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WaMu Worry? - More Overlaps Between "Stewards" of Failed Financial Firms and the Leadership of Health Care Organizations

Investigations of the failures of major US financial corporations during the global financial meltdown continue to paint a picture of bad leadership.  The latest failed corporation to get public attention was Washington Mutual (WaMu).  As <a href="http://articles.latimes.com/2010/apr/13/business/la-fi-wamu-inquiry13-2010apr13">described</a> by the Los Angeles Times, <blockquote>Before Washington Mutual collapsed in the largest bank failure in U.S. history, its executives knowingly created a 'mortgage time bomb' by making subprime loans they knew were likely to go bad and then packaging them into risky securities, a congressional investigation has found. In some cases, the bank took loans in which it had discovered fraudulent activity -- such as misstated income by borrowers -- and rolled them into mortgage securities sold to investors without disclosing the fraud, according to the report released Monday by the Senate's Permanent Subcommittee on Investigations.</blockquote> The investigation strongly suggested that WaMu leaders ignored questions about their practices: <blockquote>According to the Senate report, WaMu executives were aware in 2006 of problems at its Southern California subprime unit, Long Beach Mortgage Co. Excerpts of internal e-mails and reports offer a stark and unvarnished view of the warning signs that were dismissed as the bank tumbled toward failure. The company's chief risk officers called Long Beach Mortgage, the subprime subsidiary the firm used to stage its rapid growth in home lending, 'a real problem for WaMu.' Stephen Rotella, WaMu's former chief operating officer, described the unit as 'terrible.' The company and its Long Beach unit 'used shoddy lending practices . . . to make tens of thousands of high-risk home loans that too often contained excessive risk, fraudulent information or errors,' according to a subcommittee memo.</blockquote> Making money in the short-term was more important than long-term consequences: <blockquote>Internal company documents highlighted the profit pressures. 'In 2007, we must find new ways to grow our revenue. Home Loans Risk Management has an important role to play in that effort,' read a late 2006 message from the unit's chief risk officer to the risk management team. A June 2008 review by the bank's main regulator, the Office of Thrift Supervision, found a 'culture focused more heavily on production volume rather than quality.' Top employees could become members of the company's President's Club, which offered lavish, all-expense-paid trips to Hawaii or the Caribbean, the subcommittee found.</blockquote> A vivid anecdote about this culture of greed was <a href="http://www.politico.com/news/stories/0410/35779.html">described</a> by Politco, <blockquote>In the years before it became the largest bank failure in American history, mortgage lenders at Washington Mutual liked to party hearty at the company’s annual retreats. But a 2006 WaMu retreat produced one of the more cringe-worthy moments of the mortgage meltdown: Lenders, on the eve of their industry’s collapse, singing 'I Like Big Bucks' to the tune of Sir Mix-a-Lot’s 1992 hip-hop hit 'Baby Got Back.' 'I like big bucks and I cannot lie/You mortgage brothers can't deny,' sang the WaMu rappers. The presentation, which included cheerleaders moving in time to the music, and choreographed moves by the singers, continued: 'That when the dough roles in like you're printin’ your own cash/ And you gotta make a splash/ You just spends/ Like it never ends/ Cuz you gotta have that big new Benz/ All of that bling you're wearin'/ Shining so bright peoples starin'/ It's crazy, I gotta ski Aspen/ That's all I'm askin''</blockquote> The former CEO of WaMu, Kerry Killinger, was called to testify, but asserted that he was unaware of what was going on, according to <a href="http://seattletimes.nwsource.com/html/dannywestneat/2011598089_danny14.html">a column </a>in the Seattle Times: <blockquote>Tuesday at the congressional grilling of the Washington Mutual brass on how they ran a respected, 119-year-old bank into the ground, another defense was tried: No one knows anything. Former CEO Kerry Killinger said his bank's failure wasn't his fault (it was the economy and also the government.) But for a guy who ran the joint for 18 years, he seemed not all that clued in about what his company actually did. Much of the questioning from a panel of U.S. senators was about WaMu's now well-known history of bundling up crappy, subprime loans, sprinkling them with fairy dust and selling them as investments on Wall Street. The U.S. Senate Permanent Subcommittee on Investigations said it had evidence that WaMu rushed to unload some of these loans precisely because the bank knew they were rotten. When asked about this, Killinger said he couldn't recall (they always say that). But he also said something that floored me: He never knew much about WaMu's business of securitizing subprime loans for sale on Wall Street. Even though WaMu did it to the tune of $77 billion worth from 2000 to 2007. 'I was just simply not involved in any of those,' Killinger shrugged. They were only the fuel for the fire that burned down the U.S. economy! OK, well, moving on then. Killinger was asked about how even people inside WaMu considered the subprime securities coming out of WaMu's Long Beach Mortgage to be 'the worst paper in the market.' Blank look. News to him. How about how WaMu loan officers in various offices were involved in fraud, cutting and pasting false names on borrowers' bank statements or fabricating assets, just to move more subprime loan product? Can't remember the specifics, said the guy who was in charge. On it went, nearly two hours of I-have-no-knowledge or I-can't-recall. Earlier a lower-ranking risk officer at the bank testified he'd come to Killinger in 2004 and made an 'impassioned argument' to take a stand against rampant fraud in the loan industry. 'Blow the whistle,' the guy said he urged Killinger. 'Say we at Washington Mutual will not participate any further.' A senator asked Killinger about this. You're the CEO, the senator said. This is your bank. Didn't someone telling you there were serious fraud problems send chills up your spine? Eh. He answered blandly that he of course tried to fix any problems. But chills? His demeanor was more Alfred E. Neuman: What, me worry?</blockquote> It turns out that for his allagedly clueless leadership, Mr Killinger was paid enough to make him very rich, as per a quote from the investigation's report, <a href="http://blogs.ajc.com/jay-bookman-blog/2010/04/13/after-wamu-collapse-ceo-walked-off-with-25-million/?cxntfid=blogs_jay_bookman_blog">via the Atlanta Journal-Constitution</a>. <blockquote>WaMu’s CEO (Kerry Killinger) received millions of dollars in pay, even when his high risk loan strategy began losing money, even when the bank began to falter, and even when he was asked to leave his post. From 2003 to 2007, Mr. Killinger was paid between $11 million and $20 million each year in cash, stock, and stock options. That’s on top of four retirement plans, a deferred bonus plan, and a separate deferred compensation plan. In 2008, when he was asked to leave to leave the bank, Mr. Killinger was paid $25 million, including $15 million in severance pay. $25 million for overseeing shoddy lending practices that pumped billions of dollars of bad mortgages into the financial system. Another painful example of how executive pay at U.S. financial firms rewards failure.</blockquote> It was all gut wrenching, but perhaps the connection with health care iss not obvious. Let me explain. A question not addressed by the congressional hearings so far was how the people ultimately responsible for the direction and financial health of Washington Mutual, the company's board of directors, allowed a CEO self-described as clueless become rich while a culture of greed produced an enormous number of questionable loans which ultimately drove the company into bankruptcy. Based on the report and testimony so far, on its face the case is strong that the WaMu board must have been one of the most irresponsible groups of supposed corporate stewards yet uncovered. A list of the 13 board members who presided over the company's final collapse can be found in the company's <a href="http://www.sec.gov/Archives/edgar/data/933136/000095013408004817/v37377def14a.htm">2008 proxy report</a>. Several of them turn out also to have been or be leaders of health care organizations: - Thomas C Leppert, director since 2005, "the Mayor of Dallas, Texas," is also a member of the board of directors of the Baylor University Health System. (see <a href="http://dfwairport.com/about/admin/board/index.php?ctnid=27690">this link</a>) - Charles M Lillis, director since 2005, was also on the board of Medco Health Solutions Inc - Regina T Montoya, director since 2006, then the Chief Executive Officer of the New America Alliance, is now senior vice president and general counsel for the Children's Medical Center in Dallas, Texas. (see <a href="http://www.pegasusnews.com/news/2009/jul/10/childrens-medical-center-names-regina-montoya-seni/">this link</a>) - Margaret Osmer-McQuade, director since 2002, then President of Qualitas International, is a member of the Board of Overseers of Weill Cornell Medical College. (see <a href="http://www.med.cornell.edu/about-us/members.html">this link</a>) - Orrin C Smith, director since 2005, then President and Chief Operating Officer of Starbucks Corporation, is a member of the University of Washington UW Medicine Strategic Initiatives Committee. (see <a href="http://uwmedicine.washington.edu/Global/Make-a-Gift/leadership/Pages/default.aspx">this link</a>) So, in summary, members of the board of directors of the failed Washington Mutual, which seemingly collapsed in a fog of greed and irresponsibility, currently sit on the boards of a medical school, a teaching hospital, and a pharmacy benefits management corporation, and on a strategic initiatives committee of another medical school, while another is an executive of another teaching hospital. People whose "stewardship" allowed an apparently clueless CEO to become rich while a corporate culture with the theme, "I Like Big Bucks" drove their company into bankcrupty now also lead some of the most prestigious US health care organizations. Here is yet another example of how the leadership culture that so badly failed the financial sector was tied to the leadership of health care. (We posted <a href="http://hcrenewal.blogspot.com/2010/03/members-of-board-of-now-bankrupt-lehman.html">here</a> about how the board of the bankrupt Lehman Brothers also leads multiple health care organizations, and <a href="http://hcrenewal.blogspot.com/2010/02/university-president-but-no-longer.html">here</a> how the leaders of how some of our major universities that house medical schools overlap with the leadership of other questionable financial corporations.) We have another vivid illustration in the aftermath of the global economic collapse, and in an ongoing health care crisis, how some of the problems of health care, and academic medicine in particular, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. All health care organizations, for-profit and not-for-profit, those in the US and those in other countries, need leaders who value their health care and academic missions more than simply the money they may bring in.

WaMu Worry? - More Overlaps Between "Stewards" of Failed Financial Firms and the Leadership of Health Care Organizations

Investigations of the failures of major US financial corporations during the global financial meltdown continue to paint a picture of bad le...

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Is H. Stephen Lieber, CEO of HIT Industry Trade Group HIMSS, Misinformed or Simply Lying?

In the Wall Street Journal article today entitled "<a href="http://online.wsj.com/article/SB10001424052748704259304575043572008622004.html?mod=WSJ_Tech_RIGHTTopCarousel">Can Technology Cure Health Care?</a>" by erstwhile WSJ reporter Jacob Goldstein, H. Stephen Lieber, CEO of the health IT trade group <a href="http://www.himss.org/">HIMSS</a> disputes the idea that "electronic medical records systems focus on billing [and other administrative tasks] at the expense of patient care" and says: <blockquote>[These systems] are "primarily designed for improving clinical outcomes, and a secondary benefit is that they improve administrative efficiencies." </blockquote>Is Mr. Lieber misinformed, or worse, could he simply be lying?In fact, these systems do neither of these things, as repeated studies are showing such as I aggregated in "2009 a Pivotal Year in Healthcare IT" at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009">http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009</a>, and as in this new 2010 study report in Health Affairs: <a href="http://content.healthaffairs.org/cgi/content/abstract/29/4/639?maxtoshow=&hits=10&RESULTFORMAT=&fulltext=jha&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT" target="_blank">Electronic Health Records' Limited Successes Suggest More Targeted Uses</a> The team, led by Harvard Medical School professor Catherine M. DesRoches, surveyed more than 3,000 U.S. community hospitals to assess factors such as inpatient costs and mortality and readmission rates. Here are their findings:<blockquote>Understanding whether electronic health records, as currently adopted, improve quality and efficiency has important implications for how best to employ the estimated $20 billion in health information technology incentives authorized by the American Recovery and Reinvestment Act of 2009. We examined electronic health record adoption in U.S. hospitals and the relationship to quality and efficiency. Across a large number of metrics examined, the relationships were modest at best and generally lacked statistical or clinical significance. However, the presence of clinical decision support was associated with small quality gains. Our findings suggest that to drive substantial gains in quality and efficiency, simply adopting electronic health records is likely to be insufficient. Instead, policies are needed that encourage the use of electronic health records in ways that will lead to improvements in care. ... the researchers determined that the technological systems, as currently implemented, do not have a significant impact on improving care and reducing costs, DesRoches said. </blockquote>A key phrase is "as currently implemented." To that, I'd add "as currently designed under the leadership of the HIT industry", which is to say, poorly. I commented on this report in my prior post "Yet Another Study Shows Health IT Does Not Bat The Ball Out of the Park; And, is HIT an Issue of States' Rights?" <a href="http://hcrenewal.blogspot.com/2010/04/yet-another-study-shows-health-it-does.html">at this link</a>. These results are also in line with the 2009 National Research Council report, the highest scientific authority in the U.S. that involved Octo Barnett and other health IT pioneers. The NRC report calls <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">current approaches to health IT "insufficient"</a> and calls for major redesign of health IT to support clinicians' cognitive needs. From the NRC report:<blockquote>Most importantly, current health care IT systems offer little cognitive support; clinicians spend a great deal of time sifting through large amounts of raw data (such as lab and other test results) and integrating it with their medical knowledge to form a whole picture of the patient. Many care providers told the committee that data entered into their IT systems was used mainly to comply with regulations or to defend against lawsuits, rather than to improve care. As a result, valuable time and energy is spent managing data as opposed to understanding the patient. </blockquote>And this was from the country's most advanced centers in terms of healthcare IT. As to cost savings, there's the Nov. 2009 “<a style="font-weight: bold;" href="http://www.ischool.drexel.edu/faculty/ssilverstein/AJM-Himmelstein-Hospital-Computing.pdf">Hospital Computing and the Costs and Quality of Care: A National Study</a>” (Amer J Med 123:1; 40-46) by Himmelstein and Woolhandler at Harvard Medical School, that also concluded “as currently implemented, hospital computing might [very] modestly improve process measures of quality but not administrative or overall costs." There's also the June 2009 <a href="http://www.wharton.upenn.edu/">Wharton School of Business</a> article "Information Technology: Not a Cure for the High Cost of Health Care" that I wrote about <a href="http://hcrenewal.blogspot.com/2009/06/wharton-on-healthcare-it-can-i-go-home.html">at this HC Renewal post</a>.Typical of the recalcitrant, recidivist IT industry, Lieber goes on to blame doctors:<blockquote>"... there is a resistance on the part of some to recognize the professional clinical advantage that these systems give them, many default to 'This is designed for billing, not clinical outcomes.'" </blockquote>Never does he consider that doctors might have good reasons to avoid the technology - as in, to protect the lives of the patients in their trust. (When they see user-hostile HIT products from major vendors such as <a href="http://ww.tinyurl.com/hostileuserexper">these</a>, who can blame them?) He then waves off "glitches" - the kind that result in untold clinician inconvenience and disruption, and have resulted in an unknown but <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=FDA_iceberg">"tip of the iceberg"</a> rate of patient injury and death per the FDA - by stating that:<blockquote>"There is a range of systems out there, just as in any kind of product line, ranging from poor to mediocre to excellent." </blockquote>His merchant computing, <a href="http://hcrenewal.blogspot.com/2008/05/seedie-society-for-exorbitantly.html">card tabulator/data processing</a> mindset reveals itself in this statement. Unfortunately, health IT, as in other medical devices, IS NOT JUST ANY KIND OF PRODUCT LINE. Malfunctions and poor design do not simply cause a truckload of candy bars to be delivered to the wrong merchant.As in pharma and other medical devices, when trade group leaders of the HIT medical device companies are unaware of current research, dismiss it, and blame end users, or simply are liars, that industry deserves serious academic and governmental scrutiny. -- SS

Is H. Stephen Lieber, CEO of HIT Industry Trade Group HIMSS, Misinformed or Simply Lying?

In the Wall Street Journal article today entitled " Can Technology Cure Health Care? " by erstwhile WSJ reporter Jacob Goldstein, ...

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Yet Another Study Shows Health IT Does Not Bat The Ball Out of the Park; And, is HIT an Issue of States' Rights?

At "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009">2009 a Pivotal Year in Health IT</a>" I aggregated a number of reports and articles from that year shedding needed critical light on the irrational exuberance surrounding computers in medicine, an exuberance that seems to consider clinical professionals with years of hard training and expertise as simpletons who should bow to the cybernetic miracles created by the <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009051503667.html?hpid=topnews">health IT cartel</a>. The critical reviews continue in 2010. Here's another in Health Affairs from a team at Harvard: <a href="http://content.healthaffairs.org/cgi/content/abstract/29/4/639?maxtoshow=&hits=10&RESULTFORMAT=&fulltext=jha&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT">Electronic Health Records' Limited Successes Suggest More Targeted Uses</a>. The team, led by Harvard Medical School professor Catherine M. DesRoches, surveyed more than 3,000 U.S. community hospitals to assess factors such as inpatient costs and mortality and readmission rates. Here were their findings: <blockquote>Understanding whether electronic health records, as currently adopted, improve quality and efficiency has important implications for how best to employ the estimated $20 billion in health information technology incentives authorized by the American Recovery and Reinvestment Act of 2009. We examined electronic health record adoption in U.S. hospitals and the relationship to quality and efficiency. Across a large number of metrics examined, the relationships were modest at best and generally lacked statistical or clinical significance. However, the presence of clinical decision support was associated with small quality gains. Our findings suggest that to drive substantial gains in quality and efficiency, simply adopting electronic health records is likely to be insufficient. Instead, policies are needed that encourage the use of electronic health records in ways that will lead to improvements in care. </blockquote>On that last point, I disagree; it's not the use of HIT that needs to be encouraged, it's the remediation of HIT that needs to be encouraged/enforced to make HIT useful. More below. The authors also <a href="http://www.thecrimson.com/article/2010/4/9/systems-health-desroches-hospitals/">report</a>: <blockquote>Hospitals with comprehensive electronic health record systems were compared with those with no or basic electronic systems, and the team only found slight differences in areas such as length of stay and surgical infection prevention.Overall, the researchers determined that the technological systems, as currently implemented, do not have a significant impact on improving care and reducing costs, DesRoches said.“Having a system is not enough,” DesRoches added. “We can’t expect that hospitals are just going to plug these systems in, and suddenly you’re going to see large improvements. [Not according to our President and the heads of HHS and ONC, who've explicitly stated that health IT will produce all sorts of technologically deterministic miracles - ed.] The systems are only going to be as good as how people are using them.”</blockquote> I would differ from the authors on the last point, that "the systems are only going to be as good as how people are using them.” The authors seem to assume that health IT is a perfected technology. I would say that "the results are only going to be as good as the systems clinicians are forced to use." If the systems are <a href="http://www.tinyurl.com/hostileuserexper">crap</a>, then the results of their use will be crap. <blockquote>The authors concluded that "the study’s findings should not deter future technological advances in keeping medical records. </blockquote> In fact, I think with results such as these, improving health IT through technological advancement is an absolute imperative. To do so, however, will require major advances in the health IT industry itself - its methodologies for health IT development and validation, its qualifications for leadership, and its regulation. <blockquote> “With the amount of attention and money that the federal government is putting into this issue, I don’t think we can do anything but move forward at this point,” Desroches said.</blockquote> Again, I disagree with the author's white-flagged surrender to the diktats of the Federal Government. The Federal takeover of health IT via the establishment on ONC by HHS made me uncomfortable when it occurred in 2004, and it is increasingly clear why. When serious doubts are thrown on a technology being pushed on a critical profession and a nation's critical services, the imperative should be on slowing down and fixing the problems before spending hundreds of billions more dollars in a massive federal push, a push that even includes federal coercion in the form of Medicare penalties for non-adopters. As studies like this show, HIT medical devices are experimental, yet increasingly serve as governors of medical care. They are "governors by cybernetic proxy", I might add. These devices put the federal government, and the health IT vendors as well, with their "best practices" criteria, directly in the exam room. This is done without true patient informed consent. The rights to govern the practice of medicine reside with the states, not the Federal government. (Drug and device safety were made an exception via FDA regulation, but health IT is entirely unregulated, demonstrating incompetence at best on the part of the federal government in a matter critical to healthcare). Perhaps the states need to take up the issue of federal pressure to implement experimental health IT. Health IT is technology that seeks to govern the practice of medicine but does not seem to have significant ROI the way it is designed and implemented today. It does, however, have a definite but unknown incidence of harm (the FDA's data on patient injury and death attributed to bad IT are suspected to be just the "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=FDA_iceberg">tip of the iceberg</a>" according to the FDA itself). Perhaps states' rights need to be invoked in order to slow the out-of-control, federally fueled locomotive. It seems that federal imperatives to: <ul><li>coerce clinicians to purchase experimental products of commercial health IT companies under duress of federal penalty (much as consumers are going to be forced to purchase health insurance from commercial insurance companies under threat of penalty, although at least those products are not experimental); </li><li>determine"meaningful use" criteria;</li><li>determine who can "certify" the technology; </li><li>set up federal "<a href="http://healthit.hhs.gov/portal/server.pt?open=512&objID=1335&mode=2&cached=true">Regional Extension Centers</a>" (REC's) and a national Health Information Technology Research Center (HITRC); </li></ul>and the <a href="http://hitechanswers.net/about">HITECH act</a> itself represent a huge power grab that tramples states' rights to regulate the practice of medicine. -- SS

Yet Another Study Shows Health IT Does Not Bat The Ball Out of the Park; And, is HIT an Issue of States' Rights?

At " 2009 a Pivotal Year in Health IT " I aggregated a number of reports and articles from that year shedding needed critical ligh...

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You Can Judge a Culture By How They Treat Their Dead...

This article does not speak highly of the IT culture and the dead. Considering the IT culture that has invaded healthcare and whose tools are increasingly being mandated in treating the living, this article is another cause for concern: <a href="http://www.telegraph.co.uk/health/healthnews/7576110/Organs-removed-without-consent-after-IT-blunder.html"> </a><div class="storyHead"><a href="http://www.telegraph.co.uk/health/healthnews/7576110/Organs-removed-without-consent-after-IT-blunder.html"></a></div><blockquote><div class="storyHead"><a href="http://www.telegraph.co.uk/health/healthnews/7576110/Organs-removed-without-consent-after-IT-blunder.html">Organs removed without consent after IT blunder</a> Bereaved families will be told that organs were removed from their loved ones without consent after a blunder affecting Britain’s donor register. </div> By Patrick Hennessy and Laura Donnelly The Telegraph 10 Apr 2010 The records of 800,000 people were affected by an error that meant their wishes about the use of their organs after death were wrongly recorded. An investigation has found that 45 of those for whom wrong records were stored have since died – and in approximately 20 cases organs were taken where consent had not been given. Andy Burnham, the Health Secretary, said today he deeply regretted the distress caused to bereaved families of people whose organs were removed without consent following a huge blunder affecting the UK donor register. He said: "I want to assure the millions of people on the organ donor register that they can have full confidence that only their accurate information will be discussed with their families, and that their wishes will be respected. </blockquote> I'm not sure why people should "have full confidence" in a system where a huge blunder was made on the words of a politician ... <blockquote> "I have asked NHS Blood and Transplant to take immediate steps to identify and contact all affected families. This process is under way and will be completed as quickly as possible. </blockquote> Considering how poorly the NHS has <a href="http://www.computerweekly.com/blogs/tony_collins/2009/06/16-key-points-in-gateway-revie.html">managed its health computing</a> on a national scale, I would not be reassured. <blockquote>"I have asked Professor Sir Gordon Duff of Sheffield University to carry out a review to find out why this has happened, prevent mistakes like this being made again and ensure all necessary steps are taken to maintain confidence in the organ donor register." Donors can give permission for any of their organs to be taken, or provide more specific agreements. A glitch in the system more than a decade ago removed the distinctions expressed by people. ... The error occurred in 1999, when data held by the Driver and Vehicle Licensing Agency, which includes a request for consent in applications for a driving licence, was transferred to the organ registry. </blockquote> Allow me to reveal how this 'glitch' that removed critical data happened: careless, cavalier, undereducated, arrogant, overempowered IT personnel in HIT leadership roles. Allow me to reveal how the 'glitch' was not discovered in over a decade: careless, cavalier, undereducated, arrogant, overempowered IT personnel in HIT leadership roles. <blockquote>Joyce Robins, from the pressure group Patient Concern said: "This Government has got an absolutely dreadful record when it comes to data, but it is absolutely horrific that such sensitive details were handled in such a careless way." </blockquote> If the dead are treated this poorly, what does this say about the wishes of the living? <blockquote> The NHS is about to contact approximately 20 families who allowed organs to be taken from their relations after being misinformed about what consent had previously been given. It is illegal to remove organs without prior consent from the person who died or their next of kin. A view is sought from relations before decisions are taken. In the cases where errors were made, it is understood that families were asked for permission, but their decisions were based on misinformation about the wishes of their relations. </blockquote> Unbelievable. <blockquote> After detecting the fault last year, NHS Blood and Transplant, which holds the organ donation register, was able to correct 400,000 of the flawed records. But 400,000 more people will shortly be contacted to be told that the wrong information may be held about them, and asked to provide consent again. </blockquote> Just a little 'glitch', affecting nearly a million people. Nothing for the IT personnel to be concerned too much about. <blockquote>Until fresh consent is obtained, organs will not be taken from any of those people in the event of death. </blockquote> Let's hope the delays in organ availability don't create more dead people. <blockquote> The mistake came to light when NHS Blood and Transplant (NHSBT) wrote letters to new donors thanking them for joining the register, and outlining what they had agreed to donate. Respondents wrote back to say the information was wrong. </blockquote> Sick, living patients might not have the opportunity to tell their doctors the information in the eRecord has been corrupted or erased. The point of this case is that the utmost care needs to be used in managing health data and healthcare information systems. The results of errors are not boxes of candy bars shipped to the wrong location. As long as the culture of IT dominates in healthcare, IT being characterized by an arrogant, recalcitrant, recidivist culture whose <a href="http://www.it-cortex.com/Stat_Failure_Rate.htm">failure rates</a> are downright terrible even on non-healthcare projects, I'd frankly rather use paper. Paper doesn't suffer 'glitches' that alter hundreds of thousands of fields of critical information en masse. -- SS

You Can Judge a Culture By How They Treat Their Dead...

This article does not speak highly of the IT culture and the dead. Considering the IT culture that has invaded healthcare and whose tools a...

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A "Very Well Paid Boob" on the Harvard Corporation?

The ongoing investigation of the global financial collapse may also shed some indirect light on what has gone wrong with health care.  Consider the recent testimony by two leaders of the nearly failed, then bailed out global financial giant Citigroup, as <a href="http://www.nytimes.com/2010/04/09/business/09panel.html">reported </a>by the New York Times. One of the leaders was Robert Rubin, <blockquote>Robert E. Rubin, the former Treasury secretary, faced withering questions from the panel, the Financial Crisis Inquiry Commission, for his spare expressions of remorse. Repeatedly playing down his role as chairman of the executive committee of Citigroup’s board, he was met with anger and disbelief. 'You were either pulling the levers or asleep at the switch,' Philip N. Angelides, the committee’s chairman, told him. Mr. Rubin stopped short of accepting personal responsibility. He grudgingly conceded that a few savvy investors saw the crisis coming, asserting that nearly everyone in the financial services industry had failed to see a dozen powerful forces — from excessive debt levels to trade imbalance — come together in a perfect storm. 'We all bear responsibility for not recognizing this, and I deeply regret that,' Mr. Rubin said. Mr. Rubin’s stance left several members of the panel angry. Mr. Rubin earned more than $100 million during a decade at Citigroup. Mr. Angelides, a former California state treasurer and a fellow Democrat, did not buy it. 'You were not a garden-variety board member,' he said. 'I think to most people chairman of the executive committee of the board of directors implies leadership. Certainly $15 million a year guaranteed implies leadership and responsibility.' </blockquote> Attempts by Mr Rubin (and to some extent, former Citigroup CEO Charles O Prince III) to disavow responsibility met with more derision. For example, yesterday, see a <a href="http://www.nytimes.com/2010/04/11/opinion/11sun1.html">New York Times editorial</a>: <blockquote>The latest public hearings of the Financial Crisis Inquiry Commission, held last week, made headlines for eliciting more apologies from financiers who presided over the market collapse. You may recall a similar flurry last year, when Lloyd Blankfein, the chairman and chief executive of Goldman Sachs, was widely credited for having apologized for his firm’s role in the financial crisis. We did not buy it then; Mr. Blankfein never said what he was sorry for or to whom he was apologizing. And we are not buying it now. Mr. Prince says he 'could not' foresee the impending collapse, when he could have and should have seen it coming. Certainly, others did. Mr. Rubin has said that under his employment agreement, he was not responsible for the bank’s operations. But he was a towering figure at Citi, a source of its credibility and prestige. That implies responsibility, no matter what his contract said. Add all that to the 'I wasn’t the only one' context of both men’s comments, and their regret translates as, 'We feel bad about an accident we were powerless to prevent.' Except that the financial crisis was not an accident and they were not powerless. The crisis was the result of irresponsibility and misjudgments by many people, including Mr. Prince and Mr. Rubin. Citi, under their leadership, epitomized the financial recklessness that ruined the economy. </blockquote> A <a href="http://seattletimes.nwsource.com/html/soundeconomywithjontalton/2011556819_crisis_committee_rubin_shows_w.html">Seattle Times columnist </a>was even more harsh, calling Rubin a "very well paid boob," and: <blockquote>Rubin was barely contrite and went back to his meme of 'who knew?,' adding the unintended comedic line about how leaders shouldn't be responsibility for the 'granularity' of little things -- such as $40 billion in essentially fraudulent collateralized debt obligations. Rubin was being paid more than $100 million as a senior adviser to Citi while it headed toward collapse and a $45 billion taxpayer rescue. So 'granularity' is in the eye of the beholder. Commission vice chairman Bill Thomas said, 'Apparently you get to the top without having had to experience anything the people underneath you do. You don't have a comprehension. You're not informed, but you get to make all this money on the upside, but there's no downside.' Indeed. Rubin and Citigroup epitomize the public policies and the corporate practices that brought the economy to the brink of a new depression. As Bill Clinton's Treasury Secretary, Rubin championed financial deregulation and the financialization of the economy as manufacturing was hollowed out. Among other things he helped keep derivatives from being regulated and encouraged the creation of 'too big to fail' institutions such as Citi. Rubin led the battle to dismantle Glass-Steagall, so Citi and its giant siblings could gamble in investment banking, while also doing commercial banking and insurance. An alum of Goldman Sachs, Rubin was fine with big compensation for executives, even if their leadership wrecked the bank (Prince walked away with $120 million). Funny how Rubin was offered the lucrative Citi position after he left such 'government service.'</blockquote> So what does this tell us about health care? As we<a href="http://hcrenewal.blogspot.com/2008/12/what-linked-parallel-declines-of.html"> noted before</a>, while Robert Rubin is no longer on the board of Citigroup, he has been a member of the Harvard Corporation since 2001. The Corporation is ultimately responsible for the US' oldest and most prestigious university, its equally prestigious medical school and teaching hospitals. Yet under Rubin's stewardship, Harvard's endowment has fallen a prodigious amount, and <a href="http://hcrenewal.blogspot.com/search/label/Harvard">Harvard </a>and its <a href="http://hcrenewal.blogspot.com/search/label/Partners%20Healthcare">Partners Healthcare</a> hospital system have faced charges of conflicts of interest and various sweetheart deals. Perhaps this is to be expected when the ultimate steward may be a "very well paid boob." While Rubin's impressive resume and wealth in 2001 may have provided a rationale for his appointment to the Corporation, what would be the rationale for his continuing service? As we have <a href="http://hcrenewal.blogspot.com/2010/02/university-president-but-no-longer.html">pointed out</a>, as the world economy was driven to near ruin by "masters of the universe," some of the same also became leaders of academia and academic medicine in their spare time. Maybe this made sense 10 or 20 years ago, but why does it still make sense? On the other hand, now that we understand how bad the leadership of finance really was, it is a little easier to understand why the leadership of health care has become so bad.

A "Very Well Paid Boob" on the Harvard Corporation?

The ongoing investigation of the global financial collapse may also shed some indirect light on what has gone wrong with health care. Consi...

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Pfizer Settles One Lawsuit, Loses Another, Pays its CEO $13.7 Million

It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company. Settlement of Suit Alleging Neurontin Risks Concealed Pfizer has kept busy in court defending against charges that a company it acquired promoted Neurontin (gabapentin) for uses not approved by the US Food and Drug Administration (FDA), and not well supported by the evidence.  Most recently, it was convicted by a jury in California of being a racketeering influenced and corrupt organization (RICO) because of a long-term "racketeering conspiracy" involving Neurontin marketing (see post <a href="http://hcrenewal.blogspot.com/2010/03/settlement-and-conviction-round-up.html">here</a>). Now additionally, <a href="http://online.wsj.com/article/SB10001424052702304017404575165992338949212.html">according to the Wall Street Journal</a>, <blockquote>Pfizer Inc. said it reached a settlement agreement in a wrongful-death lawsuit brought by a woman who claimed her husband's use of the antiseizure drug Neurontin caused him to commit suicide in 2002. The suit was brought by Linda Shearer of Berkshire County, Mass., whose husband, Hartley Shearer, was prescribed Neurontin to control the effects of his paralysis. The suit alleged Pfizer promoted this use of the drug even though it wasn't approved by U.S. regulators. The suit alleged Pfizer knew the drug was associated with a risk of suicide, but failed to properly warn of the risk. </blockquote>The new wrinkle here is that Pfizer did not defend a suit that alleged the company knew of a potentially fatal side-effect of the drug, but failed to disclose that risk. Jury Awarded Damages for Treatment of Whistle-Blower Meanwhile, <a href="http://articles.courant.com/2010-04-01/business/hc-pfizer-verdict-0402apr02_1_pfizer-whistle-blower-stephen-j-fitzgerald">the Hartford Courant reported</a>: <blockquote>A former Pfizer scientist who claims she has been paralyzed by a virus designed at the pharmaceutical company's laboratory in Groton was awarded $1.3 million by a federal jury in Hartford Thursday following a trial that raised questions about safety practices in the dynamic field of genetic engineering. The amount of the settlement awarded to molecular biologist Becky McClain of Deep River will likely increase in coming days. After about day of deliberation, the jury also awarded McClain punitive damages, to be determined by U.S. District Judge Vanessa L. Bryant, and awarded fees to McClain's two Connecticut lawyers, Bruce E. Newman and Stephen J. Fitzgerald. McClain claimed in her suit that she was inadvertently exposed through work by a former Pfizer colleague in 2002 or 2003, to an engineered form of the lentivirus, a virus similar to the one that can lead to acquired immune deficiency syndrome, or AIDS. She further claimed that Pfizer wrongly fired her in 2005 for complaining about laboratory safety to the U.S. Occupational Safety and Health administration and to co-workers. Ultimately, the jury was not permitted during the 12-day trial to hear argument supporting McClain's claim of a causal link between her disability and virus research done at her laboratory in Groton. The jury based its verdict on evidence concerning McClain's two remaining claims: that her dismissal violated Connecticut's whistle blower law and McClain's free speech right. Her lawyers contended her complaint to federal safety regulators amounted to a whistle blower complaint and that her discussion of safety issues with fellow workers was free speech.</blockquote>So, after being convicted by a jury of being a "racketeering influenced and corrupt organization," (RICO), and settling civil and criminal fraud charges for an unprecedented $2.3 billion (see post <a href="http://hcrenewal.blogspot.com/2009/09/pfour-legal-settlements-for-pfizer-why.html">here</a>), and after many other allegations, settlements, and convictions (look <a href="http://hcrenewal.blogspot.com/search/label/Pfizer">here</a>),  Pfizer failed to defend one action, and lost another that argued Pfizer tried to hide information which put the company and/or its products in an unfavorable light. In fact, Even Pfizer CEO Jeffrey Kindler could not put much of a spin on the company's recent record. As reported by Duff Wilson <a href="http://www.nytimes.com/2010/04/01/business/01pfizer.html">in the New York Times</a>, <blockquote>The world’s largest drug company, Pfizer, has handled mergers badly, invented too few drugs and left its reputation in disrepair after two criminal cases. And that is the assessment of its own chief executive. </blockquote> CEO's Multi-Million Dollar Compensation But while all this was going on, the company did disclose (as mandated by the US Securities and Exchange Commission [SEC]) that CEO Kindler is continuing his acquisition of riches.  As reported by the AP (<a href="http://www.usatoday.com/news/health/2010-03-05-pfizer_N.htm">via USAToday</a>). <blockquote>The chief executive of drug giant Pfizer Inc., Jeffrey Kindler, received a 2009 compensation package valued by The Associated Press at $13.7 million, down 7.6% from 2008, as the board reduced the stock awards he received, citing economic pressures. The world's biggest drugmaker paid Kindler, 54, a salary of $1.6 million, up just $25,000 from the year before. But his performance bonus was bumped up to $3.5 million from $3 million in 2008, according to a filing this week with the Securities and Exchange Commission. Most of Kindler's compensation comes from long-term awards of stock options and restricted shares. The total fell 17% to $8.1 million in 2009, from $9.8 million, even though they were granted in late February, a month after Kindler announced plans to buy Wyeth for $68 billion, a sound strategy to counter Pfizer's looming revenue plunge. Kindler's other compensation — a variety of perks — totaled $449,731. That included $190,725 for Kindler's use of corporate aircraft as required by Pfizer's board, $43,099 for use of a car, $7,690 for financial counseling and $1,217 for home security.</blockquote> Even admitting that Kindler's compensation last year was slightly decreased from last year's not so small fortune, there still seems to be a huge disconnect between the company's ethical woes, legal settlements, and guilty pleas and its CEO's rewards. Once again, it seems that leaders of large health care organizations never face real accountability for their company's bad behavior. It almost goes without saying that in the two cases summarized above, no one who authorized, directed, or implemented the actions leading to the settlements or damages seems to have had any negative consequences. So once more with feeling.... 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. Postscript - Pay for Health Care Reform Lobbying? By the way, a <a href="http://www.theday.com/article/20100312/NWS05/303129870">commentary</a> in The [New London, CT] Day suggested an explanation for why Kindler was so richly paid last year: <blockquote>It takes pages and pages of a company securities filing to explain and justify all the bells and whistles of Kindler's 'annual incentive award,' a complicated stew of stock options and deferred payments and plain old salary. From all of this, Timothy P. Carney of the Washington Examiner found one juicy tidbit, which especially titillated industry bloggers. It turns out Kindler's salary increase, from $1.57 million to $1.6 million, was based in part, the compensation committee suggested, on his success in making a deal with President Obama that protected the drug industry from some of the more onerous proposals of health care reform. Praising Kindler as an effective lobbyist in, among other things, heading off legislation that would allow the importing of cheaper prescription drugs, the committee said: 'These efforts included constructive participation in the U.S. legislative process to advance Pfizer's goals of achieving a more rational operating environment.' Or, he kept a finger in the dike against health care reform. Indeed, a recent report by the Sunlight Foundation, a private nonprofit dedicated to more transparency in government, indicates Kindler's extensive role in negotiating a deal for the drug companies with the Obama administration and Senate Finance Committee Chairman Max Baucus. It turns out Kindler's name turns up four times on last year's White House visitor logs. The final deal Kindler helped craft promised $80 billion in cost cutting by the drug companies but blocked much more onerous reform measures for the industry, like lowering prescription drug prices through Medicare negotiations, re-importation of drugs from other countries with lower prices and quicker release of generics onto the market. The cost-saving of such measures, if allowed to occur, could have been in the hundreds of billions of dollars, according to government analysis. Kindler, as the pay committee says, did good.</blockquote> Several of our fellow bloggers have suggested that an installment of the Public Broadcasting Service (PBS) program "Frontline" will show just how much of the recent US health care reform effort was the product of health care corporate CEOs (e.g., see <a href="http://www.gooznews.com/node/3319">this post </a>on GoozNews, and <a href="http://www.joepaduda.com/archives/001795.html">this post </a>on Managed Care Matters). We shall see once the program airs, but maybe Mr Kindler's salary was a good value for Pfizer, but a very bad one for the rest of the country.

Pfizer Settles One Lawsuit, Loses Another, Pays its CEO $13.7 Million

It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company. Settlement of Suit Alleging Neurontin Risks ...

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Everybody's Doing It - Health Care Leaders Appeal to Common Practice

There were two examples in the recent news about how health care leaders employ logical fallacies to advance their positions. Caritas Christi / Cerberus We <a href="http://hcrenewal.blogspot.com/2010/04/more-doubts-about-private-equity-taking.html">posted</a> recently about the proposed takeover of the not-for-profit Caritas Christi hospital system by the Cerberus Capital Management private equity firm. We proposed skepticism about the idea. For-profit hospitals have not been shown to provide better, cheaper, or more accessible care than not-for-profit hospitals. There is reason to worry that a private-equity firm would put margin ahead of mission. The Boston Herald <a href="http://www.bostonherald.com/jobfind/news/healthcare/view/20100402caritas_ceo_health_reform_to_bankrupt_us/srvc=home&position=also">interviewed</a> Dr Ralph de la Toree, the current CEO of Caritas Christi, who would continue to run the health system after the takeover. Asked about the role of Cerberus, <blockquote>De la Torre dismissed concerns that Cerberus’ executives - and their investments - may not jibe with Caritas’ social justice mission. Cerberus investor J. Ezra Merkin, for example, is facing civil fraud charges because of his ties to disgraced money manager Bernard Madoff. Besides its failed Chrysler investment, Cerberus has also invested in companies, such as gunmaker Remington Arms, that some Catholics may not support. De la Torre admitted Cerberus has a diverse portfolio and said most boards of local nonprofits have members who have made their money through questionable means.</blockquote> The last sentence is a good example of the <a href="http://www.nizkor.org/features/fallacies/appeal-to-common-practice.html">appeal to common practice</a>. Basically, the logical fallacy is that because many do it, doing it must be good. Although we are often critical of the cronyism of boards of for-profit corporations and not-for profit organizations, even I would not go so far as to suggest that most boards include people who have made money unethically. Regardless of the prevalence of this pheonomenon, however, boards of health care organizations should be composed of people of integrity and honesty who support the mission of the organizations. Professor Uwe Reinhardt We recently <a href="http://hcrenewal.blogspot.com/2010/04/mainstream-media-discovers-conflicts-of.html">posted</a> about how prominent health economist and public health care intellectual Professor Uwe Reinhardt of Princeton University has failed to disclose conflicts of interest when opining about health policy. A follow-up <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/04/06/businessinsider-new-york-times-health-care-blogger-defends-lack-of-disclosure-on-his-5-million-in-health-related-stock-2010-4.DTL">interview</a> of Reinhardt on SFGate.com included: <blockquote>I invite you to look at the Wall Street Journal [reporters] and see their list of boards. </blockquote> I have no idea whether Wall Street Journal reporters fail to disclose their memberships on boards of companies relevant to the subject of their reporting. We have frequently discussed <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> and how they can influence medical care, teaching and research, and health care research and policy. I agree that  such conflicts are frequent, and often go undisclosed. Again, however, Prof Reinhardt seemed to be using an appeal to common practice. Just because others have failed to disclose conflicts of interest does not make such failure right. Interested readers may want to review the interviews of De La Torre and Reinhardt to see if they can find other logical fallacies. Note that we have frequently quoted Dr Joe Collier, "people who have conflicts of interest often find giving clear advice (or opinions) particularly difficult."  [Collier J. The price of independence. Br Med J 2006; 332: 1447-9. Link <a href="http://bmj.bmjjournals.com/cgi/content/full/332/7555/1447">here</a>.] We have discussed examples of how conflicted people seem to easily resort to <a href="http://hcrenewal.blogspot.com/search/label/logical%20fallacies">logical fallacies</a> to defend their conflicts (e.g., see post <a href="http://hcrenewal.blogspot.com/2009/07/again-logical-fallacies-in-defense-of.html">here</a>.) I do not think it is too much to ask prominent health care leaders to use evidence and logic, not logical fallacies to make their arguments. Those who do use logical fallacies are inviting even more skepticism about their arguments and the agenda behind them.

Everybody's Doing It - Health Care Leaders Appeal to Common Practice

There were two examples in the recent news about how health care leaders employ logical fallacies to advance their positions. Caritas Christ...

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