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The Argument Over Insurance Rate Hikes: A Systemic Problem with Health Care Organizations' Leadership and Governance?

There has been a tremendous amount of news coverage of a large rate increase proposed by Anthem Blue Cross, a subsidiary of WellPoint, in California.  For example, the <a href="http://www.latimes.com/business/la-fi-anthem10-2010feb10,0,2234973.story">Los Angeles Times reported</a> last week, <blockquote>Congress opened an investigation Tuesday into Anthem Blue Cross' impending rate increases in California as President Obama cited the premium hikes -- some as high as 39% -- in his bid to pass national healthcare legislation. The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations announced they were examining the increases, which are set to take effect March 1. The subcommittee has scheduled a Feb. 24 hearing in Washington, while an Assembly committee in Sacramento has set a hearing for Feb 23. 'Reports of premium increases up to 39% are deeply troubling,' Rep. Henry A. Waxman (D-Beverly Hills), who chairs the energy committee, said in a statement. 'At a time when millions of Americans are struggling to keep their health insurance, we need to know what possible justification there could be for increases of this magnitude.' Anthem of Woodland Hills is the state's largest for-profit insurer and a unit of Indianapolis health insurance giant WellPoint Inc. At issue are increases in monthly premiums for many of Anthem's estimated 800,000 customers with individual health insurance policies who are not part of group coverage. Anthem began informing individual policyholders last month that prices would go up March 1 and could be adjusted 'more frequently' than typical yearly increases. The company would not say how high the rates could go or how many customers would be affected. Brokers and policyholders said many of the anticipated increases were 30% to 39%, the largest they could recall. The brokers said other insurers also were raising rates by double digits. Anthem maintains that its increases are necessary to meet growing healthcare costs, even as it voices sympathy for policyholders whose premiums are rising.</blockquote>In addition, per again a <a href="http://www.latimes.com/business/la-fi-insure24-2010feb24,0,2866459,print.story">Los Angeles Times article</a> this week, <blockquote>Executives from California health insurance giant Anthem Blue Cross, under fire for scheduled rate hikes of up to 39%, insisted Tuesday that their premiums were fair and legal, and they told lawmakers they expected that the increases would go forward. Appearing before the state Assembly's health committee, the officials said that they believed rate increases for individual health insurance policies, delayed until May 1 while being reviewed by the Department of Insurance, would survive scrutiny by regulators In Sacramento, Anthem's president, Leslie Margolin, told the committee that much of the public frustration over the rate hikes was misdirected and should be aimed at the nation's healthcare system. 'This debate and this inquiry cannot and should not be just about the insurance industry or the delivery system or regulators or legislators or customers or brokers,' Margolin said. 'We have wasted precious time and precious resources doing battle with each other,' she added. 'We must come together collaboratively and strategically to address the distressing symptoms of our troubled system -- rising premiums, for example -- and to address the fundamental underlying causes of our collective failure.'</blockquote> As we have discussed time after time on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, there are multiple fundamental problems with health care in the US (and around the world.) The Anthem President above did not apparently specify what she thought these problems are. We have discussed in particular problems that arise out of abuse and concentration of power in health, particularly problems with the leadership and governance of health care organizations. We have suggested that such problems are major causes of the ever rising costs of, declining access to, and stagnant quality of health care in the US. These problems do not seem to particularly afflict WellPoint more than most other organizations, and certainly do afflict the other organizations with which WellPoint has to deal.  On the other hand, WellPoint has certainly had its own share of issues. These have been sufficient to raise questions about the organization's leadership's transparency, ethics, and management abilities. While WellPoint perhaps should not be singled out for these sorts of problems, the extent they may have contributed to the costs it imposes, and its ability to manage its relationships with other organizations should be a source of skepticism about the idealized pronouncements of its leaders. For a recent example, the Los Angeles Times also just <a href="http://www.latimes.com/business/la-fi-anthem-claims23-2010feb23,0,186309.story">reported</a>, <blockquote>California's largest for-profit health insurer violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, the state's insurance commissioner said Monday. Anthem Blue Cross of Woodland Hills could face fines of up to $7 million stemming from the alleged violations from 2006 to 2009. Commissioner Steve Poizner said the insurer repeatedly failed to respond to state regulators in a 'reasonable time' as they investigated complaints over the last year. 'We believe there is evidence to suggest there are serious issues with how Anthem Blue Cross pays claims,' Poizner said at a Sacramento news conference. 'Most disturbing to us is that they don't even respond' to the Department of Insurance 'in a timely way.' </blockquote> Furthermore, WellPoint... <ul><li>settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see post <a href="http://hcrenewal.blogspot.com/2005/07/wellpoint-settles-rico-law-suit.html">here</a>).</li><li>subsidiary New York Empire Blue Cross and Blue Shield misplaced a computer disc containing confidential information on 75,000 policy-holders (see story <a href="http://www.nytimes.com/2007/03/14/business/14insure.html">here</a>).</li><li>California Anthem Blue Cross subsidiary cancelled individual insurance policies after their owners made large claims (a practices sometimes called rescission).  The company was ordered to pay a million dollar fine in early 2007 for this (see post <a href="http://hcrenewal.blogspot.com/2007/03/wellpoint-fined-1-million-for-canceling.html">here</a>).  A state agency charged that some of these cancellations by another WellPoint subsidiary were improper (see post <a href="http://hcrenewal.blogspot.com/2007/07/more-than-half-of-wellpoints-policy.html">here</a>).  WellPoint was alleged to have pushed physicians to look for patients' medical problems that would allow rescission (see post <a href="http://hcrenewal.blogspot.com/2008/02/wellpoint-halts-attempts-to-have.html">here</a>).  It turned out that California never collected the 2007 fine noted above, allegedly because the state agency feared that WellPoint had become too powerful to take on (see post <a href="http://hcrenewal.blogspot.com/2008/07/wellpoint-settles-but-has-it-become-too.html">here</a>). But in 2008, WellPoint agreed to pay more fines for its rescission practices (see post <a href="http://hcrenewal.blogspot.com/2008/07/fines-re-statements-and-more-fines-just.html">here</a>).  In 2009, WellPoint executives were defiant about their continued intention to make rescission in hearings before the US congress (see post <a href="http://hcrenewal.blogspot.com/2009/06/managed-care-executives-will-not-limit.html">here</a>).</li><li>California Blue Cross subsidiary allegedly attempted to get physicians to sign contracts whose confidentiality provisions would have prevented them from consulting lawyers about the contract (see post <a href="http://hcrenewal.blogspot.com/2007/11/physicians-and-contracts-cautionary.html">here</a>).</li><li>formerly acclaimed CFO was fired for unclear reasons, and then allegations from numerous women of what now might be called Tiger Woods-like activities surfaced (see post <a href="http://hcrenewal.blogspot.com/2008/01/more-managed-care-management-mumbo.html">here</a>).</li><li>announced that its investment portfolio was hardly immune from the losses prevalent in late 2008 (see post <a href="http://hcrenewal.blogspot.com/2008/10/if-this-is-how-wellpoint-has-managed.html">here</a>).</li><li>was sanctioned by the US government in early 2009 for erroneously denying coverage to senior patients who subscribed to its Medicare drug plans (see post <a href="http://hcrenewal.blogspot.com/2009/01/wellpoint-sanctioned.html">here</a>).</li><li>settled charges that it had used a questionable data-base (builty by Ingenix, a subsidiary of ostensible WellPoint competitor UnitedHealth) to determine fees paid to physicians for out-of-network care (see post <a href="http://hcrenewal.blogspot.com/2009/02/wellpoint-settles.html">here</a>).  </li></ul>So, WellPoint's subsidiary Anthem President Margolin was right in that her company, or insurance and managed care companies should not be blamed for all of our health care woes.  But I submit that her company should no less have to address concerns about the transparency, honesty, and skill of its management, and how problems in these areas have driven up costs, decreased access, threatened quality, and demoralized health care professsionals  than do leaders of other health care organizations.  At the moment, such concerns are at best peripheral to the ongoing debate on health care reform in the US.  I suggest they ought to be central. ADDENDUM (24 February, 2010) - see also comments <a href="http://covertrationingblog.com/healthcare-reform/why-efficiency-is-bad-for-health-insurance-companies">on the Covert Rationing Blog</a>, and <a href="http://www.joepaduda.com/archives/001749.html">on the Managed Care Matters blog</a>.

The Argument Over Insurance Rate Hikes: A Systemic Problem with Health Care Organizations' Leadership and Governance?

There has been a tremendous amount of news coverage of a large rate increase proposed by Anthem Blue Cross, a subsidiary of WellPoint, in Ca...

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Forgotten First Principles in Healthcare IT

A review of several first principles might serve as a useful addendum to the posting "<a href="http://hcrenewal.blogspot.com/2010/02/health-it-caused-death-injury-extent.html">Health IT Caused Death & Injury, Extent Unknown, But Regulation Bad</a>." <blockquote>First principle: A computer can free professionals from tedious, repetitive work which does not require judgment. It can provide facts and figures with lightning speed, giving domain experts more time to exercise their judgment thoughtfully [<a href="http://www.radioshackcatalogs.com/catalogs_extra/1981_rsc-05/">source</a>].</blockquote> Reality: HIT commonly makes work <a href="http://www.tinyurl.com/hostileuserexper">more tedious for clinicians</a>, and there seems to be a not-so-subtle view in the industry that HIT can -- and should -- <a href="http://hcrenewal.blogspot.com/2010/01/does-ceo-of-google-use-google.html">replace or oversee their judgment</a>, and that clinicians are luddites for not embracing the "platform opportunities." <blockquote>First principle: Clinicians need sysems built upon <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/Kling_Design_ICT_table.pdf">user-centric design principles</a> (PDF) that provide cognitive support (per the 2009 <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">National Research Commission report on HIT</a>), not inventory systems of medical data.</blockquote> Reality: the designer-centric Management Information Systems paradigms of the IT industry are widely used in HIT and are inappropriate in medicine with its "unbounded, poorly defined environment" of constant clinician improvisation that makes it appear to function smoothly (per a short article focusing on first principles itself, Nemeth & Cook's "<a href="http://www.ctlab.org/documents/Hiding%20in%20plain%20sight.pdf">Hiding in plain sight: What Koppel et al. tell us about healthcare IT</a>", PDF). <blockquote>First principle: modern medicine is a field unarguably and unalterably having science at it roots, and the approach to tools used within it must itself be based on science.</blockquote> Reality: the HIT industry largely ignores science in favor of premature proclamations of "Mission Accomplished", in the form of self-exalting claims made without or with very little supporting evidence (a.k.a. 'puffery'), while studies that should be taken as a red flag about HIT (e.g., those highlighted at "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009">2009 a pivotal year in HIT</a>" languish in obscurity. These principles are largely common sense, but sense, unfortunately, seems all too uncommon in healthcare in 2010. -- SS

Forgotten First Principles in Healthcare IT

A review of several first principles might serve as a useful addendum to the posting " Health IT Caused Death & Injury, Extent Unk...

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Health IT Caused Death & Injury, Extent Unknown, But Regulation Bad Since it Would Slow Government's Campaign To Spur Widespread Adoption

[Note: the hyperlinks in this posting are very informative, so do check them - ed.] A workgroup of the Healthcare IT Policy Committee, a federal advisory body, will <a href="http://www.healthdatamanagement.com/news/safety_software_ehr_regulation-39799-1.html">hear testimony on the safety of health information technology</a> during a public hearing tomorrow (Feb. 25, 2010) in Washington. On the eve of that hearing, an article "<a href="http://huffpostfund.org/stories/2010/02/fda-considers-regulating-safety-electronic-health-systems" style="font-family: arial;">FDA Considers Regulating Safety of Electronic Health Systems</a>" was published Feb. 23, 2010 by the Huffington Post Investigative Fund, authored by Fred Schulte and Emma Schwartz. The article is bylined with "Reports of Patient Harm Include Six Deaths in Two Years." <blockquote style="font-family:arial;"><a href="http://huffpostfund.org/stories/2010/02/fda-considers-regulating-safety-electronic-health-systems" style="font-weight: bold;">FDA Considers Regulating Safety of Electronic Health Systems</a> Reports of Patient Harm Include Six Deaths in Two Years By <a href="http://huffpostfund.org/users/fred-schulte" title="View user profile.">Fred Schulte</a> and <a href="http://huffpostfund.org/users/emmaschwartz" title="View user profile.">Emma Schwartz</a> Huffington Post Investigative Fund 23 Feb 2010 Concerned about potential safety risks in health information technology, the U.S. Food and Drug Administration may be moving closer to regulating the systems for the first time. In the past two years, the agency has received reports of six patient deaths and several dozen injuries linked to malfunctions in the systems, Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health, said in testimony prepared for a government hearing on Thursday. “Because these reports are purely voluntary, they may represent only the tip of the iceberg,” Shuren said. </blockquote> In an environment of HIT <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=koppel_kreda" style="font-family: arial;">"hold harmless" provisions and defects gag clauses</a> causing executives to violate their fiduciary and Joint Commission safety standard obligations, <a href="http://hcrenewal.blogspot.com/2009/10/sham-peer-review-could-this-bad-faith.html" style="font-family: arial;">sham peer review</a> for "disruptive" or "non-team player" physicians, <a href="http://hcrenewal.blogspot.com/2009/12/we-are-unable-to-share-documents.html">suppression of HIT research</a> that could cast it in a negative light, conflicts of interest, <a href="http://hcrenewal.blogspot.com/2010/02/lawsuit-over-health-it-whistleblowing.html" style="font-family: arial;">whistleblower retaliation</a>, and <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/" style="font-family: arial;">other dysfunctions</a> in the health IT industry, I think "tip of the iceberg" may be a gross understatement. <blockquote style="font-family:arial;">... Many health policy experts believe that fostering greater use of health information technology, which officials refer to as HIT, will significantly improve the quality of medical care, cut costs and reduce medical errors and waste. The government hopes to have an electronic medical record for every American by 2014. </blockquote> These beliefs about HIT -- as it is designed, implemented and managed today -- are being contradicted by a growing body of literature, such as in a recent review article <a href="http://hcrenewal.blogspot.com/2009/12/healthcare-it-as-cybernetic-miracle.html" style="font-family: arial;">here</a> broadly reviewing the literature, a new book <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=hitormiss" style="font-family: arial;">here</a> and a collection of 2009 releases <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009" style="font-family: arial;">here</a> that is largely ignored by policy makers. This literature is largely ignored and unknown to policy makers while the relatively sparse literature "proving" the case for HIT is overemphasized, perhaps due to intense lobbying from the very wealthy HIT trade organizations as in the Washington Post <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009051503667.html?hpid=topnews" style="font-family: arial;">here</a>. <blockquote style="font-family:arial;">But digital medical systems are not risk-free. Over the past two years, the FDA’s voluntary notification system logged a total of 260 reports of “malfunctions with the potential for patient harm,” including 44 injuries and the six deaths. Among other things the systems have mixed up patients, put test results in the wrong person’s file and lost vital medical information. </blockquote> That "260 reports" is also likely highly understated; there is no regulations nor accepted national reporting system for HIT problems as there is for drugs and other medical devices. Consequently most clinicians have no idea where to even report such problems and mishaps. Further, I have probably heard more than that number of "malfunctions with potential for harm" from just a few of my former students and other contacts now in the trenches in the past year or two, who report secretive "defects lists" <a href="http://hcrenewal.blogspot.com/2009/02/are-health-it-designers-testers-and_27.html" style="font-family: arial;">numbering in the hundreds and even thousands</a> in some organizations. A percentage of items on those lists fall into the "likely to cause harm if uncorrected" category. <blockquote style="font-family:arial;"> In one example cited in the FDA testimony, an operating room management system frequently “locked up” during surgery. Lost data had to be re-entered manually “in some cases from a nurse’s recollection.” Another system failed to display a patient’s allergies properly because of software errors. In another case, results from lab testing done in a hospital emergency room were returned for the wrong patient. None of the patients, hospitals or clinics are identified in the reports. </blockquote> I noted such a "computer crash/data loss" malfunction in HIT systems for <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=clinical%20computing%20problems%20in%20ICU" style="font-family: arial;">ICU's</a> and for <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=Cardiology%20story" style="font-family: arial;">Invasive Cardiology labs</a> a decade ago. Nothing seems to have been learned by this industry about <a href="http://www.resilience-engineering.org/" style="font-family: arial;">appropriate software engineering</a> for healthcare. <blockquote style="font-family:arial;">“The FDA recognizes the tremendous importance of HIT and its potential to improve patient care. However, in light of the safety issues that have been reported to us, we believe that a framework of federal oversight of HIT needs to assure patient safety,” Shuren said. He said that to date the agency has “largely refrained” from regulating the industry. Through an FDA spokesman, Shuren declined a request for an interview. The FDA official outlined three possible approaches for tighter scrutiny. The agency could require makers of the devices to register them with the government and to submit reports on safety issues and correct problems that surface. The FDA could track this information “to help improve the design of future products.” In a second scenario, the agency could require manufacturers to report safety concerns and set minimum guidelines to assure the quality of products on the market. In a third approach, the systems could be subject to the broader regulatory actions that new medical products must face before they ever reach the market. Though the FDA didn’t specify which approach it favors, Shuren said that at a minimum the agency could “play an important role in preventing or addressing HIT-related safety issues, thereby helping to foster confidence in these devices.” </blockquote> I think plan #3 is the most consistent with regulation in other healthcare industries (pharma and medical devices), and is most ethical with regard to patient rights. I cannot think of any good reason why the HIT industry should be given special dispensation and accommodated with respect to regulation. <blockquote style="font-family:arial;">The manufacturers of the systems generally have opposed regulation by the FDA, arguing in part that imposing strict controls would slow down the government’s campaign to spur widespread adoption of the technology. Regulation will not necessarily create a “safer” electronic medical record “and might actually limit innovation and responsiveness when it is needed most,” Carl Dvorak, executive vice president of Epic Systems Corporation, a Wisconsin-based company that builds the systems mainly for hospitals and large medical practices, said in his prepared testimony for Thursday’s hearing. The hearing is being held by an advisory group created by the stimulus law. </blockquote> One thing is certain: lack of regulation will NOT create a safer HIT environment. Further, when the FDA has received reports of patient deaths and injuries linked to HIT malfunctions, but the actual number of death and injury cases is truly unknown; and when the number of "near misses" related to IT but averted by luck or by some human in the work chain, that might have easily gone the other way, is also unknown (but likely with a high degree of probability to be much, much larger than "260 per year", the conclusions that: <blockquote>Regulation will not necessarily create a “safer” electronic medical record “and might actually limit innovation and responsiveness when it is needed most... and "imposing strict controls would slow down the government’s campaign to spur widespread adoption of the technology..."</blockquote> ... are simply perverse. They do not reflect any ethical medical values of which I am familiar. <blockquote style="font-family:arial;"> Yet some inside the industry favor stepped-up scrutiny. One major vendor, Cerner Corporation, which has voluntarily reported safety incidents to the FDA in recent years, signaled its support for a rule that would make those reports mandatory. Cerner has reported potential safety concerns because it is the “right thing to do,” a company official said. </blockquote> Indeed. <blockquote style="font-family:arial;">Others inside the industry have argued for approaches that don’t involve FDA oversight. James Walker, chief medical information officer at Pennsylvania’s Geisinger Health System, said in prepared testimony for Thursday's hearing that a “patient safety organization” should be created to collect “automatic, anonymous reporting of potential hazards” in electronic health systems. </blockquote> Such an organization already exists, known as the "FDA." Apparently Walker <a href="http://www.worldcongress.com/speakerBio.cfm?speakerID=34&confcode=nw510" style="font-family: arial;">lacks experience</a> in industries that are regulated by FDA such as the pharmaceutical and medical device industries. IT systems in those industries are regulated and in fact validated, by FDA - e.g., see "<a href="http://www.fda.gov/downloads/RegulatoryInformation/Guidances/ucm126955.pdf" style="font-family: arial;">General Principles of Software Validation; Final Guidance for Industry and FDA Staff</a>", PDF, introduced with the statement that "this guidance outlines general validation principles that the Food and Drug Administration (FDA) considers to be applicable to the validation of medical device software or the validation of software used to design, develop, or manufacture medical devices." Creating yet another new organization for validating HIT would be once again accommodating that industry, and calling for one is not explicable on any reasonable logic that I can surmise. <blockquote style="font-family:arial;">The federal government’s Office of the National Coordinator for health information technology also has recognized the need for better surveillance. In January, the office issued a contract to address “undesirable and potentially harmful unintended consequences” of the systems. </blockquote> What took them so long, I ask? <blockquote style="font-family:arial;"> One industry critic said Tuesday that she hoped the FDA would follow through on its concerns. “We need monitoring and reporting systems for problems,” said Sharona Hoffman, a professor at Case Western Reserve University School of Law. “It has to go through the highest level of oversight and regulation. Every American who goes to a doctor will be affected.” </blockquote> I could not agree more. Hoffman co-authored several articles on HIT risks (links can be found <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=other" style="font-family: arial;">here</a>). The oversight cannot be done by a rubber-stamp organization; it cannot be performed by those with conflicts of interest; it should not be performed by those who for years have minimized the problems. <blockquote style="font-family:arial;"> Even those who advocate tighter oversight agree that the technology has the potential to revolutionize health care. </blockquote> No, HIT will not "<a href="http://hcrenewal.blogspot.com/2010/01/syndrome-of-useless-information.html">revolutionize</a>" healthcare. Facilitate incremental improvements, possibly - but only if the IT itself is "done well." I believe the "R" word must be removed from our cultural lexicon about IT. It is an expression of a disease, the irrational overconfidence in computing in fields depending on human cognition and judgment. If the largest single flaw in healthcare provision were lack of information availability and retrieval capabilities, it would be a (somewhat) less risible, less hysterical assertion. <blockquote style="font-family:arial;"> Though officials in some other countries have tightened oversight of the systems, U.S. manufacturers have managed to stave off formal regulation, telling the FDA in May 2008 that their products should be excluded from review partly as a means to speed up their adoption. </blockquote> The EU's evolving stance on HIT regulation is <a href="http://hcrenewal.blogspot.com/2009/06/improving-patient-safety-in-eu-hit.html" style="font-family: arial;">here</a>. <blockquote style="font-family:arial;">But critics argue that tighter scrutiny is needed to protect the public. “Oversight and quality control may slow things down, but it’s absolutely critical,” said Hoffman, the law professor. “Patients' lives are at stake.” </blockquote> Hoffman seems one of the few writing about this industry who understands what the issues are all about. I will repeat the bottom line in bold for all to see: <blockquote style="font-family:arial;"> “Patients' lives are at stake.” </blockquote> It's ironic that this observation comes from a non-physician (she is a professor of law), while too many HIT industry-connected physicians are chattering about regulation "<a href="http://evernote.com/pub/poikonen/PublicPharmacoinformatics#Note/582cbf46-d342-46bc-a39e-3d57e3a31388">stifling innovation</a>." Blood for computers? Perhaps they'd like to return to the era when <a href="http://en.wikipedia.org/wiki/Tuskegee_syphilis_experiment" style="font-family: arial;">medical experiments such as this</a> were permissible. Seeking regulatory acquiescence to special accommodations for a technology (HIT) already being pushed by government, which could potentially result in a government-corporatist alliance at the expense of the common person and of medical ethics, is quite troubling. -- SS

Health IT Caused Death & Injury, Extent Unknown, But Regulation Bad Since it Would Slow Government's Campaign To Spur Widespread Adoption

[Note: the hyperlinks in this posting are very informative, so do check them - ed.] A workgroup of the Healthcare IT Policy Committee, a f...

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Cardinal Health Settles, Novartis Settles

And the march of settlements continues.... As reported <a href="http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20100220_11_A8_Acompa624488">by the Tulsa (Oklahoma) World</a>, <blockquote>A company that provides hospital pharmacy management services in Tulsa has agreed to pay $1 million in civil penalties for failing to account for large amounts of missing prescription drugs, the U.S. Attorney's Office in Tulsa announced Friday. Cardinal Health Pharmacy Services agreed to settle allegations with the federal prosecutors' office, which alleged that the company's two Tulsa pharmacies were negligent and violated several provisions of the Controlled Substances Act. An audit showed that nearly 400,000 dosage units of hydrocodone, a painkiller, and 234,000 units of alprazolam, an anti-anxiety drug, were unaccounted for at the Hillcrest Medical Center pharmacy from October 2005 through June 2007, according to a news release. The investigation also revealed that more than 30,000 doses of drugs at the Oklahoma State University Medical Center pharmacy were unaccounted for between April 2007 and July 2008. </blockquote> Meanwhile, as reported by Associated Press (<a href="http://www.nj.com/business/index.ssf/2010/02/novartis_subsidiary_to_pay_35.html">via Nj.com</a>), <blockquote>Federal prosecutors say a Princeton-based pharmaceutical company has agreed to pay $3.5 million to settle allegations that it claimed its heart drug was eligible for Medicaid reimbursement. The U.S. attorney's office in Boston said Monday that Eon Labs Inc., a subsidiary of Swiss company Novartis AG, submitted false reports to the government between April 1999 and September 2008 that misrepresented Nitroglycerin SR's regulatory status and failed to advise that the drug did not qualify for Medicaid coverage. Prosecutors say Eon Labs did so even after the Food and Drug Administration determined that there was a lack of evidence that Nitroglycerin SR was effective.</blockquote> Note that we most recently <a href="http://hcrenewal.blogspot.com/2010/01/drowning-our-sorrows-in-ketchup.html">discussed</a> a settlement by Novartis last month (January, 2010).  The march of settlements continues. To repeat, seemingly ad infinitum, these are just the latest in a now long <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">parade of settlements</a> that serve as reminders of poor behavior by myriad health care organizations. As we have previously noted, these settlements seem to have little deterrent effect on future bad behavior. (Note that many large health care organizations have settled or plead guilty in several major cases since we started commenting on such settlements.)  Usually, the companies involved only need to pay fines, and no individual who performed, directed or approved unethical or illegal acts will suffer any negative consequences. I submit once again that such fines are viewed merely as costs of doing business by the affected companies, and do not deter future bad behavior. Until the people who approve, direct, and perform unethical or illegal acts pay some penalties, expect such acts to continue. I again suggest that to truly reform health care, we need rigorous regulation of health care organizations that has the power to deter unethical behavior that may risk patients' health.

Cardinal Health Settles, Novartis Settles

And the march of settlements continues.... As reported by the Tulsa (Oklahoma) World , A company that provides hospital pharmacy management ...

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Deja Vu All Over Again - Sheffield Researcher Under Threat for Trying to Present Data that Offends Research Sponsor

It's deja vu all over again.  A case <a href="http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=410419&c=2">reported</a> (so far only) in the UK Times Higher Education Supplement of a biomedical researcher apparently threatened because she tried to present data that did favor a particular commercial health care product. Here is the summary: <blockquote>An academic has risked the wrath of her university by submitting results to a forthcoming conference without permission. The University of Sheffield has claimed that the submission has been made in breach of a contract it has with a pharmaceutical company, which funds work in the scholar's field. Guirong Jiang, a research radiologist who has worked at Sheffield for 13 years, is due to face a disciplinary hearing over her actions this week. Her findings - submitted to a symposium of the European Calcified Tissue Society (ECTS), to be held in Glasgow in June - add to the debate over what some have claimed is a distortion in the field of osteoporosis caused by the over-diagnosis of vertebral fractures.</blockquote> Here are more particulars: <blockquote>Sheffield has censured her for making the submission without the consent of her supervisor, Richard Eastell, head of Sheffield's Academic Unit of Bone Metabolism. It said her actions breached the terms of a 2007 contract the unit has with pharmaceutical manufacturer Sanofi-Aventis to conduct studies relating to the osteoporosis treatment risedronate, which is sold as the drug Actonel. It also said Dr Jiang failed to follow 'reasonable requests' to withdraw the submission. Dr Jiang said she believed her results should be published as they had not been reflected in the unit's previous output. She added that last December she was informed that her contract would not be renewed when it came to an end this March, which she said had prompted her to throw caution to the wind and publish without permission. She has queried whether her work is bound by Sheffield's Sanofi-Aventis contract, which stipulates that the company must be allowed to review manuscripts and abstracts prior to publication. She pointed out that the work was carried out in 2002 when the unit's risedronate work was funded by Procter & Gamble in partnership with Aventis. Dr Jiang added that she had not seen or signed the full Sanofi-Aventis contract.</blockquote> Dr Jiang is still under threat: <blockquote>The disciplinary hearing, scheduled to take place on 18 February, will consider the allegation that Dr Jiang 'acted inappropriately in making a direct submission of an abstract to a journal outside unit protocol and in contravention of the terms of the research contract'. It will also consider the charge that she 'failed to follow a request by her head of unit and head of department to rectify her actions', which 'aggravated a situation which otherwise could have been quickly resolved'.</blockquote> A long time ago, in a galaxy far, far away, academics had the expectation that they could publish or present their research without first acquiring the express approval of their academic superiors (at least as long as their work was original, the research project was under their control, and that they had properly protected the rights of any human subjects). Furthermore, in at least the US, academics are citizens who expect to have free speech. But as academic institutions became more enamored of and dependent on "external funding," faculty were increasingly pressured to do only sponsored research. The growing dependence on sponsored research allowed the sponsors to try to get more control over how research was done. In the 1990s, there were several important cases in North America in which academic researchers tried to present or publish results that clashed with their research sponsors' vested interests. Doing so resulted in lesser or greater threats to the faculty. Two of the classic cases of research suppression in the 1990's demonstrated this issue. * In the "David Kern case," a textile manufacturer, Microfibres Inc., tried to prevent Dr. David Kern, a general internist and occupational medicine physicians at Memorial Hospital of Rhode Island and faculty member at Brown University, from presenting an abstract that described a case-series of a new pulmonary disease, flock-workers lung, that affected workers at Microfibres Inc. factories. Kern did present the abstract, but under a threat, never carried out, of law-suit, Memorial Hospital of Rhode Island removed Kern as head of the Occupational Medicine program, and refused to renew his contract, even though he was an Associate Professor. Brown University was unable to reverse these moves by the hospital, and Brown officials blamed Kern for signing an agreement to protect trade secrets, even though the agreement was unrelated to the research Kern did on the disease, and his research did not obviously reveal any trade secrets. [1-4] * In the "Nancy Olivieri case," Apotex, a pharmaceutical company, acted against Dr. Nancy Olivieri for revealing preliminary data from a trial of deferiprone, a chelating agent for the treatment of iron overload in thalassemia, suggesting that the drug was often ineffective in treating iron overload, and appeared to be associated with hepatic fibrosis. Ultimately, a report by the Canadian Association of University Teachers also held that her academic freedom was abridged, in the context of a negotiation between the University of Toronto and Apotex over a large donation, and that the hospital harassed Dr. Olivieri during her dispute with Apotex (link <a href="http://www.caut.ca/uploads/OlivieriInquiryReport.pdf">here</a> for report)   In the early 21st century, there was a case in the UK with spooky similarites to the present case: at the same university involved in the present case, and with at least one participant in common with that case.  About a year after we started <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, in late 2005, we wrote multiple posts about the complex and unfortunate case of Dr Aubrey Blumsohn's attempts to keep a research project honest. Our most recent summary of the case was <a href="http://hcrenewal.blogspot.com/2009/09/reappearance-of-ghost-of-seasons-past.html">here</a>. Dr Blumsohn was also doing clinical research on the drug Actonel, again at the University of Sheffield.  He was denied access to the very data he had collected, and to analyses of the data by Procter and Gamble, the then manufacturer of the drug and sponsor of the research.  Dr Blumsohn found that Procter and Gamble seemed to be arranging for ghost-writers to author abstracts about the research based on these hidden analyses.  After he complained to numerous officials at Sheffield, including Dr Richard Eastell, to no avail, he spoke to the press, and thereafter lost his academic position.  The case was just recapped in an interview of Dr Blumsohn published in the British Medical Journal(5).   So we seem to have made little progress.  Most clinical research at academic medical institutions is sponsored by firms that make drugs and devices.  The firms try to secure contracts that give them control over most aspects of the research.  Thus, they can determine how the research is designed, implemented, ana analyzed.  If the resulting <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulation</a> still does not yield results that make the firms' products look good, the sponsors can then just <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppress</a> them.  Academics who naively think it is their duty to find and disseminate the truth are in jeopardy when they attempt to present or publish results that challenge their research sponsors' vested interests.   Suppression of clinical research, however, is bad for patients and honest health care professionals, since it misleads about the benefits and harms of tests and treatments.  Suppression of clinical research dishonors research subjects who volunteer for studies, often at risk to themselves, thinking they may help to advance science and clinical care.  Suppression of clinical research undermines the fundamental mission of academia: to seek out and disseminate the truth.   Those who truly want better health care, here in the US and globally, should advocate for clinical research done without the influence of those with vested interests in how the research comes out.    Thanks to an anonymous Health Care Renewal scout who located the Times article.    References 1. DG Kern, RS Crausman, TH Durand et al. Flock worker's lung: chronic interstitial lung disease in the nylon flocking industry. Ann Intern Med 1998; 129: 261-272. (link <a href="http://www.annals.org/cgi/content/full/129/4/261">here</a>) 2. Shuchman M. Secrecy in science: the flock worker's lung investigation. Ann Intern Med 1998; 129: 341-344. (link <a href="http://www.annals.org/cgi/content/full/129/4/341">here</a>) 3. Marsh DJ. Intimidation of researchers by special interest groups. N Engl J Med 1997; 337: 1317-1318. (link here) 4. Shuchman M. Consequences of blowing the whistle in medical research. Ann Intern Med 2000; 132: 1013-1015. (link <a href="http://www.annals.org/cgi/content/full/132/12/1013">here</a>) 5.  Cyer C. Aubrey Blumsohn: academic who took on industry. Brit Med J 2009; 339:b5293. (link<a href="http://www.bmj.com/cgi/content/full/339/dec15_1/b5293"> here</a>)

Deja Vu All Over Again - Sheffield Researcher Under Threat for Trying to Present Data that Offends Research Sponsor

It's deja vu all over again. A case reported (so far only) in the UK Times Higher Education Supplement of a biomedical researcher appa...

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Networked EMR's and Healthcare Information Security: Practical When Massive IT Security Breaches Continue?

At "<a href="http://hcrenewal.blogspot.com/2010/02/networked-interoperable-secure-national.html">Networked, Interoperable, Secure National Medical Records a Castle in the Sky?</a>" I wrote that the holy grail of electronic medical record efforts - the creation of a networked, interoperable, secure national medical records system - may be far more difficult than anyone expected due to vulnerabilities in current, widespread IT networking and OS platforms. Now we hear the situation is even worse than in the articles I cited at that post: <blockquote> Wall Street Journal Feb. 18, 2010 <a href="http://online.wsj.com/article/SB10001424052748704398804575071103834150536.html">Broad New Hacking Attack Detected</a> Global Offensive Snagged Corporate, Personal Data at nearly 2,500 Companies; Operation Is Still Running Hackers in Europe and China successfully broke into computers at nearly 2,500 companies and government agencies over the last 18 months in a coordinated global attack that exposed vast amounts of personal and corporate secrets to theft, according to a computer-security company that discovered the breach. The damage from the latest cyberattack is still being assessed, and affected companies are still being notified. But data compiled by NetWitness, the closely held firm that discovered the breaches, showed that hackers gained access to a wide array of data at 2,411 companies, from credit-card transactions to intellectual property. </blockquote> One can only imagine how internet-connected hospitals, generally an IT backwater, might fare under such an onslaught. <blockquote>... In more than 100 cases, the hackers gained access to corporate servers that store large quantities of business data, such as company files, databases and email. They also broke into computers at 10 U.S. government agencies. In one case, they obtained the user name and password of a soldier's military email account, NetWitness found. A Pentagon spokesman said the military didn't comment on specific threats or intrusions. At one company, the hackers gained access to a corporate server used for processing online credit-card payments. At others, stolen passwords provided access to computers used to store and swap proprietary corporate documents, presentations, contracts and even upcoming versions of software products, NetWitness said. Data stolen from another U.S. company pointed to an employee's apparent involvement in criminal activities; authorities have been called in to investigate, NetWitness said. Criminal groups have used such information to extort sensitive information from employees in the past.</blockquote> Read the while article. These breaches are an unpleasant reality in 2010, but what's worse is there really are no solid metrics for the true extent of this 'disease.' Perhaps future Internet technologies will reduce or eliminate the problem, as one reader suggested in a comment to my aforementioned post. I do not believe, however, that patients and their medical records should be used as guinea pigs until those new networking and security technologies are widely deployed and well-proven. In effect, this is probably not a good time for actual records-level interoperability to be deployed in any manner other than in consideration of a future strategy. Operationalizing that strategy should probably await a time when the "digital ether" in which the data resides and moves is more mature, unless proprietary networks and technology are to be used and without connection to the Internet. Planning data-level compatibility between systems, on the other hand, is work that should continue. Finally, the layoffs and staffing levels in today's IT departments (at both vendor and user shops), plus the outsourcing of critical IT functions to overseas contractors where workers' loyalty to the primary firm is questionable at best, may be a contributing factor to the nakedness of corporate America's information systems. -- SS

Networked EMR's and Healthcare Information Security: Practical When Massive IT Security Breaches Continue?

At " Networked, Interoperable, Secure National Medical Records a Castle in the Sky? " I wrote that the holy grail of electronic m...

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University of California CEO - You Can Reduce My Pay if "You Throw In Air Force One"

The San Francisco Chronicle recently <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/BA6A1BUGLU.DTL">reported</a> how students at the University of California have been providing a satirical approach to the problems of the university's leadership: <blockquote>It's been a seriously dramatic year at the University of California, where hundreds of students seized buildings, demonstrated and shut down regents meetings last fall to protest rising tuition and the perceived privatization of the public school. It's also been a satirically dramatic year, thanks to the UC Movement for Efficient Privatization, a fledgling group of mostly grad students in business attire that uses humor tinged with sarcasm to lampoon UC officials. Their own name is an example. Many UC students believe leaps in tuition and reduced state funding are turning the public university into a private institution.</blockquote> In particular, they drew attention to the university president's sense of entitlement: <blockquote>UCMeP has made itself known on the Berkeley campus since September. That's when UC President Mark Yudof, who earns about $600,000, drew students' ire for telling the New York Times he'd take a $200,000 pay cut for salary parity with President Obama - if Air Force One were part of the package. Seeing this as a philanthropic opportunity, UCMeP issued fundraising flyers: 'Help Buy Mark Yudof a Plane!'</blockquote>The relevant parts of the <a href="http://www.nytimes.com/2009/09/27/magazine/27fob-q4-t.html">New York Times interview</a>, which I regret to say I missed at the time it was published, are: <blockquote>Some people feel you could close the U.C. budget gap by cutting administrative salaries, including your own. The stories of my compensation are greatly exaggerated. When you began your job last year, your annual compensation was reportedly $828,000. It actually was $600,000 until I cut my pay by $60,000. So my salary is $540,000, but it gets amplified because people say, 'You have a pension plan.' What about your housing allowance? How much is the rent on your home in Oakland? It’s about $10,000 a month. Does U.C. pay for that on top of your salary? Yes, and the reason they do that is because they have a president’s house, it needed $8 million of repairs and I decided that was not the way to go. Why the heck would I ever authorize $8 million for a house I didn’t want to live in anyhow? Why can’t you have architecture students repair the house for course credit? Let me ponder that. What do you think of the idea that no administrator at a state university needs to earn more than the president of the United States, $400,000? <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhT2dQCrvLxxi5nojjEMyPLIkI317MeI3P-ns4ZiESpXjSefmnUowhjM3i4TtGWzxx7rTAwKf6BdcTJAXSUi4E77ZRVZhdp9LDnmqS8GGqYo_VBwBB6-aoPtYT0bo0xDc7lqyjlTnKX4Euq/s1600-h/Air_Force_One_over_Mt__Rushmore.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhT2dQCrvLxxi5nojjEMyPLIkI317MeI3P-ns4ZiESpXjSefmnUowhjM3i4TtGWzxx7rTAwKf6BdcTJAXSUi4E77ZRVZhdp9LDnmqS8GGqYo_VBwBB6-aoPtYT0bo0xDc7lqyjlTnKX4Euq/s320/Air_Force_One_over_Mt__Rushmore.jpg" /></a></div>Will you throw in Air Force One and the White House?</blockquote> While Yudof's response is clearly sarcastic, he obviously never substantively addressed why he is entitled to be paid comparably to the President of the richest country in the world. We have written a few times about the travails of the <a href="http://hcrenewal.blogspot.com/search/label/University%20of%20California">University of California</a>, some of its multiple campuses, and in particular its medical schools and teaching hospitals.  Most recently we have written about how leaders of its teaching hospitals also seemed to feel entitled to substantial compensation, including bonuses for "performance" even when their institutions were receiving bad publicity for quality problems (posts <a href="http://hcrenewal.blogspot.com/2010/01/more-california-medical-centers-plagued.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/01/uci-medical-center-fails-inspection-uci.html">here</a>). Again and again we see examples of leaders of academic medical institutions, and health care organizations in general who seem to feel entitled to be judged differently, and rewarded differently than the common folk.  These entitlements exist even when the economy, or the financial performance of the specific organization prevents other people from making any economic progress. This entitlement exists even if those other poeple actually do the work, and ultimately provide the money that sustains the organization. Although the executives of not-for-profit health care organizations generally make far less than executives of for-profit health care corporations, collectively, hired managers of even not-for-profit health care organizations have become richer and richer at a time when most Americans, including many health professionals, and most primary care physicians, have seen their incomes stagnate or fall. They are less and less restrainted by passive, if not crony boards, and more and more unaccountable. In a kind of multi-centric coup d'etat of the hired managers, they have become our new de facto aristocracy. Or as we wrote in our previous post, executive compensation in health care seems best <a href="http://hcrenewal.blogspot.com/2009/12/compensation-madness-insiders-hijacking.html">described as Prof Mintzberg</a> described compensation for finance CEOs, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." As it did in finance, compensation madness is likely to keep the health care bubble inflating until it bursts, with the expected adverse consequences. Meanwhile, I say again, if health care reformers really care about improving access and controlling costs, they will have to have the courage to confront the powerful and self-interested leaders who benefit so well from their previously mission-driven organizations. It is time to reverse the coup d'etat of the hired managers.

University of California CEO - You Can Reduce My Pay if "You Throw In Air Force One"

The San Francisco Chronicle recently reported how students at the University of California have been providing a satirical approach to the ...

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