healthy4u: mission-ignorant management

Logical Fallacies to Support Putting a Major Academic Medical Center into the Contract Research Organization Business

Two uncritically positive biographical features on UCSF Chancellor Susan Desmond-Hellmann MD appeared within the last two weeks, <a href="http://www.nytimes.com/2011/10/11/science/11profile.html">one in the New York Times</a>, suggesting the game is afoot.  That game appears to be the Chancellor's new strategic direction for the university.  A New Strategy for "Increasing Collaborations" with Industry Per the NY Times, the university has just made a huge investment in bricks and mortar, <blockquote>the school’s gleaming new building for stem-cell research and its enormous new waterfront campus, Mission Bay, which is becoming a medical and biotech empire. </blockquote> Now, perhaps to pay for it, <blockquote>Dr. Desmond-Hellmann hopes to supplement the usual sources of income like patient fees, grants and tuition by increasing collaborations between the university and the biotech companies that have sprung up in the Bay Area — many of them spinoffs from research that began at the university. </blockquote> Dr Desmond-Hellmann described the general direction thus: <blockquote>Her vision for the university is to make it 'the world’s pre-eminent health sciences innovator.' That means 'unparalleled' care for patients, brilliant faculty and staff paid enough to stay and fast translation of scientific discoveries into treatments. </blockquote>That seems worthwhile, if quite a bit vague. Making "Collaboration," "Innovation," and "Translation" More Explicit An <a href="http://www.xconomy.com/national/2011/10/03/why-universities-are-key-to-the-future-of-biotech-and-how-ucsfs-chief-is-showing-the-way">article</a> in Xconomy sounded similar themes, but was more explicit. First, Dr Desmond-Hellmann said, <blockquote>I’m sticking my neck out there and saying the world is changing very quickly, and yet our aspiration at UCSF is to be a world leader in health science innovation</blockquote> So it is time to jump on the bandwagon, <blockquote>The old way of doing things doesn’t really work anymore.</blockquote> But the Xconomy article was more explicit about what sort of changes she envisioned, what innovation she had in mind, and what "translation" means in this context: <blockquote>Often, some of the best research ideas would get handed off from academia to a company at a very raw stage of development. But few venture capitalists are funding startups at this early stage of development these days, and Big Pharma R&D has always tilted more heavily toward D than R. The economy has put more pressure on companies to tilt that balance even further away from research, and more toward late-stage development that has a chance to bear fruit in the near-term. Universities need to recognize this is how things are. If they want to truly translate their innovations into products that help patients, they will have to carry the research a little further downfield themselves. Some Big Pharma companies have already shown they are willing to sponsor this kind of on campus work at UCSF and elsewhere.</blockquote> So, <blockquote>Working in collaboration with pharma companies is definitely a part of the future of advancing health, Desmond-Hellmann says. Financially, these deals are small potatoes, and aren’t going to close any budget gap. Even if UCSF researchers made a breakthrough cancer drug that generates billions of sales per year, it would likely only throw off a royalty stream to the university worth a few million a year—nice, but not exactly a big deal for a multi-billion-dollar institution. Instead, the collaborations are about improving the flow of basic research through development. Pharma companies need new products to preserve and grow their bottom lines, and they aren’t doing so hot at inventing them on their own. When budget cutters ask questions about how taxpayer dollars are spent on campus, academic centers need to be able to say something like, 'We discovered a breakthrough drug that helps people live longer, better lives,' instead of just 'We got a cool paper published in Nature.'</blockquote> Just to underline that, <blockquote>Big Pharma R&D operations, rich as they may be, are feeling the same pressure to make cuts as universities. What’s needed now are the creative partnerships, where someone knowledgeable about the whole process (like maybe a Desmond-Hellmann) steps in and finds a way to more seamlessly bring together these two factions around what they have in common.</blockquote> And the brave new world is almost here already, <blockquote>UCSF has struck a number of creative partnerships with companies like Pfizer, Sanofi, and Bayer, which are being closely followed at other universities. UCSF has also found a way, with the help of some big-time philanthropy, to break ground on two ambitious projects—a $1.5 billion hospital complex and a $200 million neurosciences research facility in the Mission Bay district. There in the same neighborhood, the university has also continued to support QB3, an incubator where academic scientists are starting companies that test whether their ideas just might have what it takes to become new drugs, devices, or diagnostics.</blockquote> So let us try to make Dr Desmond-Hellmann's new direction clear: what she meant by innovation and translation was doing contract research and development for big pharma and big biotech. The goal is not just to discover new knowledge, but to develop new products.  That should bring in a lot of money, which can pay for all sorts of fancy new buildings. A New Direction Supported by Logical Fallacies The problem is, as I hinted above, the arguments for this new direction were mainly based on <a href="http://www.nizkor.org/features/fallacies/">logical fallacies</a>. Begging the Question Note that the key argument in support of turning the university into a pharma/ biotech research and development shop was, "if they [universities] want to truly translate their innovations into products that help patients," they must develop those products themselves.  This <a href="http://www.nizkor.org/features/fallacies/begging-the-question.html">begged these questions</a>: -  Should they want to develop products? -  Why are they the only ones who can do so?  These questions were never asked in either article, perhaps because their answers are obviously "no."  Universities' missions are to discover and disseminate knowledge.  Developing and marketing products are not part of their missions.  Furthermore, there are lots of corporations that ought to be able to develop and market pharmaceuticals and devices outside of universities. Appeal to Common Practice/ Bandwagon Another argument in favor of Dr Desmond-Hellmann's radical new plan was "universities need to recognize this is how things are," in that "the old way of doing things doesn't really work anymore." This is an example of two logical fallacies, the <a href="http://www.nizkor.org/features/fallacies/appeal-to-common-practice.html">appeal to common practice</a>, and maybe <a href="http://www.nizkor.org/features/fallacies/bandwagon.html">the bandwagon fallacy</a> more so. An assertion is made that the world is changing, the change cannot be stopped or even questioned, so we all just have to climb on the bandwagon. Straw Man and Begging the Question (Again) The Xconomy article also noted: <blockquote>Some academics sneer at this late-stage research/early-stage development work. It’s a cultural attitude Desmond-Hellmann wants to change. 'There’s a technical competence in taking a discovery from a lab and turning it into a medicine. It’s embarrassing that people don’t honor that technical competence. You sometimes hear it called 'applied' or 'obvious' or some other pejoratives. But it’s my expertise. I do take that personally. There is a technical competence. It needs to be understood, put into curriculum, and valued.'</blockquote> Here Dr Desmond-Hellman seemed to be using the <a href="http://www.nizkor.org/features/fallacies/straw-man.html">straw man fallacy</a>, by setting up unattributed arguments against her cause that she could easily refute. Meanwhile, however, another <a href="http://www.nizkor.org/features/fallacies/begging-the-question.html">question she begged </a>was what exhibiting such technical competence has to do with the mission of the university. As we will discuss further below, the mission of a university is to discover and disseminate knowledge. "Technical competence" may be required to do so, but exhibiting technical competence per se is not the goal. (Consider: if the university had faculty members who were competent amateur automobile mechanics, would it fulfill the mission to establish a university automobile repair business using these faculty members' technical competence?) Another implied begged question was: if this competence ought to be a subject taught at the university, how would the need for such teaching require the university to do contract research and development for industry? Appeal to Authority Both articles also seemed to try to support Dr Desmond-Hellmann's ideas by emphasizing first that she had "a stunningly successful career in the pharmaceutical industry," perhaps so described because her "years in pharmaceuticals left her, by her own account, 'very, very wealthy," (It did allow that at the end of her career at Genentech, after she had become president of product development, "her compensation (base pay, stock and other payments) was more than $8 million a year. She also owned hundreds of thousands of shares of Genentech stock, worth $95 a share.") Also, despite her apparent membership in the top one percent of the population in terms of income, the Times article took pains to note "she is so nice," and again, "she's a very nice person." So the implication is that because she is successful, rich, and nice, her arguments and ideas must be correct.  This seems to be an <a href="http://www.nizkor.org/features/fallacies/appeal-to-authority.html">appeal to authority</a>. Questions That Should be Asked Neither the author of the NY Times article nor the author of the Xconomy article sought to ask her any of the questions that were begged, or to otherwise raised by Dr Desmond-Hellmann's grand plans.  So let me try. How Does Becoming a Contract Research Organization Fulfill the University's Mission? However her new plans are described, they entail hiring out the university's facilities and faculty to develop new products, drugs and perhaps devices. Yet the university's mission is to discover and disseminate knowledge. How will proprietary research and development fulfill that mission?  In fact, there are reasons to worry that the new focus on for-hire drug research and development will undermine the mission.  Any new knowledge produced is likely to be labelled trade secrets. Faculty who work as drug and device development contractors will not be teaching students. Students caught up in drug and device development will be working for big corporations, possibly without pay, and without any ownership of anything they may discover in the process. How Will the Resulting Institutional and Individual Conflicts of Interest be Managed? If the university becomes dependent on being paid for drug and device development, can university faculty remain unbiased teachers and researchers? Will they not feel pressured to show favor to the products, policy goals, and leadership of the corporations that are paying them? Why Would Faculty and Students Want to Participate in a Contract Research Organization Cloaked in Academic Robes? Will faculty want to be labelled as contract workers? What will that do for their academic credibility? Will students want to be educated by people beholden to specific corporations and corporate projects? Should Patients Want Care from a Contract Research Organization? How will they be confident that the drugs they are prescribed and the devices used in procedures they undergo are not chosen because their doctors and nurses feel beholden to the corporations that make them? Summary UCSF's new multimillionaire ex-biotechnology executive Chancellor seems determined to push the university into a much closer relationship with the drug, device and biotechnology industry. In fact, she seems to be advocating that the university should become, in effect, a contract research organization to service this industry. So far, this radically new direction seems to be provoking no questions, much less dissent, even though the public justification for it was apparently based on a string of logical fallacies. However, it is not clear how taking one of our major academic medical centers in this commercial direction will not harm, much less benefit its mission. For 30 odd years in the US we have been making health care more commercial, and have to show for it the world's most expensive but hardly the world's best health care system. This increasingly inaccessible system which provides care of uncertain quality has made the one percent who run it very rich. Those of us in the 99 percent need to question how making it even more commercial will do any of us any good. Post-Script: You Can Take the Executive Out of Biotech, But You Can't Take Biotech Out of the Executive When Dr Desmond-Hellmann first become UCSF Chancellor, we <a href="http://hcrenewal.blogspot.com/2009/05/bio-tech-u.html">questioned</a> how someone steeped in the culture of commercial biotechnology could distinguish that culture from the academic mission? (You heard that question here first.)  The answer now seems to be that her current ambitions substantially blur the academic mission with the pursuit of money and commercial success. Maybe one reason for this blurring of distinctions is that Dr Desmond-Hellmann apparently has not completely left the corporate world. - A <a href="http://www.athletepromotions.com/celebrity/Susan-Desmond-Hellmann-appearance-booking-agent.php">web-site </a>for a speakers' bureau in which she apparently still participates lists her as a current "Advisor of Genentech since April 2009." - In 2010, Dr Desmond-Hellmann joined the board of directors of Procter and Gamble, a company which makes many health related products, although it sold its global pharmaceutical business. Note that she got this position despite apparently not having any prior personal investment in P&G stock. However, per the company's <a href="http://www.pg.com/en_US/downloads/investors/annual_reports/2011/PG_2011_Proxy.pdf">2011 proxy statement</a>, she appears to be in line to collect over $250,000 a year in compensation for this position. It does not seem impossible that these ongoing commercial interests may influence how she acts in her role as Chancellor. ADDENDUM (5 November, 2011) - As <a href="http://www.reuters.com/article/2011/11/03/teva-pg-idUSN1E7A20BZ20111103">per Reuters</a>, <blockquote>Consumer products maker Procter & Gamble Co and Israeli drugmaker Teva Pharmaceutical Industries Ltd on Thursday gave details of a joint venture they have created to sell over-the-counter medicines. The joint venture, which was initially announced in March, will combine Teva's expertise in drug marketing with P&G's expertise in branding to expand their presence in the $200 billion consumer healthcare industry. </blockquote> So P+G is becoming more of a health care company, increasing concerns about how her position as a director of the company, which gives her fiduciary responsibility for its finances, may influence her in her role as Chancellor.

Logical Fallacies to Support Putting a Major Academic Medical Center into the Contract Research Organization Business

Two uncritically positive biographical features on UCSF Chancellor Susan Desmond-Hellmann MD appeared within the last two weeks, one in the ...

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FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman <a href="http://www.pharmalot.com/2011/02/heparin-supplier-is-warned-again-by-the-fda/">on the Pharmalot blog</a>, we hear of new concerns about a company in the supply chain that ended up with adulterated heparin and dead patients.  Before summarizing what the blog reported, let me summarize the case again. Case Summary - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2010/12/unreasonably-dangerous-heparin.html">here</a>, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting in 2008, hundreds of such reactions, and now over 80 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was sold by Baxter International. - We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. - The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.  (For a more detailed summary of the case, look <a href="http://hcrenewal.blogspot.com/2010/05/more-questions-no-answers-about-case-of.html">here</a>, and for all our posts on this topic, look <a href="http://hcrenewal.blogspot.com/search/label/heparin">here</a>.) The FDA Letter Pharmalot reported that the US Food and Drug Administration (FDA) sent a warning letter dated January 20, 2011, to Scientific Protein Laboratories LLC, and provided <a href="http://freepdfhosting.com/e89847cc8b.pdf">a link</a> to the letter.  The letter identified continuing serious problems with Scientific Protein Laboratories' operations: <blockquote>During our July 28, 2010 - September 3, 2010, inspection of your active pharmaceutical ingredient (API) manufacturing facility, Scientific Protein Laboratories LLC, located at 700 E. Main Street, Waunakee, WI, investigators from the Food and Drug Administration (FDA) identified significant deviations from Current Good Manufacturing Practice (CGMP) for the manufacture of drugs. These deviations cause your drugs to be adulterated within the meaning of section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. § 351(a)(2)(B)] in that the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with CGMP.</blockquote> The firm failed to adequately respond to complaints about its products, including heparin: <blockquote>Failure to investigate all quality related complaints whether received orally or in writing according to a written procedure. For example, your firm failed to conduct a formal investigation concerning a complaint identifying potential contamination with Oversulfated Chondroitin Sulfate (OSCS) in a lot of Heparin Sodium USP (lot 1035-0778) on October 9, 2008. Your firm did not initiate a formal investigation until September 9, 2009. In addition, at that time, your firm failed to extend your investigations to other lots of Heparin Sodium USP manufactured using the same crude lot identified with OSCS contamination. Your investigation did not consider the other lot of Heparin Sodium USP that was associated with the same contaminated crude lot until May 26, 2010, eight months after initiating a formal investigation (i.e., lot 1035-0780, which tested negative for OSCS in June 2010). We acknowledge that you initiated a voluntary recall of Heparin Sodium USP that included lots 1035-0778 and 1035-0780 on October 13, 2010. In your response, your firm notes that you have revised your procedure to state, “Any SPL employee will inform QA of a customer complaint.” However, this response does not address the fundamental issues that allowed the delays in communications and investigation to occur. Your handling of the heparin contamination complaint suggests the need to evaluate training across all departments about the types of information requiring prompt reporting to the quality unit. Further, your response does not address how you will ensure that complaint investigations are handled in a timely manner.</blockquote> Also, the firm still had problems overseeing the work of companies that supplied it: <blockquote>Your firm failed to properly evaluate a contract laboratory to ensure GMP compliance of operations occurring at the contract site</blockquote> Furthermore, it did not use the proper equipment: <blockquote>Failure to have equipment for the manufacture of APIs of appropriate design for its intended use.</blockquote> The FDA seemed concerned that company management did not understand its responsibilities: <blockquote>The manner in which you addressed this problem [the contamination of the heparin] is very worrisome with respect to the timeliness of the investigation, the identification of all potentially affected drugs, and implementing appropriate actions to resolve these issues. Be advised that your firm has the responsibility to ensure the quality, safety, and integrity of its drugs. FDA expects that your corporate management will immediately undertake a comprehensive evaluation of your quality system to ensure comprehensive compliance with CGMP.</blockquote> In addition, <blockquote>However, we are concerned about your firm’s fundamental understanding of what is required by your Quality Unit and the regulatory expectations for a firm that enters into agreements with contract testing laboratories. Although you have agreements with other firms that may delineate specific responsibilities to each party, you are ultimately responsible for the quality of your products and the reliability of test results. Regardless of who tests your products or the agreements in place, you are required to manufacture these products in accordance with section 501(a)(2)(B) of the Act to assure their identity, strength, quality, purity, and safety.</blockquote>Summary In previous discussions of the case of the adulterated heparin I speculated about reasons that the current leaders of health care corporations may have abandoned their most fundamental responsibilities, <a href="http://hcrenewal.blogspot.com/2010/12/unreasonably-dangerous-heparin.html">for example</a>: <blockquote>I submit that corporate cultures increasingly influenced by the arrogant, greedy, amoral leadership of the financial services industry that lead us to the brink of another depression are also leading us to the brink of a poisonous era in health care. Corporate leaders intent on cutting costs, and paying themselves as much of the resulting proceeds as possible, may see quality and safety as just another cost cutting target. Corporate leaders brought up in the culture of finance, but untrained and inexperienced in engineering, science, and medicine find it all too easy to ignore quality and safety and focus on the bottom line. </blockquote> The FDA letter to Scientific Protein Laboratories seems to confirm my fear that leaders of health care corporations no longer seem to understand their most elementary responsibilities for providing safe products, in this case, pure, unadulterated drugs. It did not speak to why that may be the case, but certainly does not contradict my theory above. The letter provides some reassurance that the FDA, at least, has not forgotten the case of the adulterated heparin. However, despite the number of deaths involved, this case has been relatively <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>, and never fully investigated. So here I go again: as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them. To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large).

FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman on the Pharmalot blog , we hear of new concerns about a company in the supply chain that ended up with adulterated heparin ...

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ACO = Arrogant Clinical or Aggressive Care Oligopoly?

In the 1970s, it was managed care organizations.  In the 1990s, it was vertically integrated health care systems.  In the 2010s, the fashionable concept for improving health care, apparently beloved by left-wing policy wonks and right-wing health care executives is the "accountable care organization." (ACO).  Development of the ACO is funded by the recently passed US health care reform legislation.  The <a href="https://www.cms.gov/OfficeofLegislation/Downloads/AccountableCareOrganization.pdf">official definition </a>of ACO from the US Center for Medicare and Medicaid Services is:  <blockquote>An Accountable Care Organization, also called an 'ACO' for short, is an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.</blockquote> Oddly enough, that seems like it could also describe a 1970s managed care organization, or a 1990s vertically integrated health care system. The only real difference is the idea that the ACO would be paid fees for service. All these similar concepts embody the notion that health care needs to be highly organized into big, bureaucratic organizations to improve quality and access while controlling costs. Back in August, we <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">warned</a>: <blockquote>There seems to be a strange and increasing alliance between politically- correct academic theorists and proponents of raw economic power. The theorists' notion of "accountable care organizations" seems to have become a great foil for would-be monopolists, yet the theorists have done nothing to show how their creation would really bring "power to the people." Meanwhile, maybe 'ACO' should stand for 'aggressive care oligopoly.' Meanwhile, be extremely skeptical of the latest health care fad, especially when it is supported both by academics and CEOs. </blockquote> I am not sure you really heard it here first, but you did hear it here early. Now, three months later, our doubts have become main-stream. Revisiting Sutter Health n California, National Public Radio continued to <a href="http://www.npr.org/2010/11/18/131413075/as-hospital-system-expands-patient-advocates-worry">document</a> the increasing market dominance of the Sutter Health system (which we discussed in August <a href="http://hcrenewal.blogspot.com/2010/08/how-oligopolists-rationalize-their.html">here</a>) as it marches toward becoming an ACO: <blockquote>Through new construction and expanding its doctors' groups, Sutter Health is enhancing its position as one of the most dominant hospital systems in California. In addition, Sutter is further ahead of many competitors in fashioning itself into a so-called accountable care organization, responsible for coordinating care between hospitals, specialists and primary doctors.</blockquote> A <a href="http://www.npr.org/2010/11/18/131410569/big-hospital-chains-use-clout-to-dictate-premiums">companion article </a>gave examples of how this emerging ACO is becoming increasingly oligoplistic: <blockquote>Hospital prices in the Sacramento region are among the highest in California, driven in large part by the negotiating clout of the hospital chain Sutter Health. Over the last decade and a half, Sutter has gradually accumulated hospitals and amassed a roster of doctors who contract exclusively with the company. Sutter is now one of the largest hospital chains in California with 24 acute care hospitals. 'In this Roseville market, which is a big suburban area, the hospital is Sutter,' says John Murray, a veteran insurance broker. 'It's a lock right now. Because Sutter dominates the market, major insurance companies, like Blue Cross and Aetna, can't sell policies that exclude Sutter hospitals and doctors. That dependence means the hospital chain can dictate high prices.'</blockquote>Concerns about Sutter's market dominance are also increasing: <blockquote>'As Sutter gets bigger,' says Anthony Wright, executive director of Health Access California, a nonprofit advocacy group based in Sacramento, 'it can dictate higher prices and is less accountable for ensuring good quality because it has a lock on certain markets.'</blockquote>Doubts in the New York Times In the New York Times, Robert Pear <a href="http://www.nytimes.com/2010/11/21/health/policy/21health.html">reported</a>: <blockquote>When Congress passed the health care law, it envisioned doctors and hospitals joining forces, coordinating care and holding down costs, with the prospect of earning government bonuses for controlling costs. Now, eight months into the new law there is a growing frenzy of mergers involving hospitals, clinics and doctor groups eager to share costs and savings, and cash in on the incentives. They, in turn, have deployed a small army of lawyers and lobbyists trying to persuade the Obama administration to relax or waive a body of older laws intended to thwart health care monopolies, and to protect against shoddy care and fraudulent billing of patients or Medicare. Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses. 'The new law is already encouraging a wave of mergers, joint ventures and alliances in the health care industry,' said Prof. Thomas L. Greaney, an expert on health and antitrust law at St. Louis University. 'The risk that dominant providers and dominant insurers may exercise their market power, individually or jointly, has never been greater.' </blockquote> Skeptical Liberals and Libertarians Amazingly, while ACOs seem to be supported by many left-wing policy wonks and right-wing health care executives, they have also rapidly engendered skepticism from both liberals on the left and libertarians on the right, and from within government and the private sector. For example, at the end of the NY Times article we find: <blockquote>Dr. Donald M. Berwick, the administrator of the Centers for Medicare and Medicaid Services, hails the benefits of 'integrated care.' But, Dr. Berwick said, “we need to assure both patients and society at large that destructive, exploitative and costly forms of collusion and monopolistic behaviors do not emerge and thrive, disguised as cooperation.” </blockquote> Dr Berwick is a well-known advocate of innovative approaches to improve the quality of care, but was tarred as a raving left-winger when he was nominated to his current position. On the other hand, in the New York Post was an <a href="http://www.nypost.com/p/news/opinion/opedcolumnists/health_reform_competition_crushers_f2dIEwqEdJYvA3tsNH37wM">op-ed </a>by Dr Scott Gottlieb: <blockquote>I warned that the creation of 'accountable care organizations,' which put hospitals in control of all the doctors in their outlying areas, would lead to concentrated power over the provision of medical care -- turning physicians into salaried employees and reducing consumer choices.</blockquote> Furthermore, he wrote: <blockquote>Since the ACOs will have local monopolies, they'll also have little incentive to compete for more patients in an open marketplace. Yet this is the only incentive that would spur an ACO to truly innovate and improve its delivery of medical care and offer better services. Private health plans vie to contract with the best doctors and hospitals, creating market prices for services and competition to improve outcomes. If the ACOs squeeze out this competition, the result will be a de facto 'single payer': Every market will be controlled by a single ACO,....</blockquote> Dr Gottlieb writes frequently about health care and policy issues, and is a "resident fellow at the American Enterprise Institute." Missing the Main Point: Doctors vs Business Executives as Leaders At least it did not take long this time for the fundamental flaws in the latest fashionable health care reform effort to get attention. It is really striking that this time around, skepticism is coming from both liberals and libertarians.  Maybe we all have learned something from the failures of managed care and of vertically integrated hospital systems. A Washington Post <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/11/23/AR2010112306194.html">op-ed </a>by Steven Pearlstein hinted at one fundamental problem with the ACO concept. <blockquote>Most reformers believe ...that the best way to deliver affordable quality care is through organizations such as the Mayo Clinic, which coordinate physician and hospital services under one roof and are paid not on the basis of how many procedures they do but on the quality of the care they provide. These organizations tend to rely on salaried doctors, make extensive use of electronic medical records and evidence-based 'best practices,' and, in effect, take on much of the risk traditionally borne by insurers. Several provisions of the new health-care reform law encourage the formation of such 'accountable care organizations.' </blockquote> Somehow, however, the supposed health care reformers seemed to have overlooked a crucial fact about the Mayo Clinic they are using as a model. The Mayo Clinic traditionally was basically a large physician group practice. It was run by physicians. Even <a href="http://www.mayoclinic.org/governance/leadership.html">now</a>, the Mayo Clinic's CEO is a physician (Dr John H. Noseworthy) who had a substantial clinical and academic career. The CAO is a nurse, and the three top Vice Presidents are physicians.  I submit the fact that the organization was run by physicians, physicians who once swore to put their patients' clinical care ahead of all other considerations, was crucial to the Clinic's success in taking care of patients as well as maintaining its finances. However, nearly all of the would-be ACOs we hear about now are centered on big hospital systems, run by business executives who have never taken care of patients, and never swore to put patient care ahead of anything. For example, the most advanced degree possessed by the CEO of Sutter Health is a Master's in Health Administration (see <a href="http://www.sutterhealth.org/about/ourteam/index.html">here</a>). Sutter Health does not make biographical information about its top executives particularly easy to find, but according to the most recent (2008) 990 form <a href="http://www.guidestar.org/FinDocuments/2008/942/788/2008-942788907-05747304-9.pdf">posted on Guidestar</a>, of its 19 top executives, only 2 had MD degrees. As we have <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">seen</a> time and again on Health Care Renewal, such executives have become extremely good at becoming rich in their jobs. (For example, according to the 2008 990 form, of those 19 executives, all had total compensation greater than $200,000, 16 had compensation greater than $500,000, and 9 had compensation greater than $1 million.) When things go wrong, these royally paid executives may take their golden parachutes and open the exit door, and jump on the slide. The advent of ACOs reminds me of the advent of managed care. The original managed care organizations, exemplified by Kaiser - Permanante, were also not-for-profit large group practices run by physicians. However, the "managed care organizations" that evolved out of the 1970s law, favored by our glorious former President Nixon, were for-profit corporations run by business executives. Somehow, when legislators seek to promote better health care, the legislation they right often get the crucial details wrong. The one good thing about ACOs seems to be that they have galvanized liberals and libertarians alike to worry about big, collective, bureaucratic health care organizations run by executives with no clear commitment to putting care of individual patients first. ADDENDUM (26 November, 2010) - See also comments <a href="http://www.healthbusinessblog.com/?p=4044">by David Williams</a> on the Health Business Blog.

ACO = Arrogant Clinical or Aggressive Care Oligopoly?

In the 1970s, it was managed care organizations. In the 1990s, it was vertically integrated health care systems. In the 2010s, the fashion...

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Health Care Leaders in Maine Fail to Learn from Past Experience

From down east Maine comes a telling story about the problems of contemporary health care leadership.  I assembled this case from three articles by Meg Haskell in the Bangor Daily News, links are below. (1-3) Complaints About the CEO's Clinical Policies The story begins with complaints about clinical policies instituted by the CEO of Acadia Hospital. <blockquote>[Acadia CEO David] Proffitt has come under fire in recent weeks from current and former Acadia Hospital employees who say the incidence and severity of staff injuries have risen since he initiated a policy that essentially eliminates the use of mechanical and physical restraints with mentally ill patients who become violent. (2)</blockquote> The concerns were raised with government agencies: <blockquote>Since the end of July, the federal Occupational Safety and Health Administration has been conducting an on-site investigation into employee complaints of unsafe working conditions at Acadia. The state Department of Health and Human Services also recently has investigated conditions at Acadia, with a report due later this month. (2)</blockquote> Furthermore, <blockquote>The OSHA investigation was triggered earlier this summer by a complaint filed with the agency alleging an increase in patient assaults on staff after Proffitt implemented stricter standards against the use of mechanical and physical restraints, even when patients turn violent.(3) </blockquote> Loss of Experienced Clinicians There were also concerns that Mr Proffitt presided over the loss of experienced clinicians who were replaced by those with less experience <blockquote>Employees also have alleged that Proffitt has fired or pushed out a number of clinical leaders at Acadia, including former Vice President for Medical Affairs Dr. Paul Tisher and former Chief Nursing Officer April Giard. They have criticized his replacements as lacking expertise in psychiatric care.(3)</blockquote> Lack of Clinical Experience or Training, Questionable Educational Credentials Given his direct involvement in clinical decision making, it surprising that Mr Proffitt has no clinical training or experience: <blockquote>Proffitt’s academic qualifications also have been questioned. Proffitt’s education includes a 1984 bachelor’s degree in therapeutic recreation from the University of Nebraska at Omaha, a 1989 master’s degree in recreational administration from Arizona State University, and a 2007 doctoral degree in health administration from Warren National University, now a defunct, unaccredited on-line program. His academic career has been criticized as being inadequate to prepare him for the top-level positions he has held at both Riverview and Acadia, although neither position requires a doctoral degree.(2)</blockquote> Repeating the Past It turns out that similar concerns were raised about Proffitt's performance in his previous position: <blockquote>Psychiatrists formerly employed at Riverview said this week that both patient care and employee morale eroded under Proffitt’s leadership there. 'Over the course of David Proffitt’s tenure at Riverview, a significant number of long-standing and experienced staff left and were replaced with less experienced or temporary people,' said Dr. Bryan Woods, who was employed at Riverview from 2003 to 2006 and now practices in Portland. “\'In my opinion, this resulted in a decrease in the quality of patient care.' Woods said Proffitt’s management style was often in conflict with the collaborative 'treatment team' approach commonly used in acute-care psychiatric settings. 'Ultimately, I left, because I simply could not work with him,' Woods said. Woods’ colleague Dr. Dan Filene, who also worked at Riverview under Proffitt, said direct-care staff at the state hospital were placed at increased risk by a stringent policy that all but eliminated the use of any kind of restraints. 'The staff at Riverview are heroic,' he said. 'It’s not just dangerous; it is emotionally challenging, fatiguing, low-paying work. When they are actively being injured, it can’t help but affect patient care.' Filene stressed that most people with mental illness are not dangerous or violent. Sen. Stanley Gerzofsky, D-Brunswick, is chairman of the Legislature’s Criminal Justice Committee. The committee oversees the locked forensic unit at Riverview, where criminals with severe mental illness are housed and treated. Proffitt’s policy of doing away with restraints for even the most dangerous patients prompted a number of complaints, he said. 'We heard concerns that staff members were being injured [by patients],' Gerzofsky said in an interview this week. 'Staff were complaining that [Proffitt] didn’t have the right credentials and that he didn’t take the violence very seriously. We had him in front of our committee several times.' Gerzofsky’s colleague on the committee, Sen. John Nutting, D-Leeds, said he heard from several Riverview patient families and staff members. 'Legislators were called to see if he could be replaced,' he said. 'There was really just one single reason — he was telling doctors how to treat their patients. He was trying to get between the patients and their doctors. Nutting said parents of patients were especially concerned. 'They wanted their loved ones to get the care their doctors wanted them to receive, not the CEO of the hospital,' he said.(2)</blockquote> Proffitt's credentials were also questioned before: <blockquote>Proffitt’s degrees in recreational therapy and his online doctorate, Nutting observed, did little to reassure worried families.(2)</blockquote> Proffitt's Defenders The allegations made against Proffitt, which appear to be from clinical professionals and patients' relatives, were countered by support from, perhaps not surprisingly, managers and executives: <blockquote>Michelle Hood, CEO of the hospital’s corporate parent Eastern Maine Healthcare Systems, says that under Proffitt, Acadia is 'moving in the right direction.' She lauded the progress he has made toward de-stigmatizing mental illness and ramping up Acadia’s outpatient and community services.</blockquote> Note that Michelle Hood, although she has considerable health care management experience, appears not to have any clinical experience of expertise, from <a href="http://www.emh.org/dynamic.aspx?id=6764">her official biography</a>: <blockquote>Before arriving at EMHS, Michelle was president and CEO of the Sisters of Charity of Leavenworth Health System, Montana Region, as well as president and CEO of its flagship hospital, St. Vincent Healthcare. She received her Bachelor of Science in 1978 at Purdue University and her Master of Health Care Administration at Georgia State University in 1981. Her early career included roles of associate hospital director at Emory University Hospital in Atlanta Georgia, executive vice president and chief operating officer of St. Vincent’s Hospital (of now Ascension Health) in Birmingham, Alabama and chief administrative officer of Norton Hospital in Louisville, Kentucky.</blockquote> Somehow, the process that hired Mr Proffitt, presided over by Ms Hood, did not seem to consider his previous work at Riverview: <blockquote>At EMHS, Michelle Hood said Proffitt’s troubles at Riverview 'did not come up' during his interviews for the position of CEO at Acadia. One of 16 applicants in a nationwide search to replace outgoing CEO Dorothy Hill, he had appropriate letters of reference from former employers, she said.(2) </blockquote> By the way, the process involved checking whether his educational credentials were accurate, but apparently was unconcerned with the meaning of an on-line degree from an unaccredited institution (subsequently closed down by state authorities, see here.) <blockquote>His educational credentials checked out.... (2)</blockquote> Hood dismissed concerns about losses of experienced staff: <blockquote>Asked about the loss of key clinical administrators at Acadia, including Vice President for Medical Affairs Dr. Paul Tisher and Chief Nursing Officer April Giard, Hood said 'turnover is normal' with a new administration and that Proffitt has successfully recruited new talent and promoted qualified staff from within the organization. </blockquote> The board of trustees of Acadia Hospital also supported their CEO <blockquote>At the end of last week, John Bragg, chairman of the hospital’s board of directors, said the board supports embattled CEO David Proffitt, despite a deluge of concerns raised by current and former employees and unflattering revelations about Proffitt’s educational credentials and his leadership at his previous post. At its regular meeting last Wednesday, the board went into executive session to discuss the situation, Bragg said Friday. 'We came out supporting Dr. Proffitt and the changes that are in place and the team he has put together,' he said. </blockquote> As best as I can tell, Mr Bragg is the <a href="http://corp.nhbragg.com/?cat_id=268">President</a> of a local industrial firm, N H Bragg. By the way, here is what George Eaton, chairman of the board of Eastern Maine Healthcare Systems, the parent not-for-profit corporation for Acadia Hospital, said about the executives that are accountable to him: <blockquote>By making critical decisions, engaging in aggressive fundraising and other activities, 'exceptional senior executives can and should add many multiples of what they cost to the value of the institution,' he said. Eaton said CEO compensation packages within EMHS are determined using information from comparable institutions nationwide.(1)</blockquote> Also, <blockquote>The job of the CEO is 'incredibly complex,' working in 'the most regulated environment in any industry,' Eaton said. 'The prudent thing to do is to get the best people you can,' he said, 'and pay them what you need to in order to retain them — so long as they are achieving the performance goals set by their board.'</blockquote>Note that Mr Eaton appears to be an attorney, according to the <a href="http://www.emh.org/dynamic.aspx?id=6790">EMHS site</a>, "George F. Eaton II, Esq.; Bangor; attorney, Rudman & Winchell." Summary This case illustrates much of what has gone wrong with leadership and governance of health care organizations. We see health care organizations lead by people who have <a href="http://hcrenewal.blogspot.com/search/label/ill-informed%20management">no experience or training</a> in actually giving health care. Yet people who are not doctors, nurses, or therapists make clinical policies and control clinical care, even against the advice of experienced clinicians. In fact, some such leaders seem to regard clinicians as interchangeable widget-makers making interchangeable widgets. The ill-informed leaders of health care organizations often seem sensitive about their lack of knowledge and experience, and hence may be quick to punish any health care professional who protests their ill-informed decisions.  Moreover, the ill-informed leaders of health care seem to band together to support each other, even in the face of criticism from people with real expertise in health care, or from patients and relatives directly affected by health care and how it is delivered.  Higher level executives who are supposed to supervise lower level executives, and boards of directors which are supposed to exercise stewardship and support institutional values may seem more concerned with protecting the prerogatives of all executives rather than than the patient care mission. As we have said again, again, again, health care desperately needs leadership that understand the context, and believes in the values.  It needs leaders that puts patients first, ahead of the pay and prerogatives of the executive and managerial class, our would-be new aristocracy. References 1.  Haskell M. Maine's hospitals: big jobs, big pay. Bangor Daily News, March 6, 2009.  <a href="http://www.bangordailynews.com/detail/101030.html">Link</a>. 2.  Haskell M. Acadia CEO criticized at previous post.  Bangor Daily News, September 10, 2010.  <a href="http://www.bangordailynews.com/story/Greater-Bangor/Acadia-CEO-criticized-at-earlier-post,153555">Link</a>. 3.  Haskell M. Acadia board supports CEO despite claims.  Bangor Daily News, September 20, 2010.  <a href="http://www.bangordailynews.com/story/Greater-Bangor/Acadia-board-supports-CEO-despite-claims,154302">Link</a>.

Health Care Leaders in Maine Fail to Learn from Past Experience

From down east Maine comes a telling story about the problems of contemporary health care leadership. I assembled this case from three arti...

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UPMC Fouls Another One Off

It's almost World Series time in the US, so here's a baseball story, <a href="http://pittsburgh.bizjournals.com/pittsburgh/stories/2009/09/07/daily21.html">courtesy the Pittsburgh Business Times</a>, <blockquote> University of Pittsburgh Medical Center lobbyist Leslie McCombs used Pittsburgh Pirates baseball tickets purchased by UPMC’s insurance arm to entertain film executives and others to promote the creation of a state film tax credit, according to the State Ethics Commission. The commission fined McCombs $5,025 for failing to promptly register as a lobbyist for Lions Gate Entertainment Corp. and omitting a daytime phone number in registering as a lobbyist for UPMC, according to a commission ruling reached on July 22. The confidential decision was disclosed Sept. 9 by The Associated Press. McCombs, who works for UPMC as a consultant, received permission from UPMC President and CEO Jeffrey Romoff to lobby on behalf of Lions Gate, which she described in a February 2007 e-mail to him as the, 'largest independent producer and distributor of motion pictures and television in the country.' Romoff cleared her work with Lions Gate after consulting with UPMC legal counsel and assured by McCombs in the e-mail that, 'UPMC signs will be prominently featured throughout the (‘Kill Pit’ television) series.' Filming for the eight-part miniseries, which was renamed 'The Kill Point,' began in March 2007 in Pittsburgh. Gov. Ed Rendell signed the Film Production Tax Credit bill into law in July 2007, which provided for a 25 percent film tax credit to offset production expenses. </blockquote> Also, <blockquote> From 2005 to 2006, McCombs was director of public relations for UPMC Health Plan, a for-profit subsidiary of the nonprofit hospital network. She was then named senior consultant with UPMC’s government relations department. The State Ethics Commission lists 18 baseball games where McCombs treated Lions Gate and government officials using UPMC tickets. In addition, she attended a June 15, 2007, matchup against the Chicago White Sox with Rendell and his wife, Marjorie, and Romoff and his wife, Stefania, according to the commission. It’s not clear from the commission report whose interests McCombs was representing at that game, but Rendell later reimbursed $960 for the tickets to the five games that he attended, which was returned to the health plan. In 2007, UPMC Health Plan bought $61,440 worth of Pittsburgh Pirates tickets, which were available to employees of the insurer 'in the performance of their duties,' the report states. The sum included a $20,000 seat license. </blockquote> So did you get all that? The director of public relations for the UPMC Health Plan, the managed care subsidiary of UPMC, a large academic medical center, lobbied the state governor for the enactment of a tax credit for television and movie production, partially so that the UPMC logo would appear in a television series, and entertained the governor using a few of the more than $60,000 worth of baseball tickets the medical center purchased for employee use. Amidst the complication, the public relations director violated state lobbying rules. None of these shenanigans had anything directly to do with health care, or medical education and research. The only conceivable advantage accruing to the institution would be the appearance of the UPMC logo in a television series. But most likely everyone had good times at the ball game. This story again suggests that managers of health care organization are more focused on playing marketing and political games than on health care, and generally are more focused on benefiting themselves than upholding their organizations' mission. The amounts of money involved in this case may be small, but do not underestimate the collective effects on health care access, cost and quality of managers who have their eyes on the wrong balls. UPMC has provided grist for the Health Care Renewal mill before, see earlier posts <a href="http://hcrenewal.blogspot.com/2008/11/questions-of-benefits-vs-risks-for-upmc.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/01/can-hospital-have-trade-secrets.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/02/healthcare-it-blamed-in-patient-death.html">here</a> and <a href="http://hcrenewal.blogspot.com/2009/04/upmc-pioneers-in-health-it-or-pioneers.html">here</a>.

UPMC Fouls Another One Off

It's almost World Series time in the US, so here's a baseball story, courtesy the Pittsburgh Business Times , University of Pittsbur...

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