection written by the committee allegedly included the use of ChloraPrep, although mention of that specific medication was removed in a revision<br />-  The Department of Justice alleged that the standard was based on a journal article sponsored by Cardinal Health, from which CareFusion split, and which may have been manipulated by its sponsor<br />-  NQF leaders asserted that after hearing of the case from the DOJ, the organization severed ties with Dr Denham and the non-profit organization he runs,  established a policy not to accept money from funding organizations whose leaders are on its committees, reviewed all the standards set by the committee of which Dr Denham was co-chair, and twice revised its conflict of interest policy.<br />- Despite these efforts by the NQF to remove excess influence by Dr Denham, a specific recommendation to use ChloraPrep, specified by formula but not by name, did appear in another NQF standard, one for preventing central line infections; the NQF logo apparently appeared on at least one educational event run by Dr Denham that advocated the use of ChloraPrep; and CareFusion cited NQF support in at least one promotional brochure<br />-  In retrospect, people who worked with Dr Denham on various health care quality and patient safety projects acknowledged they should have realized something fishy was going on.<br />-  Senator Charles Grassley is now investigating<br /><br /><b>The Conflicts of the NQF CEO</b><br /><br />In our <a href="http://hcrenewal.blogspot.com/2014/01/our-man-in-nqf-carefusion-settles.html">first post</a> about the case, I noted that at the time that Dr Denham was a committee member, the NQF seemed to have a relatively weak policy on conflicts of interest, although  <a href="http://hcrenewal.blogspot.com/2014/01/putting-in-ski-lifts-national-quality.html">this post</a> noted it was later strengthened somewhat.  I also commented that the organization seemed accommodating of conflicts of interest affecting its board of directors, and to have institutional conflicts of interest in that it accepted funding from health care corporations which might have interests in NQF quality standards being written in their favor.  <br /><br />So maybe it should not be too great a surprise that the latest twist in this case is the revelation that the new CEO of NQF has her own quite significant conflicts of interest.  Last week, ProPublica published a <a href="http://www.propublica.org/article/payments-to-ceo-raise-new-conflicts-at-top-health-quality-group">story</a> about the conflicts of interest of the new CEO of the NQF.  The basics were:<br /><br /><blockquote class="tr_bq"><div class="article">The top executive at the country’s pre-eminent health care quality organization is <i>being paid hundreds of thousands of dollars by two large medical companies that have a stake in the group’s work.</i><br /><br /><i>The payments to Dr. Christine Cassel raise new conflict-of-interest concerns at the National Quality Forum,</i> which endorses benchmarks that Medicare uses to compensate hospitals based on performance.<br /><br />As <a href="http://www.propublica.org/article/hidden-financial-ties-rattle-top-health-quality-group" target="_blank">ProPublica recently reported</a>, the Quality Forum is reviewing its conflict-of-interest policies after being stung by allegations that the former co-chair of one of its endorsement committees had accepted kickbacks to help a drugmaker win favorable treatment.<br /><br /><i>Cassel received about <b>$235,000 </b>in compensation and stock last year as a <a href="https://www.premierinc.com/wps/portal/premierinc/public/aboutpremier/leadership/biographies/christine-cassel" target="_blank">board member for Premier Inc.</a>, a North Carolina company that says it provides group purchasing and performance improvement consulting for an <a href="https://www.documentcloud.org/documents/1013194-premier-comments-august2013.html#document/p1/a143354" target="_blank">alliance of 2,900 hospitals</a> and thousands of nursing facilities and other providers. </i><br /><br /><i>Cassel also was paid <b>$189,000</b> as a board member for the Kaiser Foundation Health Plans and Hospitals in 2012, </i>Quality Forum officials confirmed to ProPublica. Kaiser’s tax forms are not available for 2013, but they show that in 2010 and 2011 Cassel received a total of $357,125.</div><div class="article"><br />Cassel, who declined to be interviewed, took over as chief executive officer last summer after a decade as president and CEO of the American Board of Internal Medicine. </div></blockquote><div class="article"></div><div class="article"><br />Not unexpectedly, the official position of the NQF was nothing to see here, just move along.</div><div class="article"></div><div class="article"><br /><blockquote class="tr_bq"><a href="http://www.qualityforum.org/About_NQF/Board/Board_of_Directors_Roster.aspx" target="_blank">The group's chairwoman</a>, Helen Darling, said in an email that <i>the board was 'fully aware' of Cassel’s outside compensation</i> when she was hired in December 2012. Darling, president of the National Business Group on Health, initially agreed to an interview but did not respond to follow-up contacts.<br /><br />Spokeswoman Ann Greiner said the board got a legal opinion and discussed it in depth before agreeing that <i>Cassel could recuse herself 'where her outside board service would be construed as an actual or perceived conflict of interest.'</i> So far that hasn’t happened, Greiner said.</blockquote></div><br />Note that those defending NQF saw no reason to explain why it had not previously disclosed Dr Cassel's other positions or how the conflicts would be managed.  Perhaps a board that includes executives of large health corporations, of a financial firm with large health care interests, and of a trade associations for large health care corporations would not see a problem with having a CEO who is simultaneously on the boards of a for-profit hospital group purchasing organization and a very large, albeit non-profit health care system. <br /><br />Others were much more skeptical and critical.  <br /><br /><blockquote class="tr_bq">Two ethics experts interviewed by ProPublica said Cassel’s relationships with Kaiser and Premier <i>present obvious conflicts given the Quality Forum’s broad involvement in health care.</i><br /><br />The Quality Forum maintains a clearinghouse of more than 700 quality measures — covering everything from tracking hospital readmissions to setting information technology standards — that are established by expert committees and widely adopted by U.S. hospitals and other providers. </blockquote><br />The ethics experts said they were uncertain how Cassel could recuse herself to anything related to Kaiser and Premier and still do her job.<br /><br /><blockquote class="tr_bq"><i>'Would that mean every time somebody said the word ‘hospital’ she would have to say, ‘I can’t be in this conversation?’'</i> said <a href="http://www.instituteforhealthpolicy.org/core_faculty/Campbell" target="_blank">Eric Campbell</a>, a Harvard School of Medicine professor who has published extensively on conflicts of interest.<br /><br />'Conflict of interest is as much an appearance as it is an effect,' added <a href="http://www.tufts.edu/%7Eskrimsky/bio.htm" target="_blank">Sheldon Krimsky</a>, a medical ethics expert at Tufts University. He called Cassel’s conflicts <i>'absolutely egregious'</i><br /><br />Campbell and Krimsky said the cleanest way to eliminate potential conflicts would be for Cassel to resign from the outside boards.</blockquote><br />The plot thickens because of the amount of influence wielded by the NQF,<br /><br /><blockquote class="tr_bq"> In 2009, <i>Medicare awarded a <a href="https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=bf9a9aa4529a19bab87c7c2c09ce2c9f&_cview=0" target="_blank">$40 million contract to the Quality Forum</a> to recommend <a href="https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=f5a7e6b022cc2e926efa8dccf90ec220&_cview=0" target="_blank">measures</a>it could adopt. President Obama’s health care reform law accelerated the move to pay-for-performance</i>. Medicare already <a href="http://www.kaiserhealthnews.org/Stories/2013/November/14/value-based-purchasing-medicare.aspx" target="_blank">has begun penalizing and rewarding</a> hospitals based on readmission rates, mortality and patient satisfaction measures. By 2017, it’s expected that <a href="http://www.qualityforum.org/what_we_do.aspx" target="_blank">9 percent of Medicare payments</a> will be based on performance.</blockquote><br />Having some leverage on that influence would seem to be particularly important to Premier Inc, the now publicly held for-profit group purchasing organization on whose board Dr Cassel sits,<br /><br /><blockquote class="tr_bq"> Premier reported revenues of $869 million in the fiscal year ending last June. It spent more than $1 million on lobbying in 2013, according to OpenSecrets.org. In August and November, <i>the company urged members of Congress to instruct Medicare to <a href="https://www.documentcloud.org/documents/1013194-premier-comments-august2013.html#document/p9/a143149" target="_blank">run any quality measures through the Quality Forum</a>.</i><br /><br /><i>Premier <a href="https://www.documentcloud.org/documents/1010105-premier-5-31-13-sec-form-s-1-registration.html#document/p173/a143373" target="_blank">featured Cassel’s status</a> as a board member and future top executive of the Quality Forum in documents last May describing its initial public stock offering.</i> In September<i> <a href="https://www.documentcloud.org/documents/1010111-premier-9-27-13-cassel-acquired-3-704-shares.html#document/p1/a143369" target="_blank">Cassel acquired 3,704 shares of Premier</a> stock that were then worth about <b>$100,000.</b></i><br /><br />The company’s business involves group purchasing and <i>a consulting arm that uses data analysis to help providers perform better on various quality metrics. In October, a measure sponsored by Premier to track hospital care by the average length of stay <a href="https://www.documentcloud.org/documents/1015398-nqf-ave-los-oct-2013.html" target="_blank">was up for renewal by the Quality Forum</a>.</i></blockquote><br />Of course, a Premier Inc spokesperson denied that could be a problem,<br /><br /><blockquote class="tr_bq">[Spokesperson Blair] Childs said Cassel’s role on the Premier board doesn’t pose any conflict of interest, and that <i>her relationship with Premier was vetted carefully by the Quality Forum’s board</i>. Cassel was a good addition to the Premier board because of her commitment to improved care and lower costs, he said.</blockquote>However, I submit that the conflict here is particularly acute because Dr Cassel is not merely a part time consultant or adviser to Premier Inc.  She is on the board of directors.  In 2006 we first <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">discussed</a> a newly discovered species of conflict of interest in health care, in which leaders of medical or health care organizations were simultaneously serving on boards of directors of health care corporations.  We posited these conflicts would be particularly important because being on the board of directors entails not just a financial incentive.  It ostensibly requires board members to "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. <a href="http://www.amazon.com/Corporate-Governance-Robert-G-Monks/dp/1405116986"><i>Corporate Governance</i></a>, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]  Of course, after the global financial collapse of 2008 made us sadder and a little wiser, we realized that many board members actually seem to have unyielding loyalty to their cronies among top management.  However, in any case, the stated or actual interests of a member of the board of a health care corporation, like a for-profit hospital purchasing organization, could be very different and at odds with the mission of an academic medical institution or a non-profit ostensibly dedicated to improving health care quality.  <br /><br />However, in my humble opinion, the issue here goes even beyond a blatant and undisclosed conflict of interest.  That a top steward of a big for-profit health care corporation could simultaneously be the top leader of an influential non-profit health care quality improvement organization suggests that increasingly US health care is run by an insular group of insiders whose influence gets ever larger because of their collective power, not necessarily because of their dedication or ability to improving health care.  As ProPublica put it,<br /><blockquote class="tr_bq">Rosemary Gibson, an author and senior adviser to The Hastings Center, a research group dedicated to bioethics in the public interest, said she wasn’t surprised at Cassel’s outside compensation. <i>So much money permeates decision-making in Washington, she said, that participants have become oblivious</i>.<br /><br />'The insiders don’t see it,' Gibson said. '<i>It’s like a fish in water.</i>'</blockquote><b>Additional Questions </b><br /><br /><br />Finally, the forced disclosure of Dr Cassel's conflicts of interest raise some additional questions.  <br /><br /><u>Did Dr Cassel Have an Equally Severe Conflict as CEO of the ABIM? </u><br /><br />Dr Cassel was previously the CEO of the American Board of Internal Medicine (ABIM).  This non-profit organization also has a very substantial influence on health care.  Physicians must pass its examinations to become certified as internal medicine specialists or sub-specialists such as cardiologists, gastroenterologists , etc.  Recently certified physicians, and soon all certified physicians will have to participate in ABIM sanctioned "maintenance of certification" activities or risk being flagged as not adequately keeping with the board's concept of medical progress.<br /><br />Thus the content of the ABIM examinations and sponsored activities can influence physicians' thinking and decision making.  How the ABIM under Dr Cassel's leadership dealt with conflicts of interest affecting those who write examinations, provide content, and lead the organization is unclear.<br /><br />Furthermore, it seems possible that Dr Cassel had a conflict of interest generated by her work for Premier Inc while she was still CEO of ABIM.  However, before Premier Inc made its initial public offering, information about its management and governance was scarce.  Whether Dr Cassel was on the board of a precursor to the publicly traded Premier Inc is not easy to ascertain.  Maybe the current ABIM leadership needs to consider whether Dr Cassel had a conflict involving Premier Inc or its precursor while she was CEO of ABIM, and how that conflict could have affected the direction of ABIM at the time.  <br /><br /><u>How Would Dr Cassel Respond to Criticisms of Premier Inc and How Would that Reflect on the ABIM and the NQF?</u><br /><br />Premier Inc is a hospital group purchasing organizations (GPOs).  GPOs, particularly including Premier Inc, have been criticized for anti-competitive practices that distort the market in health care drugs and devices, for accepting the ethical equivalent of kickbacks, and particularly for generating drug shortages.  For example, an <a href="http://articles.baltimoresun.com/2014-02-07/news/bs-ed-drug-shortage-20140209_1_shortages-supply-chain-drugs">opinion piece</a> in the Baltimore Sun claimed,<br /><br /><blockquote class="tr_bq"> The main reason is that most of these drugs are purchased through a handful of supply chain middlemen called hospital group purchasing organizations, or GPOs, <i>whose anti competitive practices and self-dealing have been documented in Senate antitrust hearings, media reports, government investigations and lawsuits.</i> These buyers' monopolies purchase upward of $300 billion in drugs, devices and supplies annually for about 5,000 private acute care hospitals, including virtually every one in Maryland. Five giants account for roughly 90 percent of all such purchases. [Apparently including Premier Inc - Ed]<br /><br />Under <i>a 'pay-to-play' arrangement</i>, vendors compete not on the basis of who can supply the best product at the best price but on who can pay the biggest fees to these cartels. In return, they receive exclusive contracts. <i>This artificially constrained supply chain is why many drug manufacturers have fled the marketplace, </i>leaving just one or two to produce many drugs. In turn, hospitals receive incentives based on their compliance with contracts the GPOs award to favored suppliers.<br /><br />In 1987, Congress enacted the Medicare anti-kickback 'safe harbor,' which exempted GPOs from criminal penalties for accepting payments from suppliers —<i> payments that in virtually every other industry would be considered unlawful kickbacks.</i></blockquote><br />The GPOs trade organization vigorously contested this argument, of course.<br /><br />But the awkward fact is that Dr Cassel, as a board member of Premier Inc, can be seen as a steward of that corporation, and hence responsible for the its overall direction.  Thus, Dr Cassel could easily find herself in the uncomfortable situation of having to defend and justify questionable behavior by Premier Inc while simultaneously wearing the hat of CEO of NQF.  How that would play out is not obvious.<br /><br /><b>Summary</b><br /><br />So now it appears that the problems with conflicts of interest at the NQF affect not only its standard setting committees, board of trustees, and organizational funding.  They also affect its CEO. <br /><br />Dr Joe Collier said, "people who have conflicts of interest often find giving clear advice (or opinions) particularly difficult."  [Collier J. The price of independence. Br Med J 2006; 332: 1447-9. Link <a href="http://bmj.bmjjournals.com/cgi/content/full/332/7555/1447">here</a>.]  To reduce further unclear thinking and its consequences, we again urge that academic medical institutions, and non-profit organizations dedicated to improving patient care and public health forthwith begin real reductions of conflicts of interest affecting all those who make clinical or policy decisions.    <br /><br />We <a href="http://hcrenewal.blogspot.com/2014/01/putting-in-ski-lifts-national-quality.html">previously suggested</a>:that NQF leaders might also consider:<br />-  further strengthening their conflict of interest policy for standard setting committees, particularly by minimizing the number of committee members with conflicts, and banning individuals with conflicts from chairing committees, as per the <a href="http://www.iom.edu/Reports/2011/Clinical-Practice-Guidelines-We-Can-Trust.aspx">IOM report on standards for trustworthy clinical practice guideline development</a><br />-  increasing transparency about conflicts of interest, particularly by making disclosures for all projects available without complex web searching<br />-  decreasing institutional conflicts of interest by refusing funding from health care corporations whose revenues might be affected by the content of standards and guidelines, and reducing conflicts affecting NQF board members and executives<br /><br />I would now add that in my humble opinion, the NQF ought to immediately fully disclose any other conflicts that might exist affecting its committees, staff, board of trustees, or funding, and then begin a progressive but ultimately complete phase out of all significant conflicts affecting these areas.   <br /><br />Roy M. Poses MD for Health Care Renewal <br /><br />

The CareFusion/ Dr Denham/ NQF /Leapfrog Goup Case that Would Not Go Away - NQF CEO Outed as Member of Premier Inc Board

The story of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group case refuses to go away, even if it still has not created any echoes in the mainstream media or the medical and health care literature.  Now…

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Senate Investigates Hospital Group Purchasing Organizations

Almost four years ago, we <a href="http://hcrenewal.blogspot.com/2005/11/investigation-of-novation.html">posted</a> about the strange world of hospital group purchasing organizations (GPOs). These organization purchase large volumes of medical products for member hospitals, but a "safe harbor provision" in federal law allows them to charge the vendors, not the hospitals for their services. In fact, it is legal for hospitals to share in fees the vendors give these organizations, and to award contracts to vendors who pay the largest fees.<br /><br />Our 2005 post focused on allegations about the operations of a single GPO, <a href="http://www.novationco.com/">Novation.</a> We noted "several cases in which Novation's actions seemed to have denied hospitals access to the best products, or have increased, rather than ratcheted down the cost s of supplies and equipment."<br /><br />Now, the US Senate is investigating a group of the largest GPOs. <a href="http://www.nytimes.com/2009/08/14/health/policy/14purchasing.html">According to the New York Times</a>,<br /><blockquote><br />Lawmakers eager to broaden health care coverage while holding down costs are examining the institutional market for medical supplies, a largely unseen $60 billion-a-year realm where things like bedpans and heart implants change hands.<br /><br />Senators from committees like finance, judiciary and aging are investigating the practices of companies that represent big networks of hospitals, nursing homes and other institutions. <em>These group purchasing organizations select 'preferred' manufacturers and negotiate the prices of medical products, which are a closely held secret.</em> They then use a variety of carrots and sticks to make sure their hospitals buy those brands at the contracted price.<br /><br />The senators are concerned that these groups’ practices <em>may be inflating health costs at taxpayer expense. Much of the cost is borne by the government, as it reimburses hospital expenses through the Medicare program.<br /></em><br />On Wednesday, the senators sent letters to the seven biggest group purchasing organizations, known as G.P.O.’s, demanding detailed information about their business practices, including how they are paid, what services they perform besides picking brands and negotiating prices, and how their revenues are affected when an affiliated hospital buys supplies on its own instead of using the group contract.<br /><br />The senators also asked for copies of contracts, something not normally made public.<br /><br />For years, there have been <em>complaints that the buying process is opaque and unfair. The purchasing companies’ operating expenses are usually paid by the manufacturers sitting across the bargaining table, leaving them open to accusations of steering huge blocks of institutional business to the vendors willing to pay the most.<br /></em><br />The group purchasing organizations deny this, saying they award contracts on the merits and help hospitals get good deals, saving the government money.<br /><br /><em>The savings are hard to verify, because the market’s opacity makes price comparisons nearly impossible.</em><br /><br /><em>Normally, Medicare’s law against kickbacks would bar vendors from paying the companies that award them contracts, but Congress granted the industry a special 'safe harbor' many years ago, in the belief that volume purchasing saved money.</em> The senators seem to want to test that belief and perhaps change or abolish the safe harbor, something that would turn the industry on its head.<br /><br />Some of the group purchasing organizations have been in the spotlight before. Premier and <em>Novation</em> were the subject of articles in The New York Times in 2002, which prompted Congressional hearings and the issuance of an industry code of conduct. But Senate aides said they were still hearing reports of possible abuse.... </blockquote>What I wrote about group purchasing organizations four years ago still seems apt.<br /><blockquote><br />In summary, although GPOs were ostensibly set up simply to save hospitals money when purchasing supplies and equipment, these organizations have turned into huge, complicated and opaque entities whose actions are hidden, but which seem to be conveying large amounts of money back and forth among suppliers, hospitals, and the GPOs themselves. It is not at all clear that the GPOs save the hospitals money, nor get them the best possible supplies for the money they spend.<br /><br />The leaders of the hospitals, including some of the countries most prestigious teaching hospitals, that own Novation and other GPOs ought to explain what these organizations really are doing, and particularly how they are supporting the hospitals' missions.<br /><br />Again, this is another example of how opaque and unaccountable hospital leadership may be. But, the less transparent and accountable are health care leaders, the more the health care mission is at risk.<br /></blockquote><br /><br />Finally, I applaud the Senators for taking this up at this time. To have meaningful health care reform, we need to address issues such as the opacity and unaccountability of the leadership of health care organizations, particularly not-for-profit hospitals that are supposed to put their patient care (and academic, if applicable) missions ahead of enhancing their financial surpluses and their executives' compensation.<br /><br />ADDENDUM (19 August, 2009) - See interesting comments on this post, including some important information from the trade organization for group purchasing organizations.

Senate Investigates Hospital Group Purchasing Organizations

Almost four years ago, we posted about the strange world of hospital group purchasing organizations (GPOs). These organization purchase large volumes of medical products for member hospitals, but a "s…

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