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Quis Custodiet Ipsos Custodes?

HAPPY TIMES AT NIMH Two weeks ago I <a href="http://hcrenewal.blogspot.com/2010/03/dr-pangloss-as-nih-institute-director.html">discussed</a> a Commentary in JAMA by Dr. Thomas Insel, Director of the National Institute of Mental Health. Over on <a href="http://carlatpsychiatry.blogspot.com/2010/03/dr-tom-insel-nimh-chief-scolds.html">Danny Carlat’s blog</a>, Dr. Insel took exception to my linking him with Charles Nemeroff, and appeared to be putting distance between himself and Dr. Nemeroff. So, I did some checking, and a correction to one of my statements is in order. I had said, “ … that Insel appointed Nemeroff as an advisor soon after he (Insel) moved to NIMH.” That was my recollection. It turns out what I recalled was instead Insel showcasing Nemeroff in the NIMH Director’s 7th Annual Research Roundtable June 10, 2003, a few months after Insel moved from Emory University to NIMH. Let the record stand corrected. At that gala meeting, held at the National Press Club in Washington, DC, Dr. Insel characterized Nemeroff as one of the “real stars of NIMH’s research community…” Nemeroff used the occasion to pimp GlaxoSmithKline’s drug paroxetine (Paxil), showing data on change in platelet stickiness after Paxil in patients with heart disease and depression. This highlighting of Paxil by Nemeroff focused on the surrogate outcome of platelet function, and contained no evidence that Paxil modified any important clinical endpoints. Nevertheless, Nemeroff speculated liberally about the place of antidepressant drugs in managing heart disease. This is the sort of stuff Insel described at the Roundtable as “ … an excellent sampling of the Institute’s exciting research endeavors.” My general point two weeks ago was that Dr. Insel, the Director of an NIH Institute, downplayed the seriousness of the ethics issues surrounding the seven academic psychiatrists he mentioned in his Commentary in JAMA. Though he spoke in platitudes about the need for transparency, the spirit of transparency did not move him to disclose his own close ties with Dr. Nemeroff, who is one of the seven. Lest there be any remaining doubt about those ties, here is Dr. Nemeroff lauding Dr. Insel at the 201st meeting of the National Advisory Mental Health Council September 13, 2002 in the presence of the NIH Director, Elias Zerhouni, MD. From the Minutes: Dr. Charles Nemeroff, Reunette W. Harris Professor and Chair, Department of Psychiatry and Behavioral Sciences, Emory University School of Medicine, commended Dr. Zerhouni’s selection of Dr. Insel as the next NIMH Director and added that Dr. Insel is the epitome of courage defined as grace under pressure. Dr. Nemeroff added that Dr. Insel will leave his current position as a most beloved professor, a respected scientist, and a great person. In the comments on Danny Carlat’s blog I called Dr. Insel’s objections to my linking him with Nemeroff disingenuous. I still think that. Dr. Insel and Dr. Nemeroff are closer than Insel now seems comfortable acknowledging. Their record of talking up each other is hard to ignore. The irregularities identified by Senator Grassley involving Nemeroff’s reporting to NIH, his conflict of interest, and his conflict of commitment occurred on Insel’s watch. Considering the appearance of cronyism in their relationship, is it even possible for Dr. Insel to investigate Dr. Nemeroff’s performance in areas like the Emory-GlaxoSmithKline-NIMH Collaborative Mood Disorders Initiative? Bernard Carroll

Quis Custodiet Ipsos Custodes?

HAPPY TIMES AT NIMH Two weeks ago I discussed a Commentary in JAMA by Dr. Thomas Insel, Director of the National Institute of Mental Health...

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My WSJ Letter to the Editor: "Concern About Medical Records Is Not Misplaced"

A Wall Street Journal letter to the editor I authored entitled "<a href="http://online.wsj.com/article/SB10001424052702304252704575156092885171262.html" style="font-weight: bold;">Concern About Medical Records Is Not Misplaced</a>" was published today, April 3, 2010. On Mar. 23, 2010 the WSJ had carried an Op-Ed entitled "Your Medical Records Aren't Secure" by patient privacy rights advocate Deborah Peel, MD, a <a href="http://patientprivacyrights.org/board-of-directors/">psychiatrist and founder-leader of the organization Patient Privacy Rights</a>. Dr. Peel's Op Ed can be read <a href="http://online.wsj.com/article/SB10001424052748703580904575132111888664060.html">here</a>. My letter to the editor is in response to criticism of Dr. Peel's concerns. The criticism occured in a WSJ letter "Industry Rep Calls Patient Privacy 'Overblown' Worry" on Mar. 30, 2010 by Mary R. Grealy, president of the Healthcare Leadership Council, a "coalition" of chief executives from major healthcare companies and organizations. Ms. Grealy's letter can be read <a href="http://online.wsj.com/article/SB10001424052748704094104575144110418562490.html">here</a>. In her letter, Ms. Grealy criticized Dr. Peel's concerns about medical record privacy. She opined that "Dr. Peel seeks to frighten people into believing electronic health records are more vulnerable than paper ones, which is not the case" and that "stymieing the necessary transfer of data contained in one diagnosis, one prescription or one lab test could mean the difference between life and death. That is a very high price to pay in order to address overblown privacy concerns." My letter in response published today speaks for itself: <a href="http://online.wsj.com/article/SB10001424052702304252704575156092885171262.html"></a><blockquote><a href="http://online.wsj.com/article/SB10001424052702304252704575156092885171262.html">Concern About Medical Records Is Not Misplaced </a> Wall Street Journal Letter to the Editor April 3, 2010 In her letter of March 30, Mary Grealy, president of the Healthcare Leadership Council, implies that Dr. Deborah Peel is being alarmist and hysterical about fears of electronic medical records (EMR) privacy ("<a class="" href="http://online.wsj.com/article/SB10001424052748703580904575132111888664060.html">Your Medical Records Aren't Secure</a>," op-ed. March 24). Ms. Grealy makes the fantastic assertion that EMRs are less vulnerable than paper ones. Nonsense. I do not recall many news stories of trucks hauling away 10,000 or 100,000 paper charts for diffusion to identity thieves, but massive IT security breaches and computer thefts involving tens of thousands of records or more are increasingly common. As one example, your Feb. 18 article "<a href="http://online.wsj.com/article/SB20001424052748704398804575071103834150536.html">Global Attack Snags Corporate, Personal Data</a>," tells about how hackers in Europe and China broke into computers at more than 2,400 companies and government agencies over the last 18 months, as well as at 10 U.S. government agencies. [I'd written about this story at HC Renewal <a href="http://hcrenewal.blogspot.com/2010/02/networked-emrs-and-healthcare.html">here</a> - ed.] It is quite realistic to be concerned about how hospitals, generally an IT backwater, will fare. Further, who's being hysterical? Ms. Grealy asserts that without the unrestricted flow of medical data for research, "one prescription or one lab test could mean the difference between life and death." This is classic fear-mongering. EMRs remain an experimental technology of uncertain risks and benefits. EMR data, itself uncontrolled as entered into multiple vendors' disparate EMR systems by multiple personnel of varied medical backgrounds and research experience, under widely varied circumstances, make statistically meaningful EMR-based research quite difficult if not impossible. The gold standard of medical research is the randomized controlled clinical trial (RCT), and the irrational exuberance over EMRs as somehow able to bypass or surpass the RCT is dollar sign-studded nonsense. Perhaps one day EMRs will be used to rigorously gather RCT-quality data, but not today. EMRs are not magic bullets. </blockquote> I note from a <a href="http://www.cahc.net/about_mary.html">bio</a> that Ms. Grealy is neither a medical professional nor an IT/informatics professional: <blockquote>Ms. Grealy has a bachelor degree from Michigan State University and a law degree from Duquesne University. </blockquote> Somewhat concerning is the following: <blockquote>Ms. Grealy has an extensive background in health care policy. She has led important initiatives on the uninsured, improving patient safety and quality, protecting the privacy of patient medical information and reforming the medical liability laws. She testifies frequently before Congress and federal regulatory agencies.</blockquote> Along with other non-medical medical experts such as at the EPIC company who proffer authoritative statements at HHS meetings that <a href="http://hcrenewal.blogspot.com/2010/04/does-award-for-stupidest-statement-made.html">physicians will be uncomfortable reporting EMR defects and EMR-related injuries to the FDA</a>, someone needs to remind me why we need non-medical, non-IT, non-informatics "experts" as healthcare leaders and promoters of healthcare IT universal beneficence at all. It is in my opinion injurious to have healthcare leaders who cannot count on their own personal expertise to partition fact from fiction in medical affairs, and who through lack of that expertise suffer impairment in judging the concerns, expertise and competence of others who are domain experts. (I should also note that conflicts of interest can also cause people to make statements they know are false or misleading.) -- SS

My WSJ Letter to the Editor: "Concern About Medical Records Is Not Misplaced"

A Wall Street Journal letter to the editor I authored entitled " Concern About Medical Records Is Not Misplaced " was published t...

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Does the Award for the Most Risible Statement Made by a Health IT Vendor Belong to EPIC?

It may, because I am hard pressed to find any statement that approaches this one in vacuousness. Regarding reporting of healthcare IT problems and defects that might cause, or have caused, patient harm, the executive VP at EPIC stated at a<a href="http://www.informationweek.com/story/showArticle.jhtml?articleID=224201003"> HHS Health IT Policy Committee certification workgroup</a>: <blockquote>... The FDA might not be the best organization to help the ONC create an environment where people feel comfortable coming forward with incident reports, said Carl Dvorak, executive VP at EHR system provider Epic Systems and a workgroup member Dvorak said he's also concerned that the FDA's QSR process wouldn't address problems people spoke about in recent workgroup testimony. "If the mission is to build a safer system, I don't know that the FDA can contribute toward that mission," he said.</blockquote> To this I ask these questions: 1. Where, exactly, does Mr. Dvorak think clinicians and healthcare organizations report defects and problems with devices and drugs now? Consumer Reports? Good Housekeeping? 2. What is Mr. Dvorak's first hand experience with the FDA in terms of reporting on medical devices and medical device IT, and pharmaceuticals? Could that be the reason he "doesn't know" how the FDA can contribute to "the mission" of HIT medical device safety? Perhaps Mr. Dvorak himself is uncomfortable reporting defects and problems with health IT medical devices to FDA as opposed to some new, amateur medical device safety organization [see note 1] friendly to the HIT industry or in their pockets, but clinicians won't be. Either that, or this is one of the lamest attempt at FUD in computing history [see note 2]. <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhx1-jfHKDjEB4JcowvZtmUZnOnn7_5pGkpstR5N75dAJqw9wi6VbwiL_pjXrpq7Y4ujmFymBH2IfbTePiEQXKnPJJE_OmlwoY4cXF9DwP9LDTdj_uNBO58Fyh9OtmGk5jCSSKsevXBxhkS/s1600/medwatch.png" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5455377518586343586" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhx1-jfHKDjEB4JcowvZtmUZnOnn7_5pGkpstR5N75dAJqw9wi6VbwiL_pjXrpq7Y4ujmFymBH2IfbTePiEQXKnPJJE_OmlwoY4cXF9DwP9LDTdj_uNBO58Fyh9OtmGk5jCSSKsevXBxhkS/s320/medwatch.png" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 287px; height: 167px;" /></a>A possibly real billboard from parts unknown about where to report shoddy HIT: FDA's <a href="http://www.fda.gov/Safety/MedWatch/HowToReport/ucm167733.htm" style="font-weight: bold;">MedWatch Hotline</a>. (Hat tip to <a href="http://histalk2.com/2010/03/18/news-31910/">HisTALK blog</a>.) </div> -- SS Notes: [1] See my post "<a href="http://hcrenewal.blogspot.com/2010/03/third-party-reviews-of-devices-come.html" style="font-weight: bold;">Third-Party Reviews of Medical Devices Come Under Scrutiny at the FDA - Except Healthcare IT Medical Devices, Which Get Special Accommodation</a>" for more on the issue of third-parties and amateurs performing device review. [2] HIT personnel in my experience often seem to resort to a psyops strategy of trying to instill Fear, Uncertainty and Doubt in others to kill ideas they don't like (usually, ideas that would cause them to have to work harder), although it's usually done in a far more credible manner than in this example.

Does the Award for the Most Risible Statement Made by a Health IT Vendor Belong to EPIC?

It may, because I am hard pressed to find any statement that approaches this one in vacuousness. Regarding reporting of healthcare IT proble...

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More Doubts About Private Equity Taking Over Not-for-Profit Hospital Systems

Last week, we <a href="http://hcrenewal.blogspot.com/2010/03/now-private-equity-jumps-into-health.html">posted</a> about how buy-outs of not-for-profit hospital systems by private equity firms seemed to be a new fashion in health care.  Since then, new doubts have been raised about whether this is a good idea. Detroit Medical Center, Vanguard Health, and the Blackstone Group <a href="http://www.freep.com/article/20100330/OPINION04/3300321/1322/Med-Center-mistake">Letters</a> to the Detroit Free Press raised concerns, <blockquote>As a nonprofit corporation, DMC's mission is to provide quality health care to the community. Management is accountable to Detroit area citizens and health care consumers, not to profit-motivated investors. As a private, for-profit corporation, its mission will be to provide profit for its shareholders. Management will be accountable to shareholders and will be rewarded in relation to the rate of return on their investments.</blockquote> Also, the Free Press <a href="http://www.freep.com/article/20100330/FEATURES08/100330060/1319/Groups-DMC-sale-violates-law">reported</a> that a coalition of local not-for-profit organizations challenged the legality of the proposed sale, <blockquote>The sale of the Detroit Medical Center to a for-profit Nashville company violates state law and raises issues about whether poor patients who depend on the DMC will be assured of care for years to come, three nonprofit Michigan organizations said today. Marjorie Mitchell, executive director of Michigan Universal Health Care Network, said the organizations e-mailed today a three-page list of concerns about the sale to Michigan Attorney General Mike Cox. Mitchell testified briefly today at the Detroit City Council about the issue and distributed the letter. The two other nonprofit organizations signing the letter were Metropolitan Organizing Strategy Enabling Strength, or Moses, an organization of community and religious leaders active on health issues, and Michigan Legal Services, a Detroit legal aid organization. The three groups called themselves the Coalition to Protect Detroit Health Care. Citing a provision in state law, the letter said Michigan law is clear that nonprofit companies should not 'permit assets … to be used, conveyed or distributed for non-charitable purposes.' 'The mission of a for-profit is to serve the stockholders,' the letter to Cox said. The letter said it is the opinion of the three groups that the purchase by Vanguard of the DMC 'violates Michigan’s nonprofit corporation statute.' The three organizations asked Cox to hold public meetings to answer questions about the impact of the proposed sale on the health of Detroiters, particularly uninsured people. The groups also have questions about how the DMC’s $140-million charitable assets will be used as well as concerns that use of state Renaissance Zone money would benefit a for-profit company. </blockquote> Caritas Christi Health Care and Cerberus Capital Management Boston Globe news articles <a href="http://www.boston.com/business/healthcare/articles/2010/03/25/cerberuss_success_hurt_by_a_pair_of_gambles/">noted</a> that Cerberus failed recently not only in its management of Chrysler, but of GMAC (now also bailed out by the US government), its management is secretive even for the opaque world of private equity, and it has <a href="http://www.boston.com/business/healthcare/articles/2010/03/26/equity_firm_in_caritas_buyout_lacks_medical_field_experience/">no experience</a> running "large medical systems."    A letter by Dr Arnold Relman, distinguished former editor of the New England Journal of Medicine, <a href="http://www.boston.com/bostonglobe/editorial_opinion/letters/articles/2010/03/30/beware_of_for_profit_suitor/">warned</a>, <blockquote>Cerberus promises to keep the present hospital management, add much money beyond the purchase price toward the operation and improvement of the hospitals, maintain charity support, and not sell the system — for three years. After that, who knows? Cerberus follows its own interests, and it will take money out of the community, not contribute to it. As a close observer of the for-profit hospital industry ever since its beginnings, I predict that Cerberus will sell to another business sooner or later, and the initial promises will be forgotten. That’s what happened at Framingham’s MetroWest Hospital. Control over the kinds of medical services provided by the hospital would be lost. Unprofitable services such as pediatrics, obstetrics, and outpatient psychiatry would disappear. Business-owned hospitals will resist major reforms to control medical costs or reorganize a community’s medical services in the public interest.</blockquote> Caritas Christi ran an advertisement in local papers that referred to Cerberus as its new "financial sponsor," suggesting that the company was going to give a still not-for-profit health care system a grant, quite different from what was really proposed, which was that Cerberus would become the owner of a formerly not for-profit health care system, thus rendering it into a privately held, for-profit system.  One wonders why the public relations people thought they needed to spin the deal thus. Finally, the Boston Globe <a href="http://www.boston.com/business/healthcare/articles/2010/03/28/at_caritas_helm_a_doctor_turned_dealmaker/">profiled</a> current Caritas Christi CEO Dr Ralph de la Torre, who apparently negotiated a deal that would leave him "as chief executive of Caritas, while also putting him in charge of acquiring other hospitals for Cerberus." But the article raised questions about what sort of leader he would be. It characterized him as transformed "from doctor to dealmaker," who now "stands to win a much bigger payout." Worse, it suggested that winning, as evidenced by making more money than anyone else, rather than access to quality patient care, is his prime motivation. <blockquote>He used to say, ‘It’s not about the money, but that’s one way people keep score.’ </blockquote> In addition, Dr De la Torre has now so transformed into a CEO that "he let his medical license lapse." Summary Let me note some people think that the notion that how much money one makes should be considered a "score," and that he who dies with the most money wins, was one of the central reasons for the global financial collapse. For example, Nancy Rapoport <a href="http://jurist.law.pitt.edu/forumy/2007/01/et-tu-steve-new-years-resolutions-for.php">suggested</a> some New Year's resolutions for corporate boards (in 2008!), including: <blockquote>I will remind myself and my colleagues that the level of CEO compensation is not an indicator of the company’s performance and that the arms race towards excessively high executive compensation is not a winnable race. At the point when money becomes just a way of keeping score, compensation is probably too high.</blockquote> Earlier in 2007, Michael Kinsley <a href="http://www.time.com/time/magazine/article/0,9171,1612697,00.html">wrote</a> presciently in Time about, <blockquote>a development in the larger economy. For most people, the point of money is that you can buy things with it. But at the top, where people already can buy whatever they want, the purpose of money is keeping score: making sure that you don't slip down in the Forbes 400 list.</blockquote>So, putting someone who believes that he must always make more money in order to keep "winning" in charge of a large health care system does not seem to be a recipe for better patient care or more access, but rather for ever-increasing executive compensation while making money becomes the overwhelming priority for the organization, completely eclipsing such quaint concepts as quality of care, reasonable costs, or adequate access. Recent history has not shown that for-profit hospitals deliver cheaper, better, or more accessible care than not-for-profit institutions. While their presence has influenced not-for-profit hospitals to behave more like for-profit institutions, costs have risen inexorably while quality and access decline.   Moreover, for-profit hospitals run by private equity (as opposed to publicly traded corporations) would likely to be even more opaque than they were when they were not-for-profit. Increasing opacity of health care would likely worsen, not improve our current problems. Deals that turn not-for-profit hospital systems into privately held for-profit systems ought to be scrutinized ith extreme skepticism. The questions raised above about the currently proposed deals ought to be addressed, In addition, I would suggest that all such deals should be conditioned on a requirement that the taken-over hospitals, and their parent private equity companies have to disclose at least as much as both public for-profit health care corporations and not-for-profit health care organizations are required to disclose, e.g., their ownership, the make-up of their boards of directors, the compensation, in detail, of their most highly paid officers, employees, and board members, all conflicts of interest affecting their leaders, etc. By the way, maybe such disclosure should be required of all health care organizations above some reasonable minimum size. If private equity companies are unwilling to make such disclosures, maybe they should not be allowed to run health care organizations.

More Doubts About Private Equity Taking Over Not-for-Profit Hospital Systems

Last week, we posted about how buy-outs of not-for-profit hospital systems by private equity firms seemed to be a new fashion in health car...

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New Investigations of Boston Scientific, but New CEO Made $33.5 Million for Half a Year's Work

It appears that device-maker Boston Scientific has a new set of troubles.  The Boston Globe just <a href="http://www.boston.com/business/healthcare/articles/2010/03/31/recalls_put_boston_scientific_in_regulators_sights/">reported</a>: <blockquote>Stepped-up government scrutiny of Boston Scientific Corp. stems from heightened concern over medical safety and disappointment that the company made new missteps after resolving previous problems with the Food and Drug Administration, analysts said yesterday. The Natick medical-device maker, which has been working to settle patent suits and federal investigations dating back years, recently was notified of fresh investigations begun by the Department of Justice and the Securities Exchange Commission into problems that forced it to recall implantable heart defibrillators this month. Boston Scientific said March 15 that it had halted shipments and recalled unsold units of seven brands of cardioverter and cardiac resynchronization therapy defibrillators. The products represented roughly 15 percent of the company’s $8.2 billion in 2009 sales. On March 15, the company belatedly filed a notice informing the FDA of the production changes. Larry Biegelsen, a senior analyst for Wells Fargo Securities, estimated Boston Scientific could lose $5 million in revenue every business day until defibrillator sales resume. </blockquote> The Boston Globe article noted that: <blockquote>Boston Scientific’s latest woes are reminiscent of an earlier round of friction with the FDA when defibrillator problems came to light after the company bought Guidant. The agency issued a 'warning letter' in 2006, citing multiple manufacturing violations and limiting Boston Scientific’s ability to get new devices approved until it fixed the problems. The restrictions were gradually loosened over the next two years, as the company strengthened its compliance, and the letter was lifted in 2008.</blockquote> That summary actually soft-pedaled Boston Scientific's previous woes. We started posting about the company's travails in 2005, starting with allegations that Guidant, which is now a Boston Scientific subsidiary, hid information about defects in the implantable cardiac defibrillators (ICDs) the company manufactured. As we noted in early 2005 <a href="http://hcrenewal.blogspot.com/2005/05/guideants-short-circuit.html">here</a>, Guidant executives allegedly knew that ICDs made from 2000-2002 were at risk for short-circuiting and failing, thus making them unable to deliver potentially life saving electrical shocks meant to prevent cardiac arrests, but the company only revealed the problem in 2005. By failing to notify physicians and the public, Guidant executives let expensive and profitable, but potentially useless devices to continue to be implanted, potentially increasing the risk of sudden death for the patients who received them. Then here we <a href="http://hcrenewal.blogspot.com/2005/06/guidants-short-circuit-reloaded.html">noted</a> reports that Guidant continued to ship failure-prone devices even after it had designed and started to manufacture new ICDs that were supposed to be less likely to fail. By June, 2005 we <a href="http://hcrenewal.blogspot.com/2005/06/more-short-circuits-for-guidant.html">posted</a> that Guidant had recalled thousands of ICDs, including models that were previously not identified as likely to fail. Later that year, the case <a href="http://hcrenewal.blogspot.com/2005/07/new-england-journal-of-medicine-on.html">rated</a> an article by Robert Steinbrook in the New England Journal of Medicine. Towards the end of 2005, we <a href="http://hcrenewal.blogspot.com/2005/11/eliot-spitzer-sues-guidant-for-fraud.html">noted</a> that Eliot Spitzer had sued Guidant for fraud.  At the end of the year, more information <a href="http://hcrenewal.blogspot.com/2005/12/for-guidant-these-people-are-just.html">appeared</a>, suggesting that Guidant knew the ICDs were flawed, but continued to sell them. <a href="http://hcrenewal.blogspot.com/2006/03/more-about-guidant-it-is-possible-that.html">Still more</a> appeared early in 2006. Then the business media became interested in the bidding war between Johnson and Johnson and Boston Scientific for Guidant, provoking a bit <a href="http://hcrenewal.blogspot.com/2006/01/new-problems-for-guidant-and-boston.html">more interest</a> in the tale of the suppression of data about the flawed ICDs. Then all was quiet until 2009, when Guidant, now a Boston Scientific subsidiary, plead guilty to two criminal misdemeanor charges that it failed to properly notify the FDA about problems with its ICDs (see post <a href="http://hcrenewal.blogspot.com/2009/11/boston-scientific-to-plead-guilty-of.html">here</a>). Later, the Guidant subsidiary of Boston Scientific settled charges that it gave doctors kickbacks as part of a "seeding study" to use its devices. At that time, it came to light that Boston Scientific had made another settlement, in 2007, of civil lawsuits alleging that the company hid problems with its products (see post <a href="http://hcrenewal.blogspot.com/2009/12/boston-scientific-again-settles-this.html">here</a>). However, just as the latest questions about Boston Scientific were revealed, the Boston Globe also <a href="http://www.boston.com/business/healthcare/articles/2010/03/30/new_boss_reaps_huge_reward/">reported</a> about how the company compensated its new CEO, who started in the middle of 2009: <blockquote>Boston Scientific Inc. gave its new top executive an unforgettable welcome gift. The Natick medical device maker said it paid chief executive J. Raymond Elliott, who replaced former CEO James Tobin last summer, $33.5 million in total compensation last year, making him one of region’s highest-paid corporate leaders. Elliott’s pay package includes a salary of more than $598,000 for six months, a $1.5 million signing bonus, nearly $608,000 in other incentive awards, and $29.4 million in stock awards and options that will vest over the next few years. He also received other benefits, including a $12,500 executive allowance, nearly $198,000 for personal use of the corporate jet, and more than $1 million in relocation expenses. Tobin, who retired last year after running the medical device company for about a decade, earned $13.7 million last year, roughly six times his pay level in 2007 and 2008.</blockquote> And by the way, the compensation paid both these men did not exactly correlate with the company's financial, as opposed to ethical performance: <blockquote>In February, the company agreed to pay $1.7 billion to settle patent infringement charges from rival Johnson & Johnson. And for years, the company has struggled with anemic sales growth. Last year, the company reported it lost $1 billion, its fourth straight year in the red. Sales rose 2 percent to $8.2 billion. The company’s stock rose 16 percent in 2009, reflecting the broader stock market recovery. But shares have slipped 20 percent this year.</blockquote> You just cannot make this stuff up. How could the company possible justify paying over $30 million for half a year's work by its CEO at a time when the company is facing multiple investigations, has had to settle civil cases and criminal charges, has had to stop production of one of its most important products due to its failure to meet regulatory requirments, and has lost money for four years?  This illustrates how leaders of big health care organizations are able to make themselves extremely rich at the expense of share-holders, employees, patients, and ultimately society, completely out of proportion to any claims they can make about their or their companies' performance.  This indicates the collective lack of accountability of many health care leaders, and the perverse incentives that now drive health care.  But is it any wonder that health care costs continue to rise uncontrollably? Once again, I submit that true health care reform needs to make health care leaders accountable, and subject to clear ethical standards, and to eliminate the sorts of perverse incentives that are transforming them (and other corporate CEOs) into a new aristocracy.  Without such measures, we in the US may have near universal health care insurance, but soon no one will be able to afford access to any sort of quality health care.

New Investigations of Boston Scientific, but New CEO Made $33.5 Million for Half a Year's Work

It appears that device-maker Boston Scientific has a new set of troubles. The Boston Globe just reported : Stepped-up government scrutiny o...

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Meetings and Conferences of Interest

There are a number of upcoming conferences, and sessions within conferences which may be of interest to Health Care Renewal readers. In chronological order, and with apologies for somewhat tooting our own horn,... Annual Meeting, Society of General Internal Medicine Minneapolis, MN, USA, 28 April - 1 May, 2010. Those attending this meeting who read this blog may want to come to the meeting of the SGIM Professionalism Sub-Committee of the Clinical Practice Committee, which I chair, which will be on Friday, 30 April, 7:30-8:30am, Convention Center Room 102C, during the Annual Meeting. We would like to liven up the sub-committee, so please think about attending even if you are not now a member. See the whole meeting program <a href="http://www.sgim.org/userfiles/file/PreliminaryProgFINAL.pdf">here</a>. Annual Scientific Meeting, Rhode Island Chapter, American College of Physicians Warwick, RI, 13 May, 2010. I will be giving a session on external threats to ethical practice. The whole meeting program is <a href="http://www.acponline.org/meetings/chapter/ri-2010.pdf">here</a>. European meeting of the Society for Medical Decision Making Hall in Tyrol, Austria, 30 May - 2 June, 2010. Wally Smith and I will be giving a short course on recognizing external threats to rational decision making. The meeting brochure is <a href="http://www.umit.at/dataarchive/data69/announcement_smdm_2010_final.pdf">here</a>.  PharmedOut.org Conference, "Prescription for Conflict: Should Industry Fund Continuing Medical Education?" Washington, DC, 25 June, 2010. The entire content should be of interest to our readers. The conference site is <a href="http://www.pharmedout.org/conference.htm">here</a>.  Healthy Skepticism conference,"Selling Sickness; Influence on influence" Amsterdam, Netherlands, 7-8 October. Again, the entire content should be of interest. The conference site is <a href="http://www.gezondescepsis.nl/">here</a>.

Meetings and Conferences of Interest

There are a number of upcoming conferences, and sessions within conferences which may be of interest to Health Care Renewal readers. In chro...

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The Settlement and Conviction Round-Up: Friday Frequent Flier Edition

It's time for one of our periodic round-ups of legal settlements and convictions of health care organizations.  This time, we report on three frequent fliers, in chronologic order of the appearance of the relevant news stories. Robert Wood Johnson University Hospital Hamilton (UMDNJ) We have written multiple times about the woes of the University of Medicine and Dentistry of New Jersey, which lead to a deferred prosecution agreement and operation under the watchful eye of a federal monitor for several years, and resulted in criminal convictions of a former Dean and the state legislative leader he hired.  Scroll through <a href="http://hcrenewal.blogspot.com/search/label/UMDNJ">this</a> for far too many details.  Now, the redoubtable Newark Star-Ledger <a href="http://www.nj.com/news/index.ssf/2010/03/hamilton_hospital_agrees_to_pa.html">reports</a>: <blockquote>Robert Wood Johnson University Hospital in Hamilton has agreed to pay $6.35 million to settle allegations that the facility defrauded Medicare, Justice Department officials said today. The Mercer County hospital was accused of inflating charges to Medicare patients to obtain bigger reimbursements from the federal government. 'Taxpayer dollars should go towards quality health care, not wasted on fraud and abuse,' said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. The hospital denied wrongdoing in the settlement, said Skip Cimino, the facility's president and CEO. 'Robert Wood Johnson University Hospital Hamilton has resolved the outstanding Medicare Reimbursement issue with the government and looks forward to continuing its service to the community,' he said.</blockquote> Note that Robert Wood Johnson Medical School is one of the two medical schools contained within UMDNJ. Fresenius I admit that we last <a href="http://hcrenewal.blogspot.com/2007/09/dialysis-providers-and-restraint-of.html">discussed</a> Fresenius Medical Care Holdings Inc, a for-profit provider of kidney dialysis services, a while ago, back in 2007. At that time, the company settled charges made by the US Federal Trade Commission that it had tried to restrain competition. Last week, the Tennessean reported: <blockquote>A long-running whistleblower complaint against the once-Nashville based Renal Care Group has led to a $19.3 million federal court judgment against the acquired dialysis supplier and the German company that bought it four years ago. The lawsuit, which focused on improper claims submitted to Medicare for home dialysis supplies, named Renal Care Group Supply Co. and Fresenius Medical Care Holdings Inc., as co-defendants. The federal government joined the whistleblower complaint more than two years ago. Renal Care operated a shell billing company solely to submit claims on behalf of itself in violation of federal law that requires suppliers to be independent of the dialysis facilities where patients are treated, the government said. Even after employees raised concerns, Renal Care continued to operate the billing company because of the 'illicit revenues it created,' the suit said. One employee wrote: 'I do not wish to go to jail' and felt the company's plan 'was not in the best interests of patients,' said federal Judge William J. Haynes Jr. of Nashville in his ruling. The billings reportedly occurred over a six-year period beginning in 1999. The Fresenius-Renal Care acquisition closed in 2006 at a sales price of $3.5 billion.</blockquote> Pfizer Pfizer Inc, which proclaims itself to be the world's largest pharmaceutical company, has provided an amazing amount of material for Health Care Renewal. In September, 2009, we <a href="http://hcrenewal.blogspot.com/2009/09/pfour-legal-settlements-for-pfizer-why.html">discussed</a> the huge, that is, $2.3 billion dollar settlement Pfizer made of criminal and civil fraud charges. At that time, this was the fourth settlement of charges of unethical marketing made by Pfizer since 2002. Since then, we have discussed <a href="http://hcrenewal.blogspot.com/2009/10/pfizer-in-guise-of-pharmacia-pfound-to.html">another fraud settlement</a> in October, 2009, <strike>and </strike><a href="http://hcrenewal.blogspot.com/2010/01/physician-pleads-guilty-to-fraud-for.html"><strike>yet another</strike></a><strike> in January, 2010</strike>. Today, Bloomberg <a href="http://www.businessweek.com/news/2010-03-26/pfizer-told-to-pay-142-1-million-for-neurontin-marketing-fraud.html">reported</a>: <blockquote>Pfizer Inc. violated U.S. racketeering law in the marketing of its epilepsy drug Neurontin and should pay $142.1 million in damages, a jury decided. Kaiser Foundation Health Plan Inc. and Kaiser Foundation Hospitals claimed in a monthlong trial in federal court in Boston that Pfizer illegally promoted Neurontin for unapproved uses. The insurer said it was misled into believing migraines and bipolar disorder were among the conditions that could be treated effectively with Neurontin, approved in 1993 by the U.S. Food and Drug Administration for epilepsy. 'The jury found Pfizer engaged in a racketeering conspiracy over a 10-year period,' Tom Sobol, a lawyer for Kaiser, said after yesterday’s verdict. 'That bodes well for future cases.'</blockquote> Furthermore, this was a very special kind of verdict: <blockquote>The jury, which deliberated for two days, found that New York-based Pfizer violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, and California’s Unfair Competition Law. Under RICO, the amount of actual damages found by the jury, $47.36 million, will be tripled.</blockquote> The RICO statute was meant to be used against organized crime.  A jury seems to have found that Pfizer is a "Racketeer Influenced and Corrupt Organization," that is, the moral equivalent of a crime syndicate. Summary So this week's settlement and conviction round-up shows the impunity that many health care organizations have exhibited thus far.  Some organizations have been charged again and again with unethical behavior.  Now one of the most frequent of the fliers has been convicted under the RICO law, certainly a new low. Yet none of the affected organizations in this post, and precious few we have discussed at other times, seem to have suffered any major consequences.  All have paid fines, some which seemed large at the time, but which have never been large enough to seriously threaten the organizations' financial well being.  None of the organizations seems to have lost business, or even much reputation.  Very few of the people within the organizations who approved, lead or implemented unethical behaviors have suffered any sort of negative consequences. There seems to be something very wrong here.  In the US, we have put much of our health care system in the hands of very large organizations, for-profit and not-for-profit, without holding these organizations and their leaders accountable for their actions.  The results have been increasingly rich leaders who often behave like a new aristocracy, and repeated bad behavior by the organizations they lead.  Our latest effort at health care "reform" has continued to rely on large private organizations, while so far not adding to their or their leaders' accountability.  In my humble opinion, if we really want to reform health care so as to improve quality, increase access, control costs, and support professionalism, we will have to make our new health care oligarchs accountable.

The Settlement and Conviction Round-Up: Friday Frequent Flier Edition

It's time for one of our periodic round-ups of legal settlements and convictions of health care organizations. This time, we report on ...

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