healthy4u

Yet Another Service Profession to be Revolutionized by IT

As in healthcare, here is yet another claim -- of the 'bellicose grandiosity' variety -- that IT will "revolutionize" a service profession.From TheHill.com:<blockquote><div class="title"> </div> <div> <a href="http://thehill.com/blogs/hillicon-valley/technology/75965-white-house-blames-inefficient-government-on-outdated-technologies">White House budget director blames old computers for ineffective government</a> By Ian Swanson - 1/14/2010 A big reason why the government is inefficient and ineffective is because Washington has outdated technology, with federal workers having better computers at home than in the office. This startling admission came Thursday from Peter Orszag, who manages the federal bureaucracy for President Barack Obama. The public is getting a bad return on its tax dollars because government workers are operating with outdated technologies, Orszag said in a statement that kicked off a summit between Obama and dozens of corporate CEOs. ... “It’s time to bring government into the 21st century,” Orszag said. “Information technology has the power to transform how government works and revolutionize the ease, convenience and effectiveness by which it serves the American people."</div></blockquote> I really wish that claims of IT and revolutions would cease. Perhaps the word "increase" (as in "increase the ease, convenience and effectiveness by which government serves the people") would be more accurate and indeed less hysterical. When you do hear the "R" word in association with computers, though, think very big bucks for the industry and for the management consultants, and a massive amount of uncompensated clerical work and aggravation for the profession to be "revolutionized." -- SS

Yet Another Service Profession to be Revolutionized by IT

As in healthcare, here is yet another claim -- of the 'bellicose grandiosity' variety -- that IT will "revolutionize" a se...

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Meaningfully Experimental Protocols and Interfaces to Nowhere? Nagging Questions On Healthcare IT Remain

Despite a massive push in our (yet-unnamed) U.S. national program for health IT in the past year (which I shall christen as the NPfIT in the HHS), nagging questions about healthcare IT remain. The first regards the Public Comment period on the "Meaningful Use" criteria for HIT, part of the <a href="http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a7c4a8">Medicare and Medicaid Programs; Electronic Health Record Incentive Program</a> Proposed Rule: <blockquote> This proposed rule would implement the provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5) that provide incentive payments to eligible professionals (EPs) and eligible hospitals participating in Medicare and Medicaid programs that adopt and meaningfully use certified electronic health record (EHR) technology. The proposed rule would specify the initial criteria an EP and eligible hospital must meet in order to qualify for the incentive payment; calculation of the incentive payment amounts; payment adjustments under Medicare for covered professional services and inpatient hospital services provided by EPs and eligible hospitals failing to meaningfully use certified EHR technology; and other program participation requirements. </blockquote> Perhaps submitting comments in the public forum of a blog will spread the message further than through the method above... As I wrote in Oct. 2009 at "<a href="http://hcrenewal.blogspot.com/2009/10/washington-post-article-electronic.html">Washington Post Article: Electronic medical records not seen as a cure-all</a>", there is a major problem with the term "meaningful use" itself: <blockquote> This [term "meaningful use"] is an example of putting the cart before the horse, and is a semantically-based, self contained logical fallacy of sorts. If a health IT system is harmful, the term "meaningful use" is itself Orwellian. If we don't know if HIT is beneficial, or have doubts, then such as term presupposes that health IT is inherently beneficial. A better term would have been "good faith use" - use based on the faith or hope that health IT will have an overall positive effect. The term "meaningful use" jumps the gun and is more a political slogan than a "meaningful term."</blockquote> I go further. Use of a term that a priori assumes some outcome reflects the antithesis of science. The term "meaningful use" in the domain of technology implies that those following the recipe for use of some technology, as well as their subjects, will experience meaningful outcomes. A parallel is in the logical fallacy of <a href="http://www.logicalfallacies.info/presumption/begging-the-question/">begging the question or circular argument</a>, where the conclusion of an argument is among its premises. 'A priori knowledge' is knowledge known independently of experience, i.e., from reason alone; 'a posteriori knowledge' is knowledge proven through experience. To say we as a society have a priori knowledge of the benefits of health IT would unarguably be an absurdity; to say we have uncontested a posteriori knowledge of same is, quite simply, a lie. Evidence of the portable, healthcare-improving qualities of health IT in its current form has been <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=other">weak</a>, and the literature challenging this often technologically-deterministic position <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009">is growing</a>. In scientific research, an <a href="http://en.wikipedia.org/wiki/Experiment">experiment</a> (Latin: ex- periri, "to try out") is a method of investigating causal relationships among variables, or to test a hypothesis. An experiment is a cornerstone of the empirical approach to acquiring data about the world and is used in both natural sciences and social sciences. The truth is that healthcare IT remains an experiment, using virtual medical IT devices that are entirely unregulated. The "meaningful use" criteria, basically arrived at by opinions and committee consensus, must be viewed in that framework. (I note that some NPfIT experiments in <a href="http://www.publications.parliament.uk/pa/cm200809/cmselect/cmpubacc/153/15304.htm">other lands</a> have not been very successful). When the criteria are viewed in, say, the framework of a NIH grant proposal for testing some new technology, the correct term is not "meaningful use", it is "experimental protocol" or "research protocol." The government is paying for physicians to follow an experimental protocol, reimbursing them for part of the expense and labor, in the hope that the experiment will have beneficial effects and no major adverse side effects on the practice and financing of medicine. If one accepts the premise that HIT -- and our collective understanding of how to design and implement it -- is fully proven and ready for societal rollout (which is the operative assumption of our government - witness the duress of penalties), then one is not following the methodologies of science. If, on the other hand, one accepts that it *is* an experimental technology, then one should also accept that the current rollout plans are nonscientific in the extreme. This is simply not how ethical biomedical research is conducted, e.g, without the consent of the subjects (patients) -- indeed, with actual coercion of the healthcare professionals -- and without regulation of the experimental technologies. I therefore ask the following nagging but important question: why is the term "meaningful use" even in the lexicon of the U.S. NPfIT in the HHS? Why should physicians buy into this program? Why should they not instead refuse to participate in an experiment that could waste their time or cause adverse consequences for which they are liable? Why should those who do participate not calculate the person-hours required to perform the experimental tasks as specified by the experimental protocol, and charge for their time and labor accordingly? (See some related points at the vendor post "<a href="http://blog.srssoft.com/2010/01/readers-respond-the-exorbitant-cost-of-meaningful-use/">Readers Respond: The Exorbitant Cost of Meaningful Use</a>" at the <a style="font-weight: bold;" href="http://blog.srssoft.com/">EMR Straight Talk</a> site. Note: I have no relationships with, or connections to, this vendor.) Further, what is missing in the experiment of unregulated IT medical devices is robust risk assessment, adverse events reporting, and perhaps most importantly, patient informed consent. It is also unclear if the <a href="http://hcrenewal.blogspot.com/2009/03/health-it-hold-harmless-and-defects-gag.html">"hold harmless" and "defects nondisclosure" clauses</a> traditional in IT contracting, and that likely violate healthcare leadership fiduciary responsibilities and joint commission safety standards, will be forbidden in this grand experiment. A second nagging question arises regarding a somewhat perplexing announcement: a HIT vendor's product that provides data interchange (i.e., an interface apparatus) between EMRs and other medical devices has received <a href="http://money.cnn.com/news/newsfeeds/articles/globenewswire/181482.htm">FDA pre-marketing clearance</a>, making it available for sale. On an Interface to Nowhere:<blockquote> Thousands of medical devices are used in hospitals, physician offices and homes to help clinicians provide better care to patients. Medical devices are used to monitor patient vital signs, infuse medication and even help patients breathe. These devices capture important information about patient health, but oftentimes that information resides in disparate systems outside of the patient's electronic health record (EHR). To solve this problem, [vendor] created the CareAware device connectivity architecture to connect medical devices to the EHR, enabling bi-directional data sharing between medical devices and the patient record. The[vendor] CareAware iBus, a solution that connects medical devices to the EHR to support the entire care process, recently received 510(k) pre-market clearance from the U.S. Food and Drug Administration and is now available in the United States and all U.S. territories. </blockquote> Here is the question: How is it possible that an intermediary apparatus to interface medical devices to an EHR can be subject to FDA approval, but the EHRs themselves that this intermediary apparatus interfaces the devices to can be entirely unregulated? EHRs are not subject to FDA approval or any other regulatory agency's evaluation and approval whatsover. Further, why is the FDA marginalized to the point where the only component of HIT they evaluate and approve are interfaces? This is a somewhat jarring violation of common sense and first principles of systems thinking: that systems should be evaluated in their entirety, as unexpected adverse consequences are often the result of system-related failures exacerbated by the "weak links" in the system. This probably also violates the principles of resilience engineering, a term I first learned after <a href="http://www.scribd.com/doc/12392282/To-The-Moon-In-A-Hot-Air-Balloon-Why-Is-Clinical-IT-Difficult">presenting on IT difficulties to the IEEE Medical Technology Policy Committee</a> a few years ago. With regard to these nagging questions, I'm just asking. Let the reader decide if these are reasonable questions regarding their medical care. I doubt I will receive official answers to my <a href="http://en.wikipedia.org/wiki/L%C3%A8se_majest%C3%A9">lèse majesté</a>. -- SS

Meaningfully Experimental Protocols and Interfaces to Nowhere? Nagging Questions On Healthcare IT Remain

Despite a massive push in our (yet-unnamed) U.S. national program for health IT in the past year (which I shall christen as the NPfIT in the...

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A University President on Commission

The Miami Herald <a href="http://www.miamiherald.com/news/southflorida/story/1420549.html">reported</a> on the latest thing in executive compensation for leaders of academia (and academic medicine): <blockquote>Florida State University's new president will have a larger salary than his predecessor, T.K. Wetherell, and stands to make even more in bonuses as a reward for big-time fundraising. FSU trustees chairman Jim Smith confirmed Monday that Eric Barron has signed a contract that includes a base salary of $395,000 a year in state and private dollars, plus the chance to earn annual bonuses of $100,000 for every $100 million in private donations raised. He'll also get free housing and a car, Smith said, as well as a retention bonus of $200,000 after a few years. Housing and car allowances have become standard fare for university president contracts, and in recent years Florida's university presidents have ranked among the top in the country for salary and compensation packages. But the bonus provision in Barron's five-year contract is a signal that the trustees want to see FSU's $447-million endowment grow by $1 billion over the next five years. 'We said $1 billion in five years, and we're serious about that,' Smith said Monday. FSU's trustees gave him the authority to negotiate with Barron, 58, and sign a contract. </blockquote> Note that Florida State University is the parent institution for the <a href="http://med.fsu.edu/">Florida State University College of Medicine.</a> We have all heard jokes that university presidents now need to spend more time fund raising than doing anything else. Also, we have all heard the phase "no margin, no mission" too many times. However, in this case, the search for margin seems to have completely trumped the mission. As the article implied, I have not previously heard of a university president who gets bonuses only according to how much money he or she raises. I also have not previously heard of such bonuses being based simply on a percentage of the money raised. Thus effectively, the new president is being paid on commission, the commissions being based purely on fund-raising. The problems are obvious.  First, structuring a bonus so that it is only a function of fund-raising raises fund-raising above upholding the university's mission.  Yet the board of the university has a <a href="http://www.boardsource.org/Knowledge.asp?ID=3.364">duty of obedience</a>, which  "requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization."  Making the university president's bonus solely dependent on the dollar amount of funds raised would seem to violate that duty. Second, structuring a bonus so that it is only a function of fund-raising suggests that where or how the funds are raised is no longer important.  Fund-raising done wrong can lead to conflicts of interest, obligations to unsavory people, or other ethical or legal issues.  Yet the proposed bonus would apparently be paid according to the amount paid, no matter what. Perhaps in this era of "greed is good," such a brutal reminder that academics are now expected to care more about revenue that teaching and research should not be a surprise.  But if the only incentive the university president has is fund-raising, what sort of academic institution do we expect will result?

A University President on Commission

The Miami Herald reported on the latest thing in executive compensation for leaders of academia (and academic medicine): Florida State Univ...

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A Small Echo of the Case of the Adulterated Heparin

A small news item <a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=aaDmNquvTq1o">published by Bloomberg</a> is a reminder of a serious case that was never resolved: <blockquote>Baxter International Inc., which recalled its blood thinner heparin amid reports of allergic reactions and deaths in 2008, faces at least 30 lawsuits in Chicago by injured people or their estates. As many as 300 product-liability complaints may be filed in the Illinois state court, plaintiffs’ attorney Allen Schwartz of Kralovec, Jambois & Schwartz said today in a phone interview. His law firm and two others are working to comply with a judge’s order last year to convert an aggregate lawsuit to individual claims against the Deerfield, Illinois-based company. </blockquote> I have appended a summary of the case at the bottom of the post, with relevant <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a> links.   What is most striking about this case is that it involved the deaths of many patients, and serious complications of many others.  While the nature of the contamination of the heparin, and the biology of its adverse effects were elucidated, how the contaminant was introduced into the drug marketed in the US was never clear.  Finally, to date, no individual has been held accountable, and no individual has suffered any negative consequences from a case that was as deadly as a terrorist attack.  The best that the leadership of Baxter International could do was described by Bloomberg thus: <blockquote>'We deeply regret any impact the 2008 heparin contamination situation may have had on patients and family members,' [Baxter International spokesperson Erin] Gardiner said in an e-mailed statement. 'If these lawsuits are similar to those that have already been filed, a large number of claims don’t involve contaminated heparin or in some cases, even Baxter heparin,' she said. </blockquote> Again, the "impact" apparently included death. The deaths and morbidity were due to an adulterated drug sold in the US as pure. Combatting drug adulteration was the reason the US Food and Drug Administration was founded. What amazes even me is that a case with such severe outcomes has received so little attention. To my knowledge, there has never been a formal investigation by any branch of government, or by academia, for that matter, of how the contamination occurred, or who was responsible. Aside from some minor attempts to increase general supervision by the FDA of the manufacture of drugs and drug ingredients in other countries, I am aware of no specific changes in policy or regulation meant to prevent another case of deadly drug adulteration. This is a profound and disturbing example of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, i.e., that stories that the often rich and powerful insiders who now may lead health care might find offensive produce few echoes. If there is no outrage about drug adulteration leading to patient deaths, how do we ever expect to improve our dysfunctional health care system? Case Summary - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2008/03/heparin-in-era-of-hogwash.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.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 late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was made 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. - Most recently, we found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.html">here</a>.) Further testing revealed that the contamination seemed to have taken place in China prior to the provision of the heparin to Changzhou SPL. (See post <a href="http://hcrenewal.blogspot.com/2008/03/who-was-responsible-for-purity-of.html">here</a>.) It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. - The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops." - Leaders of all organizations involved, Baxter International, Scientific Protein Laboratories, Changzhou SPL, the Chinese government, and the US Food and Drug Administration, and the US Congress assigned blame to each other, but none took individual or organizational responsibility. (See post <a href="http://hcrenewal.blogspot.com/2008/05/blaming-some-dude-for-contaminated.html">here</a>.) - Researchers (who turned out to have financial ties to a company which is developing an anti-coagulant drug that could compete with the heparin made by Baxter International) investigated the biological mechanisms by which the contamination of the heparin lead to adverse effects, but no one investigated further how the contamination occurred, or who was responsible.  (See post <a href="http://hcrenewal.blogspot.com/2009/08/who-investigated-case-of-deadly.html">here</a>.)

A Small Echo of the Case of the Adulterated Heparin

A small news item published by Bloomberg is a reminder of a serious case that was never resolved: Baxter International Inc., which recalled...

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Office of the National Coordinator for Health Information Technology (ONC): A One Man Show?

Generally, transparency in government means that the public it serves knows who that government is. Yet the "<a href="http://healthit.hhs.gov/portal/server.pt?open=512&objID=1200&&PageID=15521&mode=2&in_hi_userid=10741&cached=true">Office of the National Coordinator: Key Personne</a>l" page at HHS shows only this, the name of the Coordinator himself, Dr. David Blumenthal: <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_g_kzFCUbXTD0J8KVCw3KZbIxNPztHZWZCCwaAITR0Zm1ge68SjHIHOM9C8LDGCV8Z6QTLZrBW5vNCGTySjKXalElai8Agpt0t44kISbvYzphTo-P1vjKAISaHvkDuzra1trnE8n7OCiW/s1600-h/onc.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5426614649024801090" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_g_kzFCUbXTD0J8KVCw3KZbIxNPztHZWZCCwaAITR0Zm1ge68SjHIHOM9C8LDGCV8Z6QTLZrBW5vNCGTySjKXalElai8Agpt0t44kISbvYzphTo-P1vjKAISaHvkDuzra1trnE8n7OCiW/s320/onc.jpg" style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 357px; height: 180px;" /></a>Only one person works at ONC? click to enlarge </div> What about the others as per the <a href="http://healthit.hhs.gov/portal/server.pt?open=512&objID=1200&&PageID=15520&mode=2&in_hi_userid=10741&cached=true">Org Chart</a>? <div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTWvpRu4RhyphenhyphenFgn1nzBySKFjWWOu0-AvyLsVtXhBZ5Qy586nvodeGsX_fQ2JUo5sdhJsAPMeuUrpCz1w_lFj6tN3fTrjoUcU-WLwaV5hLvwSCXyWl_uRrl0xJjD5edkWBotEjYVfvRPcgUq/s1600-h/onc_orgchart.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5426616307910309138" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTWvpRu4RhyphenhyphenFgn1nzBySKFjWWOu0-AvyLsVtXhBZ5Qy586nvodeGsX_fQ2JUo5sdhJsAPMeuUrpCz1w_lFj6tN3fTrjoUcU-WLwaV5hLvwSCXyWl_uRrl0xJjD5edkWBotEjYVfvRPcgUq/s320/onc_orgchart.jpg" style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 244px;" /></a>ONC Org Chart (click to enlarge) </div> In the case of the Office of the National Coordinator for Healthcare IT, there are a number of possibilities for this apparent informational lapse: <ul><li>There is only one person working in this office;</li></ul><ul><li>Only one person is considered "Key Personnel";</li></ul><ul><li>This office, responsible for the national program for health IT and Electronic Medical Records in the U.S. that will "<a href="https://exchangeweb.drexel.edu/owa/redir.aspx?C=a559d6ae422c4e049617c4084f967d7b&URL=http%3a%2f%2fweb.archive.org%2fweb%2f20080714203445%2fhttp%3a%2f%2fwww.hhs.gov%2fhealthit%2fvision.html">revolutionize</a>" healthcare through better record keeping, has been careless in updating its Electronic Personnel Records; </li></ul><ul><li>The names are buried somewhere not easy to find, or the identities of the personnel are being entirely withheld from the public to prevent the public from knowing who they are and what their past and present affiliations might be.</li></ul> Why might that be an issue? Pro-IT industry conflicts of interest, qualifications, and anti-physician biases come to mind as just a few possibilities. Where's the transparency? Just asking. -- SS

Office of the National Coordinator for Health Information Technology (ONC): A One Man Show?

Generally, transparency in government means that the public it serves knows who that government is. Yet the " Office of the National C...

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Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud. In "<a href="http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/index.htm">Health care: A 'goldmine' for fraudsters</a>", CNN senior writer Parija Kavilanz observes that: <blockquote>NEW YORK (CNNMoney.com) -- There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminal gangs who are bilking the system of as much as $100 billion a year. Health care identity theft dominated all other crimes in the sector last year, according to Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association (NHCAA), an advocacy group whose members include insurers, law enforcement and regulatory agencies.The most common method of health care identity fraud occurs when someone with legitimate access, such as a hospital administrator or a doctor's assistant, sells patients' information to organized criminal groups.Increasingly, criminal groups are hacking into digital medical records so that they can steal money from the $450 billion, 44-million-beneficiary Medicare system -- making the government, by far, the "single biggest victim" of health care fraud, according to Rob Montemorra, chief of the FBI's Health Care Fraud Unit. All the stolen information includes medical insurance data and Social Security numbers, explained James Van Dyke, president of Javelin Strategy & Research, a research firm specializing in trends in security and fraud initiatives.Van Dyke said that, with the information, the fraudster falsely bills Medicare and private insurers for drugs, equipment or treatment that were never prescribed. </blockquote> I have somewhat constrained confidence in the health IT prowess of a government that cannot implement proper processes and information systems to prevent $100 billion per year in Medicare fraud. The fraud is not sophisticated; it is performed in the most simplistic manner via simple submission of fraudulent claims via boiler-room billing companies: <blockquote> To collect the money, the criminals set up shell billing companies that disappear as soon as there's any indication of an investigation, according to the FBI.</blockquote> I have less than stellar confidence that the very same government can oversee a national project for health IT to implement technology that is not just a panacea to healthcare's ills as effectively claimed, but goes far beyond that as an alterative that will <a href="http://web.archive.org/web/20080714203445/http://www.hhs.gov/healthit/vision.html">revolutionize healthcare</a>. -- SS

Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud. In " Health care: A 'goldmine' for fr...

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Non-Profit Health Care Organization Executives: Pay Them Millions or Lose Them?

CareSource is a US not-for-profit managed care organization for Medicaid patients.  This week, the Dayton (Ohio) Daily News ran an investigative series on its leadership and governance which may provide a larger lesson on the disconnect between the high ideals and high costs of the dysfunctional US health care system.  The main issue uncovered by the investigation was CareSource's generosity to its CEO.  As reported in "<a href="http://www.daytondailynews.com/business/caresource-ceos-compensation-grew-faster-than-revenues-at-nonprofit-485261.html">CareSource CEO's compensation grew faster than revenues at nonprofit</a>," <blockquote>From 2005 to 2008, CareSource more than doubled its total revenues — from $770 million to $1.8 billion. It’s now the nation’s third largest nonprofit Medicaid HMO. But CareSource’s phenomenal revenue growth was no match for the increase in total compensation for Chief Executive Pamela Morris, whose pay more than tripled — from $877,000 in 2005 to $2.9 million in 2008, according to IRS filings. </blockquote>Did Pay Buy Performance? Not only did the CEO's pay grow much faster than the organization she lead, it also seemed disproportionate to what ratings of the organization's performance are available. <blockquote>In America’s Best Health Plans for 2009-2010 — a survey conducted by U.S. News & World Report and the National Committee for Quality Assurance (NCQA) — CareSource ranked 72nd in patient satisfaction and quality of care among 82 HMOs participating in the study. It was the lowest ranking among the four participating Ohio Medicaid plans. </blockquote>"We Don't Want to Lose Her" The chair of the organization's Board of Directors claimed that such pay was necessary to secure the CEO's loyalty, per the Daily News, <blockquote>Ellen Leffak, chairwoman of the CareSource board, said a separate committee of the board sets the top executive salaries with the help of a consultant. The committee monitors what is being paid at both for-profit and non-profit competitors. Leffak said Morris is worth her multimillion-dollar compensation. 'We don’t want to lose her' to another HMO, Leffak said. 'She has provided outstanding service to the organization and we think she should be adequately compensated.' </blockquote> The implication, which perhaps Ms Leffak did not mean to openly convey, was that Ms Morris' dedication to the organization and its not-for-profit mission were less important than her desire for a multi-million dollar paycheck.  (Parenthetically, Ms Leffak also failed to specify how Ms Morris' service was determined to be "outstanding,") Furthermore, The Daily News also reported: <blockquote>CareSource officials say Morris’ pay hike, which included a $1.2 million incentive payout in 2008 from her supplemental retirement plan, is in line with salaries paid top executives with similar experience at its for-profit competitors. Morris is 61 and has been with CareSource for 24 years. </blockquote>The newspaper provided a table of CEO compensation at such for-profit competitors. The best-paid CEO in the table was Heath G Schiesser of Wellcare Health Plans, who received $8,077,718. The article did not mention that not onlyh is Wellcare for profit, but it <a href="http://www.wellcare.com/AboutUs/default">claims</a> to be a "nation-wide" operation.  It also did not mention that in August, 2009, Wellcare paid a fine for findings, which it did not contest, that it paid political contributions in Florida that violated state law (see post <a href="http://hcrenewal.blogspot.com/2009/08/wellcare-did-not-contest-that-its.html">here</a>).  Also, in May, 2009 we <a href="http://hcrenewal.blogspot.com/2009/05/wellcare-settles-accepts-deferred.html">posted</a> about WellCare's submission to a deferred prosecution agreemeent based on charges that it defrauded state programs by inflating its expenses. In 2007, we <a href="http://hcrenewal.blogspot.com/2007/11/health-plans-programs-cancelled-for.html">posted</a> about how the state of Connecticut stopped WellCare from running a plan for poor children after the company refused to reveal what it was paying physicians, and why it was failing to pay for particular services. So WellCare has paid three penalties for three different kinds of unethical behavior in the last two years. To be clear, it was the newspaper that stated Wellcare ought to be a standard of comparison, not Ms Leffak, Ms Morrison, or any CareSource official.  However, the choice of comparison further suggests how money may trump mission. Competing Against Stock Options Meanwhile, the Dayton Daily News published another article ("<a href="http://www.daytondailynews.com/business/critics-question-hospitals-ceo-on-caresource-board-485404.html">Critics question hospitals' CEO on CareSource board</a>) which suggested that the governance of CareSource may have resonated with the notion that the leadership of not-for-profit health care organizations may be more motivated by money than mission. <blockquote>Since the HMO’s inception in 1983, Tom Breitenbach, chief executive of Premier Health Partners, has had a hand in shaping CareSource. He continues today on the governing board of its parent, CareSource Management Group Services. But in recent months, health care officials and providers have raised questions about whether the head of the region’s largest hospital system should sit on the board of the parent organization of the region’s largest source of Medicaid payments. 'How can that not be a conflict of interest?' said Dr. Larry Litscher, a Dayton area urologist. 'They (the CareSource board members) have to determine the reimbursement levels' for hospitals and doctors providing service to CareSource patients. 'How can that not be interpreted as a big advantage for the hospitals?' </blockquote> But beyond the issue of conflict of interest, last year, the Dayton Daily News <a href="http://www.daytondailynews.com/n/content/oh/story/news/local/2009/02/22/ddn022209hospitalsinside.html">reported</a> on Mr Breitenbach's own incentives: <blockquote>In 2001, as Premier Health Partners Chief Executive Tom Breitenbach neared age 55, he was given an executive investment plan in addition to his supplemental retirement benefits that paid him nearly $9 million from 2002 to 2007. The requirements were that Breitenbach assume the risk of the investment and stay on as head of Premier until age 60. In 2001, MedAmerica Health Systems Corp., the parent company of Premier Health Partners and six smaller for-profit subsidiaries, found a novel way to help keep Breitenbach at the helm — they invested some of the supplemental retirement benefits he had accrued over 25 years into an executive option plan of mutual funds, in which Breitenbach assumed all risk. Breitenbach cashed out $6.7 million from the plan in 2003, another $660,000 in 2006 and a final payment of $1.5 million in 2007, for a total of $8.9 million, IRS documents show. </blockquote> Also, according to the MedAmerica Health Systems 2007 Form 990 (available <a href="http://www.guidestar.org/FinDocuments/2007/311/040/2007-311040228-048db0b5-9.pdf">through Guidestar</a>), Mr Breitbach's total compensation was $4,044,915. Again, the reason to pay so well seemed to be the fear that in the absence of for-profit levels of compensation, executives of not-for-profit organizations would quit to seek higher recompense in the for-profit world. <blockquote>In setting compensation levels, local hospital officials say they must compete with for-profit enterprises that can offer top executives hefty stock options, country club memberships and other perks that nonprofits can't. 'For-profit or nonprofit, it really has to do with attracting and retaining talent,' said Pete Luongo, who sits on the compensation committee of Kettering Adventist Healthcare, the parent of Kettering Health Network and its six hospitals. </blockquote>The implication is that not-for-profit health care organizations can and should hire people who care more about the level of compensation offered than the not-for-profit organizations' lofty missions. In this case, CareSource Says its <a href="http://www.caresource.com/en/AboutUs/Pages/OurMission.aspx">mission</a> is: <blockquote>to make a difference in the lives of underserved people by improving their health care. At CareSource, our mission is one we take to heart. In fact, we call our mission our 'heartbeat.' It is the essence of our company, and our unwavering dedication to it is a hallmark of our success. Our Vision is to be an innovative leader in the management of quality public-sector health care programs. </blockquote> Premier Health Partners says its <a href="http://www.premierhealthpartners.org/aboutus.aspx?id=760">mission</a> is: <blockquote>We will build healthier communities with others who share our commitment to provide high-quality, cost-competitive health care services. </blockquote> What cognitive dissonance is created by an organization dedicated to serving the "underserved" and another which espouses "cost-competitive" health care lead by CEOs who can only be retained by making them multi-millionaires.  Summary and Conclusions Leaders of not-for-profit organizations, starting with their boards of trustees, are <a href="http://www.boardsource.org/Knowledge.asp?ID=3.364">supposed</a> to subscribe to the duty of  obedience, "to be faithful to the organization's mission,"  and the duty of loyalty, " give undivided allegiance when making decisions affecting the organization." Presumably, that can be extended to the requirement that the top hired executives of not-for-profit put the mission ahead of their own personal gain.  Thus, boards of trustees who feel that they can only retain hired CEOs by pay so high that they will not be tempted by offers from for-profit corporations have failed in their duty by hiring CEOs who put their personal financial interests ahead of the mission.  I believe that the compensation given to CareSource and Premier Health Care CEOs, and the rationale for it, are not anomalies.  There have been many other reports about leaders of not-for-profit health care organizations compensated enough to make them multi-millionaires, justified mainly by the need to provide pay "competitive" with that available from for-profit corporations  (e.g., see posts <a href="http://hcrenewal.blogspot.com/2009/03/more-gravity-defying-compensation-for.html">here</a> and <a href="http://hcrenewal.blogspot.com/2009/03/43-million-dollar-ceo-for-not-for.html">here</a>).  Yet not-for-profit CEOs mercenary enough so that they can only be retained by for-profit levels of pay seem to be exactly the sort of people who should not be running what are supposed to be mission-oriented organizations.  Of course, the problem is only amplified when the same mercenary CEOs sit on each others' boards. When money becomes the only value for health care leaders, the health care system will cost a lot, but provide neither health nor care.  The only way to improve health care is to give it leadership that values health and caring for it more than money.

Non-Profit Health Care Organization Executives: Pay Them Millions or Lose Them?

CareSource is a US not-for-profit managed care organization for Medicaid patients. This week, the Dayton (Ohio) Daily News ran an investiga...

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